S-4

As filed with the Securities and Exchange Commission on February 18, 2000

Registration No. 333-    

U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM S-4
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933

MERRILL CORPORATION
(Exact name of registrant as specified in its charter)

Minnesota	2750	41-0946258
(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification No.)

See table of additional registrants on next page

One Merrill Circle
St. Paul, Minnesota 55108
Telephone No.: (651) 646-4501
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)

Steven J. Machov
Vice President, General Counsel and Secretary
Merrill Corporation
One Merrill Circle
St. Paul, Minnesota 55108
Telephone No.: (651) 646-4501
(Name, address, including zip code, and telephone number,
including area code, of agent for service)

Copy to:
Amy E. Culbert
Oppenheimer Wolff & Donnelly LLP
45 South Seventh Street, Suite 3300
Minneapolis, Minnesota 55402
(612) 607-7000

   Approximate date of commencement of proposed sale to the public: As soon as practicable after this registration statement becomes effective.

   If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box: / /

   If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: / /                          

   If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: / /                          

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities to be Registered	Amount to be Registered	Proposed Maximum Offering Price Per Unit (1)	Proposed Maximum Aggregate Offering Price (1)	Amount of Registration Fee (2)
12% Series B Senior Subordinated Notes due 2009	$140,000,000	100%	100%	$36,960
Guarantees	—	—	—	—

(1)

Estimated solely for the purpose of calculating the registration fee under Rule 457(f) under the Securities Act of 1933.

(2)

Calculated pursuant to Rule 457(f) under the Securities Act. No registration fee is required with respect to the Guarantees under Rule 457(n).

We hereby amend this registration statement on such date or dates as may be necessary to delay its effective date until we file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

ADDITIONAL REGISTRANTS

Exact Name of Registrant as Specified in its Charter	State or Other Jurisdiction of Incorporation or Organization	Primary Standard Industrial Classification Code	I.R.S. Employer Identification No.	Address, including Zip Code, and Telephone Number, including Area Code of Registrant's Principal Executive Offices
Merrill Communications LLC	Delaware	2750	41-0946258	One Merrill Circle St. Paul, Minnesota 55108 (651) 646-4501
Merrill Real Estate Company	Minnesota	2750	41-1814548	One Merrill Circle St. Paul, Minnesota 55108 (651) 646-4501
Merrill/Magnus Publishing Corporation	Minnesota	2750	41-1631198	One Merrill Circle St. Paul, Minnesota 55108 (651) 646-4501
Merrill/New York Company	Minnesota	2750	13-3189038	225 Varick Street New York, New York 10014 (212) 620-5600
Merrill/May Inc.	Minnesota	2750	41-1766390	4110 Clearwater Road St. Cloud, Minnesota 56301 (320) 656-5000
Merrill/Alternatives, Inc.	Minnesota	2750	41-1942608	12849 Industrial Park Blvd. Plymouth, Minnesota 55441 (612) 550-0797
Merrill International Inc.	Minnesota	2750	41-1955344	One Merrill Circle St. Paul, Minnesota 55108 (651) 646-4501
FMC Resource Management Corporation	Washington	2750	91-0950018	14640 172nd Drive SE Monroe, Washington 98272 (360) 794-3157
Merrill Training & Technology, Inc.	Minnesota	2750	41-1867060	One Merrill Circle St. Paul, Minnesota 55108 (651) 646-4501
Merrill/Global, Inc.	Minnesota	2750	41-1882477	One Merrill Circle St. Paul, Minnesota 55108 (651) 646-4501
Merrill/Executech, Inc.	Minnesota	2750	41-1912010	444 Westport Avenue, 2nd Floor Norwalk, Connecticut 06851 (203) 846-3000
Merrill/Daniels, Inc.	Minnesota	2750	36-4281828	40 Commercial Street Everett, Massachusetts 02149 (617) 389-7900

The information in this prospectus is not complete and may be changed. We may not consummate the exchange offer until the registration statement filed with the Securities and Exchange Commission becomes effective. This prospectus is not an offer to sell nor is it soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED FEBRUARY 18, 2000

PROSPECTUS

[LOGO]

OFFER TO EXCHANGE
$140,000,000 12% SERIES B SENIOR SUBORDINATED NOTES DUE 2009
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
FOR $140,000,000 OUTSTANDING UNREGISTERED
12% SERIES A SENIOR SUBORDINATED NOTES DUE 2009

THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON              ,               , 2000, UNLESS WE EXTEND IT.

Terms of the Exchange Offer

• We are offering to exchange registered 12% Series B Senior Subordinated Notes due 2009 for all of the old unregistered 12% Series A Senior Subordinated Notes due 2009.

• Subject to the satisfaction or waiver of specified conditions, we will exchange the exchange notes for all old notes that are validly tendered and not withdrawn prior to the expiration of the exchange offer.

• The terms of the exchange notes will be identical in all material respects to the terms of the old notes, except that the registration rights and related liquidated damages provisions, and the transfer restrictions applicable to the old notes will not be applicable to the exchange notes.

• This exchange offer is beneficial to you since your old notes are not registered with the Securities and Exchange Commission and may not be offered or sold without registration or an exemption from registration under federal and state securities laws. Any outstanding notes not validly tendered will remain subject to existing transfer restrictions.

• We will not receive any proceeds from the exchange offer.

• Norwest Bank Minnesota, N.A. is serving as the exchange agent. If you wish to tender your old notes, you must complete, execute and deliver, among other things, a letter of transmittal, to the exchange agent no later than 5:00 p.m., New York City time, on the expiration date.

• The exchange of old notes for exchange notes pursuant to the exchange offer will not be a taxable event for United States federal income tax purposes.

• There is no public market for the old notes or the exchange notes, and the exchange notes will not be listed on any securities exchange or included in any automated quotation system. The old notes and exchange notes can be traded in the Portal Market.

• The exchange notes will have the same financial terms and covenants as the old notes, and will be subject to the same business and financial risks.

• See "Risk Factors" on page 15 of this prospectus for a discussion of risks that you should consider before participating in the exchange offer.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

THIS PROSPECTUS IS DATED            , 2000

TABLE OF CONTENTS

	Page
Prospectus Summary	1
Risk Factors	15
Forward-Looking Statements	24
The Exchange Offer	25
Use of Proceeds	36
Capitalization	38
Selected Historical Consolidated Financial Data	39
Management's Discussion and Analysis of Financial Condition and Results of Operations	40
Business	51
Management	68
Executive Compensation	70
Security Ownership of Management and Beneficial Owners of Five Percent or More	84
Related Party Relationships and Transactions	86
Description of Merrill Communications LLC's Credit Facility	88
Description of Exchange Notes	90
Material United States Federal Income Tax Considerations	133
Plan of Distribution	134
Where You Can Find More Information	135
Legal Matters	136
Experts	136
Index to Unaudited Pro Forma Consolidated Financial Data	P-1
Index to Consolidated Financial Statements	F-1

    You should rely only on the information contained in this prospectus. We have not authorized anyone to provide you with information that is different. This prospectus may only be used where it is legal to sell these securities. The information in this prospectus is accurate as of the date on the front cover. You should not assume that the information contained in this prospectus is accurate as of any other date.

In this prospectus, "Merrill," the "company," "we," "us" or "our" refer to Merrill Corporation and its subsidiaries, except where the context makes clear that the reference is only to Merrill Corporation itself and not its subsidiaries. "Merrill Communications LLC" refers to Merrill Communications LLC, a wholly owned subsidiary of Merrill Corporation. "DLJMB" refers to DLJ Merchant Banking Partners II, L.P. "DLJ Merchant Banking funds" and "DLJMB funds" refer to DLJ Merchant Banking Partners II, L.P. and certain of its affiliated funds.

    Our fiscal year ends on January 31 of each year. Unless the context indicates otherwise, whenever we refer in this prospectus to a particular fiscal year, we mean the fiscal year ending in that particular calendar year. When we refer to "pro forma" financial results, we mean the financial results of our company and our subsidiaries as if the merger with Viking Merger Sub, Inc., the related financings and the other transactions described under "Unaudited Pro Forma Consolidated Financial Data" had occurred at the beginning of the relevant time period.

PROSPECTUS SUMMARY

This summary highlights the information contained elsewhere in this prospectus. Because this is only a summary, it does not contain all of the information that may be important to you. For a more complete understanding of this exchange offer, our company and our securities, we encourage you to read this entire prospectus.

SUMMARY OF THE TERMS OF THE EXCHANGE OFFER

Old Notes	On November 23, 1999, we sold in a private transaction the old notes, which consist of $140.0 million aggregate principal amount of our 12% Series A Senior Subordinated Notes due 2009, to Donaldson Lufkin  & Jenrette Securities Corporation, the initial purchaser. The initial purchaser then resold the old notes to qualified institutional buyers under Rule 144A of the Securities Act of 1933.
	Simultaneously with the initial sale of the old notes, we entered into an A/B exchange registration rights agreement with the initial purchaser in which we agreed, among other things, to deliver this prospectus to you and to complete an exchange offer for the old notes. We refer you to the information on page 25 under the heading "Exchange Offer—Purpose of the Exchange Offer."
The Exchange Offer	We are offering to exchange $1,000 principal amount of our 12% Series B Senior Subordinated Notes due 2009, which have been registered under the Securities Act, and which we refer to in this prospectus as the "exchange notes," for each $1,000 principal amount of our unregistered 12% Series A Senior Subordinated Notes due 2009, which we refer to in this prospectus as the "old notes."
	We sometimes refer to the exchange notes and the old notes together in this prospectus as the "notes." Currently, $140.0 million principal amount of old notes are outstanding. The terms of the exchange notes are identical in all material respects to the terms of the old notes, except that the registration rights and related liquidated damages provisions, and the transfer restrictions applicable to the old notes are not applicable to the exchange notes.
	Subject to the satisfaction or waiver of all of the conditions to the exchange offer described on page 32 under the heading "The Exchange Offer—Conditions to the Exchange Offer," we will exchange the exchange notes for all old notes that are validly tendered and not withdrawn prior to the expiration of the exchange offer. We will cause the exchange to be effected promptly after the expiration of the exchange offer.
	Upon completion of the exchange offer, there may be no market for the old notes, and if you failed to exchange your old notes, you may have difficulty selling them.
Resales of the Exchange Notes	Based on interpretations by the staff of the Securities and Exchange Commission, we believe that the exchange notes issued in the exchange offer may be offered for resale, resold or otherwise transferred by you, without compliance with the registration and prospectus delivery requirements of the Securities Act of 1933, if you:
	• acquire the exchange notes in the ordinary course of your business;
	• are not engaging in and do not intend to engage in a distribution of the exchange notes;
	• do not have an arrangement or understanding with any person to participate in a distribution of the exchange notes;
	• are not an affiliate of us within the meaning of Rule 405 under the Securities Act; and
	• are not a broker-dealer that acquired the old notes directly from us.
	If any of these conditions is not satisfied and you transfer any exchange notes without delivering a proper prospectus or without qualifying for a registration exemption, you may incur liability under the Securities Act.
	In addition, if you are a broker-dealer seeking to receive exchange notes for your own account in exchange for old notes that you acquired as a result of market-making or other trading activities, you must acknowledge that you will deliver this prospectus in connection with any offer to resell, resale or other transfer of the exchange notes that you receive in the exchange offer. We refer you to the information on page 134 under the heading "Plan of Distribution."
Expiration Date	The exchange offer will expire at 5:00 p.m., New York City time, on            , 2000, unless we extend it.
Withdrawal	You may withdraw the tender of your old notes at any time prior to the expiration of the exchange offer. We will return to you any of your old notes that are not accepted for exchange for any reason, without expense to you, promptly after the expiration or termination of the exchange offer.
Consequences of Failing to Exchange Your Old Notes	The exchange offer satisfies our obligations and your rights under the A/B exchange registration rights agreement. After the exchange offer is completed, you will not be entitled to any registration rights with respect to your old notes.
	Therefore, if you do not exchange your old notes, you will not be able to reoffer, resell or otherwise dispose of your old notes unless:
	• you comply with the registration and prospectus delivery requirements of the Securities Act; or
	• you qualify for an exemption from the Securities Act requirements.
Interest on the Exchange Notes and the Old Notes	The exchange notes will bear interest at the rate of 12% per annum from the most recent date to which interest has been paid on the old notes or, if no interest has been paid on the old notes, from November 23, 1999. Interest will be payable semi-annually on each May 1 and November 1, commencing May 1, 2000. No interest will be paid on the old notes following their acceptance for exchange. We refer you to the information on page 90 under the heading "Description of Exchange Notes."
Conditions to the Exchange Offer	The exchange offer is subject to the conditions described on page   under the heading "The Exchange Offer—Conditions to the Exchange Offer." We reserve the right to terminate or amend the exchange offer at any time before the expiration date if any of these conditions are not satisfied. The exchange offer is not conditioned upon any minimum principal amount of outstanding old notes being tendered. We refer you to the information on page  32 under the heading "The Exchange Offer—Conditions to the Exchange Offer."
Exchange Agent	Norwest Bank Minnesota, N.A. is serving as exchange agent for the exchange offer. All executed letters of transmittal should be directed to the exchange agent at the following address:
	By Registered or Certified Mail: Norwest Bank Minnesota, N.A., Corporate Trust Operations, MAC N9303-121, P.O. Box 1517, Minneapolis, Minnesota 55480
	By Regular Mail or Overnight Courier: Norwest Bank Minnesota, N.A., Corporate Trust Operations, MAC N9303-121, Sixth & Marquette Avenue, Minneapolis, Minnesota 55479
	In Person by Hand Only: Norwest Bank Minnesota, N.A., 12th Floor—Northstar East Building, Corporate Trust Services, 608 Second Avenue North, Minneapolis, Minnesota
	Questions and requests for assistance should be directed to the exchange agent at (612) 667-9764.
Procedures for Tendering Old Notes	If you wish to tender your old notes, you must cause the following to be transmitted to and received by the exchange agent no later than 5:00 p.m., New York City time, on the expiration date:
	• a confirmation of the book-entry transfer of the tendered old notes into the exchange agent's account at The Depository Trust Company;
	• a properly completed and duly executed letter of transmittal in the form accompanying this prospectus (with any required signature guarantees) or, at the option of the tendering holder in the case of a book-entry tender, an agent's message in lieu of the letter of transmittal; and
	• any other documents required by the letter of transmittal.
Guaranteed Delivery Procedures	If you wish to tender your old notes and you cannot cause the old notes or any other required documents to be transmitted to and received by the exchange agent before 5:00 p.m., New York City time, on the expiration date, you may tender your old notes according to the guaranteed delivery procedures described on page 30 under the heading "The Exchange Offer—Guaranteed Delivery Procedures."

Special Procedures for Beneficial Owners	If you are the beneficial owner of old notes that are registered in the name of your broker, dealer, commercial bank, trust company, or other nominee, and you wish to participate in the exchange offer, you should promptly contact the person in whose name your outstanding old notes are registered and instruct that person to tender your old notes on your behalf. We refer you to the information on page 28 under the heading "The Exchange Offer—Procedures for Tendering."
Representations of Tendering Holders	By tendering old notes pursuant to the exchange offer, you will, in addition to other customary representations, be required to represent to us that you:
	• are acquiring the exchange notes in the ordinary course of business;
	• are not engaging in or you do not intend to engage in a distribution of the exchange notes;
	• have no arrangement or understanding with any person to participate in a distribution of the exchange notes;
	• are not an affiliate of us, or if you are an affiliate, you will comply with the registration and prospectus delivery requirements of the Securities Act; and
	• are not a broker-dealer tendering old notes acquired directly from us.
Acceptance of Old Notes and Delivery of Exchange Notes	Subject to the satisfaction or waiver of the conditions to the exchange offer, we will accept for exchange any and all old notes that are properly tendered and not withdrawn prior to 5:00 p.m., New York City time, on the expiration date. We will cause the exchange to be effected promptly after the expiration of the exchange offer.
Material United States Federal Income Tax Considerations	The exchange of old notes for exchange notes pursuant to the exchange offer generally will not be a taxable event for United States federal income tax purposes. We refer you to the information on page 133 under the heading "Material United States Federal Income Tax Considerations."
Appraisal or Dissenters' Rights	You will have no appraisal or dissenters' rights in connection with the exchange offer.
Use of Proceeds	We will not receive any proceeds from the issuance of exchange notes pursuant to the exchange offer. We will pay all expenses incident to the exchange offer.

SUMMARY OF THE TERMS OF THE EXCHANGE NOTES

    The terms of the exchange notes will be identical in all material respects to the terms of the old notes, except that the registration rights and related liquidated damages provisions, and the transfer restrictions applicable to the old notes are not applicable to the exchange notes. The exchange notes will evidence the same debt as the old notes. The exchange notes and the old notes will be governed by the same indenture. For more complete information about the exchange notes, we refer you to the information on pages 90 through 133 under the heading "Description of Exchange Notes" in this prospectus.

Issuer	Merrill Corporation
Total Amount of the Exchange Notes Offered	$140.0 million principal amount of 12% Series B Senior Subordinated Notes due 2009.
Maturity	The exchange notes will mature on May 1, 2009.
Interest Rate	The exchange notes will bear interest at the rate of 12% per annum.
Interest Payment Dates	We will pay interest on the exchange notes semi-annually on May 1 and November 1, beginning May 1, 2000.
Optional Redemption	We may redeem some or all of the exchange notes at any time on or after November 1, 2004, in whole or in part, in cash at the redemption prices described on page 94 under the heading "Description of Exchange Notes—Optional Redemption," plus any accrued and unpaid interest to the date of redemption.
	In addition, on or before November 1, 2002, we may redeem up to 35% of the aggregate principal amount of the exchange notes and old notes originally issued at a redemption price of 112.0% with the proceeds of public equity offerings within 90 days of the closing of a public equity offering. We may make that redemption only if, after the redemption, at least 65% of the aggregate principal amount of the exchange notes and old notes originally issued remains outstanding.
Change of Control	If we sell substantially all of our assets or experience specific kinds of changes in control as described in more detail on pages 95 through 99 under the heading "Description of Exchange Notes—Repurchase at the Option of Holders—Change of Control," we will be required to make an offer to purchase the exchange notes. The purchase price will equal 101% of the principal amount of the exchange notes on the date of repurchase, plus any accrued and unpaid interest to the date of repurchase.
Subsidiary Guarantees	The exchange notes will be jointly and severally guaranteed on an unsecured, senior subordinated basis by all of our existing wholly-owned domestic restricted subsidiaries and all future wholly-owned domestic restricted subsidiaries that guarantee Merrill Communication LLC's credit facility. We have not included separate financial statements for any of our subsidiary guarantors, however, we have provided combined information for all subsidiary guarantors.
	If we cannot make payments on the exchange notes when they are due, our subsidiary guarantors must make them instead. These subsidiary guarantors are also guarantors, along with us, of Merrill Communications LLC's credit facility and are jointly and severally liable with us on a senior basis for these obligations. To secure the obligations under this credit facility, we pledged all of our limited liability company interests in Merrill Communications LLC and all of the stock of all Merrill Communications LLC's existing or future domestic restricted subsidiaries. We and the guarantor subsidiaries also granted security interests in, or liens on, substantially all other tangible and intangible assets of Merrill, Merrill Communications LLC and the guarantor subsidiaries.
Ranking	The exchange notes and the subsidiary guarantees will be general unsecured obligations of ours and will rank:
	• behind all of our and our subsidiary guarantors' existing and future senior indebtedness and secured indebtedness, including any borrowings under Merrill Communications LLC's credit facility;
	• equally with any of our and our subsidiary guarantors' future senior subordinated indebtedness, including trade payables;
	• ahead of any of our and our subsidiary guarantors' future subordinated indebtedness; and
	• effectively behind all of the liabilities of our subsidiaries that have not guaranteed the exchange notes.
	At October 31, 1999, assuming the merger and the related financings had been completed at that time, the exchange notes and the subsidiary guarantees would have been subordinated to:
	• $224.1 million of senior indebtedness; and
	• $0.6 million of liabilities, including trade payables but excluding intercompany obligations, of our non-guarantor subsidiaries.
Basic Covenants of the Indenture	We will issue the exchange notes under an indenture with Norwest Bank Minnesota, N.A., as trustee. The terms of this indenture restrict our ability and the ability of our restricted subsidiaries to:
	• incur additional indebtedness;
	• create liens;
	• engage in sale-leaseback transactions;
	• purchase or redeem capital stock;
	• make investments;
	• sell assets;
	• engage in transactions with affiliates; or
	• effect a consolidation or merger.
	These limitations are subject to a number of important qualifications and exceptions. We refer you to the information on pages 99 through 111 under the heading "Description of Exchange Notes —Covenants."
Events of Default	The indenture describes the circumstances that constitute events of default with respect to the exchange notes. We refer you to the information on pages 111 through 113 under the heading "Description of Exchange Notes—Events of Default and Remedies."
Use of Proceeds	We will not receive any proceeds from the exchange offer. For a description of the use of proceeds from the offering of the old notes, we refer you to the information on page 36 under the heading "Use of Proceeds."
Form of the Exchange Notes	The exchange notes will be represented by one or more permanent global securities in registered form deposited with Norwest Bank Minnesota, N.A., as custodian, for the benefit of The Depository Trust Company. You will not receive notes in registered form unless one of the events set forth on pages 116 through 118 under the heading "Description of Exchange Notes—Book-Entry, Delivery and Form" occurs. Instead, beneficial interests in the exchange notes will be shown on, and transfers of these interests will be effected only through, records maintained in book-entry form by The Depository Trust Company with respect to its participants.
Absence of a Public Market for the Exchange Notes	There has been no public market for the old notes, and no active public market for the exchange notes is currently anticipated. We do not intend to apply for a listing of the exchange notes on any securities exchange or inclusion in any automated quotation system. We cannot make any assurances regarding the liquidity of the market for the exchange notes, the ability of holders to sell their exchange notes or the price at which holders may sell their exchange notes. We refer you to the information on page 134 and 135 under the heading "Plan of Distribution."
Trustee	Norwest Bank Minnesota, N.A. is serving as the trustee under the indenture.

OUR COMPANY

    We are a diversified communications and document services company applying advanced information systems and intranet/Internet technology to provide a broad range of services to our financial, legal and corporate clients. Our services integrate traditional composition, imaging and printing services with document management, distribution, marketing and software solutions. This integrated approach helps streamline the preparation and distribution of business-to-business communications materials. We serve our domestic clients through 36 business centers in 28 cities throughout the United States, and our international clients through a strategic alliance and other relationships with local document service providers in Canada, Europe, Asia, Latin America and Australia.

    Our business strategy is to help our clients communicate more effectively with their clients. We pursue this strategy by providing a total outsourcing solution for all of our clients' business-to-business communications and document needs. As part of our strategy, we focus on specific client segments that have substantial and complex communications requirements for which we develop an expertise that we believe provides us with a significant competitive advantage. Our service offering is often fully integrated with our clients' internal processes, and in many cases we have dedicated full-time personnel situated on-site at our clients' locations. As a result, we have built strong, long-lasting relationships with clients that have trusted us to manage their time sensitive, confidential documents and their branded promotional materials. We believe that these strong, trusted relationships help provide us with a more stabilized source of cash flow.

    As part of our efforts in helping our clients communicate more effectively with their clients, we have been a leader in introducing electronic, digital and Internet-based solutions that add value to traditional printing services. We have designed our service offering to take advantage of our strong technological capabilities in web-based information, document collaboration and distribution and in electronic document imaging, coding and retrieval. The proprietary technology embedded within our services further strengthens our client relationships and the integration of our service offering into our clients' communication processes, which in turn leads to more stabilized cash flows. Furthermore, these capabilities allow us to wrap value-added technology-based communications solutions around basic services, such as printing, thereby allowing us to command higher margins. Our technology expertise has also positioned us as a leader in the evolution of document creation, management and distribution in both print and electronic formats. We view our technology expertise as an important competitive advantage and we have made a significant investment in this area. Currently, we have a team of over 200 project managers, software developers, and support personnel responsible for the design, development and implementation of our technology-based offerings.

    We have grown rapidly since our inception, both through internal growth and acquisitions. Since 1993, we have made 11 acquisitions, taking advantage of the consolidation opportunities presented in some of the fragmented market segments in which we participate. Through our growth, we have also expanded the diversity of our service offering and our client base.

    Our revenue and EBITDA (earnings before interest, taxation, depreciation and amortization) has increased 27.6% and 32.9%, respectively, on a compounded annual basis over the last three fiscal years. On a pro forma basis, our revenue and EBITDA for the fiscal year ended January 31, 1999 was $597.4 million and $81.9 million, respectively. For the quarter ended October 31, 1999, our revenue and EBITDA grew 20.5% and 17.9%, respectively, over the corresponding prior year period, which reflected a strong financial transactions market. We view this performance as strong support for our strategy of diversifying and stabilizing our cash flow through both the strong client relationships we have built and through the diversification we have pursued in our service offering and customer base.

    As part of the recent realignment in our corporate structure, we shifted from a geographically based matrix organization into five business units in order to provide clearer accountability, quicker decision making, sharper operational focus within each line of business and to better enable us to capitalize on the growth opportunities within each of our markets. We continue to leverage our information technology concepts across all business units. Our business units are organized under two reportable segments, Specialty Communication Services and Document Services.

Specialty Communication Services

    The Specialty Communication Services segment provides our financial, investment company and corporate clients with information technology-based solutions for the production and distribution of transactional financial documents, marketing materials, compliance documents and branded promotional materials.

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Financial Document Services. We produce and distribute (electronic and paper) time critical, transactional financial documents, such as registration statements, prospectuses, offering memoranda and other printed materials that are part of business financings, mergers and acquisitions. We managed the documentation behind five of the 10 largest domestic merger and acquisition transactions announced during 1999. We also produce compliance and reporting documents, such as annual and quarterly reports and proxy statements, that are either mailed or made electronically available to shareholders. In the financial printing market, we are one of three international financial printers with a nationwide network and recognized brand name.



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Investment Company Services. We design, produce, print and distribute marketing materials and compliance documents for public and private investment funds, insurance companies, banks and variable annuity providers, principally in the United States. We also offer software solutions that assist our fund clients with the creation and assembly of fund documents. We currently provide services to eight of the top 10 fund families, in terms of total assets, and we have had relationships with our top 10 fund clients for an average of over 12 years.



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Managed Communications Programs. We provide comprehensive business communications solutions from design to distribution, using fully integrated, customized, print-on-demand communications materials and branded products. For a majority of our clients, we offer a large number (often in excess of 200) of branded promotional products, including business cards, letterhead, product brochures, customer newsletters, retail forms, point-of-purchase materials and "high end" marketing materials. We focus on customer segments with complex distribution requirements and a need to maintain a consistent brand image among dispersed operations, including franchise, retail and agent networks. We believe we are the leading provider of communications management solutions to the real estate brokerage industry. Our clients include some of the largest and most respected real estate brands in the United States, such as Century 21 Real Estate Corporation, Coldwell Banker Corporation, ERA Franchise Systems, Inc. and RE/MAX International, Inc., as well as some of the nation's premier marketers, such as Aon Corporation, AXA Financial, Inc. (formerly The Equitable Companies Incorporated), Cendant Corporation, Eddie Bauer, Inc., Nordstrom, Inc., UnitedHealth Group and Visa U.S.A., Inc.



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Merrill Print Group. We offer comprehensive digital prepress, printing and fulfillment services to our other business units and to corporations, design firms and governmental agencies. We maintain an outsourcing strategy and a low fixed-cost asset base in order to maximize the utilization rate of our printing assets. As a result, our capital expenditures are lower than those of a traditional commercial printing company. In addition, we believe our low fixed-cost asset base and outsourcing strategy provide us with a competitive advantage during downturns in printing market demand, when the impact on our profitability is minimized relative to our competition.

Document Services

    Our Document Management Services business unit provides law firms, corporate legal departments and investment banks with information management products and services designed to enhance productivity and reduce costs. We provide a total outsourcing solution to our clients' information management needs, including providing all of the staff, technology and equipment necessary to manage the varying levels of demand associated with this function. We operate 85 document service centers on-site at client locations in 11 U.S. metropolitan markets. In these centers, we manage a range of services, including scanning, copying, fax management, desktop publishing and document imaging. We offer these services typically over a three to five year contractual period. Supporting this business are over 600 of our employees resident in our clients' facilities. We also manage reprographics and regional imaging centers that provide litigation support for small and large-scale assignments. In addition, we offer a sophisticated litigation support software program that enhances our clients' productivity in the storage and retrieval of legal documents associated with complex corporate and litigation matters.

OUR COMPETITIVE STRENGTHS

    We believe that we have the following competitive strengths:

    Leading Positions in Attractive Markets.  We maintain a disciplined focus on specific target markets with attractive business dynamics and we aggressively pursue a leadership position within each of these markets.

•

Our Financial Document Services business generates a substantial, high margin cash flow. We are one of three major international financial printers with a nationwide network and recognized brand name.



•

Our Investment Company Services, Managed Communications Programs and Document Management Services businesses compete in highly fragmented markets that are undergoing robust growth. Within each of these markets, we focus on the specific segments that we believe are the most promising.



•

Our Investment Company Services business benefits from the explosive growth in the mutual fund industry. According to the 1999 Mutual Fund Fact Book, published by the Investment Company Institute, this industry has increased at a 15.1% compounded annual growth rate in the number of shareholder accounts from 1984 through 1998. We are positioned to leverage this growth by focusing on the largest and fastest growing funds within the industry.



•

Our Managed Communications Programs business targets companies among the Fortune 2000 and specific industries, such as the real estate brokerage industry, that are geographically dispersed and are heavy users of branded communications products.



•

Our Document Management Services business primarily targets law firms and corporate legal departments, which are heavy users of its services and also represent a rapidly growing client base.

    Diversified Revenue and Customer Base.  We have broadened significantly beyond our roots as a transaction-based financial printer. By developing and growing our Investment Company Services, Managed Communications Programs and Document Management Services businesses as well as our Financial Document Services compliance business, we have diversified our revenue both by product line and customer base. As a result, transaction-based financial printing revenue accounted for only 36.5% of our fiscal year 1999 revenue and 32.7% of our revenue for the nine months ended October 31, 1999. The strength of our diversification effort was illustrated by the fact that we increased revenue and EBITDA for the fiscal year ended January 31, 1999 by 10.9% and 5.1%, respectively, over fiscal 1998 levels, despite the downturn in the financial markets in the second half of fiscal year 1999. Also, our revenue and EBITDA for the quarter ended October 31, 1999, increased 20.5% and 17.9%, respectively, over the corresponding prior year period, which reflected a strong financial transactions market.

    Innovative Developer of Value-Added Technology Solutions.  Through internal development and strategic acquisitions, we have created an offering of information technology services that positions us at the forefront of the trend towards the creation, management and distribution of documents in electronic formats. We currently have over 200 project managers, software developers and operations support personnel who design, develop and implement a wide range of capabilities in e-Commerce, order entry and collaboration systems, marketing services, data warehousing systems and internal production and billing systems. We have been a leader in introducing many technological innovations to our industry, including the first "hub and spoke" composition network (which dramatically increased the efficiency in producing financial documents), the first electronic reporting software for investment funds, the first Internet system among financial printers for delivery of revised documents ("e-proofs"), the first "e-catalogue" for realtors and the first working group collaborative service with a group discussion area offered by a financial printer through the Internet. Our technological capabilities enable us to respond to a wider array of our clients' communications needs and become more integrated within our clients' operations, while commanding higher margins.

    Strong Client Relationships and Superior Customer Service.  Over our 31 years of operations, we have developed strong client relationships and a reputation for superior customer service. We have developed these strong, long-lasting relationships with clients by repeatedly handling their most time sensitive and confidential information. In addition, many of our services are integrated into our clients' operations through our proprietary technology and, in some cases, our dedicated on-site presence at our clients' locations. We cultivate these client relationships by maintaining senior level management contact with their organizations and by continually broadening our service offering to meet a wider array of their communications needs. We strive to deliver our services with the highest level of reliability and timeliness, and we currently employ over 500 dedicated customer service representatives who are focused on this objective.

    Opportunity to Realize Cost Savings and Operating Synergies.  We strive to capitalize on opportunities to realize operating synergies and cost savings by integrating our recent acquisitions into our operations, capitalizing on our recent corporate realignment into business units and leveraging our low fixed-cost asset base. Our cost reduction initiatives include:

•

streamlining redundant functions;



•

rationalizing corporate overhead;



•

more effectively adapting technology targeted for specific business unit markets;



•

increasing utilization of existing printing capacity; and



•

maximizing purchasing efficiencies.

    Experienced Management Team with Significant Equity Ownership Interest.  We are led by an experienced team of senior officers and managers with a strong track record of achieving growth in revenue and profitability, integrating acquisitions cost-effectively and bringing to market new value-added technology-based solutions. The 10 most senior members of our executive management team have been with us for an average of 11 years, including John W. Castro, who has been President since 1981, and Rick R. Atterbury, our Executive Vice President and Chief Technology Officer, who has been with us since 1976. Under Mr. Castro's and Mr. Atterbury's leadership, we have increased revenue from $3.9 million for the fiscal year 1982 to $509.5 million for the fiscal year 1999, representing a compounded annual growth rate of 33.2%. Messrs. Castro and Atterbury are fully committed to our future success and have invested, through the retention of existing shares, $21.5 million of common equity for a then approximately 23.4% equity interest in our company (excluding warrants), as described below under the heading "The Merger."

THE MERGER

    On November 23, 1999, we merged with Viking Merger Sub, Inc. pursuant to an Agreement and Plan of Merger between Merrill and Viking Merger Sub dated as of July 14, 1999, as amended. As a result of the merger, each share of our common stock outstanding immediately prior to the merger converted into the right to receive $22.00 in cash. John W. Castro, our President and Chief Executive Officer, and Rick R. Atterbury, our Executive Vice President and Chief Technology Officer, retained an equity interest in our company representing a then 23.4% of our outstanding capital stock (excluding warrants). The merger was accounted for as a recapitalization and consequently had no impact on our historical basis of assets and liabilities nor resulted in the recording of any goodwill.

    The merger was financed by (1) $220.0 million of proceeds from new senior secured term loans entered into among Merrill Communications LLC, DLJ Capital Funding, Inc., as lead arranger and syndication agent, Wells Fargo Bank, N.A., as documentation agent and U.S. Bank National Association, as administrative agent, and the other lenders party thereto, (2) approximately $136.2 million of proceeds from the issuance by Merrill of units, each consisting of $1,000 principal amount of 12% Senior Subordinated Notes due 2009 and one warrant to purchase 1.22987 shares of class B common stock, and (3) approximately $110.7 million of proceeds from the issuance by Merrill of class B common stock, preferred stock and warrants to DLJ Merchant Banking Partners II, L.P. and certain other entities.

    Immediately after the merger, approximately 76.6% of our outstanding class B common stock was owned by DLJMB and its affiliates, 21.7% by John Castro and 1.7% by Rick Atterbury. In addition to our class B common stock, 500,000 shares of our 14.5% senior preferred stock due 2011 are outstanding and held by other investors and warrants to purchase shares of our class B common stock are held by the purchaser of the units sold in November 1999. No shares of our voting common stock are outstanding.

EMPLOYEE OFFERING

    We are currently offering shares of our class B common stock and options to purchase shares of our class B common stock to some of our employees and independent contractors of our company. We are offering these securities under our newly-created 1999 Stock Option Plan and Direct Investment Plan. We are uncertain at this time how many options will be granted or shares of our class B common stock will be purchased. We expect to complete the employee offering during the next month. For more information on the employee offering and the terms of our 1999 Stock Option Plan and Direct Investment Plan, we refer you to the information under the heading "Executive Compensation—Direct Investment Plan" and "—1999 Stock Option Plan."

OUR ADDRESS

    Our principal executive offices are located at One Merrill Circle, St. Paul, Minnesota 55108. Our telephone number is (651) 646-4501 and our worldwide web site is www.merrillcorp.com. The information contained in our web site is not incorporated by reference into this prospectus.

    We own or have the rights to various trademarks or trade names used in our business, including the following: Merrill®, Merrill e-Collaborate™, Merrill e:Proof™, Merrill<>Link™, MDB<>Link™, Merrill TextManager™, MerrillReports™, MerrillConnect™, Merrill@ccess™, Merrill net:Prospect™, E-TECH®and EFD™.

SUMMARY HISTORICAL AND UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL DATA

    The table below includes summary historical and unaudited pro forma consolidated financial data for our company. The summary historical consolidated financial data is derived from our consolidated financial statements and the related notes, which are included elsewhere in this prospectus. The summary unaudited pro forma consolidated financial data is derived from our historical financial data and give effect to the transactions described in "Unaudited Pro Forma Consolidated Financial Data" included elsewhere in this prospectus. The summary unaudited pro forma consolidated financial data is presented for illustrative purposes only and is not necessarily indicative of our financial position or results of operations if those transactions had actually occurred on those dates, and is not necessarily indicative of our future results of operations or financial position. You should read the information contained in this table in conjunction with the information under the headings "Selected Historical Consolidated Financial Data," "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Unaudited Pro Forma Consolidated Financial Data" and our consolidated financial statements and the notes to those statements included elsewhere in this prospectus.

	Year Ended January 31,									Nine Months Ended October 31,
	1997			1998			1999			1998			1999
	(dollars in millions)
Operating Data:
Revenue	$	353.8		$	459.5		$	509.5		$	391.7		$	442.4
Gross profit		126.3			164.1			178.9			141.4			152.5
Operating income		36.3			50.0			51.2			44.3			41.2
Net income		17.8			26.0			26.5			23.2			18.3
Other Data:
EBITDA (1)	$	49.8		$	67.6		$	71.1		$	58.6		$	58.3
Adjusted EBITDA (1)		49.8			67.6			71.1			58.6			60.6
Capital expenditures		9.2			17.1			16.5			11.4			7.9
Cash interest expense		4.1			4.3			4.0			3.0			5.0
Depreciation and amortization (2)		13.4			17.6			19.9			14.2			17.1
Ratio of earnings to fixed charges		6.3	x		7.6	x		7.8	x		9.7	x		5.6	x
Net cash provided by operating activities		8.5			30.9			55.8			26.2			5.7
Net cash used in investing activities		(35.8	)		(30.1	)		(23.1	)		(17.3	)		(65.2	)
Net cash provided by (used in) Financing activities		20.4			(3.4	)		(11.8	)		(5.8	)		41.0

	Pro Forma
	Year Ended January 31, 1999			Nine Months Ended October 31, 1999
	(dollars in millions)
Pro Forma Data:
Revenue	$	597.4		$	464.7
EBITDA (1)		81.9			62.5
Adjusted EBITDA (1)		81.9			64.8
Capital expenditures		18.1			8.1
Cash interest expense		38.7			29.7
Ratio of Adjusted EBITDA to cash interest expense		2.1	x		2.2	x

	As of October 31, 1999
	Historical		Pro Forma
	(dollars in millions)
Balance Sheet Data:
Cash and cash equivalents	$	5.0	$	—
Total assets		334.7		360.3
Total debt (3)		85.2		358.5
Preferred stock (4)		—		34.5
Shareholders' equity (deficit) (3)(4)(5)		160.1		(121.9	)

(1)

Earnings before interest, taxation, depreciation and amortization (EBITDA) is a key financial measure but should not be construed as an alternative to operating income or cash flows from operating activities (as determined in accordance with generally accepted accounting principles). We believe that EBITDA is a useful supplement to net income and other income statement data in understanding cash flows generated from operations that are available for taxes, debt service and capital expenditures. Adjusted EBITDA, which represents EBITDA, as defined, adjusted for non-recurring merger costs is presented because we believe it is a meaningful indicator of our operating performance and it is a measurement by which certain of the covenants under the credit facility are computed.

(2)

Depreciation and amortization includes a $1.2 million and $1.0 million goodwill writedown for the year ended January 31, 1999 and for the nine month period ended October 31, 1998, respectively.

(3)

Represents total debt net of $3.8 million of unamortized discount associated with the units. In addition, for accounting purposes, a $1.7 million value has been ascribed to the warrants and has been classified as additional paid-in-capital under shareholders' equity.

(4)

In connection with the merger, certain affiliates of DLJMB and institutional investors purchased preferred stock and warrants for total consideration of $40.0 million. For accounting purposes, a $5.5 million value has been ascribed to the warrants and has been classified as additional paid-in-capital under shareholders' equity. Prior to November 15, 2004, dividends will accrete to the liquidation value of the preferred stock unless the holders elect to receive such dividends in the form of additional shares of preferred stock. After November 15, 2004, dividends are payable in cash.

(5)

In connection with the merger, DLJMB funds invested $70.7 million, and Messrs. Castro and Atterbury invested, through the retention of existing shares, $21.5 million of common equity for an approximately 23.4% equity interest in our company (excluding warrants).

RISK FACTORS

The exchange notes, like the old notes, entail risk. In deciding whether to participate in the exchange offer, you should consider the risks associated with the nature of our business and the risk factors relating to our indebtedness, your notes and the exchange offer in addition to the other information contained in this prospectus. You should carefully consider the following factors before making a decision to exchange your old notes for the exchange notes.

Risks relating to this exchange offer

If you fail to exchange your old notes for exchange notes, you will continue to hold unregistered old notes subject to transfer restrictions, and you may be unable to sell them or to sell them at a price that you deem sufficient.

    Because we did not register the old notes under the Securities Act or any state securities laws, nor do we intend to after the exchange offer, the old notes may only be transferred in limited circumstances under federal and state securities laws. If the holders of the old notes do not exchange their old notes for exchange notes in the exchange offer, they will continue to hold unregistered old notes subject to transfer restrictions, and they may lose their rights, subject to certain limitations, to have their old notes registered under the Securities Act. A holder of old notes after the exchange offer may be unable to sell them.

You must tender the old notes in accordance with proper procedures in order to ensure the exchange will occur.

    The exchange of the old notes for the exchange notes can only occur if the proper procedures, as detailed in this prospectus, are followed. The exchange notes will be issued in exchange for the old notes only after timely receipt by the exchange agent of the old notes or a book-entry confirmation, a properly completed and executed letter of transmittal (or an agent's message in lieu thereof) and all other required documentation. If you want to tender your old notes in exchange for exchange notes, you should allow sufficient time to ensure timely delivery. Neither the exchange agent nor Merrill is under any duty to give you notification of defects or irregularities with respect to tenders of old notes for exchange. Old notes that are not tendered will continue to be subject to the existing transfer restrictions. In addition, if you are an affiliate of Merrill or you tender the old notes in the exchange offer in order to participate in a distribution of the exchange notes, you will be required to comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction. For additional information, we refer you to the information under the headings "The Exchange Offer" and "Plan of Distribution" later in this prospectus.

There is no public market for the exchange notes, so you may be unable to sell them or to sell them at a price that you deem sufficient.

    The exchange notes are new securities for which there is currently no market. We have been informed by Donaldson Lufkin & Jenrette Securities Corporation that it intends to make a market in the exchange notes after this exchange offer is completed. However, Donaldson Lufkin & Jenrette Securities Corporation may cease its market-making activities at any time. In addition, if a large number of holders of old notes do not tender old notes or tender old notes improperly, the limited amount of exchange notes that would be issued after we complete the exchange offer could adversely affect the development of a market for the exchange notes. Consequently, the exchange notes will be relatively illiquid, and you may be unable to sell them or to sell them at a price that you deem sufficient. We do not intend to apply for listing of the exchange notes on any securities exchange or for the inclusion of the exchange notes in any automated quotation system. Accordingly, we cannot assure you that a liquid market for the exchange notes will develop.

If a market develops for the exchange notes, the notes might trade at volatile prices.

    If a market develops for the exchange notes, the notes might trade at prices higher or lower than their initial offering price. The trading price would depend on many factors, such as:

•

prevailing interest rates;



•

the number of holders of the exchange notes;



•

the interest of securities dealers in making a market for the exchange notes;



•

the market for similar securities;



•

general economic conditions; and



•

changes in our financial condition, performance or prospects or in the prospects for companies in our industry generally.

Risks relating to our indebtedness and your notes

The level of our indebtedness could make it more difficult for us to meet our obligations under the exchange notes, divert our cash flow from operations for debt payments, limit our ability to borrow funds and increase our vulnerability to general adverse economic and industry conditions.

    On a pro forma basis, giving effect to the merger and the related financings, as of October 31, 1999, we had (1) total indebtedness of $358.5 million and (2) $48.1 million of borrowings available under Merrill Communications LLC's credit facility, subject to customary conditions. The credit facility and the indenture allow us to incur significant additional indebtedness, which may be secured, from time to time, for acquisitions or other corporate purposes.

    The level of our indebtedness could have important consequences to you. For example, it could:

•

make it more difficult to pay our debts, including the exchange notes, as they become due during general negative economic and market industry conditions because if our revenue decreases, we may not have sufficient cash flow from operations to make our scheduled debt payments;



•

require us to dedicate a substantial portion of our cash flow from operations to payments on our debt, thereby reducing cash flow available for general corporate purposes, including capital expenditures and acquisitions;



•

limit our ability to obtain additional debt financing in the future for working capital, capital expenditures or acquisitions;



•

increase our vulnerability to general adverse economic and industry conditions;



•

limit our flexibility in planning for or reacting to competitive and other changes in our industry and economic conditions generally;



•

expose us to risks inherent in interest rate fluctuations because some of our borrowings will be at variable rates of interest, which could result in higher interest expense in the event of increases in interest rates; and



•

place us at a disadvantage compared to our competitors that have less debt.

We may not have sufficient cash flow from operations, available cash and available borrowings under the credit facility to service our indebtedness which will require a significant amount of cash.

    Our ability to pay or to refinance our indebtedness will depend upon our future operating performance, which will be affected by general economic, financial, competitive, legislative, regulatory, business and other factors beyond our control. We anticipate that our operating cash flow, together with money Merrill Communications LLC can borrow under its credit facility, will be sufficient to meet anticipated future operating expenses, to fund capital expenditures and to service our debt as it becomes due. However, we cannot assure you that our business will generate sufficient cash flow from operations, that our currently anticipated revenue and cash flow growth will be realized or that future borrowings will be available to us under the credit facility in an amount sufficient to enable us to pay our indebtedness, including the exchange notes, or to fund our other liquidity needs. If we are unable to meet our debt service obligations or fund our other liquidity needs, we may need to restructure or refinance our indebtedness or seek additional equity capital. We cannot assure you that we will be able to accomplish those actions on satisfactory terms, if at all.

Failure to comply with any of the restrictive covenants in our indenture and credit facility could result in acceleration of your debt and we may not have sufficient cash to repay the accelerated indebtedness.

    The indenture governing the notes contain various covenants that limit our ability to engage in certain transactions. In addition, Merrill Communications LLC's credit facility contains other and more restrictive covenants and will prohibit us from prepaying our subordinated indebtedness, including the exchange notes. The credit facility also requires us to maintain specified financial ratios and satisfy other financial condition tests. Our ability to meet these financial ratios and tests can be affected by events beyond our control, and we cannot assure you that we will meet those tests. A breach of any of these covenants would result in an event of default under the credit facility. Upon the occurrence of an event of default under the credit facility, the lenders could elect to declare all amounts outstanding under the credit facility to be immediately due and payable and terminate all commitments to extend further credit. If we were unable to repay those amounts, the lenders could proceed against the collateral granted to them to secure that indebtedness. We pledged substantially all of our assets, other than assets of our foreign subsidiaries, as collateral for the credit facility, including all of our limited liability company interests in Merrill Communications LLC. An acceleration under the credit facility would also constitute an event of default under the indenture relating to the exchange notes.

The restrictive covenants in our indenture and credit facility limit our ability to respond to changing economic and business conditions and may place us at a competitive disadvantage relative to other companies that are subject to fewer or less restrictive limitations.

    The restrictive covenants in our indenture and the credit facility also limits the amount and kind of distributions that we and our subsidiaries may make and our ability to dispose of operations or to engage in mergers. These restrictions can adversely affect our ability to respond to changing economic and business conditions and may place us at a competitive disadvantage relative to other companies that are subject to fewer or less restrictive limitations. Certain transactions that we may view as important opportunities, such as certain acquisitions, are also subject to the consent of lenders under Merrill Communications LLC's credit facility, which may be withheld or granted subject to conditions specified at the time that may affect the attractiveness or viability of the transaction.

Because the exchange notes and subsidiary guarantees will rank behind our secured and senior indebtedness, holders of exchange notes may receive proportionately less than holders of our secured and senior debt in a bankruptcy, liquidation, reorganization or similar proceeding.

    The exchange notes and subsidiary guarantees will rank behind our secured debt to the extent of the assets securing that indebtedness. The exchange notes and subsidiary guarantees will also rank behind all of our and the subsidiary guarantors' existing and future senior indebtedness, including all indebtedness under, and guarantees of, Merrill Communications LLC's credit facility. As a result, if we become insolvent or enter into a bankruptcy or similar proceeding, then the holders of our senior indebtedness must be paid in full before you are paid. In addition, we cannot make any cash payments to you if we have failed to make payments to holders of designated senior indebtedness. Under certain circumstances, we cannot make any payments to you for a period of up to 179 days if a non-payment default exists under our designated senior indebtedness. At October 31, 1999, after giving pro forma effect to the merger and the related financings as if they had occurred on that date, the exchange notes would have ranked behind in right of payment to $224.1 million of senior indebtedness.

We may incur additional indebtedness ranking equal to the exchange notes or the subsidiary guarantees.

    If we or a subsidiary guarantor incur any additional debt that ranks equally with the exchange notes or the guarantees, including trade payables, the holders of that debt will be entitled to share ratably with you in any proceeds distributed in connection with any insolvency, liquidation, reorganization, dissolution or other winding-up of our company. This may have the effect of reducing the amount of proceeds paid to you.

The exchange notes will be structurally junior to indebtedness of our non-guarantor subsidiaries.

    You will not have any claim as a creditor against any of our non-guarantor subsidiaries, and indebtedness and other liabilities, including trade payables, of those subsidiaries will effectively be senior to your claims against those subsidiaries. As of October 31, 1999, on a pro forma basis, our non-guarantor subsidiaries would have had $0.6 million of outstanding liabilities, including trade payables but excluding intercompany obligations.

If our subsidiaries cannot distribute cash to us, then we may not be able to meet our debt service obligations.

    In connection with the financing of the merger, we transferred substantially all of our assets to Merrill Communications LLC, our wholly owned subsidiary. Because we are a holding company with no direct operations and no significant assets other than the limited liability company interests in Merrill Communications LLC, which have been pledged to secure Merrill Communications LLC's obligations under its credit facility, we are dependent on the cash flows of our direct and indirect subsidiaries to meet our obligations, including the payment of principal and interest on the exchange notes. We and Merrill Communications LLC are parties to the credit facility, which imposes restrictions on the ability of Merrill Communications LLC and its subsidiaries to pay dividends to us other than for the purpose of making current payments of principal and interest on the notes and specified fees and expenses incurred by us. For more information about Merrill Communications LLC's credit facility, you should read "Description of Merrill Communications LLC's Credit Facility." Subject to the restrictions contained in the indenture, future borrowings by our subsidiaries may contain restrictions or prohibitions on the payment of dividends by our subsidiaries to us.

    In addition, under applicable state law, our subsidiaries may be limited in amounts that they are permitted to pay as dividends to us on their capital stock. In particular, under Delaware law, a limited liability company, such as Merrill Communications LLC, may not make distributions to its members if, after giving effect to those distributions, the liabilities of the limited liability company could exceed the fair market value of its assets. We cannot predict what the value of our subsidiaries' assets or the amount of their liabilities will be in the future and whether those amounts will permit the payment of distributions to us. Accordingly, we cannot assure you that we will be able to pay our debt service obligations on the exchange notes.

We may be unable to purchase the exchange notes upon a change of control.

    Upon the occurrence of "change of control" events specified in "Description of Exchange Notes," you may require us to purchase your exchange notes at 101% of their principal amount, plus accrued interest. The terms of Merrill Communications LLC's credit facility limit our ability to purchase your exchange notes in those circumstances. Any of our future debt agreements may contain similar restrictions and provisions. Accordingly, we may not be able to satisfy our obligations to purchase your exchange notes unless we are able to refinance or obtain waivers under the credit facility and other indebtedness with similar restrictions. We cannot assure you that we will have the financial resources to purchase your exchange notes, particularly if that change of control event triggers a similar repurchase requirement for, or results in the acceleration of, other indebtedness. Merrill Communications LLC's credit facility currently provides that certain change of control events will constitute a default and could result in the acceleration of our indebtedness under the credit facility. Failure to make a required repurchase of exchange notes would be an event of default under the indenture governing the exchange notes and would allow the indebtedness evidenced by the exchange notes to be accelerated. This would constitute an event of default under the credit facility and would result in an acceleration of the indebtedness under the credit facility. Under these circumstances, the subordination provisions of the indenture would restrict us from making payments to the holders of the exchange notes.

Fraudulent transfer statutes may limit your rights as a noteholder.

    Federal and state fraudulent transfer laws permit a court, if it makes certain findings, to

•

avoid all or a portion of our obligations to you;



•

subordinate our obligations to you to our other existing and future indebtedness, entitling other creditors to be paid in full before any payment is made on the exchange notes; and



•

take other action detrimental to you, including invalidating the exchange notes.




In that event, we cannot assure you that you would ever be repaid.

    Under federal and state fraudulent transfer laws, in order to take any of those actions, courts will typically need to find that, at the time the notes were issued, we:

•

issued the notes with the intent of hindering, delaying or defrauding current or future creditors; or



•

received less than fair consideration or reasonably equivalent value for incurring the indebtedness represented by the notes; and

- were insolvent or were rendered insolvent by reason of the issuance of the notes;

- were engaged, or about to engage, in a business or transaction for which our assets were unreasonably small; or

- intended to incur, or believed or should have believed we would incur, debts beyond our ability to pay as such debts mature.

    Many of the foregoing terms are defined in or interpreted under those fraudulent transfer statutes.

    Different jurisdictions define "insolvency" in various ways. However, we generally would be considered insolvent at the time we incurred the indebtedness constituting the exchange notes if:

•

our liabilities exceeded our assets, at a fair valuation, or



•

the present saleable value of our assets is less than amount required to pay our total existing debts and liabilities, including the probable liability related to contingent liabilities, as they become absolute or matured.

    We cannot assure you (1) what standard a court would apply in order to determine whether we were "insolvent" as of the date the exchange notes were issued; (2) that, regardless of the method of valuation, a court would not determine that we were insolvent on that date; or (3) that a court would not determine, regardless of whether we were insolvent on the date the exchange notes were issued, that the payments constituted fraudulent transfers on another ground.

    Our obligations under the exchange notes are guaranteed by all of our wholly-owned domestic restricted subsidiaries, and the guarantees may also be subject to review under various laws for the protection of creditors. It is possible that creditors of the guarantors may challenge the guarantees as a fraudulent transfer or conveyance. The analysis set forth above would generally apply, except that the guarantees could also be subject to the claim that, since the guarantees were incurred for our benefit, and only indirectly for the benefit of the guarantors, the obligations of the guarantors thereunder were incurred for less than reasonably equivalent value or fair consideration. A court could void a guarantor's obligation under its guarantee, subordinate the guarantee to the other indebtedness of a guarantor, direct that holders of the exchange notes return any amounts paid under a guarantee to the relevant guarantor or to a fund for the benefit of its creditors, or take other action detrimental to the holders of the notes. In addition, the liability of each guarantor under the indenture will be limited to the amount that will result in its guarantee not constituting a fraudulent conveyance or improper corporate distribution, and there can be no assurance as to what standard a court would apply in making a determination as to what would be the maximum liability of each guarantor.

Risks relating to our business

A material amount of our revenue is derived from traditional printing services, and we may not be able to reduce our dependence on this revenue if our focus on value-added technology is not successful.

    An important objective of our business plan is to reduce the proportion of our revenue derived from traditional, transaction-related printing services by focusing on the value we can add to those services through our platform of advanced electronic, digital and Internet-based solutions. We believe that this focus, which emphasizes highly customized services, will lead to more stable recurring revenue from long-term contracts and to more opportunities to become a client's preferred vendor for new or enhanced products and services. While our track record for creating and selling technology-based solutions is strong so far, this strategy has many risks, including the following:

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the pace of technological changes affecting our business units and our clients' needs has been rapid and could make some of our products and services obsolete before we have recovered the cost of developing them or obtained the planned return on our investment;



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product innovations and effective servicing of our client relationships require a large investment in personnel and training. The market for technical staff is exceptionally competitive, and we may not be able to attract and retain sufficient qualified personnel to implement our plan fully;



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because technology-based markets are evolving so rapidly, they are very fragmented, with numerous competing products and services. The markets are particularly fragmented in our Investment Company Services, Managed Communications Programs and Document Management Services business units. Competitors that have greater experience, resources or a more widely accepted reputation for providing technology-based solutions may be better able to gain market share in our targeted markets or develop "next generation" products more quickly and comprehensively; and



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many of our technology-based solutions are most efficient and command better prices when they are part of a package of bundled services. If a client buys only one component of a package of bundled services, it may be more difficult for us to achieve the benefits of a long-term relationship with that client, including our revenue and margin objectives.

Revenue from printed financial documents is subject to volatility in demand, which could adversely affect our results.

    While we believe that our strong technology focus positions us to capitalize on changing communication demands, developments in e-Commerce and the growing acceptance of outsourcing as a management tool, we anticipate that our Financial Document Services and Investment Company Services business units will continue to contribute a material amount to our operating results. The market for these services depends in part on the demand for printed financial documents, which is driven largely by the Securities Exchange Commission and other regulatory bodies. The SEC has recently proposed rules streamlining the content of prospectuses and eliminating certain prospectus delivery requirements. While we do not anticipate that these rules will be adopted in their current form, any future rulemaking affecting the content of prospectuses and their delivery could have an adverse effect on our business.

    Demand for services provided by our Financial Document Services and, to a lesser extent, Investment Company Services business units can also be affected by volatility in domestic and international markets due to economic, political and other events beyond our control. In recent years, with some exceptions (for example, during the Fall of 1998), the volume of transactional activity and thus the demand for our financial document services has been high. We cannot assure you that this will continue. In addition, any financial crisis or prolonged period of market uncertainty that reduces transactional activity could materially adversely affect our results and financial condition.

Our industry is highly competitive and we may not be able to compete effectively.

    Competition in our industry is intense. In our Financial Document Services, Investment Company Services and Merrill Print Group business units we compete with large, national printers, which may have greater financial resources and which are capable of competing effectively in our marketplace. We also compete with many smaller, regional printers across the United States in these business units. In our Managed Communications Programs business unit we compete with large, national integrated print and information service providers, as well as a number of smaller regional and local companies. In our Document Management Services business unit we compete with nationwide services companies, as well as a number of smaller, local companies. Competition in our industry for all of our business units is based principally on quality of service, price, technological capability and established relationships. We cannot assure you that we will be able to compete effectively in all these areas in the future.

If we are unable to retain our key employees and attract and retain other qualified personnel, our business could suffer.

    Our ability to grow and our future success will depend to a significant extent on the continued contributions of our senior management, in particular Messrs. Castro and Atterbury, and technical and sales personnel, many of whom would be difficult to replace. We do not have key person life insurance on all of our key personnel.

    Our future success will also depend in large part on our ability to identify, attract and retain other highly qualified managerial, technical, sales and marketing and customer service personnel. Competition for these individuals is intense, especially in the markets in which we operate. We may not succeed in identifying, attracting and retaining such personnel. Further, competitors and other entities have in the past recruited and may in the future attempt to recruit our employees, particularly our sales personnel. The loss of the services of any of our key personnel, the inability to identify, attract or retain qualified personnel in the future or delays in hiring qualified personnel, particular technical and sales personnel, could make it difficult for us to manage our business and meet key objectives, such as the timely introduction of new technology-based products and services, which would harm our business, financial condition and operating results.

Our plan to replace our international joint venture arrangement with our own direct operations and to increase our international operations is risky.

    In December 1999, our Financial Document Services business unit ended its joint venture arrangement in Europe, Japan, Latin America and Asia and began its own direct operations in Europe. We also plan to expand our existing international operations and establish additional facilities in other parts of the world. The replacement of our international joint venture arrangement with our own direct operations and the expansion of our existing international operations and entry into additional international markets will require significant management attention and financial resources. In addition, there are many barriers to competing successfully in the international arena, including:

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costs of customizing products and services for foreign countries;



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difficulties in managing and staffing international operations;



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reduced protection for intellectual property rights in some countries;



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currency exchange rate fluctuations;



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longer sales and payment cycles;



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greater difficulties in collecting accounts receivable;



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the burdens of complying with a wide variety of foreign laws;



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licenses, tariffs and other trade barriers;



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potentially adverse tax consequences;



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unexpected changes in regulatory requirements; and



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political and economic instability.

    In fiscal 1999, the international joint venture arrangement that we ended accounted for less than 6.0% of our revenues. We cannot assure you that our direct operations in Europe will be successful, that our investments in establishing operations in other countries will produce desired levels of revenue or that one or more of the factors listed above will not harm our business.

There are risks associated with our strategy of growth and diversification through acquisitions.

    As part of our growth and diversification strategy, we intend to pursue acquisitions of businesses, technologies and product lines that are complementary to our core businesses. Our ability to grow through such acquisitions will depend on the availability of suitable acquisition candidates at an acceptable cost, our ability to compete effectively for these acquisition candidates and the availability of capital to complete such acquisitions. These risks could be heightened if we complete several acquisitions within a relatively short period of time. The benefits of an acquisition may often take considerable time to develop, and we cannot guarantee that any acquisition will in fact produce the intended benefits.

    In addition, acquisitions and integration of those acquisitions involve a number of risks, including:

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inaccurate assessment of undisclosed liabilities;



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entry into markets in which we may have limited or no experience;



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diversion of management's attention from our core businesses;



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potential loss of key employees or clients of the acquired businesses;



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difficulties in assimilating the operations and products of an acquired business or in realizing projected efficiencies, cost savings and revenue synergies; and



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increase in our indebtedness and contingent liabilities, which could in turn restrict our ability to access additional capital when needed or to pursue other important elements of our business strategy.

    In addition, some acquisitions may require the consent of the lenders under Merrill Communications LLC's credit facility, and we cannot predict whether approvals would be forthcoming or the terms on which the lenders would approve such acquisitions.

The interests of our controlling shareholders may be in conflict with your interests as a holder of exchange notes. This conflict could result in corporate decision-making that involves disproportionate risks to the holders of the exchange notes, including our ability to service our indebtedness or pay the principal amount of indebtedness when due.

    Circumstances may occur in which the interests of our principal shareholders could be in conflict with your interests as noteholders. For example, these shareholders may have an interest in pursuing transactions that, in their judgment, enhance the value of their equity investment in our company, even though those transactions may involve risks to you as a holder of the notes.

    Approximately 76.6% of the outstanding shares of class B common stock of our company is currently held by DLJ Merchant Banking funds. DLJ Merchant Banking funds control us and have the power to elect a majority of our directors, appoint new management and approve any action requiring the approval of the holders of common stock, including adopting amendments to our articles of incorporation and approving acquisitions or sales of all or substantially all of our assets. The directors elected by DLJ Merchant Banking funds have the ability to control decisions affecting our capital structure, including the issuance of additional capital stock, the implementation of stock repurchase programs and the declaration of dividends.

    The general partners of each of DLJ Merchant Banking funds are affiliates or employees of Donaldson, Lufkin & Jenrette, Inc. We cannot assure you that our relationship with Donaldson, Lufkin & Jenrette, Inc. will not impact our Financial Document Services business by causing other financial institutions to direct their business to our competitors.

Year 2000 issues encountered by our customers may harm our financial condition and operating results.

    Although we believe our systems were year 2000 compliant before the end of 1999 and to date none of our products have revealed any significant year 2000 problems, we believe the failure of some of our customers to make their computer systems year 2000 compliant or the abandonment or delay of offerings, acquisitions or other transactions due to year 2000 concerns and compliance efforts of our customers may temporarily harm our operating results, in particular during the fourth quarter of fiscal 2000 and the first quarter of fiscal 2001. For further information about the status of our year 2000 compliance, you should read "Management's Discussion and Analysis of Financial Condition and Results of Operations—Impact of Year 2000."

FORWARD-LOOKING STATEMENTS

    This prospectus contains forward-looking statements. In addition, from time to time, we or our representatives may make forward-looking statements orally or in writing. We base these forward-looking statements on our expectations and projections about future events, which we derive from the information currently available to us. Such forward-looking statements relate to future events or our future performance, including:

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our financial performance;



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our growth in revenue and earnings;



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our ability to integrate successfully the operations of recent acquisitions; and



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our new product and service offerings.

    You can identify forward-looking statements by those that are not historical in nature, particularly those that use terminology such as "may," "will," "should," "expects," "anticipates," "contemplates," "estimates," "believes," "plans," "projected," "predicts," "potential" or "continue" or the negative of these or similar terms. In evaluating these forward-looking statements, you should consider various factors, including:

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our ability to continue to diversify our revenue stream;



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the pace of technological changes affecting our business;



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the demand for printed financial documents; and



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the competitive environment in our business.

    In addition, you should consider the factors set forth under the heading "Risk Factors." These and other factors may cause our actual results to differ materially from any forward-looking statement.

    Forward-looking statements are only predictions. The forward-looking events discussed in this prospectus and other statements made from time to time from us or our representatives, may not occur, and actual events and results may differ materially and are subject to risks, uncertainties and assumptions about us. We are not obligated to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this prospectus and other statements made from time to time from us or our representatives, might not occur. For these statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

THE EXCHANGE OFFER

Purpose of the Exchange Offer

    We initially sold the old notes in a private offering on November 23, 1999 to Donaldson Lufkin & Jenrette (DLJ) Securities Corporation pursuant to a purchase agreement dated November 18, 1999 among us, Viking Merger Sub, Inc., our subsidiary guarantors and DLJ Securities Corporation. DLJ Securities Corporation resold the old notes to qualified institutional buyers in reliance on, and subject to the restrictions imposed under, Rule 144A under the Securities Act. As of the date of this prospectus, $140.0 million aggregate principal amount of old notes are outstanding.

    In connection with the private offering of the old notes, we and our subsidiary guarantors entered into an A/B exchange offer registration rights agreement dated November 23, 1999, with the initial purchaser, in which we and our subsidiary guarantors agreed, among other things, to:

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file with the SEC on or before February 20, 2000 an exchange offer registration statement under the Securities Act relating to an exchange offer for the old notes;



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use our reasonable best efforts to have the exchange offer registration statement declared effective by the SEC as promptly as possible but in no event later than May 20, 2000;



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unless the exchange offer would not be permitted by applicable law or SEC policy, to:

- commence the exchange offer;

- keep the exchange offer open for a period of not less than 20 business days; and

- use our reasonable best efforts to issue, on or prior to 30 business days but in no event later than 40 business days after the date on which the exchange offer registration statement was declared effective by the SEC, exchange notes in exchange for all old notes tendered prior thereto in the exchange offer.

    We are making the exchange offer to satisfy our obligations and your registration rights under the registration rights agreement. If any of the events described above do not occur within the time period required, or the exchange offer registration statement is declared effective but thereafter ceases to be effective or usable in connection with resales of old notes during the periods specified in the registration rights agreement (each, a "Registration Default"), we must pay you, as a holder of outstanding old notes, liquidated damages. These liquidated damages will be equal to:

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with respect to the first 90-day period immediately following the occurrence of the first Registration Default, an amount equal to $0.05 per week per $1,000 principal amount of notes held by that holder; and



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an additional $0.05 per week per $1,000 principal amount of notes with respect to each subsequent 90-day period until all Registration Defaults have been cured, up to a maximum amount of liquidated damages for all Registration Defaults of $0.25 per week per $1,000 principal amount of notes.

    Following the cure of all Registration Defaults, the accrual of liquidated damages will cease.

    The exchange offer being made under this prospectus, if commenced and consummated within the time periods described in this prospectus, will satisfy the requirements described above under the registration rights agreement.

Effect of the Exchange Offer

    Based on several no-action letters issued by the staff of the SEC to third parties in unrelated transactions, we believe that you may offer for resale, resell or otherwise transfer any exchange notes issued to you in the exchange offer without further registration under the Securities Act or delivery of a prospectus if you:

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are acquiring the exchange notes in the ordinary course of your business;



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are not participating, do not intend to participate and have no arrangement or understanding with any person to participate, in a distribution of the exchange notes;



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are not an "affiliate" of us, as that term is defined in Rule 405 under the Securities Act; and



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are not a broker-dealer who acquired your old notes from us.

    If you do not satisfy these criteria:

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you will not be able to rely on the interpretations of the staff of the SEC in connection with any offer for resale, resale or other transfer of exchange notes; and



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you must comply with the registration and prospectus delivery requirements of the Securities Act, or have an exemption available to you, in connection with any offer for resale, resale or other transfer of the exchange notes.

    Each broker-dealer that receives exchange notes for its own account in exchange for old notes it acquired as a result of market-making or other trading activities, may be a statutory underwriter and must acknowledge that it will deliver a prospectus in connection with any resale of its exchange notes. This will not be an admission by the broker-dealer that it is an underwriter within the meaning of the Securities Act. We refer you to the information under the heading "Plan of Distribution."

Shelf Registration Statement

    If:

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we and our subsidiary guarantors are not required to file the exchange offer registration statement or permitted to consummate the exchange offer because the exchange offer is not permitted by applicable law or SEC policy; or



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any holder of old notes notifies us in writing before the 20th business day following consummation of the exchange offer that:

- based on an opinion of counsel, it is prohibited by law or SEC policy from participating in the exchange offer; or

- it is a broker-dealer and owns notes acquired directly from us,

we and our subsidiary guarantors have agreed to:

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file with the SEC on or before 90 days after that filing obligation arises, a shelf registration statement to cover resales of the old notes by the holders thereof who satisfy certain conditions relating to the provision of information in connection with the shelf registration statement; and



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use our reasonable best efforts to cause the shelf registration statement to be declared effective by the SEC as promptly as possible but in no event after 180 days after that obligation arises.

    If any of the events described above do not occur within the time period required, or the shelf registration statement is declared effective but thereafter ceases to be effective or usable in connection with resales of old notes during the periods specified in the registration rights agreement (each such event referred to as a "Registration Default"), we must pay you, as a holder of outstanding old notes, the liquidated damages as determined above under the heading "—Purpose of the Exchange Offer."

    We will provide to each relevant holder of the old notes copies of the prospectus which is a part of the shelf registration statement, notify each such holder when the shelf registration statement has become effective and take certain other actions as are required to permit unrestricted resales of the relevant old notes. A holder of old notes that sells its old notes pursuant to the shelf registration statement generally will be required to be named as a selling security holder in the related prospectus and to deliver a prospectus to purchasers, will be subject to certain of the civil liability provisions under the Securities Act in connection with such sales and will be bound by the provisions of the registration rights agreement which are applicable to such a holder (including certain indemnification obligations). In addition, a holder of old notes will be required to deliver information to be used in connection with the shelf registration statement in order to have such holder's notes included in the shelf registration statement.

    The foregoing is a summary description of the material provisions of the A/B exchange registration rights agreement. Because it is a summary, it does not include all of the information that is included in the A/B exchange registration rights agreement. We encourage you to read the entire text of the A/B exchange registration rights agreement carefully because it, and not this description, defines your rights as a holder of the old notes. The A/B exchange registration rights agreement is included as an exhibit to the registration statement of which this prospectus is a part.

Terms of the Exchange Offer

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We will accept all old notes validly tendered and not withdrawn prior to 5:00 p.m., New York City time, on the expiration date of the exchange offer. You should read "—Expiration Date; Extensions; Amendments" below for an explanation of how the expiration date may be amended.



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We will issue and deliver $1,000 principal amount of exchange notes in exchange for each $1,000 principal amount of outstanding old notes accepted in the exchange offer. Holders may exchange some or all of their old notes in minimum denominations of $1,000 and integral multiples of $1,000 in excess thereof.



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By tendering old notes in exchange for exchange notes and by signing the letter of transmittal (or delivering an agent's message in lieu thereof), you will be representing that, among other things:

- any exchange notes to be received by you will be acquired in the ordinary course of your business;

- you have no arrangement or understanding with any person to participate in the distribution of the exchange notes;

- you are not an affiliate (as defined in Rule 405 under the Securities Act) of us, or, if you are an affiliate, you will comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable; and

- you are not a broker-dealer who acquired old notes directly from us.

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The terms of the exchange notes are identical in all material respects to the terms of the old notes, except that the registration rights and related liquidated damages provisions, and the transfer restrictions applicable to the old notes are not applicable to the exchange notes. The exchange notes will evidence the same debt as the old notes and will be entitled to the benefits of the indenture governing the old notes.



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In connection with the exchange offer, holders of the old notes do not have any appraisal or dissenters' rights under law or the indenture governing the old notes.



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We are sending this prospectus and the letter of transmittal to all registered holders of old notes as of the close of business on            , 2000.



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We are not conditioning the exchange offer upon the tender of any minimum amount of old notes.



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We have provided for customary conditions, which we may waive in our discretion. We refer you to the information under the heading "—Conditions of the Exchange Offer."



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We may accept tendered old notes by giving oral (promptly confirmed in writing) or written notice to the exchange agent. The exchange agent will act as your agent for the purpose of receiving the exchange notes from us and delivering them to you.



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You will not be required to pay brokerage commissions or fees or, subject to the instructions in the letter of transmittal, transfer taxes with respect to the exchange of old notes. We will pay all charges and expenses in connection with the exchange offer other than taxes specified under "—Transfer Taxes."

Expiration Date; Extensions; Amendments

    The exchange offer will expire at 5:00 p.m., New York City time, on            , 2000, unless we, in our sole discretion, extend it. The term "expiration date" means            , 2000, unless we, in our discretion, extend the exchange offer, in which case, the term "expiration date" means the latest date to which the exchange offer is extended. We may extend the exchange offer at any time and from time to time by giving oral (promptly confirmed in writing) or written notice to the exchange agent and by making a public announcement of the extension before 9:00 a.m., New York City time, on the next business day after the previously scheduled expiration date. We may also accept all properly tendered old notes as of the expiration date and extend the expiration date in respect of the remaining outstanding old notes. We may, in our sole discretion:

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amend the terms of the exchange offer in any manner;



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delay acceptance of, or refuse to accept, any old notes not previously accepted;



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extend the exchange offer; or



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terminate the exchange offer.

    We will give prompt notice of any amendment to the registered holders of the old notes. If we materially amend the exchange offer, we will promptly disclose the amendment in a manner reasonably calculated to inform you of the amendment and we will extend the exchange offer to the extent required by law.

Procedures for Tendering

    Only a holder of old notes may tender them in the exchange offer. For purposes of the exchange offer, the term "holder" or "registered holder" includes any participant in The Depository Trust Company whose name appears on a security position listing as a holder of old notes.

    To tender in the exchange offer, you must cause the following to be transmitted to and received by the exchange agent no later than 5:00 p.m., New York City time, on the expiration date:

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a confirmation of the book-entry transfer of the tendered old notes into the exchange agent's account at The Depository Trust Company;



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a properly completed and duly executed letter of transmittal in the form accompanying this prospectus (with any required signature guarantees) or, at the option of the tendering holder in the case of a book-entry tender, an agent's message in lieu of such letter of transmittal; and



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any other documents required by the letter of transmittal.

    If you wish to tender your old notes and you cannot cause the old notes or any other required documents to be transmitted to and received by the exchange agent before 5:00 p.m., New York City time, on the expiration date, you may tender your old notes according to the guaranteed delivery procedures described in this section under the heading "—Guaranteed Delivery Procedures."

    Any beneficial owner of old notes that are registered in the name of a broker, dealer, commercial bank, trust company, or other nominee who wishes to participate in the exchange offer should promptly contact the person through which it beneficially owns such old notes and instruct that person to tender old notes on behalf of such beneficial owner. See "Instructions Forming Part of the Terms and Conditions of the Exchange Offer" included with the letter of transmittal. If the beneficial owner wishes to tender on his or her own behalf, such owner must, prior to completing and executing the letter of transmittal and delivering such beneficial owner's old notes, either make appropriate arrangements to register ownership of the old notes in such owner's name or obtain a properly completed bond power from the registered holder. The transfer of registered ownership may take considerable time.

    The tender by a holder of old notes will constitute an agreement between such holder, us and the exchange agent in accordance with the terms and subject to the conditions specified in this prospectus and in the letter of transmittal. If a holder tenders less than all the old notes held, the holder should fill in the amount of old notes being tendered in the appropriate box on the letter of transmittal. The exchange agent will deem the entire amount of old notes delivered to it to have been tendered unless the holder has indicated otherwise.

The method of delivery of the letter of transmittal and all other required documents to the exchange agent is at your election and risk. Instead of delivery by mail, we recommend that you use an overnight or hand delivery service. In all cases, you should allow sufficient time to ensure delivery to the exchange agent prior to the expiration date. Do not send your letter of transmittal or other required documents to us.

Signature Requirements and Signature Guarantee

    You must arrange for an "eligible institution" to guarantee your signature on the letter of transmittal or a notice of withdrawal, unless the old notes are tendered:

•

by a registered holder of such old notes; or



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for the account of an eligible guarantor institution.

The following are "eligible institutions":

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a member firm of a registered national securities exchange or of the National Association of Securities Dealers, Inc.;



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a commercial bank or trust company having an office or correspondent in the United States; or



•

an "eligible guarantor institution" within the meaning of Rule 17Ad-15 under the Securities and Exchange Act of 1934.

    If a letter of transmittal is signed by a person other than the registered holder of any old notes listed in the letter of transmittal, the old notes must be endorsed or accompanied by a properly completed bond power and signed by the registered holder as the registered holder's name appears on the old notes.

    If trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, sign or endorse any required documents, they should so indicate when signing, and unless waived by us, submit evidence satisfactory to us of their authority to so act with the letter of transmittal.

Book-Entry Transfer

    The exchange agent will make a request promptly after the date of this prospectus to establish an account with respect to the old notes. Subject to the establishment of the account, any financial institution that is a participant in The Depository Trust Company's system may make book-entry delivery of old notes by causing The Depository Trust Company to transfer them into the exchange agent's account with respect to the old notes. However, the exchange agent will only exchange the old notes so tendered after a timely confirmation of their book-entry transfer into the exchange agent's account, and timely receipt of an agent's message and any other documents required by the letter of transmittal.

    The term "agent's message" means a message, transmitted by The Depository Trust Company to, and received by, the exchange agent and forming part of the confirmation of a book-entry transfer, which states that:

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The Depository Trust Company has received an express acknowledgment from a participant tendering old notes stating the aggregate principal amount of old notes which have been tendered by such participant;



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the participant has received the letter of transmittal and agrees to be bound by its terms; and



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we may enforce such agreement against the participant.

    Although you may effect delivery of old notes through The Depository Trust Company into the exchange agent's account at The Depository Trust Company, you must provide the exchange agent a completed and executed letter of transmittal with any required signature guarantee (or an agent's message in lieu thereof) and all other required documents prior to the expiration date. If you comply with the guaranteed delivery procedures described below, you must provide the letter of transmittal (or an agent's message in lieu thereof) to the exchange agent within the time period provided. Delivery of documents to The Depository Trust Company does not constitute delivery to the exchange agent.

Guaranteed Delivery Procedures

    If you wish to tender your old notes and (1) you cannot deliver the letter of transmittal or any other required documents to the exchange agent prior to the expiration date or (2) you cannot complete the procedure for book-entry transfer on a timely basis, you may instead effect a tender if:

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you make the tender through an eligible guarantor institution;



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prior to the expiration date, the exchange agent receives from such eligible guarantor institution a properly completed and duly executed notice of guaranteed delivery (by facsimile transmittal, mail or hand delivery) specifying the name and address of the holder and the principal amount of such old notes tendered, stating that the tender is being made, and guaranteeing that, within three New York Stock Exchange trading days after the date of execution of the notice of guaranteed delivery, the old notes being tendered, a properly completed and duly executed letter of transmittal or a confirmation of a book-entry transfer into the exchange agent's account at The Depository Trust Company and an agent's message and any other documents required by the letter of transmittal, will be deposited by the eligible guarantor institution with the exchange agent; and



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the exchange agent receives such old notes and letter of transmittal or confirmation of a book-entry transfer into its account at The Depository Trust Company and an agent's message and all other documents required by the letter of transmittal within three New York Stock Exchange trading days after the date of execution of the notice of guaranteed delivery.

Withdrawal of Tenders

    Except as otherwise provided in this prospectus, you may withdraw tendered old notes at any time before 5:00 p.m., New York City time, on the expiration date. To do so, you must provide the exchange agent with a written or facsimile transmission notice of withdrawal before 5:00 p.m., New York City time, on the expiration date.

    Any notice of withdrawal must:

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identify the old notes to be withdrawn (including the principal amount of the old notes and the name and number of the account at The Depository Trust Company to be credited); and



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be signed by you in the same manner as the original signature on your letter of transmittal (including any required signature guarantee) or be accompanied by documents of transfer sufficient to permit the registrar to register the transfer of the withdrawn old notes into your name.

    We will determine all questions as to the validity, form and eligibility (including time of receipt) of all withdrawal notices. Our determination will be final and binding on all parties. We will not deem any old notes so withdrawn to be validly tendered for purposes of the exchange offer and will not issue exchange notes with respect to them unless the holder of the old notes so withdrawn validly retenders them. You may retender withdrawn old notes by following one of the procedures described above under "—Procedures for Tendering" at any time prior to the expiration date.

Determination of Validity

    We will determine all questions as to the validity, form, eligibility (including time of receipt), acceptance and withdrawal of the tendered old notes in our sole discretion. Our determination will be final and binding. We may reject any and all old notes which are not properly tendered or any old notes of which our acceptance would, in the opinion of our counsel, be unlawful. We also may waive any irregularities or conditions of tender as to particular old notes. Our interpretation of the terms and conditions of the exchange offer (including the instructions in the letter of transmittal) will be final and binding on all parties. Unless waived, you must cure any defects or irregularities in connection with tenders of old notes within such time as we shall determine.

    Although we intend to notify tendering holders of defects or irregularities with respect to tenders of old notes, neither we nor anyone else has any duty to do so. Neither we nor anyone else will incur any liability for failure to give such notification. Your old notes will not be deemed tendered until you have cured or we have waived any irregularities. As soon as practicable following the expiration date, the exchange agent will return any old notes that we reject due to improper tender or otherwise unless you cured all defects or irregularities or we waive them.

    We reserve the right in our sole discretion:

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to purchase or make offers for any old notes that remain outstanding subsequent to the expiration date;



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to terminate the exchange offer, as set forth in "—Conditions of the Exchange Offer"; and



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to the extent permitted by applicable law, to purchase old notes in the open market, in privately negotiated transactions or otherwise.

    The terms of any such purchases or offers may differ from the terms of the exchange offer.

Conditions of the Exchange Offer

    We will not be required to accept for exchange, or to issue exchange notes for, any old notes, and we may terminate or amend the exchange offer before the acceptance of old notes if, in our judgment, any of the following conditions has occurred or exists or has not been satisfied:

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any action or proceeding is instituted or threatened in any court or by or before any governmental agency with respect to the exchange offer which, in our reasonable judgment, might materially impair our ability to proceed with the exchange offer or materially impair the contemplated benefits of the exchange offer to us, or any material adverse development has occurred in any existing action or proceeding with respect to us or any of our subsidiaries;



•

any change, or any development involving a prospective change, in our business or financial affairs or of any of our subsidiaries has occurred which, in our reasonable judgment, might materially impair our ability to proceed with the exchange offer or materially impair the contemplated benefits of the exchange offer to us;



•

there shall have been proposed, adopted or enacted any law, statute, rule or regulation (or an amendment to any existing law, statute, rule or regulation) which, in our sole judgment, might materially impair our ability to proceed with the exchange offer or have a material adverse effect on the contemplated benefits of the exchange offer to us;



•

there shall occur a change in the current interpretation by the staff of the SEC which permits the exchange notes issued pursuant to the exchange offer in exchange for the old notes to be offered for resale, resold and otherwise transferred by holders thereof without compliance with the registration and prospectus delivery provisions of the Securities Act provided that: (1) such exchange notes are acquired in the ordinary course of such holders' business; (2) such holders are not engaging in and do not intend to engage in a distribution of the exchange notes and have no arrangement or understanding with any person to participate in the distribution of such exchange notes; (3) such holders are not affiliates of us within the meaning of Rule 405 under the Securities Act; and (4) such holders are not broker-dealers that acquired the old notes directly from us; or



•

there shall have occurred:



(1)

any general suspension of, shortening of hours for, or limitation on prices for, trading in securities on any national securities exchange or in the over-the-counter market (whether or not mandatory);



(2)

any limitation by any governmental agency or authority which may adversely affect our ability to complete the transactions contemplated by the exchange offer;



(3)

a declaration of a banking moratorium or any suspension of payments in respect of banks by federal or state authorities in the United States (whether or not mandatory);



(4)

a commencement of a war, armed hostilities or other international or national crisis directly or indirectly involving the United States;



(5)

any limitation (whether or not mandatory) by any governmental authority on, or other event having a reasonable likelihood of affecting, the extension of credit by banks or other lending institutions in the United States; or



(6)

in the case of any of the foregoing existing at the time of the commencement of the exchange offer, a material acceleration or worsening thereof.

    The conditions listed above are for our sole benefit and may be asserted by us regardless of the circumstances giving rise to any of these conditions. We may waive these conditions in our reasonable discretion in whole or in part at any time and from time to time. The failure by us at any time to exercise any of the above rights shall not be deemed a waiver of such right and such right shall be deemed an ongoing right which may be asserted at any time and from time to time. If we determine in our reasonable discretion that any of the conditions are not satisfied, we may:

•

refuse to accept any old notes and return any old notes that have been tendered to the tendering holders;



•

extend the exchange offer and retain all old notes tendered prior to the expiration date of the exchange offer, subject to the rights of the holders of the tendered old notes to withdraw such old notes; or



•

waive such termination event with respect to the exchange offer and accept the properly tendered old notes that have not been withdrawn.

    If we determine that such waiver constitutes a material change in the exchange offer, we will promptly disclose such change in a manner reasonably calculated to inform the holders of such change and we will extend the exchange offer to the extent required by law.

Acceptance of Old Notes for Exchange; Delivery of Exchange Notes

    Upon satisfaction or waiver of all of the conditions to the exchange offer, we will accept, promptly after the expiration date, all old notes that have been validly tendered and not withdrawn, and will issue the applicable exchange notes in exchange for such old notes promptly after our acceptance of such old notes. For purposes of the exchange offer, we will be deemed to have accepted validly tendered old notes for exchange when, as, and if we have given written notice of such acceptance to the exchange agent.

    For each old note accepted for exchange, the holder of the old note will receive an exchange note having a principal amount equal to that of the surrendered old note. The exchange notes will bear interest from the most recent date to which interest has been paid on the old notes or, if no interest has been paid on the old notes, from November 23, 1999. Accordingly, registered holders of exchange notes on the relevant record date for the first interest payment date following the completion of the exchange offer will receive interest accruing from the most recent date to which interest has been paid or, if no interest has been paid, from November 23, 1999. Old notes accepted for exchange will cease to accrue interest from and after the date on which they are accepted for exchange. Holders whose old notes are accepted for exchange will not receive any payment for accrued interest on the old notes otherwise payable on any interest payment date if the record date occurs on or after date on which they are accepted for exchange and will be deemed to have waived their rights to receive the accrued interest on the old notes.

    If any tendered old notes are not accepted for any reason or if old notes are submitted for a greater principal amount than the holder desires to exchange, such unaccepted or non-exchanged old notes will be returned without expense to the tendering holder of the old notes or, if the old notes were tendered by book-entry transfer, the non-exchanged old notes will be credited to an account maintained with the book-entry transfer facility. In either case, the return of such old notes will be effected promptly after the expiration or termination of the exchange offer.

Exchange Agent

    We have appointed Norwest Bank Minnesota, N.A. as the exchange agent for the exchange offer. Norwest Bank Minnesota, N.A. also acts as trustee under the indenture. You should send all executed letters of transmittal to the exchange agent and direct all communications with the exchange agent, including requests for assistance or for additional copies of this prospectus or of the letter of transmittal as follows:

Delivery To: Norwest Bank Minnesota, N.A., Exchange Agent

By Registered and Certified Mail:	By Regular Mail or Overnight Courier:	By Person by Hand only:
Norwest Bank Minnesota, N.A. Corporate Trust Operations MAC N9303-121 P.O. Box 1517 Minneapolis, MN 55480	Norwest Bank Minnesota, N.A. Corporate Trust Operations MAC N9303-121 Sixth & Marquette Avenue Minneapolis, MN 55479	Norwest Bank Minnesota, N.A. 2th Floor—Northstar East Building Corporate Trust Services 608 Second Avenue South Minneapolis, MN

By Facsimile (for Eligible Institutions only):
(612) 667-4927

For Information or Confirmation by Telephone:
(612) 667-9764

If you deliver the letter of transmittal to an address other than as set forth above or transmit instructions via facsimile other than as set forth above, such delivery or instructions will not be effective.

Fees and Expenses

    We will pay for all expenses we incur in conducting the exchange offer. We are making the principal solicitation pursuant to the exchange offer by mail. Our officers and employees and our affiliates may also make solicitations in person, by telegraph, telephone or facsimile transmission.

    We have not retained any dealer-manager in connection with the exchange offer and will not make any payments to brokers, dealers or other persons soliciting acceptances of the exchange offer. We, however, will pay the exchange agent reasonable and customary fees for its services and will reimburse its reasonable out-of-pocket costs and expenses and will indemnify the exchange agent for all losses and claims incurred by it as a result of the exchange offer. We may also pay brokerage houses and other custodians, nominees and fiduciaries the reasonable out-of-pocket expenses incurred by them in forwarding copies of this prospectus, letters of transmittal and related documents to the beneficial owners of the old notes and in handling or forwarding tenders for exchange.

Transfer Taxes

    We will pay any transfer taxes applicable to the exchange of old notes pursuant to the exchange offer. If, however, a transfer tax is imposed for any reason other than the exchange of old notes pursuant to the exchange offer, then the amount of any of these transfer taxes (whether imposed on the registered holder thereof or any other person) will be payable by the tendering holder.

    For example, the tendering holder will pay transfer taxes, if:

•

exchange notes for principal amounts not tendered, or accepted for exchange are to be registered or issued in the name of any person other than the registered holder of the old notes tendered; or



•

tendered old notes are registered in the name of any person other than the person signing the letter of transmittal.

    If you do not submit satisfactory evidence of payment of taxes for which you are liable or exemption from them with your letter of transmittal, we will bill you for the amount of these transfer taxes directly.

Accounting Treatment

    We will record the exchange notes at the same carrying value as the old notes, which is the principal amount as reflected in our accounting records on the date of the exchange. Accordingly, we will not recognize any gain or loss for accounting purposes. We will capitalize the expenses of the exchange offer for accounting purposes and include them in other assets on our balance sheet. We will amortize these expenses on a straight line basis over the life of the exchange notes.

Consequences of Failure to Exchange Old Notes

    Holders of old notes who do not exchange their old notes for exchange notes pursuant to the exchange offer will continue to be subject to the restrictions on transfer of such old notes. The old notes were originally issued in a transaction exempt from registration under the Securities Act, and may be offered, sold, pledged, or otherwise transferred only:

•

in the United States to a person whom the seller reasonably believes is a qualified institutional buyer (as defined in Rule 144A under the Securities Act);



•

outside the United States in an offshore transaction in accordance with Rule 904 under the Securities Act;



•

pursuant to an exemption from registration under the Securities Act provided by Rule 144, if available; or



•

pursuant to an effective registration statement under the Securities Act.

    The offer, sale, pledge or other transfer of old notes must also be made in accordance with any applicable securities laws of any state of the United States, and the seller must notify any purchaser of the old notes of the restrictions on transfer described above. We do not currently anticipate that we will register the old notes under the Securities Act.

Appraisal or Dissenters' Rights

    Holders of the old notes will not have appraisal or dissenters' rights in connection with the exchange offer.

USE OF PROCEEDS

    The exchange offer is intended to satisfy our obligations under the registration rights agreement that we entered into in connection with the private offering of the old notes. We will not receive any cash proceeds from the issuance of the exchange notes. In consideration for issuing the exchange notes, we will receive old notes in like principal amount. The old notes that are surrendered in exchange for the exchange notes will be retired and canceled and cannot be reissued. As a result, the issuance of the exchange notes will not result in any increase or decrease in our indebtedness. We have agreed to bear the expenses of the exchange offer. No underwriter is being used in connection with the exchange offer.

    The proceeds from the sale of the old notes, net of discounts and expenses, were approximately $132.1 million. The net proceeds of the offering of the old notes, together with borrowings under Merrill Communications LLC's credit facility and equity investments in Merrill, were used to help fund the merger of Viking Merger Sub, Inc. with and into Merrill. In order to fund the merger of Viking Merger Sub, Inc. with and into us in November 1999 and to pay related fees and expenses:

•

Merrill Communications LLC entered into a $270.0 million senior secured credit facility, consisting of $50.0 million of revolving loan availability and $220.0 million of term loan availability, with a group of financial institutions led by DLJ Capital Funding, Inc. At the effective time of the merger, Merrill Communications LLC borrowed $220.0 million of term loans. Merrill Communications LLC may use the $50.0 million borrowing availability under the revolving credit facility for general corporate purposes, subject to customary conditions.



•

We issued and sold 140,000 units, each consisting of $1,000 principal amount of the old notes and one warrant to purchase 1.22987 shares of our class B common stock, par value $.01 per share.



•

Viking Merger Sub raised $110.7 million from the sale of $70.7 million of its common and $40.0 million of its 14.5% senior preferred stock due 2011 with warrants to certain affiliates of DLJMB and institutional investors. At the effective time of the merger, each share of common stock of Viking Merger Sub converted into one share of our class B common stock and each share of preferred stock and each warrant converted into one share of our preferred stock with identical terms and a warrant for our class B common stock. For a description of the preferred stock and warrants, we refer you to "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources."



•

John W. Castro, our President and Chief Executive Officer, and Rick R. Atterbury, our Executive Vice President and Chief Technology Officer, invested, through the retention of existing shares, $21.5 million of common equity for an approximately 23.4% equity interest in our company (excluding warrants).

    The following table sets forth the estimated sources and uses of funds for the merger and the related financings on a pro forma basis as of October 31, 1999 as though they were completed on that date:

	Pro Forma As of October 31, 1999
	(dollars in millions)
Sources:
Existing cash	$	5.0
Revolving credit facility (1)		1.9
Term loans		220.0
Units (2)		136.2
Preferred stock and warrants (3)		40.0
Management rollover (4)		21.5
Common stock purchased by DLJMB funds		70.7
Total sources	$	495.2
Uses:
Cash purchase of outstanding shares and options	$	359.2
Management rollover (4)		21.5
Repayment of existing debt (1)		83.0
Fees and expenses		23.9
Funding of other obligations (5)		7.5
Total uses	$	495.2

(1)

Borrowings under the revolving credit facility and repayment of existing debt as shown are based on the amount of indebtedness outstanding at October 31, 1999. Borrowings under the revolving credit facility were reduced by reductions in net debt at closing. Existing indebtedness consisted primarily of our (a) existing unsecured, revolving line of credit, which at October 31, 1999 had a weighted average interest rate of 6.6% per annum and would have matured in December 1999, (b) unsecured senior notes which bore interest at 7.463% per annum and would have matured in October 2006 and (c) industrial development bonds with interest rates that ranged from 4.2% to 5.5% per annum and a final maturity date in August 2010.

(2)

Represents $140.0 million of units including $1.7 million attributable to the value of the warrants and net of $3.8 million of unamortized discount.

(3)

In connection with the merger, certain affiliates of DLJMB and institutional investors purchased preferred stock and warrants for total consideration of $40.0 million. For accounting purposes, a $5.5 million value has been ascribed to the warrants and this amount has been classified as additional paid-in-capital under shareholders' equity. Prior to November 15, 2004, dividends will accrete to the liquidation value of the preferred stock unless the holders elect to receive such dividends in the form of additional shares of preferred stock. After November 15, 2004, dividends are payable in cash.

(4)

John W. Castro and Rick R. Atterbury invested, through the retention of existing shares, $21.5 million of common equity for an approximately 23.4% equity interest in our company (excluding warrants).

(5)

Primarily relates to the funding of our deferred compensations plans net of repayments of $2.1 million from employee loans.

CAPITALIZATION

    The following table presents on a consolidated basis our unaudited capitalization as of October 31, 1999 (1) on an historical basis and (2) on a pro forma basis to give effect to the merger and the related financings described under "Unaudited Pro Forma Consolidated Financial Data" as though they had occurred on that date. This table should be read in conjunction with our consolidated financial statements and related notes, our "Unaudited Pro Forma Consolidated Financial Data" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included elsewhere in this prospectus.

	As of October 31, 1999
	Historical		Pro Forma
	(dollars in millions)
Cash and cash equivalents	$	5.0	$	—
Long-term debt, including current portion:
Existing debt	$	85.2	$	2.2
Credit facility
Revolving credit facility		—		1.9
Term loans		—		220.0
Notes (1)		—		134.5
Total debt		85.2		358.5
Preferred stock, 500,000 authorized; no shares issued historical, 500,000 shares issued pro forma (2)		—		34.5
Shareholders' equity:
Class B common stock, 10,000,000 authorized, no shares issued historical, 4,191,943 shares issued pro forma (3)		—		—
Common stock, 25,000,000 authorized, 16,137,520 shares issued historical, no shares issued pro forma		0.2		—
Additional paid-in-capital		14.3		99.3
Retained earnings (3)		145.6		(221.3	)
Total shareholders' equity (deficit)		160.1		(121.9	)
Total capitalization	$	245.3	$	(271.2	)

(1)

Represents $140.0 million in aggregate principal amount of old notes offered in connection with the merger financing, net of unamortized discount of $3.8 million and $1.7 million attributed to the value of the warrants issued as part of the units. The value of the warrants has been classified as additional paid-in-capital under shareholders' equity.

(2)

Represents $40.0 million in aggregate preferred stock offered in connection with the merger financing, net of $5.5 million attributed to the value of the warrants issued as part of the preferred stock. The value of the warrants has been classified as additional paid-in-capital under shareholders' equity.

(3)

In connection with the merger, DLJMB funds invested $70.7 million, and Messrs. Castro and Atterbury invested, through the retention of existing shares, $21.5 million of common equity for an approximately 23.4% equity interest in our company (excluding warrants).

SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA

    The tables below set forth selected consolidated financial information for us for each of the five fiscal years ended January 31, 1995 to 1999 and the nine month periods ended October 31, 1998 and 1999. We derived the consolidated statements of operations data and consolidated balance sheet data as of and for the five years ended January 31, 1995 to 1999 from our consolidated financial statements which have been audited by PricewaterhouseCoopers LLP, independent accountants. We derived the consolidated statements of operations data and consolidated balance sheet data for and as of the nine months ended October 31, 1998 and 1999 from our unaudited consolidated financial statements, which include all adjustments, consisting only of normal recurring adjustments, which management considers necessary for a fair presentation of results for these unaudited periods. The results of operations for the nine months ended October 31, 1999 are not necessarily indicative of the results of operations that may be expected for the full fiscal year 2000.

    You should read the selected consolidated financial data presented below in conjunction with the "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements with related notes contained elsewhere in this prospectus.

	Year Ended January 31,															Nine Months Ended October 31,
	1995			1996			1997			1998			1999			1998			1999
	(dollars in millions)
Statement of Operations Data:
Revenue	$	236.9		$	245.3		$	353.8		$	459.5		$	509.5		$	391.7		$	442.4
Cost of revenue		159.5			165.8			227.5			295.4			330.6			250.3			289.9
Gross profit		77.4			79.5			126.3			164.1			178.9			141.4			152.5
Selling, general and administrative expenses		55.7			60.1			89.9			114.2			127.7			97.1			109.0
Merger costs		—			—			—			—			—			—			2.3
Operating income		21.7			19.5			36.3			50.0			51.2			44.3			41.2
Interest expense		(1.1	)		(1.1	)		(4.1	)		(4.3	)		(4.0	)		(3.0	)		(5.0	)
Other income (expense), net		0.5			0.3			0.3			0.8			0.4			0.5			(0.6	)
Income before provision for income taxes		21.2			18.7			32.5			46.5			47.7			41.8			35.5
Provision for income taxes		9.2			8.0			14.6			20.4			21.2			18.6			17.2
Net income	$	12.0		$	10.7		$	17.8		$	26.0		$	26.5		$	23.2		$	18.3
Balance Sheet Data (at end of period):
Cash and cash equivalents	$	10.0		$	12.1		$	5.2		$	2.5		$	23.5		$	5.7		$	5.0
Working capital (1)		23.0			34.6			71.0			77.6			60.5			89.5			104.0
Total assets		106.5			125.5			202.0			246.5			265.9			257.3			334.7
Total debt (2)		9.0			13.8			49.6			42.7			41.9			42.5			85.2
Total shareholders' equity		66.1			77.7			96.2			125.7			141.2			143.4			160.1
Other Data:
EBITDA (3)	$	31.5		$	30.3		$	49.8		$	67.6		$	71.1			58.6			58.3
Adjusted EBITDA (3)		31.5			30.3			49.8			67.6			71.1			58.6			60.6
Capital expenditures		10.1			12.5			9.2			17.1			16.5			11.4			7.9
Depreciation and amortization (4)		9.8			10.8			13.4			17.6			19.9			14.2			17.1
Ratio of earnings to fixed charges		8.7	x		7.7	x		6.3	x		7.6	x		7.8	x		9.7	x		5.6	x

(1)

Excludes cash and current maturities of debt and capital lease obligations.

(2)

Total debt includes all debt and capital lease obligations.

(3)

Earnings before interest, taxation, depreciation (EBITDA) is a key financial measure but should not be construed as an alternative to operating income or cash flows from operating activities (as determined in accordance with generally accepted accounting principles). We believe that EBITDA is a useful supplement to net income and other income statement data in understanding cash flows generated from operations that are available for taxes, debt service and capital expenditures. Adjusted EBITDA, which represents EBITDA, as defined, adjusted for non recurring merger costs is presented because we believe it is a meaningful indicator of our operating performance and it is a measurement by which certain of the covenants under the credit facility are computed.

(4)

Depreciation and amortization includes a $1.2 million and $1.0 million goodwill writedown for the year ended January 31, 1999 and the nine month period ended October 31, 1998, respectively.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with our consolidated financial statements and our unaudited pro forma condensed consolidated financial statements, including the notes to those statements, included elsewhere in this prospectus.

This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results may differ significantly from the results discussed in the forward-looking statements. Factors that might cause those differences include, but are not limited to, those discussed in "Risk Factors."

Overview

    We are a diversified communications and document services company applying advanced information systems and intranet/Internet technology to provide a full range of services to our corporate, financial and legal clients. We maintain a disciplined focus on specific target markets with substantial, complex business communication requirements, and we aggressively pursue a leadership position within each of these markets.

    In February 1999, we realigned our corporate structure by shifting from a geographically based matrix organization into five business units in order to provide clearer accountability, quicker decision making and sharper operational focus within each line of business. These business units have been organized into two reportable segments, Specialty Communication Services and Document Services:

Specialty Communication Services

•

Financial Document Services



•

Investment Company Services



•

Managed Communications Programs



•

Merrill Print Group

Document Services

•

Document Management Services

    Our management's discussion and analysis for the nine month periods ended October 31, 1998 and 1999 reflects our recent realignment into these five business units. Our management's discussion and analysis for prior periods reflect the historical presentation of our business on a product line basis.

    Our Financial Document Services business historically has generated large, high margin cash flow. This business encompasses transactional documents that generally reflect the level of deal activity in the capital markets as well as required regulatory compliance and other repetitive work that is typically not significantly affected by capital market fluctuations. While some types of transactions tend to increase when others are out of favor, a prolonged reduction in the overall level of financial transactions could be expected to have a negative impact on our Financial Document Services business. This was the case, for example, during the Fall of 1998 when pronounced economic difficulties in certain emerging markets reduced the overall level of transaction activity on a global scale. As a result, revenue related to transaction-based financial printing was depressed for the fourth quarter of fiscal year 1999 and the first quarter of fiscal year 2000, during which time we would have completed and invoiced certain transactions that were otherwise postponed or terminated. The first and second quarters of fiscal 1999, on the other hand, represented relatively robust capital markets, which translated into strong operating results for the transaction portion of our Financial Document Services business during these periods.

    In an effort to maximize the stability of our revenue and profitability, we have not only strived to grow the non-financial transaction portion of our Financial Document Services business, but we have also continued to develop and grow our other business units. Our Investment Company Services, Managed Communications Programs and Document Management Services businesses all compete in highly fragmented markets that we believe are undergoing robust growth. Compliance documentation and marketing materials for our investment fund and corporate clients are not significantly affected by capital markets fluctuations, but are usually in higher demand during our first fiscal quarter as a result of our clients' annual filing requirements. Our Managed Communications Programs and Document Management Services businesses tend to follow general economic trends. Both of these businesses also have a considerable amount of long-term contracted revenue that serves to stabilize our operating results. We generally do not begin to receive significant revenue in our Managed Communications Programs business until we have invested approximately six to 12 months analyzing our clients' communication processes and designing appropriate product and service offerings that effectively address their needs.

    The strength of our diversification effort has been attributable to both internal growth and acquisitions. On June 11, 1998, we acquired Executech, Inc. and World Wide Scan Services, LLC, an East coast-based software and imaging company that expanded Document Management Services' client base, giving us a strong presence among top-100 law firms and Fortune 200 corporate law departments. On April 14, 1999, we finalized the acquisition of Daniels Printing, Limited Partnership, a full-service financial and commercial printing company based in suburban Boston, Massachusetts, that strengthens the presence of our Investment Company Services business in the important New England market. Furthermore, we acquired Alternatives Communications Group, Inc. on June 14, 1999, extending the service capabilities, customer base and geographic reach of our Managed Communications Programs business. We have accounted for all of these acquisitions under the purchase method of accounting. Accordingly, our historical results reflect these acquired operations from the date of acquisition.

    In addition to broadening our revenue and customer base, we also strive to maintain a low fixed cost asset base and high utilization rates in connection with our printing assets. This enables us to better respond to a potential downturn in the financial markets and the associated reduction in demand for transaction-based printing services. In periods of strong demand, we subcontract as much as 40% of our printing requirements to third-party local vendors. We pursue a strategy of maintaining a low fixed cost asset base throughout all of our other business units as well. For example, we pioneered the hub and spoke network utilized in our Financial Document Services and Investment Company Services businesses as an efficient method to deploy the resources needed in those businesses. In our Document Management Services business, we have a leasing arrangement with a major manufacturer of photocopying equipment, whereby we lease such equipment on an as-needed basis and pay for such usage entirely on a per copy basis (as opposed to paying a fixed monthly rental cost). This arrangement is in line with our overall operating strategy of minimizing our fixed cost asset base and maximizing operating flexibility.

    In all of our business units, we recognize revenue when we ship or complete the product or, in the case of our Document Management Services, when we provide the service. Prior to our recent corporate realignment, our printing operations were historically reflected as a cost center in our overall operating results for the entire company. With its formation in February 1999, the Merrill Print Group has been established as a profit center responsible for managing the printing operations for all of our internal businesses as well as our growing base of commercial printing clients.

    As a result of the merger, we expect merger costs will approximate $23.9 million, of which $10.2 million relates to financing costs that will be capitalized and amortized over the term of the finance agreements. The remaining $13.7 million of fees and expenses relates to non-capitalizable merger fees and expenses. A substantial one-time charge will be recorded during the fourth quarter of fiscal year 2000. Because this charge will be funded entirely through the proceeds of the merger financing, we do not expect this charge to have a material impact on our liquidity, ongoing operations or market position. The merger will be accounted for as a recapitalization and consequently will have no impact on our historical basis of assets and liabilities nor result in the recording of any goodwill.

    We strive to capitalize on opportunities to realize operating synergies and cost savings by integrating our recent acquisitions into our operations, capitalizing on our recent corporate realignment into business units and leveraging our low fixed-cost asset base. Our cost reduction initiatives include:

•

streamlining redundant functions;



•

rationalizing corporate overhead;



•

more effectively adapting technology targeted for specific business unit markets;



•

increasing utilization of existing printing capacity; and



•

maximizing purchasing efficiencies.

Results of Operations

    The following table sets forth, for the fiscal period indicated, the revenues for each of our lines of business:

	Year Ended January 31,						Nine Months Ended October 31,
	1997		1998		1999		1998		1999
	(dollars in millions)
Specialty Communication Services:
Financial Document Services	$	198.9	$	251.5	$	256.3	$	204.1	$	203.5
Investment Company Services		55.4		83.5		101.5		78.2		102.1
Managed Communications Programs		52.7		66.4		80.5		56.3		70.5
Merrill Print Group		7.3		3.9		8.3		7.5		12.0
Total Specialty Communication Services Revenue		314.3		405.3		446.6		346.1		388.0
Document Services:
Document Management Services		39.5		54.2		62.9		45.6		54.4
Total Revenue	$	353.8	$	459.5	$	509.5	$	391.7	$	442.4

    The following table sets forth, for the fiscal period indicated, the growth in revenues for each of our lines of business:

	Year Ended January 31,
					Nine Months Ended October 31, 1999
	1998		1999
Specialty Communication Services:
Financial Document Services	26.5	%	1.9	%	(0.3	)%
Investment Company Services	50.7		21.6		30.5
Managed Communications Programs	26.0		21.1		25.3
Merrill Print Group	(46.6	)	112.8		59.3
Total Specialty Communication Services Revenue	29.0		10.2		12.1
Document Services:
Document Management Services	37.2		16.1		19.3
Total Revenue	29.9	%	10.9	%	12.9	%

Nine months ended October 31, 1999 compared to nine months ended October 31, 1998

Revenue

    Overall revenue increased 12.9% to $442.4 million for the nine month period ended October 31, 1999 from $391.7 million for the same period one year ago. Revenue in the Specialty Communication Services segment increased $41.9 million, or 12.1% to $388.0 million from $346.1 million. Within the Specialty Communication Services segment, Financial Document Services revenue decreased 0.3% to $203.5 million from $204.1 million. Revenue generated by financial transactions, which represented 32.7% of our revenue for the nine month period ended October 31, 1999, decreased 2.6% when compared to the same period a year ago. This decrease reflected lower financial transaction activity during the first half of fiscal year 2000 when compared to the record activity experienced during the first half of fiscal year 1999. Corporate regulatory compliance revenue had a modest increase of approximately 2.8% for the nine month period ended October 31, 1999. The increase was driven by an aggressive marketing initiative implemented during the first half of fiscal year 2000 offset by timing of certain projects during the latter part of the nine month period ended October 31, 1999. Investment Company Services revenue increased $23.9 million, or 30.5% to $102.1 million for the current nine month period ended October 31, 1999 from $78.2 million for the same period one year ago. This increase resulted from the positive impact of the Daniels Printing operation, new customers and added services to existing customers. Managed Communications Programs revenue increased $14.2 million or 25.3% to $70.5 million for the nine month period ended October 31, 1999 from $56.3 million for the same period one year ago. Managed Communications Programs revenue growth resulted from continued growth in new customer accounts and services to existing customers and the positive impact of the Alternatives Communications operations. Merrill Print Group revenue increased $4.5 million to $12.0 million for the nine month period ended October 31, 1999 from $7.5 million during the same period one year ago. This increase was primarily generated by the Daniels Printing operations.

    Revenue in the Document Services segment increased $8.8 million, or 19.3% to $54.4 million for the nine month period ended October 31, 1999 from $45.6 million for the nine month period ended October 31, 1998. This growth was due to increased revenue from our document service centers, our regional copy centers and from our imaging services.

Gross profit

    Gross profit increased $11.1 million, or 7.8% to $152.5 million for the nine month period ended October 31, 1999 from $141.4 million for the nine month period ended October 31, 1998. As a percentage of revenue, gross profit was 34.5% for the nine month period ended October 31, 1999 compared to 36.1% for the same period one year ago. The increase in gross profit was due to increased revenue discussed above, offset by the decrease in gross profit as a percentage of revenue. This decrease in gross profit as a percentage of revenue was due to a shift in revenue mix from higher gross margin financial transaction revenue to revenue generated by our other business units that tend to carry lower gross margins.

Selling, general and administrative

    Selling, general and administrative expenses increased $11.9 million to $109.0 million for the nine month period ended October 31, 1999 from $97.1 million for the nine month period ended October 31, 1998. Selling, general and administrative expenses primarily increased as a result of variable costs associated with increased revenues and related expenses from our recently acquired Daniels Printing and Alternatives Communications acquisitions. Selling, general and administrative expenses as a percentage of revenue were 24.7% for the nine month period ended October 31, 1999 compared with 24.8% for the nine month period ended October 31, 1998.

Merger costs

    During the nine month period ended October 31, 1999, we recorded costs associated with the proposed plan of merger of approximately $2.3 million. This amount reflects investment banking fees, accounting, legal and other direct expenses. During the fourth quarter of fiscal year 2000, we will record a significant one-time charge associated with the November 23, 1999 closing of the plan of merger.

EBITDA

    EBITDA was $58.3 million for the nine month period ended October 31, 1999 and included non-recurring merger costs of $2.3 million. Exclusive of non-recurring merger costs, EBITDA increased 3.4% to $60.6 million for the nine month period ended October 31, 1999 from $58.6 million for the nine month period ended October 31, 1998. As a percentage of revenue, EBITDA was 13.2% for the nine month period ended October 31, 1999 versus 15.0% for the nine month period ended October 31, 1998. The primary contributor to the increase in EBITDA, exclusive of non-recurring merger costs, related to the increase in gross profit partially offset by the increase in selling, general and administrative expenses as previously discussed. The primary cause for the decrease in EBITDA as a percentage of revenue related directly to $2.3 million of non-recurring merger costs and the decrease in gross profit as a percentage of revenue, as previously discussed.

Interest expense

    Interest expense for the nine month period ended October 31, 1999 was $5.0 million compared to $3.0 million for the nine month period ended October 31, 1998. The increase in interest expense was caused by borrowings under our revolving credit facility to finance the Daniels Printing and Alternatives Communications acquisitions.

Tax provision

    The effective tax rate for the nine month period ended October 31, 1999 was 48.5% compared to 44.5% for the nine month period ended October 31, 1998. The increase in the effective rate was caused by an increase in non-deductible business and entertainment expenses and non-deductible merger costs. We expect the effective tax rate to increase for the remainder of fiscal year 2000 as additional non-deductible merger costs are incurred.

Net income

    Net income was $18.3 million, or $1.10 per diluted share, for the nine month period ended October 31, 1999 versus $23.2 million, or $1.35 per diluted share, for the nine month period ended October 31, 1998. The decrease in net income was related to higher selling, general and administrative expenses, increased depreciation and amortization expense associated primarily with the Daniels Printing operation, merger costs and interest expense.

Fiscal year ended January 31, 1999 compared to fiscal year ended January 31, 1998

Revenue

    Overall revenue for fiscal year 1999 increased 11% over the previous year. Revenue in the Specialty Communication Services segment increased 10% over the previous year. The financial transactions revenue category increased 6% compared to the prior year. This increase was driven by strong mergers and acquisition activity in the first six months of fiscal year 1999. The financial transactions revenue category declined in the second half of the fiscal year by 15% as a result of the Fall market volatility. International revenue, which is included in the financial transactions revenue category, represented less than 10% of consolidated revenue and increased over fiscal year 1998 revenue. Management does not anticipate significant fluctuations in the relative percentage of international revenue during fiscal year 2000. The corporate revenue category increased 11% compared to fiscal year 1998. This increase is attributed mainly to strong growth in Investment Company Services products and continued solid demand for corporate compliance business. The commercial and other revenue category realized revenue growth of 18% over fiscal year 1998. The growth is primarily the result of our Managed Communications Programs business. The Document Services segment revenue grew 16% in fiscal year 1999. Ten percent of the growth was a result of the acquisition of Executech and affiliated World Wide Scan Services in June 1998. Document service centers, which totaled 80 at January 31, 1999, contributed revenue growth of 7% on a same-site comparison.

    We anticipate that our total revenue for fiscal year 2000 will continue to grow compared to our total revenue for fiscal year 1999, primarily as a result of our acquisition activity, increased selling efforts and new product offerings. As a percentage of our total revenue, we anticipate that our financial revenue category in fiscal year 2000 will decline as a percentage of total revenue as our other business sectors continue to grow. The forward-looking statements in this paragraph contain various risks and uncertainties that may make these statements untrue. These risks and uncertainties include, but are not limited to, the effect of economic and financial market conditions on our revenue, the extent of changes to government reporting requirements and the ability of our management to successfully select suitable acquisition candidates and the ability to integrate and manage them successfully.

Gross profit

    Fiscal year 1999 gross profit of approximately 35% declined slightly from fiscal year 1998. Strong margins were maintained despite the significant slowdown in financial transaction activity in the second half of the fiscal year 1999. Management implemented cost control measures in the second half of fiscal year 1999 to offset the lower production activity. These cost controls measures included a reduction in our workforce of approximately 100 employees (approximately three percent of our total workforce) and a decrease in our incentive bonuses payable to employees (resulting from anticipated lower company performance compared to the quantitative targets set forth in our plan). On February 1, 1999, we also reorganized our company into five distinct business units: Financial Document Services, Investment Company Services, Management Communications Programs, the Merrill Print Group and Document Management Services. By realigning our business into five operating units, we believe that we are able to achieve more accountability for overall profitability of these business units. In addition, by establishing the Merrill Print Group as a separate profit center, we hope to increase the utilization of our printing assets. In order to further this objective, management compensation for the Merrill Print Group is now based on profitability. We believe that these cost cutting initiatives together with our expectation that overhead costs will remain stable, will result in higher operating margins during the next couple of years. The decrease in gross profit as a percentage of revenue resulted from a shift in revenue mix from higher gross margin financial transaction revenue to revenue generated by our other business units that tend to carry lower gross margins. We expect to continue to realize decreasing gross margins due to the changing mix of our revenue between Financial Document Services (higher gross margin business) and non-Financial Document Services (lower gross margin business).

    The immediately preceding paragraph contains forward-looking statements involving various risks and uncertainties that may make these statements untrue. These risks and uncertainties include, but are not limited to, the effect of economic and financial market conditions on our revenue, the extent of changes to government reporting requirements, the ability of our management to successfully select suitable acquisition candidates and the ability to integrate and manage them successfully, the success of our focus on value-added technology and the ability of our management to successfully continue to diversify our operations.

Selling, general and administrative expenses

    Selling, general and administrative expenses increased in both dollar terms and as a percentage of revenue. The increase in these expenses in fiscal year 1999 was principally a result of our continued expansion of our sales and marketing activities and provisions for losses on trade receivables. Specifically, during fiscal year 1999, we hired additional sales personnel, marketing employees and product managers, and engaged in several, nationwide corporate branding and product marketing programs. We anticipate that we will continue to hire additional sales and marketing personnel in the immediate future, and will continue our corporate branding and product marketing initiatives for the foreseeable future. During the fiscal year ending January 31, 1998, management decided to discontinue the sales of hardware and software related to its Merrill Training and Technology group, formerly Merrill/Superstar Computing Company. As a result of this decision, we recorded a $1.2 million goodwill impairment as it was determined that the carrying amount of the goodwill related to the Superstar acquisition was not fully recoverable. We review the carrying value of long-lived assets and certain identifiable intangibles for impairment, at least quarterly but more frequently whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Based on this policy, no other goodwill or long-lived asset was determined to be impaired.

    Average short-term borrowings under our line of credit arrangement were approximately $4.3 million, $4.7 million and $30.1 million in fiscal years 1999, 1998 and 1997, respectively.

    Interest expense for fiscal year 1999 declined slightly compared to fiscal year 1998, which reflects stable interest rates and a slight reduction in overall amounts borrowed during fiscal year 1999.

    The effective income tax rate for fiscal year 1999 was 44.5% compared to 44% for fiscal year 1998. The effective rates were higher than the statutory federal income tax rate primarily because of state income taxes and the impact of increased non-deductible business entertainment expenses incurred in conjunction with the Financial Document Services and Investment Company Services revenue category activity previously discussed.

Fiscal year ended January 31, 1998 compared to fiscal year ended January 31, 1997

Revenue

    Overall revenue for fiscal year 1998 increased 30% over the previous year. Revenue in the Specialty Communication Services segment increased 29% over the previous year. The financial transactions revenue category increased 22% compared to 1997. This increase was driven by continued strong mergers and acquisition activity in financial markets throughout fiscal year 1998. The increase was also driven by the results of the Corporate Printing Company business acquired in April 1996. International revenue, which is included in the financial transactions revenue category, represented less than 10% of consolidated revenue and increased over fiscal year 1997. The corporate revenue category increased 49% when compared to fiscal year 1997. This increase is attributed to strong corporate compliance business, continued solid demand for EDGAR services and strong growth in Investment Company Services products. The commercial and other revenue category experienced a 17% increase in revenue over fiscal year 1997. The growth is primarily the result of our Managed Communications Programs. The Document Services segment revenue grew 37% in fiscal year 1998, reflecting continued growth in the number of Document Service Centers, which totaled 76 at January 31, 1998. This resulted from internal growth and the acquisition of selected assets of Total Management Support Services.

Gross profit

    Fiscal year 1998 gross profit of approximately 36% remained level with fiscal year 1997. Continued strong margins in both Financial Document Services and Investment Company Services along with high production utilization allowed us to maintain the same margins.

Selling, general and administrative expenses

    Selling, general and administrative expenses increased, but as a percent of revenue, declined slightly in the last year. The increase in these expenses in fiscal year 1998 was principally a result of our continued expansion of sales and marketing activities and provisions for incentive compensation.

    Average short-term borrowings under our line of credit arrangement were approximately $4.7 million, $30.1 million and $2.2 million in fiscal years 1998, 1997 and 1996, respectively. The significant decrease in the average short-term borrowings in fiscal year 1998 resulted from the issuance of $35 million in unsecured Senior Subordinated Notes in October 1996.

    Interest expense for fiscal year 1998 remained relatively consistent compared to fiscal year 1997, which reflects stable interest rates and consistent overall amounts borrowed during the time periods.

    The effective income tax rate for fiscal year 1998 was 44% compared to 45% for fiscal year 1997. The effective rates were higher than the statutory federal rate primarily because of state income taxes and the impact of increased non-deductible business entertainment expenses incurred in conjunction with the additional Financial Document Services and Investment Company Services revenue category activity previously discussed.

Liquidity and Capital Resources

Post-merger

    Our principal sources of liquidity is cash flow from operations and borrowings under Merrill Communications LLC's new credit facility. Our principal uses of cash will be debt service requirements described below, capital expenditures, working capital requirements and acquisitions.

    Capital expenditures were $7.9 million for the nine months ended October 31, 1999 and $16.5 million, $17.1 million and $9.2 million for the fiscal years 1999, 1998 and 1997, respectively. We anticipate that we will spend approximately $13.0 million on capital expenditures for the remainder of fiscal 2000 and approximately $18.0 million for fiscal 2001 for computer based production equipment, reprographics, leasehold improvements and printing equipment. We expect to realize certain revenue enhancements and cost savings as a result of such expenditures. Management believes that we will continue to require working capital consistent with past experience and that current levels of working capital, together with borrowings available under the new credit facility, will be sufficient to meet expected liquidity needs in the near term.

    On a pro forma basis, as of October 31, 1999, we had: (1) total indebtedness of approximately $358.5 million; and (2) $48.1 million of borrowings available under Merrill Communications LLC's credit facility, subject to customary conditions. The term loan facility under this credit facility consists of a $65.0 million amortizing term loan A maturing November 23, 2005 and a $155.0 million amortizing term loan B maturing November 23, 2007. This credit facility also includes a $50.0 million revolving credit facility that terminates on November 23, 2005. This credit facility may be increased by up to $30.0 million at our request, with the consent of the lenders providing the increased commitments. Borrowings under this credit facility generally bear interest based on a margin over, at our option, the base rate or the reserve-adjusted London-interbank offered rate, or LIBOR. The applicable margin is initially 3.00% over LIBOR and 1.75% over the base rate for borrowings under the revolving credit facility and for term loan A and 3.75% over LIBOR and 2.50% over the base rate for term loan B. The applicable margin for the revolving credit facility and term loan A will vary in the future based upon our leverage ratio, as defined in the credit facility. The credit facility limits Merrill Communications LLC's ability to pay dividends to us other than for the purpose of making current payments of principal and interest on the notes and specified fees and expenses incurred by us. The credit facility also contains customary covenants, including covenants that limit our ability to incur debt, pay dividends and make investments, and events of default as described in "Description of Credit Facility."

    The notes mature in 2009 and are guaranteed by each of our existing wholly-owned domestic restricted subsidiaries. Interest on the notes are payable semi-annually in cash. The notes contain customary covenants and events of default, including covenants that limit our ability to incur debt, pay dividends and make certain investments as described in "Description of Exchange Notes."

    Viking Merger Sub issued 500,000 shares of 14.5% senior preferred stock due 2011 to certain affiliates of DLJ Merchant Banking Partners II, L.P. and to institutional investors. At the effective time of the merger, each share of Viking Merger Sub preferred stock converted into preferred stock of our company with identical terms. Each share of preferred stock is entitled to cumulative, quarterly dividends at a compound rate of 14.5% per annum. Prior to November 15, 2004, dividends will accrete to the liquidation value of the preferred stock unless holders elect to receive such dividends in the form of additional shares of preferred stock. After November 15, 2004, dividends are payable in cash. Shares of preferred stock have a liquidation preference equal to the sum of $80 plus accreted dividends. Prior to the first dividend payment date, each share of preferred stock will be exchanged for 3.2 shares of preferred stock with identical terms in all respects except that the liquidation preference will be equal to $25.00 plus accrued dividends. Shares of preferred stock are non-voting, except as otherwise provided by law or by agreement. The preferred stock is subject to redemption at our option at 114.5% of liquidation preference, prior to November 15, 2004, declining ratably to 100.0% of such liquidation preference after November 15, 2007. Upon the occurrence of a change of control, each holder of preferred stock has the right to require us to repurchase all or any part of such holder's preferred stock at an offer price in cash equal to 101% of the liquidation preference thereof. Together with the preferred stock, Viking Merger Sub issued warrants to purchase 344,263 shares of its common stock at a purchase price of $0.01 per share. At the effective time of the merger, these warrants became warrants to purchase an equal amount of shares of our class B common stock at a purchase price of $0.01 per share.

    We anticipate that our operating cash flow, together with borrowings under Merrill Communications LLC's credit facility, will be sufficient to meet our anticipated future operating expenses, capital expenditures and debt service obligations as they become due. However, our ability to make scheduled payments of principal of, to pay interest on or to refinance our indebtedness and to satisfy our other debt obligations will depend upon our future operating performance, which will be affected by general economic, financial, competitive, legislative, regulatory, business and other factors beyond our control. See "Risk Factors."

    From time to time we will continue to explore additional financing methods and other means to lower our cost of capital, which could include stock issuance or debt financing and the application of the proceeds therefrom to the repayment of bank debt or other indebtedness. In addition, in connection with any future acquisitions, we may require additional funding which may be provided in the form of additional debt or equity financing or a combination thereof. There can be no assurance that any additional financing will be available to us on acceptable terms.

Historical

    Cash and cash equivalents decreased $18.5 million to $5.0 million at October 31, 1999 from $23.5 million at January 31, 1999. We generated cash from operations in the nine month period ended October 31, 1999 of $5.7 million versus $26.2 million in the nine month period ended October 31, 1998. This change was driven by decreased net income, assumption and subsequent payment of ordinary course liabilities resulting from the Daniels Printing and Alternatives Communications acquisitions and higher levels of accounts receivable balances as business activity has increased from lower levels at the beginning of the year. Net cash used in investing activities was $65.2 million and $17.3 million for the nine month periods ended October 31, 1999 and 1998, respectively. Significant uses of cash in investing activities for the current nine month period included $54.6 million of cash used for the Daniels Printing and Alternatives Communications acquisitions and capital expenditures of $7.9 million. Consideration for the Daniels Printing acquisition included approximately $44.0 million in cash, assumption and payment of existing line of credit obligations totaling approximately $5.6 million and the assumption of certain ordinary course liabilities of $7.7 million. Consideration for the Alternatives Communications acquisition included approximately $2.6 million in cash, a promissory note of $0.8 million, payment of an existing line of credit obligation of $2.1 million and assumption of certain ordinary course liabilities of $1.9 million. Net cash provided by financing activities was $41.0 million for the nine month period ended October 31, 1999 compared with net cash used in financing activities of $5.8 million for the nine month period ended October 31, 1998. This change resulted from financing a significant portion of the Daniels Printing and Alternatives Communications acquisition with our revolving credit facility and the absence of stock repurchases during the current nine month period.

    Cash provided by operating activities was $55.8 million in fiscal year 1999, compared to $30.9 million in fiscal year 1998 and $8.5 million in fiscal year 1997. Operating cash flows for fiscal year 1999 included strong earnings performance and a decrease in accounts receivable and work-in-process inventories offset by decreases in accounts payable and accrued expenses. Operating cash flows for fiscal year 1998 included strong earnings performance, a decrease in work-in-process inventories and an increase in accounts payable and accrued expenses offset by an increase in accounts receivable.

    Net cash used in investing activities was $23.1 million in fiscal year 1999, compared to $30.1 million in fiscal year 1998 and $35.8 million in fiscal year 1997. Capital expenditures were $16.5 million, $17.1 million and $9.2 million for the years ended January 31, 1999, 1998 and 1997, respectively. Capital expenditures in each fiscal year were principally for reprographic and computer-based production equipment and for leasehold improvements. Cash used for businesses acquired included Executech in fiscal year 1999, Superstar Computing, Total Management Support Services and The Corporate Printing Company in fiscal year 1998 and The Corporate Printing Company and FMC Resource Management Corporation in fiscal year 1997.

    Net cash used in financing activities was $11.8 million in fiscal year 1999 compared to $3.4 million in fiscal year 1998. Net cash used in these fiscal years was primarily a result of repurchases of common stock offset by stock option exercises and repayment of borrowings under our line of credit. Fiscal year 1997 cash provided by financing activities of $20.4 million was primarily a result of the issuance of long-term debt offset by payments on long-term debt and capital lease obligations.

Impact of Year 2000

    To date, none of our products have revealed any significant year 2000 problems. However, we believe the failure of some of our customers to make their computer systems year 2000 compliant or the abandonment or delay of offerings, acquisitions or other transactions due to year 2000 concerns held by some of our customers may temporarily harm our operating results, in particular during the fourth quarter of fiscal 2000 and the first quarter of fiscal 2001. We estimate that the total cost to identify and remediate our year 2000 problems was approximately $4.3 million. These costs primarily relate to the purchase of a new payroll system, consultant and payroll-related costs for our information technology group and some computer hardware and software package upgrade purchase costs. Such costs do not include normal system upgrades and replacements. We anticipate that our fourth quarter operating results for fiscal 2000 will be behind our original expectations due to our customers' year 2000 compliance efforts and our customers' abandonment or delay of offerings, acquisitions or other transactions.

Quantitative and Qualitative Disclosures About Market Risk

    Borrowings under our credit facility accrue interest at variable rates. Based on outstanding borrowings under the credit facility at October 31, 1999, a one-eight of one percent change in interest rates would impact interest expense in the amount of approximately $228,000 annually. On December 22, 1999, we entered into an interest rate cap with DLJ International Capital. Beginning March 24, 2000, the interest rate for $110.0 million of borrowings under our terms loans A and B will be 7.50% until December 24, 2001.

    We regularly invest excess operating cash in overnight repurchase agreements that are subject to changes in short-term interest rates. Accordingly, we believe that the market risk arising from our holding of these financial instruments is minimal.

BUSINESS

Introduction

    We are a diversified communications and document services company applying advanced information systems and intranet/Internet technology to provide a broad range of services to our financial, legal and corporate clients. Our services integrate traditional composition, imaging and printing services with document management, distribution, marketing and software solutions. This integrated approach helps streamline the preparation and distribution of business-to-business communications materials. We serve our domestic clients through 36 business centers throughout 28 cities in the United States, and our international clients through a strategic alliance and other relationships with local document service providers in Canada, Europe, Asia, Latin America and Australia.

    Our business strategy is to help our clients communicate more effectively with their clients. We pursue this strategy by providing a total outsourcing solution for all of our clients' business-to-business communications and document needs. As part of our strategy, we focus on specific client segments that have substantial and complex communications requirements for which we develop an expertise that we believe provides us with a significant competitive advantage. Our service offering is often fully integrated with our clients' internal processes, and in many cases we have dedicated full-time personnel situated on-site at our clients' locations. As a result, we have built strong, long-lasting relationships with clients that have trusted us to manage their time sensitive, confidential documents and their branded promotional materials. We believe that these strong, trusted relationships help provide us with a more stabilized source of cash flow.

    As part of our efforts in helping our clients communicate more effectively with their clients, we have been a leader in introducing electronic, digital and Internet-based solutions that add value to traditional printing services. We have designed our service offering to take advantage of our strong technological capabilities in web-based information, document collaboration and distribution and in electronic document imaging, coding and retrieval. The proprietary technology embedded within our services further strengthens our client relationships and the integration of our service offering into our clients' communication processes, which in turn leads to more stabilized cash flows. Furthermore, these capabilities allow us to wrap value-added technology-based communications solutions around basic services, such as printing, thereby allowing us to command higher margins. Our technology expertise has also positioned us as a leader in the evolution of document creation, management and distribution in both print and electronic formats. We view our technology expertise as an important competitive advantage and we have made a significant investment in this area. Currently, we have a team of over 200 project managers, software developers, and support personnel responsible for the design, development and implementation of our technology-based offerings.

    As part of the recent realignment in our corporate structure, we shifted from a geographically based matrix organization into five business units in order to provide clearer accountability, quicker decision making, sharper operational focus within each line of business and to better enable us to capitalize on the growth opportunities within each of our markets. We continue to leverage our information technology concepts across all business units. Our business units are organized under two reportable segments, Specialty Communication Services and Document Services.

Specialty Communication Services

    This segment of our business provides our financial, investment company and corporate clients with information technology-based solutions for the production and distribution of transactional financial documents, marketing materials, compliance documents, and branded promotional materials.

Financial Document Services

Overview

    Our Financial Document Services business unit produces and distributes (electronic and paper) time critical, transactional financial documents, such as registration statements, prospectuses, offering memoranda and other printed materials that are part of business financings, mergers and acquisitions. We managed the documentation behind five of the 10 largest domestic merger and acquisition transactions announced during 1999. We also produce compliance and reporting documents, such as annual and quarterly reports and proxy statements, that are either mailed or made electronically available to shareholders. In the financial printing market, we are one of three international financial printers with a nationwide network and recognized brand name.

Services and Marketing

    Our principal service is coordinating the composition, printing and distribution of electronic and paper transaction-based financial documents, as well as compliance and investor reports. Our strong reputation in maintaining confidentiality and responding to urgent time deadlines is critical to our success and has led to the long-lasting, trusted relationships we have developed with our clients. We offer 24-hour conference facilities, high-quality support services to assist in the preparation, printing and delivery of documents, and advanced information technology solutions to facilitate collaborative work environments, speed delivery of proofs and assist clients in electronic delivery of documents to their shareholder and investor base. We are also responsible for making all required regulatory filings with agencies, such as the SEC. We are the only national financial printer with a direct line to the SEC, which we believe provides greater reliability and efficiency in filing documents electronically through the SEC's EDGAR system. We believe we are also the only financial printer with an integrated, single source composition and filing system. Since the typeset and EDGAR versions are output from the same data file, our integrated, single source system provides our clients with greater reliability and efficiency in producing accurate typeset and EDGAR proofs for filing. We also coordinate the distribution of disclosure documents for our corporate clients through secure, offering-specific web sites, as well as the dissemination of their ongoing investor reports on their proprietary intranet systems or on corporate Internet sites.

    We emphasize technology-based solutions in providing financial document services to our clients, including software applications that facilitate collaborative work environments and reduce the need for face-to-face drafting sessions. Some of our more important software applications are described below:

•

Merrill e-Collaborate, introduced in 1998, is a web-based document management tool that is designed to streamline the creation of time sensitive documents. Merrill e-Collaborate provides a secure electronic work space where working group members can offer comments and review proofs instantly, without having to wait for couriers and faxes. This system also has a built-in address book with e-mail capabilities, a group discussion area and links to various securities law publications.



•

Merrill e:Proof, introduced in 1996, is an electronic distribution method of typeset and EDGAR documents through Internet e-mail or a secure point-to-point connection, that can be viewed on-screen, distributed by e-mail or printed as hard copy from any computer with access to e-mail and a printer. This software eliminates the need for time consuming and costly couriers, faxes and mail services. All documents distributed through Merrill e:Proof are password protected and encrypted to ensure a secure document.



•

Merrill<>Link, introduced in 1992, permits a client to receive sharp, clear page proofs directly in specified client locations through the use of a remote printer. Merrill<>Link has multiparty capabilities that enable printers in multiple locations to receive proof pages simultaneously. We



use Merrill<>Link extensively in our international operations to service our clients while minimizing our fixed-cost asset base.

•

MDB<>Link, introduced in 1990, offers clients the ability to print a "blueline" directly in specified client locations. Because the blueline is the last stage of document production prior to bulk printing, wider and more timely client access to these documents is viewed as a significant convenience and helps to ensure satisfaction with printing formats, page spacing and page layout.



•

Merrill IR Edge, introduced in 1999, is a web-based service through which we host, create and design investor relations web sites for our clients, including, at the client's election, electronic distribution of regulatory and investor reports, stock price information, research reports, press releases, links to other helpful web sites and other information important to investors.

    We market primarily through direct one-on-one contact with our clients, which include corporate officers and legal departments, securities attorneys, investment and merchant bankers and other financial professionals involved in public and private offerings, mergers and acquisitions or that are required to make specified disclosures under local regulations.

    Our financial printing services are provided on a project basis for individual transactions and on a periodic basis for ongoing regulatory filings or investor reports, and are typically billed on a project basis. Pricing varies significantly and is dependent in large part on the time frame allowed for the filing, the type of filing and number of proofs, document complexity, the number of pages, the distribution method for the proofs and the filing, and the extent of the revisions.

Operations

    The creation, assembly, production and distribution of financial documents requires rapid composition, printing, electronic conversion and distribution services that are available 24 hours a day and tailored to the exacting demands of our clients. Each document typically goes through many cycles of proofreading and editing, and proofs must often be delivered simultaneously to several different cities worldwide. We have over 200 conference rooms in 28 cities in the United States and additional conference facilities that are available for our clients' use in Europe and other international markets. In December 1999, we ended our joint venture arrangement with Burrups International Limited and began our own operations in Europe, with the opening of offices in London and Paris.

    We use advanced information systems and intranet/Internet technology to create a "hub and spoke" network, linking our composition center hubs in St. Paul, Minnesota and suburban Baltimore, Maryland with our 28 service facilities throughout the United States and internationally. We pioneered the use of the hub and spoke network as an efficient means of deploying the resources needed to service our clients. The concentration of resources at our hub facilities allows us to offset the peaks and valleys of workloads among our service centers. Our staff can also develop a deeper level of expertise and we can provide them with better and more constant training. We can also more easily scale up our operations during seasonally high work load periods by hiring predominantly at our hubs, rather than at service centers across the country. At January 31, 2000, we employed 1,053 employees, including 254 customer service employees and 168 sales, marketing and sales support personnel.

Competition

    We compete for clients in the financial printing area based primarily on relationships, technology offerings, cost, the scope of our capabilities worldwide and the overall quality of customer service, especially the ability to produce rapid and accurate revisions. We believe that our leading position in introducing software solutions to facilitate document production is a competitive advantage in attracting and retaining clients. Domestically and internationally, our primary competitors are Bowne & Co., Inc. and R.R. Donnelley & Sons Company, especially for the larger transactional and compliance work. We also compete with many smaller regional companies in the United States. We believe that the relationships that we have developed with many United States-based multi-national law firms and investment banks provide us with an advantage in competing for the financial document services business generated by their overseas operations.

Investment Company Services

Overview

    The Investment Company Services business unit designs, produces, prints and distributes marketing materials and compliance documents for public and private investment funds, insurance companies, banks and variable annuity providers, principally in the United States. We also offer software solutions that assist our fund clients with the creation and assembly of fund documents. We currently provide services to eight of the top 10 fund families, in terms of total assets, and we have had relationships with our top 10 fund clients for an average of over 12 years. Demand for our investment company services is driven by the number of shareholders in funds, the movement of shareholders between funds and the introduction of new funds as a result of various market dynamics. According to the 1999 Mutual Fund Fact Book, published by the Investment Company Institute, the investment fund industry has increased at a 15.1% compounded annual growth rate in the number of shareholder accounts from 1984 through 1998. In addition, the number of investment funds has experienced a 13.5% compounded annual growth rate over the same period. We believe that the number of shareholders in funds and the movement between funds will continue to grow rapidly, as the baby boomers continue to age and as investors become more sophisticated about potential fund options and portfolio diversification strategies. We also believe we will continue to see the introduction of new funds in response to changing market dynamics, as we have seen with the introduction of Internet funds and international funds in the last few years.

    Although there are more than 800 investment companies in the United States, we target our sales and marketing efforts on approximately 420 of the largest companies within the market. We believe that the investment fund industry is likely to experience substantial consolidation in the next several years and we expect the larger clients we target to be among the survivors. We also focus our operations in the largest and fastest growing markets, in terms of the number of investment companies located within the market. In April 1999, we acquired Daniels Printing, a leading provider of investment fund services in Boston. We believe that this acquisition will help us increase our penetration of this market by building on Daniels' strong reputation as a service provider in this industry. We may make other acquisitions in areas that complement our core services, such as suppliers of mail and other distribution services to fund investors.

Services and Marketing

    Public investment funds in the United States are permitted to use a wide variety of marketing materials to attract investors, many of which rely heavily on graphic and full-color print layouts. Due to the large number of funds and intense competition among funds, multi-fund complexes seek to create a brand identity that is easily recognized by a geographically diverse and fragmented investor base and to differentiate their marketing materials through the use of unique design elements. The frequency of required reports sent to individual shareholders requires substantial coordination of information from a variety of third parties, including outside administrators, transfer agents, advisers and accounting firms. In response to these market dynamics, our Investment Company Services business unit provides a full range of services that go beyond printing to the creation, production, distribution and reporting of fund documents. These services include software solutions that assist our clients in creating and assembling fund documents; comprehensive prepress services, which includes all of the necessary preparation of a document prior to printing; and document management and distribution services, including fulfillment (both electronic and paper) and inventory management of fund documents. Our personnel dedicated to this business unit are trained in the technical requirements applicable to investment funds in the United States, and we continually seek to adapt our systems rapidly to respond to changes in SEC reporting requirements or to market practices that affect our fund clients.

    In addition to collaborative Internet-based work environments for editing and proofing documents, such as Merrill e-Collaborate and Merrill e:Proof, we offer our Investment Company Services clients sophisticated software applications tailored to the unique requirements of investment funds and the specifications of our fund clients. Included among our current service offering are the following proprietary software applications:

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MerrillReports, introduced in 1991, is a program that assists investment funds in preparing shareholder reports by automating the process of creating, typesetting and transmitting financial reports.  MerrillReports gathers information from a fund's accounting system and its transfer agent's records and is customized to accommodate a fund's accounting system and the specific requirements of its financial mapping and design elements. This software allows a fund to create and distribute its own proofs internally and to its filing agent. MerrillReports is a leading software system for fund prospectus creation and assembly.



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Merrill TextManager, introduced in 1998, is a software application that allows an investment fund client to create, manage and share text among multiple users, facilitating collaboration within and among teams. The system creates an electronic library of approved text that can be retrieved and reused, ensuring language consistency among multiple documents and reducing review cycles. Merrill TextManager also tracks changes within individual documents and changes among groups of documents.



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MerrillConnect, introduced in 1998, is an integrated software system that manages the sales and marketing process for investment funds. The system provides sales tracking, marketing analyses and a central database of all investor contacts.



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Electronic Distribution Services, introduced in 1999, is a consent database system designed to comply with SEC regulations requiring investment funds to obtain consent from investors before sending them disclosure information electronically. The system maintains a database of consent replies, as well as preferences for diskette, CD-ROM or Internet distribution.

    We market our services through a direct sales force of approximately 30 sales representatives, many of whom have significant prior experience at fund companies. Our sales representatives are highly trained not only in our service offering, but also in the operations and regulatory issues of the investment company industry. We believe that this training provides our sales force with a significant competitive advantage. In addition to direct, one-on-one marketing, we participate actively in investment company conventions and conferences and engage in direct mail and branding campaigns.

    Our services are generally provided on a periodic basis, often weekly for our larger clients, and are typically billed on a project basis. The majority of our pricing is subject to change at any time and varies substantially based on the type of project and the size and scope of our relationship with the client. We often bundle our traditional composition and printing services with our software solutions.

Operations

    The creation, assembly, production and distribution of documents for our Investment Company Services clients is similar to the process used in our Financial Document Services business unit. This process requires design, composition, printing, electronic conversion and distribution services that are available 24 hours per day and tailored to the exacting demands of our clients. Our Investment Company Services business unit uses the same hub and spoke technology as our Financial Document Services business. We also employ customer service representatives who are trained in the operations and regulatory issues of the investment company industry. Recently, we have begun to place customer service personnel in-house at several of our clients' locations, which has further strengthened our client relationships and improved client satisfaction. At January 31, 2000, we employed 469 employees, including 94 customer service employees and 44 sales, marketing and sales support personnel.

Competition

    We compete in the investment funds market based primarily on overall quality of our customer service, particularly our ability to produce rapid, accurate revisions consistently incorporating the client's special design and informational requirements. We also compete based on cost, relationships and our design, printing and distribution capabilities. We believe that our customized software applications, particularly in document creation and assembly, constitute a significant competitive advantage. Our acquisition of Daniels Printing has strengthened our presence in the New England market, where over 25% of the total public investments funds in the industry are located. Competition for composition and printing services in this market is highly fragmented. Our primary competitors for these services include large, national financial printers and smaller, regional printers across the United States. The market for many of the communication and marketing services that we offer is even more fragmented given that these services are also offered by various other market participants, such as software designers, mailing and courier services and data processing companies. We believe that our integrated suite of tailored investment fund services provides us with a competitive advantage relative to these other service providers.

Managed Communications Programs

Overview

    The Managed Communications Programs business unit provides comprehensive business communications solutions from design to distribution, using fully integrated, customized, print-on-demand communications materials and branded products. For a majority of our clients, we offer a large number (often in excess of 200) of branded promotional products, including business cards, letterhead, product brochures, customer newsletters, retail forms, point-of-purchase materials and "high-end" marketing materials. We focus on customer segments with complex distribution requirements and a need to maintain a consistent brand image among dispersed operations, including franchise, retail and agent networks. We believe we are the leading provider of communications management solutions to the real estate brokerage industry. Our clients include some of the largest and most respected real estate brands in the United States, such as Century 21 Real Estate Corporation, Coldwell Banker Corporation, ERA Franchise Systems, Inc. and RE/MAX International, Inc., as well as some of the nation's premier marketers, such as Aon Corporation, AXA Financial, Inc. (formerly The Equitable Companies Incorporated), Cendant Corporation, Eddie Bauer, Inc., Nordstrom, Inc., UnitedHealth Group and Visa U.S.A., Inc.

Services and Marketing

    Our service offering is designed to help our clients present a uniform image across dispersed operations and to reduce our clients' cost of communicating with their clients. We assist our clients in designing, sourcing and distributing various communication materials (including letterhead, business cards or member directories), as well as promotional products (including umbrellas, pens and tee-shirts) and point-of-purchase materials (including sales tickets and jewelry price tags). In some cases, we design the catalogues of promotional items used by our clients and we manage the inventory of such items. In providing our service, we maintain a database of information about each end-user and his or her marketing efforts, purchasing history and other information. This database of information is a valuable strategic asset, which our clients rely upon to conduct their operations. Through this database, for example, we can help our clients create targeted direct marketing campaigns. As part of our service, we also help clients re-engineer their methods of business communication, which typically results in significant improvements in productivity and cost savings for our clients. These engagements contribute towards our strategy of maintaining strong and long-lasting client relationships in which we become an integrated part of our client's communication process and, as a result, less susceptible to competition from other communications service providers.

    One of the major clients of our Managed Communications Programs business unit is Coldwell Banker Corporation. As an example of the services we provide, we are the preferred vendor for all promotional material used by Coldwell Banker's real estate agents, and we designed the Coldwell Banker catalogue that comprises such items. The 88 page catalogue contains over 200 promotional items, including business cards, "just listed" mailing cards, home buying brochures and umbrellas with the Coldwell Banker logo. Real estate agents can place orders for any item in the catalogue by telephone, fax or the Internet. We then either ship from our own inventory, print-on-demand, or procure the item from a third party supplier. Our staff is trained to cross-sell certain items and suggest particular product group offerings in specific circumstances. For example, we may suggest to a new agent a starter kit containing business cards, letterhead, envelopes and home buyer guides. If an agent is sponsoring a promotional event, such as a golf outing, we may up-sell certain items by suggesting golf shirts with the Coldwell Banker logo, which we would purchase from a third party supplier. By centralizing the purchasing and fulfillment with us, Coldwell Banker ensures that all of its agents adhere to a uniform brand image. Coldwell Banker also realizes significant savings by eliminating purchasing agents and buyers and consolidating its buying power. We also maintain a database of the spending histories for each agent and are able to recommend starter kits or quantities based on historical usage. Furthermore, we can report purchasing habits and trends to Coldwell Banker for analysis.

    We offer our Managed Communications Programs clients software applications, including the following:

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Merrill@ccess, introduced in 1998, is an on-line ordering, requisitioning and inventory management system that can be customized to meet specific user requirements. It provides a visual representation of all marketing communication materials including kits, kit components and their contents.Merrill@ccess also has the ability to display availability, estimate the approximate cost of the order, provide various shipping methods, and confirm the order in real time.



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Merrill net:Prospect, introduced in 1998, is an Internet ordering site used by real estate agents for target mailings. Key features include a postcard with business reply, a personalized postcard with agent photo, the choice of three standard or custom headlines, the ability to order on-line with turnaround in two to three days, and options for custom messages and a property photo.



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Merrill net:Prospect Plus, introduced in 1999, is an advanced version of Merrill net:Prospect. Some of the additional features of this product include a custom broker monthly mailing program, on-line photo display, custom broker headlines, on-line mailing history and database storage and maintenance.



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e-stores, introduced in 1997, are e-Commerce sites that are customized for particular clients. These stores provide order entry and database services that interface with our fulfillment and print manufacturing operations. Our standard e-stores includes "shopping cart" transactions, various security features, product descriptions and images, a help guide and search engine. Our advanced e-stores include, in addition to the standard features, printable order forms, product previews, quota administration, more advanced security features, user profile product display, shopping carts with edits, order history, status reporting and custom shipping methods.

    Our marketing approach varies based on the type of client. For our real estate and franchisor clients, we employ a two tier selling approach. First, we use a direct sales force to market our overall package of services to the parent company or franchisor, with the goal of becoming the preferred vendor for branded promotional materials for the agent or franchise network. This tier of the sales and implementation cycle typically ranges from 12 to 36 months, reflecting the time required to analyze and understand the client's logistical and communications requirements, to design and implement an appropriate program and to transition the services from the client's own operations or its outside vendor. We believe that the investment of time and resources into this sales cycle strengthens our relationships with our clients and creates a barrier to entry by other competitors. For the second tier of the sale, we market the products approved by the parent company or franchisor to the agents or franchisees. We market to these clients through the Internet, direct mail and, occasionally, through direct sales. For our corporate clients, we have a single tier approach based entirely on direct sales efforts.

    We generally contract to supply branded promotional materials to large geographically dispersed companies or franchisors for a typical three-year term. In the case of our real estate and franchisor clients, we are promoted as the preferred vendor to their agents or franchisees and our revenue is generated by selling products to these agents or franchisees. Our basic products and services (such as business cards and flyers) are priced on a "per piece" basis, while other, more customized products and services (such as umbrellas and golf shirts) are sold on a "cost plus" basis. If we manage a client's entire inventory and fulfillment needs, we either charge a fixed fee, which would include all necessary software tools, or we charge on a menu basis, where our clients can pick the services they desire.

Operations

    We use a sophisticated order entry system for receiving and processing orders, which includes mail orders, fax and a large inbound telemarketing staff. We fulfill these orders by bulk printing these items through the Merrill Print Group with further personalizing and imprinting completed at our facility in St. Cloud, Minnesota. Our other catalogue products are shipped directly to the client from our third party vendors. We use an automated "materials handling system" that manages order processing, billing, shipping and inventory levels. Most orders are filled within four days of receipt. We recently began an initiative to move our clients to our e-stores and telephone order systems from the traditional fax and mail order methods, which we believe will strengthen our ability to cross-sell our products and increase our revenue. At January 31, 2000, we employed 842 employees, including 121 customer service employees and 87 sales, marketing and sales support personnel.

Competition

    We compete primarily based on the scope of the services that we provide, price and the overall quality of our customer service. The competitive market for our Managed Communications Programs services is highly fragmented. Our main competitors are large, national integrated print and information service providers, as well as a number of smaller regional and local companies.

Merrill Print Group

Overview

    The Merrill Print Group offers comprehensive digital prepress, printing and fulfillment services to our other business units and to corporations, design firms and governmental agencies. We maintain an outsourcing strategy and a low fixed-cost asset base in order to maximize the utilization rate of our printing assets. As a result, our capital expenditures are lower than those of a traditional commercial printing company. In addition, we believe our low fixed-cost asset base and outsourcing strategy provide us with a competitive advantage during downturns in printing market demand, when the impact on our profitability is minimized relative to our competition.

    In April 1999, we broadened Merrill Print Group's capabilities by acquiring Daniels Printing, a full-service financial and commercial printing company based in suburban Boston, Massachusetts. In operation for over 100 years, Daniels Printing has long been a provider of high-quality printing and related services to investment companies and corporations predominantly in the Northeastern United States. Daniels Printing sells its high-end color printing products in the form of annual reports, brochures, marketing materials and other advertising materials and packaging to large corporate clients, including The Gillette Company, International Paper Company, Polaroid Corporation and other Fortune 1000 companies.

Services and Marketing

    We offer a broad range of prepress, printing and distribution services. Our prepress capabilities consist of both traditional and digital prepress services, including all of the necessary image preparation of a document prior to its printing. This stage of the process involves a significant amount of client interaction, including a client's review of proofs and the layout of documents. In addition to printing time sensitive documents, such as the prospectuses and proxy statements produced by our Financial Document Services and Investment Company Services business units, we also print high-quality commercial documents, such as annual reports, high-end marketing materials and branded promotional materials sold by both our Managed Communications Program and the Merrill Print Group. In addition, we print ballots in connection with public elections and referenda in the counties and the State of California. Our distribution services consist primarily of distributing regulatory and investor information to transfer agents or investment bankers as directed by these clients.

    Currently, our principal clients are our other business units, which together account for a majority of our capacity. As part of our focus on attracting third party commercial printing, we intend to direct our marketing efforts to design firms, high growth companies, Fortune 1000 companies that require high quality printing and companies in industries, such as fashion, that rely heavily on print media. We also plan to increase our commercial printing business, such as the production of "glossy" marketing and educational materials and four-color print annual reports, with clients in our Investment Company Services and Financial Documents Services business units.

    Contracts for our printing services are generally on a purchase order basis. Pricing is based on the quantity of materials printed, the number of pages and type of paper required, the amount of color in the document and the time frame allowed to complete the document.

Operations

    We operate printing plants in St. Paul, Minnesota; Los Angeles, California; Chicago, Illinois; Dallas, Texas; Union, New Jersey; and suburban Boston, Massachusetts. These plants primarily serve the printing requirements of clients in our Financial Document Services and Investment Company Services business units. Printing requirements associated with Investment Company Services and the compliance document printing within Financial Document Services are significantly more predictable and less time sensitive than printing associated with financial transactions. By leveraging our printing assets among both types of printing, we are able to maximize our utilization by scheduling the more predictable and less time-sensitive printing during lulls in demand for transactions-based printing. This leverage provides us with a competitive advantage in maximizing utilization and operating efficiencies. We also operate a specialized color printing facility in St. Cloud, Minnesota. This facility primarily serves our Managed Communications Programs business unit. With our new plant in suburban Boston, Massachusetts, which was a part of the Daniels Printing acquisition, we have expanded our financial and corporate printing capabilities by adding high-quality, high-speed presses and improved prepress capabilities. All of our facilities are linked together by a high speed data network. As part of our outsourcing strategy, we subcontract certain of our printing requirements, particularly those of our Financial Document Services and Investment Company Services business units, to third-party local printing plants. At January 31, 2000, we employed 604 employees. Our customer service group is responsible for the coordination of all prepress and distribution services whether the work is produced internally or externally. This group is responsible for maintaining our high-quality levels while maximizing our utilization levels and operating efficiencies.

Competition

    The commercial printing market is highly fragmented and we compete with national and regional printing companies. For our high-end annual reports and commercial printing, we compete with a number of national companies. Competition in our commercial printing business is intense and is based on quality, price, technological capability and established relationships. We believe that we maintain a strong competitive position in our markets due to our targeted marketing and sales programs, our high level of customer service, and our manufacturing efficiency and productivity.

Document Services

Document Management Services

Overview

    Our Document Management Services business unit provides law firms, corporate legal departments and investment banks with information management products and services designed to enhance productivity and reduce costs. We provide a total outsourcing solution to our clients' information management needs, including providing all of the staff, technology and equipment necessary to manage the varying levels of demand associated with this function. We operate 85 document service centers on-site at client locations in 11 U.S. metropolitan markets. In these centers we manage a range of services, including scanning, copying, fax management, desktop publishing and document imaging. We offer these services typically over a three to five year contractual period. Supporting this business are over 600 of our employees resident in our clients' facilities. We also manage reprographics and regional imaging centers that provide litigation support for small and large-scale assignments. In addition, we offer a sophisticated litigation support software program that enhances our clients' productivity in the storage and retrieval of legal documents associated with complex corporate and litigation matters.

    We have focused our operations principally on the legal market given the complexity and importance of its document and information management requirements. This focus has provided us with an expertise and strong reputation in handling their time sensitive and confidential documents, which we believe provides us with a significant competitive advantage. We plan to use our expertise in managing the legal market's documents needs to expand into other professional services markets, such as the investment banking and accounting firm market, which have similarly complex information and document management requirements. The software and other technology-based solutions that we have developed for the legal market may also be readapted with limited additional investment for use in these other customer segments. We also focus our operations in markets where we already have a critical mass of operations or in markets where we have been offered a project and believe we can rapidly establish a critical mass. This approach strengthens our profitability by allowing us to leverage our local management infrastructure and to better utilize our local workforce, which can be moved among our client locations depending upon the relative workload and demand required by each of our clients within the market.

    We believe that the outsourcing of document and information management operations by clients within our targeted customer segments will grow rapidly over the next several years. As the requirements of these document and information management operations become increasingly complex, the investment and resources needed by our clients to maintain their competitive advantage becomes significantly more burdensome. The skills of the workforce needed to manage such operations also increases. Given that these operations represent an ancillary function to our clients' core operations, our clients experience difficulty in attracting a skilled workforce to manage this function. As a result, many of these clients feel economically compelled to outsource these operations.

Services and Marketing

    We offer a broad array of document-based information management services including:

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Document service centers, in which we offer comprehensive copying, fax and mailroom management, records management, desktop publishing and document imaging services within a client's offices. Through our document service centers, we address a client's total document management needs, including providing on-site employees, equipment and management of the operation.



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Large-volume reprographics, in which we provide digital printing and copying services to our clients for projects that are time sensitive, highly confidential and often require a rapid turnaround time. We provide photocopying services, sequential numbering, storage and retrieval of paper documents that are often provided to us in multiple boxes on varying paper sizes and binding techniques. We produce photocopies at our own service facilities or using equipment and personnel that we provide at the client's office. These services are typically provided to clients for a specific litigation matter and range in volume from 6,000 to five million pages. Larger reproduction services are generally for "high profile" cases that continue for several months or years.



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Imaging and coding services, in which we create electronic document repositories for clients. We convert documents from paper to an electronic medium using scanning equipment at our own regional imaging centers or equipment and personnel at the client's office. We provide the images to the client on CD-ROM or using our Merrill E-TECH software. We also provide coding services, which are heavily used in litigation matters at our national coding center in Norwalk, Connecticut. As part of this service, each page in a large volume of documents can be coded with various parameters, including the author, the document type, title, primary recipient and carbon and blind copy recipients. Our Electronic File Discovery (EFD) service electronically captures e-mail files and their attached documents, automatically extracting bibliographic information (including dates, sender and all recipients) and textual content on a page basis for full text searches.



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Litigation support software, in which we provide a document imaging, coding and retrieval system enabling our clients to analyze, sort, annotate, edit and print litigation documents. We license our Merrill E-TECH software to law firms and corporate law departments either on a project basis, on a firm-wide basis or as part of our imaging and coding service offerings. We plan to introduce a browser-based version of Merrill E-TECH in Spring 2000.

    We principally target law firms and corporate law firms that have a minimum of 26 attorneys (estimated to be over 2,000 law firms and 200 corporate law departments). We also have begun to target investment banks and accounting firms which have complex document and information management needs that are likely to be outsourced. To increase awareness of our service offering, we host presentations at trade shows and conduct limited advertising in directory and trade publications. Our sales effort is also supported through our document service centers, where our staff can gain an in-depth knowledge of our clients' total document and information management needs and are thus able to sell other services we offer that our clients may not yet be utilizing. Given the range of services we provide in our document services centers and the integration of these operations into our clients' communication processes, the sale of this service requires a consultative approach and typically requires six to nine months to complete. Software applications also generally require a six to nine month sales cycle. We believe that the investment of time and resources into these sales cycles strengthens our relationships with our clients and creates a barrier to entry by other competitors. Sales of our reprographics, imaging and coding services are event-driven and typically have a short sales cycle lasting from days to weeks.

    Pricing for our services in this business unit varies substantially depending on the type and scope of the project. Document service centers are typically provided under three to five year contracts, with pricing dependent on the level of support staff and the number of copies provided monthly. Reprographic, imaging and coding services may be provided on a purchase order or long-term contractual basis, depending on the size of the job. In the case of projects linking several locations, such as our document repository services, we will also charge a flat administration fee reflecting considerations such as the minimum number of pages required to establish the repository and the cost of relevant software applications. We also charge licensing, servicing and maintenance fees for our E-TECH software.

Operations

    We operate 89 document service centers located on-site at our clients' premises in 11 U.S. metropolitan markets. We provide the management, staffing and equipment for all of these centers. We have a lease arrangement with a major manufacturer of photocopying equipment, whereby we lease such equipment on an as-needed basis and pay for usage on a per copy basis (as opposed to paying a fixed monthly rental cost). We also are able to replace, remove or add equipment generally for no additional charges. This arrangement is in line with our overall operating strategy of minimizing our fixed-cost asset base. We also operate reprographics facilities in Los Angeles (three centers) and San Francisco, California; Denver, Colorado; St. Paul, Minnesota; Chicago, Illinois; Dallas and Houston, Texas; Boston, Massachusetts; Union, New Jersey; and Washington, D.C. These facilities are equipped with high-performance photocopying equipment and, in some locations, servers and personal computers for our Merrill E-TECH software. Our national imaging center in Norwalk, Connecticut, contains all of the equipment used to convert documents into a digital format, including scanners, personal computers, printers, photocopying equipment and servers. At January 31, 2000, we employed 1,211 employees, including 48 customer service employees and 73 sales, marketing and sales support personnel. Approximately 600 of our employees in our document service centers are located on-site at our clients' premises.

Competition

    In our Document Management Services business unit, we compete with nationwide services companies, including Bowne & Co., Inc. and Uniscribe Professional Services, Inc., and a number of smaller, local companies. We also compete with other vendors of specialized litigation support services and a large number of photocopying and imaging shops, including both privately-owned and franchised operations. Competition in this part of our business is intense and is based principally on service, price, speed, accuracy, technological capability and established relationships. For our Merrill E-TECH software, we compete with various software products, most commonly a product offered by Summation Legal Technologies, Inc. We compete primarily on the basis of quality and features of the product, customer service and support as well as cost.

Technology

Overview

    Our technology expertise has positioned us as a leader in the evolution of document creation, management and distribution in both print and electronic formats. We view our technological expertise as an important competitive advantage, and we have made a significant investment in competencies that maintain our leading position and diversify our revenue base. These competencies include:

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text processing, conversion and formatting;



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Internet, extranet and intranet capabilities;



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database management;



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image and graphic processing; and



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digital printing.

    We strive to leverage the applications we develop for a specific client or business unit by modifying them for use by other clients or business units. Merrill e-Collaborate, for example, was first used in our Financial Document Services business, but has since received strong interest from clients in both Investment Company Services and Document Management Services. We also plan to utilize the e-Commerce capabilities we have developed in our Managed Communications Programs business unit for applications in our Investment Company Services business unit.

    Currently, we employ over 200 full-time project managers, software developers, and support personnel responsible for the design, development and implementation of our technology-based offerings. We have also created a program, Merrill Technology Portfolio, whereby we establish and partly fund companies to develop innovations related to technological capabilities or products that are useful to our business. Recently, we have begun to offer the entrepreneur sponsoring these innovations up to a 20% equity interest in the venture, in the form of stock options or stock grants. We believe that this program allows us to attract and retain the top talent in our industry, to provide them with incentives to realize their innovations and to leverage our investment in technology.

Product and Services

    Our technology services assist our clients to communicate more effectively with their clients by streamlining the document creation, production and distribution process and by assisting the client in administering the process. Many of our technology services improve the speed by which the documents are created, produced and distributed as well as the accuracy of these documents by automating the gathering and distribution of financial and textual information.

    The following table lists our principal proprietary communications tools.

Product	Key Features	Business Unit(s)
Creation Tools
MerrillReports	Assists investment companies in preparing their shareholder reports by automating the process of creating, composing and transmitting financial reports.	Investment Company Services
	Gathers information from a funds accounting system and transfer agents records.
	Customized to a fund's accounting system and to the specific requirements of each fund's financial mapping, style and design elements.
	Allows a mutual fund to create and distribute its own proofs internally and to its filing agent.
Merrill TextManager	Software application that allows an investment fund to create, manage and share text among multiple users, facilitating collaboration within and among teams.	Investment Company Services
	Creates an electronic library of text that can be retrieved and reused, ensuring consistency among multiple documents and reducing review cycles.
	Tracks changes within individual documents and changes among groups of documents.
Merrill e-Collaborate	Web-based document management tool designed to streamline the creation of time sensitive documents. Secure electronic work space where working group members can offer comments and review proofs instantly, without having to wait for couriers or faxes.	Financial Document Services and Investment Company Services
	Built in address book with e-mail capabilities.
	Contains a group discussion area and links to various securities law publications.
Merrill E-TECH	Document imaging, coding and retrieval system that enables our clients to analyze, sort, annotate, edit and print litigation documents.	Document Management Services
Merrill net:Prospect Merrill net:Prospect Plus	Turn-key, on-line management and direct mail fulfillment system that is customizable to individual real estate broker specifications.	Managed Communications Programs
	Key features include a postcard with business reply, a personalized postcard with agent photo, the choice of standard or custom headlines, the ability to order on-line with quick turnaround, and options for custom messages and a property photo.
	Additional features of Merrill net:Prospect Plus include a custom broker monthly mailing program, on-line photo display, custom broker headlines, on-line mailing history and database storage and maintenance.

Product	Key Features	Business Unit(s)
e-stores	Customized e-Commerce sites providing order entry and database services that interface with our fulfillment and print manufacturing operations.	Managed Communications Programs
	Includes "shopping cart" transactions, various security features, product descriptions and images, a help guide and search engine.
	Advanced e-stores include, in addition to the standard features, printable order forms, product previews, quota administration, more advanced security features, user profile product display, shopping carts with edits, order history, status reporting and custom shipping methods.
Production Tools
Job Control System	Enables our customer service representatives to track client information for a particular print job, including names, addresses and proof delivery locations.	Financial Document Services, Investment Company Services and Merrill Print Group
MDB<>Link	Offers clients the ability to print a "blueline" directly in their office, eliminating the need for courier and overnight delivery of bluelines.	Financial Document Services
Distribution Tools
Merrill e:Proof	Electronic distribution method of typeset and EDGAR documents through Internet e-mail or a secure point-to-point connection.	Financial Document Services and Investment Company Services
Merrill<>Link	Permits a client to receive sharp, clear page proofs right in a client's office without the necessity of couriers, e-mail or faxes through the use of a remote printer.	Financial Document Services and Investment Company Services
	Multiport capabilities permitting printers in multiple locations to receive proof pages simultaneously.
Electronic Distribution Services	Consent database system designed to comply with SEC regulations requiring investment funds to obtain consent from investors before sending them disclosure information electronically.	Financial Document Services and Investment Company Services
	Maintains a database of consent replies and preferences for diskette, CD-ROM or Internet distribution.
Merrill IR Edge	Web-based service where we host, create and design investor relations websites for our clients, including, at the client's election, electronic distribution of regulatory and investor reports, stock price information, research reports, press releases, links to other helpful websites and other information important to investors.	Financial Document Services
Information Tools
MerrillConnect	Integrated software system that completely manages the sales and marketing process for investment funds, including sales tracking, marketing analyses and a central database of all investor contacts including order entry, database management and fulfillment.	Investment Company Services

Product	Key Features	Business Unit(s)
Merrill@ccess	On-line ordering, requisitioning and inventory management system that can be customized to meet specific user requirements.	Managed Communications Programs
	Provides visual representation of all marketing communication materials including kits and kit components and their contents.
	Has the ability to display availability, estimate the approximate cost of the order, provide various shipping methods and confirm the order in real time.

Employees

    As of January 31, 2000, we had 4,161 full-time employees and 194 temporary employees. None of our employees are covered by a collective bargaining agreement. We consider our employee relations to be good.

    We compete intensely with others in the industry to attract and retain qualified technical and sales personnel. To date, we believe that we have provided incentives sufficient to minimize the loss of key personnel and to attract additional staff for both replacement and expansion. Many of our sales personnel are under employment contracts of varying terms with us.

Properties

    We lease or own the following facilities:

Location	Description	Leased or Owned
St. Cloud, Minnesota	Printing, warehouse and office facilities; 123,000 sq. ft.	Owned
St. Paul, Minnesota	Office and prepress facilities; 150,000 sq. ft. in two buildings, of which approximately 85,000 sq. ft. is leased to other businesses	Owned
Everett, Massachusetts	Printing and office facilities; 135,745 sq. ft. in two buildings	Owned
St. Paul, Minnesota	Printing and office facilities; 47,000 sq. ft.	Leased for a term expiring November 30, 2005
New York, New York	Conference and office facilities; 102,000 sq. ft.	Leased for a term expiring October 31, 2014
New York, New York	Conference and office facilities; 13,830 sq. ft.	Leased for a term expiring November 25, 2005
Boston, Massachusetts	Conference and office facilities; 13,500 sq. ft.	Leased for a term expiring November 30, 2003
Other cities	Conference, office and warehouse facilities; 150 to 77,000 sq. ft.	Leased with expirations ranging from June 30, 1999 to October 31, 2014

    We believe that our facilities are adequate for our current operations.

Environmental Matters

    We are subject to many laws and regulations relating to the protection of the environment and human health and safety. While we do not believe compliance with these laws will have a material adverse effect on our business, we cannot assure you that we have been and will be at all times in compliance with all such requirements, or that we will not incur material fines, penalties, costs or liabilities in connection with such requirements or a failure to comply with them. In addition, these laws may become more stringent and our processes may change, therefore the amount and timing of expenditures in the future may vary substantially from those currently anticipated.

    Some environmental laws require investigation and cleanup of environmental contamination at properties we now or previously owned, leased or operated or at which our waste was disposed of or released. Although we are not currently aware of any obligations to perform any remediation that will require us to incur costs which would have a material adverse effect on our business, we may be required to conduct remedial activities in the future which may be material to our business, and we also may be subject to claims for property damage, personal injury, natural resource damages or other issues as a result of such matters.

Legal Proceedings

    Two purported shareholder class action lawsuits have been filed against our company and each of our directors in Minnesota state court on behalf of our unaffiliated shareholders. The lawsuits allege, among other things, that (1) John Castro and Rick Atterbury unfairly possessed non-public information concerning the prospects of our company when negotiating with our company on behalf of themselves and Viking Merger Sub and (2) the individual defendants breached their fiduciary duties to our shareholders by facilitating, through unfair procedures, Viking Merger Sub's proposal to acquire our company to the exclusion of others, for unfair and inadequate consideration. The lawsuits further allege that these actions prevented or could prevent our shareholders from realizing the full and fair value of their stock. The plaintiffs sought preliminary and permanent injunctive relief restraining the defendants from proceeding with a transaction with Viking Merger Sub and a declaratory judgment that the defendants have breached their fiduciary duties.

    On October 22, 1999, Merrill, the defendant directors and the named plaintiffs, on behalf of themselves and the putative class of persons on behalf of whom the plaintiffs brought the lawsuits, reached an agreement in principle with respect to the settlement of this litigation. On that date, counsel to each of the parties to the litigation entered into a memorandum of understanding, agreeing to execute and present to the court as soon as is practicable an appropriate stipulation of settlement and any other documentation required in order to obtain approval by the court of the settlement. Any proposed settlement would be subject to the approval of the court and would not be effective unless the merger is completed. We anticipate that any settlement of this litigation will not have a material adverse effect on our financial condition, operating results or liquidity.

    On October 28, 1999 in the Court of Common Pleas in Allegheny County Pennsylvania, SmartTran filed a Praecipe for Issuance of Writ of Summons against us for the alleged breach of contract. Attached to the Praecipe was a request for production of documents. The Praecipe relates to an agreement where we agreed to pay SmartTran a commission if they could negotiate an improvement of our vendor discounts with shipping companies. We are currently in settlement discussions with SmartTran on this matter.

MANAGEMENT

Executive Officers and Directors

    The following table sets forth the name, age as of January 31, 2000 and position with Merrill of each person who serves as a director or as an executive officer of our company.

Name	Age	Position
John W. Castro (1)	51	President, Chief Executive Officer and Director
Rick R. Atterbury	46	Executive Vice President, Chief Technology Officer and Director
Steven J. Machov	48	Vice President, Secretary and General Counsel
Kathleen A. Larkin	39	Vice President, Human Resources
Kay A. Barber	49	Vice President of Finance, Chief Financial Officer and Treasurer
Allen J. McNee	41	President, Document Management Services
B. Michael James	43	President, Financial Document Services
Mark A. Rossi	42	President, Investment Company Services
Joseph P. Pettirossi	35	President, Managed Communications Programs
Raymond J. Goodwin	36	President, Merrill Print Group
Lawrence M. Schloss	45	Director
William F. Dawson, Jr. (1).	35	Director
Keith R. Palumbo (1)	31	Director

(1)

Member of compensation committee.

John W. Castro has been our President and Chief Executive Officer since 1984 and a member of our board of directors since 1981. Mr. Castro also serves as a Director of BMC Industries, Inc.

Rick R. Atterbury is our Executive Vice President and Chief Technology Officer and a member of our board of directors. Mr. Atterbury has served as a member of our board of directors since 1989 and as our Executive Vice President and Chief Technology Officer since February 1999. From 1996 to January 1999, Mr. Atterbury was our Executive Vice President, and prior to that time, he served as our Vice President of Operations.

Steven J. Machov has been our Vice President since 1993, our Secretary since 1990 and our General Counsel since 1987.

Kathleen A. Larkin has been our Vice President of Human Resources since 1993.

    Kay A. Barber has been our Vice President of Finance, our Chief Financial Officer and our Treasurer since August 1995. In January 2000, Ms. Barber accepted a consulting position with us where she will assist us in the areas of process improvement, cost reduction initiatives, acquisitions and business strategy. Ms. Barber, however, will not assume this new position and will remain our Chief Financial Officer until we find a replacement for her which we expect will be during the next 90 days. From January 1993 to August 1995, Ms. Barber was Vice President, Finance and Controller for Growing Healthy, Inc.

Allen J. McNee has been our President of Document Management Services since February 1999. From February 1996 through January 1999, Mr. McNee was our Vice President of Document Management Services. Prior to that time, Mr. McNee served as our Director of Facilities Management/ Document Reproduction Group, from February 1992 through January 1996.

B. Michael James has been our President of Financial Document Services since February 1999 and President of our subsidiary, Merrill/New York Company since January 1994. From January 1996 to February 1999, Mr. James was Vice President of our East Region and International Operations. Prior to that time, Mr. James was our Vice President of Human Resources from June 1989, when Mr. James joined us, to January 1994.

Mark A. Rossi has been our President of Investment Company Services since February 1999. From February 1997 to February 1999, Mr. Rossi was our Vice President of the Central Region. Prior to that time, Mr. Rossi served as our President of Southern California, from February 1993 to January 1997.

Joseph P. Pettirossi has been our President of Managed Communications Programs since February 1999. From July 1996 to February 1999, Mr. Pettirossi was the President of one of our subsidiaries, Merrill/ May, Inc. Prior to joining us in 1996, Mr. Pettirossi was the Chief Operating Officer and Chief Financial Officer of Northwest Racquet Swim & Health Clubs, Inc., from November 1994 to June 1996 and the Vice President and Chief Financial Officer of the Minnesota Professional Basketball Limited Partnership and the Minnesota Arena Limited Partnership, from September 1992 to March 1995.

Raymond J. Goodwin has been our President of Merrill Print Group since February 1999. From March 1997 to February 1999, Mr. Goodwin was our central Region Sales Manager. Prior to that time, Mr. Goodwin served as President of our Denver and Houston operations, from January 1993 to March 1997.

Lawrence M. Schloss was appointed to our board of directors in November 1999 upon completion of the merger. Mr. Schloss has been a Managing Director of DLJ Inc. since 1985 and is Head of DLJ's Merchant Banking Group. Mr. Schloss joined DLJ in 1978. He is a member of the Investment Committee of DLJ Merchant Banking Partners I, L.P. and DLJ Merchant Banking Partners II, L.P. (Co-Chairman), Chairman of DLJ Investment Partners I, L.P. and DLJ Investment Partners II, L.P. (mezzanine fund), Global Retail Partners, L.P., DLJ Real Estate Capital Partners, L.P., DLJ Diversified Partners, L.P., DLJ Fund Investments, L.P. and Private Equity Partners, L.P. He currently serves as Chairman of the Board of McCulloch Corp. and as a Director of DecisionOne Corporation, Thermadyne Holdings, Inc., and Wilson Greatbatch Corp. Mr. Schloss previously served as Director of GTECH Holdings Corporation, OSi Specialties, Inc., Krueger International, Inc. and MPB Corporation.

William F. Dawson, Jr., was appointed to our board of directors in November 1999 upon completion of the merger. Mr. Dawson has been a principal of DLJ Merchant Banking II, Inc. since August 1997. From December 1995 to August 1997, he was a Senior Vice President in Donaldson Lufkin & Jenrette, Inc.'s high yield capital markets group. Prior to that time, Mr. Dawson was a Vice President in the leveraged finance group within DLJ's investment banking group. Mr. Dawson serves as Director of Thermadyne Holdings Corporation, Von Hoffmann Press and Insilco Corporation.

Keith R. Palumbo was appointed to our board of directors in November 1999 upon completion of the merger. Mr. Palumbo has been a Vice President of DLJ Merchant Banking II, Inc. since December 1997. Prior to that time, Mr. Palumbo was an Associate in DLJ's investment banking group. Mr. Palumbo serves as a Director of Insilco Corporation.

    It is currently contemplated that the number of our directors will be increased to eight. The identity of the three additional directors, however, has not been determined at this time.

Director Compensation

    Our directors are not paid any additional compensation for their service as members of our board of directors.

EXECUTIVE COMPENSATION

Cash and Non-Cash Compensation

    The following table sets forth the cash and non-cash compensation for each of the last three fiscal years awarded to or earned by our Chief Executive Officer and our four other most highly compensated executive officers who were executive officers at the end of the fiscal year and whose salary and bonus exceeded $100,000 in fiscal year 1999.

Summary Compensation Table

							Long-Term Compensation
	Annual Compensation
Name and Principal Position							Securities Underlying Options (2)	All Other Compensation (3)
	Year	Salary		Bonus (1)
John W. Castro President and Chief Executive Officer	1999 1998 1997	$	359,375 300,000 300,000	$	626,000 840,000 693,000	(4)	35,000 69,000 0	$	47,504 44,824 28,583
Rick R. Atterbury Executive Vice President and Chief Technology Officer	1999 1998 1997		264,583 225,000 225,000		375,600 504,000 415,800		25,000 69,000 60,000		37,700 35,890 22,477
Kay A. Barber Vice President, Chief Financial Officer and Treasurer	1999 1998 1997		176,875 162,500 144,790		32,400 135,300 124,500		10,000 13,800 40,000		17,456 16,800 11,740
Steven J. Machov Vice President, General Counsel and Secretary	1999 1998 1997		152,291 140,834 132,915		27,900 120,700 113,550		10,000 27,600 20,000		15,688 15,169 10,645
Kathleen A. Larkin Vice President, Human Resources	1999 1998 1997		117,708 107,500 98,963		21,600 103,550 95,000		10,000 13,800 20,000		12,690 12,225 8,467

(1)

Cash bonuses for services rendered have been included as compensation for the year earned, even though all or part of such bonuses were actually calculated and paid in the following year.

(2)

Amounts have been adjusted for a two-for-one stock split effected in October 1997. All options shown in this table were cashed-out in connection with the merger.

(3)

"All Other Compensation" for fiscal year 1999 includes: (a) $11,200 each for Mr. Castro, Mr. Atterbury, Ms. Barber, Mr. Machov, and Ms. Larkin contributed by us for our 401(k) and defined contribution retirement plans; (b) premium payments under life insurance policies on the lives of the executives at the following incremental costs: Mr. Castro $998 and Mr. Atterbury $689; and (c) our contributions to the Supplemental Retirement Plan: Mr. Castro $35,306, Mr. Atterbury $25,811, Ms. Barber $6,256, Mr. Machov $4,488, and Ms. Larkin $1,490.

(4)

Mr. Castro deferred receipt of $140,000 of this amount.

Options

    The following tables summarize option grants during fiscal year 1999 to the executive officers named in the summary compensation table above, and the potential realizable value of the options held by such persons at the end of fiscal year 1999. There were no option exercises by the executive officers named in the summary compensation table above during fiscal year 1999.

Option Grants in Last Fiscal Year

	Individual Grants
		Percent of Total Options Granted to Employees in Fiscal Year					Potential Realizable Value at Assumed Annual Rates of Stock Price Appreciation for Option Term (2)
Name	Number of Securities Underlying Options Granted (#) (1)			Exercise or Base Price ($/sh)		Expiration Date
							5% ($)		10% ($)
John W. Castro	35,000	6.0	%	$	21.375	5/28/03	$	206,693	$	456,738
Rick R. Atterbury	25,000	4.3			21.375	5/28/03		147,638		326,241
Kay A. Barber	10,000	1.7			21.375	5/28/03		59,055		130,497
Steven J. Machov	10,000	1.7			21.375	5/28/03		59,055		130,497
Kathleen A. Larkin	10,000	1.7			21.375	5/28/03		59,055		130,497

(1)

These options were granted under our 1993 Stock Incentive Plan. These options were to become exercisable under the plan so long as the executive remained employed by us or with one of our subsidiaries. These options were granted at an exercise price equal to the market price on the date of grant. The options were to be exercisable in installments. The options were to become exercisable as to 20% one year after the date of grant and as to an additional 20% each year thereafter, with the final installment exercisable on or after November 28, 2002. Upon consummation of the merger, all outstanding options whether vested or unvested were canceled and the holders received in cash $22.00 less the exercise price per share of the option multiplied by the number of options held.

(2)

These amounts represent certain assumed rates of appreciation only. Actual gains, if any, on stock option exercises are dependent upon our future performance and the executive's continued employment with us. The amounts are not intended to forecast possible future appreciation, if any, in the price of our common stock.

    All outstanding options whether vested or unvested were canceled upon consummation of the merger. The holders of each option received in cash a per share amount equal to $22.00 less the exercise price per share of the option. The following table shows the number of options held by each of the executive officers named in the summary compensation table above and the amounts paid to these individuals at the effective time of the merger in exchange for cancellation of these options.

Name	Outstanding Options	Payment at Effective Time
John W. Castro	76,400	$	410,000
Rick R. Atterbury	205,000		1,805,125
Kay A. Barber	54,040		555,250
Steven J. Machov	43,860		367,925
Kathleen A. Larkin	48,540		491,313

Aggregated Option Exercises in Last Fiscal Year
And Fiscal Year-End Option Values

	Number of Securities Underlying Unexercised Options at Fiscal Year End (#)		Value of Unexercised In-The-Money Options at Fiscal Year End ($) (1)
Name
	Exercisable	Unexercisable	Exercisable		Unexercisable
John W. Castro	13,800	104,000	$	45,713	$	228,563
Rick R. Atterbury	67,800	205,000		169,463		698,250
Kay A. Barber	23,760	83,800		163,080		491,963
Steven J. Machov	11,520	65,600		44,910		235,925
Kathleen A. Larkin	14,260	65,800		98,986		373,838

(1)

Value calculated as the market value on January 31, 1999 ($15.9375), the average of the bid and asked prices as reported on the Nasdaq National Market, less the option exercise price. Options are in-the-money if the market price of the shares exceeds the option exercise price.

Employment Arrangements

Employment agreements with Messrs. Castro and Atterbury

    Effective upon completion of the merger, John Castro and Rick Atterbury have new employment agreements with us. Under these employment agreements, if either Mr. Castro or Mr. Atterbury is terminated without cause, he will receive:

•

a lump sum payment equal to 2.99 times his annual base salary;



•

a lump sum payment equal to 2.99 times his average bonus over the three consecutive years immediately before his termination; and



•

continuation of all insurance and other benefits for a period of three years.

    In addition, his entire account balance and all accrued benefits under our supplemental executive retirement plan and those under our other plans or arrangements providing similar benefits will vest and become nonforfeitable as of the termination date.

    The following table illustrates the amount of the lump sum payments that Messrs. Castro and Atterbury would be entitled to receive if they are terminated prior to May 23, 2000:

Executive	Amount of Payment
John W. Castro	$	3,273,200
Rick R. Atterbury		2,113,300

    The above amounts exclude:

•

costs associated with medical, dental and vision benefits;



•

cash payments for tax obligations arising from excise taxes, if any; and



•

the amount of the executive's vested benefits under the supplemental executive retirement plan.

    Should either Mr. Castro or Mr. Atterbury receive any payments under his employment agreement in connection with a change of control he would be entitled to a gross-up payment intended to offset the effect of any excise tax owed under Section 4999 of the Internal Revenue Code.

    Each of Messrs. Castro and Atterbury receive an annual base salary equal to $375,000 and $275,000 per year for Mr. Castro and Mr. Atterbury, respectively. Their salaries will be reviewed no less frequently than annually by our board and may be increased by our board in its sole discretion. In addition, each of Messrs. Castro and Atterbury are entitled to participate in an annual bonus program. Mr. Castro and Mr. Atterbury are also entitled to a target bonus for fiscal 2000.

Other employment arrangements

    The merger agreement between our company and Viking Merger Sub, Inc. provides that, Merrill, as the surviving company, will until November 23, 2000 provide benefits to our employees that will, in the aggregate, be comparable to those provided by us to our employees prior to the merger (other than any stock option or other equity-based incentive plan previously provided).

Severance agreements

    The merger constituted a "change in control" under change in control agreements we entered into in May 1998 with John Castro, Rick Atterbury, Steven Machov, Kay A. Barber and Kathleen A. Larkin. Under these agreements, all of these executive officers, except Messrs. Castro and Atterbury, who have separate employment agreements as described above, would be entitled to receive certain benefits if they are terminated prior to November 23, 2001.

    The executives are not considered "terminated" for purposes of these agreements if they die or are terminated for "cause" (defined as the executive's (1) gross misconduct, (2) willful and continued failure to substantially perform his or her duties after demand is given by the chairman of the board, or (3) conviction of a felony or gross misdemeanor which is materially and demonstrably injurious to us or which impairs the executive's ability to substantially perform his or her duties). The executive is, however, considered "terminated" if the executive voluntarily leaves our employ for "good reason." "Good reason" means

•

an adverse and material change in title, status, position, authority, duties or responsibilities as an executive;



•

reduction in base salary or an adverse change in the form or timing of the pay;



•

failure to cover the executive under similar benefit plans at a substantially similar total cost to the executive (including equity based plans);



•

relocation to more than 30 miles from the executive's existing office;



•

failure to obtain a successor's consent to the change in control agreement;



•

any termination of employment not properly noticed; or



•

our refusal to allow the executive to continue to attend to matters or engage in activities not directly related to our business.

    The executive is entitled to receive the following payments and benefits upon the triggering of these agreements:

•

cash payment equal to two times the sum of the executive's (1) base salary plus (2) target cash bonus for the year during which the change in control occurs or the average of the cash bonus for the three fiscal years ending immediately prior to the change in control, whichever is greater;



•

medical, dental and vision benefits to the executive, his or her family members and dependents for two years after the "date of termination" of employment, at a substantially similar total cost to the executive;



•

the account balance under our supplemental executive retirement plan will become fully vested and non-forfeitable. In addition, we will cause all distributions under this plan to be made regardless of the provisions of the plan that permit such distributions to be deferred; and



•

cash payment, if any, sufficient to cover all tax obligations arising from excise taxes.

    These change in control agreements have a term ending November 23, 2001, although they will automatically renew for additional 12-month periods unless we give the executive 90 days' advance notice of our intent to terminate the agreements.

    The following table illustrates the amount of the lump sum payments that the executives would be entitled to receive if they are terminated prior to November 23, 2001:

Name	Amount of Payment
Kay A. Barber	$	606,000
Steven J. Machov		516,800
Kathleen A. Larkin		416,800

    The above amounts exclude:

•

costs associated with medical, dental and vision benefits;



•

cash payments for tax obligations arising from excise taxes, if any; and



•

the amount of the executive's vested benefits under the supplemental executive retirement plan.

    We intend to renegotiate the above change in control agreements in the next few months. The terms and conditions have not yet been determined.

Indemnification and insurance

    Pursuant to the merger agreement, for six years after the closing date of the merger, we must indemnify and hold harmless our present and former officers and directors for acts or omissions occurring before the close of the merger to the extent provided under our articles of incorporation and by-laws in effect on the date of the merger agreement. In addition, for six years after the close of the merger, we must provide officers' and directors' liability insurance for acts or omissions occurring before the close of the merger covering each such person currently covered by our officers' and directors' liability insurance policy on terms with respect to coverage and amount no less favorable than those of such policy in effect on July 14, 1999; provided that the cost of such insurance will not exceed 200% of the amount per annum we paid in our last fiscal year.

Board indemnification agreements

    In May 1999, we entered into compensation and indemnification agreements with each of the members of the special committee, Paul G. Miller, Ronald N. Hoge and Michael S. Scott Morton, to compensate them for their additional duties, responsibilities and burdens in connection with their service on the special committee. In return for their services as members of the special committee, each of Messrs. Miller, Hoge and Scott Morton received $25,000. We will also reimbursed them for any reasonable out-of-pocket travel and other expenses incurred in connection with their service on the special committee. In addition to their general right to indemnification under our articles of incorporation, we agreed to indemnify and advance expenses to each of them to the full extent provided by applicable law and our articles of incorporation in connection with any threatened, pending or completed proceeding, including a proceeding by or in the right of the company.

    We also entered into indemnification agreements with each of our disinterested members of the board of directors to compensate them for their additional duties, responsibilities and burdens in connection with their service on the board in considering the merger. In addition to their general right to indemnification under our articles of incorporation, we also agreed to indemnify and advance expenses to each of them to the full extent provided by applicable law and our articles of incorporation in connection with any threatened, pending or completed proceeding, including a proceeding by or in the right of the company.

Stock option plan

    On December 20, 1999, our board of directors and shareholders adopted the 1999 Stock Option Plan pursuant to which we may grant incentive and non-statutory stock options to purchase shares of our class B common stock to employees, non-employee directors, consultants and independent contractors. Our board has created a compensation committee to, among other things, administer the option plan, including determining the persons who are to receive options, as well as the type, terms and number of shares subject to each option. The option plan will terminate on December 19, 2009, unless our board of directors decides to terminate it earlier.

    Shares available for issuance.  We have reserved 825,000 shares of our class B common stock for issuance under the option plan. We are currently offering options to purchase shares of our class B common stock at an exercise price of $22.00 per share to some of our employees and independent contractors of our company. We are uncertain at this time how many options will be granted. Any options granted will generally become exercisable over a six-year period, or in the case of some options, in the event certain performance milestones are met. We expect to complete the employee offering during the next month. Shares subject to options granted under the option plan that lapse or are terminated may again be subject to grants under the plan.

    Effect of termination of employment or other service.  Options granted under the option plan generally terminate when an optionee's employment or other service with our company terminates. The reason for the optionee's termination dictates what happens to his or her options. Unless otherwise provided in the optionee's stock option agreement, if an optionee is terminated for "cause," his or her options will immediately terminate and no longer be exercisable. In addition, we will have the right to repurchase from the optionee all shares of class B common stock the optionee previously acquired upon the exercise of any options at a price equal to the exercise price paid by the optionee to acquire these shares of class B common stock.

    Unless otherwise provided in an optionee's stock option agreement, if an optionee's employment or other service with us terminates for any other reason whatsoever, whether due to voluntary resignation, death, disability, retirement or termination by us without cause, the options that were exercisable as of the optionee's termination date will remain exercisable for one year. There are other situations, however, when an optionee's options may terminate earlier. For example, if an optionee engages in an "adverse action" (as defined below) before or within 12 months after the termination of his or her employment or other service with us, the Compensation Committee may immediately terminate all of the optionee's rights under the option plan and his or her options. We refer you to the information under the heading "—Effect of an adverse action" below. In no circumstance will an optionee's options remain exercisable after their expiration date.

    For purposes of the option plan, "cause" means:

•

dishonesty, fraud, misrepresentation, embezzlement or other act of dishonesty with respect to Merrill or any subsidiary of Merrill;



•

any serious unlawful or criminal activity;



•

any intentional and deliberate breach of a duty or duties that are material in relation to an optionee's overall duties;



•

any material breach of any employment, service, confidentiality or non-compete agreement the optionee has entered into with us; or



•

any action the compensation committee determines to be adverse to Merrill or any of our subsidiaries (an "adverse action"); such as:

- the disclosure of any of our confidential information to any person not authorized to receive it;

- the engagement in any commercial activity that in the judgment of the compensation committee competes with our business; or

- the interference with our relationships with employees or customers.

    In the event an optionee's employment or other service with us changes such that the number of hours the optionee works is significantly reduced for what will likely be an extended period of time, the compensation committee will have the right to modify the terms of any unvested options the optionee then holds, including without limitation the right to immediately terminate without notice of any kind all of the optionee's rights he or she has in the optionee's unvested options.

    Limitations on our right to repurchase.  In connection with any repurchase of optionee's shares, we will only be required to pay the optionee for these shares as rapidly as permissible without violating any of our loan covenants or other contractual restrictions applicable to and binding upon us. Any amounts not paid to an optionee on the repurchase date will bear interest at a fixed annual rate equal to 8%. In addition, we will only be required to repurchase any shares to the extent that the repurchase does not violate any applicable laws.

    Effect of an adverse action.  Our compensation committee may immediately terminate all of an optionee's rights under the option plan and his or her options if the optionee engages in any "adverse action" (as defined above) before or within 12 months after the termination of the optionee's employment or other service with us. In addition, if an optionee take an adverse action during the 12 months before or within 12 months after his or her termination, the compensation committee may rescind any option exercises that occurred during such period and require the optionee to pay us within 10 days of receipt of notice of such rescission, the amount of any gain the optionee realized as a result of the rescinded exercise.

    Effect of a DLJMB liquidation event.  If a "DLJMB liquidation event" (as defined below) occurs, an optionee's options may become immediately exercisable in full and remain exercisable for the remainder of their terms. An exhibit to the optionee's option agreement states whether or not the vesting of his or her option will accelerate upon a DLJMB liquidation event. To the extent the acceleration of the vesting of an option, together with any other payment the optionee has the right to receive from us would constitute a "parachute payment" under the Internal Revenue Code, then the payments will be reduced so they will not be subject to any excise tax imposed by the Internal Revenue Code. The payments will not be reduced, however, if the optionee is subject to a separate agreement with us that provides otherwise.

    A "DLJMB liquidation event" means any of the following, except for transfers to "permitted "transferees," as defined in the Investors' Agreement dated November 23, 1999 among us and our shareholders:

•

a sale or other transfer by DLJMB of 90% or more of its shares of common equity in Merrill (including all common equity originally purchased by DLJMB and any additional common equity purchased by DLJMB thereafter, whether voting, class B or any other class of common equity created by Merrill) to one or more persons or entities (in one transaction or in a series of related transactions) other than in connection with a public offering of our common equity;



•

the sale, lease, exchange or other transfer of substantially all of our assets to a person or entity that is not controlled by us; or



•

a merger or consolidation to which we are a party if our shareholders immediately prior to the effective date of such merger or consolidation do not have beneficial ownership immediately following the effective date of such merger or consolidation of more than 50% of the combined voting power of the surviving corporation's outstanding securities ordinarily having the right to vote at elections of directors.

    Transfer restrictions.  An optionee may not assign or transfer any of his or her options prior to their exercise to any person, including trusts for estate planning purposes. Furthermore, the optionee may not subject any of his or her options to any lien during the optionee's lifetime. Once an optionee exercises his or her options, all shares of our class B common stock issued upon exercise of these options will be subject to the transfer restrictions and other provisions set forth in the Investors' Agreement dated November 23, 1999 among Merrill and our shareholders. Upon the exercise of an option, an optionee will automatically become a party to and be bound by all the terms and conditions of the Investors' Agreement. If the optionee:

•

acquires more than a certain percentage of the total shares of class B common stock available for issuance under the option plan as determined by the compensation committee from time to time; or



•

is an employee of Merrill or any of our subsidiaries and reports directly to our Chief Executive Officer or Chief Operating Officer,

the optionee will be deemed a "Co-invest Management Stockholder" for all purposes of the Investors' Agreement. If the optionee does not meet the above criteria, he or she will be deemed an "Other Stockholder" for purposes of the Investors' Agreement.

Direct investment plan

    On December 20, 1999, our board of directors and shareholders adopted the Direct Investment Plan pursuant to which we may offer certain of our employees, non-employee directors, consultants and independent contractors the opportunity to purchase reinvestment and coinvestment shares of our class B common stock. Our board has created a compensation committee to, among other things, administer the direct investment plan. The direct investment plan will terminate on December 19, 2009, unless our board of directors decides to terminate it earlier.

    Number of shares reserved for issuance.  We have reserved 1,459,091 shares of our class B common stock for issuance under the direct investment plan. Of the 1,459,091 shares, 227,272 shares are designated for reinvestment shares and 1,231,819 shares are designated for coinvestment shares. We are currently offering shares of our class B common stock to some of our employees and independent contractors of our company. We are uncertain at this time how many coinvestment and reinvestment shares will be purchased. We expect to complete the employee offering during the next month.

    Reinvestment shares.  The reinvestment shares are the shares of class B common stock participants may be permitted to purchase out of their own funds. Not all participants in the direct investment plan are given the opportunity to purchase reinvestment shares. Participants are solely responsible for paying the entire amount of the purchase price of reinvestment shares, and unlike the coinvestment shares, we do not lend participants any funds to purchase their reinvestment shares.

    Coinvestment shares.  The coinvestment shares are the shares of class B common stock participants may be permitted to purchase with our financial assistance. We will loan participants an amount up to 65% of the total purchase price of the coinvestment shares a participant elects to purchase. The participant will be solely responsible for paying the remaining 35% or more balance of the purchase price. The proceeds of the loan must be used solely to assist the participant with the purchase of his or her coinvestment shares. As a condition to us making the loan, all of a participant's coinvestment shares must be pledged as collateral for the loan.

    Assuming we loaned the participant 65% of the total purchase price of the coinvestment shares, upon the purchase of coinvestment shares, a participant will become immediately vested with respect to 35% of the coinvestment shares since this portion will have been fully paid by the participant. With respect to the coinvestment shares, they will vest as follows:

Vesting Date	% of Coinvestment Shares Vested as of the Vesting Date*
One year from purchase date	35% of the coinvestment shares
Two years from purchase date	35% of the coinvestment shares
Three years from purchase date	57% of the coinvestment shares
Four years from purchase date	79% of the coinvestment shares
Five years from purchase date	100% of the coinvestment shares

*

In the event that the vesting of any coinvestment shares results in a fractional share, this fractional share will be rounded up to the nearest whole share.

    A participant may not sell or transfer his or her unvested coinvestment shares while they are pledged to us, except to us in certain circumstances. Once coinvestment shares vest, the participant will be able to transfer these shares to the extent permitted by the direct investment plan and the Investors' Agreement, and the participant will receive more favorable pricing in the event we later repurchase his or her shares.

    Non-recourse promissory notes.  Any loan we make to assist participants in purchasing coinvestment shares will be evidenced by a nonrecourse promissory note. The loan will accrue interest at a fixed annual rate of 8%. While interest on the loan will accrue, the participant will not be required to pay any interest during the term of the note. All accrued but unpaid interest and the principal balance must be paid on the earlier of:

•

the date the participant's employment or other service with us terminates;



•

a "DLJMB liquidation event" (as defined above);



•

the date the participant sells his or her pledged shares to someone as permitted by the Investors' Agreement, other than a "permitted transferee" (as defined under the Investors' Agreement) and other than to us in connection with a hardship repurchase;



•

within 120 days following an initial public offering of any of our equity securities; or



•

eight years from the date of the note.

    In the event the repayment of a participant's note is triggered by an initial public offering of our equity securities, the participant may repay his or her note with cash, or with the compensation committee's approval, reinvestment shares or coinvestment shares. We will pay the participant the fair market value for each reinvestment share and vested coinvestment share we repurchase, and the compensation committee in its sole discretion will determine the purchase price for any unvested coinvestment shares repurchased. A participant may not be required to repay his or her note at that time if the total proceeds from the purchase of the participant's shares does not exceed the outstanding principal balance on his or her note plus accrued but unpaid interest and any resulting tax liability.

    The compensation committee may decide, however, to extend the maturity of a note. In addition, a participant may prepay his or her note at anytime.

    A participant may not at any time sell his or her unvested coinvestment shares. Although a participant may sell his or her vested coinvestment shares under certain circumstances set forth in the direct investment plan and the Investors' Agreement, depending upon the type of sale, the participant may be required to repay his or her note with the proceeds of the sale.

    If a participant transfers all or a portion of his or her vested coinvestment shares to a "permitted transferee" (as defined in the Investors' Agreement), such permitted transferee, as a condition to the transfer of the coinvestment shares, must agree to be bound by the terms and conditions of the direct investment plan and any agreement evidencing the sale of these shares to the participant, and must also agree to take these shares subject to the terms and conditions of the note and pledge agreement. The participant, however, must remain the primary obligor of all obligations outstanding under the note and the pledge agreement regardless of his or her transfer to a permitted transferee.

    If a participant sells all or a portion of his or her vested coinvestment shares to someone other than a permitted transferee in accordance with the terms of the Investors' Agreement, the participant's note will become immediately due and payable to the extent of the lesser of:

•

the total unpaid principal balance and interest on the loan; or



•

the net after tax proceeds realized upon such sale.

    We will have the right to set-off against any amounts we owe the participant, including without limitation, any dividends paid on the shares, amounts the participant owes under the note. Amounts will be applied first to accrued interest on the note and then to the outstanding principal balance on the note.

    Pledge of shares.  As collateral for the note, a participant must grant to us a security interest in all of the participant's coinvestment shares by executing a pledge agreement. Any stock certificates issued for coinvestment shares will be held by us as collateral for the loan until such time as the loan and all accrued interest on the loan are paid in full. If the collateral for a participant's note exceeds the outstanding balance of the loan and all accrued interest, we may, upon the participant's request and in our discretion, release some of the participant's shares.

    If we repurchase a participant's pledged coinvestment shares, the proceeds will be applied against the outstanding balance of the participant's loan and all accrued interest. So long as a participant's coinvestment shares are pledged to us, they may not be subject in any manner to alienation, sale, transfer, assignment, bankruptcy, pledge, attachment, charge or encumbrance of any kind nor in any manner be subject to the debts or liabilities of any person, except as permitted under the Investors' Agreement.

    If the participant is unable to pay his or her note when it becomes due, we will have the right under the pledge agreement to reacquire the participant's shares. If, at any time pursuant to the terms of the direct investment plan, we repurchase a participant's pledged coinvestment shares, the proceeds of the repurchase will be applied against the outstanding balance of his or her loan and all accrued interest before the participant receive any proceeds.

    The note is a non-recourse note, which means that if the proceeds of the repurchase do not exceed the outstanding balance of the participant's loan and all accrued interest, we will not have the right under the terms of the note to hold the participant personally responsible for the remaining amount he or she owes under the note.

    Right of repurchase.  If a participant's employment or other service with us terminates for any reason whatsoever, whether due to voluntary resignation, death, disability, retirement, or termination by us with or without cause (as defined above) prior to a DLJMB liquidation event (as defined above), we will have the right to repurchase all or any portion of the participant's shares. The price we will pay for these shares depends on the reason for the participant's termination.

    If the participant's employment or other service with us is terminated by us for cause, we will pay for each share owned by the participant (whether it is a reinvestment share or a coinvestment share or is vested or unvested) the lesser of:

•

an amount equal to:

- the fair market value of each share as determined on the valuation date in the fiscal year in which the participant's employment or other service is terminated; and

- plus any increase, or minus any decrease, in the fair market value of the participant's shares from the beginning of the fiscal year in which the participant's employment or other service is terminated until the date of the participant's termination (the "Pro Rata Adjustment"); or

•

the purchase price the participant paid for each share, without any accrued and unpaid interest on the loan relating to the coinvestment shares being paid.

    Unless otherwise determined by the compensation committee, if a participant's employment or other service with us terminates for any other reason whatsoever other than for cause, we will pay the participant:

•

for each coinvestment share that has vested at the time of termination and all of the participant's reinvestment shares, an amount equal to:

- the fair market value of each share as determined on the valuation date in the fiscal year in which the participant's employment or other service is terminated; and

- plus or minus any Pro Rata Adjustment.

•

for each coinvestment share that has not vested at the time of termination, an amount equal to the lesser of:

- the fair market value of each coinvestment share as determined on the valuation date in the fiscal year in which the participant's employment or other service is terminated, and plus or minus any Pro Rata Adjustment; or

- the purchase price the participant paid for each unvested coinvestment share plus all accrued and unpaid interest on the loan relating to the unvested coinvestment share.

    In the event we repurchase any of the participant's coinvestment shares, the compensation committee, in its sole discretion, will on the repurchase date make an appropriate adjustment to the purchase price paid on this date to repay any interest that has accrued on the participant's loan from the date of the termination of the participant's employment or other services with us until the date we repurchase the participant's coinvestment shares.

    Determination of fair value.  Since our class B common stock is not currently listed on an exchange or quoted on Nasdaq, the over-the-counter bulletin board or other comparable service, "fair market value" for purposes of the direct investment plan is determined by the compensation committee. This determination will be performed on an annual basis on a date that is no more than 120 days after our fiscal year end. The compensation committee will base its determination on a specified formula or such other value as the compensation committee determines is appropriate. The formula that the compensation committee may use in determining fair market value is as follows:

•

multiply six times our EBITDA (as defined in the plan) as shown on our consolidated statement of operations for our most recent fiscal year end and as adjusted to reflect any material acquisitions or dispositions or other material changes in our business;


•

subtract our total debt and the total amount of the liquidation preference on our preferred stock;


•

add our total cash to this difference; and


•

divide the sum by the number of shares of our capital stock outstanding on the valuation date, including all options and warrants.

    Put right.  So long as a participant's employment or other service with us terminates by reason of voluntary resignation, death, disability, retirement or terminated by us without cause, the participant will have the right to "put" all or any portion of his or her reinvestment shares and vested coinvestment shares to us and require us to repurchase these shares in the event neither we nor anyone to whom we may assign our right of repurchase decides to repurchase the participant's shares.

    The per share price at which we must purchase these shares will be equal to:

•

the fair market value for each share as determined on the valuation date in the fiscal year in which the participant's employment or other service is terminated; and


•

plus or minus any Pro Rata Adjustment.

    Hardship repurchases.  In the event a participant feels he or she has an immediate and heavy financial need, the participant may request that the compensation committee repurchase his or her shares. A repurchase under these circumstances will be permitted only if the compensation committee determines in its sole discretion that the repurchase is made on account of the participant's immediate and heavy financial need and is necessary to satisfy this financial need. A repurchase will be deemed to be made on account of an immediate and heavy financial need only if the compensation committee determines in its sole discretion that the repurchase will be made to pay:

•

expenses for medical care (as described in Section 213(d) of the Internal Revenue Code), incurred or to be incurred by the participant, his or her spouse or dependent (as described in Section 152 of the Internal Revenue Code);


•

payments necessary to prevent the participant from being evicted from his or her principal residence or foreclosure on the mortgage on his or her principal residence; or


•

any other situation in which the compensation committee in its sole discretion determines the participant is in immediate and heavy financial need.

    A hardship repurchase will be deemed to be necessary to satisfy the participant's immediate and heavy financial need only if the compensation committee determines in its sole discretion that the aggregate purchase price we must pay is not more than the sum of the amount of the participant's immediate and heavy financial need plus the amount necessary to pay any estimated federal, state or local taxes or penalties that the participant will incur in connection with the repurchase. The compensation committee will only be entitled to pay the participant the fair market value for each share as determined on the most recent valuation date prior to the hardship repurchase.

    Limitations on our right to repurchase.  In connection with any repurchase of a participant's shares, we will only be required to pay the participant for these shares as rapidly as permissible without violating any of our loan covenants or other contractual restrictions applicable to and binding upon us. Any amounts not paid to a participant on the repurchase date will bear interest at a fixed annual rate equal to 8%. In addition, we will only be required to repurchase any shares to the extent that the repurchase does not violate any applicable laws.

    Effect of adverse action.  If a participant engages in any adverse action (as defined above under the heading "—Employment Arrangements—Stock option plan—Effect of termination of employment or other service") before or within 12 months after the participant's employment or other service with us terminates by reason of voluntary resignation, death, disability, retirement or is terminated by us without cause, we will have the right to repurchase all of the participant's shares for the lesser of:

•

the fair market value for each share as of the most recent valuation date prior to the participant's termination of employment or other service; or


•

the purchase price the participant paid for his or her shares.

    In addition, if the participant received an amount in excess of this purchase price in connection with a prior repurchase by us or the sale or other transfer of these shares during the 12 months before or 12 months after the date the participant's employment or other service with us terminates, the participant will be required to pay us in cash any such excess within 10 days of receipt of notice from us.

    Effect of DLJMB liquidation event.  If a DLJMB liquidation event (as defined above under the heading "—Employment Arrangements—Stock option plan—Effect of DLJMB liquidation event) occurs, all of a participant's unvested coinvestment shares will become immediately vested in full. To the extent the acceleration of the vesting of these coinvestment shares, together with any other payment the participant has the right to receive from us would constitute a "parachute payment" under the Internal Revenue Code, then the payments will be reduced so they will not be subject to any excise tax imposed by the Internal Revenue Code. The payments will not be reduced, however, if the participant is subject to a separate agreement with us that provides otherwise.

    Transfer restrictions.  All shares purchased under the direct investment plan will be subject to the transfer restrictions and other provisions of the direct investment plan and the Investors' Agreement. Under the direct investment plan, any shares pledged as collateral to secure a note may not be transferred to anyone other than a permitted transferee. In addition, a participant is prohibited from selling or transferring any of his or her shares during the first six months after the purchase date.

    In addition to the restrictions on transferability imposed by the direct investment plan, a participant that purchases reinvestment or coinvestment shares will automatically become a party to and be bound by all the terms and conditions of the Investors' Agreement. If a participant:

•

acquires more than a certain percentage of the total shares of class B common stock available for sale under the direct investment plan, as determined by the compensation committee from time to time; or


•

is an employee of Merrill or any of our subsidiaries and reports directly to our Chief Executive Officer or Chief Operating Officer,

the participant will be deemed a "Co-invest Management Stockholder" for all purposes of the Investors' Agreement. If a participant does not meet the above criteria, he or she will be deemed an "Other Stockholder" for purposes of the Investors' Agreement.

Sale of shares to Atterbury

    In connection with the employee offering, we expect to sell shares of our class B common stock to Rick Atterbury for $22.00 per share. We may finance more than 65% of the purchase price for these shares; and therefore, these shares may be sold outside the scope, terms and conditions of our direct investment plan. We expect that after giving effect to this transaction and Atterbury's retained equity interest in connection with the merger, the percentage of the total amount loaned by us to Atterbury to the total purchase price paid by Atterbury for all these shares will not exceed 65%. We expect to complete this transaction and the employee offering during the next month.

SECURITY OWNERSHIP OF MANAGEMENT
AND BENEFICIAL OWNERS OF FIVE PERCENT OR MORE

    The following table sets forth information with respect to the beneficial ownership of our class B common stock and preferred stock as of January 31, 2000 by (1) any person or group who beneficially owns more than 5% of our class B common stock, (2) each of our executive officers named in our "Summary Compensation" table on page 70 and (3) all of our directors and officers as a group. Unless otherwise noted, each person possesses sole voting and investment power with respect to the shares indicated. Shares not outstanding but deemed beneficially owned because of the right to acquire them within 60 days are considered outstanding only when determining the amount and percent owned by each person.

Name of Beneficial Owner	Number of Shares of Preferred Stock (1)	Percentage of Outstanding Preferred Stock		Number of Shares of Class B Common Stock (1)	Percentage of Outstanding Class B Common Stock
DLJ Merchant Banking funds (2)	337,500	67.5	%	3,445,229	77.9	%
John W. Castro	0	0		909,091	21.7	%
Rick R. Atterbury	0	0		70,000	1.7	%
BNY Capital Corporation (3)	62,500	12.5	%	43,033	1.0	%
Connecticut General Life Insurance Company (4)	48,750	9.8	%	33,566	*
Carlyle High Yield Partners, L.P. (5).	37,500	7.5	%	25,820	*
Steven J. Machov	0	0		0	0
Kathleen A. Larkin	0	0		0	0
Kay A. Barber	0	0		0	0
Lawrence M. Schloss (3)	0	0		0	0
William F. Dawson, Jr. (3)	0	0		0	0
Keith R. Palumbo (3)	0	0		0	0
All directors and executive officers as a group (12 persons) (3)	0	0		979,091	23.4	%

*

less than one percent

(1)

Under the SEC's rules, each person or entity is deemed to be a beneficial owner with the power to vote and direct the disposition of these shares.

(2)

Consists of shares held directly by DLJ Merchant Banking Partners II, L.P. and the following affiliated investors: DLJ Merchant Banking Partners II-A, L.P.; DLJ Offshore Partners II, C.V.; DLJ Diversified Partners, L.P.; DLJ Diversified Partners-A, L.P.; DLJ Millennium Partners, L.P.; DLJ Millennium Partners-A, L.P.; DLJMB Funding II, Inc.; DLJ First ESC L.P.; DLJ EAB Partners, L.P.; and DLJ ESC II, L.P. See "Related Party Relationships and Transactions." Includes 232,377 shares of class B common stock issuable upon the exercise of outstanding warrants. The address of each of these investors is 277 Park Avenue, New York, New York 10172, except that the address of Offshore Partners is John B. Gorsiraweg 14, Willemstad, Curaçao, Netherlands Antilles.

(3)

Messrs. Schloss, Dawson and Palumbo are officers of DLJ Merchant Banking, Inc., an affiliate of the DLJ Merchant Banking funds. Shares shown for Messrs. Schloss, Dawson and Palumbo exclude shares shown as held by the DLJ Merchant Banking funds, as to which they disclaim beneficial ownership. The address for Messrs. Schloss, Dawson and Palumbo is c/o DLJ Merchant Banking Inc., 277 Park Avenue, New York, New York 10172.

(4)

Includes 43,033 shares of class B common stock issuable upon the exercise of outstanding warrants. BNY Capital Corporation's address is 48 Wall Street, New York, New York 10005.

(5)

Includes 33,566 shares of class B common stock issuable upon the exercise of outstanding warrants. Carlyle High Yield Partners, L.P.'s address is 1001 Pennsylvania Avenue N.W., Suite 220 South, Washington, D.C. 20004.

(6)

Includes 25,820 shares of class B common stock issuable upon the exercise of outstanding warrants. Connecticut General Life Insurance Company's address is 900 Cottage Grove Road, Bloomfield, Illinois 06002.

RELATED PARTY RELATIONSHIPS AND TRANSACTIONS

Investors' Agreement

    Viking Merger Sub, DLJ Merchant Banking funds, Messrs. Castro and Atterbury and certain other investors entered into an Investors' Agreement which became effective at the effective time of the merger and as a result of the merger became binding on our company. The Investors' Agreement provides that any person acquiring shares of our class B common stock who is required by the Investors' Agreement or by any other agreement or plan of ours to become a party to the Investors' Agreement will execute an agreement to be bound by all the terms and conditions of the Investors' Agreement, including those described below.

    The terms of the Investors' Agreement restrict certain transfers of the shares of our capital stock by DLJ Merchant Banking funds, Messrs. Castro and Atterbury and any future shareholders party to the agreement, including the participants in our 1999 Stock Option Plan and our Direct Investment Plan. The agreement permits:

•

such shareholders (other than DLJ Merchant Banking funds) to participate in certain sales of shares of capital stock by the DLJ Merchant Banking funds;



•

DLJ Merchant Banking funds to require such other shareholders to sell shares of capital stock in certain circumstances, including if DLJ Merchant Banking funds choose to sell 75% or more of the shares owned by them at a price in excess of $22.00 per share; and



•

such shareholders to purchase certain equity securities proposed to be issued by us on a preemptive basis.

    The Investors' Agreement includes a registration rights provision under which the shareholders which are a party to it have the right to request us to register certain securities under the Securities Act in specified circumstances.

    The Investors' Agreement also provides that our company will indemnify the parties against specified liabilities, including certain liabilities under the Securities Act.

    The Investors' Agreement also provides that DLJ Merchant Banking funds have the right to nominate four of the eight members of our board of directors, that three of the eight members of our board will be nominated by Messrs. Castro and Atterbury and that one member of the board be nominated by a DLJ mezzanine fund that owns our preferred shares and warrants. The current parties to the Investors' Agreement have agreed to vote their common shares so that the composition of our board is as set out above. The participants in our 1999 Stock Option Plan and Direct Investment Plan are not subject to the voting agreement provisions.

Financial Advisory Fees and Agreements

    DLJ Securities Corporation, an affiliate of DLJ Merchant Banking funds, acted as financial advisor to us and as the initial purchaser of the units we sold in connection with the merger. We paid customary fees to DLJ Securities Corporation as compensation for its services as financial advisor and initial purchaser. DLJ Capital Funding, Inc., an affiliate of DLJ Merchant Banking funds, received customary fees and reimbursement of expenses in connection with the arrangement and syndication of the new credit facility and as a lender under the new credit facility. The aggregate amount of all fees paid to the DLJ entities in connection with the merger and the related financings was approximately $15.8 million, plus out-of-pocket expenses.

    We have agreed to pay DLJ Securities Corporation an annual advisory fee of $300,000. We and our subsidiaries may from time to time enter into other investment banking relationships with DLJ Securities Corporation or one of its affiliates pursuant to which DLJ Securities Corporation or its affiliates will receive customary fees and will be entitled to reimbursement for all related reasonable disbursements and out-of-pocket expenses. We expect that any arrangement will include provisions for the indemnification of DLJ Securities Corporation against a variety of liabilities, including liabilities under the federal securities laws.

Interest Cap Transaction

    On December 22, 1999, we entered into an interest cap transaction with DLJ International Capital for $462,000. The effective date of the interest cap transaction is March 24, 2000 and terminates December 24, 2001. The cap rate is 7.5% for up to $110.0 million of borrowings under our credit facility.

Purchase of Shares from DLJMB

    In connection with the employee offering, we anticipate to purchase from DLJMB, 258,307 shares of class B common stock for $22.00 per share, or an aggregate purchase price of approximately $5.7 million, in order to adjust the ownership percentage of DLJMB compared to our other shareholders.

Executive Compensation Arrangements

    For a discussion of all material executive compensation arrangements between us and our executive officers, including the participation of our executive officers in our stock option plan and direct investment plan, we refer you to the information under the heading "Executive Compensation."

DESCRIPTION OF MERRILL COMMUNICATIONS LLC'S CREDIT FACILITY

    Merrill Communications LLC's credit facility includes:

•

a $50.0 million revolving credit facility, and



•

a $220.0 million term loan facility, consisting of a $65.0 million term loan A and a $155.0 million term loan B.

    The term loan A and the revolving credit facility matures on November 23, 2005, and the term loan B matures on November 23, 2007. This credit facility is subject to a potential, although uncommitted, increase of up to $30.0 million at our request at any time prior to November 23, 2005. The increase is only available if one or more financial institutions agree to finance this increase.

    We pledged all of our limited liability company interests in Merrill Communications LLC as collateral for the credit facility.

    Loans under the credit facility bear interest, at our option, at:

•

the reserve adjusted LIBOR rate plus 3.00% or at the alternate base rate plus 1.75% for borrowings under the revolving credit facility and for term loan A, and



•

the reserve adjusted LIBOR rate plus 3.75% or at the alternate base rate plus 2.50% for term loan B.

    Merrill Communications LLC pays commitment fees in an amount equal to 0.50% per year on the daily average unused portion of the revolving credit facility. These fees are payable quarterly in arrears and upon the maturity or termination of the revolving credit facility. Beginning November 23, 2006, the applicable margins for revolving credit loans and term loan A and commitment fees will be subject to possible reductions based on our leverage ratio, which measures the ratio of our consolidated total debt to our consolidated EBITDA (as defined in the credit facility).

    Merrill Communications LLC pays a letter of credit fee on the outstanding undrawn amounts of letters of credit issued under the credit facility at a rate per year equal to, with respect to each letter of credit, the then existing applicable LIBOR rate margin for revolving credit loans, multiplied by the stated amount of each letter of credit, which shall be shared by all lenders participating in that letter of credit on a pro rata basis, and an additional fronting fee to the issuer of each letter of credit, payable quarterly in arrears. Merrill Communications LLC also pays customary transaction charges in connection with any letters of credit.

    The term facility is subject to the following amortization schedule:

Year	Term Loan A Amortization		Term Loan B Amortization
1	0	%	1	%
2	5		1
3	10		1
4	20		1
5	25		1
6	40		1
7	—		1
8	—		93
	100	%	100	%

    The credit facility is subject to mandatory prepayment:

•

with 100% of the net after-tax cash proceeds of the sale or other disposition of any of our property or assets, or receipt of casualty proceeds by us, subject to specified exceptions, including our right to reinvest such proceeds during the 365 day period after our receipt of them;



•

with 50% of the net cash proceeds received from the issuance of our equity securities unless our leverage ratio is less than 3.5:1 on a pro forma basis, subject to specified exceptions;



•

with 100% of the net cash proceeds received from issuances of our debt securities, subject to specified exceptions; and



•

with 50% of excess cash flow, as defined in the new credit facility, for each fiscal year unless the leverage ratio is less than 3.5:1 on a pro forma basis, subject to specified exceptions.

    All mandatory prepayment amounts will be applied first pro rata to the prepayment of the term facilities to reduce the remaining amortization payments in direct order of maturity. Merrill Communications LLC is permitted to elect, in its sole discretion, to permit lenders holding a portion of term loan B to decline to have their loan prepaid. Any lender holding a portion of term loan B may then, in its sole discretion, waive the application of its pro rata share of any mandatory prepayment, with 50% of the waived proceeds applied to the prepayment of the term A loan, until paid in full, and the balance retained by Merrill Communications LLC.

    We and all our direct and indirect domestic restricted subsidiaries are guarantors of Merrill Communications LLC's credit facility. Merrill Communications LLC's obligations under the credit facility are secured by a first priority perfected lien on substantially all existing and after-acquired property of Merrill Communications LLC and the subsidiary guarantors, including substantially all accounts receivable, inventory, equipment, intellectual property and other personal property and certain real property interests, and a pledge of all of our limited liability company interests in Merrill Communications LLC and of all of the stock of all Merrill Communications LLC's existing or future domestic restricted subsidiaries and no more than 65% of the voting stock of any foreign restricted subsidiary unless there is a change in tax laws such that no adverse income tax consequences to us or Merrill Communications LLC would result from a pledge in excess of 65%.

    The credit facility contains customary covenants and restrictions on our and Merrill Communications LLC's ability to engage in specified activities, including, but not limited to:

•

limitations on other indebtedness, liens and investments;



•

restrictions on dividends and redemptions and prepayments of subordinated debt;



•

limitations on capital expenditures;



•

restrictions on certain mergers and acquisitions, sales of assets and sale leaseback transactions;



•

restrictions or changes in our business; and



•

restrictions on transactions with our affiliates and our entering into negative pledges or certain other restrictive agreements.

    The credit facility also contains financial covenants requiring us to maintain:

•

minimum EBITDA (as defined in the credit facility);



•

minimum coverage of interest expense;



•

minimum coverage of fixed charges; and



•

a maximum leverage ratio.

    Borrowings under the credit facility are subject to significant conditions, including compliance with the financial ratios and the other covenants included in the credit facility and the absence of any material adverse change.

DESCRIPTION OF EXCHANGE NOTES

General

    The definitions of some of the terms used in the following summary are set forth below under "—Definitions." For purposes of this summary, the term "Merrill" refers only to Merrill Corporation and not to any of its subsidiaries.

    The old notes were issued and the exchange notes will be issued pursuant to an indenture among Merrill Corporation, the Guarantors party thereto and Norwest Bank Minnesota, N.A., as trustee. The terms of the exchange notes include those stated in the indenture and those made part of the indenture by reference to the Trust Indenture Act of 1939, as amended.

    The following description is a summary of the material provisions of the indenture. It is not complete and is qualified in its entirety by reference to the indenture, including the definitions therein of some of the terms used below. We urge you to read the indenture because it, and not this description, defines your rights as a holder of the exchange notes. Copies of the indenture are available as set forth below under "Where You Can Find More Information."

Brief Description of the Exchange Notes and the Subsidiary Guarantees

The Exchange Notes

    The exchange notes will:

•

be general unsecured obligations of Merrill;



•

rank behind in right of payment to all secured indebtedness to the extent of the assets securing that indebtedness;



•

rank behind in right of payment to all existing and future Senior Indebtedness of Merrill, including guarantees under Merrill Communications LLC's Credit Facility;



•

rank equally in right of payment with any future senior subordinated Indebtedness of Merrill;



•

rank ahead in right of payment to all future subordinated Indebtedness of Merrill; and



•

be effectively behind to all liabilities of Merrill's non-guarantor subsidiaries.

The Subsidiary Guarantees

    The exchange notes will be unconditionally guaranteed (the "Guarantees") on a senior subordinated basis by our existing Wholly Owned Restricted Subsidiaries that are Domestic Subsidiaries. The Guarantees will:

•

be general unsecured obligations of the Guarantors;



•

rank behind in right of payment to all existing and future Senior Indebtedness of the Guarantors, including borrowings and guarantees under the Credit Facility;



•

rank equally in right of payment with any future senior subordinated Indebtedness of the Guarantors; and



•

rank ahead of in right of payment to any future subordinated Indebtedness of the Guarantors.

    On a pro forma basis, as of October 31, 1999, Merrill and the Guarantors had outstanding approximately $224.1 million of Senior Indebtedness and our non-guarantor subsidiaries had $0.6 million of outstanding liabilities, including trade payables but excluding intercompany obligations. The indenture will permit Merrill and its Subsidiaries to incur additional Indebtedness, including Senior Indebtedness, in the future. See "Risk Factors" The exchange notes and the Guarantees will be subordinated to our secured and senior indebtedness and "—Covenants—Incurrence of Indebtedness and Issuance of Preferred Stock."

    As of the date of the indenture, all of our Subsidiaries except Document.com, Inc. and Cetara Corporation will be Restricted Subsidiaries. For the nine months ended October 31, 1999, these two subsidiaries accounted for less than 1.0% of our revenue and assets. So long as we satisfy the conditions described in the definition of "Unrestricted Subsidiary," we will be permitted to designate current or future Subsidiaries as "Unrestricted" Subsidiaries. Unrestricted Subsidiaries are not subject to the restrictive covenants included in the indenture and do not guarantee the exchange notes.

Principal, Maturity and Interest

•

The exchange notes will initially be limited in aggregate principal amount to $140.0 million and will mature on May 1, 2009.



•

The exchange notes will be issued in denominations of $1,000 and integral multiples thereof.



•

Interest on the exchange notes will accrue at the rate of 12.0% per year.



•

We will pay interest in arrears every May 1 and November 1, commencing on May 1, 2000, to holders of record on the immediately preceding April 15 and October 15.



•

Interest on the exchange notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the date of original issuance.



•

Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months.

    We will pay principal of, premium, if any, and interest and liquidated damages, if any, on the exchange notes:

•

at the office or agency we maintain for that purpose within the City and State of New York;



•

or, at our option, by check mailed to the holders of the exchange notes at their respective addresses set forth in the register of holders of exchange notes;



•

however, all payments with respect to exchange notes represented by one or more permanent Global Notes will be paid by wire transfer of immediately available funds to the account of The Depository Trust Company or any successor thereto.

    Until we designate another office or agency, our office or agency in New York will be the office of the trustee maintained for that purpose.

    Subject to the covenants described below, we may issue additional exchange notes under the indenture having the same terms in all respects as the exchange notes, or similar in all respects except for the payment of interest on the exchange notes (1) scheduled and paid prior to the date of issuance of those additional exchange notes or (2) payable on the first Interest Payment Date following that date of issuance. The exchange notes offered hereby and any additional exchange notes would be treated as a single class for all purposes under the indenture.

Subordination

    The payment of Subordinated Note Obligations will be subordinated in right of payment, as set forth in the indenture, to the prior payment in full in cash or Cash Equivalents of all Senior Indebtedness, whether outstanding on the date of the indenture or thereafter incurred.

    Upon any distribution to creditors of Merrill in a liquidation or dissolution of Merrill or in a bankruptcy, reorganization, insolvency, receivership or similar proceeding relating to Merrill or its property, an assignment for the benefit of creditors or any marshaling of Merrill's assets and liabilities,

(1)

the holders of Senior Indebtedness will be entitled to receive payment in full in cash or Cash Equivalents of all Obligations due in respect of such Senior Indebtedness, including interest after the commencement of any such proceeding whether or not allowable as a claim in any such proceeding at the rate specified in the applicable Senior Indebtedness, before the holders of exchange notes will be entitled to receive any payment with respect to the Subordinated Note Obligations, and



(2)

until all Obligations with respect to Senior Indebtedness are paid in full in cash or Cash Equivalents, any distribution to which the holders of exchange notes would be entitled shall be made to the holders of Senior Indebtedness.

    However, holders of exchange notes may receive and retain Permitted Junior Securities and payments made from the trust described under "—Legal Defeasance and Covenant Defeasance."

    Merrill also may not make any payment upon or in respect of the Subordinated Note Obligations, except in Permitted Junior Securities or from the trust described under "—Legal Defeasance and Covenant Defeasance," until all Obligations with respect to Senior Indebtedness have been paid in full in cash or Cash Equivalents if:

(1)

a default in the payment of the principal (including reimbursement obligations in respect of letters of credit) of, premium, if any, or interest on or commitment, letter of credit or administrative fees relating to, Designated Senior Indebtedness occurs and is continuing beyond any applicable period of grace; or



(2)

any other default occurs and is continuing with respect to Designated Senior Indebtedness that permits holders of the Designated Senior Indebtedness as to which that default relates to accelerate its maturity and the trustee receives a notice of that default (a "Payment Blockage Notice") from Merrill or the holders of any Designated Senior Indebtedness.

    Payments on the exchange notes may and shall be resumed:

(1)

in the case of a payment default, upon the date on which that default is cured or waived; and



(2)

in case of a nonpayment default, the earlier of the date on which that nonpayment default is cured or waived or 179 days after the date on which the applicable Payment Blockage Notice is received, unless a payment default on Designated Senior Indebtedness then exists.

    No new period of payment blockage may be commenced unless and until 360 days have elapsed since the effectiveness of the immediately prior Payment Blockage Notice. No nonpayment default that existed or was continuing on the date of delivery of any Payment Blockage Notice to the trustee shall be, or be made, the basis for a subsequent Payment Blockage Notice unless that default shall have been waived or cured for a period of not less than 90 days.

    "Designated Senior Indebtedness" means:

(1)

any Indebtedness outstanding under the Credit Facility; and



(2)

any other Senior Indebtedness permitted under the indenture the principal amount of which is $25 million or more and that has been designated by Merrill in writing to the trustee as "Designated Senior Indebtedness."

    "Permitted Junior Securities" means Equity Interests in Merrill or unsecured debt securities of Merrill that are subordinated to all Senior Indebtedness (and any debt securities issued in exchange for Senior Indebtedness) to substantially the same extent as, or to a greater extent than, the exchange notes are subordinated to Senior Indebtedness that have a final maturity date and a Weighted Average Life to Maturity which is at least six months greater than the final maturity of the Senior Indebtedness (and any debt securities issued in exchange for Senior Indebtedness).

    "Senior Indebtedness" means, with respect to any Person:

(1)

all Obligations of that Person outstanding under the Credit Facility and all Hedging Obligations payable to a lender or an Affiliate thereof or to a Person that was a lender or an Affiliate thereof at the time the contract was entered into under the Credit Facility or any of its Affiliates, including, without limitation, interest accruing subsequent to the filing of, or which would have accrued but for the filing of, a petition for bankruptcy, whether or not that interest is an allowable claim in that bankruptcy proceeding;



(2)

any other Indebtedness, unless the instrument under which that Indebtedness is incurred expressly provides that it is subordinated in right of payment to any other Senior Indebtedness of that Person; and



(3)

all Obligations with respect to the foregoing.

    Notwithstanding anything to the contrary in the foregoing, Senior Indebtedness will not include:

(a)

any liability for federal, state, local or other taxes;



(b)

any Indebtedness of that Person, other than pursuant to the Credit Facility, to any of its Subsidiaries or other Affiliates;



(c)

any trade payables; or



(d)

any Indebtedness that is incurred in violation of the indenture.

    "Subordinated Note Obligations" means all Obligations with respect to the exchange notes, including, without limitation, principal, premium, if any, interest and liquidated damages, if any, payable pursuant to the terms of the exchange notes (including upon the acceleration or redemption thereof), together with and including any amounts received or receivable upon the exercise of rights of rescission or other rights of action, including claims for damages, or otherwise.

    We will promptly notify holders of Senior Indebtedness if payment of the exchange notes is accelerated because of an Event of Default.

    As a result of the subordination provisions described above, in the event of a liquidation or insolvency, holders of exchange notes may recover less ratably than creditors of Merrill who are holders of Senior Indebtedness. See "Risk Factors—Because the exchange notes and subsidiary guarantees will rank behind our secured and senior indebtedness, holders of exchange notes may receive proportionately less than holders of our secured and senior debt in a bankruptcy, liquidation, reorganization or similar proceeding."

Guarantees

    Our payment obligations under the exchange notes will be jointly and severally guaranteed by the Guarantors. The Guarantee of each Guarantor will be subordinated to the prior payment in full in cash or cash equivalents of all Senior Indebtedness of that Guarantor, including that Guarantor's borrowings under, or guarantee of, the Credit Facility, to the same extent that the exchange notes are subordinated to Senior Indebtedness of Merrill. We have not included separate financial statements concerning each separate Guarantor because we do not believe that this information is material to our investors. The obligations of each Guarantor under its Guarantee will be limited so as not to constitute a fraudulent conveyance under applicable law. See "Risk Factors—Fraudulent transfer statutes may limit your rights as a noteholder."

    No Guarantor may consolidate with or merge with or into another Person or entity, whether or not the Guarantor is the surviving Person, unless:

(1)

subject to the provisions of the following paragraph, the Person formed by or surviving any such consolidation or merger, if other than Merrill or the Guarantor, unconditionally assumes all the obligations of the Guarantor pursuant to a supplemental indenture in form and substance reasonably satisfactory to the trustee under the indenture, the Guarantee and the registration rights agreement; and



(2)

immediately after giving effect to such transaction, no Default or Event of Default exists.

    In the event of:

•

a sale or other disposition of all or substantially all of the assets of a Guarantor, by way of merger, consolidation or otherwise, if the Guarantor applies the Net Proceeds of that sale in accordance with the "Asset Sale" provisions of the indenture;



•

a sale or other disposition of all of the capital stock of a Guarantor, if the Net Proceeds of that sale are applied in accordance with the "Asset Sale" provisions of the indenture; or



•

the designation of any Restricted Subsidiary that is a Guarantor as an Unrestricted Subsidiary in accordance with the terms of the indenture,

    that Guarantor will be released and relieved of any obligations under its Guarantee.

Optional Redemption

    Except as provided below, the exchange notes will not be redeemable at Merrill's option prior to November 1, 2004. Thereafter, the exchange notes will be subject to redemption at any time at the option of Merrill, in whole or in part, upon not less than 30 nor more than 60 days' notice, in cash at the redemption prices (expressed as percentages of principal amount) set forth below, plus accrued and unpaid interest and liquidated damages, if any, thereon to the applicable redemption date, if redeemed during the twelve-month period beginning on November 1 of the years indicated below:

Year	Percentage
2004	106.0	%
2005	104.0	%
2006	102.0	%
2007 and thereafter	100.0	%

    Notwithstanding the foregoing, on or prior to November 1, 2002, Merrill may redeem up to 35% of the aggregate principal amount of exchange notes and old notes taken together from time to time originally issued under the indenture in cash at a redemption price of 112.0% of the principal amount thereof, plus accrued and unpaid interest and liquidated damages, if any, thereon to the redemption date, with the net cash proceeds of one or more Public Equity Offerings; provided that:

(1)

at least 65% of the aggregate principal amount of exchange notes and old notes taken together from time to time originally issued under the indenture remains outstanding immediately after the occurrence of the redemption; and



(2)

the redemption shall occur within 90 days of the date of the closing of any such Public Equity Offering.

Selection and Notice

    If less than all of the exchange notes are to be redeemed at any time, the trustee will select the exchange notes for redemption as follows:

(1)

in compliance with the requirements of the principal national securities exchange, if any, on which the exchange notes are listed; or



(2)

if the exchange notes are not so listed, on a pro rata basis, by lot or by another method the trustee considers fair and appropriate.

No exchange notes of $1,000 or less shall be redeemed in part. Notices of redemption shall be mailed by first class mail at least 30 but not more than 60 days before the redemption date to each holder of exchange notes to be redeemed at its registered address. Notices of redemption may not be conditional.

    If any exchange note is to be redeemed in part only, the notice of redemption that relates to that exchange note shall state the portion of the principal amount thereof to be redeemed. A new exchange note in principal amount equal to the unredeemed portion thereof will be issued in the name of the holder thereof upon cancellation of the original exchange note. Exchange notes called for redemption become due on the date fixed for redemption. On and after the redemption date, interest ceases to accrue on exchange notes or portions of them called for redemption.

Mandatory Redemption

    Except as set forth below under the heading "Repurchase at the Option of Holders," Merrill is not required to make mandatory redemption of, or sinking fund payments with respect to, the exchange notes.

Repurchase at the Option of Holders

Change of Control

    Upon the occurrence of a Change of Control, each holder of exchange notes will have the right to require Merrill to repurchase all or any part (equal to $1,000 or an integral multiple thereof) of that holder's exchange notes pursuant to the offer described below (the "Change of Control Offer") at an offer price in cash equal to 101% of the aggregate principal amount thereof, plus accrued and unpaid interest and liquidated damages, if any, thereon to the date of repurchase (the "Change of Control Payment"). Within 90 days following any Change of Control, Merrill will, or will cause the trustee to, mail a notice to each holder describing the transaction or transactions that constitute the Change of Control and offering to repurchase exchange notes on the date specified in that notice, which date shall be no earlier than 30 days and no later than 60 days from the date that notice is mailed (the "Change of Control Payment Date"), pursuant to the procedures required by the indenture and described in that notice. Merrill will comply with the requirements of Rule 14e-1 under the Securities and Exchange Act of 1934 and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with the repurchase of the exchange notes as a result of a Change of Control. To the extent that the provisions of any securities laws or regulations conflict with the provisions of the indenture relating to a Change of Control Offer, Merrill will comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations described in the indenture by virtue thereof.

    On the Change of Control Payment Date, Merrill will, to the extent lawful:

(1)

accept for payment all exchange notes or portions thereof properly tendered pursuant to the Change of Control Offer;



(2)

deposit with the Paying Agent an amount equal to the Change of Control Payment in respect of all exchange notes or portions thereof so tendered; and



(3)

deliver or cause to be delivered to the trustee the exchange notes so accepted together with an Officers' Certificate stating the aggregate principal amount of exchange notes or portions thereof being purchased by Merrill.

    The Paying Agent will promptly mail to each holder of exchange notes so tendered the Change of Control Payment for that holder's exchange notes, and the trustee will promptly authenticate and mail or cause to be transferred by book-entry to each holder a new exchange note equal in principal amount to any unpurchased portion of the exchange notes surrendered, if any; provided that each new exchange note will be in a principal amount of $1,000 or an integral multiple thereof.

    The indenture provides that, prior to complying with the provisions of this covenant, but in any event within 90 days following a Change of Control, Merrill will either repay all outstanding Senior Indebtedness or obtain the requisite consents, if any, under all agreements governing outstanding Senior Indebtedness to permit the repurchase of exchange notes required by this covenant. The indenture requires Merrill to publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date.

    The Change of Control provisions described above will be applicable whether or not any other provisions of the indenture are applicable. Except as described above with respect to a Change of Control, the indenture does not contain provisions that permit the holders of the exchange notes to require that Merrill repurchase or redeem the exchange notes in the event of a takeover, recapitalization or similar transaction.

    The Credit Facility prohibits Merrill from purchasing any exchange notes and also provides that certain change of control events, which may include events not otherwise constituting a Change of Control under the indenture, with respect to Merrill would constitute a default thereunder. Any future credit agreements or other agreements relating to Senior Indebtedness to which Merrill becomes a party may contain similar restrictions and provisions. In the event a Change of Control occurs at a time when Merrill is prohibited from purchasing exchange notes, Merrill could seek the consent of its lenders to the purchase of exchange notes or could attempt to refinance the borrowings that contain that prohibition. If Merrill does not obtain such a consent or repay those borrowings, Merrill will remain prohibited from purchasing notes. In that case, Merrill's failure to purchase tendered exchange notes would constitute an Event of Default under the indenture, which would, in turn, constitute a default under the Credit Facility. In those circumstances, the subordination provisions in the indenture would likely restrict payments to the holders of exchange notes.

    Merrill will not be required to make a Change of Control Offer upon a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in the indenture applicable to a Change of Control Offer made by Merrill and purchases all exchange notes validly tendered and not withdrawn under that Change of Control Offer.

    "Change of Control" means the occurrence of any of the following:

(1)

the sale, lease, transfer, conveyance or other disposition, other than by way of merger or consolidation, in one or a series of related transactions, of all or substantially all of the assets of Merrill and its Subsidiaries, taken as a whole, to any "person" or "group" (as those terms are used in Section 13(d) of the Exchange Act), other than the Principals and their Related Parties;



(2)

the adoption of a plan for the liquidation or dissolution of Merrill;



(3)

the consummation of any transaction, including, without limitation, any merger or consolidation, the result of which is that any "person" or "group" (as those terms are used in Section 13(d) of the Exchange Act), other than the Principals and their Related Parties, becomes the "beneficial owner" (as that term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act), directly or indirectly through one or more intermediaries, of 50% or more of the voting power of the outstanding voting stock of Merrill; or



(4)

the first day on which a majority of the members of the board of directors of Merrill are not Continuing Members.

    The definition of Change of Control includes a phrase relating to the sale, lease, transfer, conveyance or other disposition of "all or substantially all" of the assets of Merrill and its Subsidiaries taken as a whole. Although there is a developing body of case law interpreting the phrase "substantially all," there is no precise established definition of the phrase under applicable law. Accordingly, the ability of a holder of exchange notes to require Merrill to repurchase exchange notes as a result of a sale, lease, transfer, conveyance or other disposition of less than all of the assets of Merrill and its Subsidiaries taken as a whole to another Person or group may be uncertain.

    "Continuing Members" means, as of any date of determination, any member of the board of directors of Merrill who:

(1)

was a member of Merrill's board of directors immediately after consummation of the Merger and the Merger Financing; or



(2)

was nominated for election or elected to Merrill's board of directors with the approval of, or whose election to the board of directors was ratified by, at least a majority of the Continuing Members who were members of Merrill's board of directors at the time of that nomination or election or was proposed by DLJ Merchant Banking Funds.

Asset Sales

    The indenture provides that Merrill will not, and will not permit any of its Restricted Subsidiaries to, consummate an Asset Sale unless:

(1)

Merrill or the Restricted Subsidiary, as the case may be, receives consideration at the time of that Asset Sale at least equal to the fair market value (evidenced by a resolution of the board of directors set forth in an Officers' Certificate delivered to the trustee) of the assets or Equity Interests issued or sold or otherwise disposed of; and



(2)

at least 75% of the consideration therefor received by Merrill or the Restricted Subsidiary is in the form of:



(a)

cash or Cash Equivalents; or



(b)

property or assets that are used or useful in a Permitted Business, or the Capital Stock of any Person engaged in a Permitted Business if, as a result of the acquisition by Merrill or any Restricted Subsidiary thereof, that Person becomes a Restricted Subsidiary.

    For the purposes of this provision, each of the following shall be deemed to be cash:

(i)

any liabilities, as shown on Merrill's or the Restricted Subsidiary's most recent balance sheet, of Merrill or any Restricted Subsidiary (other than contingent liabilities and liabilities that are by their terms subordinated to the exchange notes or any guarantee thereof) that are assumed by the transferee of any such assets pursuant to a customary novation agreement that releases Merrill or the Restricted Subsidiary from further liability;



(ii)

any securities, notes or other obligations received by Merrill or the Restricted Subsidiary from the transferee that are converted by Merrill or the Restricted Subsidiary into cash or Cash Equivalents within 180 days of their receipt by Merrill of the Restricted Subsidiary, but only to the extent of the cash or Cash Equivalents received; and



(iii)

any Designated Noncash Consideration received by Merrill or any of its Restricted Subsidiaries in that Asset Sale having an aggregate fair market value, taken together with all other Designated Noncash Consideration received pursuant to this clause (iii) that is at that time outstanding, not to exceed 15% of Total Assets at the time of the receipt of that Designated Noncash Consideration, with the fair market value of each item of Designated Noncash Consideration being measured at the time received and without giving effect to subsequent changes in value.

    The 75% limitation referred to in clause (2) above will not apply to any Asset Sale in which the cash or Cash Equivalents portion of the consideration received therefrom, determined in accordance with subclauses (i), (ii) and (iii) above, is equal to or greater than what the total after-tax proceeds of such Asset Sale would have been had that Asset Sale complied with the aforementioned 75% limitation.

    Within 365 days after the receipt of any Net Proceeds from an Asset Sale, Merrill or the Restricted Subsidiary, as the case may be, shall apply the Net Proceeds, at its option (or to the extent Merrill or Merrill Communications LLC is required to apply the Net Proceeds pursuant to the terms of the Credit Facility), to:

(1)

repay or purchase Senior Indebtedness or Pari Passu Indebtedness of Merrill or any Indebtedness of any Restricted Subsidiary, as the case may be,

provided that if Merrill shall so repay or purchase Pari Passu Indebtedness of Merrill;

(a)

it will equally and ratably reduce Indebtedness under the exchange notes if the exchange notes are then redeemable; or



(b)

if the exchange notes may not then be redeemed, Merrill shall make an offer, in accordance with the procedures set forth below for an Asset Sale Offer, to all holders of exchange notes to purchase at a purchase price equal to 100% of the principal amount of the exchange notes, plus accrued and unpaid interest and liquidated damages, if any, thereon to the date of purchase, the exchange notes that would otherwise be redeemed; or




(2)

(a)  an investment in property, the making of a capital expenditure or the acquisition of assets that are used or useful in a Permitted Business; or



(b)

the acquisition of Capital Stock of any Person primarily engaged in a Permitted Business if:



(x)

as a result of the acquisition by Merrill or any Restricted Subsidiary thereof, that Person becomes a Restricted Subsidiary; or



(y)

the Investment in that Capital Stock is permitted by clause (6) of the definition of Permitted Investments.

    Pending the final application of any Net Proceeds, Merrill may temporarily reduce Indebtedness or otherwise invest those Net Proceeds in any manner that is not prohibited by the indenture.

    Any Net Proceeds from Asset Sales that are not applied or invested as provided in the first sentence of the second preceding paragraph will be deemed to constitute "Excess Proceeds." When the aggregate amount of Excess Proceeds exceeds $15.0 million, Merrill will be required to make an offer to all holders of exchange notes (an "Asset Sale Offer") to purchase the maximum principal amount of exchange notes that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount equal to 100% of the principal amount thereof, plus accrued and unpaid interest and liquidated damages, if any, thereon to the date of purchase, in accordance with the procedures set forth in the indenture.

    To the extent that any Excess Proceeds remain after consummation of an Asset Sale Offer, Merrill may use those Excess Proceeds for any purpose not otherwise prohibited by the indenture. If the aggregate principal amount of exchange notes surrendered by holders thereof in connection with an Asset Sale Offer exceeds the amount of Excess Proceeds, the trustee shall select the exchange notes to be purchased as set forth under "—Selection and Notice." Upon completion of an offer to purchase, the amount of Excess Proceeds shall be reset at zero.

    Merrill will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with the repurchase of the exchange notes pursuant to an Asset Sale Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions of the indenture relating to an Asset Sale Offer, Merrill will comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations described in the indenture by virtue thereof.

Covenants

Restricted Payments

    The indenture provides that Merrill will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly:

(1)

declare or pay any dividend or make any other payment or distribution on account of Merrill's or any of its Restricted Subsidiaries' Equity Interests other than:



•

dividends or distributions payable in Equity Interests other than Disqualified Stock of Merrill;



•

or dividends or distributions payable to Merrill or any Wholly Owned Restricted Subsidiary of Merrill;



(2)

purchase, redeem or otherwise acquire or retire for value any Equity Interests of Merrill, other than any of those Equity Interests owned by Merrill or any Restricted Subsidiary of Merrill;



(3)

make any principal payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value, any Indebtedness of Merrill that is subordinated in right of payment to the exchange notes, except in accordance with the mandatory redemption or repayment provisions set forth in the original documentation governing that Indebtedness (but not pursuant to any mandatory offer to repurchase upon the occurrence of any event); or



(4)

make any Restricted Investment




(all payments and other actions set forth in clauses (1) through (4) above being collectively referred to as "Restricted Payments"),

unless, at the time of and after giving effect to that Restricted Payment:

(1)

no Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof;



(2)

Merrill would, immediately after giving pro forma effect thereto as if that Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of the covenant described under the caption "—Incurrence of Indebtedness and Issuance of Preferred Stock"; and



(3)

that Restricted Payment, together with the aggregate amount of all other Restricted Payments made by Merrill and its Restricted Subsidiaries after the date of the indenture (excluding Restricted Payments permitted by clauses (1) (to the extent that the declaration of any dividend referred to therein reduces amounts available for Restricted Payments pursuant to this clause (3)), (2) through (7), (9), (10), (12), (13), (14) and (16) of the next succeeding paragraph), is less than the sum, without duplication, of:



(a)

50% of the Consolidated Net Income of Merrill for the period (taken as one accounting period) commencing August 1, 1999 to the end of Merrill's most recently ended fiscal quarter for which internal financial statements are available at the time of that Restricted Payment (or, if Consolidated Net Income for that period is a deficit, less 100% of the deficit); plus



(b)

100% of the Qualified Proceeds received by Merrill after the date of the indenture from contributions to Merrill's capital or from the issue or sale after the date of the indenture of Equity Interests of Merrill or of Disqualified Stock or convertible debt securities of Merrill to the extent that they have been converted into those Equity Interests, other than:



•

Equity Interests, Disqualified Stock or convertible debt securities sold to a Subsidiary of Merrill and



•

Disqualified Stock or convertible debt securities that have been converted into Disqualified Stock; plus




(c)

the amount equal to the net reduction in Investments in Persons after the date of the indenture who are not Restricted Subsidiaries (other than Permitted Investments) resulting from:



(i)

Qualified Proceeds received as a dividend, repayment of a loan or advance or other transfer of assets (valued at the fair market value thereof) to Merrill or any Restricted Subsidiary from those Persons;



(ii)

Qualified Proceeds received upon the sale or liquidation of those Investments; and



(iii)

the redesignation of Unrestricted Subsidiaries (excluding any increase in the amount available for Restricted Payments pursuant to clause (8) or (12) below arising from the redesignation of that Unrestricted Subsidiary) whose assets are used or useful in, or which is engaged in, one or more Permitted Business as Restricted Subsidiaries (valued, proportionate to Merrill's equity interest in that Subsidiary, at the fair market value of the net assets of that Subsidiary at the time of that redesignation).

    The foregoing provisions will not prohibit:

(1)

the payment of any dividend within 60 days after the date of declaration thereof, if at said date of declaration, the payment would have complied with the provisions of the indenture;



(2)

the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness or Equity Interests of Merrill in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of Merrill) of other Equity Interests of Merrill (other than any Disqualified Stock), provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition shall be excluded from clause (3)(b) of the preceding paragraph;



(3)

the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness of Merrill with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness;



(4)

the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of Merrill held by any employee or independent contractor of Merrill (or any of its Restricted Subsidiaries) pursuant to any equity subscription agreement or stock option agreement; provided that:



(a)

the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests shall not exceed:



(i)

$7.5 million in any calendar year, with unused amounts in any calendar year being carried over to succeeding calendar years subject to a maximum (without giving effect to the following clause (ii)) of $15.0 million in any calendar year; plus



(ii)

the aggregate net cash proceeds received by Merrill during that calendar year from any reissuance of Equity Interests by Merrill to members of management of Merrill and its Restricted Subsidiaries; provided that the amount of any such net cash proceeds that are used to permit an acquisition or retirement for value pursuant to this clause (4) shall be excluded from clause (3)(b) of the preceding paragraph; and




(b)

no Default or Event of Default shall have occurred and be continuing immediately after that transaction;




(5)

payments and transactions in connection with:



(a)

the Merger, including, without limitation, any payments made pursuant to the Merger Agreement or the financial advisory agreements with DLJ Securities Corporation described under "Related Relationships and Party Transactions";



(b)

the Merger Financing;



(c)

the Offering;



(d)

the Credit Facility (including commitment, syndication and arrangement fees payable thereunder); and



(e)

the application of the proceeds thereof, and the payment of fees and expenses with respect thereto;




(6)

the payment of dividends by a Restricted Subsidiary on any class of common stock of that Restricted Subsidiary if:



(a)

that dividend is paid pro rata to all holders of that class of common stock; and



(b)

at least a majority of that class of common stock is held by Merrill or one or more of its Restricted Subsidiaries;




(7)

the repurchase of any class of common stock of a Restricted Subsidiary if:



(a)

that repurchase is made pro rata with respect to that class of common stock; and



(b)

at least a majority of that class of common stock is held by Merrill or one or more of its Restricted Subsidiaries;




(8)

any other Restricted Investment made in a Permitted Business which, together with all other Restricted Investments made pursuant to this clause (8) since the date of the indenture, does not exceed $25.0 million (in each case, after giving effect to all subsequent reductions in the amount of any Restricted Investment made pursuant to this clause (8), either as a result of (i) the repayment or disposition thereof for cash or (ii) the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued, proportionate to Merrill's equity interest in that Subsidiary at the time of that redesignation, at the fair market value of the net assets of that Subsidiary at the time of that redesignation), in the case of clause (i) and (ii), not to exceed the amount of the Restricted Investment previously made pursuant to this clause (8)); provided that no Default or Event of Default shall have occurred and be continuing immediately after making that Restricted Investment;



(9)

the declaration and payment of dividends to holders of any class or series of Disqualified Stock of Merrill or any Restricted Subsidiary issued on or after the date of the indenture in accordance with the covenant described under the caption "—Incurrence of Indebtedness and Issuance of Preferred Stock"; provided that no Default or Event of Default shall have occurred and be continuing immediately after making that Restricted Payment;



(10)

repurchases of Equity Interests deemed to occur upon exercise of stock options if those Equity Interests represent a portion of the exercise price of those options;



(11)

the payment of dividends or distributions on Merrill's common stock, following the first public offering of Merrill's common stock after the date of the indenture, of up to 6.0% per year of the net proceeds received by Merrill from that public offering of its common stock other than with respect to public offerings with respect to Merrill's common stock registered on Form S-8; provided that no Default or Event of Default shall have occurred and be continuing immediately after any such payment of dividends or distributions;



(12)

any other Restricted Payment which, together with all other Restricted Payments made pursuant to this clause (12) since the date of the indenture, does not exceed $25.0 million, in each case, after giving effect to all subsequent reductions in the amount of any Restricted Investment made pursuant to this clause (12) either as a result of (i) the repayment or disposition thereof for cash or (ii) the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued, proportionate to Merrill's equity interest in that Subsidiary at the time of that redesignation, at the fair market value of the net assets of that Subsidiary at the time of that redesignation), in the case of clause (i) and (ii), not to exceed the amount of the Restricted Investment previously made pursuant to this clause (12); provided that no Default or Event of Default shall have occurred and be continuing immediately after making that Restricted Payment;



(13)

the pledge by Merrill of the Capital Stock of an Unrestricted Subsidiary of Merrill to secure Non-Recourse Debt of that Unrestricted Subsidiary;



(14)

the purchase, redemption or other acquisition or retirement for value of any Equity Interests of any Restricted Subsidiary issued after the date of the indenture, provided that the aggregate price paid for any such repurchased, redeemed, acquired or retired Equity Interests shall not exceed the sum of:



(a)

the amount of cash and Cash Equivalents received by that Restricted Subsidiary from the issue or sale thereof; and



(b)

any accrued dividends thereon the payment of which would be permitted pursuant to clause (9) above;




(15)

any Investment in an Unrestricted Subsidiary that is funded by Qualified Proceeds received by Merrill after the date of the indenture from contributions to Merrill's capital or from the issue and sale after the date of the indenture of Equity Interests of Merrill or of Disqualified Stock or convertible debt securities to the extent they have been converted into that Equity Interests (other than Equity Interests, Disqualified Stock or convertible debt securities sold to a Subsidiary of Merrill and other than Disqualified Stock or convertible debt securities that have been converted into Disqualified Stock) in an amount (measured at the time that Investment is made and without giving effect to subsequent changes in value) that does not exceed the amount of those Qualified Proceeds (excluding any such Qualified Proceeds to the extent utilized to permit a prior "Restricted Payment" pursuant to clause (3)(b) of the preceding paragraph); and



(16)

distributions or payments of Receivables Fees.

    The board of directors of Merrill may designate any Restricted Subsidiary to be an Unrestricted Subsidiary if that designation would not cause a Default. For purposes of making that designation, all outstanding Investments by Merrill and its Restricted Subsidiaries (except to the extent repaid in cash) in the Subsidiary so designated will be deemed to be Restricted Payments at the time of that designation and will reduce the amount available for Restricted Payments under the first paragraph of this covenant. All such outstanding Investments will be deemed to constitute Restricted Investments in an amount equal to the greater of:

(1)

the net book value of that Investments at the time of that designation; and



(2)

the fair market value of that Investments at the time of that designation.

    That designation will only be permitted if that Restricted Investment would be permitted at that time and if that Restricted Subsidiary otherwise meets the definition of an Unrestricted Subsidiary.

    The amount of:

(1)

all Restricted Payments (other than cash) shall be the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by Merrill or that Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment; and



(2)

Qualified Proceeds (other than cash) shall be the fair market value on the date of receipt thereof by Merrill of those Qualified Proceeds.

    The fair market value of any non-cash Restricted Payment shall be determined by the board of directors of Merrill whose resolution with respect thereto shall be delivered to the trustee.

    Not later than the date of making any Restricted Payment, Merrill shall deliver to the trustee an Officers' Certificate stating that the Restricted Payment is permitted and setting forth the basis upon which the calculations required by the covenant "Restricted Payments" were computed.

Incurrence of Indebtedness and Issuance of Preferred Stock

    The indenture provides that:

(1)

Merrill will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Indebtedness);



(2)

Merrill will not, and will not permit any of its Restricted Subsidiaries to, issue any shares of Disqualified Stock; and



(3)

Merrill will not permit any of its Restricted Subsidiaries to issue any shares of preferred stock;

provided that Merrill or any Restricted Subsidiary may incur Indebtedness, including Acquired Indebtedness, or issue shares of Disqualified Stock if the Fixed Charge Coverage Ratio for Merrill's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which that additional Indebtedness is incurred or that Disqualified Stock is issued would have been at least 2.0 to 1, determined on a consolidated pro forma basis, including a pro forma application of the net proceeds therefrom, as if the additional Indebtedness had been incurred, or the Disqualified Stock had been issued, as the case may be, at the beginning of that four-quarter period.

    The provisions of the first paragraph of this covenant will not apply to the incurrence of any of the following items of Indebtedness (collectively, "Permitted Indebtedness"):

(1)

the incurrence by Merrill and its Restricted Subsidiaries of Indebtedness under the Credit Facility and the Foreign Credit Facilities; provided that the aggregate principal amount of all Indebtedness (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Merrill and those Restricted Subsidiaries thereunder) outstanding under the Credit Facility and the Foreign Credit Facilities does not exceed an amount equal to $325.0 million;



(2)

the incurrence by Merrill and its Restricted Subsidiaries of Existing Indebtedness;



(3)

the incurrence by Merrill of Indebtedness represented by the old notes issued in Offering (and exchange notes offered hereby) and the indenture and guarantees thereof by its Restricted Subsidiaries;



(4)

the incurrence by Merrill or any of its Restricted Subsidiaries of Indebtedness or Disqualified Stock represented by Capital Expenditure Indebtedness, Capital Lease Obligations or other obligations, in each case, the proceeds of which are used solely for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment (including acquisitions of Capital Stock of a Person that becomes a Restricted Subsidiary to the extent of the fair market value of the property, plant or equipment so acquired) used in the business of Merrill or that Restricted Subsidiary, in an aggregate principal amount (or accreted value, as applicable) or, in the case of Disqualified Stock, liquidation preference after giving effect to that incurrence, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness or Disqualified Stock incurred pursuant to this clause (4), not to exceed $30.0 million outstanding after giving effect to that incurrence;



(5)

Indebtedness arising from agreements of Merrill or any Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Restricted Subsidiary for the purpose of financing that acquisition; provided that:



(a)

that Indebtedness is not reflected on the balance sheet of Merrill or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a)); and



(b)

the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by Merrill and/or that Restricted Subsidiary in connection with that disposition;




(6)

the incurrence by Merrill or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refund, refinance, defease or replace Indebtedness (other than intercompany Indebtedness) that was permitted by the indenture to be incurred;



(7)

the incurrence by Merrill or any of its Restricted Subsidiaries of intercompany Indebtedness or Disqualified Stock between or among Merrill and/or any of its Restricted Subsidiaries; provided that:



(a)

if Merrill is the obligor on that Indebtedness or Disqualified Stock, that Indebtedness or Disqualified Stock is expressly subordinated to the prior payment in full in cash of all Obligations with respect to the exchange notes; and



(b)

(i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness or Disqualified Stock being held by a Person other than Merrill or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such Indebtedness or Disqualified Stock to a Person that is not either Merrill or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an incurrence of that Indebtedness or Disqualified Stock by Merrill or that Restricted Subsidiary, as the case may be, that was not permitted by this clause (7);




(8)

the incurrence by Merrill or any of its Restricted Subsidiaries of Hedging Obligations that are incurred for the purpose of fixing or hedging:



(a)

interest rate risk with respect to any Indebtedness that is permitted by the terms of the indenture to be outstanding;



(b)

exchange rate risk with respect to agreements or Indebtedness of that Person payable denominated in a currency other than U.S. dollars; and



(c)

risk with respect to fluctuations in the cost of raw materials, including paper,

provided that those agreements do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in foreign currency exchange rates, interest rates or the cost of raw materials or by reason of fees, indemnities and compensation payable thereunder;

(9)

the guarantee by Merrill or any of its Restricted Subsidiaries of Indebtedness or Disqualified Stock of Merrill or a Restricted Subsidiary of Merrill that was permitted to be incurred by another provision of this covenant;



(10)

the incurrence by Merrill or any of its Restricted Subsidiaries of Indebtedness or Disqualified Stock in connection with an acquisition in an aggregrate principal amount (or accreted value, as applicable) or, in the case of Disqualified Stock, liquidation preference after giving effect to that incurrence, including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease or replace any Indebtedness or Disqualified Stock incurred pursuant to this clause (10), not to exceed $30.0 million outstanding after giving effect to that incurrence;



(11)

obligations in respect of performance and surety bonds and completion guarantees (including related letters of credit) provided by Merrill or any Restricted Subsidiary in the ordinary course of business; and



(12)

the incurrence by Merrill or any of its Restricted Subsidiaries of additional Indebtedness or Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) outstanding or, in the case of Disqualified Stock, liquidation preference after giving effect to that incurrence, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness or Disqualified Stock incurred pursuant to this clause (12), not to exceed $30.0 million.

    For purposes of determining compliance with this covenant:

•

in the event that an item of Indebtedness or Disqualified Stock meets the criteria of more than one of the categories of Permitted Indebtedness described in clauses (1) through (12) above or is entitled to be incurred pursuant to the first paragraph of this covenant, Merrill shall, in its sole discretion, classify that item of Indebtedness or Disqualified Stock in any manner that complies with this covenant and that item of Indebtedness or Disqualified Stock will be treated as having been incurred pursuant to only one of those clauses or pursuant to the first paragraph hereof; and



•

accrual of interest or dividends, accretion or amortization of original issue discount will not be deemed to be an incurrence of Indebtedness or Disqualified Stock for purposes of this covenant.

Liens

    The indenture provides that Merrill will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, assume or suffer to exist any Lien, other than a Permitted Lien, that secures obligations under any Pari Passu Indebtedness or subordinated Indebtedness of Merrill on any asset or property now owned or hereafter acquired by Merrill or any of its Restricted Subsidiaries, or any income or profits therefrom or assign or convey any right to receive income therefrom, unless the exchange notes are equally and ratably secured with the obligations so secured until such time as those obligations are no longer secured by a Lien; provided that, in any case involving a Lien securing subordinated Indebtedness of Merrill, that Lien is subordinated to the Lien securing the exchange notes to the same extent that subordinated Indebtedness is subordinated to the exchange notes.

Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries

    The indenture provides that Merrill will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any encumbrance or restriction on the ability of any Restricted Subsidiary to:

(1)

(a) pay dividends or make any other distributions to Merrill or any of its Restricted Subsidiaries (i) on its Capital Stock or (ii) with respect to any other interest or participation in, or measured by, its profits; or



(b)

pay any Indebtedness owed to Merrill or any of its Restricted Subsidiaries;




(2)

make loans or advances to Merrill or any of its Restricted Subsidiaries; or



(3)

transfer any of its properties or assets to Merrill or any of its Restricted Subsidiaries.

    However, the foregoing restrictions will not apply to encumbrances or restrictions existing under or by reason of:

(1)

Existing Indebtedness as in effect on the date of the indenture;



(2)

the Credit Facility as in effect as of the date of the indenture, and any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings thereof;



(3)

the indenture and the notes;



(4)

applicable law and any applicable rule, regulation or order;



(5)

any agreement or instrument of a Person acquired by Merrill or any of its Restricted Subsidiaries as in effect at the time of that acquisition (except to the extent created in contemplation of that acquisition), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person, or the property or assets of the Person, so acquired, provided that, in the case of Indebtedness, that Indebtedness was permitted by the terms of the indenture to be incurred;



(6)

customary non-assignment or subletting provisions in leases or licenses entered into in the ordinary course of business and consistent with past practices;



(7)

purchase money obligations for property acquired in the ordinary course of business that impose restrictions of the nature described in clause (5) above on the property so acquired;



(8)

contracts for the sale of assets, including, without limitation, customary restrictions with respect to a Subsidiary pursuant to an agreement that has been entered into for the sale or disposition of all or substantially all of the Capital Stock or assets of that Subsidiary;



(9)

Permitted Refinancing Indebtedness, provided that the restrictions contained in the agreements governing that Permitted Refinancing Indebtedness are, in the good faith judgment of Merrill's board of directors, not materially less favorable, taken as a whole, to the holders of the exchange notes than those contained in the agreements governing the Indebtedness being refinanced;



(10)

secured Indebtedness otherwise permitted to be incurred pursuant to the covenants described under "—Incurrence of Indebtedness and Issuance of Preferred Stock" and "—Liens" that limit the right of the debtor to dispose of the assets securing that Indebtedness;



(11)

restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business;



(12)

other Indebtedness or Disqualified Stock of Restricted Subsidiaries permitted to be incurred subsequent to the Issuance Date pursuant to the provisions of the covenant described under "—Incurrence of Indebtedness and Issuance of Preferred Stock";



(13)

customary provisions in joint venture agreements and other similar agreements entered into in the ordinary course of business; and



(14)

restrictions created in connection with any Receivables Facility that, in the good faith determination of the board of directors of Merrill, are necessary or advisable to effect that Receivables Facility.

Merger, Consolidation, or Sale of Assets

    The indenture provides that Merrill may not consolidate or merge with or into (whether or not Merrill is the surviving corporation), or sell, assign, transfer, convey or otherwise dispose of all or substantially all of its properties or assets in one or more related transactions to, another Person unless:

(1)

Merrill is the surviving corporation or the Person formed by or surviving any such consolidation or merger (if other than Merrill) or to which that sale, assignment, transfer, conveyance or other disposition shall have been made is a corporation organized or existing under the laws of the United States, any state thereof or the District of Columbia;



(2)

the Person formed by or surviving any such consolidation or merger (if other than Merrill) or the Person to which that sale, assignment, transfer, conveyance or other disposition shall have been made assumes all the obligations of Merrill under the registration rights agreement, the notes and the indenture pursuant to a supplemental indenture in a form reasonably satisfactory to the trustee;



(3)

immediately after that transaction no Default or Event of Default exists; and



(4)

Merrill or the Person formed by or surviving any such consolidation or merger (if other than Merrill), or to which that sale, assignment, transfer, conveyance or other disposition shall have been made:



(a)

will, at the time of such transaction and after giving pro forma effect thereto as if that transaction had occurred at the beginning of the applicable four-quarter period, be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of the covenant described under the caption "—Incurrence of Indebtedness and Issuance of Preferred Stock"; or



(b)

would, together with its Restricted Subsidiaries, have a higher Fixed Charge Coverage Ratio immediately after that transaction (after giving pro forma effect thereto as if that transaction had occurred at the beginning of the applicable four-quarter period) than the Fixed Charge Coverage Ratio of Merrill and its Restricted Subsidiaries immediately prior to that transaction.

    The foregoing clause (4) will not prohibit the Merger or:

(a)

a merger between Merrill and a Wholly Owned Subsidiary of Merrill created for the purpose of holding the Capital Stock of Merrill;



(b)

a merger between Merrill and a Wholly Owned Restricted Subsidiary; or



(c)

a merger between Merrill and an Affiliate incorporated solely for the purpose of reincorporating Merrill in another State of the United States,

so long as, in the case of clauses (a), (b) and (c), the amount of Indebtedness of Merrill and its Restricted Subsidiaries is not increased thereby.

    The indenture provides that Merrill will not lease all or substantially all of its assets to any Person.

Transactions with Affiliates

    The indenture provides that Merrill will not, and will not permit any of its Restricted Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate of Merrill (each of the foregoing, an "Affiliate Transaction"), unless:

(1)

that Affiliate Transaction is on terms that are no less favorable to Merrill or that Restricted Subsidiary than those that would have been obtained in a comparable transaction by Merrill or that Restricted Subsidiary with an unrelated Person; and



(2)

Merrill delivers to the trustee, with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $7.5 million, either:



(a)

a resolution of the board of directors set forth in an Officers' Certificate certifying that the relevant Affiliate Transaction complies with clause (1) above and that the Affiliate Transaction has been approved by a majority of the disinterested members of the board of directors; or



(b)

an opinion as to the fairness to the holders of that Affiliate Transaction from a financial point of view issued by an accounting, appraisal or investment banking firm of national standing.

    Notwithstanding the foregoing, the following items shall not be deemed to be Affiliate Transactions:

(1)

customary directors' fees, indemnification or similar arrangements or any employment agreement or other compensation plan or arrangement entered into by Merrill or any of its Restricted Subsidiaries in the ordinary course of business (including ordinary course loans to employees not to exceed (a) $7.5 million outstanding in the aggregate at any time and (b) $2.0 million to any one employee) and consistent with the past practice of Merrill or that Restricted Subsidiary;



(2)

transactions between or among Merrill and/or its Restricted Subsidiaries;



(3)

payments of customary fees by Merrill or any of its Restricted Subsidiaries to the DLJ Merchant Banking funds and their Affiliates made for any financial advisory, financing, underwriting or placement services or in respect of other investment banking activities, including, without limitation, in connection with acquisitions or divestitures which are approved by a majority of the board of directors in good faith;



(4)

any agreement as in effect on the date of the indenture or any amendment thereto (so long as that amendment is not disadvantageous to the holders of the exchange notes in any material respect) or any transaction contemplated thereby;



(5)

payments and transactions in connection with:



•

the Merger and the Merger Financing, including, without limitation, any payments made pursuant to the Merger Agreement or the financial advisory agreements with DLJ Securities Corporation described under "Related Relationships and Party Transactions,"



•

the Credit Facility and the payment of the fees and expenses with respect thereto, including commitment, syndication and arrangement fees payable thereunder, and



•

the Offering, including underwriting discounts and commissions in connection therewith, and the application of the proceeds thereof, and the payment of the fees and expenses with respect thereto;



(6)

Restricted Payments that are permitted by the provisions of the indenture described under the caption "—Restricted Payments" and any Permitted Investments; and



(7)

sales of accounts receivable, or participations therein, in connection with any Receivables Facility.

Sale and Leaseback Transactions

    The indenture provides that Merrill will not, and will not permit any of its Restricted Subsidiaries, to enter into any sale and leaseback transaction; provided that Merrill or any Restricted Subsidiary may enter into a sale and leaseback transaction if:

(1)

Merrill or that Restricted Subsidiary, as the case may be, could have:



(a)

incurred Indebtedness in an amount equal to the Attributable Indebtedness relating to that sale and leaseback transaction pursuant to the covenant described under the caption "—Incurrence of Indebtedness and Issuance of Preferred Stock"; and



(b)

incurred a Lien to secure that Indebtedness pursuant to the covenant described under the caption "—Liens";




(2)

the gross cash proceeds of that sale and leaseback transaction are at least equal to the fair market value (as determined in good faith by the board of directors and set forth in an Officers' Certificate delivered to the trustee) of the property that is the subject of that sale and leaseback transaction; and



(3)

the transfer of assets in that sale and leaseback transaction is permitted by, and Merrill applies the proceeds of that transaction in compliance with, the covenant described under the caption "Repurchase at the Option of Holders—Asset Sales."

No Senior Subordinated Indebtedness

    The indenture provides that:

•

Merrill will not incur any Indebtedness that is subordinated or junior in right of payment to any Senior Indebtedness and senior in right of payment to the exchange notes.



•

no Guarantor will incur any Indebtedness that is subordinate or junior in right of payment to any Senior Indebtedness and senior in right of payment to that Guarantor's Guarantee.

Additional Note Guarantees

    The Indenture provides that, if any Wholly Owned Restricted Subsidiary of the Company that is a Domestic Subsidiary guarantees any Indebtedness under the Credit Facility, then such Restricted Subsidiary shall become a Guarantor and execute a supplemental indenture and deliver an opinion of counsel, in accordance with the terms of the Indenture.

Reports

    The indenture provides that, whether or not required by the rules and regulations of the SEC, so long as any exchange notes are outstanding, Merrill will furnish to the holders of exchange notes:

(1)

all quarterly and annual financial information that would be required to be contained in a filing with the SEC on Forms 10-Q and 10-K if Merrill were required to file those Forms, including a "Management's Discussion and Analysis of Financial Condition and Results of Operations" and, with respect to the annual information only, a report thereon by Merrill's certified independent accountants; and



(2)

all current reports that would be required to be filed with the SEC on Form 8-K if Merrill were required to file those reports, in each case, within the time periods specified in the SEC's rules and regulations.

    In addition, following the consummation of this exchange offer, whether or not required by the rules and regulations of the SEC, Merrill will file a copy of all that information and reports referred to in clauses (1) and (2) above with the SEC for public availability within the time periods specified in the SEC's rules and regulations (unless the SEC will not accept such a filing) and make that information available to securities analysts and prospective investors upon request.

    In addition, Merrill and the Guarantors have agreed that, for so long as any exchange notes remain outstanding, they will furnish to the holders and to securities analysts and prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

Events of Default and Remedies

    The indenture provides that each of the following constitutes an Event of Default:

(1)

default for 30 days in the payment when due of interest on, or liquidated damages with respect to, the exchange notes or the old notes (whether or not prohibited by the subordination provisions of the indenture);



(2)

default in payment when due of the principal of or premium, if any, on the exchange notes or the old notes (whether or not prohibited by the subordination provisions of the indenture);



(3)

failure by Merrill or any of its Restricted Subsidiaries for 30 days after receipt of notice from the trustee or holders of at least 25% in principal amount of the exchange notes and the old notes taken together and then outstanding to comply with the provisions described under the captions "Repurchase at the Option of Holders—Change of Control," "—Asset Sales," "Covenants—Restricted Payments," "—Incurrence of Indebtedness and Issuance of Preferred Stock" or "—Merger, Consolidation or Sale of Assets";



(4)

failure by Merrill for 60 days after notice from the trustee or the holders of at least 25% in principal amount of the exchange notes and old notes taken together and then outstanding to comply with any of its other agreements in the indenture or the exchange notes;



(5)

default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by Merrill or any of its Restricted Subsidiaries (or the payment of which is guaranteed by Merrill or any of its Restricted Subsidiaries), whether that Indebtedness or guarantee now exists, or is created after the date of the indenture, which default:



(a)

is caused by a failure to pay Indebtedness at its stated final maturity (after giving effect to any applicable grace period provided in that Indebtedness) (a "Payment Default"); or



(b)

results in the acceleration of that Indebtedness prior to its stated final maturity and,




in each case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a Payment Default or the maturity of which has been so accelerated, aggregates $10.0 million or more;

(6)

failure by Merrill or any of its Restricted Subsidiaries to pay final judgments aggregating in excess of $10.0 million (net of any amounts with respect to which a reputable and creditworthy insurance company has acknowledged liability in writing), which judgments are not paid, discharged or stayed within a period of 60 days; and



(7)

except as permitted by the indenture, any Guarantee shall be held in any judicial proceeding to be unenforceable or invalid or shall cease for any reason to be in full force and effect or any Guarantor, or any Person acting on behalf of any Guarantor, shall deny or disaffirm its obligations under its Guarantee; and



(8)

certain events of bankruptcy or insolvency with respect to Merrill or any of its Restricted Subsidiaries that is a Significant Subsidiary.

    If any Event of Default (other than an Event of Default specified in clause (8) above with respect to events of bankruptcy or insolvency with respect to Merrill or any Restricted Subsidiary that is a Significant Subsidiary) occurs and is continuing, the holders of at least 25% in principal amount of the exchange notes and old notes taken together and then outstanding may direct the trustee to declare all the exchange notes to be due and payable immediately. Upon any such declaration, the exchange notes shall become due and payable immediately. However, so long as any Indebtedness permitted to be incurred pursuant to the Credit Facility shall be outstanding, that acceleration shall not be effective until the earlier of:

(1)

an acceleration of any such Indebtedness under the Credit Facility; or



(2)

five business days after receipt by Merrill and the administrative agent under the Credit Facility of written notice of that acceleration.

    Notwithstanding the foregoing, in the case of an Event of Default specified in clause (8) above with respect to events of bankruptcy or insolvency with respect to Merrill or any Restricted Subsidiary that is a Significant Subsidiary, all outstanding exchange notes will become due and payable without further action or notice. Holders of the exchange notes may not enforce the indenture or the exchange notes except as provided in the indenture.

    The holders of a majority in aggregate principal amount of the exchange notes and old notes taken together and then outstanding by written notice to the trustee may on behalf of all of the holders rescind an acceleration and its consequences if the rescission would not conflict with any judgment or decree and if all existing Events of Default (except nonpayment of principal, interest or premium or liquidated damages, if any, that has become due solely because of the acceleration) have been cured or waived, provided that, in the event of a declaration of acceleration of the exchange notes because an Event of Default has occurred and is continuing as a result of the acceleration of any Indebtedness described in clause (5) above, the declaration of acceleration of the exchange notes shall be automatically annulled if the holders of any Indebtedness described in that clause (5) have rescinded the declaration of acceleration in respect of that Indebtedness within 30 days of the date of that declaration and if:

(1)

the annulment of the acceleration of the exchange notes would not conflict with any judgment or decree of a court of competent jurisdiction; and



(2)

all existing Events of Default, except non-payment of principal or interest on the exchange notes that became due solely because of the acceleration of the exchange notes, have been cured or waived.

    Subject to certain limitations, holders of a majority in principal amount of the exchange notes and old notes taken together and then outstanding may direct the trustee in its exercise of any trust or power. The trustee may withhold from holders of the exchange notes notice of any continuing Default or Event of Default (except a Default or Event of Default relating to the payment of principal or interest) if it determines that withholding notice is in their interest.

    The holders of a majority in aggregate principal amount of the exchange notes and old notes taken together and then outstanding by notice to the trustee may on behalf of the holders of all of the exchange notes waive any existing Default or Event of Default and its consequences under the indenture except a continuing Default or Event of Default in the payment of interest on, or the principal of, the exchange notes.

    Merrill is required to deliver to the trustee annually a statement regarding compliance with the indenture, and Merrill is required upon becoming aware of any Default or Event of Default to deliver to the trustee a statement specifying that Default or Event of Default.

No Personal Liability of Directors, Officers, Employees and Shareholders

    No director, officer, employee, incorporator or shareholder of Merrill or any Guarantor, as such, shall have any liability for any obligations of Merrill or the Guarantors under the exchange notes, the Guarantees or the indenture or for any claim based on, in respect of, or by reason of, those obligations or their creation. Each holder of exchange notes by accepting an exchange note waives and releases all that liability. The waiver and release are part of the consideration for issuance of the exchange notes. That waiver may not be effective to waive liabilities under the federal securities laws, and it is the view of the SEC that such a waiver is against public policy.

Legal Defeasance and Covenant Defeasance

    Merrill may, at its option and at any time, elect to have all of its obligations, and all obligations of the Guarantors, discharged with respect to the outstanding exchange notes, Guarantees and the indenture ("Legal Defeasance") except for:

(1)

the rights of holders of outstanding exchange notes to receive payments in respect of the principal of, premium, if any, and interest and liquidated damages, if any, on those exchange notes when those payments are due from the trust referred to below;



(2)

Merrill's obligations with respect to the exchange notes concerning issuing temporary notes, registration of notes, mutilated, destroyed, lost or stolen notes and the maintenance of an office or agency for payment and money for security payments held in trust;



(3)

the rights, powers, trusts, duties and immunities of the trustee, and Merrill's obligations in connection therewith; and



(4)

the Legal Defeasance provisions of the indenture.

    In addition, Merrill may, at its option and at any time, elect to have its obligations released with respect to certain covenants that are described in the indenture ("Covenant Defeasance") and thereafter any omission to comply with those obligations shall not constitute a Default or Event of Default with respect to the exchange notes. In the event Covenant Defeasance occurs, certain events (not including non-payment with respect to the notes, bankruptcy, receivership, rehabilitation and insolvency events) described under "Events of Default and Remedies" will no longer constitute an Event of Default with respect to the exchange notes.

    In order to exercise either Legal Defeasance or Covenant Defeasance,

(1)

Merrill must irrevocably deposit with the trustee, in trust, for the benefit of the holders of the exchange notes, cash in U.S. dollars, non-callable Government Securities, or a combination thereof, in those amounts as will be sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay the principal of, premium, if any, and interest and liquidated damages, if any, on the outstanding exchange notes on the stated maturity or on the applicable redemption date, as the case may be, and Merrill must specify whether the exchange notes are being defeased to maturity or to a particular redemption date;



(2)

in the case of Legal Defeasance, Merrill shall have delivered to the trustee an opinion of counsel in the United States reasonably acceptable to the trustee confirming that:



(a)

Merrill has received from, or there has been published by, the Internal Revenue Service a ruling; or



(b)

since the date of the indenture, there has been a change in the applicable federal income tax law,





in either case to the effect that, and based thereon that opinion of counsel shall confirm that, subject to customary assumptions and exclusions, the holders of the outstanding exchange notes will not recognize income, gain or loss for federal income tax purposes as a result of that Legal Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if that Legal Defeasance had not occurred;

(3)

in the case of Covenant Defeasance, Merrill shall have delivered to the trustee an opinion of counsel in the United States reasonably acceptable to the trustee confirming that, subject to customary assumptions and exclusions, the holders of the outstanding exchange notes will not recognize income, gain or loss for federal income tax purposes as a result of that Covenant Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if that Covenant Defeasance had not occurred;



(4)

no Default or Event of Default shall have occurred and be continuing on the date of that deposit (other than a Default or Event of Default resulting from the borrowing of funds to be applied to that deposit) or, insofar as Events of Default from bankruptcy or insolvency events are concerned, at any time in the period ending on the 123rd day after the date of deposit;



(5)

that Legal Defeasance or Covenant Defeasance will not result in a breach or violation of, or constitute a default under, any material agreement or instrument (other than the indenture) to which Merrill or any of its Subsidiaries is a party or by which Merrill or any of its Subsidiaries is bound;



(6)

Merrill must have delivered to the trustee an opinion of counsel to the effect that, subject to customary assumptions and exclusions, after the 123rd day following the deposit, the trust funds will not be subject to the effect of Section 547 of the United States Bankruptcy Code or any analogous New York State law provision or any other applicable federal or New York bankruptcy, insolvency, reorganization or similar laws affecting creditors' rights generally;



(7)

Merrill must deliver to the trustee an Officers' Certificate stating that the deposit was not made by Merrill with the intent of preferring the holders of exchange notes over the other creditors of Merrill with the intent of defeating, hindering, delaying or defrauding creditors of Merrill or others; and



(8)

Merrill must deliver to the trustee an Officers' Certificate and an opinion of counsel (which opinion may be subject to customary assumptions and exclusions), each stating that all conditions precedent provided for relating to the Legal Defeasance or the Covenant Defeasance have been complied with.

Paying Agent and Registrar to the Exchange Notes

    The trustee will initially act as paying agent and registrar. We may change the paying agent or registrar without prior notice to the holders of the exchange notes. We or any of our subsidiaries may act as paying agent or registrar.

Transfer and Exchange

    A holder may transfer or exchange notes in accordance with the indenture. The Registrar and the trustee may require a holder, among other things, to furnish appropriate endorsements and transfer documents and Merrill may require a holder to pay any taxes and fees required by law or permitted by the indenture. Merrill is not required to transfer or exchange any exchange note selected for redemption. Also, Merrill is not required to transfer or exchange any exchange note for a period of 15 days before a selection of exchange notes to be redeemed. The registered holder of an exchange note will be treated as the owner of it for all purposes.

Amendment, Supplement and Waiver

    Except as provided below, the indenture, the Guarantee and the exchange notes may be amended or supplemented with the consent of the holders of at least a majority in principal amount of the exchange notes and old notes taken together and then outstanding, and any existing default or compliance with any provision of the indenture, the Guarantee or the exchange notes may be waived with the consent of the holders of a majority in principal amount of the exchange notes and old notes taken together. Consents obtained in connection with a purchase of, or tender offer or exchange offer for, exchange notes shall be included for those purposes.

    Without the consent of each holder affected, an amendment or waiver may not, with respect to any exchange notes held by a non-consenting holder:

(1)

reduce the principal amount of exchange notes whose holders must consent to an amendment, supplement or waiver;


(2)

reduce the principal of or change the fixed maturity of any exchange note or alter the provisions with respect to the redemption of the exchange notes (other than the provisions described under the caption "—Repurchase at the Option of Holders");


(3)

reduce the rate of or extend the time for payment of interest on any exchange note;


(4)

waive a Default or Event of Default in the payment of principal of or premium, if any, or interest or liquidated damages, if any, on the exchange notes (except a rescission of acceleration of the exchange notes by the holders of at least a majority in aggregate principal amount of the exchange notes and a waiver of the payment default that resulted from that acceleration);


(5)

make any exchange note payable in money other than that stated in the exchange notes;


(6)

make any change in the provisions of the indenture relating to waivers of past Defaults;


(7)

waive a redemption payment with respect to any exchange note (other than the provisions described under the caption "—Repurchase at the Option of Holders");


(8)

release any Guarantor from its obligations under its Guarantee or the indenture, except in accordance with the terms of the indenture; or


(9)

make any change in the foregoing amendment and waiver provisions.

    Notwithstanding the foregoing, any:

(1)

amendment to or waiver of the covenant described under the caption "—Repurchase at the Option of Holders—Change of Control"; and


(2)

amendment to Article 10 of the indenture (which relates to subordination)

will require the consent of the holders of at least two-thirds in aggregate principal amount of the exchange notes and old notes taken together and then outstanding if that amendment would materially adversely affect the rights of holders of exchange notes.

    Notwithstanding the foregoing, without the consent of any holder of exchange notes, Merrill and the trustee may amend or supplement the indenture, the Guarantees or the exchange notes:

(1)

to cure any ambiguity, defect or inconsistency;



(2)

to provide for uncertificated exchange notes in addition to or in place of certificated exchange notes;



(3)

to provide for the assumption of Merrill's obligations to holders of exchange notes in the case of a merger or consolidation or sale of all or substantially all of the assets of Merrill or to provide for the assumption of any Guarantor's obligations under its Guarantee in the case of a merger or consolidation of that Guarantor;



(4)

to make any change that would provide any additional rights or benefits to the holders of exchange notes or that does not materially adversely affect the legal rights under the indenture of any such holder;



(5)

to comply with requirements of the SEC in order to effect or maintain the qualification of the indenture under the Trust Indenture Act;



(6)

to provide for guarantees of the exchange notes; or



(7)

to evidence and provide acceptance of the appointment of a successor Trustee under the indenture.

Concerning the Trustee

    The indenture contains certain limitations on the rights of the trustee, should it become a creditor of Merrill, to obtain payment of claims in certain cases, or to realize on certain property received in respect of any such claim as security or otherwise. The trustee will be permitted to engage in other transactions; however, if it acquires any conflicting interest it must eliminate that conflict within 90 days, apply to the SEC for permission to continue or resign.

    The holders of a majority in principal amount of the outstanding exchange notes and old notes taken together and then outstanding will have the right to direct the time, method and place of conducting any proceeding for exercising any remedy available to the trustee, subject to certain exceptions. The indenture provides that in case an Event of Default shall occur (which shall not be cured), the trustee will be required, in the exercise of its power, to use the degree of care of a prudent man in the conduct of his own affairs. Subject to such provisions, the trustee will be under no obligation to exercise any of its rights or powers under the indenture at the request of any holder of exchange notes, unless that holder shall have offered to the trustee security and indemnity satisfactory to it against any loss, liability or expense.

Book-Entry, Delivery and Form

    The certificates representing the exchange notes will be issued in fully registered form, without coupons. Except as described below, the exchange notes will be deposited with, or on behalf of, The Depository Trust Company, New York, New York ("DTC"), and registered in the name of Cede & Co. as DTC's nominee, in the form of a global note (the "global registered note").

The Global Registered Note

    Merrill expects that under procedures established by DTC (1) upon deposit of the global registered note, DTC or its custodian will credit on its internal system interests in the global registered note to the accounts of persons who have accounts with DTC ("Participants") and (2) ownership of the global registered note will be shown on, and the transfer of ownership thereof will be effected only through, records maintained by DTC or its nominee, with respect to interests of Participants, and the records of Participants with respect to interests of persons other than Participants. Ownership of beneficial interests in the global registered note will be limited to Participants or persons who hold interests through Participants.

    So long as DTC or its nominee is the registered owner or holder of the exchange notes, DTC or such nominee will be considered the sole owner or holder of the exchange notes represented by the global registered note for all purposes under the indenture. No beneficial owner of an interest in the global registered note will be able to transfer such interest except in accordance with DTC's procedures, in addition to those provided for under the indenture with respect to the exchange notes.

    Payments of the principal of, or premium and interest on, the global registered note will be made to DTC or its nominee, as the case may be, as the registered owner thereof. None of Merrill, the trustee or any paying agent under the indenture will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in the global registered note or for maintaining, supervising or reviewing any records relating to such beneficial ownership interest.

    We expect that DTC or its nominee, upon receipt of any payment of the principal of, or premium and interest on, the global registered note, will credit Participants' accounts with payments in amounts proportionate to their respective beneficial interests in the principal amount of such global registered note as shown on the records of DTC or its nominee. We also expect that payments by Participants to owners of beneficial interests in the global registered note held through such Participants will be governed by standing instructions and customary practice as is now the case with securities held for the accounts of customers registered in the names of nominees for such customers. Such payments will be the responsibility of such Participants.

    Transfers between Participants in DTC will be effected in accordance with DTC rules and will be settled in immediately available funds. If a holder requires physical delivery of a certificated note for any reason, including to sell exchange notes to persons in states which require physical delivery of the exchange notes or to pledge such securities, such holder must transfer its interest in the global registered note in accordance with the normal procedures of DTC and with the procedures set forth in the indenture.

    DTC has advised us that DTC will take any action permitted to be taken by a holder of exchange notes, including the presentation of exchange notes for exchange as described below, only at the direction of one or more Participants to whose account at DTC interests in the global registered note are credited and only in respect of such portion of the aggregate principal amount of exchange notes as to which such Participant or Participants has or have given such direction. However, if there is an Event of Default under the indenture, DTC will exchange the global registered note for certificated exchange notes, which it will distribute to its Participants.

    DTC has advised us as follows: DTC is a limited purpose trust company organized under the laws of the State of New York, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the Uniform Commercial Code and a "clearing agency" registered under the provisions of Section 17A of the Exchange Act. DTC was created to hold securities for its Participants and facilitate the clearance and settlement of securities transactions between Participants through electronic book-entry changes in accounts of its Participants, thereby eliminating the need for physical movement of certificates. Participants include securities brokers and dealers, banks, trust companies and clearing corporations and other organizations. Indirect access to the DTC system is available to others such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a Participant, either directly or indirectly ("Indirect Participants").

    Although DTC has agreed to the foregoing procedures in order to facilitate transfers of interest in the global registered notes among Participants, it is under no obligation to perform such procedures, and such procedures may be discontinued at any time. Neither Merrill nor the trustee will have any responsibility for the performance by DTC or its Participants or Indirect Participants of their respective obligations under the rules and procedures governing their operations.

Certificated Notes

    Interests in the global registered note will be exchangeable or transferable, as the case may be, for certificated notes if:

(1)

DTC (a) notifies us that it is unwilling or unable to continue as depositary for the global registered note and we fail to appoint a successor depositary or (b) has ceased to be a clearing agency registered under the Exchange Act;

(2)

We, at our option, notify the trustee in writing that we elect to cause the issuance of the exchange notes in certificated form; or

(3)

there shall have occurred and be continuing to occur a Default or an Event of Default with respect to the exchange notes.

    In addition, beneficial interests in the global registered note may be exchanged for certificated notes upon request but only upon at least 20 days' prior written notice given to the trustee by or on behalf of DTC in accordance with customary procedures. In all cases, certificated notes delivered in exchange for the global registered note or beneficial interest therein will be registered in the names, and issued in any approved denominations, requested by or on behalf of the depositary, in accordance with its customary procedures.

Same Day Settlement And Payment

    The indenture will require that payments in respect of the exchange notes represented by the global registered note, including principal, premium, if any, interest and Liquidated Damages, if any, be made by wire transfer of immediately available next day funds to the accounts specified by the holder. With respect to certificated notes, Merrill will make all payments of principal, premium, if any, interest and Liquidated Damages, if any, by wire transfer of immediately available funds to the accounts specified by the holders thereof or, if no such account is specified, by mailing a check to each such holder's registered address. Merrill expects that secondary trading in certificated notes will also be settled in immediately available funds.

Registration Rights; Liquidated Damages

    Merrill, the Guarantor, and the initial purchaser entered into an A/B exchange registration rights agreement on November 23, 1999. Pursuant to this registration rights agreement, Merrill and the Guarantors agreed to file with the SEC an exchange offer registration statement on the appropriate form under the Securities Act with respect to the exchange notes. Upon the effectiveness of this exchange offer registration statement, Merrill will offer to the holders of Transfer Restricted Securities pursuant to the exchange offer who are able to make certain representations the opportunity to exchange their Transfer Restricted Securities for exchange notes. If:

(1)

Merrill and the Guarantors are not required to file the exchange offer registration statement or permitted to consummate the exchange offer because the exchange offer is not permitted by applicable law or SEC policy; or



(2)

any holder of Transfer Restricted Securities notifies Merrill in writing prior to the 20th business day following consummation of the exchange offer that:



(a)

based on an opinion of counsel, it is prohibited by law or SEC policy from participating in the exchange offer; or



(b)

it is a broker-dealer and owns notes acquired directly from Merrill,

Merrill and the Guarantors will file with the SEC a shelf registration statement to cover resales of the old notes by the holders thereof who satisfy certain conditions relating to the provision of information in connection with the shelf registration statement.

    Merrill and the Guarantors will use their reasonable best efforts to cause the applicable registration statement to be declared effective as promptly as possible by the SEC.

    For purposes of the preceding, "Transfer Restricted Securities" means each:

(1)

old note, until the earliest to occur of:



(a)

the date on which that old note is exchanged in the exchange offer for an exchange note which is entitled to be resold to the public by the holder thereof without complying with the prospectus delivery requirements of the Securities Act;



(b)

the date on which that old note has been disposed of in accordance with a shelf registration statement (and purchasers thereof have been issued exchange notes); or



(c)

the date on which that old note is distributed to the public pursuant to Rule 144 under the Securities Act; and




(2)

exchange note issued to a broker-dealer until the date on which that exchange note is disposed of by that broker-dealer pursuant to the "Plan of Distribution" contemplated by the exchange offer registration statement (including the delivery of the prospectus contained therein).

    The registration rights agreement provides that:

(1)

Merrill and the Guarantors will file an exchange offer registration statement with the SEC on or before February 20, 2000;



(2)

Merrill and the Guarantors will use their reasonable best efforts to have the exchange offer registration statement declared effective by the SEC on or before May 20, 2000;



(3)

unless the exchange offer would not be permitted by applicable law or SEC policy, Merrill and the Guarantors will commence the exchange offer, keep the exchange offer open for a period of not less than 20 business days and use their reasonable best efforts to issue, on or prior to 30 business days after the date on which the exchange offer registration statement was declared effective by the SEC, exchange notes in exchange for all old notes tendered prior thereto in the exchange offer; and



(4)

if obligated to file the shelf registration statement, Merrill and the Guarantors will file the shelf registration statement with the SEC on or prior to 90 days after that filing obligation arises and use its reasonable best efforts to cause the shelf registration statement to be declared effective by the SEC on or prior to 180 days after that obligation arises.

    Merrill will pay liquidated damages to each holder of notes upon the occurrence of any of the following:

(1)

Merrill or the Guarantors fail to file any of the registration statements required by the registration rights agreement on or before the date specified for that filing;



(2)

any of such registration statements is not declared effective by the SEC on or prior to the date specified for that effectiveness (the "Effectiveness Target Date");



(3)

Merrill fails to consummate the exchange offer within 40 business days of the Effectiveness Target Date with respect to the exchange offer registration statement; or



(4)

the shelf registration statement or the exchange offer registration statement is declared effective but thereafter ceases to be effective or usable in connection with resales of Transfer Restricted Securities during the periods specified in the registration rights agreement

(each such event referred to in clauses (1) through (4) above a "Registration Default"). The exchange offer being made hereby, if commenced and consummated within the time periods described in this prospectus, will satisfy those requirements under the registration rights agreement.

    Such liquidated damages shall be:

(1)

with respect to the first 90-day period immediately following the occurrence of the first Registration Default, an amount equal to $0.05 per week per $1,000 principal amount of notes held by that holder; and



(2)

an additional $0.05 per week per $1,000 principal amount of notes with respect to each subsequent 90-day period until all Registration Defaults have been cured, up to a maximum amount of liquidated damages for all Registration Defaults of $0.25 per week per $1,000 principal amount of notes.

    All accrued liquidated damages will be paid on each Damages Payment Date to the Global Note holder by wire transfer of immediately available funds or by federal funds check and to holders of Certificated Securities by wire transfer to the accounts specified by them or by mailing checks to their registered addresses if no such accounts have been specified. Following the cure of all Registration Defaults, the accrual of liquidated damages will cease.

    Holders of old notes will be required to make certain representations to Merrill and the Guarantors (as described in the registration rights agreement) in order to participate in the exchange offer and will be required to deliver certain information to be used in connection with the shelf registration statement and to provide comments on the shelf registration statement within the time periods set forth in the registration rights agreement in order to have their old notes included in the shelf registration statement and benefit from the provisions regarding liquidated damages set forth above with respect to the shelf registration statement.

Definitions

    Set forth below are some of the defined terms used in the indenture. Reference is made to the indenture for a full disclosure of all those terms, as well as any other capitalized terms used herein for which no definition is provided.

    "Accounts Receivable Subsidiary" means an Unrestricted Subsidiary of Merrill to which Merrill or any of its Restricted Subsidiaries sells any of its accounts receivable pursuant to a Receivables Facility.

    "Acquired Indebtedness" means, with respect to any specified Person,

(1)

Indebtedness of any other Person existing at the time that other Person is merged with or into or became a Subsidiary of that specified Person, including, without limitation, Indebtedness incurred in connection with, or in contemplation of, that other Person merging with or into or becoming a Subsidiary of that specified Person; and



(2)

Indebtedness secured by a Lien encumbering an asset acquired by that specified Person at the time that asset is acquired by that specified Person.

    "Affiliate" of any specified Person means any other Person which, directly or indirectly, controls, is controlled by or is under direct or indirect common control with, that specified Person. For purposes of this definition, "control," when used with respect to any Person, means the power to direct the management and policies of that Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise, and the terms "controlling" and "controlled" have meanings correlative to the foregoing.

    "Asset Sale" means:

(1)

the sale, lease, conveyance, disposition or other transfer (a "disposition") of any properties, assets or rights (including, without limitation, by way of a sale and leaseback); provided that the sale, lease, conveyance or other disposition of all or substantially all of the assets of Merrill and its Subsidiaries taken as a whole will be governed by the provisions of the indenture described under the caption "—Change of Control" and/or the provisions described under the caption "—Merger, Consolidation or Sale of Assets" and not by the provisions of the Asset Sale covenant; and



(2)

the issuance, sale or transfer by Merrill or any of its Restricted Subsidiaries of Equity Interests of any of Merrill's Restricted Subsidiaries,




in the case of either clause (1) or (2), whether in a single transaction or a series of related transactions,

(a)

that have a fair market value in excess of $5.0 million; or



(b)

for net proceeds in excess of $5.0 million.




Notwithstanding the foregoing, the following items shall not be deemed to be Asset Sales:

(1)

dispositions in the ordinary course of business;



(2)

a disposition of assets by Merrill to a Restricted Subsidiary or by a Restricted Subsidiary to Merrill or to another Restricted Subsidiary;



(3)

a disposition of Equity Interests by a Restricted Subsidiary to Merrill or to another Restricted Subsidiary;



(4)

the sale and leaseback of any assets within 90 days of the acquisition thereof;



(5)

foreclosures on assets;



(6)

any exchange of like property pursuant to Section 1031 of the Internal Revenue Code of 1986, as amended, for use in a Permitted Business;



(7)

any sale of Equity Interests in, or Indebtedness or other securities of, an Unrestricted Subsidiary;



(8)

a Permitted Investment or a Restricted Payment that is permitted by the covenant described under the caption "—Restricted Payments";



(9)

sales of accounts receivable, or participations therein, in connection with any Receivables Facility; and



(10)

the licensing or sale of intellectual property.

    "Attributable Indebtedness" in respect of a sale and leaseback transaction means, at the time of determination, the present value (discounted at the rate of interest implicit in that transaction, determined in accordance with GAAP) of the obligation of the lessee for net rental payments during the remaining term of the lease included in that sale and leaseback transaction, including any period for which that lease has been extended or may, at the option of the lessor, be extended.

    "Capital Expenditure Indebtedness" means Indebtedness or Disqualified Stock incurred by any Person to finance the purchase or construction of any property or assets acquired or constructed by that Person which have a useful life or more than one year so long as:

(1)

the purchase or construction price for that property or assets is included in "addition to property, plant or equipment" in accordance with GAAP;



(2)

the acquisition or construction of that property or assets is not part of any acquisition of a Person or line of business; and



(3)

that Indebtedness or Disqualified Stock is incurred within 90 days of the acquisition or completion of construction of that property or assets.

    "Capital Lease Obligation" means, at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease that would at that time be required to be capitalized on a balance sheet in accordance with GAAP.

    "Capital Stock" means:

(1)

in the case of a corporation, corporate stock;



(2)

in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;



(3)

in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and



(4)

any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.

    "Cash Equivalents" means:

(1)

Government Securities;



(2)

any certificate of deposit maturing not more than 365 days after the date of acquisition issued by, or demand deposit or time deposit of, an Eligible Institution or any lender under the Credit Facility;



(3)

commercial paper maturing not more than 365 days after the date of acquisition of an issuer (other than an Affiliate of Merrill) with a rating, at the time as of which any investment therein is made, of "A-3" (or higher) according to S&P or "P-2" (or higher) according to Moody's or carrying an equivalent rating by a nationally recognized rating agency if both of the two named rating agencies cease publishing ratings of investments;



(4)

any bankers acceptances or money market deposit accounts issued by an Eligible Institution;



(5)

any fund investing exclusively in investments of the types described in clauses (1) through (4) above; and



(6)

in the case of any Subsidiary organized or having its principal place of business outside the United States, investments denominated in the currency of the jurisdiction in which that Subsidiary is organized or has its principal place of business which are similar to the items specified in clauses (1) through (5) above, including without limitation any deposit with a bank that is a lender to any Restricted Subsidiary.

    "Consolidated Cash Flow" means, with respect to any Person for any period, the Consolidated Net Income of that Person and its Restricted Subsidiaries for that period plus, to the extent deducted in computing Consolidated Net Income,

(1)

provision for taxes based on income or profits of that Person and its Restricted Subsidiaries for that period;



(2)

Fixed Charges of that Person for that period;



(3)

depreciation, amortization (including amortization of goodwill and other intangibles) and all other non-cash charges, but excluding any other non-cash charge to the extent that it represents an accrual of or reserve for cash expenses in any future period or amortization of a prepaid cash expense that was paid in a prior period, of that Person and its Restricted Subsidiaries for that period;



(4)

net periodic post-retirement benefits;



(5)

other income or expense net as set forth on the face of that Person's statement of operations;



(6)

expenses and charges related to the Merger and Merger Financing, including, without limitation, any payment made pursuant to the Merger Agreement or the financial advisory agreements with DLJ Securities Corporation described under "Related Relationships and Party Transactions," the Credit Facility, the Offering and the application of the proceeds thereof; and



(7)

any non-capitalized transaction costs incurred in connection with actual, proposed or abandoned financings, acquisitions or divestitures, including, but not limited to, financing and refinancing fees and costs incurred in connection with the Merger and Merger Financing,

in each case, on a consolidated basis and determined in accordance with GAAP.

    Notwithstanding the foregoing, the provision for taxes based on the income or profits of, the Fixed Charges of, and the depreciation and amortization and other non-cash charges of, a Restricted Subsidiary of a Person shall be added to Consolidated Net Income to compute Consolidated Cash Flow only to the extent and in the same proportion that Net Income of that Restricted Subsidiary was included in calculating the Consolidated Net Income of that Person.

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

(1)

the interest expense of that Person and its Restricted Subsidiaries for that period, on a consolidated basis, determined in accordance with GAAP, including amortization of original issue discount, non-cash interest payments, the interest component of all payments associated with Capital Lease Obligations, imputed interest with respect to Attributable Indebtedness, commissions, discounts and other fees and charges incurred in respect of letter of credit or bankers' acceptance financings, and net payments, if any, pursuant to Hedging Obligations; provided that in no event shall (a) any amortization of deferred financing costs, (b) interest expense attributable to any defeased (covenant or legal) Indebtedness and (c) any non-cash interest expense on preferred stock or warrants (other than non-cash interest expense on Disqualified Stock) be included in Consolidated Interest Expense; and



(2)

the consolidated capitalized interest of that Person and its Restricted Subsidiaries for that period, whether paid or accrued; provided, however, that Receivables Fees shall be deemed not to constitute Consolidated Interest Expense.

    Notwithstanding the foregoing, the Consolidated Interest Expense with respect to any Restricted Subsidiary that is not a Wholly Owned Restricted Subsidiary shall be included only to the extent and in the same proportion that the net income of that Restricted Subsidiary was included in calculating Consolidated Net Income.

    "Consolidated Net Income" means, with respect to any Person for any period, the aggregate of the Net Income of that Person and its Restricted Subsidiaries for that period, on a consolidated basis, determined in accordance with GAAP; provided that

(1)

the Net Income (or loss) of any Person that is not a Restricted Subsidiary or that is accounted for by the equity method of accounting shall be included only to the extent of the amount of dividends or distributions paid in cash to the referent Person or a Restricted Subsidiary thereof;



(2)

the Net Income (or loss) of any Restricted Subsidiary other than a Subsidiary organized or having its principal place of business outside the United States shall be excluded to the extent that the declaration or payment of dividends or similar distributions by that Restricted Subsidiary of that Net Income (or loss) is not at the date of determination permitted without any prior governmental approval (that has not been obtained) or, directly or indirectly, by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Restricted Subsidiary, except for any such restriction existing under or by reason of the Credit Facility;



(3)

the Net Income (or loss) of any Person acquired in a pooling of interests transaction for any period prior to the date of that acquisition shall be excluded; and



(4)

the cumulative effect of a change in accounting principles shall be excluded.

    "Credit Facility" means that Credit Agreement, dated as of November 23, 1999 among Merrill Communications LLC, as borrower, Merrill, as guarantor, various financial institutions party thereto, and DLJ Capital Funding, Inc., as syndication agent, including any related notes, guarantees, collateral documents, instruments and agreements executed in connection therewith, and, in each case, as amended, modified, renewed, refunded, replaced or refinanced from time to time, including any agreement:

(1)

extending or shortening the maturity of any Indebtedness incurred thereunder or contemplated thereby;



(2)

adding or deleting lenders, borrowers or guarantors thereunder;



(3)

increasing the amount of Indebtedness incurred thereunder or available to be borrowed thereunder, provided that on the date that Indebtedness is incurred it would not be prohibited by the covenant described under the caption "—Incurrence of Indebtedness and Issuance of Preferred Stock"; or



(4)

otherwise altering the terms and conditions thereof.

    "Default" means any event that is or with the passage of time or the giving of notice or both would be an Event of Default.

    "Designated Noncash Consideration" means the fair market value of non-cash consideration received by Merrill or one of its Restricted Subsidiaries in connection with an Asset Sale that is so designated as Designated Noncash Consideration pursuant to an Officers' Certificate, setting forth the basis of that valuation, executed by the principal executive officer and the principal financial officer of Merrill, less the amount of cash or Cash Equivalents received in connection with a sale of that Designated Noncash Consideration.

    "Disqualified Stock" means any Capital Stock that, by its terms (or by the terms of any security into which it is convertible, or for which it is exchangeable), or upon the happening of any event (other than any event solely within the control of the issuer thereof), matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, is exchangeable for Indebtedness (except to the extent exchangeable at the option of that Person subject to the terms of any debt instrument to which that Person is a party) or redeemable at the option of the holder thereof, in whole or in part, on or prior to the date on which the notes mature;provided that any Capital Stock that would constitute Disqualified Stock solely because the holders thereof have the right to require the issuer to repurchase that Capital Stock upon the occurrence of a Change of Control or an Asset Sale shall not constitute Disqualified Stock if the terms of that Capital Stock provide that the issuer may not repurchase or redeem any such Capital Stock pursuant to those provisions unless that repurchase or redemption complies with the covenant described under the caption "—Covenants—Restricted Payments," and provided further that, if that Capital Stock is issued to any plan for the benefit of employees of Merrill or its Subsidiaries or by any such plan to those employees, that Capital Stock shall not constitute Disqualified Stock solely because it may be required to be repurchased by Merrill in order to satisfy applicable statutory or regulatory obligations.

    "DLJ Merchant Banking funds" means DLJ Merchant Banking Partners II, L.P. and its Affiliates.

    "Domestic Subsidiary" means a Subsidiary that is organized under the laws of the United States or any State, district or territory thereof.

    "Eligible Institution" means a commercial banking institution that has combined capital and surplus not less than $100.0 million or its equivalent in foreign currency, whose short-term debt is rated "A-3" or higher according to Standard & Poor's Ratings Group ("S&P") or "P-2" or higher according to Moody's Investor Services, Inc. ("Moody's") or carrying an equivalent rating by a nationally recognized rating agency if both of the two named rating agencies cease publishing ratings of investments.

    "Equity Interests" means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock).

    "Existing Indebtedness" means Indebtedness or Disqualified Stock of Merrill and its Restricted Subsidiaries (other than Indebtedness under the Credit Facility) in existence on the date of the indenture, until those amounts are repaid.

    "Fixed Charges" means, with respect to any Person for any period, the sum, without duplication, of,

(1)

the Consolidated Interest Expense of that Person for that period; and



(2)

all dividend payments on any series of preferred stock of that Person (other than dividends payable solely in Equity Interests that are not Disqualified Stock and any non-cash dividends on preferred stock that is not Disqualified Stock),

in each case, on a consolidated basis and in accordance with GAAP.

    "Fixed Charge Coverage Ratio" means, with respect to any Person for any period, the ratio of the Consolidated Cash Flow of that Person for that period (exclusive of amounts attributable to discontinued operations, as determined in accordance with GAAP, or operations and businesses disposed of prior to the Calculation Date (as defined)) to the Fixed Charges of that Person for that period (exclusive of amounts attributable to discontinued operations, as determined in accordance with GAAP, or operations and businesses disposed of prior to the Calculation Date).

    In the event that the referent Person or any of its Subsidiaries incurs, assumes, guarantees or redeems any Indebtedness (other than revolving credit borrowings) or issues or redeems preferred stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated but prior to the date on which the event for which the calculation of the Fixed Charge Coverage Ratio is made (the "Calculation Date"), then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect to that incurrence, assumption, guarantee or redemption of Indebtedness, or that issuance or redemption of preferred stock and the use of the proceeds therefrom, as if the same had occurred at the beginning of the applicable four-quarter reference period.

    In addition, for purposes of making the computation referred to above, the Merger and acquisitions that have been made by Merrill or any of its Subsidiaries, including all mergers or consolidations and any related financing transactions, during the four-quarter reference period or subsequent to that reference period and on or prior to the Calculation Date shall be deemed to have occurred on the first day of the four-quarter reference period and Consolidated Cash Flow for that reference period shall be calculated to include the Consolidated Cash Flow of the acquired entities on a pro forma basis after giving effect to cost savings reasonably expected to be realized in connection with that acquisition, as determined in good faith by an officer of Merrill (regardless of whether those cost savings could then be reflected in pro forma financial statements under GAAP, Regulation S-X promulgated by the SEC or any other regulation or policy of the SEC) and without giving effect to clause (3) of the proviso set forth in the definition of Consolidated Net Income.

    "Foreign Credit Facilities" means any Indebtedness of a Restricted Subsidiary organized or having its principal place of business outside the United States.

    "GAAP" means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a significant segment of the accounting profession, which are in effect on the date of the indenture.

    "guarantee" means a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business), direct or indirect, in any manner (including, without limitation, letters of credit or reimbursement agreements in respect thereof), of all or any part of any Indebtedness.

    "Guarantors" means (i) each Wholly Owned Restricted Subsidiary of Merrill on the date of the Indenture that is a Domestic Subsidiary and (ii) any other Subsidiary that executes a Guarantee of the notes in accordance with the provisions of the indenture.

    "Hedging Obligations" means, with respect to any Person, the obligations of that Person under (a) interest rate swap agreements, interest rate cap agreements and interest rate collar agreements (b) forward foreign exchange contracts or currency swap agreements, (c) other agreements or arrangements designed to protect that Person against fluctuations in interest rates or currency values and (d) agreements designed to protect that Person against fluctuations in raw material prices, including paper.

    "Indebtedness" means, with respect to any Person, any indebtedness of that Person in respect of borrowed money or evidenced by bonds, notes, debentures or similar instruments or letters of credit (or reimbursement agreements in respect thereof) or banker's acceptances or representing Capital Lease Obligations or the balance deferred and unpaid of the purchase price of any property or representing any Hedging Obligations, except any such balance that constitutes an accrued expense, trade payable or customer contract advances, if and to the extent any of the foregoing Indebtedness (other than letters of credit and Hedging Obligations) would appear as a liability upon a balance sheet of that Person prepared in accordance with GAAP, as well as all Indebtedness of others secured by a Lien on any asset of that Person (whether or not that Indebtedness is assumed by that Person) and, to the extent not otherwise included, the guarantee by that Person of any Indebtedness of any other Person, provided that Indebtedness shall not include the pledge by Merrill of the Capital Stock of an Unrestricted Subsidiary of Merrill to secure Non-Recourse Debt of that Unrestricted Subsidiary.

    The amount of any Indebtedness outstanding as of any date shall be:

(1)

the accreted value thereof, in the case of any Indebtedness that does not require current payments of interest; and



(2)

the principal amount thereof (together with any interest thereon that is more than 30 days past due), in the case of any other Indebtedness provided that the principal amount of any Indebtedness that is denominated in any currency other than United States dollars shall be the amount thereof, as determined pursuant to the foregoing provision, converted into United States dollars at the Spot Rate in effect on the date that Indebtedness was incurred or, if that indebtedness was incurred prior to the date of the indenture, the Spot Rate in effect on the date of the indenture.

    "Investments" means, with respect to any Person, all investments by that Person in other Persons, including Affiliates, in the forms of direct or indirect loans (including guarantees by the referent Person of, and Liens on any assets of the referent Person securing, Indebtedness or other obligations of other Persons), advances or capital contributions (excluding (i) commission, travel and similar advances to officers and employees made in the ordinary course of business and (ii) extensions of trade credit on commercially reasonable terms in accordance with normal trade practices), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities, together with all items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP, provided that an investment by Merrill for consideration consisting of common equity securities of Merrill shall not be deemed to be an Investment other than for purposes of clause (3) of the definition of "Qualified Proceeds."

    If Merrill or any Restricted Subsidiary of Merrill sells or otherwise disposes of any Equity Interests of any direct or indirect Restricted Subsidiary of Merrill such that, after giving effect to any such sale or disposition, that Person is no longer a Subsidiary of Merrill, Merrill shall be deemed to have made an Investment on the date of any such sale or disposition equal to the fair market value of the Equity Interests of that Restricted Subsidiary not sold or disposed of in an amount determined as provided in the final three paragraphs of the covenant described under the caption "—Restricted Payments."

    "Lien" means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of that asset, whether or not filed, recorded or otherwise perfected under applicable law, including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction.

    "Management Loans" means one or more loans by Merrill to employees, independent contractors and/or directors of Merrill and any of its Restricted Subsidiaries to finance the purchase by such employees, independent contractors and directors of common stock of Merrill.

    "Merger" means the merger of Merrill with Viking Merger Sub, Inc., pursuant to the terms of the Merger Agreement.

    "Merger Agreement" means that Merger Agreement dated as of July 14, 1999 between Merrill and Viking Merger Sub, Inc., a company controlled by DLJ Merchant Banking Partners II, L.P. and its affiliates, as amended.

    "Merger Financing" means;

(1)

the issuance and sale by Viking Merger Sub, Inc. of its common stock, warrants to purchase common stock and preferred stock for consideration;



(2)

the issuance and sale by Merrill of the units; and



(3)

the execution and delivery by Merrill and certain of its subsidiaries of the Credit Facility and the borrowing of loans, if any, and issuance of letters of credit thereunder

in each case, to fund the Merger and related transactions, including without limitation, the payment of fees and expenses and the refinancing of outstanding indebtedness of Merrill and its subsidiaries.

    "Net Income" means, with respect to any Person, the net income (loss) of that Person, determined in accordance with GAAP and before any reduction in respect of preferred stock dividends, excluding, however:

(1)

any gain (or loss), together with any related provision for taxes on that gain (or loss), realized in connection with:



(a)

any Asset Sale, including, without limitation, dispositions pursuant to sale and leaseback transactions; or



(b)

the extinguishment of any Indebtedness of that Person or any of its Restricted Subsidiaries; and




(2)

any extraordinary or nonrecurring gain (or loss), together with any related provision for taxes on that extraordinary or nonrecurring gain (or loss).

    "Net Proceeds" means the aggregate cash proceeds received by Merrill or any of its Restricted Subsidiaries in respect of any Asset Sale (including, without limitation, any cash received upon the sale or other disposition of any non-cash consideration received in any Asset Sale), net of, without duplication,

(1)

the direct costs relating to that Asset Sale, including, without limitation, legal, accounting and investment banking fees, and sales commissions, recording fees, title transfer fees and appraiser fees and cost of preparation of assets for sale, and any relocation expenses incurred as a result thereof;



(2)

taxes paid or payable as a result thereof (after taking into account any available tax credits or deductions and any tax sharing arrangements);



(3)

amounts required to be applied to the repayment of Indebtedness (other than revolving credit Indebtedness incurred pursuant to the Credit Facility) secured by a Lien on the asset or assets that were the subject of that Asset Sale; and



(4)

any reserve established in accordance with GAAP or any amount placed in escrow, in either case for adjustment in respect of the sale price of such asset or assets until such time as that reserve is reversed or that escrow arrangement is terminated, in which case Net Proceeds shall include only the amount of the reserve so reversed or the amount returned to Merrill or its Restricted Subsidiaries from that escrow arrangement, as the case may be.

    "Non-Recourse Debt" means Indebtedness,

(1)

no default with respect to, which (including any rights that the holders thereof may have to take enforcement action against an Unrestricted Subsidiary) would permit (upon notice, lapse of time or both) any holder of any other Indebtedness of Merrill or any of its Restricted Subsidiaries to declare a default on such other Indebtedness or cause the payment thereof to be accelerated or payable prior to its stated maturity; and



(2)

as to which the lenders have been notified in writing that they will not have any recourse to the stock (other than the stock of an Unrestricted Subsidiary pledged by Merrill to secure debt of that Unrestricted Subsidiary) or assets of Merrill or any of its Restricted Subsidiaries;

provided that in no event shall Indebtedness of any Unrestricted Subsidiary fail to be Non-Recourse Debt solely as a result of any default provisions contained in a guarantee thereof by Merrill or any of its Restricted Subsidiaries if Merrill or that Restricted Subsidiary was otherwise permitted to incur that guarantee pursuant to the indenture.

    "Obligations" means any principal, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities payable under the documentation governing any Indebtedness.

    "Offering" means the offering of the units by Merrill in November 1999.

    "Pari Passu Indebtedness" means Indebtedness of Merrill that ranks pari passu in right of payment to the notes.

    "Permitted Business" means any Person engaged directly or indirectly in the communications and document services business or any business reasonably related, incidental or ancillary thereto.

    "Permitted Investments" means:

(1)

any Investment in Merrill or in a Restricted Subsidiary of Merrill;



(2)

any Investment in cash or Cash Equivalents;



(3)

any Investment by Merrill or any Restricted Subsidiary of Merrill in a Person, if as a result of that Investment,



(a)

that Person becomes a Restricted Subsidiary of Merrill; or



(b)

that Person is merged, consolidated or amalgamated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, Merrill or a Wholly Owned Restricted Subsidiary of Merrill;




(4)

any Investment made as a result of the receipt of non-cash consideration from an Asset Sale that was made pursuant to and in compliance with the covenant described under the caption "—Repurchase at the Option of Holders—Asset Sales";



(5)

any Investment acquired solely in exchange for Equity Interests (other than Disqualified Stock) of Merrill;



(6)

any Investment in a Person engaged in a Permitted Business (other than an Investment in an Unrestricted Subsidiary) having an aggregate fair market value, taken together with all other Investments made pursuant to this clause (6) that are at that time outstanding, not to exceed 15% of Total Assets at the time of that Investment (with the fair market value of each Investment being measured at the time made and without giving effect to subsequent changes in value);



(7)

Investments relating to any special purpose Wholly Owned Subsidiary of Merrill organized in connection with a Receivables Facility that, in the good faith determination of the board of directors of Merrill, are necessary or advisable to effect that Receivables Facility;



(8)

the Management Loans;



(9)

Hedging Obligations permitted to be incurred under "—Covenants—Incurrence of Indebtedness and Issuance of Preferred Stock"; and



(10)

any Investment acquired in exchange for the license or sale of intellectual property.

    "Permitted Liens" means:

(1)

Liens on property of a Person existing at the time that Person is merged into or consolidated with Merrill or any Restricted Subsidiary, provided that those Liens were not incurred in contemplation of that merger or consolidation and do not secure any property or assets of Merrill or any Restricted Subsidiary other than the property or assets subject to the Liens prior to that merger or consolidation;



(2)

Liens existing on the date of the indenture;



(3)

Liens securing Indebtedness consisting of Capitalized Lease Obligations, purchase money Indebtedness, mortgage financings, industrial revenue bonds or other monetary obligations, in each case incurred solely for the purpose of financing all or any part of the purchase price or cost of construction or installation of assets used in the business of Merrill or its Restricted Subsidiaries, or repairs, additions or improvements to those assets, provided that:



(a)

those Liens secure Indebtedness in an amount not in excess of the original purchase price or the original cost of any such assets or repair, addition or improvement thereto (plus an amount equal to the reasonable fees and expenses in connection with the incurrence of that Indebtedness);



(b)

those Liens do not extend to any other assets of Merrill or its Restricted Subsidiaries (and, in the case of repair, addition or improvements to any such assets, that Lien extends only to the assets (and improvements thereto or thereon) repaired, added to or improved);



(c)

the Incurrence of that Indebtedness is permitted by "—Covenants—Incurrence of Indebtedness and Issuance of Preferred Stock"; and



(d)

those Liens attach within 365 days of that purchase, construction, installation, repair, addition or improvement;




(4)

Liens to secure any refinancings, renewals, extensions, modifications or replacements (collectively, "refinancing") (or successive refinancings), in whole or in part, of any Indebtedness secured by Liens referred to in the clauses above so long as that Lien does not extend to any other property (other than improvements thereto);



(5)

Liens securing letters of credit entered into in the ordinary course of business and consistent with past business practice;



(6)

Liens on and pledges of the capital stock of any Unrestricted Subsidiary securing Non-Recourse Debt of that Unrestricted Subsidiary;



(7)

Liens securing (a) Indebtedness (including all Obligations) under the Credit Facility or any Foreign Credit Facility and (b) Hedging Obligations payable to a lender under the Credit Facility or an Affiliate thereof or to a Person that was a lender or Affiliate thereof at the time the contract was entered into to the extent such Hedging Obligations are secured by Liens on assets also securing Indebtedness (including all Obligations) under the Credit Facility;



(8)

Liens created by the defeasance (covenant or legal) of any Indebtedness; and



(9)

other Liens securing Indebtedness that is permitted by the terms of the indenture to be outstanding having an aggregate principal amount at any one time outstanding not to exceed $50.0 million.

    "Permitted Refinancing Indebtedness" means any Indebtedness or Disqualified Stock of Merrill or any of its Restricted Subsidiaries issued within 60 days after repayment of, in exchange for, or the net proceeds of which are used to extend, refinance, renew, replace, defease or refund other Indebtedness or Disqualified Stock of Merrill or any of its Restricted Subsidiaries; provided that:

(1)

the principal amount (or accreted value, if applicable) or, in the case of Disqualified Stock, liquidation preference of that Permitted Refinancing Indebtedness does not exceed the principal amount of (or accreted value, if applicable) or, in the case of Disqualified Stock, liquidation preference, plus premium, if any, and accrued interest on the Indebtedness or Disqualified Stock so extended, refinanced, renewed, replaced, defeased or refunded (plus the amount of reasonable expenses incurred in connection therewith);



(2)

that Permitted Refinancing Indebtedness has a final maturity date no earlier than the final maturity date of, and has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness or Disqualified Stock being extended, refinanced, renewed, replaced, defeased or refunded; and



(3)

in the case of Disqualified Stock or, in the case of Indebtedness, if the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded is subordinated in right of payment to the notes, that Permitted Refinancing Indebtedness is subordinated in right of payment to, the notes on terms at least as favorable, taken as a whole, to the holders of notes as those contained in the documentation governing the Disqualified Stock or Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded.

    "Principals" means the DLJ Merchant Banking funds, John Castro and Rick Atterbury.

    "Public Equity Offering" means

(1)

any issuance of common stock by Merrill, other than Disqualified Stock, and



(2)

any issuance of preferred stock by Merrill, other than Disqualified Stock,

that is registered pursuant to the Securities Act, other than issuances registered on Form S-8 and issuances registered on Form S-4, excluding issuances of common stock pursuant to employee benefit plans of Merrill or otherwise as compensation to employees of Merrill.

    "Qualified Proceeds" means any of the following or any combination of the following:

(1)

cash;



(2)

Cash Equivalents;



(3)

assets (other than Investments) that are used or useful in a Permitted Business; and



(4)

the Capital Stock of any Person engaged in a Permitted Business if, in connection with the receipt by Merrill or any Restricted Subsidiary of Merrill of that Capital Stock,



(a)

that Person becomes a Restricted Subsidiary of Merrill or any Restricted Subsidiary of Merrill; or



(b)

that Person is merged, consolidated or amalgamated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, Merrill or any Restricted Subsidiary of Merrill.

    "Receivables Facility" means one or more receivables financing facilities, as amended from time to time, pursuant to which Merrill or any of its Restricted Subsidiaries sells its accounts receivable to an Accounts Receivable Subsidiary.

    "Receivables Fees" means distributions or payments made directly or by means of discounts with respect to any participation interests issued or sold in connection with, and other fees paid to a Person that is not a Restricted Subsidiary in connection with, any Receivables Facility.

    "Related Party" means, with respect to any Principal,

(1)

any controlling shareholder or partner of that Principal on the date of the indenture; or



(2)

any trust, corporation, partnership or other entity, the beneficiaries, shareholders, partners, owners or Persons beneficially holding (directly or through one or more Subsidiaries) a majority of the controlling interest of which consist of the Principals and/or such other Persons referred to in the immediately preceding clause (1) or this clause (2).

    "Restricted Investment" means an Investment other than a Permitted Investment.

    "Restricted Subsidiary" of a Person means any Subsidiary of the referent Person that is not an Unrestricted Subsidiary.

    "Significant Subsidiary" means any Subsidiary that would be a "significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as that Regulation is in effect on the date hereof.

    "Spot Rate" means, for any currency, the spot rate at which that currency is offered for sale against United States dollars as determined by reference to the New York foreign exchange selling rates, as published in The Wall Street Journal on that date of determination for the immediately preceding business day or, if that rate is not available, as determined in any publicly available source of similar market data.

    "Stated Maturity" means, with respect to any installment of interest or principal on any series of Indebtedness, the date on which that payment of interest or principal was scheduled to be paid in the original documentation governing that Indebtedness, and shall not include any contingent obligations to repay, redeem or repurchase any that interest or principal prior to the date originally scheduled for the payment thereof.

    "Subsidiary" means, with respect to any Person,

(1)

any corporation, association or other business entity of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person (or a combination thereof); and



(2)

any partnership or limited liability company,



(a)

the sole general partner or the managing general partner or managing member of which is that Person or a Subsidiary of that Person; or



(b)

the only general partners or managing members of which are that Person or of one or more Subsidiaries of that Person (or any combination thereof).

    "Total Assets" means the total consolidated assets of Merrill and its Restricted Subsidiaries, as shown on the most recent balance sheet (excluding the footnotes thereto) of Merrill.

    "Unrestricted Subsidiary" means any Subsidiary that is designated by the board of directors as an Unrestricted Subsidiary pursuant to a board resolution, but only to the extent that Subsidiary:

(1)

has no Indebtedness other than Non-Recourse Debt;



(2)

is not party to any agreement, contract, arrangement or understanding with Merrill or any Restricted Subsidiary of Merrill unless the terms of any such agreement, contract, arrangement or understanding are no less favorable to Merrill or that Restricted Subsidiary than those that might be obtained at the time from Persons who are not Affiliates of Merrill;



(3)

is a Person with respect to which neither Merrill nor any of its Restricted Subsidiaries has any direct or indirect obligation,



(a)

to subscribe for additional Equity Interests (other than Investments described in clause (7) of the definition of Permitted Investments); or



(b)

to maintain or preserve that Person's financial condition or to cause that Person to achieve any specified levels, of operating results; and




(4)

has not guaranteed or otherwise directly or indirectly provided credit support for any Indebtedness of Merrill or any of its Restricted Subsidiaries other than guarantees that are being released upon designation.

    Any such designation by the board of directors shall be evidenced to the trustee by filing with the trustee a certified copy of the board resolution giving effect to that designation and an Officers' Certificate certifying that designation complied with the foregoing conditions and was permitted by the covenant described under the caption entitled "—Covenants—Restricted Payments." If, at any time, any Unrestricted Subsidiary would fail to meet the foregoing requirements as a Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted Subsidiary for purposes of the indenture and any Indebtedness of that Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of Merrill as of that date (and, if that Indebtedness is not permitted to be incurred as of that date under the covenant described under the caption entitled "—Covenants—Incurrence of Indebtedness and Issuance of Preferred Stock," Merrill shall be in default of that covenant).

    The board of directors of Merrill may at any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that the designation shall be deemed to be an incurrence of Indebtedness by a Restricted Subsidiary of Merrill of any outstanding Indebtedness of that Unrestricted Subsidiary and that designation shall only be permitted if:

(1)

that Indebtedness is permitted under the covenant described under the caption entitled "—Covenants—Incurrence of Indebtedness and Issuance of Preferred Stock"; and



(2)

no Default or Event of Default would be in existence following that designation.

    "Weighted Average Life to Maturity" means, when applied to any Indebtedness or Disqualified Stock at any date, the number of years obtained by dividing:

(1)

the sum of the products obtained by multiplying



(a)

the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal or, in the case of Disqualified Stock, liquidation preference, including payment at final maturity, in respect thereof; by



(b)

the number of years (calculated to the nearest one-twelfth) that will elapse between that date and the making of that payment; by




(2)

the then outstanding principal amount of that Indebtedness or Disqualified Stock.

    "Wholly Owned Restricted Subsidiary" of any Person means a Restricted Subsidiary of that Person all the outstanding Equity Interests or other ownership interests of which (other than directors' qualifying shares) shall at the time be owned by that Person or by one or more Wholly Owned Restricted Subsidiaries of that Person or by that Person and one or more Wholly Owned Restricted Subsidiaries of that Person.

    "Wholly Owned Subsidiary" of any Person means a Subsidiary of that Person all of the outstanding Equity Interests or other ownership interests of which (other than directors' qualifying shares) shall at the time be owned by that Person or by one or more Wholly Owned Subsidiaries of that Person.

MATERIAL UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS

    The following is a summary of the material United States federal income tax consequences associated with the exchange of the old notes for the exchange notes pursuant to the exchange offer by any holder. This summary is based upon existing United States federal income tax law, which is subject to change, possibly retroactively. This summary does not discuss all aspects of United States federal income taxation which may be important to particular holders in light of their individual investment circumstances, such as exchange notes held by investors subject to special tax rules (e.g., financial institutions, insurance companies, broker-dealers and tax-exempt organizations) or to persons that will hold the exchange notes as a part of a straddle, hedge or synthetic security transaction for United States federal income tax purposes or that have a functional currency other than the United States dollar, all of whom may be subject to tax rules that differ significantly from those summarized below.

    In addition, this summary does not discuss any foreign, state or local income tax considerations or any taxes other than income taxes. This summary assumes that investors (1) purchased their old notes for cash in the original offering thereof, (2) exchanged their old notes for exchange notes in the exchange offer, and (3) hold their exchange notes as "capital assets" (generally, property held for investment) under the United States Internal Revenue Code of 1986, as amended.

You should consult with your tax advisor regarding the United States federal, state, local and foreign income and other tax considerations of the exchange of the old notes for the exchange notes pursuant to the exchange offer and the ownership and disposition of the exchange notes.

    The exchange of the old notes for the exchange notes pursuant to the exchange offer will not constitute a "significant modification" of the old notes for federal income tax purposes because the terms of the exchange notes are not materially different from the terms of the old notes. Accordingly, the exchange will be disregarded for federal income tax purposes and the exchange notes received will be treated as a continuation of the old notes in the hands of each holder of a new note. As a result:

•

you should not recognize taxable gain or loss as a result of exchanging old notes for exchange notes pursuant to the exchange offer;



•

the holding period of the exchange notes should include the holding period of the old notes exchanged therefor; and



•

the adjusted tax basis of the exchange notes should be the same as the adjusted tax basis of the old notes exchanged therefor.

PLAN OF DISTRIBUTION

    We are not using any underwriters for this exchange offer. We are bearing the expenses of the exchange.

    Each broker-dealer that receives exchange notes for its own account pursuant to the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of these exchange notes. A broker-dealer may use this prospectus, as it may be amended or supplemented from time to time, in connection with resales of exchange notes received in exchange for old notes where the old notes were acquired as a result of market-making or other trading activities (not directly from us). We have agreed that, for a period of 90 days after the expiration date, we will make this prospectus, as amended or supplemented, available to any broker-dealer for use in connection with any resale of these exchange notes.

    We will not receive any proceeds from any sale of exchange notes by broker-dealers or any other persons. Broker-dealers may sell from time to time exchange notes they receive for their own account pursuant to the exchange offer through:

•

one or more transactions in the over-the-counter market;



•

in negotiated transactions;



•

through the writing of options on the exchange notes; or



•

a combination of these methods of resale.

    Such broker-dealers may sell at:

•

market prices prevailing at the time of resale;



•

prices related to the prevailing market prices; or



•

negotiated prices.

    Any broker-dealer may resell directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from the broker-dealer or the purchasers of the exchange notes. Any broker-dealer that resells exchange notes that it received for its own account pursuant to the exchange offer and any broker-dealer that participates in a distribution of the exchange notes may be deemed to be an "underwriter" within the meaning of the Securities Act. Any profit on any underwriter's resale of exchange notes and any commission or concessions received by any underwriters may be deemed to be underwriting compensation under the Securities Act.

    The letter of transmittal states that, by acknowledging that it will deliver and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. We have agreed, for a period of 90 days after the expiration date to promptly send additional copies of this prospectus and any amendment or supplement to this prospectus to any broker-dealer that requests these documents in the letter of transmittal. We have also agreed to pay all expenses incident to the exchange offer (including the expenses of one counsel for the initial purchasers of the old notes directly from us) and will indemnify the holders of the exchange notes (including any broker-dealers) against certain liabilities, including liabilities under the Securities Act to the extent they arise out of or are based upon (1) any untrue statement or alleged untrue statement of a material fact contained in the registration statement or prospectus or (2) an omission or alleged omission to state in the registration statement or the prospectus a material fact that is necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. This indemnification obligation does not extend to statements or omissions in the registration statement or prospectus made in reliance upon and in conformity with written information pertaining to the holder that is furnished to us by or on behalf of the holder.

WHERE YOU CAN FIND MORE INFORMATION

    We have filed with the Securities and Exchange Commission a registration statement on Form S-4 under the Securities Act of 1933, and the rules and regulations promulgated under the Securities Act, with respect to the exchange notes offered for exchange under this prospectus. This prospectus, which constitutes part of the registration statement, does not contain all of the information set forth in the registration statement and the attached exhibits and schedules. For additional information regarding our company, our subsidiary guarantors and the exchange offer, we refer you to the registration statement on Form S-4. The statements contained in this prospectus as to the contents of any contract, agreement or other document that is filed as an exhibit to the registration statement are not necessarily complete. Accordingly, each such statement is qualified in all respects by reference to the full text of such contract, agreement or document filed as an exhibit to the registration statement or otherwise filed with the SEC.

    You may read and copy any of the information we file with the SEC, including the registration statement and exhibits thereto, at the following SEC public reference rooms:

Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549 Citicorp Center
500 West Madison Street
Chicago, Illinois 60621 7 World Trade Center
Suite 1300
New York, New York 10048

    You may obtain information regarding the operation of the SEC's public reference rooms by calling the SEC at 1-800-SEC-0330. In addition, our SEC filings made electronically through the SEC's EDGAR system are available to the public at the SEC's website at http://www.sec.gov. The Securities Act file number for our SEC filings is 333-        .

    Upon the effectiveness of the registration statement of which this prospectus is a part, we will be required to file annual, quarterly and special reports and other documents with the SEC under the Securities Act. Our obligation to file periodic reports with the SEC will be suspended if the exchange notes issued in this exchange offer are held of record by fewer than 300 holders as of the beginning of our fiscal year other than the fiscal year in which the registration statement is declared effective. However, to the extent permitted, the indenture governing the exchange notes requires us to file with the SEC financial and other information for public availability. In addition, the indenture governing the exchange notes requires us to deliver to you upon your request copies of all reports that we file with the SEC without any cost to you. We will also furnish such other reports as we may determine or as the law requires.

    Whether or not required by the SEC, so long as any exchange notes are outstanding, we will file with the SEC for public availability (unless the SEC will not accept such a filing), within the time periods specified in the SEC's rules and regulations:

•

all quarterly and annual financial information that would be required to be contained in a filing with the SEC on Forms 10-Q and 10-K if we were required to file such Forms, including "Management's Discussion and Analysis of Financial Condition and Results of Operations" and, with respect to the annual information only, a report on the annual financial statements by our certified independent accountants; and



•

all current reports that would be required to be filed with the SEC on Form 8-K if we were required to file these reports.

    In addition, we will make this information available to security analysts and prospective investors upon request. For so long as any exchange notes are outstanding, we will also furnish to the holders of the exchange notes and to security analysts and prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act during any period in which we or our subsidiary guarantors are not subject to Section 13 or 15(d) of the Exchange Act.

    Anyone who receives this prospectus may obtain a copy of the indenture and registration rights agreement without charge by writing to Merrill Corporation, One Merrill Circle, St. Paul, Minnesota 55108; Attention: General Counsel.

LEGAL MATTERS

    The validity of the exchange notes offered hereby was passed upon for us by Oppenheimer Wolff & Donnelly LLP, Minneapolis, Minnesota. A copy of the legal opinion rendered by Oppenheimer Wolff & Donnelly LLP was filed as an exhibit to the registration statement containing this prospectus.

EXPERTS

    The consolidated financial statements as of January 31, 1998 and 1999 and for each of the three years in the period ended January 31, 1999, included in this prospectus, have been so included in reliance on the report of PricewaterhouseCoopers LLP, independent accountants given on the authority of said firm as experts in auditing and accounting.

INDEX TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL DATA

	Page
Unaudited Pro Forma Consolidated Financial Data	P-2
Unaudited Pro Forma Consolidated Balance Sheet as of October 31, 1999	P-3
Notes to Unaudited Pro Forma Consolidated Balance Sheet as of October 31, 1999	P-4
Unaudited Pro Forma Consolidated Statement of Operations for the Year Ended January 31, 1999	P-6
Unaudited Pro Forma Consolidated Statement of Operations for the Nine Month Period Ended October 31, 1999	P-7
Notes to Unaudited Pro Forma Consolidated Statement of Operations	P-8

UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL DATA

     The following unaudited pro forma consolidated financial data of our company are based on our historical consolidated financial statements adjusted to give effect to the transactions described below.

    The unaudited pro forma consolidated balance sheet gives effect to the merger with Viking Merger Sub and related merger financing and the application of the proceeds thereof, as if it had occurred on October 31, 1999. The unaudited pro forma consolidated statement of operations for the year ended January 31, 1999 and the nine month period ended October 31, 1999 give effect to the following as if each had occurred at the beginning of the period presented:

(1)

the merger, the merger financing and the application of the proceeds thereof;



(2)

the acquisition of Daniels Printing, Limited Partnership ("Daniels"), which was completed on April 14, 1999;



(3)

the acquisition of Alternatives Communications, Inc. ("Alternatives"), which was completed on June 14, 1999;



(4)

the elimination of Superstar Computing, Inc.'s historical operating results, as management has effectively shut down Superstar Computing, Inc.'s operations as of the date of this Registration Statement; and



(5)

in the case of the year ended January 31, 1999, the acquisition of Executech, Inc. and an affiliated company, World Wide Scan Services, LLC ("Executech"), which was completed on June 11, 1998.

    The pro forma adjustments are described in the accompanying notes to the financial statements and were applied to the respective historical consolidated financial statements of our company to reflect and account for the merger as a recapitalization consisting of an equity investment by investors, debt financing and the redemption of shares in the merger. As a recapitalization, the historical basis of our assets and liabilities will be carried forward to the surviving company with the aggregate cost of repurchasing our shares accounted for as a reduction of shareholders' equity. Accordingly, the historical basis of our assets and liabilities has not been impacted by the merger.

    The unaudited pro forma consolidated financial data are based upon estimates, available information and certain assumptions that management believes are reasonable under the circumstances and may be revised as additional information becomes available. The unaudited pro forma consolidated financial data should be read in conjunction with our historical financial statements, including the notes thereto, our "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the other financial information appearing elsewhere in this Information Statement. The unaudited pro forma consolidated financial data do not purport to represent what our actual results or financial position would have been if the merger and the other transactions described above had actually occurred on the dates indicated and are not necessarily representative of our results for any future period.

MERRILL CORPORATION

UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET

     (in thousands)

	as of October 31, 1999
	Historical		Merger Adjustments			Pro Forma
ASSETS
Current assets:
Cash and cash equivalents	$	4,962	$	(4,962	)(1)	$	—
Trade receivables, net		136,749		—			136,749
Work-in-process inventories		19,090		—			19,090
Other inventories		11,117		—			11,117
Other current assets		15,884		11,485	(2)		27,369
Total current assets		187,802		6,523			194,325
Property, plant and equipment, net		56,729		—			56,729
Goodwill, net		76,838		—			76,838
Other assets		13,315		10,160	(3)		32,397
				9,306	(1)
				(384	)(4)
Total assets	$	334,684	$	25,605		$	360,289
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Notes payable to banks	$	44,900	$	(44,900	)(1)	$	—
Current maturities of long-term debt		970		(220	)(1)		750
Current maturities of capital lease obligations		183		—			183
Accounts payable		33,784		—			33,784
Accrued expenses		45,089		(288	)(1)		44,801
Total current liabilities		124,926		(45,408	)		79,518
Credit Facility:
Revolving credit facility		—		1,871	(1)		1,871
Term loans		—		220,000	(1)		220,000
High yield notes		—		134,471	(1)		134,471
Long term debt, net of current maturities		37,890		(37,890	)(1)		—
Capital lease obligations, net of current maturities		1,262		—			1,262
Other liabilities		10,525		—			10,525
Total liabilities		174,603		273,044			447,647
Redeemable preferred stock		—		34,534	(1)		34,534
Shareholders' equity (deficit):
Common Stock		161		(161	)		—
Class B common stock		—		42			42
Additional-paid-in-capital		14,272		85,060			99,332
Retained earnings (deficit)		145,648		(366,914	)		(221,266	)
Total shareholders' equity (deficit)		160,081		(281,973	)(5)		(121,892	)
Total liabilities and shareholders' equity (deficit)	$	334,684	$	25,605		$	360,289

MERRILL CORPORATION
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET

(1)

Sets forth the estimated sources and uses of funds for the merger and the related financings:

Sources:	(dollars in thousands)
Existing cash	$	4,962
Revolving credit facility		1,871
Term loans		220,000
Units (a)		136,156
Preferred stock (b)		40,000
Management rollover (c)		21,540
Common stock purchased by DLJMB funds		70,683
Total Sources:	$	495,212
Uses:
Cash purchase of outstanding shares and options	$	359,236
Management rollover		21,540
Repayment of existing debt		83,010
Fees and expenses		23,888
Funding of other obligations (d)		7,538
Total Uses:	$	495,212

(a)

Represents $140.0 million of units including $1.7 million attributable to the value of the warrants and net of $3.8 million of unamortized discount.



(b)

In connection with the merger, certain affiliates of DLJMB and institutional investors purchased preferred stock and warrants for total consideration of $40.0 million. For accounting purposes, a $5.5 million value has been ascribed to the warrants and has been classified as a component of shareholders' equity.



(c)

Messrs. Castro and Atterbury invested, through the retention of existing shares, $21.5 million of common equity for an approximately 23.4% equity interest in our company (excluding warrants).



(d)

Reflects the funding of deferred compensation plans and accrued interest net of repayments of $2.1 million from employee loans.

(2)

Reflects tax benefit of expense adjustments at the statutory tax rate of 38.9% as shown below:

			(dollars in thousands)
Option cash proceeds			$	25,740
Non-capitalized transaction fees and expenses	13,728
Less: estimated non-deductible portion	(10,328	)
Deductible non-capitalized transaction fees and expenses				3,400
Write-off of existing deferred debt issuance costs				384
Total deductible expenses				29,524
Statutory tax rate				38.9	%
Tax benefit			$	11,485

(3)

Represents the portion of estimated transaction fees and expenses attributable to the new credit facility and the units.

(4)

Reflects the write-off of existing deferred debt issuance costs.

(5)

Represents the change in shareholders' equity (deficit) as a result of the merger, including the merger financing and the application of the proceeds:

	(dollars in thousands)
Cash to purchase shares (a)	$	(333,496	)
Option cash proceeds (b)		(25,740	)
Non-capitalized transaction fees and expenses (c)		(13,728	)
Write-off of existing deferred debt issuance costs		(384	)
Common stock purchased by DLJMB funds		70,683
Value ascribed to warrants issued with notes		1,685
Value ascribed to warrants issued with preferred stock		5,466
Receivable related to management loans		2,056
Tax benefit of expense adjustments		11,485
Total change in stockholders' equity (deficit)	$	(281,973	)

(a)

Based on the purchase of 15,158,929 shares at $22.00 per share.



(b)

Based on the purchase of 3,021,118 options at an average purchase price of $8.52 (the difference between $22.00 and $13.48, the average exercise price of the options).



(c)

Represents all non-capitalized transaction fees and expenses, including estimated legal, accounting, advisory and consulting fees of $10.3 million, $1.9 million of bridge finance commitment fees and estimated debt prepayment fees of $1.5 million. The tax benefit of these expenses is included seperately in the table above.

MERRILL CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
for the year ended January 31, 1999
(dollars in thousands, except ratio)

				Acquisitions
	Company Historical										Net Acquisition Adjustments			Superstar Computing			Merger Adjustments			Pro Forma(9)
				Daniels		Executech			Alternatives
Revenue	$	509,543		$	66,159	$	2,367		$	20,879	$	—		$	(1,524	)	$	—		$	597,424
Cost of revenue		330,632			49,081		1,122			15,802		569	(1)		(1,227	)		—			394,854
												(1,125	)(2)
Gross profit		178,911			17,078		1,245			5,077		556			(297	)		—			202,570
Selling, general and administrative expenses		127,705			13,670		713			4,671		1,453	(3)		(2,839	)		(667	)		142,961
												(1,981	)(2)					236	(5)
Operating income		51,206			3,408		532			406		1,084			2,542			431			59,609
Interest expense		3,961			1,281		—			270		—			—			34,765	(6)		40,277
Other (income) expense, net		(426	)		75		(1	)		—		—			—			—			(352	)
Income (loss) before provision for income taxes		47,671			2,052		533			136		1,084			2,542			(34,334	)		19,684
Provision for (benefit from) income taxes		21,214			—		—			—		—			—			(11,049	)(7)		10,165
Income (loss) from continuing operations		26,457			2,052		533			136		1,084			2,542			(23,285	)		9,519
Preferred stock dividends		—			—		—			—		—			—			6,293	(8)		6,293
Income (loss) from continuing operations available to common	$	26,457		$	2,052	$	533		$	136	$	1,084		$	2,542		$	(29,578	)	$	3,226
Other data:
EBITDA	$	71,069		$	5,734	$	550		$	443	$	3,106		$	677		$	367		$	81,946
Adjusted EBITDA		71,069			5,734		550			443		3,106			677			367			81,946
Depreciation and amortization of intangibles		19,863			2,326		18			37		2,022			(1,865	)		(64	)		22,337
Capital expenditures		16,479			985		267			342		—			—			—			18,073
Cash interest expense		3,961																			38,655
Ratio of earnings to fixed charges		7.8	x																		1.5	x

MERRILL CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
for the nine month period ended October 31, 1999
(dollars in thousands, except ratio)

				Acquisitions
	Company Historical								Net Acquisition Adjustment			Superstar Computing			Merger Adjustments			Pro Forma(9)
				Daniels		Alternatives
Revenue	$	442,401		$	15,725	$	6,837		$	—		$	(294	)	$	—		$	464,669
Cost of revenue		289,896			10,622		4,954			116	(1)		(178	)		—			304,797
										(613	)(2)
Gross profit		152,505			5,103		1,883			497			(116	)		—			159,872
Selling, general and administrative expenses		109,031			2,814		2,295			326	(3)		(337	)		(429	)(4)		113,036
										(852	)(2)					188	(5)
Merger costs		2,300			—		—			—			—			(2,300	)		—
Operating income		41,174			2,289		(412	)		1,023			221			2,541			46,836
Interest expense		5,009			231		63			—			—			25,613	(6)		30,916
Other expense, (income) net		616			37		—			—			—			—			653
Income (loss) before provision for income taxes		35,549			2,021		(475	)		1,023			221			(23,072	)		15,267
Provision for (benefit from) income taxes		17,240			—		—			—			—			(8,880	)(7)		8,360
Income (loss) from continuing operations		18,309			2,021		(475	)		1,023			221			(14,192	)		6,907
Preferred stock dividends		—			—		—			—			—			4,638	(8)		4,638
Income (loss) from continuing operations available to common	$	18,309		$	2,021	$	(475	)	$	1,023		$	221		$	(18,830	)	$	2,269
Other Data:
EBITDA	$	58,298		$	2,694	$	(382	)	$	1,465		$	209		$	204		$	62,488
Adjusted EBITDA		60,598			2,694		(382	)		1,465			209			204			64,788
Depreciation and amortization of intangibles		17,124			405		30			442			(12	)		(37	)		17,952
Capital expenditures		7,937			37		93			—			—			—			8,067
Cash interest expense		5,009																	29,701
Ratio of earnings to fixed charges		5.6	x																1.5	x

    MERRILL CORPORATION

NOTES TO UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

(1)

Reflects additional depreciation and amortization expense resulting from fair value adjustments to property, plant and equipment attributable to the Daniels and Executech acquisitions.

(2)

Reflects the elimination of historical costs in conjunction with the Daniels and Alternatives acquisitions:

	Year Ended January 31, 1999						Nine Months Ended October 31, 1999
	Daniels		Alternatives		Total		Daniels		Alternatives		Total
	(dollars in thousands)
Contractual executive compensation	$	867	$	626	$	1,493	$	442	$	202	$	644
Services and facilities(a)		713		—		713		371		—		371
Reduced employee compensation and benefits		900		—		900		450		—		450
	$	2,480	$	626	$	3,106	$	1,263	$	202	$	1,465

(a)

Includes contractual reduction in purchasing costs and the elimination of redundant facilities and services.

(3)

Reflects the amortization of goodwill on a straight line basis as follows:

	Year Ended January 31, 1999
	Daniels		Executech		Alternatives		Total
	(dollars in thousands)
Goodwill	$	23,300	$	2,682	$	3,313
Amortization period in years		20		15		15
Annual goodwill amortization	$	1,165	$	179	$	221
Months to include in pro forma		12		4.5		12
Incremental pro forma amortization	$	1,165	$	67	$	221	$	1,453

	Nine Months Ended October 31, 1999
	Daniels		Alternatives		Total
	(dollars in thousands)
Goodwill	$	23,300	$	3,313
Amortization period in years		20		15
Annual goodwill amortizaiton	$	1,165	$	221
Months to include in pro forma		2.5		4.5
Incremental pro forma amortization	$	243	$	83	$	326

(4)

Reflects the elimination of public company expenses associated with conducting an annual meeting, producing and distributing annual reports and quarterly shareholder letters and board expenses.

(5)

Reflects retainer fees for investment banking services provided by DLJ Securities Corporation of $300,000 annually and the elimation of historical deferred financing costs of $64,000 for the year ended January 31, 1999 and $37,000 for the nine month period ended October 31, 1999.

(6)

Reflects the additional interest expense attributable to the merger financing:

	Year Ended January 31, 1999			Nine Months Ended October 31, 1999
	(dollars in thousands)
Increase in interest expense
Revolving credit facility (a)	$	170		$	128
Term loan A (a)		5,915			4,436
Term loan B (b)		15,268			11,451
Notes (c)		16,800			12,600
Commitment fees on undrawn revolving credit facility		241			180
Amortization of discount		226			168
Accretion of unit warrant value (d)		99			74
Amortization of deferred financing costs		1,297			973
Total		40,016			30,010
Elimination of historical interest expense associated with repaid indebtedness		(5,251	)		(4,397	)
Net increase in interest expense	$	34,765		$	25,613

(a)

Interest expense was calculated at an assumed interest rate of 9.10%.



(b)

Interest expense was calculated at an assumed interest rate of 9.85%.



(c)

Interest expense was calculated at an interest rate of 12.00%.



(d)

For accounting purposes, a $1.7 million value has been ascribed to the warrants and has been classified as a component of shareholders' equity. The warrant value shall be accreted over 9.5 years.

A one-eighth of one percent change in interest rates would impact interest expense for borrowings under the revolving credit facility and the term loans A and B, collectively, in the amount of approximately $277,000 for the year ended January 31, 1999 and approximately $208,000 for the nine months ended October 31, 1999.

(7)

Reflects the income tax effect of all pro forma entries at statutory tax rates.

(8)

Reflects dividends on preferred stock issued in the merger ($40.0 million liquidation preference multiplied by a 14.5% compounded quarterly dividend rate). For accounting purposes, a $5.5 million value has been ascribed to the warrants and has been classified as a component of shareholders' equity. The warrant value shall be amortized over 12 years. The amortization for the year ended January 31, 1999 would have been $170,000 and for the nine months ended October 31, 1999 would have been $128,000.

(9)

The direct investment plan is considered a variable plan for accounting purposes. Accordingly, non-cash compensation expense will be recorded when the fair market value of the class B common stock increases. The unaudited pro forma consolidated statement of operations for the year ended January 31, 1999 and the nine month period ended October 31, 1999 does not include any related compensation expenses associated with the direct investment plan.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	Page
Annual Financial Statements
Report of Independent Accountants	F-2
Consolidated Balance Sheets as of January 31, 1998 and 1999	F-3
Consolidated Statements of Operations for the Years Ended January 31, 1997, 1998 and 1999	F-4
Consolidated Statements of Cash Flows for the Years Ended January 31, 1997, 1998 and 1999	F-5
Consolidated Statements of Changes in Shareholders' Equity for the Years Ended January 31, 1997, 1998 and 1999	F-6
Notes to Consolidated Financial Statements	F-7
Interim Financial Statements—Unaudited	F-18
Consolidated Balance Sheets as of January 31, 1999 and October 31, 1999 (unaudited)	F-19
Consolidated Statements of Operations for the Nine Months Ended October 31, 1998 and 1999 (unaudited)	F-20
Consolidated Statements of Cash Flows for the Nine Months Ended October 31, 1998 and 1999 (unaudited)	F-21
Notes to Interim Consolidated Financial Statements (unaudited)	F-22

REPORT OF INDEPENDENT ACCOUNTANTS

     To the Shareholders and Board of Directors of Merrill Corporation:

    In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of operations, changes in shareholders' equity and cash flows present fairly, in all material respects, the financial position of Merrill Corporation and Subsidiaries as of January 31, 1999 and 1998 and the results of their operations and their cash flows for each of the three years in the period ended January 31, 1999, in conformity with generally accepted accounting principles. These financial statements are the responsibility of Merrill Corporation's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with generally accepted auditing standards which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for the opinion expressed above.

/s/ PRICEWATERHOUSECOOPERS LLP

PRICEWATERHOUSECOOPERS LLP
March 29, 1999
Saint Paul, Minnesota

MERRILL CORPORATION

CONSOLIDATED BALANCE SHEETS

(dollars in thousands)

	As of January 31,
	1998		1999
ASSETS
Current assets
Cash and cash equivalents	$	2,531	$	23,477
Trade receivables, less allowance for doubtful accounts of $6,992 and $8,126, respectively		116,721		102,365
Work-in-process inventories		13,686		12,639
Other inventories		7,112		7,559
Other current assets		10,290		12,253
Total current assets		150,340		158,293
Property, plant and equipment, net		41,045		44,935
Goodwill, net		44,437		49,744
Other assets		10,657		12,973
Total assets	$	246,479	$	265,945
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Current maturities of long-term debt	$	655	$	2,210
Current maturities of capital lease obligations		249		236
Accounts payable		29,142		29,640
Accrued expenses		41,033		44,642
Total current liabilities		71,079		76,728
Long-term debt, net of current maturities		40,225		38,110
Capital lease obligations, net of current maturities		1,616		1,375
Other liabilities		7,884		8,581
Total liabilities		120,804		124,794
Commitments and contingencies (Notes 3 and 5)
Shareholders' equity
Common stock, $.01 par value: 25,000,000 shares authorized; 16,315,136 and 15,823,155 shares, respectively, issued and outstanding		163		158
Undesignated stock: 500,000 shares authorized; no shares issued		—		—
Additional paid-in capital		22,401		12,722
Retained earnings		103,111		128,271
Total shareholders' equity		125,675		141,151
Total liabilities and shareholders' equity	$	246,479	$	265,945

The accompanying notes are an integral part of the consolidated financial statements.

MERRILL CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(dollars in thousands, except per share data)

	For the Years Ended January 31,
	1997			1998			1999
Revenue	$	353,769		$	459,516		$	509,543
Cost of revenue		227,478			295,390			330,632
Gross profit		126,291			164,126			178,911
Selling, general and administrative expenses		89,946			114,174			127,705
Operating income		36,345			49,952			51,206
Interest expense		(4,124	)		(4,321	)		(3,961	)
Other income, net		263			835			426
Income before provision for income taxes		32,484			46,466			47,671
Provision for income taxes		14,645			20,445			21,214
Net income	$	17,839		$	26,021		$	26,457

The accompanying notes are an integral part of the consolidated financial statements.

MERRILL CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollars in thousands)

	For the Years Ended January 31,
	1997			1998			1999
Operating activities
Net income	$	17,839		$	26,021		$	26,457
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization		10,825			11,147			13,066
Amortization of intangible assets		2,581			6,500			5,617
Writedown of goodwill		—			—			1,180
Provision for losses on trade receivables		2,861			2,064			3,273
Provision for unbillable inventories		2,678			(1,063	)		67
Deferred income taxes		(6,555	)		(2,592	)		(3,518	)
Change in deferred compensation		401			1,285			1,807
Changes in operating assets and liabilities, net of effects from business acquisitions
Trade receivables		(18,499	)		(36,706	)		11,796
Work-in-process inventories		(11,667	)		12,082			865
Other inventories		583			(1,667	)		(333	)
Other current assets		(1,718	)		(4,012	)		257
Accounts payable		(3,720	)		7,336			(348	)
Accrued expenses		11,365			11,537			(3,267	)
Income taxes		1,530			(1,059	)		(1,109	)
Net cash provided by operating activities		8,504			30,873			55,810
Investing activities
Purchase of property, plant and equipment		(9,216	)		(17,069	)		(16,479	)
Business acquisitions, net of cash acquired		(26,010	)		(13,179	)		(4,039	)
Other investing activities, net		(564	)		137			(2,551	)
Net cash used in investing activities		(35,790	)		(30,111	)		(23,069	)
Financing activities
Borrowings on notes payable to banks		139,050			104,275			86,600
Repayments on notes payable to banks		(139,100	)		(110,225	)		(86,600	)
Proceeds from issuance of long-term debt		35,000			—			—
Principal payments on long-term debt and capital lease obligations		(15,164	)		(936	)		(814	)
Repurchase of common stock		—			(3,065	)		(12,813	)
Dividends paid		(948	)		(1,133	)		(1,297	)
Exercise of stock options		1,045			5,417			2,149
Tax benefit realized upon exercise of stock options		328			2,192			884
Other equity transactions, net		162			83			96
Net cash provided by (used in) financing activities		20,373			(3,392	)		(11,795	)
(Decrease) increase in cash and cash equivalents		(6,913	)		(2,630	)		20,946
Cash and cash equivalents, beginning of year		12,074			5,161			2,531
Cash and cash equivalents, end of year	$	5,161		$	2,531		$	23,477
Supplemental cash flow disclosures
Income taxes paid	$	19,253		$	22,000		$	24,724
Interest paid		2,866			3,757			3,599

The accompanying notes are an integral part of the consolidated financial statements.

MERRILL CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

(dollars in thousands, except per share data)

	For the Years Ended January 31, 1997, 1998 and 1999
	Common Stock			Additional Paid-in Capital			Retained Earnings			Total
Balance, January 31, 1996	$	157		$	16,245		$	61,332		$	77,734
Exercise of stock options		2			1,043						1,045
Tax benefit realized upon exercise of stock options					328						328
Other					162						162
Cash dividends								(948	)		(948	)
Net income								17,839			17,839
Balance, January 31, 1997	$	159		$	17,778		$	78,223		$	96,160
Exercise of stock options		7			5,410						5,417
Tax benefit realized upon exercise of stock options					2,192						2,192
Repurchase of common stock		(3	)		(3,062	)					(3,065	)
Other					83						83
Cash dividends								(1,133	)		(1,133	)
Net income								26,021			26,021
Balance, January 31, 1998	$	163		$	22,401		$	103,111		$	125,675
Exercise of stock options		2			2,147						2,149
Tax benefit realized upon exercise of stock options					884						884
Repurchase of common stock		(7	)		(12,806	)					(12,813	)
Other					96						96
Cash dividends								(1,297	)		(1,297	)
Net income								26,457			26,457
Balance, January 31, 1999	$	158		$	12,722		$	128,271		$	141,151

The accompanying notes are an integral part of the consolidated financial statements.

MERRILL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     One—Nature of Business and Significant Accounting Policies

    Nature of Business  The Company provides paper and electronic document services consisting of creative design, typesetting, printing, reproduction, distribution, data and information services to financial, legal, investment company, real estate and corporate clients worldwide.

    Use of Estimates  The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. The most significant areas which require the use of management's estimates relate to the determination of the allowances for doubtful accounts and unbillable inventories.

    Principles of Consolidation  The consolidated financial statements include all majority-owned subsidiaries. All significant intercompany transactions and balances have been eliminated.

    Cash Equivalents  The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.

    Inventories  Work-in-process, which includes purchased services, materials, direct labor and overhead, is valued at the lower of cost or net realizable value, with cost determined on a specific job-cost basis. Other inventories consist primarily of paper and printed materials and are valued at the lower of cost or market, with cost determined on a specific job-cost basis.

    Property, Plant and Equipment  Property, plant and equipment are stated at cost. Significant additions or improvements extending asset lives are capitalized; normal maintenance and repair costs are expensed as incurred. Depreciation is determined using the straight-line method over the estimated useful lives of the assets which range from three to 30 years. Amortization of leasehold improvements is recorded on a straight-line basis over the estimated useful lives of the assets or the lease term, whichever is shorter. When assets are sold or retired, related gains or losses are included in the results of operations.

    Goodwill  Goodwill recognized in business acquisitions accounted for as purchases is amortized on the straight-line method, principally over 15 years. The Company periodically evaluates the recoverability of unamortized goodwill through measurement of future estimated undiscounted operating unit cash flows.

    Income Taxes  Deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each year end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense is the tax payable for the year and the change during the year in deferred tax assets and liabilities.

    Revenue Recognition  The Company recognizes revenue when service projects are completed or products are shipped.

    Stock-Based Compensation  The Company accounts for stock-based compensation using the intrinsic value method prescribed by Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees," and related interpretations. Accordingly, compensation costs for stock options granted to employees are measured as the excess, if any, of the fair value of the Company's stock at the date of the grant over the amount an employee must pay to acquire the stock. Such compensation costs, if any, are amortized on a straight-line basis over the underlying option vesting terms. The Company accounts for stock-based compensation to non-employees using the fair value method prescribed by SFAS No. 123, "Accounting for Stock Based Compensation." Compensation costs for stock options granted to non-employees are based on fair value of the option at the date of grant.

    Business Segments  Effective January 31, 1999, the Company adopted SFAS No. 131, "Disclosures About Segments of an Enterprise and Related Information," which requires the Company to report information about its operating segments according to the management approach for determining reportable segments. This approach is based on the way management organizes segments within a company for making operating decisions and assessing performance. Segment results have been reported for all periods presented and are described in Note Nine.

Two—Selected Financial Statement Data

	As of January 31,
	1998			1999
	(dollars in thousands)
Property, Plant and Equipment, net
Land	$	1,951		$	1,951
Buildings		11,965			12,111
Equipment		54,929			63,068
Furniture and fixtures		11,057			14,157
Leasehold improvements		10,479			18,664
Construction in progress		5,609			1,090
		95,990			111,041
Less accumulated depreciation and amortization		(54,945	)		(66,106	)
	$	41,045		$	44,935
Goodwill, net
Goodwill	$	52,913		$	63,462
Less accumulated amortization		(8,476	)		(13,718	)
	$	44,437		$	49,744
Accrued Expenses
Commissions and compensation	$	25,003		$	22,089
Retirement plan		4,965			3,970
Purchase price consideration		800			7,734
Other		10,265			10,849
	$	41,033		$	44,642

Three—Business Acquisitions

    On April 15, 1996, the Company purchased substantially all of the operating assets and assumed certain liabilities of The Corporate Printing Company, Inc. and Affiliated Group (CPC) for approximately $22.6 million in cash. The Company did not purchase any assets relating to CPC's pressroom and shipping businesses. The purchase price was subsequently reduced by approximately $1.7 million in accordance with terms of the purchase agreement. In accordance with the agreement, additional contingent purchase consideration of $8 million was paid in August 1997. The Company also entered into a five-year non-compete agreement with CPC's principal shareholder that requires payments totaling $3.4 million through April 15, 2001. The principal shareholder is also entitled to an additional $500,000 annually through March 31, 2001, as the Company maintained certain business of a specified customer. The acquisition has been accounted for as a purchase.

    On March 28, 1996, the Company purchased all of the outstanding common stock of FMC Resource Management Corporation for $5.4 million in cash and promissory notes for $2.0 million. The agreement calls for additional contingent consideration, not to exceed $4 million, based on annual gross profits of the acquired business through January 31, 2001, as defined in the agreement. Contingent consideration recorded through January 31, 1999, was $2.4 million. The acquisition has been accounted for as a purchase.

    Results of the acquired companies' operations have been included in the Consolidated Statements of Operations from their respective dates of acquisitions. Pro forma (unaudited) results of the Company for the year ended January 31, 1997, as if the acquisitions had been effective at February 1, 1995, are as follows:

(In thousands, except per share data)	For the Year Ended January 31, 1997
Revenue	$	376,647
Net income		17,047

    During fiscal year 1999, the Company completed the acquisition of substantially all of the operating assets and liabilities of Executech, Inc. and an affiliated company, World Wide Scan Services, LLC for $3.2 million in cash. The agreement calls for additional consideration totalling approximately $10.0 million through fiscal year 2003. The acquisition has been accounted for as a purchase and is not significant to the financial position or results of operations of the Company.

Four—Financing Arrangements

    Bank Financing  The Company has a revolving credit agreement with a group of banks that provides for an unsecured bank line of credit which expires on November 29, 1999. Subsequent to January 31, 1999, the agreement was amended to increase the amount available for borrowing from $40 million to $70 million. There were no borrowings outstanding under this agreement at January 31, 1999 and 1998. Under the agreement, the Company has the option to borrow at the Agent's reference rate, at 1.0% above the London Interbank Offered Rate (LIBOR) or at 1.0% above a certificate of deposit-based rate, and is required to pay quarterly commitment fees of 0.25% on the unused portion of the line of credit. The weighted average interest rates on borrowings on the line of credit were 7.39%, 8.26% and 8.44% for the years ended 1997, 1998 and 1999, respectively. The revolving credit agreement includes various covenants, including the maintenance of minimum tangible net worth and limitations on the amounts of certain transactions, including payment of dividends.

    Long-Term Debt  Long-term debt consisted of the following:

	As of January 31,
	1998			1999
	(dollars in thousands)
Unsecured senior notes, bearing interest at 7.463%, with semi-annual interest only payments through October 2000, at which time annual principal and semi-annual interest payments are due through October 2006. The notes have various covenants, including the maintenance of certain financial ratios and limitations on the amount of certain transactions including the payment of dividends	$	35,000		$	35,000
Industrial development bonds, due in annual installments, including interest ranging from 4.2% to 5.5%, over the life of the bonds with the remaining unpaid balance due on August 1, 2010; collateralized by land, building and equipment with a carrying value of $4,712 at January 31, 1999		3,380			3,320
Unsecured promissory notes payable due in March 1999. The notes bear interest at LIBOR plus 1.0%, adjustable and payable annually. The interest rate at January 31, 1998 and 1999 was 7.281% and 6.8125%, respectively		2,000			2,000
Unsecured promissory note payable in equal annual installments of $500 on December 31 through 1998		500			—
		40,880			40,320
Less current maturities of long-term debt		(655	)		(2,210	)
	$	40,225		$	38,110

    The aggregate maturities of long-term debt are as follows:

	(dollars in thousands)
2000	$	2,210
2001		5,220
2002		5,230
2003		5,240
2004		5,250
Thereafter		17,170
	$	40,320

    Based on quoted market prices for similar issues, the fair value of long-term debt approximated its carrying value at January 31, 1998 and 1999.

Five—Leases

    The Company leases an office and production facility and the associated land and equipment under capital leases that terminate at various dates through November 30, 2005. Certain leases contain bargain purchase options. A summary of the Company's property under capital leases, which is classified as property, plant and equipment, is as follows:

	As of January 31,
	1998			1999
	(dollars in thousands)
Land	$	333		$	333
Building		2,439			2,439
Equipment		594			389
Less accumulated amortization		(1,366	)		(1,334	)
	$	2,000		$	1,827

     The Company also leases office space and equipment under noncancelable operating leases which expire at various dates through October 31, 2014. Rental expense charged to operations was $6.0 million, $8.0 million and $9.0 million for the years ended January 31, 1997, 1998 and 1999, respectively.

    Future minimum rental commitments under noncancelable leases at January 31, 1999, are as follows:

	Capital Leases			Operating Leases
	(dollars in thousands)
2000	$	392		$	6,697
2001		330			5,737
2002		330			4,645
2003		330			4,349
2004		330			3,751
Thereafter		605			16,317
		2,317		$	41,496
Imputed interest		(706	)
Present value of minimum lease payments		1,611
Less current maturities of capital lease obligations		(236	)
Capital lease obligations, net of current maturities	$	1,375

Six—Income Taxes

    Components of the provision for income taxes are as follows:

	For the Years Ended January 31,
	1997			1998			1999
	(dollars in thousands)
Current
Federal	$	17,758		$	19,974		$	21,204
State		3,442			3,063			3,528
		21,200			23,037			24,732
Deferred		(6,555	)		(2,592	)		(3,518	)
Provision for income taxes	$	14,645		$	20,445		$	21,214

    Temporary differences comprising the net deferred tax asset recognized in the accompanying Consolidated Balance Sheets are as follows:

	As of January 31,
	1998		1999
	(dollars in thousands)
Deferred compensation	$	1,980	$	3,997
Property, plant and equipment		2,126		2,359
Insurance reserves		1,130		1,406
Vacation accrual		1,085		1,228
Allowance for doubtful accounts		1,349		1,188
Goodwill amortization		433		1,131
Inventories		958		1,038
Other, net		972		1,204
Net deferred tax asset	$	10,033	$	13,551

     Management expects that the Company will fully realize the benefits attributable to the net deferred tax asset at January 31, 1999. Accordingly, no valuation allowance has been recorded at January 31, 1999.

    Significant differences between income taxes on income for financial reporting purposes and income taxes calculated using the federal statutory tax rate are as follows:

	As of January 31,
	1997		1998		1999
	(dollars in thousands)
Provision for federal income taxes at statutory rate	$	11,369	$	16,263	$	16,684
State income taxes, net of federal benefit		1,444		1,646		1,967
Non-deductible business meeting and entertainment expenses		1,210		1,832		2,003
Other		622		704		560
	$	14,645	$	20,445	$	21,214

    Consolidated federal income tax returns filed by the Company have been examined by the Internal Revenue Service through fiscal 1994. The Company's fiscal 1995, 1996 and 1997 federal and certain state income tax returns are presently under audit. Management believes any additional taxes which may ultimately result from these audits or any other state or local agencies' audits would not have a material adverse effect on the Company's consolidated financial position or results of operations.

Seven—Retirement Plan

    On February 1, 1998, the Company combined its defined contribution retirement plan and its 401(k) incentive savings plan. Under the new plan, Company contributions are based on 4% of eligible employee compensation and 100% matching contributions up to a maximum of the first 3% of a participant's 401(k) contribution. Substantially all employees of the Company are covered by the new plan. Related costs of all retirement plans charged to operations were $4.0 million, $5.1 million and $6.1 million for the years ended January 31, 1997, 1998 and 1999, respectively.

Eight—Shareholders' Equity

    Common Stock  In August 1997, the Company's Board of Directors declared a 2-for-1 stock split of the Company's common stock in the form of a 100% stock dividend which was paid on October 15, 1997, to shareholders of record on September 30, 1997. The Consolidated Statements of Changes in Shareholders' Equity and all share and per share amounts have been retroactively restated to reflect the stock split. Also, all information regarding shares outstanding, stock purchase agreements, stock options and stock grants has been retroactively restated to reflect the stock split.

    The classes, series, rights and preferences of the undesignated stock may be established by the Company's Board of Directors. No action with respect to such shares has been taken. During fiscal year 1997, the Company's Board of Directors approved the repurchase of up to 1,500,000 shares of the Company's common stock. In fiscal year 1999, the Company repurchased 734,000 shares of common stock for approximately $12.8 million. Through January 31, 1999, 998,000 shares of common stock had been repurchased for approximately $15.9 million.

    Stock Plans  Under Company-sponsored incentive and stock option plans, 6,506,000 shares of common stock were reserved for the granting of incentive awards to employees in the form of incentive stock options, nonstatutory stock options and restricted stock awards at exercise prices not less than 100% of the fair market value of the Company's common stock on the date of grant. As of January 31, 1999, stock options for 5,342,300 shares and 70,800 restricted stock awards had been granted under the plans, leaving 1,092,900 shares available for future grants.

    Under the Company's 1996 Non-employee Director Plan (the Plan), 400,000 shares of common stock were reserved for granting of non-statutory options and awarding of common stock as partial payment to non-employee directors who serve on the Company's Board of Directors. Non-statutory stock options issued under the Plan are granted at an exercise price not less than 100% of the fair market value of the Company's common stock on the date of grant. Compensation expense is recorded when common stock is awarded as partial payment for the director's annual retainer in an amount approximately equal to the fair market value of the Company's common stock on the date of grant. As of January 31, 1999, non-statutory options for 120,000 shares and 10,863 shares of common stock had been granted under the Plan, leaving 269,137 shares available for future grants.

    In addition to options granted under the plans above, the Company has granted non-qualified options to directors and consultants at prices equal to or exceeding market value at date of grant. Options granted under all Company-sponsored stock plans generally vest and expire over five to seven years.

    A summary of selected information regarding all stock options for the three years ended January 31, 1999, is as follows:

	Number of Shares		Exercise Price Per Share		Weighted Average Exercise Price Per Share
Balance, January 31, 1996	1,854,628		$	2.00-14.88	$	8.46
Granted	1,092,000			8.12-11.96		9.06
Exercised	(152,436	)		3.68-10.38		6.85
Canceled	(106,364	)		8.12-13.25		9.86
Balance, January 31, 1997	2,687,828			2.00-14.88		8.74
Granted	1,129,200			11.19-22.75		13.95
Exercised	(759,400	)		2.00-15.06		7.88
Canceled	(88,200	)		8.13-10.00		8.86
Balance, January 31, 1998	2,969,428			2.00-22.75		10.94
Granted	611,000			18.25-21.38		20.95
Exercised	(239,750	)		2.00-15.06		8.97
Canceled	(70,600	)		8.13-21.38		13.92
Balance, January 31, 1999	3,270,078		$	3.68-22.75	$	12.89

     At January 31, 1999, the weighted average exercise price and remaining life of the stock options are as follows:

Range of exercise prices	$3.68-8.25		$8.50-13.50		$14.75-22.75		Total
Total options outstanding		821,700		1,485,878		962,500		3,270,078
Weighted average exercise price	$	8.06	$	10.94	$	20.00	$	12.89
Weighted average remaining life		3.3 years		3.5 years		4.6 years		3.8 years
Options exercisable		248,400		386,918		128,100		763,418
Weighted average price of exercisable options	$	7.92	$	11.30	$	18.24	$	11.37

    Had the Company used the fair value-based method of accounting for its incentive and stock option plans beginning on February 1, 1995, and charged compensation cost against income, over the vesting period based on the fair value of options at the date of grant, net income and net income per share would have been reduced to the following pro forma amounts:

	For the Years Ended January 31,
	1997		1998		1999
	(dollars in thousands, except per share data)
Net Income
As reported	$	17,839	$	26,021	$	26,457
Pro forma		17,223		24,541		24,300

    The pro forma information above includes only stock options granted since fiscal year 1996. Pro forma compensation expense under the fair value-based method of accounting will increase in the future as additional stock option grants will be considered.

    The weighted average grant date fair value of options granted during fiscal years 1997, 1998 and 1999 was $4.72, $6.68 and $10.32, respectively. The weighted average grant date fair value of options was calculated by using the fair value of each option grant, utilizing the Black-Scholes option-pricing model and the following key assumptions:

	For the Years Ended January 31,
	1997		1998		1999
Risk free interest rate	6.87	%	6.50	%	5.50	%
Expected life	6 years		5 years		5 years
Expected volatility	48.85	%	43.52	%	51.18	%
Expected dividend yield	0.68	%	0.38	%	0.41	%

Nine—Segment and Related Information

    SFAS No. 131, "Disclosures About Segments of an Enterprise and Related Information," changes the way the Company reports information about its operating segments. The information for fiscal years 1997 and 1998 is also presented.

    The Company's business units have been aggregated into two reportable segments comprising of Specialty Communication Services and Document Services.

    Specialty Communication Services  This segment consists of three business units—Financial Document Services, Investment Company Services and Managed Communications Programs—that print documents and deliver services used in the financial marketplace, including mutual fund and insurance companies and banks, and national organizations. The principal markets for this segment include major

metropolitan centers in the world including North America, Europe, Latin America and the Far East. Customers include major investment bankers, corporate officers, mutual fund companies, national and regional real estate networks and other business services.

    Document Services  Document Management Services is the sole business unit reported in this segment. They deliver document management solutions to legal and corporate clients through client-based service centers. These Merrill-managed facilities provide clients with a broad range of value-added document services, including litigation copying and support, imaging, electronic document scanning, storage and retrieval, binding and post-production shipping. The principal markets for this segment are major metropolitan areas in North America. Customers include law firms and large corporations.

    The accounting policies of the reportable segments are the same as those described in Note One of Notes to Consolidated Financial Statements. The Company evaluates the performance of its operating segments based on revenue and operating earnings of the respective business units. Intersegment sales and transfers are not significant.

    Summarized financial information concerning the Company's reportable segments is shown in the following table. The "Interest & Other" column includes corporate-related items and, as it relates to income before provision for income taxes, income and expense not allocated to reportable segments.

	Specialty Communication Services		Document Services			Interest & Other			Total
	(dollars in thousands)
1997
Revenue	$	314,187	$	39,582					$	353,769
Income (loss) before provision for income taxes		45,555		(9,210	)	$	(3,861	)		32,484
Total assets		167,043		11,729			23,225			201,997
1998
Revenue	$	405,742	$	53,774					$	459,516
Income (loss) before provision for income taxes		57,276		(7,324	)	$	(3,486	)		46,466
Total assets		205,200		16,530			24,749			246,479
1999
Revenue	$	446,579	$	62,964					$	509,543
Income (loss) before provision for income taxes		52,995		(1,789	)	$	(3,535	)		47,671
Total assets		186,825		25,966			53,154			265,945

Ten—Quarterly Data (Unaudited)

    The following is a summary of unaudited quarterly data for the years ended January 31, 1998 and 1999:

	First Quarter		Second Quarter		Third Quarter		Fourth Quarter		Total
	(dollars in thousands, except per share data)
1998
Revenue	$	109,859	$	115,601	$	112,091	$	121,965	$	459,516
Gross profit		43,585		41,066		39,374		40,101		164,126
Net income		7,754		6,312		5,707		6,248		26,021
1999
Revenue	$	123,514	$	148,458	$	119,759	$	117,812	$	509,543
Gross profit		48,358		53,974		39,100		37,479		178,911
Net income		8,012		8,706		6,488		3,251		26,457

Eleven—Subsequent Event

    On April 14, 1999, the Company purchased substantially all assets and assumed certain liabilities of Daniels Printing, Limited Partnership for $45.0 million in cash plus $10.6 million in payoff of existing term debt and line of credit plus the assumption of $7.7 million of certain ordinary course liabilities. The acquisition will be accounted for as a purchase. The acquisition was financed using the Company's line of credit and available operating cash.

Interim Financial Statements—Unaudited

MERRILL CORPORATION

CONSOLIDATED BALANCE SHEETS

(dollars in thousands)

(unaudited)

	January 31, 1999		October 31, 1999
ASSETS
Current assets
Cash and cash equivalents	$	23,477	$	4,962
Trade receivables, less allowance for doubtful accounts of $8,126 and $8,211, respectively		102,365		136,749
Work-in-process inventories		12,639		19,090
Other inventories		7,559		11,117
Other current assets		12,253		15,884
Total current assets		158,293		187,802
Property, plant and equipment, net		44,935		56,729
Goodwill, net		49,744		76,838
Other assets		12,973		13,315
Total assets	$	265,945	$	334,684
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Notes payable to banks			$	44,900
Current maturities of long-term debt	$	2,210		970
Current maturities of capital lease obligations		236		183
Accounts payable		29,640		33,784
Accrued expenses		44,642		45,089
Total current liabilities		76,728		124,926
Long-term debt, net of current maturities		38,110		37,890
Capital lease obligations, net of current maturities		1,375		1,262
Other liabilities		8,581		10,525
Total liabilities		124,794		174,603
Shareholders' equity
Common stock, $.01 par value: 25,000,000 shares authorized; 15,823,155 and 16,137,520 shares, respectively, issued and outstanding		158		161
Undesignated stock: 500,000 shares authorized; no shares issued
Additional paid-in capital, net of note receivables of $2,055 at October 31, 1999		12,722		14,272
Retained earnings		128,271		145,648
Total shareholders' equity		141,151		160,081
Total liabilities and shareholders' equity	$	265,945	$	334,684

The accompanying notes are an integral part of the consolidated financial statements.

MERRILL CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(dollars in thousands)
(unaudited)

	Nine Months Ended October 31
Revenue	$	391,731		$	442,401
Cost of revenue		250,299			289,896
Gross profit		141,432			152,505
Selling, general and administrative expenses		97,095			109,031
Merger costs		—			2,300
Operating income		44,337			41,174
Interest expense		(3,011	)		(5,009	)
Other (expense) income, net		487			(616	)
Income before provision for income taxes		41,813			35,549
Provision for income taxes		18,607			17,240
Net income	$	23,206		$	18,309

The accompanying notes are an integral part of the consolidated financial statements.

MERRILL CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollars in thousands)
(unaudited)

	Nine Months Ended October 31
	1998			1999
Operating activities
Net income	$	23,206		$	18,309
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization		9,134			12,163
Amortization of intangible assets		4,113			4,961
Writedown of goodwill		1,000			—
Provision for losses on trade receivables		3,458			1,955
Deferred compensation		1,724			1,138
Changes in operating assets and liabilities, net of effects from business acquisitions
Trade receivables		(2,572	)		(19,824	)
Work-in-process inventories		(619	)		(1,683	)
Other inventories		(2,114	)		(2,570	)
Other current assets		(635	)		805
Accounts payable		(1,686	)		(3,973	)
Accrued expenses		(7,413	)		(9,829	)
Accrued and deferred income taxes		(1,372	)		4,227
Net cash provided by operating activities		26,224			5,679
Investing activities
Business acquisitions, net of cash acquired		(3,230	)		(54,559	)
Purchase of property, plant and equipment		(11,361	)		(7,937	)
Other, net		(2,742	)		(2,706	)
Net cash used in investing activities		(17,333	)		(65,202	)
Financing activities
Borrowings on notes payable to banks		86,600			146,875
Repayments on notes payable to banks		(86,600	)		(104,107	)
Principal payments on long-term debt and capital lease obligations		(258	)		(2,381	)
Repurchase of common stock		(6,585	)		—
Dividends paid		(981	)		(963	)
Exercise of stock options		1,832			1,033
Tax benefit realized upon exercise of stock options		785			551
Other equity transactions, net		(552	)		—
Net cash (used in) provided by financing activities		(5,759	)		41,008
Increase (decrease) in cash and cash equivalents		3,132			(18,515	)
Cash and cash equivalents, beginning of period		2,531			23,477
Cash and cash equivalents, end of period	$	5,663		$	4,962

The accompanying notes are an integral part of the consolidated financial statements.

MERRILL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    Our consolidated financial statements as of October 31, 1999, and nine month periods ended October 31, 1998 and 1999, have been prepared by us, without audit. The consolidated financial statements reflect all adjustments, consisting of normal recurring accruals, which we consider necessary for a fair presentation of the results for the indicated periods. Certain information and accounting policies and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. The year end consolidated balance sheet data was derived from audited consolidated financial statements, but does not include all disclosures required by generally accepted accounting principles. These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included elsewhere herein.

2.  MERGER

    On November 23, 1999, we finalized an agreement and plan of merger with Viking Merger Sub., Inc. (Viking), an affiliate of DLJ Merchant Banking Partners II L.P. and certain of its affiliates whereby Viking merged into us, and we continued as the surviving company. In connection with the merger, our shareholders received $22.00 in cash, per share of common stock. John Castro, our President and Chief Executive Officer, and Rick Atterbury, our Executive Vice President and Chief Technology Officer, continued to hold shares of a new class B common stock that they received shortly before the merger in exchange for some of their shares of our common stock. Messrs. Castro and Atterbury received $22.00 in cash for each of their remaining shares of our common stock. The holders of each share of Viking's common stock received class B common stock in Merrill for each of their shares of Viking's common stock outstanding at the time of the merger; and the holders of each share of Viking's preferred stock and warrants received preferred stock or warrants, as the case may be, in Merrill for each of their shares of Viking's preferred stock or warrants outstanding at the time of the merger. The transaction was accounted for as a recapitalization and did not have any impact on our historical basis of assets and liabilities.

    In connection with the merger, we entered into a new $270.0 million senior secured credit facility on November 23, 1999 with a syndicate of financial institutions. The credit facility consists of a $50.0 million revolving credit facility and a $220.0 million term loan facility consisting of a $65.0 million term loan A and a $155.0 million term loan B. The revolving credit facility and the term loan A will mature on November 23, 2005 and the term loan B will mature on November 23, 2007. The new credit facility allows for a potential, although uncommitted, increase of up to $30.0 million at our request at any time prior to November 23, 2005. This increase is only available if one or more financial institutions agree to finance this increase. The new credit facility is collateralized by substantially all of our consolidated assets. Amounts borrowed under the revolving credit facility and for term loan A will bear interest, at our option, at the reserve adjusted LIBOR rate plus 3.00% or at the alternate base rate plus 1.75%. Borrowings under term loan B will bear interest, at our option, at the reserve adjusted LIBOR rate plus 3.75% or at the alternate base rate plus 2.50%. We will also pay commitment fees in an amount equal to 0.50% per year on the daily average unused portion of the revolving credit facility. Beginning August 1, 2000, the applicable margins for revolving credit loans and term loan A and commitment fees will be subject to possible reductions based on our leverage ratio as defined in the credit agreement. The new credit facility requires quarterly principal and interest payments. In addition, the new credit facility is subject to mandatory principal prepayments if certain events occur as defined in the credit agreement.

    On November 23, 1999 we also issued $140.0 million of 12.0% senior subordinated notes with warrants to purchase 172,182 shares of common stock. The notes mature on May 1, 2009 and require semi-annual interest payments. The notes may be redeemed on or after November 1, 2004. Up to 35.0% of the notes will be redeemable on or prior to November 1, 2002, with the net proceeds of public equity offering. Each warrant entitles the holder to purchase 1.22987 shares of our class B common stock at an exercise price of $22.00 per share. The warrants are exercisable on or after November 1, 2001 and expire on May 1, 2009.

3.  BUSINESS ACQUISITIONS

    On April 14, 1999, we purchased substantially all operating assets and assumed certain liabilities of Daniels Printing, Limited Partnership for approximately $44.0 million in cash, assumption and payment of existing lines of credit obligations totaling approximately $5.6 million and the assumption of certain ordinary course liabilities of $7.7 million. The acquisition has been accounted for as a purchase. The excess of the purchase price over the estimated fair value of the net identifiable assets acquired approximated $23.3 million and is being amortized using the straight-line method over 20 years.

    Pro Forma (unaudited) results for the three month period ended October 31, 1998 and the nine month periods ended October 31, 1998 and 1999, are as follows:

	Nine Months ended October 31, 1998		Nine Months ended October 31, 1999
	(dollars in thousands)
Revenues	$	445,540	$	458,126
Net Income		24,227		19,431

    On June 14, 1999, we purchased substantially all operating assets and assumed certain liabilities of Alternatives Communications Group, Inc. for approximately $2.6 million in cash, a promissory note for $0.8 million, payment of an existing line of credit obligation of $2.1 million, and the assumption of certain ordinary course liabilities of $1.9 million. The acquisition has been accounted for as a purchase and is not significant to our financial position or operating results. The excess of the purchase price over the estimated fair value of the net identifiable assets acquired approximated $3.3 million and is being amortized using the straight-line method over 15 years.

    These acquisitions were financed with excess operating cash and amounts available under our revolving credit facility.

4.  SEGMENT AND RELATED INFORMATION

    SFAS No. 131, "Disclosures About Segments of an Enterprise and Related Information," changed the way we report information about our operating segments. Our five business units have been aggregated into two reportable segments, comprised of Specialty Communication Services and Document Services.

    Specialty Communication Services  This segment consists of four business units: Financial Document Services, Investment Company Services, Managed Communications Programs and Merrill Print Group. Our Specialty Communication Services segment provides our financial, investment company and corporate clients with information technology-based solutions for the production and distribution of transactional financial documents, marketing materials, compliance documents and branded promotional materials. We are one of three international financial printers with a nationwide network and recognized brand name.

    Document Services  This segment consists solely of our Document Management Services business which provides law firms, corporate legal departments and investment banks with information-management products and services designed to enhance productivity and reduce costs. We provide a total outsourcing solution to our clients' information management needs, including providing all of the staff, technology and equipment necessary to manage the varying levels of demand associated with this function.

    The accounting policies of the reportable segments are the same as those described in Note One of Notes to Consolidated Financial Statements included in our 1999 Annual Report. We evaluate the performance of our operating segments based on revenue and operating earnings of the respective business units. Intersegment sales and transfers are not significant.

    Summarized financial information concerning our reportable segments is shown in the following table. The "Interest & Other" column includes corporate-related items and, as it relates to income before provision for income taxes, income and expense not allocated to reportable segments.

(dollars in thousands)	Specialty Communication Services		Document Services			Interest & Other			Total
Nine month period ended October 31, 1998
Revenue	$	346,136	$	45,595					$	391,731
Income (loss) before provision for income taxes	$	47,190	$	(2,853	)	$	(2,524	)	$	41,813
Nine month period ended October 31, 1999
Revenue	$	388,014	$	54,387					$	442,401
Income (loss) before provision for income taxes	$	40,618	$	556		$	(5,625	)	$	35,549
As of January 31, 1999
Total assets	$	186,825	$	25,966		$	53,154		$	265,945
As of October 31, 1999
Total assets	$	255,682	$	37,138		$	41,864		$	334,684

6.  SUPPLEMENTAL CASH FLOW DISCLOSURES

   Options to purchase 219,160 shares of common stock during the nine month period ended October 31, 1999 were exercised using non-interest bearing notes primarily to our officers. Amounts advanced under the notes, totaling approximately $2.1 million as of October 31, 1999, are recorded as a reduction of additional paid-in capital on the accompanying unaudited consolidated balance sheets. All of these notes were paid off in connection with the merger with Viking Merger Sub, Inc.

    During the nine month period ended October 31, 1998, we recorded an obligation of $8.0 million for additional consideration related to business acquisitions.

SCHEDULE II

MERRILL CORPORATION
VALUATION AND QUALIFYING ACCOUNTS

for the years ended January 31, 1999, 1998 and 1997
and for the nine month periods ended
October 31, 1998 and 1999
(in thousands)

Column A	Column B		Column C					Column D			Column E
			Additions
Description	Balance at Beginning of Year		Charged to Income		Charged to Other Accounts			Deductions from Reserves			Balance at End of Year
Year Ended January 31, 1997
Valuation account deducted from assets to which it applies—
Allowance for doubtful accounts	$	3,545	$	2,861	$	61	(A)	$	440	(B)	$	6,027
Allowance for unbillable inventories	$	562	$	2,678							$	$3,240
Year Ended January 31, 1998
Valuation account deducted from assets to which it applies—
Allowance for doubtful accounts	$	6,027	$	2,064	$	55	(A)	$	1,154	(B)	$	6,992
Allowance for unbillable inventories	$	3,240						$	1,063	(C)	$	2,177
Year Ended January 31, 1999
Valuation account deducted from assets to which it applies—
Allowance for doubtful accounts	$	6,992	$	3,273				$	2,139	(B)	$	8,126
Allowance for unbillable inventories	$	2,177	$	67							$	2,244
For the nine months ended October 31, 1998
Valuation account deducted from assets to which it applies—
Allowance for doubtful accounts	$	6,992	$	3,458				$	2,001	(B)	$	8,449
Allowance for unbillable inventories	$	2,177	$	897							$	3,074
For the nine months ended October 31, 1999
Valuation account deducted from assets to which it applies—
Allowance for doubtful accounts	$	8,126	$	1,955				$	1,870	(B)	$	8,211
Allowance for unbillable inventories	$	2,244	$	48							$	2,292

(A)

Recoveries on accounts previously written off.

(B)

Uncollectible accounts written off and adjustments to the allowance.

(C)

Adjustments to the allowance account to reflect estimated net realizable value at year-end.

[LOGO]

Offer to Exchange
$140,000,000 12% Series B Senior Subordinated Notes due 2009
Which Have Been Registered Under the Securities Act of 1933
for $140,000,000 Outstanding Unregistered
12% Series A Senior Subordinated Notes Due 2009

PROSPECTUS

              , 2000

We have not authorized any dealer, salesperson or other person to give you any information other than this prospectus or to make any representation as to matters not stated in this prospectus. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any of the securities offered hereby in any jurisdiction to any person to whom it is unlawful to make an offer in any jurisdiction.

PART II

INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

Item 20. Indemnification of Directors and Officers.

    The Minnesota Business Corporation Act requires Merrill and each of its subsidiary guarantors (except for FMC Resource Management Corporation and Merrill Communications LLC) to indemnify any director, officer or employee made or threatened to be made a party to a proceeding, by reason of the former or present official capacity of the person, against judgments, penalties, fines, settlements and reasonable expenses incurred in connection with the proceeding if certain statutory standards are met. "Proceeding" means a threatened, pending or completed civil, criminal, administrative, arbitration or investigative proceeding, including a derivative action in the name of the company. Reference is made to the detailed terms of Section 302A.521 of the Minnesota Business Corporation Act for a complete statement of these indemnification rights.

    The Articles of Incorporation of Merrill and each of its subsidiary guarantors (except FMC Resource Management Corporation and Merrill Communications LLC), provide that each director, officer, employee and agent, past or present of our company, and persons serving as such of another corporation or entity at our request, shall be indemnified to the fullest extent permitted by applicable state law, provided, however, that Merrill Daniels, Inc., Merrill/Executech, Inc., Merrill/Alternatives, Inc. and Merrill Global Inc. only provide indemnification to directors and officers and Merrill/May Inc. provides indemnification to its employees and agents at the discretion of its board of directors.

    The Delaware Limited Liability Company Act requires Merrill Communications LLC to indemnify any member or manager or other person from and against any and all claims and demands. Reference is made to the detailed terms of Section 18-108 of the Delaware Limited Liability Company Act for a complete statement of these indemnification rights.

    The Amended and Restated Limited Liability Company Agreement of Merrill Communications LLC provides that each director, member, officer, employee and agent, past or present of our company, and persons serving as such of another company or entity at our request, will be indemnified to the fullest extent permitted by applicable state law.

    The Washington Business Corporation Act requires FMC Resource Management Corporation to indemnify any director, officer or employee made or threatened to be made a party to a proceeding, by reason of the former or present official capacity of the person, against judgments, penalties, fines, settlements and reasonable expenses incurred in connection with the proceeding if certain statutory standards are met. "Proceeding" means a threatened, pending or completed civil, criminal, administrative, arbitration or investigative proceeding, including a derivative action in the name of the company. Reference is made to the detailed terms of Sections 23B.08.500, 23B.08.510, 23B.08.520, 23B.08.530, 23B.08.550, 23B.08.560 and 23B.08.570 of the Washington Business Corporation Act for a complete statement of these indemnification rights.

    Merrill and each of its subsidiary guarantors maintain directors' and officers' liability insurance, including a reimbursement policy in favor of Merrill and each of its subsidiary guarantors.

Item 21. Exhibits and Financial Statements Schedules.

a.  Exhibits.

Exhibit No.	Description
2.1	Agreement and Plan of Merger dated as of July 14, 1999 between Merrill and Viking Merger Sub, Inc., as amended.
3.1	Articles of Incorporation of Merrill Corporation, as amended.
3.2	Amendment to Articles of Incorporation of Merrill Corporation as of June 20, 1986 and March 27, 1987.
3.3	Amendment to Articles of Incorporation of Merrill Corporation as of November 22, 1999.
3.4	Certificate of Formation of Merrill Communications LLC.
3.5	Articles of Incorporation of Merrill Real Estate Company.
3.6	Articles of Incorporation of Merrill/Magnus Publishing Corporation, as amended.
3.7	Articles of Incorporation of Merrill/New York Company, as amended.
3.8	Articles of Incorporation of Merrill/May, Inc., as amended.
3.9	Articles of Incorporation of Merrill/Alternatives, Inc., as amended.
3.10	Articles of Incorporation of Merrill International Inc.
3.11	Articles of Incorporation of FMC Resource Management Corporation, as amended.
3.12	Articles of Incorporation of Merrill Training & Technology, Inc., as amended.
3.13	Articles of Incorporation of Merrill/Global Inc.
3.14	Articles of Incorporation of Merrill/Executech, Inc., as amended.
3.15	Articles of Incorporation of Merrill/Daniels, Inc., as amended.
3.16	Restated Bylaws of Merrill Corporation, as amended.
3.17	Amended and Restated Limited Liability Company Agreement of Merrill Communications LLC.
3.18	Bylaws of Merrill Real Estate Company.
3.19	Bylaws of Merrill/Magnus Publishing Corporation.
3.20	Bylaws of Merrill/New York Company.
3.21	Bylaws of Merrill/May, Inc.
3.22	Bylaws of Merrill/Alternatives, Inc.
3.23	Bylaws of Merrill International Inc.
3.24	Amended and Restated Bylaws of FMC Resource Management Corporation.
3.25	Bylaws of Merrill Training & Technology, Inc.
3.26	Bylaws of Merrill/Global Inc.
3.27	Bylaws of Merrill/Executech, Inc.
3.28	Bylaws of Merrill/Daniels, Inc.
4.1	Indenture dated as of November 23, 1999 among Merrill, the Guarantors and Norwest Bank Minnesota, N.A., as Trustee.
4.2	A/B Exchange Registration Rights Agreement dated November 23, 1999 among Merrill, the Guarantors and Donaldson, Lufkin & Jenrette Securities Corporation.
4.3	Warrant Registration Rights Agreement dated November 23, 1999 among Merrill, the Guarantors and Donaldson, Lufkin & Jenrette Securities Corporation.
4.4	Warrant Agreement between Merrill and Norwest Bank Minnesota, N.A. dated November 23, 1999 issued in connection with November 1999 unit offering.
4.5	Form of Warrant to purchase shares of class B common stock dated November 23, 1999 issued in connection with November 1999 equity investment.
5.1	Opinion and Consent of Oppenheimer Wolff & Donnelly LLP.
10.1	Purchase Agreement dated as of November 18, 1999 among Merrill, the Guarantors and Donaldson Lufkin & Jenrette Securities Corporation.
10.2	Credit Agreement dated as of November 23, 1999 among Merrill, as a Guarantor, Merrill Communications LLC, as the Borrower, Various Financial Institutions, as the Lenders, DLJ Capital Funding, Inc., as the Syndication Agent for the Lenders, Wells Fargo Bank, N.A., as the Documentation Agent for the Lenders, and U.S. Bank National Association, as the Administrative Agent for the Lenders.
10.3	Investors' Agreement dated November 23, 1999 among Merrill and the shareholders party thereto.
10.4	Employment Agreement effective as of November 23, 1999 between Merrill and John W. Castro.
10.5	Employment Agreement effective as of November 23, 1999 between Merrill and Rick R. Atterbury.
10.6	1999 Stock Option Plan.
10.7	Direct Investment Plan.
10.8	Form of Participation Agreement in 1999 Stock Option Plan and Direct Investment Plan between Merrill and each of its executive officers.
10.9	Form of Letter Agreement effective May 28, 1998 with Kay A. Barber, Steven J. Machov and Kathleen A. Larkin.
10.10	Stock Purchase Agreement dated March 28, 1996 by and among Merrill Corporation and the Shareholders of FMC Resource Management Corporation.
10.11	Asset Purchase Agreement dated as of June 11, 1998 among Merrill Acquisition Corporation and Executech, Inc., World Wide Scan Services, LLC, the Shareholders of Executech, Inc. and the Members of World Wide Scan Services LLC.
10.12	First Amendment to Asset Purchase Agreement dated December 18, 1998 among Merrill/Executech, Inc. and Executech, Inc., World Wide Scan Services, LLC, the Shareholders of Executech, Inc. and the Members of World Wide Scan Services LLC.
10.13	Second Amendment to Asset Purchase Agreement dated effective as of June 11, 1998 among Merrill/Executech, Inc. and Executech, Inc., World Wide Scan Services, LLC, the Shareholders of Executech, Inc. and the Members of World Wide Scan Services LLC.
10.14	Asset Purchase Agreement dated March 11, 1999 among Merrill Daniels, Inc., Daniels Printing, Limited Partnership and all of the partners of Daniels Printing Limited Partnership.
10.15	Facilities Lease dated October 1, 1985 between the Port Authority of the City of Saint Paul as lessor and Merrill Corporation as lessee.
10.16	Land Lease dated October 1, 1985 between the Port Authority of the City of Saint Paul as lessor and Merrill Corporation as lessee.
10.17	Lease dated as of May 1, 1994 between The Rector, Church-Wardens, and Vestrymen of Trinity Church in the City of New York, as landlord and The Corporate Printing Company, Inc., as lessee, assignor to Merrill/New York Company.
10.18	Office Lease Agreement dated July 30, 1998 between Beametfed Inc. and Merrill Corporation.
10.19	Agreement of Lease dated January 25, 1995 between East 55th Street Limited Partnership (assignee of The Overton-La Cholla Joint Venture) and Merrill Daniels, Inc. (assignee to Daniels Printing, Limited Partnership) .
12.1	Statement of earnings to fix charges.
21.1	Subsidiaries of Merrill.
23.1	Consent of Oppenheimer Wolff & Donnelly LLP.
23.3	Consent of PricewaterhouseCoopers, LLP.
24.1	Powers of Attorney.
25.1	Statement of Eligibility and Qualification under the Trust Indenture Act of 1939 on Form T-1 of Norwest Bank Minnesota, N.A. to act as Trustee under the indenture.
27.1	Financial Data Schedule.
99.1	Form of Letter of Transmittal.
99.2	Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees.
99.3	Form of Letter to Clients.
99.4	Form of Notice of Guaranteed Delivery.

b.  Financial Statements Schedules.

    Schedule II - Valuation and Qualifying Accounts

Item 22. Undertakings.

    Each of the undersigned registrants hereby undertakes:

    1.  To file, during any period in which offers or sales are being made of the securities registered hereby, a post-effective amendment to this registration statement:

    a.  To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;

    b.  To reflect in the prospectus any facts or events arising after the effective date of this registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this registration statement.

    Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and

    c.  To include any material information with respect to the plan of distribution not previously disclosed in this registration statement or any material change to such information in this registration statement; provided, however, that the undertakings set forth in paragraphs (a) and (b) above shall not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in this registration statement.

    2.  That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment will be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time will be deemed to be the initial bona fide offering thereof.

    3.  To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

    4.  That, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in this registration statement will be deemed to be a new registration statement relating to the securities offered herein, and the offering of such securities at that time will be deemed to be the initial bona fide offering thereof.

    5.  To respond to requests for information that is incorporated by reference into this prospectus pursuant to Item 4, 10(b), 11, or 13 of this form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request.

    6.  To supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective.

    Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of each of the registrants pursuant to the foregoing provisions, or otherwise, each of the registrants has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrants of expenses incurred or paid by a director, officer, or controlling person of the registrants in the successful defense of any action, suit, or proceeding) is asserted by such director, officer, or controlling person in connection with the securities being registered, each of the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue.

SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of St. Paul, State of Minnesota, on February 18, 2000.

MERRILL CORPORATION
By:	/s/ JOHN W. CASTRO John W. Castro President and Chief Executive Officer (Principal Executive Officer)

POWER OF ATTORNEY

    Each person whose signature appears below constitutes and appoints John W. Castro, Rick R. Atterbury and Steven J. Machov, and each of them, his or her true and lawful attorney-in-fact and agent with full powers of substitution and resubstitution, for and in his or her name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this registration statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent or his substitute or substitutes, may lawfully do or cause to be done by virtue thereof.

    Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed on February 18, 2000 by the following persons in the capacities indicated.

Signature	Title
/s/ JOHN W. CASTRO John W. Castro	President, Chief Executive Officer and Director (Principal Executive Officer)
/s/ RICK R. ATTERBURY Rick R. Atterbury	Executive Vice President, Chief Technology Officer and Director
/s/ KAY A. BARBER Kay A. Barber	Chief Financial Officer (Principal Financial and Accounting Officer)
/s/ LAWRENCE M. SCHLOSS Lawrence M. Schloss	Director
/s/ WILLIAM F. DAWSON, JR. William F. Dawson, Jr.	Director
/s/ KEITH R. PALUMBO Keith R. Palumbo	Director

SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of St. Paul, State of Minnesota, on February 18, 2000.

MERRILL COMMUNICATIONS LLC
By:	/s/ JOHN W. CASTRO John W. Castro President and Chief Executive Officer (Principal Executive Officer)

POWER OF ATTORNEY

    Each person whose signature appears below constitutes and appoints John W. Castro, Rick R. Atterbury and Steven J. Machov, and each of them, his or her true and lawful attorney-in-fact and agent with full powers of substitution and resubstitution, for and in his or her name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this registration statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent or his substitute or substitutes, may lawfully do or cause to be done by virtue thereof.

    Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed on February 18, 2000 by the following persons in the capacities indicated.

Signature	Title
/s/ JOHN W. CASTRO John W. Castro	President, Chief Executive Officer and Director (Principal Executive Officer)
/s/ RICK R. ATTERBURY Rick R. Atterbury	Vice President and Chief Technology Officer
/s/ KAY A. BARBER Kay A. Barber	Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer)
/s/ LAWRENCE M. SCHLOSS Lawrence M. Schloss	Director
/s/ WILLIAM F. DAWSON, JR. William F. Dawson, Jr.	Director
/s/ KEITH R. PALUMBO Keith R. Palumbo	Director

SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of St. Paul, State of Minnesota, on February 18, 2000.

MERRILL REAL ESTATE COMPANY
By:	/s/ JOHN W. CASTRO John W. Castro President and Chief Executive Officer (Principal Executive Officer)

POWER OF ATTORNEY

    Each person whose signature appears below constitutes and appoints John W. Castro, Rick R. Atterbury and Steven J. Machov, and each of them, his or her true and lawful attorney-in-fact and agent with full powers of substitution and resubstitution, for and in his or her name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this registration statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent or his substitute or substitutes, may lawfully do or cause to be done by virtue thereof.

    Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed on February 18, 2000 by the following persons in the capacities indicated.

Signature	Title
/s/ JOHN W. CASTRO John W. Castro	President, Chief Executive Officer and Director (Principal Executive Officer)
/s/ RICK R. ATTERBURY Rick R. Atterbury	Executive Vice President and Director
/s/ KAY A. BARBER Kay A. Barber	Treasurer (Principal Financial and Accounting Officer)
/s/ STEVEN J. MACHOV Steven J. Machov	Secretary and Director

SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of St. Paul, State of Minnesota, on February 18, 2000.

MERRILL/MAGNUS PUBLISHING CORPORATION
By:	/s/ STEVEN J. MACHOV Steven J. Machov President and Secretary (Principal Executive Officer)

POWER OF ATTORNEY

    Each person whose signature appears below constitutes and appoints John W. Castro, Rick R. Atterbury and Steven J. Machov, and each of them, his or her true and lawful attorney-in-fact and agent with full powers of substitution and resubstitution, for and in his or her name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this registration statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent or his substitute or substitutes, may lawfully do or cause to be done by virtue thereof.

    Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed on February 18, 2000 by the following persons in the capacities indicated.

Signature	Title
/s/ STEVEN J. MACHOV Steven J. Machov	President, Secretaty and Director (Principal Executive Officer)
/s/ JOHN W. CASTRO John W. Castro	Chairman of the Board and Director
/s/ RICK R. ATTERBURY Rick R. Atterbury	Vice President and Director
/s/ KAY A. BARBER Kay A. Barber	Treasurer and Director (Principal Financial and Accounting Officer)
/s/ NANCY LAKE-SMITH Nancy Lake-Smith	Director

SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of St. Paul, State of Minnesota, on February 18, 2000.

MERRILL/NEW YORK COMPANY
By:	/s/ B. MICHAEL JAMES B. Michael James President (Principal Executive Officer)

POWER OF ATTORNEY

    Each person whose signature appears below constitutes and appoints John W. Castro, Rick R. Atterbury and Steven J. Machov, and each of them, his or her true and lawful attorney-in-fact and agent with full powers of substitution and resubstitution, for and in his or her name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this registration statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent or his substitute or substitutes, may lawfully do or cause to be done by virtue thereof.

    Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed on February 18, 2000 by the following persons in the capacities indicated.

Signature	Title
/s/ B. MICHAEL JAMES B. Michael James	President and Director (Principal Executive Officer)
/s/ JOHN W. CASTRO John W. Castro	Chairman of the Board and Director
/s/ RICK R. ATTERBURY Rick R. Atterbury	Director
/s/ KAY A. BARBER Kay A. Barber	Treasurer (Principal Financial and Accounting Officer)

SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of St. Paul, State of Minnesota, on February 18, 2000.

MERRILL/MAY INC.
By:	/s/ JOSEPH PETTIROSSI Joseph Pettirossi President (Principal Executive Officer)

POWER OF ATTORNEY

    Each person whose signature appears below constitutes and appoints John W. Castro, Rick R. Atterbury and Steven J. Machov, and each of them, his or her true and lawful attorney-in-fact and agent with full powers of substitution and resubstitution, for and in his or her name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this registration statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent or his substitute or substitutes, may lawfully do or cause to be done by virtue thereof.

    Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed on February 18, 2000 by the following persons in the capacities indicated.

Signature	Title
/s/ JOSEPH PETTIROSSI Joseph Pettirossi	President (Principal Executive Officer)
/s/ KAY A. BARBER Kay A. Barber	Treasurer and Director (Principal Financial and Accounting Officer)
/s/ JOHN W. CASTRO John W. Castro	Director
/s/ STEVEN J. MACHOV Steven J. Machov	Secretary and Director

SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of St. Paul, State of Minnesota, on February 18, 2000.

MERRILL/ALTERNATIVES, INC.
By:	/s/ JOSEPH PETTIROSSI Joseph Pettirossi President (Principal Executive Officer)

POWER OF ATTORNEY

    Each person whose signature appears below constitutes and appoints John W. Castro, Rick R. Atterbury and Steven J. Machov, and each of them, his or her true and lawful attorney-in-fact and agent with full powers of substitution and resubstitution, for and in his or her name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this registration statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent or his substitute or substitutes, may lawfully do or cause to be done by virtue thereof.

    Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed on February 18, 2000 by the following persons in the capacities indicated.

Signature	Title
/s/ JOSEPH PETTIROSSI Joseph Pettirossi	President and Director (Principal Executive Officer)
/s/ KAY A. BARBER Kay A. Barber	Chief Financial Officer (Principal Financial and Accounting Officer)
/s/ JOHN W. CASTRO John W. Castro	Director

SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of St. Paul, State of Minnesota, on February 18, 2000.

MERRILL INTERNATIONAL INC.
By:	/s/ ROBERT M. CHEPAK Robert M. Chepak President (Principal Executive Officer)

POWER OF ATTORNEY

    Each person whose signature appears below constitutes and appoints John W. Castro, Rick R. Atterbury and Steven J. Machov, and each of them, his or her true and lawful attorney-in-fact and agent with full powers of substitution and resubstitution, for and in his or her name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this registration statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent or his substitute or substitutes, may lawfully do or cause to be done by virtue thereof.

    Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed on February 18, 2000 by the following persons in the capacities indicated.

Signature	Title
/s/ ROBERT M. CHEPAK Robert M. Chepak	President (Principal Executive Officer)
/s/ KAY A. BARBER Kay A. Barber	Treasurer (Principal Financial and Accounting Officer)
/s/ RICK R. ATTERBURY Rick R. Atterbury	Director
/s/ STEVEN J. MACHOV Steven J. Machov	Secretary and Director
/s/ KATHLEEN A. LARKIN Kathleen A. Larkin	Director

SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of St. Paul, State of Minnesota, on February 18, 2000.

FMC RESOURCE MANAGEMENT CORPORATION
By:	/s/ JOSEPH PETTIROSSI Joseph Pettirossi   Chief Executive Officer (Principal Executive Officer)

POWER OF ATTORNEY

    Each person whose signature appears below constitutes and appoints John W. Castro, Rick R. Atterbury and Steven J. Machov, and each of them, his or her true and lawful attorney-in-fact and agent with full powers of substitution and resubstitution, for and in his or her name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this registration statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent or his substitute or substitutes, may lawfully do or cause to be done by virtue thereof.

    Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed on February 18, 2000 by the following persons in the capacities indicated.

Signature	Title
/s/ JOSEPH PETTIROSSI Joseph Pettirossi	Chief Executive Officer and Director (Principal Executive Officer)
/s/ KAY A. BARBER Kay A. Barber	Treasurer (Principal Financial and Accounting Officer)
/s/ JOHN W. CASTRO John W. Castro	Director
/s/ STEVEN J. MACHOV Steven J. Machov	Secretary and Director

SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of St. Paul, State of Minnesota, on February 18, 2000.

MERRILL TRAINING & TECHNOLOGY, INC.
By:	/s/ JOHN W. CASTRO John W. Castro Chief Executive Officer (Principal Executive Officer)

POWER OF ATTORNEY

    Each person whose signature appears below constitutes and appoints John W. Castro, Rick R. Atterbury and Steven J. Machov, and each of them, his or her true and lawful attorney-in-fact and agent with full powers of substitution and resubstitution, for and in his or her name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this registration statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent or his substitute or substitutes, may lawfully do or cause to be done by virtue thereof.

    Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed on February 18, 2000 by the following persons in the capacities indicated.

Signature	Title
/s/ JOHN W. CASTRO John W. Castro	Chief Executive Officer and Director (Principal Executive Officer)
/s/ RICK R. ATTERBURY Rick R. Atterbury	Vice President and Director
/s/ KAY A. BARBER Kay A. Barber	Treasurer (Principal Financial and Accounting Officer)
/s/ STEVEN J. MACHOV Steven J. Machov	Secretary and Director

SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of St. Paul, State of Minnesota, on February 18, 2000.

MERRILL/GLOBAL, INC.
By:	/s/ ROBERT M. CHEPAK Robert M. Chepak President (Principal Executive Officer)

POWER OF ATTORNEY

    Each person whose signature appears below constitutes and appoints John W. Castro, Rick R. Atterbury and Steven J. Machov, and each of them, his or her true and lawful attorney-in-fact and agent with full powers of substitution and resubstitution, for and in his or her name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this registration statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent or his substitute or substitutes, may lawfully do or cause to be done by virtue thereof.

    Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed on February 18, 2000 by the following persons in the capacities indicated.

Signature	Title
/s/ ROBERT M. CHEPAK Robert M. Chepak	President (Principal Executive Officer)
/s/ RICK R. ATTERBURY Rick R. Atterbury	Vice President and Director
/s/ KAY A. BARBER Kay A. Barber	Treasurer (Principal Financial and Accounting Officer)
/s/ STEVEN J. MACHOV Steven J. Machov	Secretary and Director
/s/ KATHLEEN A. LARKIN Kathleen A. Larkin	Director

SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of St. Paul, State of Minnesota, on February 18, 2000.

MERRILL/EXECUTECH, INC.
By:	/s/ JOHN W. CASTRO John W. Castro President (Principal Executive Officer)

POWER OF ATTORNEY

    Each person whose signature appears below constitutes and appoints John W. Castro, Rick R. Atterbury and Steven J. Machov, and each of them, his or her true and lawful attorney-in-fact and agent with full powers of substitution and resubstitution, for and in his or her name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this registration statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent or his substitute or substitutes, may lawfully do or cause to be done by virtue thereof.

    Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed on February 18, 2000 by the following persons in the capacities indicated.

Signature	Title
/s/ JOHN W. CASTRO John W. Castro	President (Principal Executive Officer)
/s/ RICK R. ATTERBURY Rick R. Atterbury	Vice President and Director
/s/ KAY A. BARBER Kay A. Barber	Treasurer (Principal Financial and Accounting Officer)
/s/ STEVEN J. MACHOV Steven J. Machov	Secretary and Director

SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of St. Paul, State of Minnesota, on February 18, 2000.

MERRILL/DANIELS, INC.
By:	/s/ JOHN W. CASTRO John W. Castro President (Principal Executive Officer)

POWER OF ATTORNEY

    Each person whose signature appears below constitutes and appoints John W. Castro, Rick R. Atterbury and Steven J. Machov, and each of them, his or her true and lawful attorney-in-fact and agent with full powers of substitution and resubstitution, for and in his or her name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this registration statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent or his substitute or substitutes, may lawfully do or cause to be done by virtue thereof.

    Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed on February 18, 2000 by the following persons in the capacities indicated.

Signature	Title
/s/ JOHN W. CASTRO John W. Castro	Chief Executive Officer and Director (Principal Executive Officer)
/s/ RICK R. ATTERBURY Rick R. Atterbury	Vice President and Director
/s/ KAY A. BARBER Kay A. Barber	Treasurer (Principal Financial and Accounting Officer)
/s/ STEVEN J. MACHOV Steven J. Machov	Secretary and Director

INDEX TO EXHIBITS

No.	Item	Method of Filing
2.1	Agreement and Plan of Merger dated as of July 14, 1999 between Merrill and Viking Merger Sub, Inc., as amended.	Incorporated by reference to our Current Report on Form 8-K dated July 20, 1999.
3.1	Articles of Incorporation of Merrill Corporation.	Incorporated herein by reference to our Registration Statement on Form S-1 (File No. 33-4062).
3.2	Amendment to Articles of Incorporation of Merrill Corporation as of June 20, 1986 and March 28, 1987.	Incorporated herein by reference to our Annual Report on Form 10-K for the fiscal year ended January 31, 1987
3.3	Amendment to Articles of Incorporation of Merrill Corporation as of November 22, 1999.	Filed herewith.
3.4	Certificate of Formation of Merrill Communications LLC.	Filed herewith.
3.5	Articles of Incorporation of Merrill Real Estate Company.	Filed herewith.
3.6	Articles of Incorporation of Merrill/Magnus Publishing Corporation, as amended.	Filed herewith.
3.7	Articles of Incorporation of Merrill/New York Company, as amended.	Filed herewith.
3.8	Articles of Incorporation of Merrill/May, Inc., as amended.	Filed herewith.
3.9	Articles of Incorporation of Merrill/Alternatives, Inc., as amended.	Filed herewith.
3.10	Articles of Incorporation of Merrill International Inc.	Filed herewith.
3.11	Articles of Incorporation of FMC Resource Management Corporation, as amended.	Filed herewith.
3.12	Articles of Incorporation of Merrill Training & Technology, Inc., as amended.	Filed herewith.
3.13	Articles of Incorporation of Merrill/Global Inc.	Filed herewith.
3.14	Articles of Incorporation of Merrill/Executech, Inc., as amended.	Filed herewith.
3.15	Articles of Incorporation of Merrill/Daniels, Inc., as amended.	Filed herewith.
3.16	Restated Bylaws of Merrill Corporation, as amended.	Incorporated by reference to our Annual Report on Form 10-K for the fiscal year ended January 31, 1990.
3.17	Amended and Restated Limited Liability Company Agreement of Merrill Communications LLC.	Filed herewith.
3.18	Bylaws of Merrill Real Estate Company.	Filed herewith.
3.19	Bylaws of Merrill/Magnus Publishing Corporation.	Filed herewith.
3.20	Bylaws of Merrill/New York Company.	Filed herewith.
3.21	Bylaws of Merrill/May, Inc.	Filed herewith.
3.22	Bylaws of Merrill/Alternatives, Inc.	Filed herewith.
3.23	Bylaws of Merrill International Inc.	Filed herewith.
3.24	Amended and Restated Bylaws of FMC Resource Management Corporation.	Filed herewith.
3.25	Bylaws of Merrill Training & Technology, Inc.	Filed herewith.
3.26	Bylaws of Merrill/Global Inc.	Filed herewith.
3.27	Bylaws of Merrill/Executech, Inc.	Filed herewith.
3.28	Bylaws of Merrill/Daniels, Inc.	Filed herewith.
4.1	Indenture dated as of November 23, 1999 among Merrill, the Guarantors and Norwest Bank Minnesota, N.A., as Trustee.	Filed herewith.
4.2	A/B Exchange Registration Rights Agreement dated November 23, 1999 among Merrill, the Guarantors and Donaldson, Lufkin & Jenrette Securities Corporation.	Filed herewith.
4.3	Warrant Registration Rights Agreement dated November 23, 1999 among Merrill, the Guarantors and Donaldson, Lufkin & Jenrette Securities Corporation.	Filed herewith.
4.4	Warrant Agreement between Merrill and Norwest Bank Minnesota, N.A. dated November 23, 1999 issued in connection with November 1999 unit offering.	Filed herewith.
4.5	Form of Warrant to purchase shares of class B common stock dated November 23, 1999 issued in connection with November 1999 equity investment.	Filed herewith.
5.1	Opinion and Consent of Oppenheimer Wolff & Donnelly LLP.	Filed herewith.
10.1	Purchase Agreement dated as of November 18, 1999 among Merrill, the Guarantors and Donaldson Lufkin & Jenrette Securities Corporation.	Filed herewith.
10.2	Credit Agreement dated as of November 23, 1999 among Merrill, as a Guarantor, Merrill Communications LLC, as the Borrower, Various Financial Institutions, as the Lenders, DLJ Capital Funding, Inc., as the Syndication Agent for the Lenders, Wells Fargo Bank, N.A., as the Documentation Agent for the Lenders, and U.S. Bank National Association, as the Administrative Agent for the Lenders.	Filed herewith.
10.3	Investors' Agreement dated November 23, 1999 among Merrill and the shareholders party thereto.	Filed herewith.
10.4	Employment Agreement effective as of November 23, 1999 between Merrill and John W. Castro.	Filed herewith.
10.5	Employment Agreement effective as of November 23, 1999 between Merrill and Rick R. Atterbury.	Filed herewith.
10.6	1999 Stock Option Plan.	Filed herewith.
10.7	Direct Investment Plan.	Filed herewith.
10.8	Form of Participation Agreement in 1999 Stock Option Plan and Direct Investment Plan between Merrill and each of its executive officers.	Filed herewith.
10.9	Form of Letter Agreement effective May 28, 1998 with Kay A. Barber, Steven J. Machov and Kathleen A. Larkin.	Incorporated by reference to our Annual Report on Form 10-K for the fiscal year ended January 31, 1999.
10.10	Stock Purchase Agreement dated March 28, 1996 by and among Merrill Corporation and the Shareholders of FMC Resource Management Corporation.	Incorporated by reference to our Current Report on Form 8-K dated April 15, 1996.
10.11	Asset Purchase Agreement dated as of June 11, 1998 among Merrill Acquisition Corporation and Executech, Inc., World Wide Scan Services, LLC, the Shareholders of Executech, Inc. and the Members of World Wide Scan Services LLC.	Incorporated by reference to our Annual Report on Form 10-K for the fiscal year ended January 31, 1999.
10.12	First Amendment to Asset Purchase Agreement dated December 18, 1998 among Merrill/Executech, Inc. and Executech, Inc., World Wide Scan Services, LLC, the Shareholders of Executech, Inc. and the Members of World Wide Scan Services LLC.	Incorporated by reference to our Annual Report on Form 10-K for the fiscal year ended January 31, 1999.
10.13	Second Amendment to Asset Purchase Agreement dated effective as of June 11, 1998 among Merrill/Executech, Inc. and Executech, Inc., World Wide Scan Services, LLC, the Shareholders of Executech, Inc. and the Members of World Wide Scan Services LLC.	Incorporated by reference to our Annual Report on Form 10-K for the fiscal year ended January 31, 1999.
10.14	Asset Purchase Agreement dated March 11, 1999 among Merrill Daniels, Inc., Daniels Printing, Limited Partnership and all of the partners of Daniels Printing Limited Partnership.	Incorporated by reference to our Current Report on Form 8-K filed on April 29, 1999.
10.15	Facilities Lease dated October 1, 1985 between the Port Authority of the City of Saint Paul as lessor and Merrill Corporation as lessee.	Incorporated by reference to our Registration Statement on Form S-1 (File No. 33-4062).
10.16	Land Lease dated October 1, 1985 between the Port Authority of the City of Saint Paul as lessor and Merrill Corporation as lessee.	Incorporated by reference to our Registration Statement on Form S-1 (File No. 33-4062).
10.17	Lease dated as of May 1, 1994 between The Rector, Church-Wardens, and Vestrymen of Trinity Church in the City of New York, as landlord and The Corporate Printing Company, Inc., as lessee, assignor to Merrill/New York Company.	Incorporated by reference to our Annual Report on Form 10-K for the fiscal year ended January 31, 1997.
10.18	Office Lease Agreement dated July 30, 1998 between Beametfed Inc. and Merrill Corporation.	Incorporated by reference to our Annual Report on Form 10-K for the fiscal year ended January 31, 1999.
10.19	Agreement of Lease dated January 25, 1995 between East 55th Street Limited Partnership (assignee of The Overton-La Cholla Joint Venture) and Merrill Daniels, Inc. (assignee to Daniels Printing, Limited Partnership) .	Incorporated by reference to our Annual Report on Form 10-K for the fiscal year ended January 31, 1999.
12.1	Statement of earnings to fix charges.	Filed herewith.
21.1	Subsidiaries of Merrill.	Filed herewith.
23.1	Consent of Oppenheimer Wolff & Donnelly LLP.	Included in Exhibit 5.1.
23.3	Consent of PricewaterhouseCoopers LLP	Filed herewith.
24.1	Powers of Attorney.	Included in signature pages to this registration statement.
25.1	Statement of Eligibility and Qualification under the Trust Indenture Act of 1939 on Form T-1 of Norwest Bank Minnesota, N.A. to act as Trustee under the indenture.	Filed herewith.
27.1	Financial Data Schedule.	Filed herewith.
99.1	Form of Letter of Transmittal.	Filed herewith.
99.2	Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees.	Filed herewith.
99.3	Form of Letter to Clients.	Filed herewith.
99.4	Form of Notice of Guaranteed Delivery.	Filed herewith.

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PROSPECTUS SUMMARY
SUMMARY OF THE TERMS OF THE EXCHANGE OFFER
SUMMARY OF THE TERMS OF THE EXCHANGE NOTES

OUR COMPANY
OUR COMPETITIVE STRENGTHS
THE MERGER
EMPLOYEE OFFERING

OUR ADDRESS
SUMMARY HISTORICAL AND UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL DATA

FORWARD-LOOKING STATEMENTS
THE EXCHANGE OFFER

Delivery To: Norwest Bank Minnesota, N.A., Exchange Agent
USE OF PROCEEDS

CAPITALIZATION
SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

MANAGEMENT
EXECUTIVE COMPENSATION
Summary Compensation Table
Option Grants in Last Fiscal Year
Aggregated Option Exercises in Last Fiscal Year And Fiscal Year-End Option Values

SECURITY OWNERSHIP OF MANAGEMENT AND BENEFICIAL OWNERS OF FIVE PERCENT OR MORE
RELATED PARTY RELATIONSHIPS AND TRANSACTIONS

DESCRIPTION OF MERRILL COMMUNICATIONS LLC'S CREDIT FACILITY
DESCRIPTION OF EXCHANGE NOTES

MATERIAL UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
PLAN OF DISTRIBUTION
WHERE YOU CAN FIND MORE INFORMATION
LEGAL MATTERS
EXPERTS

CONSOLIDATED BALANCE SHEETS
CONSOLIDATED STATEMENTS OF OPERATIONS

CONSOLIDATED STATEMENTS OF CASH FLOWS
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

CONSOLIDATED BALANCE SHEETS
CONSOLIDATED STATEMENTS OF OPERATIONS

PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

EX-3.3

       [MINNESOTA                      MINNESOTA SECRETARY OF STATE
        STATE SEAL]               AMENDMENT OF ARTICLES OF INCORPORATION

BEFORE COMPLETING THIS FORM, PLEASE READ INSTRUCTIONS LISTED BELOW.

CORPORATE NAME:  (List the name of the company prior to any desired name change)

                              Merrill Corporation
- --------------------------------------------------------------------------------

This amendment is effective on the day it is filed with the Secretary of State,
unless you indicate another date, no later than 30 days after filing with the
Secretary of State. _________________________________

The following amendment(s) of articles regulating the above corporation were
adopted: (Insert full text of newly amended article(s) indicating which
article(s) is (are) being amended or added.) If the full text of the amendment
will not fit in the space provided, attach additional numbered pages. (Total
number of pages including this form 2.)

                                  ARTICLE VI


                         See Exhibit A attached hereto.







This amendment has been approved pursuant to MINNESOTA STATUTES CHAPTER 302A OR
317A. I certify that I am authorized to execute this amendment and I further
certify that I understand that by signing this amendment, I am subject to the
penalties of perjury as set forth in section 609.48 as if I had signed this
amendment under oath.


                                            /s/ Steven J. Machov
                                           ------------------------------------
                                            Steven J. Machov, Secretary
                                                (Signature of Authorized Person)
- -------------------------------------------------------------------------------
INSTRUCTIONS                                           FOR OFFICE USE ONLY

1.  Type or print with black ink.
2.  A Filing Fee of:  $35.00, made payable to the
    Secretary of State
3.  Return completed forms to:

         Secretary of State
         180 State Office Building
         100 Constitution Ave.
         St. Paul, MN 55155-1299
         (612) 296-2803




                                                                       EXHIBIT A

         RESOLVED, That Article VI of Merrill Corporation's Articles of
Incorporation is hereby amended in its entirety to read as follows:

                                   ARTICLE VI

(a)  The aggregate number of shares that this Corporation has authority to issue
     is thirty-five million five hundred thousand (35,500,000) shares which
     shall consist of: (i) five hundred thousand (500,000) undesignated shares;
     (ii) twenty-five million (25,000,000) shares of voting common stock of $.01
     par value per share; and (iii) ten million (10,000,000) shares of voting
     Class B common stock of $.01 par value per share. The voting common stock
     and Class B common stock shall be identical in all respects and shall have
     equal rights and privileges, except as provided in paragraph (b) below.
     Only the authorization of the Board of Directors is necessary for this
     Corporation to issue shares and other securities and rights to purchase
     shares and other securities. The Board of Directors is authorized to
     establish, from the undesignated shares, one or more classes and series of
     shares to designate each such class and series and to fix the relative
     rights and preferences of each such class and series. No holders of shares
     shall be entitled as such preemptively or as a matter of right to subscribe
     for or purchase any part of any issue of stock or any securities
     convertible into stock of any class whatsoever, whether now or hereafter
     authorized and whether issued for cash, property, services, or by way of
     dividends or otherwise, unless the Board of Directors shall grant
     preemptive rights to the holders of some or all of the undesignated shares
     with respect to some or all of the undesignated shares. This Corporation
     may issue shares and it may issue shares of any class or series of the
     undesignated shares to the holders of shares of voting common stock or
     Class B common stock. There shall be no right of cumulative voting.

(b)  The Class B common stock shall, with respect to rights on liquidation,
     winding up or dissolution of the Corporation, rank prior to the voting
     common stock, but junior to all other classes and series of equity
     securities of the Corporation now or hereafter authorized, issued or
     outstanding (such other classes and series of equity securities
     collectively referred to herein as "SENIOR STOCK"). In the event of any
     voluntary or involuntary liquidation, dissolution or winding up of the
     Corporation, the holders of outstanding shares of Class B common stock
     shall be entitled to receive out of the assets of the Corporation available
     for distribution to shareholders, before any distribution of assets shall
     be made to the holders of shares of voting common stock, an amount equal to
     One Dollar ($1.00) per outstanding share of Class B common stock; PROVIDED,
     HOWEVER, if, upon any such voluntary or involuntary liquidation,
     dissolution or winding up of the Corporation, the amounts payable with
     respect to Senior Stock are not paid in full, the holders of voting common
     stock and Class B common stock shall not receive any distribution of assets
     of the Corporation. If, upon any voluntary or involuntary liquidation,
     dissolution or winding up of the Corporation, the amounts payable with
     respect to the Class B common stock are not paid in full, the holders of
     voting common stock shall not receive any distribution of assets of the
     Corporation. All distributions made with respect to the Class B common
     stock in connection with such a liquidation, dissolution or winding up of
     the Corporation shall be made pro rata to the holders entitled thereto.
     After amounts payable with respect to Senior Stock are paid in full and
     after payment to the holders of the Class B common stock of the full
     preferential amount provided for in this paragraph (b) of Article VI, the
     holders of the voting common stock and Class B common stock shall share on
     a pro rata basis in any distribution of assets of the Corporation. Neither
     the voluntary sale, conveyance, exchange or transfer (for cash, securities
     or other consideration) of all or any part of the property or assets of the
     Corporation, nor the consolidation or merger or other business combination
     of the Corporation with or into any other corporation or corporations,
     shall be deemed to be a voluntary or involuntary liquidation, dissolution
     or winding up of the Corporation, unless such voluntary sale, conveyance,
     exchange or transfer shall be in connection with a plan of liquidation,
     dissolution or winding up of the Corporation.




              CERTIFICATE OF DESIGNATION OF 14.5% SENIOR PREFERRED
                                 STOCK DUE 2011

                                       of

                               MERRILL CORPORATION

       Pursuant to Section 401, Subd. 3(b) of the Business Corporation Act
                            of the State of Minnesota

         I, the undersigned, Steven J. Machov, Secretary of Merrill Corporation,
a Minnesota corporation (hereinafter called the "CORPORATION"), pursuant to the
provisions of Section 401, Subd. 3(b) of the Business Corporation Act of the
State of Minnesota, do hereby make this Certificate of Designations and do
hereby state and certify that pursuant to the authority expressly vested in the
Board of Directors of the Corporation by the Articles of Incorporation, the
Board of Directors on November 19, 1999, in accordance with Section 401, Subd.
3, of the Business Corporation Act of the State of Minnesota, duly adopted the
following resolution establishing a series of 500,000 shares of preferred stock,
to be designated as 14.5% Senior Preferred Stock due 2011:

         RESOLVED, that, pursuant to the authority vested in the Board of
Directors by the Articles of Incorporation (which authorizes the Board of
Directors to designate 500,000 undesignated shares as shares of preferred stock,
$0.01 par value ("PREFERRED STOCK")), the Board of Directors hereby establishes
a series of 14.5% Senior Preferred Stock due 2011 and hereby states the
designation and number of shares, and fixes the powers, preferences and
relative, participating, optional and other special rights, and the
qualifications, limitations and restrictions, of such series of Preferred Stock.

         RESOLVED, that each share of such series of Preferred Stock shall rank
equally in all respects and shall be subject to the following provisions:

         (1) NUMBER AND DESIGNATION. 500,000 shares of the Preferred Stock of
the Corporation shall be designated as 14.5% Senior Preferred Stock due 2011
(the "SENIOR PREFERRED STOCK").

         (2) RANK. The Senior Preferred Stock shall, with respect to dividend
rights and rights on liquidation, dissolution and winding up, rank prior to all
classes of or series of common stock of the Corporation, including any class of
the Corporation's common shares, par value $0.01 per share ("COMMON SHARES"),
and each other class of capital stock of the Corporation, the terms of which
provide that such class shall rank junior to the Senior Preferred Stock or the
terms of which do not specify any rank relative to the Senior Preferred Stock.
All equity securities of the Corporation to which the Senior Preferred Stock
ranks prior (whether with respect to dividends



or upon liquidation, dissolution, winding up or otherwise), including the
Common Shares, are collectively referred to herein as the "JUNIOR
SECURITIES." All equity securities of the Corporation with which the Senior
Preferred Stock ranks on a parity (whether with respect to dividends or upon
liquidation, dissolution or winding up) are collectively referred to herein
as the "PARITY SECURITIES." The respective definitions of Junior Securities
and Parity Securities shall also include any rights or options exercisable
for or convertible into any of the Junior Securities and Parity Securities,
as the case may be. The Senior Preferred Stock shall be subject to the right
of the Corporation to create Junior Securities.

         (3) DIVIDENDS.

                  (a) (i) The holders of shares of Senior Preferred Stock shall
                  be entitled to receive, when, as and if declared by the Board
                  of Directors, out of funds legally available for the payment
                  of dividends, dividends (subject to Sections 3(a)(ii) and
                  (iii) hereof) at a rate equal to 14.5% per annum (computed on
                  the basis of a 360 day year of twelve 30 day months) (the
                  "DIVIDEND RATE") on the Liquidation Value (as defined below)
                  of each share of Senior Preferred Stock on and as of each
                  Dividend Payment Date (as defined below). In the event the
                  Corporation is unable or shall fail to discharge its
                  obligation to redeem all outstanding shares of Senior
                  Preferred Stock pursuant to paragraph 5(c) or 5(d) hereof, the
                  Dividend Rate shall increase by .25 percent per quarter (each,
                  a "DEFAULT DIVIDEND") for each quarter or portion thereof
                  following the date on which such redemption was required to be
                  made until cured, PROVIDED that the aggregate increase shall
                  not exceed 5%. Such dividends shall be payable in the manner
                  set forth below in Sections 3(a)(ii) and (iii) quarterly on
                  February 15, May 15, August 15, and November 15 of each year
                  (unless such day is not a business day, in which event on the
                  next succeeding business day) (each of such dates being a
                  "DIVIDEND PAYMENT DATE" and each such quarterly period being a
                  "DIVIDEND PERIOD"). Such dividends shall be cumulative from
                  the date of issue, whether or not in any Dividend Period or
                  Periods there shall be funds of the Corporation legally
                  available for the payment of such dividends.

                  (ii) On and prior to November 15, 2004, dividends shall not be
                  payable in cash to holders of shares of Senior Preferred Stock
                  but shall, subject to Section 3(b) hereof, accrete to the
                  Liquidation Value in accordance with Section 4(a) hereof
                  whether or not such dividends are declared by the Board of
                  Directors.

                  (iii) On each Dividend Payment Date following November 15,
                  2004, each such dividend shall be payable in cash on the
                  Liquidation Value per share of the Senior Preferred Stock, in
                  equal quarterly amounts at the Dividend Rate (to which the
                  Default Dividend, if any, shall be added), to the holders of
                  record of shares of the Senior Preferred Stock, as they appear
                  on the stock records of the Corporation at the close of
                  business on such record dates, not more than 60 days or less
                  than 10 days preceding the payment dates thereof, as shall be
                  fixed by the Board of Directors. Accrued and unpaid dividends
                  for any past Dividend Periods may be



                  declared and paid at any time, without reference to any
                  Dividend Payment Date, to holders of record on such date,
                  not more than 45 days preceding the payment date thereof,
                  as may be fixed by the Board of Directors.

         (b) At the written request of the holders of a majority of the shares
of Senior Preferred Stock, the Corporation shall, commencing on the first
Dividend Payment Date after such request and ending on November 15, 2004, be
required to pay all dividends on shares of Senior Preferred Stock by the
issuance of additional shares of Senior Preferred Stock ("ADDITIONAL SHARES")
but only if the Corporation shall have reserved and authorized for issuance the
full amount of Additional Shares. The Additional Shares shall be identical to
all other shares of Senior Preferred Stock, except as set forth in Section 4.
For the purposes of determining the number of Additional Shares to be issued as
dividends pursuant to this Paragraph (b), such Additional Shares shall be valued
at their Applicable Liquidation Value as provided in Section 4(c). The
entitlement to dividends under this paragraph (b) shall cumulate on Additional
Shares payable under this paragraph (b) whether or not such dividends are
declared by the Board of Directors.

         (c) Holders of shares of Senior Preferred Stock shall not be entitled
to any dividends, whether payable in cash, property or stock, in excess of the
cumulative dividends, as herein provided, on the Senior Preferred Stock. Except
as provided in this Section 3, no interest, or sum of money in lieu of interest,
shall be payable in respect of any dividend payment or payments on the Senior
Preferred Stock that may be in arrears.

         (d) So long as any shares of the Senior Preferred Stock are
outstanding, no dividends, except as described in the next succeeding sentence,
shall be declared or paid or set apart for payment and no distribution shall be
declared or made upon Parity Securities, nor shall any Parity Securities be
redeemed, purchased or otherwise acquired by the Corporation unless full
cumulative dividends (to the extent such dividends are payable in cash) have
been or contemporaneously are declared and paid or declared and a sum sufficient
for the payment thereof set apart for such payment on the Senior Preferred Stock
for all Dividend Periods terminating on or prior to the date of payment of the
dividend on such class or series of Parity Securities. When (to the extent such
dividends are payable in cash) dividends are not paid in full or a sum
sufficient for such payment is not set apart, as aforesaid, all dividends
declared upon shares of the Senior Preferred Stock and all dividends declared
upon any other class or series of Parity Securities shall (in each case, to the
extent payable in cash) be declared ratably in proportion to the respective
amounts of dividends accumulated and unpaid on the Senior Preferred Stock and
accumulated and unpaid on such Parity Securities.

         (e) So long as any shares of the Senior Preferred Stock are
outstanding, no dividends (other than dividends or distributions paid in shares
of, or options, warrants or rights to subscribe for or purchase shares of,
Junior Securities) shall be declared or paid or set apart for payment and no
other distribution shall be declared or made upon Junior Securities, nor shall
any Junior Securities be redeemed, purchased or otherwise acquired (other than a
redemption, purchase or other acquisition of Common Shares made for purposes of
an employee incentive or benefit plan of the Corporation or any subsidiary) (any
such dividend, distribution, redemption or purchase being hereinafter referred
to as a "JUNIOR SECURITIES DISTRIBUTION") for any consideration (nor



shall any moneys be paid to or made available for a sinking fund for the
redemption of any shares of any such stock) by the Corporation, directly or
indirectly (except by conversion into or exchange for Junior Securities),
unless in each case (i) the full cumulative dividends on all outstanding
shares of the Senior Preferred Stock and any other Parity Securities shall
(to the extent payable in cash) have been paid or set apart for payment for
all past Dividend Periods with respect to the Senior Preferred Stock and all
past dividend periods with respect to such Parity Securities and (ii) (to the
extent payable in cash) sufficient funds shall have been paid or set apart
for the payment of the dividend for the current Dividend Period with respect
to the Senior Preferred Stock and the current dividend period with respect to
such Parity Securities.

         (4) LIQUIDATION PREFERENCE. (a) In the event of any liquidation,
dissolution or winding up of the Corporation, whether voluntary or involuntary,
before any payment or distribution of the assets of the Corporation (whether
capital or surplus) shall be made to or set apart for the holders of Junior
Securities, the holders of the shares of Senior Preferred Stock shall be
entitled to receive an amount equal to the Liquidation Value of such share plus
any accrued and unpaid dividends, payable in cash, to the date of distribution.
"LIQUIDATION VALUE" on any date means, with respect to (x) any share of Senior
Preferred Stock other than any Additional Shares, the sum of (1) $80.00 per
share and (2) the aggregate of all dividends accreted on such share until the
most recent Dividend Payment Date upon which an accretion to Liquidation Value
has occurred (or if such date is a Dividend Payment Date upon which an accretion
to Liquidation Value has occurred, such date), PROVIDED that in the event of an
actual liquidation, dissolution or winding up of the Corporation or the
redemption of any shares of Senior Preferred Stock pursuant to Section 5
hereunder, the amount referred to in (2) shall be calculated by including
dividends accreting to the actual date of such liquidation, dissolution or
winding up or the redemption date, as the case may be, rather than the Dividend
Payment Date referred to above and PROVIDED FURTHER that in no event will
dividends accrete beyond the earlier of (i) November 15, 2004 and (ii) the most
recent Dividend Payment Date prior to the Dividend Payment Date on which
dividends on the Senior Preferred Stock are payable in Additional Shares and (y)
any Additional Share, the Applicable Liquidation Value; provided that, in the
event of an actual liquidation, dissolution or winding up of the Corporation or
the redemption of any shares of Senior Preferred Stock pursuant to Section 5
hereunder, the Applicable Liquidation Value shall be calculated to include,
without duplication, dividends accruing to the actual date of such liquidation,
dissolution or winding up or the redemption date, as the case may be. All
accretions to Liquidation Value will be calculated using compounding on a
quarterly basis (computed on the basis of a 360 day year of twelve 30 day
months). Except as provided in the preceding sentences, holders of shares of
Senior Preferred Stock shall not be entitled to any distribution in the event of
liquidation, dissolution or winding up of the affairs of the Corporation. If,
upon any liquidation, dissolution or winding up of the Corporation, the assets
of the Corporation, or proceeds thereof, distributable among the holders of the
shares of Senior Preferred Stock shall be insufficient to pay in full the
preferential amount aforesaid and liquidating payments on any Parity Securities,
then such assets, or the proceeds thereof, shall be distributed among the
holders of shares of Senior Preferred Stock and any such other Parity Securities
ratably in accordance with the respective amounts that would be payable on such
shares of Senior Preferred Stock and any such other stock as if all amounts
payable thereon were paid in full. For the purposes of this paragraph (4), (i) a
consolidation or merger of the Corporation with one or more corporations, or
(ii) a sale



or transfer of all or substantially all of the Corporation's assets, shall
not be deemed to be a liquidation, dissolution or winding up, voluntary or
involuntary, of the Corporation.

         (b) Subject to the rights of the holders of any Parity Securities,
after payment shall have been made in full to the holders of the Senior
Preferred Stock, as provided in this paragraph (4), any other series or class or
classes of Junior Securities shall, subject to the respective terms and
provisions (if any) applying thereto, be entitled to receive any and all assets
remaining to be paid or distributed, and the holders of the Senior Preferred
Stock shall not be entitled to share therein.

         (c) The "APPLICABLE LIQUIDATION VALUE" of any Additional Shares shall
be the Liquidation Value of Senior Preferred Stock outstanding immediately prior
to the first Dividend Payment Date occurring after a request for payment in
Additional Shares has been made in accordance with Section 3(b).

         (5) REDEMPTION. (a) REDEMPTION AT THE OPTION OF THE CORPORATION PRIOR
TO YEAR FIVE. The Corporation may, at its option, to the extent it shall have
funds legally available for such payment, redeem, prior to November 15, 2004, in
whole but not in part, shares of Senior Preferred Stock, at a redemption price
per share equal to 114.5% of the Liquidation Value, in cash, plus accrued and
unpaid dividends, payable in cash, on such shares to the date fixed for
redemption, without interest.

         (b) REDEMPTION AT THE OPTION OF THE CORPORATION AFTER YEAR FIVE. On and
after November 15, 2004, to the extent the Corporation shall have funds legally
available for such payment, the Corporation may, at its option, redeem shares of
Senior Preferred Stock, at any time in whole but not in part, at redemption
prices per share in cash (calculated as a percentage of Liquidation Value) set
forth in the table below, together with accrued and unpaid dividends thereon,
payable in cash, to the date fixed for redemption, without interest:



                Year Beginning
                  November 15               PERCENTAGE OF LIQUIDATION VALUE
                                         
                     2004                                 107.25
                     2005                                 104.83
                     2006                                 102.42
            2007 (and thereafter)                         100.00



         (c) REDEMPTION IN THE EVENT OF A CHANGE OF CONTROL. In the event of a
Change of Control, the Corporation shall, to the extent it shall have funds
legally available for such payment, offer to redeem all of the shares of Senior
Preferred Stock then outstanding, and shall redeem the shares of Senior
Preferred Stock of any holder of such shares that shall consent to such
redemption, upon a date no later than 30 days (or if a later date is required
under federal securities laws the first date thereafter on which such redemption
is permitted; the date upon which such redemption may occur is referred to as
the "CHANGE OF CONTROL REDEMPTION DATE") following the Change of Control, at a
redemption price per share equal to 101% of the Liquidation Value,



in cash, plus accrued and unpaid cash dividends thereon, payable in cash, to
the date fixed for redemption, without interest.

         "CHANGE OF CONTROL" means the occurrence of any of the following:

         (i) the sale, lease, transfer, conveyance or other disposition, other
than by way of merger or consolidation, in one or a series of related
transactions, of all or substantially all of the assets of the Corporation and
its subsidiaries, taken as a whole, to any "person" or "group" (as those terms
are used in Section 13(d) of the Exchange Act), other than the Initial Investors
and their Related Parties;

         (ii) the adoption of a plan for the liquidation or dissolution of the
Corporation;

         (iii) the consummation of any transaction, including, without
limitation, any merger (but excluding the merger of the Corporation with and
into Merrill Corporation (the "MERGER")) or consolidation, the result of which
is that any person"person" or "group" (as those terms used in Section 13(d) of
the Exchange Act), other the Initial Investors and their Related Parties,
becomes the "beneficial owner" (as that term is defined in Rule 13d-3 and Rule
13d-5 under the Exchange Act), directly or indirectly through one or more
intermediaries, of 50% or more of the voting power of the outstanding voting
stock of the Corporation; or

         (iv) the first day, after the Merger, on which a majority of the
members of the board of directors of the Corporation are not Continuing Members.

         "CONTINUING MEMBERs" means, as of any date of determination, any member
of the board of directors of the Corporation who:

         (i) was a member of the Corporation's board of directors immediately
after consummation of the Merger; or

         (ii) was nominated for election or elected to the Corporation's board
of directors with the approval of, or whose election to the board of directors
was ratified by, at least a majority of the Continuing Members who were members
of the Corporation's board or directors at the time of that nomination or
election.

         "INITIAL INVESTORS" means the DLJ Entities (as defined in the
Investors' Agreement), John Castro and Rick Atterbury.

         "RELATED PARTY" means, with respect to any Initial Investor,

         (i) any controlling shareholder or partner of that Initial Investor on
the Closing Date; or

         (ii) any trust, corporation, partnership or other entity, the
beneficiaries, shareholders, partners, owners or persons beneficially holding
(directly or through one or more subsidiaries) a majority of the controlling
interest of which consist of the Initial Investors and/or such other persons
referred to in the immediately preceding clause (i) or this clause (ii).



         "INVESTORS' AGREEMENT" means the Investors' Agreement executed on
November 23, 1999 among Viking Merger Sub, Inc., DLJ Merchant Banking Partners
II, L.P., DLJ Merchant Banking Partners II-A, L.P., DLJ Offshore Partners, C.V.,
DLJ Merchant Banking Funding, Inc., DLJ Offshore Partners II, C.V., DLJ
Diversified Partners, L.P., DLJ Diversified Partners-A, L.P., DLJ Millennium
Partners, L.P., DLJ Millennium-A, L.P., DLJMB Funding II, Inc., DLJ EAB
Partners, L.P., DLJ First ESC L.P., DLJ ESC II L.P., DLJ Investment Partners II,
L.P., DLJ Investment Partners, L.P. and certain other stockholders listed on the
signature pages thereof.

         (d) MANDATORY REDEMPTION. To the extent the Corporation shall have
funds legally available for such payment, on November 15, 2011, if any shares of
the Senior Preferred Stock shall be outstanding, the Corporation shall redeem
all outstanding shares of the Senior Preferred Stock, at a redemption price
equal to the aggregate Liquidation Value, in cash, together with any accrued and
unpaid dividends thereon, payable in cash, to the date fixed for redemption,
without interest.

         (e) STATUS OF REDEEMED SHARES. Shares of Senior Preferred Stock which
have been issued and reacquired in any manner, including shares purchased or
redeemed, shall (upon compliance with any applicable provisions of the laws of
the State of Minnesota) have the status of authorized and unissued shares of the
class of Preferred Stock undesignated as to series and may be redesignated and
reissued as part of any series of Preferred Stock; PROVIDED that no such issued
and reacquired shares of Senior Preferred Stock shall be reissued or sold as
Senior Preferred Stock.

         (f) FAILURE TO REDEEM. If the Corporation is unable or shall fail to
discharge any obligation it may have to redeem all outstanding shares of Senior
Preferred Stock pursuant to paragraph 5(a), 5(b), 5(c) or 5(d) (each, a
"MANDATORY REDEMPTION OBLIGATION"), such Mandatory Redemption Obligation shall
be discharged as soon as the Corporation is able to discharge such Mandatory
Redemption Obligation. If and so long as any Mandatory Redemption Obligation
with respect to the Senior Preferred Stock shall not be fully discharged, the
Corporation shall not (i) directly or indirectly, redeem, purchase, or otherwise
acquire any Parity Security or discharge any mandatory or optional redemption,
sinking fund or other similar obligation in respect of any Parity Securities
(except in connection with a redemption, sinking fund or other similar
obligation to be satisfied pro rata with the Senior Preferred Stock) or (ii) in
accordance with paragraph 3(e), declare or make any Junior Securities
Distribution, or, directly or indirectly, discharge any mandatory or optional
redemption, sinking fund or other similar obligation in respect of the Junior
Securities.

         (g) FAILURE TO PAY DIVIDENDS. Notwithstanding the foregoing provisions
of this paragraph (5), unless full cumulative cash dividends (whether or not
declared) on all outstanding shares of Senior Preferred Stock shall have been
paid or contemporaneously are declared and paid or set apart for payment for all
dividend periods terminating on or prior to the applicable redemption date, none
of the shares of Senior Preferred Stock shall be redeemed, and no sum shall be
set aside for such redemption, unless shares of Senior Preferred Stock are
redeemed pro rata to the holdings of holders of Senior Preferred Stock.



         (6) PROCEDURE FOR REDEMPTION. (a) In the event the Corporation shall
redeem shares of Senior Preferred Stock pursuant to Sections 5(a), (b) or (d),
notice of such redemption shall be given by first class mail, postage prepaid,
mailed not less than 30 days nor more than 60 days prior to the redemption date,
to each holder of record of the shares to be redeemed at such holder's address
as the same appears on the stock register of the Corporation; PROVIDED that
neither the failure to give such notice nor any defect therein shall affect the
validity of the giving of notice for the redemption of any share of Senior
Preferred Stock to be redeemed except as to a holder to whom the Corporation has
failed to give said notice or except as to a holder whose notice was defective.
Each such notice shall state: (i) the redemption date; (ii) the number of shares
of Senior Preferred Stock of such holder and in the aggregate to be redeemed;
(iii) the redemption price; (iv) the place or places where certificates for such
shares are to be surrendered for payment of the redemption price; and (v) that
dividends on the shares to be redeemed will cease to accrue on such redemption
date.

         (b) In the case of any redemption pursuant to Sections 5(a), (b) or (d)
hereof, notice having been mailed as provided in Section 6(a) hereof, from and
after the redemption date (unless default shall be made by the Corporation in
providing money for the payment of the redemption price of the shares called for
redemption), dividends on the shares of Senior Preferred Stock so called for
redemption shall cease to accrue, and all rights of the holders thereof as
stockholders of the Corporation (except the right to receive from the
Corporation the redemption price) shall cease. Upon surrender in accordance with
said notice of the certificates for any shares so redeemed (properly endorsed or
assigned for transfer, if the Board of Directors of the Corporation shall so
require and the notice shall so state), such share shall be redeemed by the
Corporation at the redemption price aforesaid. In case fewer than all the shares
represented by any such certificate are redeemed, a new certificate shall be
issued representing the unredeemed shares without cost to the holder thereof.

         (c) In the case of a redemption pursuant to Section 5(c) hereof, notice
shall be given by first class mail, postage prepaid, mailed not more than 10
days following the occurrence of the Change of Control and not less than 20 days
prior to the redemption date, to each holder of record of Senior Preferred Stock
at such holder's address as the same appears on the stock register of the
Corporation; PROVIDED that neither the failure to give such notice nor any
defect therein shall affect the validity of the giving of notice for the
redemption of any share of Senior Preferred Stock to be redeemed except as to a
holder to whom the Corporation has failed to give said notice or except as to a
holder whose notice was defective. Each such notice shall state: (i) that a
Change of Control has occurred; (ii) the Change of Control Redemption Date;
(iii) the redemption price; (iv) that such holder may elect to cause the
Corporation to redeem all or any of the shares of Senior Preferred Stock held by
such holder; (v) the place or places where certificates for such shares are to
be surrendered for payment of the redemption price; and (vi) that dividends on
any shares a holder elects to cause the Corporation to redeem will cease to
accrue on such redemption date.

         Upon receipt of such notice, the holder shall, within the time period
specified therein, return such notice to the Corporation indicating the number
of shares of Senior Preferred Stock such holder shall elect to cause the
Corporation to redeem, if any.



         (d) In the case of a redemption pursuant to Section 5(c) hereof, notice
having been mailed as provided in Section 6(c) hereof, from and after the Change
of Control Redemption Date (unless default shall be made by the Corporation in
providing money for the payment of the redemption price of the shares called for
redemption), dividends on such shares of Senior Preferred Stock as any holder
elects to cause the Corporation to redeem shall cease to accrue, and all rights
of the holders thereof as stockholders of the Corporation (except the right to
receive from the Corporation the redemption price) shall cease. Upon surrender
in accordance with said notice of the certificates for any shares so redeemed
(properly endorsed or assigned for transfer, if the Board of Directors of the
Corporation shall so require and the notice shall so state), such share shall be
redeemed by the Corporation at the redemption price aforesaid. In case fewer
than all the shares represented by any such certificate are redeemed, a new
certificate shall be issued representing the unredeemed shares without cost to
the holder thereof.

         (7) VOTING RIGHTS. (a) The holders of record of shares of Senior
Preferred Stock shall not be entitled to any voting rights except as hereinafter
provided in this paragraph (7), as otherwise provided by law or as provided in
the Investors' Agreement.

         (b) If and whenever (i) four consecutive or six quarterly cash
dividends payable on the Senior Preferred Stock have not been paid in full, (ii)
for any reason (including the reason that funds are not legally available for a
redemption), the Corporation shall have failed to discharge any Mandatory
Redemption Obligation (including a redemption in the event of a Change of
Control pursuant to Section 5(c) hereof), (iii) the Corporation shall have
failed to provide the notice required by Section 6(c) hereof within the time
period specified in such section or (iv) the Corporation shall have failed to
comply with Sections 3(d), 3(e), 7(c), 7(d) or (9) hereof, the number of
directors then constituting the Board of Directors shall be increased by two and
the holders of a majority of the outstanding shares of Senior Preferred Stock,
together with the holders of shares of any other series of preferred stock on a
parity with or senior to the Senior Preferred Stock issued in accordance with
Section 7(c) hereof upon which like rights have been conferred and are
exercisable (resulting from either the failure to pay dividends or the failure
to redeem) (any such series is referred to as the "PREFERRED SHARES"), voting as
a single class regardless of series, shall be entitled to elect two additional
directors to serve on the Board of Directors, such election to be at any annual
meeting of stockholders or special meeting held in place thereof, or at a
special meeting of the holders of the Senior Preferred Stock and the Preferred
Shares called as hereinafter provided. Whenever (i) all arrears in cash
dividends on the Senior Preferred Stock and the Preferred Shares then
outstanding shall have been paid and cash dividends thereon for the current
quarterly dividend period shall have been paid or declared and set apart for
payment, (ii) the Corporation shall have fulfilled its Mandatory Redemption
Obligation, (iii) the Corporation shall have fulfilled its obligation to provide
notice as specified in subsection (b)(iii) above, or (iv) the Corporation shall
have complied with Sections 3(d), 3(e), 7(c), 7(d) or (9) hereof, as the case
may be, then the right of the holders of the Senior Preferred Stock to elect
such additional two directors shall cease (but subject always to the same
provisions for the vesting of such voting rights in the case of any similar
future (i) arrearage in four consecutive or six quarterly cash dividends, (ii)
failure to fulfill any Mandatory Redemption Obligation, (iii) failure to fulfill
the obligation to provide the notice required by Section 6(c) hereof within the
time period specified in such section or (iv) failure to comply with Sections



3(d), 3(e), 7(c), 7(d) or (9)) and the terms of office of all persons elected as
directors by the holders of the Senior Preferred Stock shall forthwith terminate
and the number of the Board of Directors shall be reduced accordingly. At any
time after such voting power shall have been so vested in the holders of shares
of Senior Preferred Stock and the Preferred Shares, the secretary of the
Corporation may, and upon the written request of any holder of Senior Preferred
Stock (addressed to the secretary at the principal office of the Corporation)
shall, call a special meeting of the holders of the Senior Preferred Stock and
of the Preferred Shares for the election of the two directors to be elected by
them as herein provided, such call to be made by notice similar to that provided
in the Bylaws of the Corporation for a special meeting of the stockholders or as
required by law. If any such special meeting required to be called as above
provided shall not be called by the secretary within 20 days after receipt of
any such request, then any holder of shares of Senior Preferred Stock may call
such meeting, upon the notice above provided, and for that purpose shall have
access to the stock books of the Corporation. The directors elected at any such
special meeting shall hold office until the next annual meeting of the
stockholders or special meeting held in lieu thereof if such office shall not
have previously terminated as above provided. If any vacancy shall occur among
the directors elected by the holders of the Senior Preferred Stock and the
Preferred Shares, a successor shall be elected by the Board of Directors, upon
the nomination of the then-remaining director elected by the holders of the
Senior Preferred Stock and the Preferred Shares or the successor of such
remaining director, to serve until the next annual meeting of the stockholders
or special meeting held in place thereof if such office shall not have
previously terminated as provided above.

         (c) Without the written consent of a majority of the outstanding shares
of Senior Preferred Stock or the vote of holders of a majority of the
outstanding shares of Senior Preferred Stock at a meeting of the holders of
Senior Preferred Stock called for such purpose, the Corporation will not (i)
amend, alter or repeal any provision of the Articles of Incorporation (by
merger, other than the Merger, or otherwise) so as to adversely affect the
preferences, rights or powers of the Senior Preferred Stock; PROVIDED that any
such amendment that decreases the dividend payable on or the Liquidation Value
of the Senior Preferred Stock or extends the maturity of the Senior Preferred
Stock shall require the affirmative vote of holders of each share of Senior
Preferred Stock at a meeting of holders of Senior Preferred Stock called for
such purpose or written consent of the holder of each share of Senior Preferred
Stock; or (ii) create, authorize or issue any class of stock ranking prior to,
or on a parity with, the Senior Preferred Stock with respect to dividends or
upon liquidation, dissolution, winding up or otherwise, or increase the
authorized number of shares of any such class or series, or reclassify any
authorized stock of the Corporation into any such prior or parity shares or
create, authorize or issue any obligation or security convertible into or
evidencing the right to purchase any such prior or parity shares, except that
the Corporation may, without such approval, create, authorize and issue Parity
Securities for the purpose of utilizing the proceeds from the issuance of such
Parity Securities for the redemption of all outstanding shares of Senior
Preferred Stock in accordance with the terms hereof.

         (d) Without the affirmative vote or written consent of holders of a
majority of the issued and outstanding shares of Senior Preferred Stock, voting
or consenting, as the case may be, as a separate class, given in person or by
proxy, either in writing or by resolution adopted at an



annual or special meeting, the Corporation shall not, in a single transaction
or series of related transactions, consolidate or merge (except for the
Merger) with or into, or sell, assign, transfer, lease, convey or otherwise
dispose of all or substantially all of its assets to, another Person unless:
(A) either (1) the Corporation is the surviving or continuing Person or (2)
the Person (if other than the Corporation) formed by such consolidation or
into which the Corporation is merged or the Person that acquires by
conveyance, transfer or lease the properties and assets of the Corporation
substantially as an entirety, shall be a corporation, partnership or trust
organized and existing under the laws of the United States or any State
thereof or the District of Columbia; (B) if the Corporation is not the
surviving Person, the Senior Preferred Stock shall be converted into or
exchanged for and shall become shares of such successor, transferee or
resulting Person, having in respect of such successor, transferee or
resulting Person the same powers, preferences and relative, participating,
optional or other special rights and the qualifications, limitations or
restrictions thereon, that the Senior Preferred Stock had immediately prior
to such transaction; (C) immediately after giving effect to such transaction
and the assumption of the obligations as set forth in clause (A) above and
the incurrence of any debt to be incurred in connection therewith, on a pro
forma basis, such surviving Person or the Corporation, as the case may be,
shall have a Consolidated Net Worth equal to or greater than the Consolidated
Net Worth of the Corporation immediately prior to such transaction (without
giving effect to any purchase accounting adjustments related to such
transactions); and (D) the Corporation is current on all dividend payments,
payable in cash, pursuant to paragraph (3)(a)(iii) hereof.

         For purposes of the foregoing, the transfer (by lease, assignment, sale
or otherwise) in a single transaction or series of related transactions, of all
or substantially all of the properties or assets of one or more subsidiaries of
the Corporation, the capital stock of which constitutes all or substantially all
of the properties and assets of the Corporation shall be deemed to be the
transfer of all or substantially all of the properties and assets of the
Corporation.

         For purposes of the foregoing, "CONSOLIDATED NET WORTH" shall mean,
with respect to any Person as of any date, the sum of (i) the consolidated
equity of the common stockholders of such Person and its consolidated
subsidiaries as of such date plus (ii) the respective amounts reported on the
balance sheet of such Person and its consolidated subsidiaries as of such date
with respect to any series of preferred stock (other than Disqualified Stock)
that by its terms is a Junior Security, determined in accordance with GAAP.

         For purposes of the foregoing, "DISQUALIFIED STOCK" shall mean any
capital stock which, by its terms (or by the terms of any security into which it
is convertible or for which it is exchangeable), or upon the happening of any
event (other than any event solely within the control of the issuer thereof),
matures or is mandatorily redeemable, pursuant to a sinking fund obligation or
otherwise, or is redeemable at the option of the holder thereof, in whole or in
part, on or prior to November 15, 2011; PROVIDED that any capital stock that
would constitute Disqualified Stock solely because the holders thereof have the
right to require the issuer to repurchase that capital stock upon the occurrence
of any change of control of the issuer, or sale or other disposition of any
assets of the issuer shall not constitute Disqualified Stock and PROVIDED
FURTHER that, if that capital stock is issued to any plan for the benefit of
employees of the Corporation or its subsidiaries or by any such plan to those
employees, that capital stock shall not



constitute Disqualified Stock solely because it may be required to be
repurchased by the Corporation in order to satisfy applicable statutory or
regulatory obligations.

         For purposes of the foregoing, "GAAP" shall mean generally accepted
accounting principles set forth in the opinions and pronouncements of the
Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other entity as have been
approved by a significant segment of the accounting profession, which are in
effect from time to time.

         (e) In exercising the voting rights set forth in this paragraph (7),
each share of Senior Preferred Stock shall have one vote per share, except that
when any other series of preferred stock shall have the right to vote with the
Senior Preferred Stock as a single class on any matter, then the Senior
Preferred Stock and such other series shall have with respect to such matters
one vote per $80.00 of Liquidation Value or other liquidation preference. Except
as otherwise required by applicable law or as set forth herein, the shares of
Senior Preferred Stock shall not have any relative, participating, optional or
other special voting rights and powers and the consent of the holders thereof
shall not be required for the taking of any corporate action.

         (8) REPORTS. So long as any of the Senior Preferred Stock is
outstanding, the Corporation will furnish the holders thereof with the quarterly
and annual financial reports that the Corporation is required to file with the
Securities and Exchange Commission pursuant to Section 13 or Section 15(d) of
the Securities Exchange Act of 1934 or, in the event the Corporation is not
required to file such reports, reports containing the same information as would
be required in such reports.

         (9) LIMITATION ON TRANSACTIONS WITH AFFILIATES. The Corporation shall
comply with the limitations on transactions with affiliates that are set forth
in Section 4.11 of the Indenture dated as of November 23, 1999 between Norwest
Bank Minnesota, N.A., as Trustee, and Merrill Corporation relating to those
certain 12% Senior Subordinated Notes due 2009 (the "INDENTURE") as fully as
though such limitations (and the definitions relating thereto) were set forth
herein, regardless of whether any securities issued pursuant to such Indenture
remain outstanding, provided that if such Section 4.11 shall require the
obtaining by the Corporation of any board resolution, officer's certificate or
fairness opinion, no delivery shall be required for purposes of the Senior
Preferred Stock to any trustee, or any like Person, of any such document.

         (10) GENERAL PROVISIONS. (a) The term "PERSON" as used herein means any
corporation, limited liability company, partnership, trust, organization,
association, other entity or individual.

         (b) The term "OUTSTANDING", when used with reference to shares of
stock, shall mean issued shares, excluding shares held by the Corporation or a
subsidiary.

         (c) The headings of the paragraphs, subparagraphs, clauses and
subclauses used herein are for convenience of reference only and shall not
define, limit or affect any of the provisions hereof.



         (d) Each holder of Senior Preferred Stock, by acceptance thereof,
acknowledges and agrees that payments of dividends, interest, premium and
principal on, and redemption and repurchase of, such securities by the
Corporation are subject to restrictions on the Corporation contained in certain
credit and financing agreements.

         IN WITNESS WHEREOF, Merrill Corporation has caused this Certificate of
Designation to be signed and attested by the undersigned this 22nd day of
November, 1999.

                                           Merrill Corporation


                                           By  /s/ STEVEN J. MACHOV
                                               ---------------------------------
                                               Name:  Steven J. Machov
                                               Title:  Secretary

EX-3.4

                            CERTIFICATE OF FORMATION
                                       OF
                           MERRILL COMMUNICATIONS LLC

         The undersigned, intending to form a limited liability company under
the Delaware Limited Liability Company Act (the "Act"), and as required by
Section 18-201 thereof, hereby states the following:

         1. The name of the limited liability company is Merrill Communications
LLC (the "Company").

         2. The address of the Company's registered office in the State of
Delaware is Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware
19801 in the City of Wilmington, County of New Castle. The name of the Company's
registered agent at such address is The Corporation Trust Company.

         The undersigned has executed this Certificate of Formation of Merrill
Communications LLC this 5th day of November, 1999.




                                                     /s/ Nona L. Goertz
                                                    --------------------------
                                                    Authorized Person

EX-3.5

                          ARTICLES OF INCORPORATION OF

                           MERRILL REAL ESTATE COMPANY

         The undersigned incorporator, being a natural person 18 years of age or
older, in order to form a corporate entity under Minnesota Statutes, Chapter
302A, hereby adopts the following Articles of Incorporation:

                                 ARTICLE I.

         The name of this corporation is MERRILL REAL ESTATE COMPANY.

                                 ARTICLE II.

         The registered office of this corporation is located at One Merrill
Circle, Energy Park, St. Paul, Minnesota 55108.

                                 ARTICLE III.

         The corporation is authorized to issue an aggregate total of
twenty-five thousand (25,000) shares.

                                 ARTICLE IV.

         The name and address of the incorporator is: Marvin A. Liszt, 9855 West
78th Street, Suite 210, Eden Prairie, Minnesota 55344.


                                                /s/ Marvin A. Liszt
                                                ------------------------------
                                                    Marvin A. Liszt

STATE OF MINNESOTA         )
                           )ss.
COUNTY OF HENNEPIN         )

         The foregoing instrument was acknowledged before me this 10th day of
July, 1995, by Marvin A. Liszt, incorporator.


                                                 /s/ Lori A. Garceau
                                                -------------------------------
                                                      Notary Public

EX-3.6

                            ARTICLES OF INCORPORATION
                                       OF
                               MC PUBLISHING, INC.


The undersigned incorporator, being a natural person, eighteen years of age or
older, in order to form a corporate entity under Minnesota Statutes, Chapter
302A, hereby adopts the following Articles of Incorporation:

                                   ARTICLE I.

The name of this Corporation is MC PUBLISHING, INC.

                                  ARTICLE II.

The registered office of the Corporation in Minnesota is One Merrill Circle, St.
Paul, Minnesota 55108.

                                  ARTICLE III.

A.   The aggregate number of shares of capital stock which the Corporation
     shall have authority to issue is One Thousand (1,000) shares of common
     stock, per value $.01 per share.

B.   There shall be no cumulative voting in the election of directors.

                                  ARTICLE IV.

The affirmative vote of the holders of ninety percent (90%) of the issued and
outstanding shares of common stock shall be necessary to amend these Articles of
Incorporation.

                                   ARTICLE V.

The name and mailing address of the incorporator of this Corporation is as
follows:

            NAME                                        ADDRESS
            ----                                        -------

      Steven J. Machov                            One Merrill Circle
                                                  St. Paul, MN 55108


                                  ARTICLE VI.

The names and mailing addresses of the first directors of this Corporation are
as follows:

         NAME                         ADDRESS
         ----                         -------

         John Castro                  One Merrill Circle
                                      St. Paul, MN 55108

         Nancy Lake-Smith             1485 Edgecumbe Road
                                      St. Paul, MN 55116

         Rick Atterbury               One Merrill Circle
                                      St. Paul, MN 55108

         John B. McCain               One Merrill Circle
                                      St. Paul, MN 55108

         Steven J. Machov             One Merrill Circle
                                      St. Paul, MN 55108


                                  ARTICLE VII.

The purpose of the Corporation are general business purposes.

                                 ARTICLE VIII.

The Corporation shall have perpetual duration.

                                  ARTICLE IX.

The Corporation shall possess all powers necessary to conduct any business in
which it is authorized to engage, including, but not limited to, all those
powers expressly conferred upon business corporations by Chapter 302A of the
Minnesota Statutes, as it may from time to time be amended, together with those
powers implied therefrom.

                                   ARTICLE X.

The affirmative vote of the holders of a majority of the voting power of the
shares represented and voting at a duly held meeting is required for an action
of the shareholders, except where Chapter 302A of the Minnesota Statutes, as
amended, or these Articles require an affirmative vote of a larger majority.


                                       2


                                  ARTICLE XI.

Shares of the Corporation acquired by the Corporation shall become authorized
but unissued shares and may be reissued as provided in these Articles.

                                  ARTICLE XII.

A.       The Board of Directors may from time to time, by vote of a majority of
         its members present at a duly held meeting, adopt, amend or repeal all
         or any of the Bylaws of the Corporation as permitted by Chapter 302A of
         the Minnesota Statutes, as it may from time to time be amended, subject
         to the power of the shareholders to adopt, amend or repeal such Bylaws.

B.       The Board of Directors is authorized to accept and reject subscriptions
         for and to dispose of shares of authorized stock of the Corporation,
         including the granting of stock options, warrants and other rights to
         purchase stock, without action by the shareholders and upon such terms
         and conditions as may be deemed advisable by the Board of Directors in
         the exercise of its discretion, except as otherwise limited by Chapter
         302A of the Minnesota Statutes, as it may from time to time be amended.

C.       The Board of Directors is authorized to issue, sell or otherwise
         dispose of bonds, debentures, certificates of indebtedness and other
         securities, including those convertible into stock, without action by
         the shareholders and for such consideration and upon such terms and
         conditions as may be deemed advisable by the Board of Directors in the
         exercise of its discretion, except as otherwise limited by Chapter 302A
         of the Minnesota Statutes, as it may from time to time be amended.

                                 ARTICLE XIII.

Any action required or permitted to be taken at a meeting of the Board may be
taken by written consent signed by all the directors: provided that, if the
action is one which does not require shareholder approval, such action may he
taken by written consent signed by the number of directors that would be
required to take same action at a meeting at which all directors were present.

                                  ARTICLE XIV.

Each director, officer, employee or agent, past and present, of the Corporation,
and each person who serves or may have served at the request of the Corporation
as a director, officer, employee or agent of another Corporation or an employee
benefit plan, and their respective heirs, administrators and executors, shall be
indemnified by the Corporation in accordance with, and to the fullest extent
permissible under, the provisions of Chapter 302A of the Minnesota Statutes, as
it may from time to time be amended.

                                       3


                                  ARTICLE XV.

No director of the Corporation, including a person deemed to be a director under
applicable law, shall be personally liable to the Corporation or its
shareholders for monetary damages for breach of fiduciary duty by such director
as a director, except to the extent provided by applicable law for: (i)
liability based on a breach of the duty of loyalty to the Corporation or the
shareholders; (ii) liability for acts or omissions not in good faith or that
involve intentional misconduct or a knowing violation of law; (iii) liability
based on the payment of an improper dividend or an improper acquisition of the
Corporation's shares under Section 559 of the Minnesota Business Corporation Act
(Minnesota Statutes, Chapter 302A) or on violations of state securities laws
under Section 80A.23 of the Minnesota Statutes; (iv) liability for any
transaction from which the director derived an improper personal benefit; or (v)
liability for any act or omission occurring prior to the date that this Article
XV becomes effective. If Chapter 302A of the Minnesota Business Corporation Act
is amended hereafter to authorize the further elimination or limitation of the
liability of directors, then the liability of a director of the Corporation, in
addition to the limitation on personal liability provided herein, shall be
eliminated or limited to the fullest extent permitted by any such amendment. Any
repeal or modification of this Article by the shareholders of the Corporation
shall not adversely affect any right or protection of a director of the
Corporation existing at or prior to the time of such repeal or modification.

IN WITNESS WHEREOF, the above-named incorporator has executed these Articles of
Incorporation this 23rd day of November, 1988.


                                            INCORPORATOR:

                                            /s/ Steven J. Machov
                                            ----------------------------------
                                            Steven J. Machov




STATE OF MINNESOTA     }
                       }  SS.
COUNTY OF RAMSEY       }


The foregoing instrument was acknowledged before me this 23rd day of November,
1988, by Steven J. Machov.


                                            /s/ Linnea J. Nash
                                            -----------------------------------
                                            Notary Public

                                                        [SEAL]

                                       4


                               STATE OF MINNESOTA
                               SECRETARY OF STATE

                              ARTICLES OF AMENDMENT


Corporate Name:  MC PUBLISHING, INC.

Date of Adoption of Amendment:  March 28, 1989

Effective Date, if any, of Amendment:  March 28, 1989

Amendment Approved by:  Shareholders

Pursuant to the provisions of Minnesota Statutes, Section 302A.135, the
following amendment of articles regulating the above corporation were adopted:

                                    ARTICLE I

     THE NAME OF THIS CORPORATION IS MERRILL/MAGNUS PUBLISHING CORPORATION.

I swear that the foregoing is true and accurate and that I have authority to
sign this document on behalf of the Corporation.


                                            /s/ Steven J. Machov
                                            ----------------------------------
                                            Steven J. Machov
                                            Secretary



State of Minnesota     }
                       }  SS.
County of Ramsey       }


The foregoing instrument was acknowledged before me this 28th day of March,
1989.


                                            /s/ Linnea Nash
                                            ----------------------------------
                                            Linnea Nash
                                            Notary Public

EX-3.7

                            ARTICLES OF INCORPORATION
                                       OF
                            MERRILL/NEW YORK COMPANY
                     ---------------------------------------


The undersigned incorporator, being a natural person, eighteen years of age or
older, in order to form a corporate entity under Minnesota Statutes, Chapter
302A, hereby adopts the following Articles of Incorporation:

                                   ARTICLE I.

The name of this Corporation is MERRILL/NEW YORK COMPANY.

                                  ARTICLE II.

The registered office of the Corporation in Minnesota is 1731 University Avenue,
St. Paul, Minnesota 55104.

                                  ARTICLE III.

The aggregate number of shares of capital stock which the Corporation shall have
authority to issue is Twenty Thousand (20,000) shares of common stock, par value
$.01 per share.

The shareholders of the corporation shall not have any preemptive rights in any
future issuance of stock by the Corporation.

At each election for Directors, every holder of common stock shall have the
right to vote in person or by proxy, the number of shares registered in his name
for as many persons as there are Directors to be elected and for whose election
he has the right to vote, or to cumulate his votes by casting for one candidate
the number of votes equal to the number of Directors to be elected




multiplied by the number of votes represented by his shares, or by distributing
all of his votes on the same principle among any number of such candidates.

                                  ARTICLE IV.

The affirmative vote of the holders of two-thirds (2/3) in number of the issued
and outstanding shares of common stock shall be necessary to amend these
Articles of Incorporation.

                                   ARTICLE V.

The name and mailing address of the incorporator and first director of this
Corporation is as follows:

                  NAME                            ADDRESS
                  ----                            -------
                  Douglas L. Hemer                1700 First Bank Building
                                                  St. Paul, Minnesota  55101

                                  ARTICLE VI.

The names and mailing addresses of the first directors of this Corporation are
as follows:

                  NAME                            ADDRESS
                  ----                            -------
                  John Castro                     1731 University Avenue
                                                  St. Paul, Minnesota  55104

                  Robert F. Nienhouse             1731 University Avenue
                                                  St. Paul, Minnesota  55104

                  Richard Atterbury               1731 University Avenue
                                                  St. Paul, Minnesota  55104

                                  ARTICLE VII.

The purposes of the Corporation are general business purposes.


                                       2



                                  ARTICLE VIII.

The Corporation shall have perpetual duration.

                                   ARTICLE IX.

The Corporation shall possess all powers necessary to conduct any business in
which it is authorized to engage, including, but not limited to, all those
powers expressly conferred upon business corporations by Chapter 302A of the
Minnesota Statutes, as it may from time to time be amended, together with those
powers implied therefrom.

                                   ARTICLE X.

The affirmative vote of the holders of a majority of the voting power of the
shares represented and voting at a duly held meeting is required for an action
of the shareholders, except that no merger, consolidation, dissolution or sale,
lease or exchange of all or substantially all of the Corporation's property and
assets shall be made unless authorized by the affirmative vote of two-thirds
(2/3) of the holders of the issued and outstanding shares of stock.

                                  ARTICLE XI.

Shares of the Corporation acquired by the Corporation shall become authorized
but unissued shares and may be reissued as provided in these Articles.

                                  ARTICLE XII.

(A) The Board of Directors may from time to time, by vote of a majority of its
members present at a duly held meeting, adopt, amend or repeal all or any of the
Bylaws of the corporation as permitted by Chapter 302A of the Minnesota
Statutes, as it may from time to time be amended, subject to the power of the
shareholders to adopt, amend or repeal such Bylaws, except


                                       3



that any amendment to the number of directors providing for less than five (5)
directors may be made only with the affirmative vote of the holders of
two-thirds (2/3) in number of the issued and outstanding shares of stock.

(B) The Board of Directors is authorized to accept and reject subscriptions for
and to dispose of shares of authorized stock of the Corporation, including the
granting of stock options, warrants and other rights to purchase stock, without
action by the shareholders and upon such terms and conditions as may be deemed
advisable by the Board of Directors in the exercise of its discretion, except as
otherwise limited by Chapter 302A of the Minnesota Statutes, as it may from time
to time be amended.

(C) The Board of Directors is authorized to issue, sell or otherwise dispose of
bonds, debentures, certificates of indebtedness and other securities, including
those convertible into stock, without action by the shareholders and for such
consideration and upon such terms and conditions as may be deemed advisable by
the Board of Directors in the exercise of its discretion, except as otherwise
limited by Chapter 302A of the Minnesota Statutes, as it may from time to time
be amended.

(D) The Board of Directors is authorized to adopt, by an affirmative vote of a
majority of its members present at a duly held meeting, a resolution or
resolutions providing for the establishment of a class or series of authorized
stock of the corporation or bonds, debentures, certificates of indebtedness or
other securities, setting forth the designation of and number of


                                       4



shares constituting the class or series and fixing the relative rights and
preferences of the class or series.

                                 ARTICLE XIII.

Any action required or permitted to be taken at a meeting of the Board may be
taken by written consent signed by all the directors; provided that, if the
action is one which does not require shareholder approval, such action may be
taken by written consent signed by the number of directors that would be
required to take the same action at a meeting at which all directors were
present.

                                  ARTICLE XIV.

Each director, officer, employee or agent, past and present, of the corporation,
and each person who serves or may have served at the request of the Corporation
as a director, officer, employee or agent of another Corporation or an employee
benefit plan, and their respective heirs, administrators and executors, shall be
indemnified by the Corporation in accordance with, and to the fullest extent
permissible under, the provisions of Chapter 302A of the Minnesota Statutes, as
it may from time to time be amended.

IN WITNESS WHEREOF, The above-named incorporator has executed these Articles of
Incorporation this 30th day of December, 1983.

                                                   INCORPORATOR:

                                                   /s/ Douglas L. Hemer
                                                   -----------------------------
                                                   Douglas L. Hemer


                                       5



STATE OF MINNESOTA       )
                         )  ss.
COUNTY OF RAMSEY         )



The foregoing instrument was acknowledged before me this 30th of December, 1983,
by Douglas L. Hemer.

                                                     /s/ Norma L. Prokosch
                                                     ---------------------------
                                                     Notary Public


                                       6



                              AMENDMENT OF ARTICLES

                                       OF

                            MERRILL/NEW YORK COMPANY
                            ------------------------

CORPORATE NAME:                                         Merrill/New York Company
DATE OF ADOPTION OF AMENDMENTS:                         March 16, 1984
AMENDMENTS APPROVED BY CORPORATE:                       Shareholders


Pursuant to the provisions of Minnesota Statutes, Sections 302A.l33 and
302A.l35, the following amendments of Articles of Incorporation were adopted:

1.       Articles IV, X and XII(A) are amended to read as follows:

                                   ARTICLE IV.

         The affirmative vote of the holders of ninety percent (90%) of the
         issued and outstanding shares of common stock shall be necessary to
         amend these Articles of Incorporation.

                                   ARTICLE X.

         The affirmative vote of the holders of ninety percent (90%) of the
         shares represented and voting at a duly held meeting is required for an
         action of the shareholders.

                                  ARTICLE XII.

         (A) The Board of Directors may from time to time, by vote of a majority
         of its members present at a duly held meeting, adopt, amend or repeal
         all or any of the Bylaws of the corporation as permitted by Chapter
         302A of the Minnesota Statutes, as it may from time to time be amended,
         subject to the power of the shareholders to adopt, amend or repeal such
         Bylaws, except that any amendment to the number of directors providing
         for more than seven (7) directors may be made only with the affirmative
         vote of the holders of ninety percent (90%) of the issued and
         outstanding shares of stock.




2.       The following is added to Article IX:

         The Corporation shall lack the power to enter into any contract or
         agreement which is inconsistent with or in contravention of Section 5.1
         of a certain Shareholder Participation Agreement dated as of March 16,
         1984, by and among K. F. Merrill Company, Latham Process Corp., Virgil
         L. Jackson and the Corporation as the same may from time to time be
         amended hereafter.



                                                 Signed:  /s/ Richard G. Lareau
                                                          ----------------------
                                                          Richard G. Lareau

                                                 Position:
                                                          ----------------------
                                                          Secretary


STATE OF MINNESOTA       )
                         ) ss.
COUNTY OF HENNEPIN       )

The foregoing instrument was acknowledged before me on this 12th day of April,
1984.


                                                          /s/ Mary H. Waryan
                                                          ----------------------
                                                          Notary Public




                               State of Minnesota
                               Secretary of State

                              Articles of Amendment


Corporate Name:   Merrill/New York Company

Date of Adoption of Amendment:      August 17, 1987

Effective Date, if any, of Amendment:

Amendment Approved by:     Shareholders


Pursuant to the provisions of Minnesota Statutes, Section 302A.135, the
following amendment of articles regulating the above corporation were adopted:

                                   ARTICLE XV

         No director of the Corporation, including, a person deemed to be a
         director under applicable law, shall be personally liable to the
         Corporation or its share-holders for monetary damages for breach of
         fiduciary duty by such director as a director, except to the extent
         provided by applicable law for: (i) liability based on a breach of the
         duty of loyalty to the Corporation or the shareholders; (ii) liability
         for acts or omissions not in good faith or that involve intentional
         misconduct or a knowing violation of law; (iii) liability based on the
         payment of an improper dividend or an improper acquisition of the
         Corporation's shares under Section 559 of the Minnesota Business
         Corporation Act (Minnesota Statutes, Chap. 302A) or on violations of
         state securities laws under Section 80A.23 of the Minnesota Statutes;
         (iv) liability for any transaction from which the director derived an
         improper personal benefit; or (v) liability for any act or omission
         occurring prior to the date that this Article XV becomes effective. If
         Chapter 302A of the Minnesota Business Corporation Act is amended
         hereafter to authorize the further elimination or limitation of the
         liability of directors, then the liability of a director of the
         Corporation, in addition to the limitation on personal liability
         provided herein, shall be eliminated or limited to the fullest extent
         permitted by any such amendment. Any repeal or modification of this
         Article by the shareholders of the Corporation shall not adversely
         affect any right or protection of a director of the Corporation
         existing at or prior to the time of such repeal or modification.




I swear that the foregoing is true and accurate and that I have authority to
sign this document on behalf of the Corporation.


                                                 /s/ John B. McCain
                                                 ------------------------------
                                                 John B. McCain
                                                 Secretary


STATE OF MINNESOTA       )
                         ) ss.
COUNTY OF RAMSEY         )

The foregoing instrument was acknowledged before me on this 1st day of June,
1988.


                                                 /s/ Steven J. Machov
                                                 ------------------------------
                                                 Steven J. Machov
                                                 Notary Public




         OFFICE OF THE SECRETARY OF STATE
         MODIFICATION OF STATUTORY REQUIREMENTS
            OR AMENDMENTS OF ARTICLES OF INCORPORATION

         - READ INSTRUCTIONS AT BOTTOM OF PAGE BEFORE COMPLETING THIS FORM

CORPORATE NAME
                           MERRILL/NEW YORK COMPANY
DATE OF ADOPTION OF AMENDMENTS MODIFICATION EFFECTIVE DATES, IF ANY, OF
AMENDMENTS MODIFICATIONS*


Amendments/Modifications were approved by the: ____ Shareholders ____ Directors
___ Incorporators

(Note: See Minnesota Statutes section 302A.131 for the procedure to be used in
approving amendments.)



The following amendments of articles or modifications to the statutory
requirements regulating the above corporation were adopted: (Insert full text of
newly amended or modified article(s) indicating which article(s) is (are) being
amended or added. If the full text of the amendment will not fit in the space
provided, please do not use this form. Instead, retype the amendment on a
separate sheet or sheets using this format.)

ARTICLE I         "The following change was adopted pursuant to Minnesota
                  Statute 302A."

            Merrill/New York Company
            One Merrill Circle, Energy Park
            St. Paul, MN  55108

* Note:  Effective date may be any date within 30 days after the filing date. If
         no date is specified, the effective date is the date filed.

I swear that the foregoing is true and accurate and that I have the authority to
sign this document on behalf of the corporation.

STATE OF MINNESOTA       )                  Signed:  /s/
                                                   ------------------------
                         )
COUNTY OF RAMSEY         ) ss.              Position:   Secretary
                                                     ----------------------

The foregoing instrument was acknowledged before me this 18th day of November,
1988.
     Notarial
       Seal                                 /s/ Linnea J. Nash
                                            ------------------------------------
                                                       (Notary Public)


- -   INSTRUCTIONS                            FOR USE BY SECRETARY OF STATE D.A.R.
1.  TYPE OR PRINT USING DARK INK.
2.  INCLUDE FILING FEE.
3.  MAKE FILING FEE PAYABLE TO THE
     SECRETARY OF STATE.
4.  MAIL OR BRING COMPLETE FORM TO:
     SECRETARY OF STATE
     CORPORATION DIVISION
     180 STATE OFFICE BUILDING
     ST. PAUL, MN 55101
     (612) 296-2803




                               State of Minnesota
                               Secretary of State

                              Articles of Amendment


Corporate Name:   Merrill/New York Company

Date of Adoption of Amendment:      August 17, 1987

Effective Date, if any, of Amendment:

Amendment Approved by:     Shareholders


Pursuant to the provisions of Minnesota Statutes, Section 302A.135, the
following amendment of articles regulating the above corporation were adopted:

                                   ARTICLE XV

         No director of the Corporation, including a person deemed to be a
         director under applicable law, shall be personally liable to the
         Corporation or its shareholders for monetary damages for breach of
         fiduciary duty by such director as a director, except to the extent
         provided by applicable law for: (i) liability based on a breach of the
         duty of loyalty to the Corporation or the shareholders; (ii) liability
         for acts or omissions not in good faith or that involve intentional
         misconduct or a knowing violation of law; (iii) liability based on the
         payment of an improper dividend or an improper acquisition of the
         Corporation's shares under Section 559 of the Minnesota Business
         Corporation Act (Minnesota Statutes, Chap.302A) or on violations of
         state securities laws under Section 80A.23 of the Minnesota Statutes;
         (v) liability for any act or omission occurring prior to the date that
         this Article XV becomes effective. If Chapter 302A of the Minnesota
         Business Corporation Act is amended hereafter to authorize the further
         elimination or limitation of the liability of directors, then the
         liability of a director of the Corporation, in addition to the
         limitation on personal liability provided herein, shall be eliminated
         or limited to the fullest extent permitted by any such amendment. Any
         repeal or modification of this Article by the shareholders of the
         Corporation shall not adversely affect any right or protection of a
         director of the Corporation existing at or prior to the time of such
         repeal or modification.

I swear that the foregoing is true and accurate and that I have authority to
sign this document on behalf of the Corporation


                                                             /s/ John Castro
                                                             -------------------




STATE OF MINNESOTA       )
                         ) ss.
COUNTY OF RAMSEY         )

The foregoing instrument was acknowledged before me on this 29th day of March,
1991.


                                                  /s/ Steven J. Machov
                                                  ------------------------------
                                                  Steven J. Machov
                                                  Notary Public

EX-3.8

                            ARTICLES OF INCORPORATION
                                       OF
                            MERRILL ACQUISITION CORP.


The undersigned incorporator, being a natural person, eighteen years of age or
older, in order to form a corporate entity under Minnesota Statutes, Chapter
302A, adopts the following Articles of Incorporation:

                                   ARTICLE I.

The name of the Corporation is Merrill Acquisition Corp. (the "Corporation").

                                  ARTICLE II.

The registered office of the Corporation is located at One Merrill Circle,
Energy Park, St. Paul, MN 55108.

                                  ARTICLE III.

The aggregate number of shares of stock which the Corporation shall have
authority to issue is ten thousand (10,000) shares of common stock, $.01 per
share.

                                  ARTICLE IV.

The name and address of the incorporator of the Corporation is:

          Name                         Address
          ----                         -------

          Joseph W. Wirth              3400 Plaza VII
                                       45 South 7th Street
                                       Minneapolis, MN  55402

                                   ARTICLE V.

No shareholder of the Corporation shall have any cumulative voting rights.

                                  ARTICLE VI.

No shareholder of the Corporation shall have any preemptive rights by virtue of
Section 302A.413 of the Minnesota Statutes (or similar provisions of future law)
to subscribe for, purchase or acquire any shares of the Corporation of any
class, whether unissued or now or hereafter authorized, or any obligations or
other securities convertible into or exchangeable for any such shares.




                                  ARTICLE VII.

Shares of the Corporation acquired by the Corporation shall be authorized but
unissued shares and may be reissued as provided in these Articles.

                                 ARTICLE VIII.

Any action required or permitted to be taken at a meeting of the Board of the
Corporation not needing approval by the shareholders under Minnesota Statutes,
Chapter 302A, may be taken by written action signed by the number of directors
that would be required to take such action at a meeting of the Board of
Directors at which all directors are present.

                                  ARTICLE IX.

No director of the Corporation shall be personally liable to the Corporation or
its shareholders for monetary damages for breach of fiduciary duty by such
director as a director; provided, however, that this Article shall not eliminate
or limit the liability of a director to the extent provided by applicable law
(i) for any breach of the director's duty of loyalty to the Corporation or its
shareholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under Section
302.559 or 80A.23 of the Minnesota Statutes, as amended (iv) for any transaction
from which the director derived an improper personal benefit or (v) for any act
or omission occurring prior to the effective date of this Article. If the
Minnesota Business Corporation Act hereafter is amended to authorize the further
elimination or limitation of the liability of directors, then the liability of a
director of the Corporation in addition to the limitation and elimination of
personal liability provided herein, shall be eliminated or limited to the
fullest extent permitted by the Minnesota Business Corporation Act, as so
amended. No amendment to or repeal of this Article shall apply to, or have any
effect on, the liability or alleged liability of any director for or with
respect to any acts or omissions of such director occurring prior to such
amendment or repeal.

IN WITNESS WHEREOF, I have hereunto set my hand this 20th day of December, 1993.


                                                  INCORPORATOR:

                                                  /s/ Joseph W. Wirth
                                                  ------------------------------
                                                  Joseph W. Wirth




                               State of Minnesota
                        Office of the Secretary of State

                     AMENDMENT OF ARTICLES OF INCORPORATION

READ INSTRUCTIONS AT BOTTOM OF PAGE BEFORE COMPLETING THIS FORM

- --------------------------------------------------------------------------------
CORPORATE NAME
                            MERRILL ACQUISITION CORP.
- --------------------------------------------------------------------------------

This amendment is effective on the day it is filed with the Secretary of State,
unless you indicate another date, no later than 30 days after filing with the
Secretary of State, in this box:

                       ----------------------------------


                       ----------------------------------

The following amendments of articles or modifications to the statutory
requirements regulating the above corporation were adopted: (Insert full text of
newly amended or modified article(s) indicating which article(s) is (are) being
amended or added. If the full text of the amendment will not fit in the space
provided, please do not use this form. Instead, retype the amendment on a
separate sheet or sheets using this format.)

ARTICLE I.

         The name of the Corporation is May Printing Company, Inc. (the
"Corporation").

This amendment has been approved pursuant to chapter 302A, Minnesota Statutes.

I certify that I am authorized to execute this amendment and I further certify
that I understand that by signing this amendment, I am subject to the penalties
of perjury as set forth in section 609.48 as if I had signed this amendment
under oath.


                                              /s/ Steven J. Machov, Secretary
                                              ----------------------------------
                                              (Signature of Authorized Person)

- --------------------------------------------------------------------------------

INSTRUCTIONS:                                 FOR USE BY THE SECRETARY OF STATE

1.  Type or print with dark black ink.
2.  Filing fee:  $35.00
3.  Make check payable to Secretary
    of State.
4.  Mail or bring completed forms to:

    Secretary of State
    Business Services Division
    180 State Office Building
    St. Paul, MN 55155
    (612) 296-2803




                               STATE OF MINNESOTA

                               SECRETARY OF STATE



                              CERTIFICATE OF MERGER


         I, JOAN ANDERSON GROWE, SECRETARY OF STATE OF MINNESOTA, CERTIFY THAT:
THE DOCUMENTS REQUIRED TO EFFECTUATE A MERGER BETWEEN THE ENTITIES LISTED BELOW
AND DESIGNATING THE SURVIVING ENTITY HAVE BEEN FILED IN THIS OFFICE ON THE DATE
NOTED ON THIS CERTIFICATE.


         MERGER FILED PURSUANT TO MINNESOTA STATUTES, CHAPTER:         302A

         STATE OF FORMATION AND NAMES OF MERGING ENTITIES:

                  MN:      MERRILL CUSTOM COMMUNICATIONS, INC.

                  MN:      MAY PRINTING COMPANY, INC.

         STATE OF FORMATION AND NAME OF SURVIVING ENTITY:

                  MN:      MAY PRINTING COMPANY, INC.

         EFFECTIVE DATE OF MERGER:  JANUARY 31, 1995

         NAME OF SURVIVING ENTITY AFTER EFFECTIVE DATE OF MERGER:

                  MERRILL/MAY, INC.

         THIS CERTIFICATE HAS BEEN ISSUED ON:        JANUARY 31, 1995







                                              /s/ Joan Anderson Growe
                                              ----------------------------------
                                                              Secretary of State




                               ARTICLES OF MERGER

                                    Merger of
          Merrill Custom Communications, Inc., a Minnesota corporation
                                  with and into
               May Printing Company, Inc., a Minnesota corporation


         Pursuant to Minnesota Statutes, Section 302A.621, Merrill Corporation,
a Minnesota corporation ("Merrill"), hereby adopts the following Articles of
Merger for the purpose of merging Merrill Custom Communications, Inc., a
Minnesota corporation ("MCC"), that is a wholly-owned subsidiary of Merrill,
with and into May Printing Company, Inc. ("May"), also a wholly-owned subsidiary
of Merrill, which shall be the surviving corporation.

Article 1.        The plan of merger required by Minnesota Statutes, Section
                  302A.62l, subd. 3, to be set forth herein is set forth in the
                  resolutions attached hereto as Exhibit A (the "Resolutions")
                  which Resolutions were duly adopted by the affirmative vote of
                  a majority of the Board of Directors of Merrill at a meeting
                  held on January 23, 1995.

Article 2.        The number of (i) shares of authorized capital stock and
                  (ii) issued and outstanding shares of capital stock of MCC and
                  May, and the number of shares of capital stock of MCC and May
                  owned by Merrill are as follows:




                                           Authorized            Issued and                Number of Shares Owned
          Corporation                        Capital             Outstanding                     by Merrill
          -----------                      ----------            -----------               ----------------------
                                                                                  
              MCC                 25,000 shares of Common        3,325 shares of Common             3,325
                                  Stock, $1.00 par value         Stock

              May                 10,000 shares of Common        1,000 shares of Common             1,000
                                  Stock, $.01 par value          Stock


Article 3.        The plan of merger was not retailed to shareholders of MCC and
                  May because MCC and May are wholly-owned subsidiaries of
                  Merrill.

         IN WITNESS WHEREOF, Merrill has, this 30th day of January, 1995, caused
these Articles of Merger to be executed by its officer thereunto duly
authorized.


                               MERRILL CORPORATION

                               By /s/ Steven J. Machov
                                  ----------------------------------------------
                               Its Vice President, General Counsel and Secretary
                                  ----------------------------------------------




                                                                       Exhibit A


         WHEREAS, Merrill Corporation ("Merrill") is a corporation duly
         organized and validly existing under the laws of the State of
         Minnesota;

         WHEREAS, Merrill Custom Communications, Inc. (MCC") is a corporation
         duly organized and validly existing under the laws of the State of
         Minnesota with an authorized capital stock consisting of 25,000 shares
         of common stock, $1.00 par value (the "MCC Common Stock"), of which, on
         the date hereof, 3,325 shares are issued and outstanding;

         WHEREAS, May Printing Company, Inc. ("May") is a corporation duly
         organized and validly existing under the laws of the State of Minnesota
         with an authorized capital stock consisting of 10,000 shares of common
         stock, $.01 par value (the "May Common Stock"), of which, on the date
         hereof, 1,000 shares are issued and outstanding;

         WHEREAS, 100% of the issued and outstanding shares of May and MCC
         Common Stock are owned by Merrill; and

         WHEREAS, MCC and May are sometimes hereinafter referred to as the
         "Constituent Corporations" and May is sometimes referred to as the
         "Surviving Corporation";

         WHEREAS, it is desirable to change the name of the Surviving
         Corporation to Merrill/May, Inc.;

         NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors of Merrill
         hereby approves and adopts the following plan of merger (the "Plan of
         Merger"), pursuant to which, in accordance with the provisions of these
         Resolutions and the Minnesota Business Corporation Act (the "Minnesota
         Act"), MCC shall be merged with and into the Surviving Corporation (the
         "Merger").

                                    ARTICLE 1

                                     MERGER

1.1 NAME OF PARENT AND SUBSIDIARIES. The name of the parent corporation is
"Merrill Corporation" and the name of the subsidiary corporations are "Merrill
Custom Communications, Inc." ("MCC") and "May Printing Company, Inc." ("May").

1.2 MERGER OF MERGING CORPORATION INTO SURVIVING CORPORATION. In accordance with
the provisions of these Resolutions and the Minnesota Business Corporation Act,
Minn. Stat. Ch. 302A (the "Minnesota Act"), MCC shall be merged with and into
May which shall be the Surviving Corporation (the "Merger"). The name of the
Surviving Corporation shall be changed to "Merrill/May, Inc."




1.3 RIGHTS AND LIABILITIES OF SURVIVING CORPORATION. At the effective time of
the Merger, as defined in Article III below, MCC shall be merged into the
Surviving Corporation, and the separate existence of MCC shall cease and the
Surviving Corporation shall continue its corporate existence under the laws of
the State of Minnesota. The Surviving Corporation (a) shall continue possessed
of all of its rights and property as constituted immediately prior to the
effective time of the Merger and succeed without other transfer to all rights
and property of MCC (b) shall continue subject to all of its debts and
liabilities as the same shall have existed immediately prior to the effective
time of the Merger, and (c) shall become subject to any debts and liabilities of
MCC, all as more fully provided in Section 302A.64l of the Minnesota Act.

1.4 ARTICLES OF INCORPORATION AND BYLAWS OF SURVIVING CORPORATION. The Articles
of Incorporation and By-laws of the Surviving Corporation will remain the same,
except the Articles of Incorporation and Bylaws of the Surviving Corporation
shall be amended to reflect the name change from May Printing Company, Inc., to
Merrill/May, Inc.

1.5 DIRECTORS AND OFFICERS OF SURVIVING CORPORATION. The officers and directors
of the Surviving Corporation shall be the same officers and directors in office
as of the effective time of the Merger.

1.6 MAILING THE PLAN OF MERGER. A copy of this Plan of Merger will not be mailed
to shareholders of MCC and May because MCC and May are wholly-owned subsidiaries
of Merrill.

                                    ARTICLE 2

                              CONVERSION OF SHARES

         Each share of the capital stock of MCC issued and outstanding at the
effective time of the Merger shall not be converted into shares of the Surviving
Corporation, but shall be cancelled.

                                    ARTICLE 3

                            EFFECTIVE TIME OF MERGER

         This Plan Of Merger shall, along with articles of merger meeting the
requirements of Section 302A.621, Subd. 3 of the Minnesota Act (the "Articles of
Merger"), be filed with the Secretary of State and the State of Minnesota in
accordance with applicable law. The Merger shall become effective January 31,
1995, which time is herein referred to as the "effective time of the Merger."

         RESOLVED FURTHER, that the appropriate officers of the Company are
hereby authorized and directed, in the name of and on behalf of this Company to
prepare, execute and deliver such documents, instruments or certificates, and to
take such other actions, as they may deem necessary or advisable fully to
effectuate the Merger.

EX-3.9

                            ARTICLES OF INCORPORATION
                                       OF
                       MERRILL/MAY ACQUISITION CORPORATION


         The undersigned incorporator, being a natural person, eighteen years of
age or older, in order to form a corporate entity under Minnesota Statutes,
Chapter 302A, adopts the following Articles of Incorporation:

                                   ARTICLE I.

         The name of this corporation is Merrill/May Acquisition Corporation
(the "Company").

                                   ARTICLE II.

         The registered office of the Company in Minnesota is: 4110 Clearwater
Road, St. Cloud, Minnesota 56301.

                                  ARTICLE III.

         The aggregate number of shares of stock which the Company shall have
authority to issue is ten thousand (10.000) shares, all of which shall be
designated common stock, $0.01 par value (the "Common Stock"). Shares of Common
Stock of the Company acquired by the Company shall become authorized but
unissued shares and may be reissued as provided in these Articles of
Incorporation.

                                   ARTICLE IV.

         The name and address of the incorporator of this Company are:

                       Name                       Address
                       ----                       -------

          Norma J. Williams                       Merrill Corporation
                                                  One Merrill Circle
                                                  St. Paul, MN 55108

                                   ARTICLE V.

         No shareholder of this Company shall have any cumulative voting rights.

                                   ARTICLE VI.

         No shareholder of this company shall have any preemptive rights by
virtue of Section 302A.413 of the Minnesota Statutes (or similar provisions of
future law) to subscribe for, purchase or acquire any shares of the Company of
any class, whether unissued or no or hereafter


                                  Page 1 of 2



authorized, or any obligations or other securities convertible into or
exchangeable for any such shares.

                                  ARTICLE VII.

         Any action required or permitted to be taken at a meeting of the Board
of Directors of this Company may be taken by written action signed by the number
of directors that would be required to take such action at a meeting of the
Board of Directors at which all directors are present.

                                  ARTICLE VIII.

         No director of this Company shall be personally liable to the Company
or its shareholders for monetary damages for breach of fiduciary duty by such
director as a director; provided, however, that this Article VIII shall not
eliminate or limit the liability of a director to the extend provided by
applicable law (i) for any breach of the director's duty of loyalty to the
Company or its shareholders, (ii) for acts or omissions not in good faith or
that involve intentional misconduct or a knowing violation of law, (iii) under
Section 302A.559 or Section 80A.23 of the Minnesota Statutes, as amended, (iv)
for any transaction from which the director derived an improper personal
benefit, or (v) for any act or omission occurring prior to the effective date of
this Article VIII. If the Section 302A of the Minnesota Statutes is hereinafter
amended to authorize the further elimination or limitation of the liability of
directors, then the liability of a director of the Company in addition to the
limitation and elimination of personal liability provided herein, shall be
eliminated or limited to the fullest extend permitted by the Minnesota Statutes,
as so amended. No amendment to or repeal of this Article VIII shall apply to, or
have any effect on, the liability or alleged liability of any director for or
with respect to any acts or omissions of such director occurring prior to such
amendment or repeal.

                                   ARTICLE IX.

         The Company shall indemnify its officers and directors to the fullest
extent permissible under the provisions of Chapter 302A of the Minnesota
Statutes, as amended from time to time, or as required or permitted by other
provisions of law. Any repeal or modification of this Article IX will be
prospective only and will not adversely affect any right to indemnification of a
director or officer of the Company existing at thc time of such repeal or
modification.

         IN WITNESS WHEREOF, I have hereunto set my hand this 7th day of June,
1999.


INCORPORATOR


/s/ Norma J. Williams
- ---------------------------
Norma J. Williams


                                  Page 2 of 2



                          MINNESOTA SECRETARY OF STATE

                     AMENDMENT OF ARTICLES OF INCORPORATION


READ INSTRUCTIONS LISTED BELOW, BEFORE COMPLETING THIS FORM.

1.       Type or print in black ink.
2.       There is a $35.00 fee payable to the Secretary of State for filing this
         "Amendment of Articles of Incorporation".
3.       Return Completed Amendment Form and Fee to the address listed on the
         bottom of the form.

- --------------------------------------------------------------------------------

CORPORATE NAME: (List the name of the company prior to any desired name change)

                       MERRILL/MAY ACQUISITION CORPORATION
- --------------------------------------------------------------------------------

This amendment is effective on the day it is filed with the Secretary of State,
unless you indicate another date, no later than 30 days after filing with the
Secretary of State.

                        ---------------------------------

The following amendment(s) to articles regulating the above corporation were
adopted: (Insert full text of newly amended article(s) indicating which
article(s) is (are) being amended or added.) If the full text of the amendment
will not fit in the space provided, attach additional numbered pages. (Total
number of pages including this form ___.)

                                    ARTICLE I

                  Article I of the Company's Articles of Incorporation is
                  amended in its entirety to read as follows:

                           The name of this corporation is Merrill/Alternatives,
                           Inc. (the "Company").



This amendment has been approved pursuant to MINNESOTA STATUTES CHAPTER 302A
or 317A. I certify that I am authorized to execute this amendment and I further
certify that I understand that by signing this amendment, I am subject to the
penalties of perjury as set forth in section 609.48 as if I had signed this
amendment under oath.

                                          /s/ Steven J. Machov
                                          --------------------------------------
                                                (Signature of Authorized Person)
                                          Steven J. Machov, Secretary

Name and telephone number of contact person:  Norma Williams      (651) 632-1426
                                            --------------------        --------

All of the information on this form is public and required in order to process
this filing. Failure to provide the requested information will prevent the
Office from approving or further processing this filing.

If you have any questions please contact the Secretary of State's office at
(651)296.2803.

RETURN TO:        Secretary of State
                  180 State Office B1dg., 100 Constitution Ave.
                  St. Paul, MN 55155-1299. (651)296.2803

EX-3.10

                            ARTICLES OF INCORPORATION
                                       OF
                           MERRILL INTERNATIONAL INC.


         The undersigned incorporator, being a natural person 18 years of age or
older, in order to f on a corporate entity under Minnesota Statutes, Chapter
302A, hereby adopts the following Articles of Incorporation:

                                   ARTICLE I

         The name of this Corporation is Merrill International Inc.

                                   ARTICLE II

         The registered office of this Corporation is located at One Merrill
Circle, St. Paul, Minnesota  55108.

                                  ARTICLE III

         This Corporation is authorized to issue an aggregate total of 10,000
shares, all of which shall be designated Common Stock, having a par value of
$.0l per share.

                                   ARTICLE IV

         The name and address of the incorporator of this Corporation is as
follows:

                                Anne M. Lonsbury
                               2200 Norwest Center
                               90 South 7th Street
                          Minneapolis, Minnesota 55402

                                   ARTICLE V

         No shareholder of this Corporation shall have any cumulative voting
rights.

                                   ARTICLE VI

         No shareholder of this Corporation shall have any preemptive rights to
subscribe for, purchase or acquire any shares of the Corporation of any class,
whether unissued or now or hereafter authorized, or any obligations or other
securities convertible into or exchangeable for any such shares.

                                  ARTICLE VII

         Any action required or permitted to be taken at a meeting of the Board
of Directors of this Corporation not needing approval by the shareholders under
Minnesota Statutes, Chapter 302A,




may be taken by written action signed by the number of directors that would be
required to take such action at a meeting of the Board of Directors at which
all directors are present.

                                  ARTICLE VIII

         No director of this Corporation shall be personally liable to the
Corporation or its shareholders for monetary damages for breach of fiduciary
duty by such director as a director; provided, however, that this Article shall
not eliminate or limit the liability of a director to the extent provided by
applicable law (i) for any breach of the director's duty of loyalty to the
Corporation or its shareholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
section 302A.559 or 80A.23 of the Minnesota Statutes, (iv) for any transaction
from which the director derived an improper personal benefit or (v) for any act
or omission occurring prior to the effective date of this Article. No amendment
to or repeal of this Article shall apply to or have any effect on the liability
or alleged liability of any director of the Corporation for or with respect to
any acts or omissions of such director occurring prior to such amendment or
repeal.

         IN WITNESS WHEREOF, I have hereunto set my hand this 30th day of
November, 1994.


                                           /s/ Anne M. Lonsbury
                                           ------------------------------------
                                           Anne M. Lonsbury, Incorporator


                                       2

EX-3.11

- -------------------------------------------------------------------------------

STATE OF WASHINGTON                                           SECRETARY OF STATE

- -------------------------------------------------------------------------------


I, RALPH MUNRO, Secretary of State of the State of Washington and custodian of
its seal, hereby issue this

                            CERTIFICATE OF AMENDMENT

                                       to

                          FORMS MANAGEMENT INCORPORATED

a Washington Profit corporation. Articles of Amendment were filed for record in
this office on the date indicated below.

              Changing name to FMC RESOURCE MANAGEMENT CORPORATION

U.B.I. Number:    601 111 339                     Date:      November 14, 1994





                                  GIVEN UNDER MY HAND AND THE SEAL OF THE STATE
                                  OF WASHINGTON, AT OLYMPIA, THE STATE CAPITAL

                                  /S/ RALPH MUNRO
                                  ---------------------------------------------
                                  RALPH MUNRO, SECRETARY OF STATE




                              ARTICLES OF AMENDMENT
                                       OF
                         FORMS MANAGEMENT, INCORPORATED

         Pursuant to the provisions of the Washington Business Corporation Act,
Chapter 23B.10 RCW, the following Articles of Amendment to the Articles of
Incorporation are submitted for filing.

                                    ARTICLE I

         The name of this corporation is currently FORMS MANAGEMENT,
INCORPORATED (the "Corporation"), but is being changed by this amendment to FMC
RESOURCE MANAGEMENT CORPORATION.

                                   ARTICLE II

         The amendments to the Articles of Incorporation as adopted are as
         follows:

            (1)   Article I of the Articles of Incorporation is amended to
         change the name of the corporation to FMC RESOURCE MANAGEMENT
         CORPORATION and shall read as follows:

                  The name of this corporation shall be FMC RESOURCE MANAGEMENT
                  CORPORATION.

                                  ARTICLE III

         The amendment provides for no exchange, classification, or cancellation
         of issued shares.

                                  ARTICLE IV

         The amendment was adopted by the Board of Directors of the Corporation
         on November 7, 1994.

                                   ARTICLE V

         Shareholder action on the amendment is not required under the bylaws of
the Company or the Washington Business Corporation Act and, consequently, the
amendment was adopted by the Board of Directors without shareholder action.

         IN WITNESS WHEREOF, the Corporation has caused these Articles of
Amendment to be executed on this 7 day of November, 1994.

                                         FORMS MANAGEMENT, INCORPORATED
                                         (Now FMC RESOURCE MANAGEMENT
                                         CORPORATION)

                                         By:   /s/ C. William Smith
                                            ---------------------------
                                         C. William Smith, its
                                         President

ARTICLES OF AMENDMENT OF
FORMS MANAGEMENT, INC.



                               STATE OF WASHINGTON

                               SECRETARY OF STATE

I, RALPH MUNRO, SECRETARY OF STATE OF THE STATE OF WASHINGTON AND CUSTODIAN OF
ITS SEAL,

         hereby certify by this certificate that the attached is a true and
         correct copy of

                            CERTIFICATE OF AMENDMENT

                                       of

                          FORMS MANAGEMENT INCORPORATED

                 Changing name to FORMS MANAGEMENT INCORPORATED

                     as filed in this office on May 16, 1989

                                   Date:      October 6, 1999

                                   GIVEN UNDER MY HAND AND THE SEAL OF THE STATE
                                   OF WASHINGTON, AT OLYMPIA, THE STATE CAPITAL

                                   /s/ Ralph Munro
                                   --------------------------------------------
                                   RALPH MUNRO, SECRETARY OF STATE




- --------------------------------------------------------------------------------

STATE OF WASHINGTON                                           SECRETARY OF STATE

- --------------------------------------------------------------------------------


I, RALPH MUNRO, Secretary of State of the State of Washington and custodian of
its seal, hereby issue this

                            CERTIFICATE OF AMENDMENT

                                       to

                            FORMS MANAGEMENT COMPANY

a Washington Profit corporation. Articles of Amendment were filed for record in
this office on the date indicated below.

                 Changing name to FORMS MANAGEMENT INCORPORATED

U.B.I. Number:    601 111 339                      Date:           May 16, 1989





                                     Given under my hand and the seal of the
                                     State of Washington, at Olympia, the State
                                     Capitol.

                                     /s/ Ralph Munro
                                     ----------------------------------------
                                          RALPH MUNRO, SECRETARY OF STATE




                              ARTICLES OF AMENDMENT
                                       OF
                            FORMS MANAGEMENT COMPANY

         Articles of amendment of the Articles of Incorporation of FORMS
MANAGEMENT COMPANY are herein executed by said corporation, pursuant to the
provisions of Revised Code of Washington 23A.l6.040 and 23A.l6.050, as follows:

         1.    The current name of the corporation is FORMS MANAGEMENT COMPANY.

         2.    The amendment to the articles of incorporation of said
corporation is as follows: ARTICLE 1 is amended to read as follows:

               The name of this corporation is FORMS MANAGEMENT, INCORPORATED.

         3.    The date of the adoption of said amendment by the shareholders
of said corporation is May 12, 1989.

         4.    The number of shares outstanding of said corporation is FIVE
THOUSAND ONE HUNDRED (5,100) shares.

               The number of shares entitled to vote on said amendment was
FIVE THOUSAND ONE HUNDRED (5,100).

         5.    The number of shares voted for and against said amendment,
respectively, were as follows:

               For Amendment: 5,100 shares
               Against Amendment: -0- shares

                                                    FORMS MANAGEMENT COMPANY

                                                    /s/ Hugh C. Schuster
                                                    ---------------------------
                                                    HUGH C. SCHUSTER
Dated     5/12     , 1989                           ITS PRESIDENT
     --------------





                               STATE OF WASHINGTON

                               SECRETARY OF STATE

I, RALPH MUNRO, SECRETARY OF STATE OF THE STATE OF WASHINGTON AND CUSTODIAN OF
ITS SEAL,

          hereby certify by this certificate that the attached is a true and
          correct copy of

                          CERTIFICATE OF INCORPORATION

                                       of

                            FORMS MANAGEMENT COMPANY

                  as filed in this office on September 30, 1988




                                  Date:      October 6, 1999

                                  GIVEN UNDER MY HAND AND THE SEAL OF THE STATE
                                  OF WASHINGTON, AT OLYMPIA, THE STATE CAPITAL

                                  /s/ Ralph Munro
                                  -----------------------------------
                                  RALPH MUNRO, SECRETARY OF STATE




- --------------------------------------------------------------------------------

STATE OF WASHINGTON                                           SECRETARY OF STATE

- --------------------------------------------------------------------------------


I, RALPH MUNRO, Secretary of State of the State of Washington and custodian of
its seal, hereby issue this

                          CERTIFICATE OF INCORPORATION

                                       to

                            FORMS MANAGEMENT COMPANY

a Washington Profit corporation. Articles of Amendment were filed for record in
this office on the date indicated below.

U.B.I. Number:    601 111 339                         Date:   September 30, 1988



                                     Given under my hand and the seal of the
                                     State of Washington, at Olympia, the State
                                     Capitol.

                                     /s/ Ralph Munro
                                     ------------------------------------------
                                     RALPH MUNRO, SECRETARY OF STATE




                            ARTICLES OF INCORPORATION

                                       OF

                            FORMS MANAGEMENT COMPANY

                                    ARTICLE 1

         The name of this corporation is FORMS MANAGEMENT COMPANY.

                                    ARTICLE 2

         This corporation has perpetual existence.

                                    ARTICLE 3

         This corporation is organized for the purposes of transacting any and
all lawful business for which corporations may be incorporated under Title 23A
of the Revised Code of Washington, as amended.

                                    ARTICLE 4

         The address of the registered office of the corporation is 11711 North
Creek Parkway South, Bothell, Washington 98011, and the name of the registered
agent at such address is Mark Trumper.

                                    ARTICLE 5

         The total authorized number of par value shares of the corporation is
One Hundred Thousand (100,000) shares of the par value of One Dollars ($1.00)
per share, amounting in the aggregate to One Hundred Thousand Dollars
($100,000).

                                    ARTICLE 6

         Shareholders of the corporation shall be entitled to preemptive rights
to subscribe for or purchase any part of new or additional issues of stock or
securities convertible into stock of any class whatsoever whether now or
hereafter authorized, and whether issued for cash, property, services, by way of
dividend, or otherwise.

                                    ARTICLE 7

         The number of directors of this corporation shall be fixed in the
manner specified by the bylaws of this corporation. The first directors of the
corporation are three (3) in number and his their names and addresses are:



                      Name                           Address
                      --------------------------------------

              Hugh C. Schuster                     8149 NE 150th
                                                   Bothell, WA  98011

              Mark J. Trumper                      810 Hindley Lane
                                                   Edmonds, WA  98020

              C. William Smith                     12007 12th Drive S.E.
                                                   Everett, WA  98020

         The first directors shall serve until the first annual meeting of
shareholders and until their successors are elected and qualified.

                                    ARTICLE 8

         The name and address of the incorporator are:

                      Name                           Address
                      --------------------------------------

              Hugh C. Schuster                     8149 NE 150th
                                                   Bothell, WA  98011

                                    ARTICLE 9

         At each election for directors every shareholder entitled to vote at
such election shall have the right to vote in person or by proxy, the number of
shares owned by him for as may persons as there are directors to be elected, or
to cumulate his votes by giving one candidate as many votes as the number of
such directors multiplied by the number of his shares shall equal, or by
distributing such votes on the same principle among any number of such
candidates.

                                   ARTICLE 10

         (1)   No contracts or other transactions between the corporation and
any other corporation, and no act of the corporation shall in any way be
affected or invalidated by the fact that any of the directors of the
corporation are pecuniarily or otherwise interested in, or are directors or
officers of, such other corporation; and

         (2)   Any director individually, or any firm of which any director may
be a member, may be a party to, or may be pecuniarily or otherwise interested
in, any contracts or transactions of the corporation, provided that the fact
that he or such firm is so interested shall be disclosed or shall have been
known to the Board of Directors or a majority thereof.

         (3)   The directors of the corporation shall have the greatest
limitation of liability authorized under Washington law.


                                   ARTICLE 11

         The corporation reserves the right to amend, alter, change or repeal
any provision contained in these Articles of Incorporation, in the manner now or
hereafter prescribed by law, and all rights and powers conferred herein on
shareholders and directors are subject to this reserved power.

         DATED:         9/23           , 1988
               ------------------------

         /s/ Hugh G. Schuster
         ---------------------------------------
         Hugh G. Schuster

CONSENT TO APPOINTMENT AS REGISTERED AGENT

         I, MARK J. TRUMPER do hereby consent to serve as registered agent for
FORMS MANAGEMENT COMPANY.

         I understand that as agent for the corporation, it will be my
responsibility to receive service of process in the name of the corporation; to
forward all mail to the corporation; and to immediately notify the office of the
Secretary of State in the event of my resignation, or of any changes in the
registered office address of the corporation for which I am agent.

         DATED:         9/23/88        , 1988
               ------------------------
         /s/ Mark J. Trumper
         ---------------------------------------
         MARK J. TRUMPER

Address of Registered Agent:

11711 North Creek Parkway South
Bothell, WA  98011

EX-3.12

                            ARTICLES OF INCORPORATION
                                       OF
                       MERRILL/SUPERSTAR COMPUTING COMPANY


The undersigned, for purposes of forming a corporation under Chapter 302A of the
Minnesota Statutes, as amended, does hereby sign and acknowledge these Articles
of Incorporation:

                                   ARTICLE I.

The name of the corporation is Merrill/Superstar Computing Company (the
"Corporation").

                                  ARTICLE II.

The registered office of the Corporation in Minnesota is One Merrill Circle,
Energy Park, St. Paul, Minnesota 55108.

                                  ARTICLE III.

The aggregate number of shares of stock which the Corporation shall have
authority to issue is one thousand (1,000) shares of common stock, $0.01 par
value.

                                  ARTICLE IV.

The name and mailing address of the incorporator is as follows:

           NAME                           ADDRESS
           ----                           -------

         Nona L. Goertz                   Oppenheimer Wolff & Donnelly
                                          3400 Plaza VII
                                          45 South 7th Street
                                          Minneapolis, Minnesota  55402-1609

                                   ARTICLE V.

A director of the Corporation shall not be personally liable to the Corporation
or its shareholders for monetary damages for breach of fiduciary duty as a
director, except to the extent provided by applicable law (i) for any breach of
the director's duty of loyalty to the Corporation or its shareholders, (ii) for
acts or omissions not in good faith or that involve intentional misconduct or a
knowing violation of law, (iii) under Sections 302A.559 or 80A.23 of the
Minnesota Statutes,




as amended, (iv) for any transaction from which the director derived an improper
personal benefit, or (v) for any act or omission occurring prior to the date
that this Article becomes effective. If the Minnesota Business Corporation Act
hereafter is amended to authorize the further elimination or limitation of the
liability of directors, then the liability of a director of the Corporation in
addition to the limitation and elimination of personal liability provided
herein, shall be eliminated or limited to the fullest extent permitted by the
Minnesota Business Corporation Act, as so amended. No amendment to or repeal of
this Article V shall apply to, or have any effect on, the liability or alleged
liability of any director for or with respect to any acts or omissions of such
director occurring prior to such amendment or repeal.

                          ARTICLE VI.

The Corporation shall indemnify to the fullest extent permissible under the
provisions of Chapter 302A of the Minnesota Statutes, as amended (as now or
hereafter in effect), any person made or threatened to be made a party to or
witness in any threatened, pending, or completed civil, criminal,
administrative, arbitration, or investigative proceeding, including a proceeding
by or in the right of the Corporation by reason of the fact that he, his
testator or intestate, is or was a director or officer of the Corporation, or by
reason of the fact that such director or officer, while a director or officer of
the Corporation, is or was serving at the request of the Corporation, or whose
duties in that position involved service as a director, officer, partner,
trustee or agent of another organization or employee benefit plan, against all
judgments, penalties, fines, including, without limitation, excise taxes
assessed against the person with respect to an employee benefit plan,
settlements, and reasonable expenses, including attorneys' fees and
disbursements. Nothing contained herein shall affect any rights to
indemnification to which employees or agents of the Corporation other than
directors and officers may be entitled under the provisions of Chapter 302A of
the Minnesota Statutes, as amended. Any repeal or modification of this Article

                                       2


VI shall be prospective only, and shall not adversely affect any right to
indemnification or protection of a director or officer of the Corporation
existing at the time of such repeal or modification.

                                  ARTICLE VII.

Any action required or permitted to be taken at a meeting of the Board of
Directors may be taken by written consent signed by all the directors; provided
that, if the action is one which does not require shareholder approval, such
action may be taken by written consent signed by the number of directors that
would be required to take the same action at a meeting at which all directors
were present.

                                 ARTICLE VIII.

The shareholders of the Corporation have no right to cumulate their votes in the
election of directors.

                                  ARTICLE IX.

The shareholders of the Corporation have not preemptive rights in any future
issuance of stock by the Corporation.


IN WITNESS WHEREOF, the undersigned hereunto set her hand this 18th day of
February, 1997.

                                       Incorporator:


                                       /s/ Nona L. Goertz
                                       ---------------------------------------
                                       Nona L. Goertz


                                       3



[LOGO]

                          MINNESOTA SECRETARY OF STATE
                     AMENDMENT OF ARTICLES OF INCORPORATION

BEFORE COMPLETING THIS FORM, PLEASE READ INSTRUCTIONS LISTED BELOW.

CORPORATE NAME:  (List the name of the company prior to any desired name change)

         Merrill/Superstar Computing Co.
- -----------------------------------------------------------------------------

This amendment is effective on the day it is filed with the Secretary of State,
unless you indicate another date, no later than 30 days after filing with the
Secretary of State.
                    -----------------------------


The following amendment(s) of articles regulating the above corporation were
adopted: (Insert full text of newly amended article(s) indicating which
article(s) is (are) being amended or added.) If the full text of the amendment
will not fit in the space provided, attach additional numbered pages. (Total
number of pages including this form 1 .)
                                   ---

                                    ARTICLE I
                                           ---


       The name of the corporation is Merrill Training & Technology, Inc.
                              (the "Corporation").





This amendment has been approved pursuant to MINNESOTA STATUTES CHAPTER 302A OR
317A. I certify that I am authorized to execute this amendment and I further
certify that I understand that by signing this amendment, I am subject to the
penalties of perjury as set forth in section 609.48 as if I had signed this
amendment under oath.

                                       /s/ Steven J. Machov, Secretary
                                       -------------------------------
                                       (Signature of Authorized Person)

- -------------------------------------------------------------------------------
INSTRUCTIONS                                             FOR OFFICE USE ONLY

1.  Type or print with black ink.
2.  A Filing Fee of:  $35.00, made payable to the
      Secretary of State
3.  Return completed forms to:

         Secretary of State
         180 State Office Building
         100 Constitution Ave.
         St. Paul, MN 55155-1299
         (612) 296-2803

EX-3.13

                            ARTICLES OF INCORPORATION
                                       OF
                               MERRILL/GLOBAL INC.

         The undersigned incorporator, being a natural person, eighteen years of
age or older, in order to form a corporate entity under Minnesota Statutes,
Chapter 302A, adopts the following Articles of Incorporation:

                                   ARTICLE I.

     The name of this corporation is Merrill/Global Inc. (the "Company").

                                  ARTICLE II.

     The registered office of the Company in Minnesota is: One Merrill Circle,
Energy Park, St. Paul, Minnesota 55108.

                                  ARTICLE III.

     The aggregate number of shares of stock which the Company shall have
authority to issue is one thousand (1,000) shares, all of which shall be
designated common stock, $0.01 par value (the "Common Stock"). Shares of Common
Stock of the Company acquired by the Company shall become authorized but
unissued shares and may be reissued as provided in these Articles of
Incorporation.

                                  ARTICLE IV.

         The name and address of the incorporator of this Company are:



         NAME                                        ADDRESS
         ----                                        -------
                                               
      Deanna Counsell                             Oppenheimer Wolff & Donnelly
                                                  45 South Seventh Street
                                                  Suite 3400, Plaza VII
                                                  Minneapolis, MN  55402


                                   ARTICLE V.

     No shareholder of this Company shall have any cumulative voting rights.

                                   ARTICLE VI.

         No shareholder of this Company shall have any preemptive rights by
 virtue of Section 302A.413 of the Minnesota Statutes (or similar provisions of
future law) to subscribe for, purchase or acquire any shares of the Company of
any class, whether unissued or now or hereafter authorized, or any obligations
or other securities convertible into or exchangeable for any such shares.



                                  ARTICLE VII.

         Any action required or permitted to be taken at a meeting of the Board
of Directors of this Company may be taken by written action signed by the number
of directors that would be required to take such action at a meeting of the
Board of Directors at which all directors are present.

                                 ARTICLE VIII.

         No director of this Company shall be personally liable to the Company
or its shareholders for monetary damages for breach of fiduciary duty by such
director as a director; provided, however, that this Article VIII shall not
eliminate or limit the liability of a director to the extent provided by
applicable law (i) for any breach of the director's duty of loyalty to the
Company or its shareholders, (ii) for acts or omissions not in good faith or
that involve intentional misconduct or a knowing violation of law, (iii) under
Section 302A.559 or Section 80A.23 of the Minnesota Statutes, as amended, (iv)
for any transaction from which the director derived an improper personal
benefit, or (v) for any act or omission occurring prior to the effective date of
this Article VIII. If the Section 302A of the Minnesota Statutes is hereinafter
amended to authorize the further elimination or limitation of the liability of
directors, then the liability of a director of the Company in addition to the
limitation and elimination of personal liability provided herein, shall be
eliminated or limited to the fullest extent permitted by the Minnesota Statutes,
as so amended. No amendment to or repeal of this Article VIII shall apply to, or
have any effect on, the liability or alleged liability of any director for or
with respect to any acts or omissions of such director occurring prior to such
amendment or repeal.

                                  ARTICLE IX.

         The Company shall indemnify its officers and directors to the fullest
extent permissable under the provisions of Chapter 302A of the Minnesota
Statutes, as amended from time to time, or as required or permitted by other
provisions of law. Any repeal or modification of this Article IX will be
prospective only and will not adversely affect any right to indemnification of a
director or officer of the Company existing at the time of such repeal or
modification.

         IN WITNESS WHEREOF, I have hereunto set my hand this 14th day of July,
1997.


INCORPORATOR

/s/ Deanna Counsell
- -----------------------------------
Deanna Counsell



                                       2

EX-3.14

                             ARTICLES OF INCORPORATION
                                         OF
                          MERRILL ACQUISITION CORPORATION

     The undersigned incorporator, being a natural person, eighteen years of age
or older, in order to form a corporate entity under Minnesota Statutes, Chapter
302A, adopts the following Articles of Incorporation:

                                   ARTICLE I.

     The name of this corporation is Merrill Acquisition Corporation (the
"Company").

                                  ARTICLE II.

     The registered office of the Company in Minnesota is: One Merrill Circle,
Energy Park, St. Paul, Minnsota 55108.

                                  ARTICLE III.

     The aggregate number of shares of stock which the Company shall have
authority to issue is ten thousand (10,000) shares, all of which shall be
designated common stock, $0.01 par value (the "Common Stock").  Shares of Common
Stock of the Company acquired by the Company shall become authorized but
unissued shares and may be reissued as provided in these Articles of
Incorporation.

                                  ARTICLE IV.

     The name and address of the incorporator of this Company are:

               NAME                        ADDRESS

               Deanna Counsell             Oppenheimer Wolff & Donnelly LLP
                                           45 South Seventh Street
                                           Suite 3400, Plaza VII
                                           Minneapolis, MN  55402

                                   ARTICLE V.

     No shareholder of this Company shall have any cumulative voting rights.

                                  ARTICLE VI.

     No shareholder of this Company shall have any preemptive rights by virtue
of Section 302A.413 of the Minnesota Statutes (or similar provisions of future
law) to subscribe for,



purchase or acquire any shares of the Company of any class, whether unissued or
now or hereafter authorized, or any obligations or other securities convertible
into or exchangeable for any such shares.

                                  ARTICLE VII.

     Any action required or permitted to be taken at a meeting of the Board of
Directors of this Company may be taken by written action signed by the number of
directors that would be required to take such action at a meeting of the Board
of Directors at which all directors are present.

                                 ARTICLE VIII.

     No director of this Company shall be personally liable to the Company or
its shareholders for monetary damages for breach of fiduciary duty by such
director as a director; provided, however, that this Article VIII shall not
eliminate or limit the liability of a director to the extent provided by
applicable law (i) for any breach of the director's duty of loyalty to the
Company or its shareholders, (ii) for acts or omissions not in good faith or
that involve intentional misconduct or a knowing violation of law, (iii) under
Section 302A.559 or Section 80A.23 of the Minnesota Statutes, as amended, (iv)
for any transaction from which the director derived an improper personal
benefit, or (v) for any act or omission occurring prior to the effective date of
this Article VIII.  If the Section 302A of the Minnesota Statutes is hereinafter
amended to authorize the further elimination or limitation of the liability of
directors, then the liability of a director of the Company in addition to the
limitation and elimination of personal liability provided herein, shall be
eliminated or limited to the fullest extent permitted by the Minnesota Statutes,
as so amended.  No amendment to or repeal of this Article VIII shall apply to,
or have any effect on, the liability or alleged liability of any director for or
with respect to any acts or omissions of such director occurring prior to such
amendment or repeal.

                                  ARTICLE IX.

     The Company shall indemnify its officers and directors to the fullest
extent permissable under the provisions of Chapter 302A of the Minnesota
Statutes, as amended from time to time, or as required or permitted by other
provisions of law.  Any repeal or modification of this Article IX will be
prospective only and will not adversely affect any right to indemnification of a
director or officer of the Company existing at the time of such repeal or
modification.

       IN WITNESS WHEREOF, I have hereunto set my hand this 30th day of January,
1998.


INCORPORATOR

/s/ Deanna Counsell
- ---------------------------
Deanna Counsell


                                       2


                          MINNESOTA SECRETARY OF STATE
                     AMENDMENT OF ARTICLES OF INCORPORATION

 BEFORE COMPLETING THIS FORM, PLEASE READ INSTRUCTIONS LISTED BELOW.

 CORPORATE NAME:  (List the name of the company prior to any desired name
 change)

 Merrill Acquisition Corporation
 -------------------------------------------------------------------------------

 This amendment is effective on the day it is filed with the Secretary of
 State, unless you indicate another date, no later than 30 days after filing
 with the Secretary of State.  _________________________

 The following amendment(s) of articles regulating the above corporation were
 adopted:  (Insert full text of newly amended article(s) indicating which
 article(s) is (are) being amended or added.)  If the full text of the
 amendment will  not fit in the space provided, attach additional numbered
 pages.  (Total number of pages including this form 1.)

                                 ARTICLE I

      Article  I  of  the Company's Articles of Incorporation is amended in its
      entirety to read as follows:

           The name of this corporation is Merrill/Executech, Inc.
           (the "Company").



 This amendment has been approved pursuant to MINNESOTA STATUTES CHAPTER 302A
 OR 317A.  I certify that I am authorized to execute this amendment and I
 further certify that I understand that by signing this amendment, I am subject
 to the penalties of perjury as set forth in section 609.48 as if I had signed
 this amendment under oath.

                               /s/ Steven J. Machov
                               ------------------------------------------
                               Steven J. Machov, Secretary
                                    (Signature of Authorized Person)

- --------------------------------------------------------------------------------
 INSTRUCTIONS                                 FOR OFFICE USE ONLY


 1.   Type or print with black ink.
 2.   A Filing Fee of:  $35.00, made
      payable to the Secretary of State
 3.   Return completed forms to:

      Secretary of State
      180 State Office Building
      100 Constitution Ave.
      St. Paul, MN 55155-1299
      (612) 296-2803

EX-3.15

                            ARTICLES OF INCORPORATION
                                       OF
                              MERRILL DANIELS, INC.


     The undersigned incorporator, being a natural person, eighteen years of age
or older, in order to form a corporate entity under Minnesota Statutes, Chapter
302A. adopts the following Articles of Incorporation:

                                   ARTICLE I.

     The name of this corporation is Merrill Daniels, Inc. (the "Company').

                                  ARTICLE II.

     The registered office of the Company in Minnesota is: One Merrill Circle,
Energy Park, St. Paul, Minnesota 55108

                                  ARTICLE III.

     The aggregate number of shares of stock which the Company shall have
authority to issue is ten thousand (10,000) shares, all of which shall be
designated common stock, $0.01 par value (the "Common Stock'). Shares of Common
Stock of the Company acquired by the Company shall become authorized but
unissued shares and may be reissued as provided in these Articles of
Incorporation.

                                  ARTICLE IV.

     The name and address of the incorporator of this Company are:



         NAME                                        ADDRESS
         ----                                        -------
                                                  
         Norma J. Williams                           Merrill Corporation
                                                     One Merrill Circle
                                                     St. Paul, MN  55108



                                   ARTICLE V.

     No shareholder of this Company shall have any cumulative voting rights.

                                  ARTICLE VI.

     No shareholder of this company shall have any preemptive rights by virtue
of Section 302A.413 of the Minnesota Statutes (or similar provisions of future
law) to subscribe for, purchase or acquire any shares of the Company of any
class, whether unissued or no or hereafter authorized, or any obligations or
other securities convertible into or exchangeable for any such shares.

                                  Page 1 of 2



                                  ARTICLE VII.

     Any action required or permitted to be taken at a meeting of the Board of
Directors of this Company may be taken by written action signed by the number of
directors that would be required to take such action at a meeting of the Board
of Directors at which all directors are present.

                                 ARTICLE VIII.

     No director of this Company shall be personally liable to the Company or
its shareholders for monetary damages for breach of fiduciary duty by such
director as a director; provided, however, that this Article VIII shall not
eliminate or limit the liability of a director to the extend provided by
applicable law (i) for any breach of the director's duty of loyalty to the
Company or its shareholders, (ii) for acts or omissions not in good faith or
that involve intentional misconduct or a knowing violation of law, (iii) under
Section 302A.559 or Section 80A.23 of the Minnesota Statutes, as amended, (iv)
for any transaction from which the director derived an improper personal
benefit, or (v) for any act or omission occurring prior to the effective date of
this Article VIII. If the Section 302A of the Minnesota Statutes is hereinafter
amended to authorize the further elimination or limitation of the liability of
directors, then the liability of a director of the Company in addition to the
limitation and elimination of personal liability provided herein, shall be
eliminated or limited to the fullest extend permitted by the Minnesota Statutes,
as so amended. No amendment to or repeal of this Article VIII shall apply to, or
have any effect on, the liability or alleged liability of any director for or
with respect to any acts or omissions of such director occurring prior to such
amendment or rcpeal.

                                  ARTICLE IX.

     The Company shall indemnify its officers and directors to the fullest
extent permissible under the provisions of Chapter 302A of the Minnesota
Statutes, as amended from time to time, or as required or permitted by other
provisions of law. Any repeal or modification of this Article IX will be
prospective only and will not adversely affect any right to indemnification of a
director or officer of the Company existing at the time of such repeal or
modification.

     IN WITNESS WHEREOF, I have hereunto set my hand this 11th day of March,
1999.


INCORPORATOR

/s/ Norma J. Williams
- ------------------------------
Norma J. Williams


                                  Page 2 of 2





                          MINNESOTA SECRETARY OF STATE

                     AMENDMENT OF ARTICLES OF INCORPORATION


READ INSTRUCTIONS LISTED BELOW, BEFORE COMPLETING TH1S FORM.

1.   Type or print in black ink.
2.   There is a $35.00 fee payable to the Secretary of State for filing this
     "Amendment of Articles of Incorporation".
3.   Return Completed Amendment Form and Fee to the address listed on the
     bottom of the form.

- ------------------------------------------------------------------------------

CORPORATE NAME: (List the name of the company prior to any desired name change)

                              MERRILL DANIELS, INC.
- -----------------------------------------------------------------------------

This amendment is effective on the day it is filed with the Secretary of State,
unless you indicate another date, no later than 30 days after filing with the
Secretary of State.
                        ---------------------------------

The following amendment(s) to articles regulating the above corporation were
adopted: (Insert full text of newly amended article(s) indicating which
article(s) is (are) being amended or added.) If the full text of the amendment
will not fit in the space provided, attach additional numbered pages. (Total
number of pages including this form ___.)

                                    ARTICLE I

                  Article I of the Company's Articles of Incorporation is
                  amended in its entirety to read as follows:

                           The name of this corporation is
                           Merrill/Daniels, Inc. (the "Company").



This amendment has been approved pursuant to MINNESOTA STATUTES CHAPTER 302A
OR 317A. I certify that I am authorized to execute this amendment and I further
certify that I understand that by signing this amendment, I am subject to the
penalties of perjury as set forth in section 609.48 as if I had signed this
amendment under oath.

                                      /s/ Rick Atterbury
                                     -----------------------------------------
                                     (Signature of Authorized Person)
                                     Rick Atterbury, Vice President

Name and telephone number of contact person:  Norma Williams  (651)632-1426
                                              ---------------      ---------

All of the information on this form is public and required in order to process
this filing. Failure to provide the requested information will prevent the
Office from approving or further processing this filing.

If you have any questions please contact the Secretary of State's office at
(651)296.2803.

RETURN TO:        Secretary of State
                  180 State Office B1dg., 100 Constitution Ave.
                  St. Paul, MN 55155-1299. (651)296.2803

EX-3.17

                                 AMENDED AND RESTATED
                        LIMITED LIABILITY COMPANY AGREEMENT OF
                              MERRILL COMMUNICATIONS LLC


     This Amended and Restated Limited Liability Company Agreement (this
"Agreement") of Merrill Communications LLC, a Delaware limited liability company
(the "Company"), is entered into by and between the Company and Merrill
Corporation, a Minnesota corporation, as the sole member of the Company (the
"Member"), effective on November 23, 1999 immediately after the Effective Time
of the Merger, as such terms are defined in the Agreement and Plan of Merger
dated as of July 14, 1999, as amended, between the Member and Viking Merger Sub,
Inc., a Minnesota corporation (the "Merger Agreement").  This Agreement amends
and restates in its entirety the Company's limited liability company agreement
dated November 5, 1999 (the "Prior LLC Agreement").

     In consideration of the formation of the Company on November 5, 1999, at
the time of the filing of the Company's Certificate of Formation in the office
of the Secretary of State of the State of Delaware, and of the adoption of the
Prior LLC Agreement and of the Member's subsequent contribution of substantially
all of its assets and liabilities to the Company as of immediately after the
Effective Time of the Merger, the Member and the Company hereby agree as
follows:

     1.   NAME.  The name of the Company is Merrill Communications LLC.

     2.   PURPOSE.  The Company is formed for the object and purpose of, and the
nature of the business to be conducted and promoted by the Company are, engaging
in any lawful act or activity for which limited liability companies may be
formed under the Delaware Limited Liability Company Act, 6 Del. C. Section
18-101, ET SEQ. (the "Act"), and engaging in any and all activities necessary or
incidental to the foregoing.

     3.   CERTIFICATES.  The Member, or any officers of the Member, as an
authorized person, within the meaning of the Act, shall execute, deliver and
file, or cause the execution, delivery and filing of, all certificates required
or permitted by the Act to be filed in the Office of the Secretary of State of
the State of Delaware.

     4.   REGISTERED OFFICE.  The address of the registered office of the
Company in the State of Delaware is c/o Corporation Trust Center, 1209 Orange
Street, Wilmington, Delaware 19801, in the County of New Castle.

     5.   REGISTERED AGENT.  The name and address of the registered agent of the
Company for service of process on the Company in the State of Delaware is The
Corporation Trust Company, 1209 Orange Street, Wilmington, Delaware 19801, in
the County of New Castle.

     6.   SOLE MEMBER.  The name and the business, residence or mailing address
of the sole Member of the Company is as follows:


                                          1


                  Name                                   Address
                  ----                                   -------

           Merrill Corporation                     One Merrill Circle
                                                St. Paul, Minnesota 55108

     7.   TITLE TO COMPANY PROPERTY.  All property of the Company, whether real
or personal, tangible or intangible, shall be owned by the Company as an entity,
and the Member, individually, shall not have any direct ownership interest in
such property.

     8.   ADDITIONAL MEMBERS.  New or additional members in the Company may be
admitted only by approval of the sole Member in its sole discretion.

     9.   TRANSFER OF MEMBERSHIP INTERESTS.  Subject to Sections 29 and 37,
membership interests in the Company may be transferred to the extent permitted
by law.

     10.  POWERS.  The Company shall have the power and authority to do any and
all acts necessary or convenient to or in furtherance of the purposes described
in Section 2 hereof, including all power and authority, statutory or otherwise,
possessed by, or which may be conferred upon, limited liability companies under
the laws of the State of Delaware.

     11.  TAX CHARACTERIZATION.  To the fullest extent permitted by applicable
federal, state or local law, the Company will be treated for tax purposes as
having no separate existence from the Member, and no action inconsistent with
such tax characterization of the Company will be taken without the express
written consent of the Member.

     12.  MANAGEMENT.  The management of the Company shall be vested exclusively
in the Company's board of directors (the "Board of Directors," and each member
thereof is a "Director").  The same notice, quorum, meeting, voting, action
without a meeting, committee structure and other administrative provisions
applicable to the board of directors of the Member pursuant to Article III of
the bylaws of the Member, as amended from time to time (the "Bylaws"), shall
apply to the Board of Directors of the Company.  For purposes of this Agreement
the term "shareholder" in the Bylaws shall mean a "Member" herein and the terms
"director" in the Bylaws shall mean a "Director" herein.  The Company's officers
shall have the same duties as set forth in Article IV of the Bylaws.  Each
Director shall be a manager of the Company as defined in the Act.

     13.  RELIANCE BY THIRD PARTIES.  Any person or entity dealing with the
Company may rely upon a certificate signed by the President or Secretary of the
Company, or signed by the President or Secretary of the Member, as to:

          (i)    the persons or entities authorized to execute and deliver any
                 instrument or document of or on behalf of the Company, and

          (ii)   the persons or entities authorized to take any action or
                 refrain from taking any action as to any matter whatsoever
                 involving the Company.

     14.  INDEMNIFICATION.  Subject to any limitations imposed by the Act that
cannot be modified in this Agreement, the Company, its receiver or its trustee,
will indemnify and save


                                          2


harmless the Directors, the Member, the officers or any of their respective
affiliates, officers, directors, shareholders, employees, agents, subsidiaries
or assigns, from and against any liability, loss or damage incurred by them or
by the Company by reason of any claim or demand whatsoever related to or arising
from any act performed or omitted to be performed by them or any of them in
connection with the business of the Company or the provisions of this Agreement,
including costs and attorneys' fees (which costs and attorneys' fees may be paid
as incurred) in defense of, any amounts expended in the settlement of and any
judgments resulting from any such claim or demand, provided that no person or
entity will be entitled to indemnification hereunder for their own acts or
omissions constituting fraud, intentional criminal misconduct or gross
negligence, for settlements to which the Member did not consent, or for actions
not meeting the standard of care described in Section 15.  Any indemnification
under this Section 14 shall be satisfied solely out of the assets of the Company
and no person shall have any recourse against the Member with respect to such
indemnification.  The indemnification provided in this Section 14 is for the
benefit of the specified persons only and shall not be deemed to create any
right to indemnification for any other person.  The Company may purchase and
maintain insurance on behalf of any person who is or was a Director, officer,
employee or agent of the Company, or is or was serving at the request of the
Company as a manager, director, officer, employee or agent of another company,
partnership, joint venture, trust or other enterprise against any liability
asserted against him/her and incurred by him/her in any such capacity, or
arising out of his/her status as such, whether or not the Company would have the
power or the obligation to indemnify him/her against such liability under the
provisions of this Section 14.

     15.  STANDARD OF CARE; PERSONAL LIABILITY.  The Directors, officers and
other persons appointed by the Member or the Directors to act on their behalf
shall act in a manner that they believe in good faith to be in the best
interests of the Company and with such care as an ordinarily prudent person in a
like position would use under similar circumstances.  The Directors, officers
and such persons shall not be liable to the Company or the Member for any action
taken in managing the business or affairs of the Company if they perform the
duties of their offices in compliance with the standard contained in this
Section 15, and they shall be entitled to indemnification as provided in Section
14.  The Directors, officers and other persons appointed by the Member or the
Directors to act on their behalf shall not be liable to the Company or to the
Member for any loss or damage sustained by the Company or the Member except loss
or damage resulting from intentional misconduct or knowing violation of law or a
transaction for which they received an improper personal benefit.

     16.  RECORDS AND ACCOUNTING MATTERS.  The Board of Directors will keep or
cause to be kept the records and books of account of the Company in a manner
consistent with good business practices in accordance with generally accepted
accounting principles and will make the same available to the Member from time
to time for any purpose reasonably related to the Member's interest in the
Company.

     17.  CAPITAL CONTRIBUTIONS.  Upon formation and execution of the Prior LLC
Agreement, and in exchange for the entire interest in the Company, the Member
contributed $1,000 in cash.  At the effective time of this Agreement, the Member
has made an additional contribution to the Company of substantially all of its
assets and assigned substantially all of its liabilities to the Company, other
than the assets and liabilities that are summarized on Schedule A hereto.


                                          3


     18.  ADDITIONAL CONTRIBUTIONS.  The Member may make, but shall not be
required to make, any additional capital contributions to the Company.

     19.  ALLOCATION OF PROFITS AND LOSSES.  The Company's profits and losses
shall be allocated exclusively to the Member, or, pursuant to the tax
characterization described in Section 11, such profits and losses shall be
treated as realized or incurred directly by the Member for certain tax purposes.

     20.  DISTRIBUTIONS.  Subject to any limitations imposed by the Delaware
Limited Liability Company Act, distributions shall be made to the Member at the
times and in the aggregate amounts determined by the Board of Directors.

     21.  TRANSACTIONS WITH MEMBER AND AFFILIATES.  To the extent permitted by
applicable law, and, unless otherwise provided in this Agreement, the Company is
hereby authorized to purchase property and services from, sell property or
services to, or otherwise deal with the Member of the Company, acting on its own
behalf, or any Affiliate (as defined below) of the Member.  For purposes of this
Agreement, "Affiliate" means any one or more of the following:  (i) a person
directly or indirectly controlling, controlled by or under common control with
another person; (ii) a person owning or controlling ten percent (10%) or more of
the outstanding voting interests in such other person; (iii) any officer,
director, manager, member or partner of such person; and (iv) if such other
person is an officer, director, manager, member or partner, any company for
which such person acts in any such capacity.

     22.  RESIGNATION.  Any Director may resign from the Board of Directors of
the Company upon providing notice thereof to the Company.

     23.  DISSOLUTION AND WINDING UP.  The Company shall have perpetual
existence unless it shall be dissolved and its affairs shall have been wound up
upon (a) the written consent of the Member or (b) the entry of a decree of
judicial dissolution under Section 18-802 of the Act.  Upon dissolution of the
Company, the Member or the person required by law to wind up the Company's
affairs will cause the cancellation of the Certificate of Formation and will
reduce the assets of the Company to cash (unless it is determined to distribute
certain Company assets in kind).  Proceeds will be applied in the following
order of priority:

          (i)    to the payment of liabilities and obligations of the Company
                 (unless it is determined that, pursuant to a distribution in
                 kind, the Member will assume such liabilities or take assets of
                 the Company subject thereto) including liabilities payable to
                 the Member, loans from the Member and expenses of winding up;

          (ii)   to the establishment of such reserves as such person may
                 reasonably deem necessary for any contingent liabilities and
                 obligations of the Company for such period as such person deems
                 advisable for the purpose of disbursing such reserves in
                 payment of such liabilities or obligations and, at the
                 expiration of such period, the balance of such reserves, if
                 any, will be distributed as hereinafter provided; and

          (iii)  the balance, if any, to be distributed to the Member.


                                          4


     24.  LIMITED LIABILITY.  Except as otherwise provided by the Act, the
debts, obligations and liabilities of the Company, whether arising in contract,
tort or otherwise, shall be solely the debts, obligations and liabilities of the
Company, and none of the Members, any of its Affiliates, any Director or any
officer, director, employee, partner or agent of any of them shall not have any
liability for the obligations or liabilities of the Company.

     25.  FISCAL YEAR.  The fiscal year of the Company shall be the twelve month
period ending on January 31.

     26.  COMPANY SEAL.  The Company will have no seal unless the Board of
Directors shall otherwise determine.  The seal of the Company, if any, shall be
in such form as the Board of Directors shall prescribe.

     27.  ENTIRE AGREEMENT.  This Agreement constitutes the entire agreement
among the parties and supersedes any prior agreement or understanding among them
with respect to the subject matter hereof.

     28.  SEVERABILITY.  If any provision of this Agreement is held to be
illegal, invalid, or unenforceable under the present or future laws effective
during the term of this Agreement, such provision will be fully severable; this
Agreement will be construed and enforced as if such illegal, invalid, or
unenforceable provision had never comprised a part of this Agreement; and the
remaining provisions of this Agreement will remain in full force and effect and
will not be affected by the illegal, invalid, or unenforceable provision or by
its severance from this Agreement.  Furthermore, in lieu of such illegal,
invalid, or unenforceable provision, there will be added automatically as a part
of this Agreement a provision as similar in terms to such illegal, invalid, or
unenforceable provision as may be possible to make such provision legal, valid,
and enforceable.

     29.  ASSIGNMENTS.  The Member may assign, transfer, pledge or encumber all
or any portion of its limited liability company interest to any person, subject
to obtaining the consent of the Board of Directors which consent may be withheld
in the sole and absolute discretion of the Board of Directors.  Such person
shall become a Member upon the filing of the instrument of assignment with the
records of the Company.  Any assignment pursuant to this Section 29 shall be
accomplished only by proper endorsement by the assignor to the assignee of the
certificate of limited liability company interest described in Section 37.  In
considering whether to consent to any such proposed assignment, the Board of
Directors may take into account any change in the tax characterization of the
Company resulting from such assignment.

     30.  AMENDMENTS.  This Agreement may be amended or restated from time to
time by the Member and the Company.

     31.  ASSURANCES.  The Member shall hereafter execute and deliver such
further instruments and do such further acts and things as may be reasonably
required or useful to carry out the intent and purpose of this Agreement and as
are not inconsistent with the terms hereof.

     32.  GOVERNING LAW.  This Agreement shall be governed by, and construed
under, the laws of the State of Delaware, all rights and remedies being governed
by said laws.


                                          5


     33.  NO THIRD PARTY BENEFICIARY.  This Agreement is made solely and
specifically among and for the benefit of the parties hereto, and their
respective successors and permitted assigns, and no other person will have any
rights, interest, or claims hereunder or be entitled to any benefits under or on
account of this Agreement as a third party beneficiary or otherwise; provided,
however, that nothing in this Section 33 shall limit, restrict or preclude any
person from obtaining indemnification from the Company pursuant to Section 14
hereof.

     34.  NOTICES.  All notices, offers or other communications required or
permitted to be given pursuant to this Agreement shall be in writing and may be
personally served or sent by United States mail and shall be deemed to have been
given when delivered in person or three business days after deposit in the
United States mails, registered or certified, postage prepaid, and properly
addressed, by or to the appropriate party.  For purposes of this Section 34, the
addresses of the parties hereto shall be as set forth on the signature page
hereto.  The address of any party hereto may be changed by a notice in writing
given in accordance with the provisions of this Section 34.

     35.  SURVIVAL.  All covenants, agreements, statements, representations,
warranties and indemnities made in this Agreement shall survive the execution
and delivery of this Agreement and, where appropriate to facilitate the intent
of this Agreement, the dissolution, liquidation and winding up of the Company.

     36.  COUNTERPARTS.  This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one agreement binding
on the parties.  Each party shall become bound by this Agreement immediately
upon signing any counterpart, independently of the signature of any other party.

     37.  CERTIFICATE OF LIMITED LIABILITY COMPANY INTEREST.  The interests of
the Member in the Company shall constitute "securities" within the meaning of
(i) Article 8 of the Uniform Commercial Code (including Section 8-102(a)(15)
thereof) as in effect from time to time in the States of Delaware and New York,
and (ii) the Uniform Commercial Code of any other applicable jurisdiction that
now or hereafter substantially includes the 1994 revisions to Article 8 thereof
as adopted by the American Law Institute and the National Conference of
Commissioners on Uniform State Laws and approved by the American Bar Association
on February 14, 1995.  Pursuant to Section 18-702(c) of the Delaware Limited
Liability Company Act, such interests shall be evidenced by a certificate or
certificates of limited liability company interest in the form attached as
Exhibit I hereto or in such other form as shall be determined by the Company's
Board of Directors.  Such certificate shall contain the following legend:

     THE SALE, ASSIGNMENT, TRANSFER, PLEDGE, ENCUMBRANCE OR OTHER DISPOSITION OF
     THE LIMITED LIABILITY COMPANY INTEREST EVIDENCED BY THIS CERTIFICATE IS
     RESTRICTED UNDER THE TERMS OF A LIMITED LIABILITY COMPANY AGREEMENT DATED
     NOVEMBER 23, 1999 AMONG THE COMPANY AND ITS SOLE MEMBER, A COPY OF WHICH IS
     ON FILE AT THE PRINCIPAL EXECUTIVE OFFICE OF THE COMPANY.


                                          6


     IN WITNESS WHEREOF, the undersigned, intending to be legally bound hereby,
have duly executed this Limited Liability Company Agreement effective as of the
date and year first set forth above.


 Address for Notice:              MERRILL COMMUNICATIONS LLC,
 -------------------                 a Delaware limited liability company
 One Merrill Circle
 St. Paul, Minnesota 55108
 Attn: General Counsel            By:   /s/ John Castro
                                     ----------------------------------------
                                       John W. Castro
                                  Its: President and Chief Executive Officer


 Address for Notice:              MERRILL CORPORATION,
 -------------------                   a Delaware corporation
 One Merrill Circle
 St. Paul, Minnesota 55108
 Attn:  General Counsel           By:  /s/ Steven J. Machov
                                     ----------------------------------------
                                       Steven J. Machov
                                  Its:  Vice President, General Counsel and
                                        Secretary


                                          7


                                                                      SCHEDULE A

                          SUMMARY OF ASSETS AND LIABILITIES
                      EXCLUDED FROM CONTRIBUTION BY SOLE MEMBER

          (1)    Leases, contract rights and other assets the transfers of which
                 require the consent or approval of (or would give rise to any
                 right of termination by or any right of penalty in favor of)
                 any third party or governmental entity.

          (2)    Certain pending litigation.

          (3)    Prior to January 1, 2000, the Member's employees and related
                 employee benefit plans and arrangements.

          (4)    Other assets and liabilities excluded from the contribution as
                 set forth on Exhibit A to the Bill of Sale, Contribution and
                 Assignment/Assumption Agreement of Operating Assets and
                 Liabilities between the Member and the Company dated November
                 23, 1999.


                                         A-1



                                                                       EXHIBIT I

                          FORM OF LIMITED LIABILITY COMPANY
                                 INTEREST CERTIFICATE




                                         I-1

EX-3.18

                                       BYLAWS

                                         OF

                            MERRILL REAL ESTATE COMPANY

                                     ARTICLE 1

                                      OFFICES

          1.1)   REGISTERED OFFICE.  The registered office of the Corporation
shall be located within the State of Minnesota, as set forth in the Articles of
Incorporation.  The Board of Directors shall have authority to change the
registered office of the Corporation, and a statement evidencing any such change
shall be filed with the Secretary of State of Minnesota as required by law.

          1.2)   OFFICES.  The Corporation may have other offices, including
its principal business office, either within or without the State of Minnesota.

                                     ARTICLE 2

                                   CORPORATE SEAL

          The Board of Directors shall determine whether or not the Corporation
will adopt a corporate seal.  If a corporate seal is adopted, inscribed on the
corporate seal shall be the name of the Corporation and the words "Corporate
Seal," and when so directed by the Board of Directors, a duplicate of the seal
may be kept and used by the Secretary of the Corporation.

                                     ARTICLE 3

                                    SHAREHOLDERS

          3.1)   REGULAR MEETINGS.  Regular meetings of the shareholders shall
be held at the Corporation's principal office or such other place within or
without the State of Minnesota as is designated by the Board of Directors.
Regular meetings may be held annually or on a less frequent periodic basis, as
established by a resolution of the Board of Directors, or may be held on call by
the Board of Directors from time to time as and when the Board determines.  At
each regular meeting the shareholders shall elect qualified successors for
directors who serve for an indefinite term or whose terms have expired or are
due to expire within six (6) months after the date of the meeting, and may
transact such other business which properly comes before them.  The foregoing
notwithstanding, in the event a regular meeting of the shareholders has not been
held for a period of fifteen (15) months, a shareholder or group of shareholders
holding three percent (3%) or more of the issued and outstanding voting shares
may demand that a regular meeting of the shareholders be held by giving written
notice to the President or Treasurer of the Corporation.  Within thirty (30)
days after receipt of the notice, the Board shall cause a regular meeting of the
shareholders to be called and held within ninety (90) days of receipt of the
notice.



Any regular meeting held pursuant to such a request by a shareholder or
shareholders shall be held within the county where the principal executive
office of the Corporation is located.

          3.2)   SPECIAL  MEETINGS.  Special meetings of the shareholders shall
be called by the Chief Executive Officer or Chief Financial Officer, or such
other officers as may be designated by the Board of Directors, upon request of
two (2) members of the Board of Directors, or upon a written request of
shareholders holding ten percent (10%) or more of the shares entitled to vote.
The request must specify the purpose of the meeting.  Within thirty (30) days
after receipt of the request, the Board of Directors must call a special meeting
of the shareholders to be held within ninety (90) days of receipt of the
request.  Any special meeting held pursuant to such a request by a shareholder
or shareholders shall be held within the county where the principal executive
office of the Corporation is located.

          3.3)   QUORUM.  Business may be transacted at any duly held meeting
of shareholders at which a quorum is present.  The holders of a majority of the
voting power of the shares entitled to vote at a meeting are a quorum.  The
shareholders present at the meeting may continue to transact business until
adjournment, even though a number of shareholders withdraw leaving less than a
quorum.  If a quorum is not present at any meeting, those present have the power
to adjourn the meeting from time to time until the requisite number of voting
shares are present.  The date, time and place of the reconvened meeting shall be
announced at the time of adjournment and notice of the reconvened meeting shall
be given to all shareholders who were not present at the time of adjournment.
Any business which might have been transacted at the meeting which was adjourned
may be transacted at the reconvened meeting.

          3.4)   VOTING.  At each shareholders meeting, every shareholder
having the right to vote is entitled to vote in person or by proxy.
Shareholders have one (1) vote for each share having voting power standing in
their name on the books of the Corporation, unless otherwise provided in the
Articles of Incorporation of the Corporation, or these Bylaws, or in the terms
of the shares.  Upon the demand of any shareholder, the vote for directors or
the vote upon any question before the meeting shall be by ballot.  All elections
and questions shall be decided by a majority vote of the number of shares
entitled to vote and represented at any meeting at which there is a quorum,
except as otherwise required by statute, the Articles of Incorporation, these
Bylaws, or by agreement among the shareholders.

          3.5)   NOTICE OF MEETING.  Notice of regular or special meetings of
the shareholders shall be given by an officer or agent of the Corporation to
each shareholder shown on the books of the Corporation to be the holder of
record of shares entitled to vote at the meeting.  If the notice is to be
mailed, then the notice must be mailed to each shareholder at the shareholder's
address as shown on the books of the Corporation at least five (5) calendar days
prior to the meeting.  If the notice is not mailed, then the notice must be
given at least forty-eight (48) hours prior to the meeting.  The notice must
contain the date, time and place of the meeting, and in the case of a special
meeting, must also contain a statement of the purpose of the meeting.  In no
event shall notice be given more than sixty (60) days prior to the meeting.

          3.6)   PROXIES.  At all meetings of shareholders, a shareholder may
vote by proxy executed in writing by the shareholder or by his duly authorized
attorney-in-fact.  Such proxies must be filed with an officer of the Corporation
before or at the time of the meeting.  No proxy

                                   2


shall be valid after eleven (11) months from the date of its execution,
unless otherwise provided in the proxy.

          3.7)   CLOSING TRANSFER BOOKS.  The Board of Directors may close the
stock transfer books for a period of time which does not exceed sixty (60) days
preceding any of the following: the date of any meeting of shareholders; the
payment of dividends; the allotment of rights; or the change, conversion or
exchange of shares.

          3.8)   RECORD DATE.  In lieu of closing the stock transfer books, the
Board of Directors may fix in advance a date, not exceeding sixty (60) days
preceding the date of any of the events described in Section 3.7, as a record
date for the determination of shareholders entitled to notice of and to vote at
any meeting and any meeting subsequent to adjournment; to receive any dividend
or allotment of rights; or to exercise the rights in respect to any change,
conversion or exchange of shares.  In such case, only those shareholders of
record on the record date so fixed shall be entitled to receive notice of and to
vote at the meeting and any meeting subsequent to adjournment thereof, to
receive a dividend or allotment of rights, to exercise such rights, as the case
may be, notwithstanding any transfer of any shares on the books of the
Corporation after any record date so fixed.  If the share transfer books are not
closed and no record date is fixed for determination of the shareholders of
record, then the date on which notice of the meeting is mailed or the date of
adoption of a resolution of the Board of Directors declaring a dividend,
allotment of rights, change, conversion or exchange of shares, as the case may
be, shall be the record date of such determination.

          3.9)   PRESIDING OFFICER.  The Chief Executive Officer of the
Corporation shall preside over all meetings of the shareholders.  In the absence
of the Chief Executive Officer, the shareholders may choose any person present
to act as a presiding officer.

          3.10)  ORDER OF BUSINESS.  The suggested order of business at the
regular meeting, and so far as possible at all other meetings of the
shareholders, shall be:

     1.   Calling of roll.
     2.   Proof of due notice of meeting, unanimous attendance or waiver of
          notice.
     3.   Reading and disposal of any unapproved minutes.
     4.   Annual reports of all officers and committees.
     5.   Election of directors.
     6.   Unfinished business.
     7.   New business.
     8.   Adjournment.

          3.11)  WRITTEN ACTION BY SHAREHOLDERS.  Any action which may be taken
at a meeting of the shareholders may be taken without a meeting and notice if a
consent in writing, setting forth the action so taken, is signed by all of the
shareholders entitled to notice of a meeting for such purpose.

                                   3

                                     ARTICLE 4

                                     DIRECTORS

          4.1)   GENERAL POWERS.  The property, affairs, and business of the
Corporation shall be managed by the Board of Directors.

          4.2)   NUMBER.  The number of directors shall be fixed by resolution
of the shareholders at their regular meetings or special meetings called for
that purpose; provided, however, that the number may be increased by resolution
of the Board of Directors.  Any newly created directorships resulting from any
action by the Board of Directors shall be filled by a majority vote of the
directors serving at the time of increase.

          4.3)   QUALIFICATIONS AND TERM OF OFFICE.  Directors need not be
shareholders or residents of the State of Minnesota.  The Board of Directors
shall be elected by the shareholders at their regular meeting and at any special
shareholders meeting called for that purpose.  A director elected for an
indefinite term shall serve until the next regular meeting of the shareholders
and until the director's successor is elected and qualifies, or until the
earlier death, resignation, removal, or disqualification of the director.  A
director elected for a fixed term of office, which shall not exceed five (5)
years, shall hold office until the director's successor is elected and
qualifies, or until the earlier death, resignation, removal, or disqualification
of the director.

          4.4)   QUORUM.  A majority of the Board of Directors constitutes a
quorum for the transaction of business; provided, however, that if any vacancies
exist by reason of death, resignation or otherwise,, a majority of the remaining
directors constitutes a quorum.  If less than a quorum is present at the
meeting, a majority of the directors present may adjourn the meeting from time
to time without further notice.

          4.5)   ACTION OF DIRECTORS.  The acts of a majority of the directors
present at a meeting at which a quorum is present are the acts of the Board of
Directors.

          4.6)   MEETINGS.  Meetings of the Board of Directors may be held
from time to time at any place, within or without the State of Minnesota that
the Board of Directors may select.  If the Board of Directors fails to select
a place for a meeting, the meeting shall be held at the principal executive
office of the Corporation.  The Chief Executive Officer or any director may
call a meeting of the Board of Directors by giving notice to all directors of
the date, time and place of the meeting.  If the notice is to be mailed, then
the notice must be mailed to each director at least five (5) calendar days
prior to the meeting.  If the notice is not mailed, then the notice must be
given at least forty-eight (48) hours prior to the meeting.  If the date,
time and place of the meeting of the Board of Directors has been announced at
a previous meeting of the Board of Directors, no additional notice of such
meeting is required, except 'hat notice shall be given to all directors who
were not present the previous meeting.  Notice of the meeting of the Board of
Directors need not state the purposes of the meeting.  A director may orally
or in writing waive notice of the meeting.  Attendance by a director at a
meeting of the Board of Directors is also a waiver of notice of such meeting,
except where the director objects at the

                                     4

beginning of the meeting to the transaction of business because the meeting
allegedly is not lawfully called or convened and does not participate thereafter
in the meeting.

          4.7)   MEETING BY ELECTRONIC COMMUNICATIONS.  A conference among
directors by any means of communication through which the directors may
simultaneously hear each other during the conference constitutes a meeting of
the Board of Directors if the number of directors participating in the
conference would be sufficient to constitute a quorum at a meeting, and if the
same notice is given of the conference as would be required for a Board of
Directors meeting under these Bylaws.  In any Board of Directors meeting, a
director may participate by any means of communication through which the
director, other directors so participating, and all directors physically present
at the meeting may simultaneously hear each other during the meeting.

          4.8)   COMPENSATION.   Directors may receive such compensation as may
be determined from time to time by resolution of the Board of Directors.

          4.9)   COMMITTEES.  By the affirmative vote of a majority of the
directors, the Board of Directors may establish a committee or committees
having the authority of the Board of Directors in the management of the
business of the Corporation to the extent provided in the resolution adopted
by the Board of Directors.  A committee shall consist of one or more persons,
who need not be directors, appointed by affirmative vote of a majority of the
directors present. A majority of the members of the committee present at any
meeting of the committee is a quorum for the transaction of business, unless
a larger or smaller proportion or number is provided in the resolution
approved by the Board of Directors.  Minutes of any committees created by the
Board of Directors shall be available upon request to members of the
committee and to any director.

          4.10)  ACTION BY ABSENT DIRECTOR.  A director may give advance
written consent or opposition to a proposal to be acted upon at a Board of
Directors meeting by giving a written statement to the Chief Executive Officer,
Chief Financial Treasurer, or any director setting forth a statement of the
proposal to be voted on and containing a statement of the director's voting
preference with regards to the proposal.  An advance written statement does not
constitute presence of the director for purposes of determining a quorum, but
the advance written statement shall be counted in the vote on the subject
proposal provided that the proposal acted on at the meeting is substantially the
same or has substantially the same effect as the proposal set forth in the
advance written statement.  The advance written statement by a director on a
proposal shall be included in the records of the Board of Director's action on
the proposal.

          4.11)  REMOVAL OF DIRECTORS BY SHAREHOLDERS.  At any duly called
meeting of the shareholders, the affirmative vote of a number of shares
sufficient to elect a director may remove any or all of the directors, with or
without cause, and may elect replacements.

          4.12)  REMOVAL OF DIRECTORS BY BOARD OF DIRECTORS.  Any director who
has been elected by the Board of Directors to fill a vacancy on the Board of
Directors, or to fill a directorship created by action of the Board of
Directors, and who has not subsequently been re-elected by the shareholders, may
be removed by a majority vote of all directors constituting the Board, exclusive
of the director whose removal is proposed.

                                   5


          4.13)  VACANCIES.  Any vacancy on the Board of Directors may be
filled by vote of the remaining directors, even though less than a quorum.

          4.14)  ORDER OF BUSINESS.  The suggested order of business at any
meeting of the directors shall be:

     1.   Calling of roll.
     2.   Proof of due notice of meeting, unanimous attendance or waiver of
          notice.
     3.   Reading and disposal of any unapproved minutes.
     4.   Annual reports of all officers and committees.
     5.   Election of directors.
     6.   Unfinished business.
     7.   New business.
     8.   Adjournment.

          4.15)  WRITTEN ACTION BY DIRECTORS.  Any action which may be taken at
a meeting of the Board of Directors may be taken without a meeting and notice
thereof if a consent in writing, setting forth the action to be taken, is signed
by all of the directors.

          4.16)  DISSENT FROM ACTION.  A director of the Corporation who is
present at a meeting of the Board of Directors at which any action is taken
shall be presumed to have assented to the action taken unless the director
objects at the beginning of the meeting to the transaction of business because
the meeting is not lawfully called or convened and does not participate
thereafter, or unless the director votes against the action at the meeting, or
is prohibited from voting on the action.

                                     ARTICLE 5

                                      OFFICERS

          5.1)   ELECTION OF OFFICERS.  The Board of Directors shall, from
time to time, elect a President, who may also be designated as Chief
Executive Officer, and a Treasurer, who may also be designated as Chief
Financial Officer. The Board of Directors may elect, but shall not be
required to elect, a Secretary, one or more Vice Presidents, and a Chairman
of the Board.  In addition, the Board of Directors may elect such other
officers and agents as it may deem necessary.  The officers shall exercise
such powers and perform such duties as are prescribed by applicable statutes,
the Articles of Incorporation, the Bylaws, or as may be determined from time
to time by the Board of Directors. Any number of offices may be held by the
same person.

          5.2)   TERM OF OFFICE.  The officers shall hold office until their
successors are elected and qualify; provided, however, that any officer may be
removed with or without cause by the affirmative vote of a majority of the
directors present at a Board of Directors meeting.

          5.3)   CHIEF EXECUTIVE OFFICER.   The Chief Executive Officer shall:

     1.   When present, preside at all meetings of the shareholders;

     2.   When present, preside at all meetings of the Board of Directors;

                                         6


     3.   Sign and deliver in the name of the Corporation any deeds,
          mortgages, bonds, contracts, or other instruments pertaining to
          the business of the Corporation, except in cases in which the
          authority to sign and deliver is required by law to be exercised
          by another person or is expressly delegated by the Articles of
          Incorporation or Bylaws or by the Board of Directors to some
          other officer or agent of the Corporation;

     4.   Maintain records of and, whenever necessary, certify all
          proceedings of the Board of Directors and the shareholders; and

     5.   Perform other duties prescribed by the Board of Directors.

     All other officers shall be subject to the direction and authority of the
     Chief Executive Officer.

          5.4)   CHIEF FINANCIAL OFFICER.  The Chief Financial Officer shall:

     1.   Keep accurate financial records for the Corporation;

     2.   Deposit all money, drafts, and checks in the name of and to the credit
          of the Corporation in the banks and depositories designated by the
          Directors;

     3.   Endorse for deposit all notes, checks, and drafts received by the
          Corporation as ordered by the Board of Directors, making proper
          vouchers therefor;

     4.   Disburse corporate funds and issue checks and drafts in the name of
          the Corporation, as ordered by the Board of Directors;

     5.   Render to the Chief Executive Officer and the Board of Directors
          whenever requested an account of all transactions by the Chief
          Financial Officer and of the financial condition of the Corporation;
          and

     6.   Perform other duties prescribed by the Board of Directors or by the
          Chief Executive Officer.

          5.5)   VICE PRESIDENT.  Each Vice President, if any, has such powers
and shall perform such duties as may be specified in these Bylaws or prescribed
by the Board of Directors.  In the event of absence or disability of the Chief
Executive Officer, the Vice President shall succeed to the Chief Executive
Officer's powers and duties.  If there are two or more Vice Presidents, the
order of succession shall be determined through seniority by the order in which
elected or as otherwise prescribed by the Board of Directors.

          5.6)   SECRETARY.  The Secretary, if any, shall attend all meetings
of the shareholders and the Board of Directors.  The Secretary shall act as
clerk and shall record all the proceedings of the meetings in the minute book of
the Corporation and shall give proper notice of meetings of shareholders and the
Board of Directors.  The Secretary shall keep the seal of the

                                  7


Corporation, if any, and shall affix the seal to any instrument requiring it
and shall attest the seal, and shall perform such other duties as may be
prescribed from time to time by the Board of Directors.

          5.7)   CHAIRMAN OF THE BOARD.  The Chairman of the Board, if any,
shall preside at all meetings of the Board of Directors and shall perform such
other duties as may from time to time be assigned by the Board of Directors.

          5.8)   ASSISTANT OFFICERS.  In the event of absence or disability of
any Vice President, Secretary, or Chief Financial Officer, the assistant to such
officer, if any, shall succeed to the powers and duties of the absent officer
until the principal officer resumes his duties or a replacement is elected by
the Board of Directors.  If there are two or more assistants, the order of
succession shall be determined through seniority by the order in which elected
or as otherwise prescribed by the Board of Directors.  The assistant officers
shall exercise such other powers and duties as may be delegated to them from
time to time by the Board of Directors or the principal officer under whom they
serve, but at all times remain subordinate to the principal officers they are
designated to assist.

                                     ARTICLE 6

                          REPAYMENT OF DISALLOWED AMOUNTS

          Any payments made to, or on behalf of, an officer (including a former
officer) of the Corporation, e.g., salary, commission, bonus, rent, travel or
entertainment expense, which shall be finally disallowed in whole or in part as
a deductible expense by the Internal Revenue Service or the tax authority of any
state, shall be repayed by such officer to the Corporation to the extent of the
amount of such disallowed deduction.  For these purposes, the term "final
disallowance" shall mean an agreement by the Corporation with the Internal
Revenue Service or state tax authority to such disallowance, a determination by
the Internal Revenue Service or other such tax authority with respect to which
the time to protest or appeal has lapsed, or the final decision of a court
establishing such disallowance.  A decision of a court shall be deemed final
when the period during which an appeal from a decision of the court can be made
has lapsed.  Such officer may elect to repay the Corporation either in a lump
sum, or in installments.  If the officer elects to repay the Corporation in a
lump sum, the payment of the disallowed amount shall be due within ninety (90)
days of the date on which the Corporation notifies the officer of such
disallowance.  If the officer elects to repay the Corporation in installments,
the disallowed amount shall be repaid in no more than twelve (12) equal monthly
installments, together with interest at a rate which is one percent (1%) in
excess of the so-called base rate or prime rate in effect at the Corporation's
principal bank on the date on which the Corporation notifies the officer that an
obligation for payment has arisen under this Article 6.  Such monthly
installments shall commence on the fifteenth (15th) day of the first calendar
month following the calendar month during which the Corporation notifies the
officer that such obligation of payment has arisen.

                                   8


                                     ARTICLE 7

                                  INDEMNIFICATION

          Directors, officers, committee members, and other persons shall have
the rights to indemnification provided by Section 302A.521 of the Minnesota
Statutes and law amendatory thereof and supplementary thereto.

                                     ARTICLE 8

                             SHARES AND THEIR TRANSFER

          8.1)   CERTIFICATES OF SHARES.  Unless the Board of Directors has
provided that the Corporation's shares are to be uncertificated, every owner of
shares of the Corporation shall be entitled to a certificate, to be in such form
as the Board of Directors prescribes, certifying the number of shares owned by
such owner.  The certificates for such shares shall be numbered in the order in
which they are issued and shall be signed in the name of the Corporation by the
Chief Executive Officer or a Vice President or by the Secretary or Assistant
Secretary, or the Chief Financial Officer or any other officer of the
Corporation authorized by the Board of Directors, and shall have the corporate
seal, if any, affixed thereto.  A record shall be kept of the name of the person
owning the shares represented by each certificate, the number of shares
represented by each certificate, the respective issue dates thereof, and in the
case of cancellation, the respective dates of cancellation.  Except as provided
in Section 8.5 of this Article 8, every certificate surrendered to the
Corporation for exchange or transfer shall be cancelled, and no other
certificate shall be issued in exchange for any existing certificate until such
existing certificate is cancelled.

          8.2)   UNCERTIFICATED SHARES.  The Board of Directors by a majority
vote of directors present at a duly called meeting may provide that any or all
shares of classes or series of shares are to be uncertificated shares.  In that
case, any shareholder who is issued uncertificated shares shall be provided with
the information legally required to be disclosed in a certificate.

          8.3)   ISSUANCE OF SHARES.  The Board of Directors is authorized to
issue shares of the capital stock of the Corporation up to the number of shares
authorized by the Articles of Incorporation.  Shares may be issued for any
consideration, including, without limitation, money or other tangible or
intangible property received by the Corporation or to be received by the
Corporation under a written agreement, or services rendered to the Corporation
or to be rendered to the Corporation under a written agreement, as authorized by
a resolution approved by the affirmative vote of a majority of the directors
present, valuing all nonmonetary consideration and establishing a price in money
or other consideration, or a minimum price, or a general formula or method by
which the price will be determined.  Upon authorization by resolution approved
by the affirmative vote of a majority of the directors present, the Corporation
may, without any new or additional consideration, issue shares of its authorized
and unissued capital stock in exchange for or in conversion of its outstanding
shares, or issue its own shares pro rata to its shareholders or the shareholders
of one or more classes or series, to effectuate share dividends or splits,
including reserve share splits.  No shares of a class or series shall be issued
to the holders of

                                       9


shares of another class or series, unless issuance is either
expressly provided for in the Articles of Incorporation or is approved at a
meeting by the affirmative vote of the holders of a majority of the voting power
of all shares of the same class or series as the shares to be issued.

          8.4)   TRANSFER OF SHARES.  Transfer of shares on the books of the
Corporation may be authorized only by the shareholder named in the certificate
or the shareholder's legal representative or duly authorized attorney-in-fact
and only upon surrender for cancellation of the certificate for such shares.
The shareholder in whose name shares stand on the books of the Corporation shall
be considered the owner thereof for all purposes regarding the Corporation.

          8.5)   LOST CERTIFICATES.  Any shareholder claiming a certificate for
shares to be lost or destroyed shall make an affidavit or affirmation of that
fact in such form as the Board of Directors may require and shall, if the
directors so require, give the Corporation a bond of indemnity in form and with
one or more sureties satisfactory to the Board of Directors and in an amount
determined by the Board of Directors, to indemnify the Corporation against any
claim that may be made against it on account of the alleged loss or destruction
of the certificate.  A new certificate may then be issued in the same tenor and
for the same number of shares as the one alleged to have been destroyed or lost.

          8.6)   TRANSFER AGENT AND REGISTRAR.  The Board of Directors may
appoint one or more transfer agents or transfer clerks and one or more
registrars and may require all certificates for shares to bear the signature or
signatures of any of them.

          8.7)   FACSIMILE SIGNATURE.  Where any certificate is manually signed
by a transfer agent, a transfer clerk, or a registrar appointed by the Board of
Directors to perform such duties, a facsimile or engraved signature of the
officers and a facsimile corporate seal, if any, may be inscribed on the
certificate in lieu of the actual signatures and seal.

                                     ARTICLE 9

                         FINANCIAL AND PROPERTY MANAGEMENT

          9.1)   FISCAL YEAR.  The fiscal year of the Corporation shall end on
December 31st of each year.

          9.2)   CHECKS.  All checks, drafts, other orders for the payment of
money, notes, or other evidences of indebtedness issued in the name of the
Corporation shall be signed by the Chief Executive Officer or Chief Financial
Officer, or any other officer or officers, agent or agents of the Corporation,
as may from time to time be determined by resolution of the Board of Directors.

          9.3)   DEPOSITS.  All funds of the Corporation not otherwise employed
shall be deposited from time to time to the credit of the Corporation in such
banks, trust companies, or other depositories as the Board of Directors may
select.

          9.4)   VOTING SECURITIES HELD BY CORPORATION.  The Chief Executive
Officer, or other officer or agent designated by the Board of Directors, shall
have full power and authority on behalf of the Corporation to attend, act at and
vote at any meeting of security or interest

                                   10


holders of other corporations or entities in 4hich the Corporation may hold
securities or interests.  At the meeting, the Chief Executive Officer or
other designated agent shall possess and exercise any and all rights and
powers incident to the ownership of the securities or interests which the
Corporation holds.

                                     ARTICLE 10

                                     AMENDMENTS

          The Board of Directors of the Corporation is expressly authorized to
make Bylaws of the Corporation and from time to time to adopt, amend, or repeal
Bylaws so made to the extent and in the manner prescribed by the Minnesota
Statutes.  The Board of Directors shall not adopt, amend, or repeal a Bylaw
fixing a quorum for meetings of shareholders, prescribing procedures for
removing directors or filling vacancies in the Board of Directors or fixing the
number of directors or their classifications, qualifications, or terms of
office, but may adopt or amend a Bylaw to increase the number of directors.  The
authority in the Board of Directors is subject to the power of the voting
shareholders to adopt, change or repeal the Bylaws by a vote of shareholders
holding a majority of the shares entitled to vote and present or represented at
any regular meeting or special meeting called for that purpose.

                                     ARTICLE 11

                         RESTRICTION ON TRANSFER OF SHARES

          11.1)  CORPORATE AND SHAREHOLDER OPTION.  No transfer of shares of
the common stock of the Corporation or securities convertible into common stock
of the Corporation shall be made, nor any sale or assignment thereof be valid,
unless such shares or securities shall have first been offered in writing to the
Corporation and secondly to the shareholders of the Corporation.  The
Corporation shall have the right to purchase the same within ten (10) days of
receipt of notice of such transfer, sale or assignment 1) upon the same terms
and conditions of any such proposed transfer, sale or assignment; 2) under a
pre-existing agreement to purchase such shares or securities between the
Corporation and such shareholder; or 3) if neither of the foregoing is
applicable, at the book value of such shares or securities on the last day of
the calendar month immediately preceding the date of notice of such transfer,
sale or assignment.  If the Corporation shall not exercise its option within the
aforesaid ten (10) day period, the shareholders shall have an additional five
(5) days in which to purchase such shares or securities, pro rata, upon the same
terms and conditions as the Corporation.

          11.2)  RENEWAL OF NOTICE.  Any transfer, sale or assignment to be
made after the expiration of the aforesaid option period must be made upon the
same terms and conditions contained in the notice of transfer and within an
additional five (5) days after the expiration thereof; otherwise, an additional
notice must be given to the Corporation and the Corporation's shareholders and
an additional option period must expire prior to any such transfer.

          11.3)  EXERCISE OF OPTION.  The Corporation or the shareholders,
whichever is applicable, may exercise the option herein granted by depositing
within the prescribed option period, in cash, the full purchase price with any
national or state chartered bank.  Within the prescribed option period, the
Corporation or the shareholders exercising the option shall give

                                  11


notice thereof to the selling shareholder, or the representative of such
shareholder, as the case may be, by depositing written notice in the United
States mail addressed to his last known address.  The bank designated to hold
the funds shall disburse them to the person entitled to them upon the
surrender of the certificate or certificates of the shares or securities
properly endorsed, plus the release in full by such person for all claims he
may have against the Corporation on account of ownership of the common stock
or securities.

          11.4)  ENDORSEMENT ON STOCK CERTIFICATES.  An endorsement in language
substantially as follows shall be placed on each certificate of stock or
securities issued by the Corporation:  "This certificate is subject to a
repurchase option by the Corporation and its shareholders as set forth in
Article 11 of the Bylaws, which Bylaws are available for inspection at the
registered office of the Corporation."

          The foregoing Bylaws were adopted as the complete Bylaws of the
Corporation by action of the Board of Directors on the 18th day of July, 1995.



                                         /s/ John Castro
                                         --------------------------------------
                                         John Castro


                                         /s/ Rick Atterbury
                                         --------------------------------------
                                         Rick Atterbury


                                         /s/ Steven J. Machov
                                         --------------------------------------
                                         Steve Machov












                                      12

EX-3.19

                        MERRILL/MAGNUS PUBLISHING CORPORATION

                                       BYLAWS



                                      ----------

                                     ARTICLE I.

                                      OFFICES

       SECTION 1.  REGISTERED OFFICE.  The registered office of the Corporation
required by Chapter 302A of the Minnesota Statutes to be maintained in the State
of Minnesota is as designated in the Articles of Incorporation.  The Board of
Directors of the Corporation may, from time to time, change the location of the
registered office.  On or before the day that such change is to become
effective, a certificate of such change and of the new address of the new
registered office shall be filed with the Secretary of State of the State of
Minnesota.

       SECTION 2.  OTHER OFFICES.  The Corporation may establish and maintain
such other offices, within or without the State of Minnesota, as are from time
to time authorized by the Board of Directors.

                                    ARTICLE II.

                              MEETINGS OF SHAREHOLDERS

       SECTION 1.  PLACE OF MEETING.  All meetings of the shareholders shall be
held at the registered office of the Corporation in the State of Minnesota or at
such place within or without the state as may be fixed from time to time by the
Board of Directors, provided that a meeting called by or at the demand of a
shareholder shall be held in the county where the principal executive office of
the Corporation is located.

       SECTION 2.  DATE OF MEETING.  A regular meeting of shareholders may be
held for the purpose of electing directors or for the transaction of any other
business as may come before the meeting.   It shall be the duty of the Chairman
of the Board or the Chief Executive Officer, upon demand of any shareholder
holding three percent (3%) or more or all voting shares, to call such meeting if
a regular meeting of shareholders has not been held during the immediately
preceding fifteen (15) months.   If said officers fail to call and hold such
meeting within ninety (90) days after receipt of the demand, the shareholder
making the demand shall have the right and power to call such meeting.

       SECTION 3.  NOVICE OF REGULAR MEETINGS.  Written notice of the time and
place of each regular shareholder meeting shall be mailed, postage prepaid, at
least ten (10) but not more than sixty (60) days before such meeting, to each
shareholder entitled to vote thereat at his or her address as the same appears
upon the books of the Corporation.

       SECTION 4.  SPECIAL MEETINGS.  Special meetings of the shareholders, for
any purpose or purposes, unless otherwise prescribed by statute or by the
Articles of Incorporation, may be



called by the Chairman of the Board or the Chief Executive Officer and shall
be called by the Chairman of the Board or the Chief Executive Officer at the
request in writing of two or more members of the Board of Directors, or at
the request in writing of shareholders owning ten percent (10%) or more of
the voting power of all outstanding voting shares.  Such request, which shall
be by registered mail or delivered in person to the Chairman of the Board or
the Chief Executive Officer, shall state the purpose or purposes of the
proposed meeting.

       SECTION 5.  NOTICE OF SPECIAL MEETINGS.  Written notice of the time,
place and purpose or purposes for a special meeting shall be mailed, postage
prepaid, at least five (5) but not more than sixty (60) days before such
meeting, to each shareholder entitled to vote at such meeting at his or her
address as the same appears upon the books of the Corporation.

       SECTION 6.  BUSINESS TO BE TRANSACTED.  No business shall be transacted
at any special meeting of shareholders except that stated in the notice of the
meeting.

       SECTION 7.  WAIVER OF NOTICE.  A shareholder may waive notice of a
meeting of shareholders.  A waiver of notice by a shareholder entitled to notice
is effective whether given before, at, or after the meeting, and whether given
in writing, orally, or by attendance.  Attendance by a shareholder at a meeting
is a waiver of notice of that meeting, except where the shareholder objects at
the beginning of the meeting to the transaction of business because the meeting
is not lawfully called or convened, or objects before a vote on an item of
business because the item may not lawfully be considered at that meeting and
does not participate in the consideration of the item at that meeting.

       SECTION 8.  QUORUM AND ADJOURNMENT.  The holders of a majority of the
voting power of the shares present in person or by proxy entitled to vote at a
meeting shall constitute a quorum at all meetings of the shareholders for the
transaction of business, except as otherwise provided by statute or by the
Articles of Incorporation.   If, however, such quorum shall not be present or
represented at any meeting of the shareholders, the shareholders entitled to
vote thereat, present in person or represented by proxy, shall have the power to
adjourn the meeting from time to time, without notice other than announcement at
the meeting, until a quorum shall be present or represented.  At such adjourned
meeting at which a quorum shall be present or represented any business may be
transacted which might have been transacted at the meeting as originally
noticed.   The shareholders present at a duly called or held meeting at which a
quorum is present may continue to transact business until adjournment, even
though the withdrawal of a number of shareholders originally present leaves less
than the proportion or number otherwise required for a quorum.

       SECTION 9.  VOTING RIGHTS.  A shareholder may cast a vote in person or by
proxy.  When a quorum is present at the time a meeting is convened, the vote of
the holders of a majority of the shares entitled to vote on any question present
in person or by proxy shall decide such question unless the question is one upon
which, by express provision of the applicable statute or the Articles of
Incorporation, a different vote is required, in which case such express
provision shall govern and control the decision of such question.

       SECTION 10.  MANNER OF VOTING.  Each shareholder shall at every meeting
of the shareholders be entitled to one vote in person or by proxy for each
share of the capital stock

                               2


having voting power held by such shareholder, but no proxy shall be valid
after eleven (11) months from its date, unless the proxy expressly provides
for a longer period, and, except where the transfer books of the Corporation
have been closed or a date has been fixed as a record date for the
determination of its shareholders entitled to vote, no share of stock that
has been transferred on the books of the Corporation within twenty (20) days
next preceding any election of directors shall be voted on at such election
for directors.

       SECTION 11.  RECORD DATE.  The Board of Directors may fix a date, not
exceeding sixty (60) days preceding the date of any meeting of shareholders, as
a record date for the determination of the shareholders entitled to notice of
and to vote at such meeting, and in such case only shareholders of record on the
date so fixed, or their legal representatives, shall be entitled to notice of
and to vote at such meeting, notwithstanding any transfer of any shares on the
books of the Corporation after any record date so fixed.  The Board of Directors
may close the books of the Corporation against transfers of shares during the
whole or any part of such period.

       SECTION 12.  ORGANIZATION OF MEETINGS.  The Chairman of the Board shall
preside at all meetings of the shareholders, and in his or her absence the Chief
Executive Officer shall act as Chairman.   The Secretary shall act as secretary
of all meetings of the shareholders, or in his or her absence any person
appointed by the Chairman shall act as secretary.

                                    ARTICLE III.

                                 BOARD OF DIRECTORS

       SECTION 1.  GENERAL POWERS.  The business and affairs of the Corporation
shall be managed by or under its Board of Directors which may exercise all such
powers of the Corporation and do all such lawful acts and things as are not by
statute or by the Articles of Incorporation or by these Bylaws required to be
exercised or done by the shareholders.

       SECTION 2.  NUMBER AND TERM OF OFFICE.  The number of directors which
shall constitute the whole board shall not be less than three (3) as determined
from time to time by the Board of Directors.  The directors shall be elected at
the annual meeting of the shareholders, except as provided in Section 4 of this
Article or as otherwise permitted by statute, and each director elected shall
hold office until his or her successor is elected and qualified.   Directors
need not be shareholders.

       SECTION 3.  RESIGNATION AND REMOVAL.  My director may resign at any time
by giving written notice to the Corporation.   Such resignation shall take
effect at the date of the receipt of such notice, or at any later time specified
therein, and, unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.   Any director may be
removed at any time, with or without cause, by the affirmative vote of the
holders of a majority of the voting shares entitled to elect such director.

       SECTION 4.  QUALIFICATIONS.  No person may serve as a director if such
person is an employee, officer, agent, partner or director, or beneficial
owner of 5% or more of the common

                                 3


stock of any business enterprise which is competitive with the business of
the corporation or its subsidiaries.

       SECTION 5.  VACANCIES.  If the office of any director becomes vacant by
reason of death, resignation, removal disqualification, or otherwise, the
directors then in office, although less than a quorum, by a majority vote, may
choose a successor who shall hold office for the unexpired term in respect of
which such vacancy occurred.   With respect to the initial election of a
director to fill a newly created directorship resulting from an increase in the
number of directors by action of the Board of Directors in the manner permitted
by statute, such vacancy shall be filled by the affirmative vote of a majority
of the directors serving at the time of the increase.

       SECTION 6.  MEETINGS OF DIRECTORS.  The Board of Directors of the
Corporation may hold meetings, from time to time, either within or without the
State of Minnesota, at such place as a majority of the members of the Board of
Directors may from time to time appoint.   If the Board of Directors fails to
select a place for the meeting, the meeting shall be held at the principal
executive office of the Corporation.

       SECTION 7.  CALLING MEETINGS.  Meetings of the Board of Directors may be
called by (i) the Chief Executive Officer on two (2) days notice or (ii) any
director on ten (10) days' notice, to each director, either personally, by
telephone or by mail or telegram.  Every such notice shall state the date, time
and place of the meeting.   Notice of a meeting called by a person other than
the Chief Executive Officer shall state the purpose of the meeting.

       SECTION 8.  PARTICIPATION BY CONFERENCE TELEPHONE.  Directors of the
Corporation may participate in a meeting of the Board of Directors by means of
conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other, and participation in a
meeting by that means shall constitute presence in person at the meeting.

       SECTION 9.  WAIVE OF NOTICE.  A director may waive notice of a meeting of
the Board of Directors.   A waiver of notice by a director entitled to notice is
effective whether given before, at, or after the meeting, and whether given in
writing, orally, or by attendance.  Attendance by a director at a meeting is a
waiver of notice of that meeting, except where the director objects at the
beginning of the meeting to the transaction of business because the meeting was
not lawfully called or convened and does not participate thereafter in the
meeting.

       SECTION 10.  ABSENT DIRECTORS.  A director may give advance written
consent or opposition to a proposal to be acted on at a meeting of the Board of
Directors by actual delivery prior to the meeting of such advance written
consent or opposition to the Chairman of the Board or the Chief Executive
Officer or a director who is present at the meeting.   If the director is not
present at the meeting, advance written consent or opposition to a proposal
shall not constitute presence for purposes of determining the existence of a
quorum, but consent or opposition shall be counted as a vote in favor of or
against the proposal and shall be entered in the minutes or other record of
action at the meeting, if the proposal acted on at the meeting is substantially
the same or has substantially the same effect as the proposal to which the
director has consented or objected.

                                  4


       SECTION 11.  QUORUM.  At all meetings of the Board of Directors a
majority of the directors shall constitute a quorum for the transaction of
business, and the act of a majority of the directors present at any meeting at
which there is a quorum shall be the act of the Board of Directors, except as
may be otherwise specifically provided by applicable statute or by the Articles
of Incorporation.  If a quorum shall not be present at any meeting from time to
time, without notice other than announcement at the meeting, until a quorum is
present.   If a quorum is present at the call of a meeting, the directors may
continue to transact business until adjournment notwithstanding the withdrawal
of enough directors to leave less than a quorum.

       SECTION 12.  ORGANIZATION OF MEETINGS.  The Chairman of the Board shall
preside at ALL meetings of the Board of Directors, and in his or her absence the
Chief Executive Officer shall act as Chairman.  The Secretary shall act as
secretary of all meetings of the Board of Directors, and in his or her absence
any person appointed by the Chairman shall act as secretary.

       SECTION 13.  ACTION WITHOUT MEETING.  Unless otherwise restricted by the
Articles of Incorporation or these Bylaws, any action required or permitted to
be taken at any meeting of the Board of Directors may be taken without a
meeting, if a written consent thereto is signed by all members of the Board of
Directors and such written consent is filed with the minutes of proceedings of
the Board of Directors.  If the proposed action need not be approved by the
shareholders and the Articles of Incorporation so provide, action may be taken
by written consent signed by the number of directors that would be required to
take the same action at a meeting of the Board of Directors at which all
directors were present.  Such action shall be effective on the date on which the
last signature is placed on such writing or writings, or such other effective
date as is set forth therein.

       SECTION 14.  COMPENSATION OF DIRECTORS.  The directors may be paid their
expenses, if any, of attendance at each meeting of the Board of Directors and
may not be paid a fixed sum for attendance at each meeting of the Board of
Directors nor a stated salary as director.  No such payment shall preclude any
director from serving the Corporation in any other capacity and receiving
compensation therefor.  Members of special or standing committees may be allowed
like compensation for attending committee meetings.

       SECTION 15.  COMMITTEES OF THE BOARD OF DIRECTORS.  The Board of
Directors may, by resolution passed by a majority of the whole board, designate
one or more committees, each committee to consist of two or more of the
directors of the Corporation, which, to the extent provided in the resolution,
shall have and may exercise the powers of the Board of Directors in the
management of the business and affairs of the Corporation.  Such committee or
committees shall have such name or names as may be determined from time to time
by resolution adopted by the Board of Directors.  Each committee shall keep
regular minutes of its meetings and report the same to the Board of Directors
when required.  The Chief Executive Officer shall serve as a member of the
Executive Committee if one is established.



                               5

                                    ARTICLE IV.

                                      OFFICERS

       SECTION 1.  NUMBER.  The officers of the Corporation shall be chosen by
the Board of Directors and shall be a Chairman, a Chief Executive Officer, a
Vice President, a Chief Financial Officer, a Secretary and a Treasurer.  The
Board of Directors may also choose additional Vice Presidents, and one or more
Assistant Secretaries and Assistant Treasurers.  Two or more offices may be held
by the same person, except that where the offices of Chief Executive Officer and
Secretary are held by the same person, such person shall not hold any other
office.

       SECTION 2.  ELECTION.  The Board of Directors at its first meeting after
each annual meeting of shareholders shall choose a Chairman, a Chief Executive
Officer, one or more Vice Presidents, a Chief Financial Officer, a Secretary and
a Treasurer.

       SECTION 3.  OTHER OFFICERS AND AGENTS.  The Board of Directors may
appoint such other officers and agents as it shall deem necessary who shall hold
their offices for such terms and shall exercise such powers and perform such
duties as shall be determined from time to time by the Board.

       SECTION 4.  SALARIES.  The salaries of all officers and agents of the
Corporation shall be fixed by the Board of Directors.

       SECTION 5.  TERM OF OFFICE.  The officers of the Corporation shall hold
office until their successors are chosen and qualify.  Any officer elected or
appointed by the Board of Directors may be removed at any time by the
affirmative vote of a majority of the Board of Directors.  Any vacancy occurring
in any office of the Corporation shall be filled by the Board of Directors.

       SECTION 6.  CHAIRMAN.  The Chairman shall preside at all meetings of the
shareholders and the Board of Directors and shall see that all orders and
resolutions of the Board of Directors are carried into effect.  In addition, he
or she shall have such other duties as may from time to time be prescribed by
the Board of Directors.

       SECTION 7.  CHIEF EXECUTIVE OFFICER.  The Chief Executive Officer of the
Corporation shall have the general and active management of the business of the
Corporation and may use the title of President.  He or she shall execute and
deliver in the name of the Corporation, any deeds, mortgages, bonds, contracts,
or other instruments pertaining to the business of the Corporation and in
addition, shall have such other duties as may from time to time be prescribed by
the Board of Directors.

       SECTION 8.  VICE PRESIDENT.  The Vice President, or if there shall be
more than one, the vice presidents in the order determined by the Board of
Directors, shall, in the absence or disability of the Chief Executive Officer,
perform the duties and exercise the powers of the Chief Executive Officer and
shall perform such other duties and have such other powers as the Board of
Directors may from time to time prescribe.


                                   6


       SECTION 9.  CHIEF FINANCIAL OFFICER.  The Chief Financial Officer of the
Corporation shall have overall responsibility for supervision of the
Corporation's finances, including but not limited to, corporate borrowings,
maintaining books of account, administration of accounts receivable and payable,
supervision of the finances and accounts of subsidiaries, record keeping and
administration of insurance and benefit plans, and maintenance of internal audit
and control systems and shall perform such other duties as may from time to time
be prescribed by the Board of Directors or the Chief Executive Officer.

       SECTION 10.  TREASURER.  The Treasurer shall have the custody of the
corporate funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the Corporation and shall
deposit all moneys and other valuable effects in the name and to the credit of
the Corporation in such depositories as may be designated by the Board of
Directors.  He or she shall disburse the funds of the Corporation as may be
ordered by the Chief Financial Officer, or the Board of Directors, taking proper
vouchers for such disbursements, and shall render to the Chief Financial Officer
and the Board of Directors, at its regular meetings, or when the Chief Financial
Officer or the Board of Directors so requires, an account of all his or her
transactions as Treasurer and of the financial condition of the Corporation.  If
required by the Board of Directors, he or she shall give the Corporation a bond
(which shall be renewed every six years) in such sum and with such surety or
sureties as shall be satisfactory to the Board of Directors for the faithful
performance of the duties of his or her office and for the restoration to the
Corporation, in case of his or her death, resignation, retirement or removal
from office, of all books, papers, vouchers, money and other property of
whatever kind in his or her possession or under his control belonging to the
Corporation.

       SECTION 11.  ASSISTANT TREASURER.  The Assistant Treasurer, or if there
shall be more than one, the Assistant Treasurers in the order determined by the
Board of Directors, shall, in the absence or disability of the Treasurer,
perform the duties and exercise the powers of the Treasurer and shall perform
such other duties and have such other powers as the Board of Directors may from
time to time prescribe.

       SECTION 12.  SECRETARY.  The Secretary shall attend all meetings of the
Board of Directors and all meetings of the shareholders and record all the
proceedings of the meetings of the Corporation and of the Board of Directors in
a book to be kept for that purpose and shall perform like duties for the
standing committees when required.  The Secretary shall give, or cause to be
given, notice of all meetings of the shareholders and special meetings of the
Board of Directors, and shall perform such other duties as may be prescribed by
the Board of Directors or Chief Executive Officer, under whose supervision he or
she shall be.  The Secretary shall have custody of the corporate seal of the
Corporation and he or she, or an Assistant Secretary, shall have authority to
affix the same to any instrument requiring it and when so affixed, it may be
attested by his or her signature or by the signature of such Assistant
Secretary.  The Board of Directors may give general authority to any other
officer to affix the seal of the Corporation and to attest the affixing by his
signature.

       SECTION 13.  ASSISTANT SECRETARY.  The Assistant Secretary, or if there
be more than one, the Assistant Secretaries in the order determined by the Board
of Directors, shall, in the absence or disability of the Secretary, perform the
duties and exercise the powers of the

                                 7


Secretary and shall perform such otherduties and have such other powers as
the Board of Directors may from time to time prescribe.

                                     ARTICLE V.

                               CERTIFICATES OF STOCK

       SECTION 1.  CERTIFICATES OF STOCK.  Every holder of stock in the
Corporation shall be entitled to have a certificate, signed by, or in the name
of the Corporation by, the Chairman or a Vice President and the Chief Executive
Officer or the Secretary of the Corporation, certifying the number of shares
owned by him or her in the Corporation.

       SECTION 2.  FACSIMILE SIGNATURES.  Where a certificate is signed (1) by a
transfer agent or an assistant transfer agent or (2) by a transfer clerk acting
on behalf of the Corporation and a registrar, the signature of any such
Chairman, President, Vice President, or Secretary may be facsimile.  In case any
officer or officers who have signed, or whose facsimile signature or signatures
have been used on, any such certificate or certificates shall cease to be such
officer or officers of the Corporation, whether because of death, resignation or
otherwise, before such certificate or certificates have been delivered by the
Corporation, such certificate or certificates may nevertheless be adopted by the
Corporation and be issued and delivered as though the person or persons who
signed such certificate or certificates or whose facsimile signature or
signatures have been used thereon had not ceased to be such officer or officers
of the Corporation.

       SECTION 3.  LOST OR DESTROYED CERTIFICATES.  The Board of Directors may
direct a new certificate or certificates to be issued in place of any
certificate or certificates theretofore issued by the Corporation alleged to
have been lost or destroyed, upon the making of an affidavit of that fact by the
person claiming the certificate of stock to be lost or destroyed.  When
authorizing such issue of a new certificate or certificates, the Board of
Directors may, in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost or destroyed certificate or
certificates, or his, her or its legal representative, to advertise the same in
such manner as it shall require and/or to give the Corporation a bond in such
sum as it may direct as indemnity against any claim that may be made against the
Corporation with respect to the certificate alleged to have been lost or
destroyed.

       SECTION 4.  TRANSFER OF STOCK.  Upon surrender to the Corporation or the
transfer agent of the Corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignment or authority to
transfer, it shall be the duty of the Corporation to issue a new certificate to
the person entitled thereto, cancel the old certificate and record the
transaction upon its books.

       SECTION 5.  REGISTERED SHAREHOLDERS.  The Corporation shall be entitled
to recognize the exclusive right of a person registered on its books as the
owner of shares to receive dividends, and to vote as such owner, and to hold
liable for calls and assessments a person registered on its books as the owner
of shares, and shall not be bound to recognize any equitable or other claim to
or interest in such share or shares on the part of any other person, whether or

                                   8


not it shall have express or other notice thereof, except as otherwise provided
by the laws of Minnesota.

                                    ARTICLE VI.

                                 GENERAL PROVISIONS

       SECTION 1.  DIVIDENDS.  Dividends upon the capital stock of the
Corporation, subject to the provisions of the Articles of Incorporation, if any,
may be declared by the Board of Directors at any regular or special meeting,
pursuant to law.  Dividends may be paid in cash, in property, or in shares of
the capital stock, subject to the provisions of the Articles of Incorporation.

       SECTION 2.  RESAVES.  Before payment of any dividend, there may be set
aside out of any funds of the Corporation available for dividends such sum or
sums as the directors from time to time, in their absolute discretion, think
proper as a reserve or reserves to meet contingencies, or for equalizing
dividends, or for repairing or maintaining any property of the Corporation, or
for such other purpose as the directors shall think conducive to the interest of
the Corporation, and the directors may modify or abolish any such reserve in the
manner in which it was created.

       SECTION 3.  CHECKS.  All checks or demands for money and notes of the
Corporation shall be signed by such officer or officers or such other person or
persons as the Board of Directors may from time to time designate.

       SECTION 4.  FISCAL YEAR.  The fiscal year of the Corporation shall be
fixed by resolution of the Board of Directors.

                                    ARTICLE VII.

                                     AMENDMENTS

       SECTION 1.  AMENDMENTS.  The power to make, alter, amend or rescind these
Bylaws is vested in the Board of Directors, subject to the power of the
shareholders to adopt, amend or repeal these Bylaws, as permitted by applicable
statute.







                                     9

EX-3.20

                                       BYLAWS

                                         OF

                              MERRILL/NEW YORK COMPANY

                                     ARTICLE I.

                                      OFFICES.

       SECTION 1.  REGISTERED OFFICE.  The registered office of the Corporation
required by Chapter 302A of the Minnesota Statutes to be maintained in the State
of Minnesota is as designated in the Articles of Incorporation.  The Board of
Directors of the Corporation may, from time to time, change the location of the
registered office.  On or before the day that such change is to become
effective, a certificate of such change and of the new address of the new
registered office shall be filed with the Secretary of State of the State of
Minnesota.

       SECTION 2.  OTHER OFFICES.  The Corporation may establish and maintain
such other offices, within or without the State of Minnesota, as are from time
to time authorized by the Board of Directors.

                                    ARTICLE II.

                             MEETINGS OF SHAREHOLDERS.

       SECTION 1.  PLACE OF MEETING.  All meetings of the shareholders shall be
held at the registered office of the Corporation in the State of Minnesota or at
such place within or without the state as may be fixed from time to time by the
Board of Directors, provided that a meeting called by or at the demand of a
shareholder shall be held in the county where the principal executive office of
the Corporation is located.

       SECTION 2.  DATE OF MEETING.  A regular meeting of shareholders may be
held for the purpose of electing directors or for the transaction of any other
business as may come before the meeting.  It shall be the duty of the Chairman
of the Board or Treasurer, upon demand of any shareholder holding three percent
(3%) or more of all voting shares, to call such meeting if a regular meeting of
shareholders has not been held during the immediately preceding fifteen (15)
months.  If said officers fail to call and hold such meeting within ninety (90)
days after receipt of the demand, the shareholder making the demand shall have
the right and power to call such meeting.

       SECTION 3.  NOTICE OF REGULAR MEETINGS.  Written notice of the time and
place of each regular shareholder meeting shall be mailed, postage prepaid, at
least ten (10) but not more than sixty (60) days before such meeting, to each
shareholder entitled to vote thereat at his address as the same appears upon the
books of the Corporation.

       SECTION 4.  SPECIAL MEETINGS.  Special meetings of the shareholders, for
any purpose or purposes, unless otherwise prescribed by statute, by the Articles
of Incorporation or by any applicable agreement among shareholders, may be
called by the Chairman of the Board or Treasurer and shall be called by the
Chairman of the Board or Treasurer at the request in writing of any member of
the Board of Directors, or at the request in writing of shareholders owning ten



percent (10%) or more of the voting power of all outstanding voting shares.
Such request, which shall be by registered mail or delivered in person to the
Chairman of the Board or Treasurer, shall state the purpose or purposes of the
proposed meeting.

       SECTION 5.  NOTICE OF SPECIAL MEETINGS.  Written notice of the time,
place and purpose or purposes of a special meeting shall be mailed, postage
prepaid, at least five (5) but not more than sixty (60) days before such
meeting, to each shareholder entitled to vote at such meeting at his address as
the same appears upon the books of the Corporation.

       SECTION 6.  BUSINESS TO BE TRANSACTED.  No business shall be transacted
at any special meeting of shareholders except that stated in the notice of the
meeting.

       SECTION 7.  WAIVER OF NOTICE.  A shareholder may waive notice of a
meeting of shareholders.  A waiver of notice by a shareholder entitled to notice
is effective whether given before, at, or after the meeting, and whether given
in writing, orally, or by attendance.  Attendance by a shareholder at a meeting
is a waiver of notice of that meeting, except where the shareholder objects at
the beginning of the meeting to the transaction of business because the meeting
is not lawfully called or convened, or objects before a vote on an item of
business because the item may not lawfully be considered at that meeting and
does not participate in the consideration of the item at that meeting.

       SECTION 8.  QUORUM AND ADJOURNMENT.  The holders of a majority of the
voting power of the shares entitled to vote at a meeting, present in person or
by proxy at the meeting, shall constitute a quorum at all meetings of the
shareholders for the transaction of business except as otherwise provided by
statute or by the Articles of Incorporation.  If, however, such quorum shall not
be present or represented at any meeting of the shareholders, the shareholders
entitled to vote thereat, present in person or represented by proxy, shall have
the power to adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present or represented.  At
such adjourned meeting at which a quorum shall be present or represented any
business may be transacted which might have been transacted at the meeting as
originally noticed.  The shareholders present at a duly called or held meeting
at which a quorum is present may continue to transact business until
adjournment, even though the withdrawal of a number of shareholders originally
present leaves less than the proportion or number otherwise required for a
quorum.

       SECTION 9.  VOTING RIGHTS.  A shareholder may cast his vote in person or
by proxy.  When a quorum is present at the time a meeting is convened, the vote
of the holders of a majority of the shares entitled to vote on any question
present in person or by proxy shall decide such question unless the question is
one upon which, by express provision of the applicable statute, the Articles of
Incorporation or any applicable agreement among shareholders, a different vote
is required, in which case such express provision shall govern and control the
decision of such question.

       SECTION 10.  MANNER OF VOTING.  Each shareholder shall at every meeting
of the shareholders be entitled to one vote in person or by proxy for each share
of the capital stock having voting power held by such shareholder, but no proxy
shall be valid after eleven (11) months from its date, unless the proxy
expressly provides for a longer period, and, except where the transfer books of
the Corporation have been closed or a date has been fixed as a record date

                                    2


for the determination of its shareholders entitled to vote, no share of stock
that has been transferred on the books of the Corporation within twenty (20)
days next preceding any election of directors shall be voted on at such
election for directors.

       SECTION 11.  CUMULATIVE VOTING.  Notwithstanding the provisions of
Sections 9 and 10 of this Article II, if notice, in writing, is given by any
shareholder to any officer of the Corporation before the meeting, or to the
presiding officer at the meeting at which the election is to occur at any time
before the election of directors at the meeting, that he or she intends to
cumulate his or her votes in such election, each shareholder shall have the
right to multiply the number of votes to which he or she may be entitled by the
number of directors to be elected, and he or she may cast all such votes for one
candidate or distribute them among any two or more candidates.  In such case it
shall be the duty of the presiding officer prior to the election of directors to
announce that such notice has been given.

       SECTION 12.  RECORD DATE.  The Board of Directors may fix a date, not
exceeding sixty (60) days preceding the date of any meeting of shareholders, as
a record date for the determination of the shareholders entitled to notice of
and to vote at such meeting, and in such case only shareholders of record on the
date so fixed, or their legal representatives, shall be entitled to notice of
and to vote at such meeting, notwithstanding any transfer of any shares on the
books of the Corporation after any record date so fixed.  The Board of Directors
may close the books of the Corporation against transfers of shares during the
whole or any part of such period.

       SECTION 13.  ORGANIZATION OF MEETINGS.  The Chairman of the Board shall
preside at all meetings of the shareholders, and in his or her absence the Vice
Chairman of the Board or the President shall act as Chairman.  The Secretary
shall act as secretary of all meetings of the shareholders, or in his or her
absence any person appointed by the Chairman shall act as secretary.

       SECTION 14.  ACTION WITHOUT A MEETING.  Any action required or permitted
to be taken at a shareholders' meeting may be taken without a meeting if
authorized by a writing or writings signed by all of the holders of shares who
would be entitled to vote on that action.  Such action shall be effective on the
date on which the last signature is placed on such writing or writings, unless a
different effective date is provided in the written action.  If any action so
taken requires a certificate to be filed in the office of the Secretary of
State, the officer signing such certificate shall state therein that the action
was effected in the manner aforesaid.

                                    ARTICLE III.

                                BOARD OF DIRECTORS.

       SECTION 1.  GENERAL POWERS.  The business and affairs of the Corporation
shall be managed by or under its Board of Directors which may exercise all such
powers of the Corporation and do all such lawful acts and things as are not by
statute, by the Articles of Incorporation, by these Bylaws or by any applicable
agreement among shareholders required to be exercised or done by the
shareholders.

                                  3


       SECTION 2.  NUMBER AND TERM OF OFFICE.  The number of directors which
shall constitute the whole board shall be determined by the Board of Directors
or by the shareholders at a regular meeting; provided, however, that the number
of directors shall not be less than five (5) except upon the affirmative vote of
the shareholders holding not less than two-thirds (2/3) of the issued and
outstanding shares of the Corporation.  Except as otherwise permitted by statute
or provided by any applicable agreement among shareholders, the directors shall
be elected at each regular meeting of the Corporation's shareholders (or at any
special meeting of the shareholders called for that purpose) by a majority of
the voting power of the shares represented and voting (subject to the right of
cumulative voting as provided in Section 11, Article II hereof), and each
director shall be elected to serve until the next regular meeting of the
shareholders or until his or her successor shall have been duly elected and
qualified.

       SECTION 3.  RESIGNATION AND REMOVAL.  Any director may resign at any time
by giving written notice to the Corporation.  Such resignation shall take effect
at the date of the receipt of such notice, or at any later time specified
therein, and, unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.  Any director may be
removed at any time, with or without cause, by the affirmative vote of the
holders of a majority of the voting shares entitled to elect such director.

       SECTION 4.  VACANCIES.  If the office of any director becomes vacant by
reason of death, resignation, removal, disqualification, or otherwise, the
directors then in office, although less than a quorum, by a majority vote, may
choose a successor who shall hold office for the unexpired term in respect of
which such vacancy occurred.  With respect to the initial election of a director
to fill a newly created directorship resulting from an increase in the number of
directors by action of the Board of Directors in the manner permitted by
statute, such vacancy shall be filled by the affirmative vote of a majority of
the directors serving at the time of the increase.

       SECTION 5.  MEETINGS OF DIRECTORS.  The Board of Directors of the
Corporation may hold meetings, from time to time, either within or without the
State of Minnesota, at such place as a majority of the members of the Board of
Directors may from time to time appoint.  If the Board of Directors fails to
select a place for the meeting, the meeting shall be held at the principal
executive office of the Corporation.

       SECTION 6.  CALLING MEETINGS.  Meetings of the Board of Directors may be
called by (i) the Chairman of the Board on two (2) days' notice or (ii) any
director on ten (10) days' notice to each director, either personally, by
telephone or by mail or telegram.  Every such notice shall state the date, time
and place of the meeting.  Notice of a meeting called by a person other than the
Chairman of the Board shall state the purpose of the meeting.

       SECTION 7.  PARTICIPATION BY CONFERENCE TELEPHONE.  Directors of the
Corporation may participate in a meeting of the Board of Directors by means of
conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other, and participation in a
meeting by that means shall constitute presence in person at the meeting.

                                 4


       SECTION 8.  WAIVER OF NOTICE.  A director may waive notice of a meeting
of the Board of Directors.  A waiver of notice by a director entitled to notice
is effective whether given before, at, or after the meeting, and whether given
in writing, orally, or by attendance.  Attendance by a director at a meeting is
a waiver of notice of that meeting, except where the director objects at the
beginning of the meeting to the transaction of business because the meeting was
not lawfully called or convened and does not participate thereafter in the
meeting.

       SECTION 9.  ABSENT DIRECTORS.  A director may give advance written
consent or opposition to a proposal to be acted on at a meeting of the Board of
Directors by actual delivery prior to the meeting of such advance written
consent or opposition to the Chairman of the Board, the Vice Chairman of the
Board or President, or a director who is present at the meeting.  If the
director is not present at the meeting, advance written consent or opposition to
a proposal shall not constitute presence for purposes of determining the
existence of a quorum, but consent or opposition shall be counted as a vote in
favor of or against the proposal and shall be entered in the minutes or other
record of action at the meeting, if the proposal acted on at the meeting is
substantially the same or has substantially the same effect as the proposal to
which the director has consented or objected.

       SECTION 10.  QUORUM.  At all meetings of the Board of Directors a
majority of the directors shall constitute a quorum for the transaction of
business, and the act of a majority of the directors present at any meeting at
which there is a quorum shall be the act of the Board of Directors, except as
may be otherwise specifically provided by applicable statute, by the Articles of
Incorporation or by any applicable agreement among shareholders.  If a quorum
shall not be present at any meeting of the Board of Directors, the directors
present thereat may adjourn the meeting from time to time, without notice other
than announcement at the meeting, until a quorum is present.  If a quorum is
present at the call of a meeting, the directors may continue to transact
business until adjournment notwithstanding the withdrawal of enough directors to
leave less than a quorum.

       SECTION 11.  ORGANIZATION OF MEETINGS.  The Chairman of the Board shall
preside at all meetings of the Board of Directors, and in his or her absence the
Vice Chairman of the Board or President shall act as Chairman.  The Secretary
shall act as secretary of all meetings of the Board of Directors, and in his or
her absence any person appointed by the Chairman shall act as secretary.

       SECTION 12.  ACTION WITHOUT MEETING.  Unless otherwise restricted by the
Articles of Incorporation or these Bylaws, any action required or permitted to
be taken at any meeting of the Board of Directors may be taken without a
meeting, if a written consent thereto is signed by all members of the Board of
Directors and such written consent is filed with the minutes of proceedings of
the Board of Directors.  If the proposed action need not be approved by the
shareholders and the Articles of Incorporation so provide, action may be taken
by written consent signed by the number of directors that would be required to
take the same action at a meeting of the Board of Directors at which all
directors were present.  Such action shall be effective on the date on which the
last signature is placed on such writing or writings, or such other effective
date as is set forth therein.

                                 5


       SECTION 13.  COMPENSATION OF DIRECTORS.  By resolution of the Board of
Directors, each director may be paid his or her expenses, if any, of attendance
at each meeting of the Board of Directors, and may be paid a stated amount as a
director or a fixed sum for attendance at each meeting of the Board of
Directors, or both.  No such payment shall preclude a director from serving the
Corporation in any other capacity and receiving compensation therefor.

                                    ARTICLE IV.

                                      OFFICERS

       SECTION 1.  NUMBER.  The officers of the Corporation shall be chosen
by the Board of Directors and shall include Chairman of the Board, a
President, a Secretary, and a Treasurer.  The Board of Directors may also
choose one or more Vice Chairmen of the Board, one or more Executive Vice
Presidents, one or more Vice Presidents, and one or more Assistant
Secretaries and Assistant Treasurers. Any number of offices or functions of
those offices may be held or exercised by the same person.

       SECTION 2.  ELECTION.  The Board of Directors at its first meeting after
each regular meeting of shareholders shall choose a Chairman of the Board, a
President, a Secretary and a Treasurer.

       SECTION 3.  OTHER OFFICERS AND AGENTS.  The Board of Directors may
appoint such other officers and agents as it shall deem necessary who shall hold
their offices for such terms and shall exercise such powers and perform such
duties as shall be determined from time to time by the Board of Directors.

       SECTION 4.  SALARIES.  The salaries of all officers of the Corporation
shall be fixed by the Board of Directors.

       SECTION 5.  TERM OF OFFICE.  The officers of the Corporation shall hold
office until their successors are chosen and qualify.  Any officer elected or
appointed by the Board of Directors may be removed with or without cause at any
time by the affirmative vote of a majority of the Board of Directors.  Any
officer may resign at any time by giving written notice to the Chairman of the
Board or the Secretary of the Corporation.  Any vacancy occurring in any office
of the Corporation shall be filled by the Board of Directors.

       SECTION 6.  THE CHAIRMAN OF THE BOARD .  POWERS AND DUTIES.  The Chairman
of the Board shall be the Chief Executive Officer of the Corporation, shall
preside at all meetings of the Board of Directors and the shareholders, shall
have general and active management of the business of the Corporation, shall see
that all orders and resolutions of the Board of Directors are carried into
effect, and shall perform such other duties prescribed by the Board of
Directors.  He or she or the President shall execute bonds, mortgages, and other
contracts of the Corporation, except where required or permitted by law to be
otherwise signed and executed and except where the signing and execution thereof
shall be expressly delegated by the Board of Directors to some other officer or
agent of the Corporation, and shall maintain records of and, whenever necessary,
certify all proceedings of the Board of Directors and the shareholders.  Except
as otherwise prescribed by these Bylaws or the Board of Directors, he or she
shall prescribe duties of other officers.

                                  6


       SECTION 7.  VICE CHAIRMAN OF THE BOARD.  POWERS AND DUTIES.  The Vice
Chairman of the Board, if any, or if there shall be more than one, the Vice
Chairmen of the Board in the order determined by the Board of Directors, shall
report directly to the Chairman of the Board and shall perform such duties as
may be assigned by the Chairman of the Board.  In the absence of the Chairman of
the Board, he or she shall perform such duties of the Chairman as shall be
assigned to him or her by the Board of Directors.

       SECTION 8.  PRESIDENT.  POWERS AND DUTIES.  The President shall be the
Chief Operating Officer of the Corporation, shall report directly to the
Chairman of the Board, and shall perform such duties as may be assigned by the
Chairman of the Board.  He or she or the Chairman shall execute bonds,
mortgages, and other contracts of the Corporation, except where required or
permitted by law to be otherwise signed and executed and except where the
signing and execution thereof shall be expressly delegated by the Board of
Directors to some other officer or agent of the Corporation.  In the absence of
the Chairman of the Board, he or she shall perform such duties of the Chairman
as shall be assigned to him or her by the Board of Directors.

       SECTION 9.  EXECUTIVE VICE PRESIDENT.  POWERS AND DUTIES.  The Executive
Vice President, if any, or if there shall be more than one, the Executive Vice
Presidents in the order determined by the Board of Directors, shall perform such
duties and have such powers as the Board of Directors, the Chairman or the
President may from time to time prescribe.

       SECTION 10.  THE VICE PRESIDENT.  POWERS AND DUTIES.  The Vice President,
if any, or if there shall be more than one, the Vice Presidents in the order
determined by the Board of Directors, shall perform such duties and have such
powers as the Board of Directors, the Chairman or the President may from time to
time prescribe.

       SECTION 11.  THE SECRETARY.  POWERS AND DUTIES.  The Secretary shall
attend all meetings of the Board of Directors and all meetings of the
shareholders and record all the proceedings of the meetings of the Corporation
and of the Board of Directors in a book to be kept for that purpose.  He or she
shall give, or cause to be given, notice of all meetings of the shareholders and
special meetings of the Board of Directors, and shall perform such other duties
as may be prescribed by the Board of Directors, the Chairman or President, under
whose supervision he or she shall be.

       SECTION 12.  ASSISTANT SECRETARY.  POWERS AND DUTIES.  The Assistant
Secretary or, if there be more than one, the Assistant Secretaries, in the order
determined by the Board of Directors, shall, in the absence or disability of the
Secretary, perform the duties and exercise the powers of the Secretary and shall
perform such other duties and have such other powers as the Board of Directors,
the Chairman or the President may from time to time prescribe.

       SECTION 13.  THE TREASURER.  POWERS AND DUTIES.  The Treasurer shall be
the Chief Financial Officer of the Corporation, shall have custody of the
Corporation's funds and securities, shall keep full and accurate accounts of
receipts and disbursements in books belonging to the Corporation, shall deposit
all monies and other valuable effects in the name and to the credit of the
Corporation in such depositories as may be designated by the Board of Directors,
and shall perform such other duties prescribed by the Board of Directors, the
Chairman or by the President.
                                  7


       SECTION 14.  TREASURER'S ACCOUNTING.  He or she shall disburse such funds
of the Corporation as may be ordered by the Board of Directors, taking proper
vouchers for such disbursements, and shall render to the Chairman of the Board
and the Board of Directors, at its regular meetings, or when the Board of
Directors so requires, an account of all his or her transactions as Treasurer
and of the financial condition of the Corporation.

       SECTION 15.  TREASURER'S BOND.  If required by the Board of Directors, he
or she shall give the Corporation a bond (which shall be renewed every six (6)
years) in such sum and with such surety or sureties as shall be satisfactory to
the Board of Directors for the faithful performance of the duties of his or her
office and for the restoration to the Corporation, in case of his or her death,
resignation, retirement or removal from office, of all books, papers, vouchers,
money and other property of whatever kind in his or her possession or under his
or her control belonging to the Corporation.

       SECTION 16.  ASSISTANT TREASURER.  POWERS AND DUTIES.  The Assistant
Treasurer or, if there shall be more than one, the Assistant Treasurers, in the
order determined by the Board of Directors, shall, in the absence or disability
of the Treasurer, perform the duties and exercise the powers of the Treasurer
and shall perform such other duties and have such other powers as the Board of
Directors, the Chairman or the President may from time to time prescribe.

                                     ARTICLE V.

                               CERTIFICATES OF STOCK

       SECTION 1.  CERTIFICATES OF STOCK.  Every holder of stock in the
Corporation shall be entitled to have a certificate, signed by, or in the name
of the Corporation by the President and the Secretary or an Assistant Secretary
of the Corporation, if there be one, certifying the number of shares owned by
him or her in the Corporation.  The certificates of stock of each class shall be
numbered in the order of their issue.

       SECTION 2.  FACSIMILE SIGNATURES.  Where a certificate is signed (1) by a
transfer agent or an assistant transfer agent, or (2) by a transfer clerk acting
on behalf of the Corporation and a registrar, the signature of any such
President, Secretary or Assistant Secretary may be facsimile.  In case any
officer or officers who have signed, or whose facsimile signature or signatures
have been used on any such certificate or certificates shall cease to be such
officer or officers of the Corporation before such certificate or certificates
have been delivered by the Corporation, such certificate or certificates may
nevertheless be adopted by the Corporation and be issued and delivered as though
the person or persons who signed such certificate or certificates or whose
facsimile signature or signatures have been used thereon had not ceased to be
such officer or officers of the Corporation.

       SECTION 3.  LOST OR DESTROYED CERTIFICATES.  The Board of Directors may
direct a new certificate or certificates to be issued in place of any
certificate or certificates theretofore issued by the Corporation alleged to
have been lost or destroyed, upon the making of an affidavit of that fact by the
person claiming the certificate of stock to be lost or destroyed.  When
authorizing such issue of a new certificate or certificates, the Board of
Directors may, in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost or destroyed certificate or
certificates, or his or her legal representative, to advertise the same in such
manner
                                      8


as it shall require and/or to give the Corporation a bond in such sum as it
may direct as indemnity against any claim that may be made against the
Corporation with respect to the certificate alleged to have been lost or
destroyed.

       SECTION 4.  TRANSFERS OF STOCK.  Upon surrender to the Corporation or the
transfer agent of the Corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignment or authority to
transfer, it shall be the duty of the Corporation to issue a new certificate to
the person entitled thereto, cancel the old certificate and record the
transaction upon its books.

       SECTION 5.  REGISTERED SHAREHOLDERS.  The Corporation shall be entitled
to recognize the exclusive right of a person registered on its books as the
owner of shares to receive dividends, and to vote as such owner, and shall be
entitled to hold liable for calls and assessments a person so registered on its
books as the owner of shares, and shall not be bound to recognize any equitable
or other claim to or interest in such share or shares on the part of any other
person, whether or not it shall have express or other notice thereof, except as
otherwise provided by applicable statute.

                                    ARTICLE VI.

                                 GENERAL PROVISIONS

       SECTION 1.  DIVIDENDS.  Subject to the provisions of the applicable
statute and the Articles of Incorporation, dividends upon the capital stock of
the Corporation may be declared by the Board of Directors at any regular or
special meeting, and may be paid in cash, in property, or in shares of the
capital stock.

       SECTION 2.  RESERVES.  Before payment of any dividend, there may be set
'aside out of any funds of the Corporation available for dividends such sum or
sums as the directors from time to time, in their absolute discretion, think
proper as a reserve or reserves to meet contingencies, or for equalizing
dividends, or for repairing or maintaining any property of the Corporation, or
for such other purposes as the directors shall think conducive to the interest
of the Corporation, and the directors may modify or abolish any such reserve in
the manner in which it was created.

       SECTION 3.  CHECKS.  All checks or demands for money and notes of the
Corporation shall be signed by such officer or officers or such other person or
persons as the Board of Directors may from time to time designate.

       SECTION 4.  FISCAL YEAR.  The fiscal year of the Corporation shall be
fixed by resolution of the Board of Directors.

       SECTION 5.  SEAL.  The Corporation shall not have a corporate seal.

                                    ARTICLE VII.

                                     AMENDMENTS

       SECTION 1.  AMENDMENTS.  The power to make, alter, amend or rescind these
Bylaws is vested in the Board of Directors, subject to the power of the
shareholders to adopt, amend or repeal these Bylaws, as permitted by applicable
statute and by the Articles of Incorporation.

                                    9

EX-3.21

                                  MERRILL/MAY, INC.



                              ________________________

                                       BYLAWS

                              ________________________




                                 TABLE OF CONTENTS
                                                                           Page
                                                                           ----
ARTICLE I. Offices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
    Section 1.  Principal Executive Office. . . . . . . . . . . . . . . . . . 1
    Section 2.  Registered Office . . . . . . . . . . . . . . . . . . . . . . 1
    Section 3.  Other Offices . . . . . . . . . . . . . . . . . . . . . . . . 1

ARTICLE II. Meetings of Shareholders. . . . . . . . . . . . . . . . . . . . . 1
    Section 1.  Place of Meetings . . . . . . . . . . . . . . . . . . . . . . 1
    Section 2.  Regular Meetings. . . . . . . . . . . . . . . . . . . . . . . 1
    Section 3.  Notice of Regular Meetings. . . . . . . . . . . . . . . . . . 1
    Section 4.  Special Meetings. . . . . . . . . . . . . . . . . . . . . . . 2
    Section 5.  Notice of Special Meetings. . . . . . . . . . . . . . . . . . 2
    Section 6.  Business to be Transacted . . . . . . . . . . . . . . . . . . 2
    Section 7.  Waiver of Notice. . . . . . . . . . . . . . . . . . . . . . . 2
    Section 8.  Meetings Held Upon Shareholder Demand . . . . . . . . . . . . 2
    Section 9.  Quorum and Adjournment. . . . . . . . . . . . . . . . . . . . 2
    Section 10.  Voting Rights. . . . . . . . . . . . . . . . . . . . . . . . 3
    Section 11.  Proxies. . . . . . . . . . . . . . . . . . . . . . . . . . . 3
    Section 12.  Manner of Voting . . . . . . . . . . . . . . . . . . . . . . 3
    Section 13.  Record Date. . . . . . . . . . . . . . . . . . . . . . . . . 3
    Section 14.  Organization of Meetings . . . . . . . . . . . . . . . . . . 3
    Section 15.  Electronic Conferences and Participation by Electronic
                 means. . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
    Section 16.  Action Without a Meeting . . . . . . . . . . . . . . . . . . 4

ARTICLE III. Board of Directors . . . . . . . . . . . . . . . . . . . . . . . 4
    Section 1.  General Powers. . . . . . . . . . . . . . . . . . . . . . . . 4
    Section 2.  Number and Term of Office . . . . . . . . . . . . . . . . . . 4
    Section 3.  Resignation and Removal . . . . . . . . . . . . . . . . . . . 4
    Section 4.  Vacancies and Newly Created Directorships . . . . . . . . . . 4
    Section 5.  Meetings of Directors . . . . . . . . . . . . . . . . . . . . 5
    Section 6.  Calling Meetings. . . . . . . . . . . . . . . . . . . . . . . 5
    Section 7.  Participation by Electronic Communications. . . . . . . . . . 5
    Section 8.  Waiver of Notice. . . . . . . . . . . . . . . . . . . . . . . 5
    Section 9.  Absent Directors. . . . . . . . . . . . . . . . . . . . . . . 5
    Section 10.  Quorum . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
    Section 11.  Organization of Meetings . . . . . . . . . . . . . . . . . . 6
    Section 12.  Committees . . . . . . . . . . . . . . . . . . . . . . . . . 6
    Section 13.  Action Without Meeting . . . . . . . . . . . . . . . . . . . 6
    Section 14.  Compensation of Directors. . . . . . . . . . . . . . . . . . 6

ARTICLE IV. Officers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
    Section 1.  Number and Qualification. . . . . . . . . . . . . . . . . . . 6
    Section 2.  Election and Term of Office . . . . . . . . . . . . . . . . . 7
    Section 3.  Resignation . . . . . . . . . . . . . . . . . . . . . . . . . 7
    Section 4.  Salaries. . . . . . . . . . . . . . . . . . . . . . . . . . . 7

                                  i


    Section 5.  The Chief Executive Officer . . . . . . . . . . . . . . . . . 7
    Section 6.  The Chief Financial Officer . . . . . . . . . . . . . . . . . 7
    Section 7.  The Chairperson of the Board. . . . . . . . . . . . . . . . . 8
    Section 8.  The President . . . . . . . . . . . . . . . . . . . . . . . . 8
    Section 9.  The Vice President. . . . . . . . . . . . . . . . . . . . . . 8
    Section 10.  Secretary. . . . . . . . . . . . . . . . . . . . . . . . . . 8
    Section 11.  Treasurer. . . . . . . . . . . . . . . . . . . . . . . . . . 8
    Section 12.  Authority and Duties . . . . . . . . . . . . . . . . . . . . 8

ARTICLE V   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

ARTICLE V. Certificates of Stock. . . . . . . . . . . . . . . . . . . . . . . 9
    Section 1.  Certificates of Stock . . . . . . . . . . . . . . . . . . . . 9
    Section 2.  Facsimile Signatures. . . . . . . . . . . . . . . . . . . . . 9
    Section 3.  Lost or Destroyed Certificates. . . . . . . . . . . . . . . . 9
    Section 4.  Transfers of Stock. . . . . . . . . . . . . . . . . . . . . . 9
    Section 5.  Registered Shareholders . . . . . . . . . . . . . . . . . . . 9

ARTICLE VI. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . .10
    Section 1.  Indemnification . . . . . . . . . . . . . . . . . . . . . . .10
    Section 2.  Advances. . . . . . . . . . . . . . . . . . . . . . . . . . .10
    Section 3.  Insurance . . . . . . . . . . . . . . . . . . . . . . . . . .10

ARTICLE VII. General Provisions . . . . . . . . . . . . . . . . . . . . . . .10
    Section 1.  Execution of Instruments. . . . . . . . . . . . . . . . . . .10
    Section 2.  Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . .10
    Section 3.  Dividends . . . . . . . . . . . . . . . . . . . . . . . . . .10
    Section 4.  Reserves. . . . . . . . . . . . . . . . . . . . . . . . . . .10
    Section 5.  Seal. . . . . . . . . . . . . . . . . . . . . . . . . . . . .11

ARTICLE VIII. Amendments. . . . . . . . . . . . . . . . . . . . . . . . . . .11
    Section 1.  Amendments. . . . . . . . . . . . . . . . . . . . . . . . . .11

                                  ii



                                       BYLAWS
                                         OF
                                  MERRILL/MAY, INC.

                                     ARTICLE I.

                                      OFFICES.

     SECTION 1.     PRINCIPAL EXECUTIVE OFFICE.  The principal executive office
of the corporation shall be determined from time to time by the Board of
Directors.

     SECTION 2.     REGISTERED OFFICE.  The registered office of the Corporation
required by Chapter 302A of the Minnesota Statutes to be maintained in the State
of Minnesota is as designated in the Articles of Incorporation.  The Board of
Directors of the Corporation may, from time to time, change the location of the
registered office.  On or before the day that such change is to become
effective, a certificate of such change and of the new address of the new
registered office shall be filed with the Secretary of State of the State of
Minnesota.

     SECTION 3.     OTHER OFFICES.  The Corporation may establish and maintain
such other offices, within or without the State of Minnesota, as are from time
to time authorized by the Board of Directors.

                                  ARTICLE II.
                             MEETINGS OF SHAREHOLDERS.

     SECTION 1.     PLACE OF MEETINGS.  All meetings of the shareholders shall
be held at the principal executive office of the Corporation or at such other
place as may be designated by the Board of Directors or the Chief Executive
Officer.  Any regular or special meeting of the shareholders of the Corporation
called by or held pursuant to a written demand of Shareholders shall be held in
the county where the principal executive office of the Corporation is located.

     SECTION 2.     REGULAR MEETINGS.  Regular meetings of the shareholders may
be held on an annual or other less frequent basis on such dates and at such
times and places as may be designated by the Board of Directors in the notices
of meeting.  If a regular meeting has not been held during the immediately
preceding 15 months, one or more shareholders holding three percent (3%) or more
of the voting power of all shares entitled to vote may call a regular meeting of
shareholders by delivering to the Chief Executive Officer a written demand for a
regular meeting.  At each regular meeting the shareholders shall elect qualified
successors for directors who serve for an indefinite term or whose terms have
expired or are due to expire within six months after the date of the meeting and
may transact any other business, provided, however, that no business with
respect to which special notice is required by law shall be transacted unless
such notice shall have been given.

     SECTION 3.     NOTICE OF REGULAR MEETINGS.  Unless otherwise required by
law, written notice of the time and place of each regular shareholder meeting
shall be mailed, postage prepaid, at least ten (10) but not more than sixty (60)
days before such meeting, to each shareholder entitled to vote thereat at his or
her address as the same appears upon the books of the Corporation.



     SECTION 4.     SPECIAL MEETINGS.  A special meeting of the shareholders may
be called for any purpose or purposes at any time by the Chief Executive
Officer; by the Chief Financial Officer; by the Board of Directors or any two or
more members thereof, or by one or more shareholders holding not less than ten
percent (10%) of the voting power of all shares of the Corporation entitled to
vote, who shall demand such special meeting by written notice given to the Chief
Executive Officer or the Chief Financial Officer of the Corporation specifying
the purposes of such meeting.

     SECTION 5.     NOTICE OF SPECIAL MEETINGS.  Written notice of the time,
place and purpose or purposes of a special meeting shall be mailed, postage
prepaid, at least five (5) but not more than sixty (60) days before such
meeting, to each shareholder entitled to vote at such meeting at his or her
address as the same appears upon the books of the Corporation.

     SECTION 6.     BUSINESS TO BE TRANSACTED.  No business shall be transacted
at any special meeting of shareholders except that stated in the notice of the
meeting.

     SECTION 7.     WAIVER OF NOTICE.  A shareholder may waive notice of the
date, time, place and purpose or purposes of a meeting of shareholders.  A
waiver of notice by a shareholder entitled to notice is effective whether given
before, at or after the meeting, and whether given in writing, orally or by
attendance.  Attendance by a shareholder at a meeting is a waiver of notice of
that meeting, unless the shareholder objects at the beginning of the meeting to
the transaction of business because the meeting is not lawfully called or
convened, or objects before a vote on an item of business because the item may
not lawfully be considered at that meeting and does not participate in the
consideration of the item at that meeting.

     SECTION 8.     MEETINGS HELD UPON SHAREHOLDER DEMAND.  Within 30 days after
receipt of a demand by the Chief Executive Officer or the Chief Financial
Officer from any shareholder or shareholders entitled to call a meeting of the
shareholders, it shall be the duty of the Board of Directors of the Corporation
to cause a special or regular meeting of shareholders, as the case may be, to be
duly called and held on notice no later than 90 days after receipt of such
demand.  If the Board fails to cause such a meeting to be called and held as
required by this Section, the shareholder or shareholders making the demand may
call the meeting by giving notice as provided in Sections 3 or 5 hereof at the
expense of the Corporation.

     SECTION 9.     QUORUM AND ADJOURNMENT.  The holders of a majority of the
voting power of the shares entitled to vote at a meeting, present in person or
by proxy at the meeting, shall constitute a quorum at all meetings of the
shareholders for the transaction of business except as otherwise provided by
statute or by the Articles of Incorporation.  If, however, such quorum shall not
be present or represented at any meeting of the shareholders, the shareholders
entitled to vote thereat, present in person or represented by proxy, shall have
the power to adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present or represented.  At
such adjourned meeting at which a quorum shall be present or represented any
business may be transacted which might have been transacted at the meeting as
originally noticed.  The shareholders present at a duly called or held meeting
at which a quorum is present may continue to transact business until
adjournment, even though the withdrawal of a number of shareholders originally
present leaves less than the proportion or number otherwise required for a
quorum.

                                2


     SECTION 10.    VOTING RIGHTS.  A shareholder may cast his or her vote in
person or by proxy.  When a quorum is present at the time a meeting is convened,
the affirmative vote of the holders of a majority of the shares entitled to vote
on any question present in person or by proxy shall decide such question unless
the question is one upon which, by express provision of the applicable statute
or the Articles of Incorporation, a different vote is required, in which case
such express provision shall govern and control the decision of such question.

     SECTION 11.    PROXIES.  A shareholder may cast or authorize the casting of
a vote by filing a written appointment of a proxy with an officer of the
Corporation at or before the meeting at which the appointment is to be
effective.  The shareholder may sign or authorize the written appointment by
telegram, cablegram or other means of electronic transmission setting forth or
submitted with information, sufficient to determine that the shareholder
authorized such transmission.  Any copy, facsimile, telecommunication or other
reproduction of the original of either the writing or transmission may be used
in lieu of the original, provided that it is a complete and legible reproduction
of the entire original.  No proxy shall be valid after eleven (11) months from
its date, unless the proxy expressly provides for a longer period

     SECTION 12.    MANNER OF VOTING.  Each shareholder shall at every meeting
of the shareholders be entitled to one vote in person or by proxy for each share
of the capital stock having voting power held by such shareholder and except
where the transfer books of the Corporation have been closed or a date has been
fixed as a record date for the determination of its shareholders entitled to
vote, no share of stock that has been transferred on the books of the
Corporation within twenty (20) days next preceding any election of directors
shall be voted in such election of directors.

     SECTION 13.    RECORD DATE.  The Board of Directors may fix a date, not
exceeding sixty (60) days preceding the date of any meeting of shareholders, as
a record date for the determination of the shareholders entitled to notice of
and to vote at such meeting, and in such case only shareholders of record on the
date so fixed, or their legal representatives, shall be entitled to notice of
and to vote at such meeting, notwithstanding any transfer of any shares on the
books of the Corporation after any record date so fixed.  The Board of Directors
may close the books of the Corporation against transfers of shares during the
whole or any part of such period.

     SECTION 14.    ORGANIZATION OF MEETINGS.  The Chairperson of the Board
shall preside at all meetings of the shareholders, in the absence of a
chairperson or if the office of Chairperson of the Board is vacant, the Chief
Executive Officer shall preside at meetings of the shareholders and in his or
her absence the Chief Financial Officer shall act as presiding Officer.  The
Secretary shall act as secretary of all meetings of the shareholders, or in his
or her absence any person appointed by the presiding officer shall act as
secretary.

     SECTION 15.    ELECTRONIC CONFERENCES AND PARTICIPATION BY ELECTRONIC
MEANS.  A conference among shareholders conducted by any means of communication
through which the shareholders may simultaneously hear each other during the
conference shall constitute a regular or special meeting of shareholders,
provided the notice of the conference is given to every holder of shares
entitled to vote pursuant to sections 3 or 5 hereof.  A shareholder may
participate in a regular or special meeting of shareholders by any means of
communication through which the

                                 3


shareholder, other shareholders so participating, and all shareholders
physically present at the meeting may simultaneously hear each other during
the meeting.  Such participation in a meeting shall constitute presence at
the meeting in person or by proxy.

     SECTION 16.    ACTION WITHOUT A MEETING.  Any action required or permitted
to be taken at a shareholders' meeting may be taken without a meeting if
authorized by a writing or writings signed by all of the holders of shares who
would be entitled to vote on that action.  Such action shall be effective on the
date on which the last signature is placed on such writing or writings, unless a
different effective date is provided in the written action.  If any action so
taken requires a certificate to be filed in the office of the Secretary of
State, the officer signing such certificate shall state therein that the action
was effected in the manner aforesaid.

                                   ARTICLE III.
                                BOARD OF DIRECTORS.

     SECTION 1.     GENERAL POWERS.  The business and affairs of the Corporation
shall be managed by or under its Board of Directors which may exercise all such
powers of the Corporation and do all such lawful acts and things as are not by
statute or by the Articles of Incorporation or by these Bylaws required to be
exercised or done by the shareholders.

     SECTION 2.     NUMBER AND TERM OF OFFICE.  The number of directors which
shall constitute the whole Board of Directors shall be fixed from time to time
by resolution of the shareholder, subject to increase by resolution of the Board
of Directors.  No decrease in the number of directors pursuant to this section
shall effect the removal of any director then in office except upon the
compliance with the provisions of Section 3 of this Articles.  Except as
otherwise permitted by statute, each director shall be elected at a regular
meeting of the Corporation's shareholders (or at any special meeting of the
shareholders called for that purpose) by a majority of the voting power of the
shares represented and voting, and each director shall be elected to serve until
the next regular meeting of the shareholders and thereafter until a successor is
duly elected and qualified, unless a prior vacancy shall occur by reason of
death, resignation, or removal for office.  Directors shall be natural persons,
but need not be shareholders.

     SECTION 3.     RESIGNATION AND REMOVAL.  Any director may resign at any
time by giving written notice to the Corporation.  Such resignation shall take
effect at the date of the receipt of such notice, or at any later time specified
therein, and, unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.  The entire Board of
Directors or any director or directors may be removed at any time, with or
without cause, at any special meeting of the shareholders duly called for that
purpose as provided in these Bylaws, by the affirmative vote of the holders of a
majority of the voting shares entitled to elect such director or directors.

     SECTION 4.     VACANCIES AND NEWLY CREATED DIRECTORSHIPS.  If the office of
any director becomes vacant by reason of death, resignation, removal,
disqualification, or otherwise, the directors then in office, although less than
a quorum, by a majority vote, may choose a successor who shall hold office for
the unexpired term in respect of which such vacancy occurred.  Any newly created
directorship resulting from an increase in the authorized number of directors by
action of the Board of Directors may be filled by a majority vote of the
directors serving at the

                                  4


time of such increase.  Any vacancy or newly created directorship may be
filled by resolution of the shareholders.

     SECTION 5.     MEETINGS OF DIRECTORS.  The Board of Directors of the
Corporation may hold meetings, from time to time, either within or without the
State of Minnesota, at such place as a majority of the members of the Board of
Directors may from time to time appoint.  If the Board of Directors fails to
select a place for the meeting, the meeting shall be held at the principal
executive office of the Corporation.

     SECTION 6.     CALLING MEETINGS.  Meetings of the Board of Directors may be
called by (i) the Chief Executive Officer on two (2) days' notice or (ii) any
director on ten (10) days' notice, to each director, either personally, by
telephone or by mail or telegram.  Every such notice shall state the date, time
and place of the meeting.  Notice of a meeting called by a person other than the
Chief Executive Officer shall state the purpose of the meeting.

     SECTION 7.     PARTICIPATION BY ELECTRONIC COMMUNICATIONS.  Directors of
the Corporation may participate in a meeting of the Board of Directors by means
of conference telephone or by similar means of communication by which all
persons participating in the meeting can simultaneously hear each other.  A
director so participating shall be deemed present in person at the meeting.

     SECTION 8.     WAIVER OF NOTICE.  A director may waive notice of a meeting
of the Board of Directors.  A waiver of notice by a director entitled to notice
is effective whether given before, at, or after the meeting, and whether given
in writing, orally, or by attendance.  Attendance by a director at a meeting is
a waiver of notice of that meeting, except where the director objects at the
beginning of the meeting to the transaction of business because the meeting was
not lawfully called or convened and does not participate thereafter in the
meeting.

     SECTION 9.     ABSENT DIRECTORS.  A director may give advance written
consent or opposition to a proposal to be acted on at a meeting of the Board of
Directors by actual delivery prior to the meeting of such advance written
consent or opposition to the Chief Executive Officer or Chief Financial Officer
or a director who is present at the meeting.  If the director is not present at
the meeting, advance written consent or opposition to a proposal shall not
constitute presence for purposes of determining the existence of a quorum, but
consent or opposition shall be counted as a vote in favor of or against the
proposal and shall be entered in the minutes or other record of action at the
meeting, if the proposal acted on at the meeting is substantially the same or
has substantially the same effect as the proposal to which the director has
consented or objected.

     SECTION 10.    QUORUM.  At all meetings of the Board of Directors a
majority of the directors shall constitute a quorum for the transaction of
business, and the act of a majority of the directors present at any meeting at
which there is a quorum shall be the act of the Board of Directors, except as
may be otherwise specifically provided by applicable statute or by the Articles
of Incorporation.  If a quorum shall not be present at any meeting of the Board
of Directors, the directors present thereat may adjourn the meeting from time to
time, without notice other than announcement at the meeting, until a quorum is
present.  If a quorum is present

                                5



at the call of a meeting, the directors may continue to transact business
until adjournment notwithstanding the withdrawal of enough directors to leave
less than a quorum.

     SECTION 11.    ORGANIZATION OF MEETINGS.  The Chairperson of the Board
shall preside at all meetings of the Board of Directors and in his or her
absence the Chief Executive Officer shall act as presiding officer.  The
Secretary shall act as secretary of all meetings of the Board of Directors, and
in his or her absence any person appointed by the presiding officer shall act as
secretary.

     SECTION 12.    COMMITTEES.  The Board of Directors, by a resolution
approved by the affirmative vote of a majority of the directors then holding
office, may establish one or more committees of one or more persons having the
authority of the Board of Directors in the management of the business of the
corporation to the extent provided in such resolution.  Such committees,
however, shall at all times be subject to the direction and control of the Board
of Directors.  Committee members need not be directors and shall be appointed by
the affirmative vote of a majority of the directors present.  A majority of the
members of any committee shall constitute a quorum for the transaction of
business at a meeting of any such committee.  In other matters of procedure the
provisions of these Bylaws shall apply to committees and the members thereof to
the same extent they apply to the Board of Directors and directors, including,
without limitation, the provisions with respect to meetings and notice thereof,
absent members, written actions, and valid acts.  Each committee shall keep
regular minutes of its proceedings and report the same to the Board of
Directors.

     SECTION 13.    ACTION WITHOUT MEETING.  Unless otherwise restricted by the
Articles of Incorporation or these Bylaws, any action required or permitted to
be taken at any meeting of the Board of Directors may be taken without a
meeting, if a written consent thereto is signed by all members of the Board of
Directors and such written consent is filed with the minutes of proceedings of
the Board of Directors.  If the proposed action need not be approved by the
shareholders and the Articles of Incorporation so provide, action may be taken
by written consent signed by the number of directors that would be required to
take the same action at a meeting of the Board of Directors at which all
directors were present.  Such action shall be effective on the date on which the
last signature is placed on such writing or writings, or such other effective
date as is set forth therein.

     SECTION 14.    COMPENSATION OF DIRECTORS.  By resolution of the Board of
Directors, each director may be paid his or her expenses, if any, of attendance
at each meeting of the Board of Directors, and may be paid a stated amount as a
director or a fixed sum for attendance at each meeting of the Board of
Directors, or both.  No such payment shall preclude a director from serving the
Corporation in any other capacity and receiving compensation therefor.

                                    ARTICLE IV.
                                     OFFICERS.

     SECTION 1.     NUMBER AND QUALIFICATION.  The Officers of the Corporation
shall consists of one or more natural persons duly elected by the Board of
Directors exercising the functions of the offices of Chief Executive Officer and
Chief Financial Officer.  The Board of Directors may elect or appoint such other
officers or agents as it deems necessary for the operation and

                                6



management of the Corporation, with such powers, rights, duties and
responsibilities as may be determined by the Board of Directors, including,
without limitation, a President, one or more Vice Presidents, a Secretary and
a Treasurer, each of whom shall have the powers, rights duties and
responsibilities set for the in these Bylaws unless otherwise determined by
the Board.  Any of the Offices or functions of those offices may be held by
the same person.

     SECTION 2.     ELECTION AND TERM OF OFFICE.  The officers of the
Corporation shall be elected by the Board of Directors and may be elected at any
regular or special meeting held pursuant to these Bylaws.  All officers shall
hold office until their successors have been duly elected and qualified, unless
prior thereto such officer shall have resigned or been removed from office as
hereinafter provided.

     SECTION 3.     RESIGNATION.  REMOVAL AND VACANCIES.  An officer may resign
at any time by giving written notice to the Corporation.  The resignation is
effective without acceptance when the notice is given to the Corporation, unless
a later effective date is specified in the notice.  Any officer or agent elected
or appointed by the Board of Directors shall hold office at the pleasure of the
Board of Directors and may be removed, with or without cause, at any time by the
affirmative vote of a majority of the Board of Directors present at a duly held
Board meeting.  A vacancy in an office may, or in the case of a vacancy in the
office of Chief Executive Officer or Chief Financial Officer shall, be filled
for the unexpired portion of the term by action of the Board of Directors.

     SECTION 4.     SALARIES.  The salaries of all officers of the Corporation
shall be fixed by the Board of Directors or by the Chief Executive Officer if
authorized by the Board of Directors.

     SECTION 5.     THE CHIEF EXECUTIVE OFFICER.  Unless provided otherwise by a
resolution adopted by the Board of Directors, the chief executive officer shall
have general active management of the business of the corporation, in the
absence of the Chairperson of the Board or if the office of Chairperson of the
Board is vacant, shall preside at meetings of the shareholders and Board of
Directors, shall see that all orders and resolutions of the Board of Directors
are carried into effect, shall sign and deliver in the name of the corporation
any deeds, mortgages, bonds, contracts, or other instruments pertaining to the
business of the corporation, except in cases in which the authority to sign and
deliver is required by law to be exercised by another person or is expressly
delegated by the Articles of Incorporation, these Bylaws, or the Board of
Directors to some other officer or agent of the corporation, may maintain
records of and, whenever necessary, certify proceedings of the Board of
Directors and shareholders, and shall perform such other duties as may from time
to time be prescribed by the Board of Directors.

     SECTION 6.     THE CHIEF FINANCIAL OFFICER.  Unless provided otherwise by a
resolution adopted by the Board of Directors, the chief financial officer shall
keep accurate financial records for the corporation, shall deposit all monies,
drafts, and checks in the name of and to the credit of the corporation in such
banks and depositories as the Board of Directors shall designate from time to
time, shall endorse for deposit all notes, checks, and drafts received by the
corporation as ordered by the Board of Directors, making proper vouchers
therefor, shall disburse corporate funds and issue checks and drafts in the name
of the corporation as ordered by the Board of Directors, shall render to the
chief executive officer and the Board of Directors, whenever requested, an
account of all such officer's transactions as chief financial officer and of

                                  7



the financial condition of the corporation, and shall perform such other
duties as may be prescribed by the Board of Directors or the chief executive
officer from time to time.

     SECTION 7.     THE CHAIRPERSON OF THE BOARD.  The Board of Directors may
elect a Chairperson of the Board who, if elected, shall preside at all meetings
of the shareholders and of the Board of Directors and shall perform such other
duties as may be prescribed by the Board of Directors from time to time.

     SECTION 8.     THE PRESIDENT.  Unless otherwise determined by the Board of
Directors, the President shall be the chief executive officer of the
corporation.  If an officer other than the President is designated chief
executive officer, the President shall have such powers and perform such duties
as the Board of Directors or the chief executive officer may prescribe from time
to time.

     SECTION 9.     THE VICE PRESIDENT.  The Vice President, if any, or Vice
Presidents in case there be more than one, shall have such powers and perform
such duties as the chief executive officer or the Board of Directors may
prescribe from time to time.  In the absence of the President or in the event of
the President's death, inability, or refusal to act, the Vice President, or in
the event there be more than one Vice President, the Vice Presidents in the
order designated by the Board of Directors or in the absence of any designation,
in the order of their election, shall perform the duties of the President and
when so acting shall have all the powers of and be subject to all of the
restrictions upon the President.

     SECTION 10.    SECRETARY.  The Secretary shall attend all meetings of the
Board of Directors and all meetings of the shareholders and shall maintain
records of all the proceedings of the meetings in a book to be kept for that
purpose, and whenever necessary, certify all proceedings of the Board of
Directors and of the shareholders.  The Secretary shall keep the stock books of
the corporation, when so directed by the Board of Directors or other person or
persons authorized to call such meetings, shall give or cause to be given notice
of meetings of the shareholders and of meetings of the Board of Directors, and
shall also perform such other duties and have such other powers as the chief
executive officer or the Board of Directors may prescribe from time to time.

     SECTION 11.    TREASURER.  Unless otherwise determined by the Board of
Directors, the Treasurer shall be the chief financial officer of the
corporation.  If an officer other than the Treasurer is designated chief
financial officer, the Treasurer shall have such powers and perform such duties
as the chief executive officer or the Board of Directors may prescribe from time
to time.

     SECTION 12.    AUTHORITY AND DUTIES.  In addition to the foregoing
authority and duties, all officers of the Corporation shall respectively have
such authority and perform such duties in the management of the business of the
Corporation as may be designated from time to time by the Board of Directors.
Unless prohibited by a resolution approved by the affirmative vote of a majority
of the directors present, an officer elected or appointed by the Board may,
without the approval of the Board, delegate some or all of the duties and powers
of an office to other persons.

                                          8



                                     ARTICLE V.
                               CERTIFICATES OF STOCK.

     SECTION 1.     CERTIFICATES OF STOCK.  Every holder of stock in the
Corporation shall be entitled to have a certificate, signed by, or in the name
of the Corporation by the Chief Executive Officer and the Secretary or an
Assistant Secretary of the corporation, if there be one, certifying the number
of shares owned by him or her in the Corporation.  The certificates of stock of
each class shall be numbered in the order of their issue.

     SECTION 2.     FACSIMILE SIGNATURES.  Where a certificate is signed (1) by
a transfer agent or an assistant transfer agent, or (2) by a transfer clerk
acting on behalf of the Corporation and a registrar, the signature of any such
Chief Executive Officer, Secretary or Assistant Secretary may be facsimile.  In
case any officer or officers who have signed, or whose facsimile signature or
signatures have been used on any such certificate or certificates shall cease to
be such officer or officers of the Corporation before such certificate or
certificates have been delivered by the Corporation, such certificate or
certificates may nevertheless be adopted by the Corporation and be issued and
delivered as though the person or persons who signed such certificate or
certificates or whose facsimile signature or signatures have been used thereon
had not ceased to be such officer or officers of the Corporation.

     SECTION 3.     LOST OR DESTROYED CERTIFICATES.  The Board of Directors may
direct a new certificate or certificates to be issued in place of any
certificate or certificates theretofore issued by the Corporation alleged to
have been lost or destroyed, upon the making of an affidavit of that fact by the
person claiming the certificate of stock to be lost or destroyed.  When
authorizing such issue of a new certificate or certificates, the Board of
Directors may, in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost or destroyed certificate or
certificates, or his or her legal representative, to advertise the same in such
manner as it shall require and/or to give the Corporation a bond in such sum as
it may direct as indemnity against any claim that may be made against the
Corporation with respect to the certificate alleged to have been lost or
destroyed.

     SECTION 4.     TRANSFERS OF STOCK.  Upon surrender to the Corporation or
the transfer agent of the Corporation of a certificate for shares duly endorsed
or accompanied by proper evidence of succession, assignment or authority to
transfer, it shall be the duty of the Corporation to issue a new certificate to
the person entitled thereto, cancel the old certificate and record the
transaction upon its books.

     SECTION 5.     REGISTERED SHAREHOLDERS.  The Corporation shall be entitled
to recognize the exclusive right of a person registered on its books as the
owner of shares to receive dividends, and to vote as such owner, and shall be
entitled to hold liable for calls and assessments a person so registered on its
books as the owner of shares, and shall not be bound to recognize any equitable
or other claim to or interest in such share or shares on the part of any other
person, whether or not it shall have express or other notice thereof, except as
otherwise provided by applicable statute.

                                   9



                                    ARTICLE VI.
                                  INDEMNIFICATION.

     SECTION 1.     INDEMNIFICATION.  The Corporation shall indemnify its
directors officers and for such expenses and liabilities, in such manner, under
such circumstances, and to extent, as required or permitted by Minnesota
Statues, Section 302A.52l, as amended from time to time, or as required or
permitted by other provisions of law.  The Corporation may but shall not be
required to indemnify agents or employees of the Corporation other than
directors and officers to the fullest extent permitted by law as determined by
the Board of Directors from time to time.  Any repeal or modification of this
Article shall be prospective only, and shall not adversely affect any right to
indemnification or protection of a director, officer or employee of this
Corporation existing at the time of such repeal or modification.

     SECTION 2.     ADVANCES.  The Corporation may, without a vote of the
directors, advance money to its directors, officers or employees to cover
expenses that can reasonably be anticipated to be incurred by them in the
performance of their duties and for which they would be entitled to
reimbursement in the absence of an advance.

     SECTION 3.     INSURANCE.  The Corporation may purchase and maintain
insurance on behalf of any person in such person's official capacity against any
liability asserted against and incurred by such person in or arising from that
capacity, whether or not the Corporation would otherwise be required to
indemnify the person against the liability.

                                   ARTICLE VII.
                                GENERAL PROVISIONS.

     SECTION 1.     EXECUTION OF INSTRUMENTS.  All deeds, mortgages, bonds,
checks, contracts and other instruments pertaining to the business and affairs
of the Corporation shall be signed on behalf of the Corporation by the Chief
Executive Officer, or the President, or any Vice President, or by such other
person or persons as may be designated from time to time by the Board of
Directors.  If a document must be executed by persons holding different offices
or functions and one person holds such offices or exercises such functions, that
person may execute the document in more than one capacity if the document
indicates each such capacity.

     SECTION 2.     FISCAL YEAR.  The fiscal year of the Corporation shall be
determined by the Board of Directors.

     SECTION 3.     DIVIDENDS.  Subject to the provisions of the applicable
statute and the Articles of Incorporation, dividends upon the capital stock of
the Corporation may be declared by the Board of Directors at any regular or
special meeting, and may be paid in cash, in property, or in shares of the
capital stock.

     SECTION 4.     RESERVES.  Before payment of any dividend, there may be set
aside out of any funds of the Corporation available for dividends such sum or
sums as the directors from time to time, in their absolute discretion, think
proper as a reserve or reserves to meet contingencies, or for equalizing
dividends, or for repairing or maintaining any property of the Corporation, or
for such other purposes as the directors shall think conducive to the interest
of the Corporation, and the directors may modify or abolish any such reserve in
the manner in which it was created.

                                10



     SECTION 5.     SEAL.  The Corporation shall have no seal.

                                   ARTICLE VIII.
                                    AMENDMENTS.

     SECTION 1.     AMENDMENTS.  The Board of Directors shall have the power to
adopt, amend or repeal the Bylaws of the Corporation, subject to the power of
the shareholders to change or repeal the same, provided, however, that the Board
shall not adopt, amend or repeal any Bylaw fixing a quorum for meetings of
shareholders, prescribing procedures for removing directors or filling vacancies
in the Board, or fixing the number of director of their classifications,
qualifications or terms of office, buy may adopt or amend a Bylaw that increases
the number of directors.
                                                               December 20,1993


                                      11

EX-3.22

                                       BYLAWS

                                         OF

                              MERRILL/ALTERNATIVES, INC.
                                  (THE "COMPANY")

                                     ARTICLE I.
                                      OFFICES

SECTION 1. PRINCIPAL EXECUTIVE OFFICE.  The principal executive office of the
company will be determined from time to time by the Board of Directors.

SECTION 2. REGISTERED OFFICE.  The registered office of the Company required by
Chapter 302A of the Minnesota Statutes to be maintained in the State of
Minnesota is as designated in the Articles of Incorporation. The Board of
directors of the Company may, from time to time, change the location of the
registered office. On or before the day that such change is to become effective,
a certificate of such change and of the new address of the new registered office
will be filed with the Secretary of State of the State of Minnesota.

SECTION 3. OTHER OFFICE.  The company may establish and maintain such other
offices, within or without the State of Minnesota, as are from time to time
authorized by the Board of Directors.

                                    ARTICLE II.
                              MEETINGS OF SHAREHOLDERS

SECTION 1. PLACE OF MEETINGS.  Each meeting of the shareholders will be held at
the principal executive office of the Company or at such other place as may be
designated by the Board of Directors or the Chief Executive Officer; provided,
however, that any meeting called by or at the demand of a shareholder or
shareholders will be held in the county where the principal executive office of
the company is located.

SECTION 2. REGULAR MEETINGS.  Regular meetings of the shareholders may be held
on an annual or other less frequent basis as determined by the Board of
Directors; provided, however, that if a regular meeting has not been held during
the immediately preceding 15 months, a shareholder or shareholders holding three
percent or more of the voting power of all shares entitled to vote may demand a
regular meeting of shareholders by written demand given to the Chief Executive
Officer of the company. If said officer fails to call and hold such meeting
within 90 days after receipt of the demand, the shareholder making the demand
will have the right and power to call such meeting. At each regular meeting the
shareholders will elect directors whose terms have expired or are due to expire
within six months after the date of the meeting and may transact such other
business, as may properly be brought before the meeting.

SECTION 3. NOTICE OF REGULAR MEETING.  Unless otherwise required by law, written
notice of the time and place of each regular shareholder meeting will be mailed,
postage prepaid, at least 10 but not more than 60 days before such meeting, to
each shareholder entitled to vote thereat at his or her address as the same
appears upon the books of the Company.



SECTION 4. SPECIAL MEETINGS.  A special meeting of the shareholders may be
called for any purpose or purposes at any time by the Chief Executive Officer
and will be called by the Chief Executive Officer at the request in writing of
two or more members of the Board of directors or at the request in writing of
one or more shareholders holding not less than ten percent of the voting power
of all shares of the company entitled to vote. Such request which will be by
registered mail or delivered in person to the Chief Executive Officer of the
Company specifying the purposes of the proposed meeting.

SECTION 5. NOTICE OF SPECIAL MEETINGS.  Written notice of the time, place and
purpose or purposes of a special meeting will be mailed, postage prepaid, at
least five but not more than 60 days before such meeting, to each shareholder
entitled to vote at such meeting at his or her address as the same appears upon
the books of the Company.

SECTION 6. BUSINESS TO BE TRANSACTED.  No business will be transacted at any
special meeting of shareholders except that stated in the notice of the meeting.

SECTION 7. WAIVER OF NOTICE.  A shareholder may waive notice of the date, time,
place and purpose or purposes of a meeting of shareholders. A waiver of notice
by a shareholder entitled to notice is effective whether given before, at or
after the meeting, and whether given in writing, orally or by attendance.
Attendance by a shareholder at a meeting is a waiver of notice of that meeting,
unless the shareholder objects at the beginning of the meeting to the
transaction of business because the meeting is not lawfully called or convened,
or objects before a vote on an item of business because the item may not
lawfully be considered at that meeting and does not participate in the
consideration of the item at that meeting.

SECTION 8. QUORUM AND ADJOURNMENT.  The holders of a majority of the voting
power of the shares entitled to vote at a meeting, present in person or by proxy
at the meeting, will constitute a quorum at all meetings of the shareholders for
the transaction of business except as otherwise provided by statute or by the
Articles of Incorporation. If, however, such quorum will not be present or
represented at any meeting of the shareholders, the shareholders entitled to
vote thereat, present in person or represented by proxy, will have the power to
adjourn the meeting from time to time, without notice other than announcement at
the meeting, until a quorum will be present or represented. At such adjourned
meeting at which a quorum will be present or represented any business may be
transacted which might have been transacted at the meeting a originally noticed.
The shareholders present at a duly called or held meeting at which a quorum is
present may continue to transact business until adjournment, even though the
withdrawal of a number of shareholders originally present leaves less than the
proportion or number otherwise required for a quorum.

SECTION 9. VOTING RIGHTS.  A shareholder may cast his or her vote in person or
by proxy. When a quorum is present at the time a meeting is convened, the
affirmative vote of the holders of a majority of the shares entitled to vote on
any question present in person or by proxy will decide such question unless the
question is one upon which, by express provision of the applicable statute or
the Articles of Incorporation, a different vote is required, in which case such
express provision will govern and control the decision of such question.

                                  2 of 10


SECTION 10. PROXIES.  A shareholder may cast or authorize the casting of a vote
by filing a written appointment of a proxy with an officer of the Company at or
before the meeting at which the appointment is to be effective. The shareholder
may sign or authorize the written appointment by telegram, cablegram or other
means of electronic transmission setting forth or submitted with information
sufficient to determine that the shareholder authorized such transmission. Any
copy, facsimile, telecommunication or other reproduction of the original of
either the writing or transmission may be used in lieu of the original, provided
that it is a complete and legible reproduction of the entire original. No proxy
will be valid after 11 months from its date, unless the proxy expressly provides
for a longer period.

SECTION 11. MANNER OF VOTING.  Each shareholder will at every meeting of the
shareholders be entitled to one vote in person or by proxy for each share of the
capital stock having voting power held by such shareholder and, except where the
transfer books of the Company have been closed or a date has been fixed as a
record date for the determination of its shareholders entitled to vote, no share
of stock that has been transferred on the books of the Company within 20 days
next preceding any election of directors will be voted in such election of
directors.

SECTION 12. RECORD DATE.  The Board of Directors may fix a date, not exceeding
60 days preceding the date of any meeting of shareholders, as a record date for
the determination of the shareholders entitled to notice of any to vote at such
meeting, and in such case only shareholders of record on the date so fixed, or
their legal representatives, will be entitled to notice of and to vote at such
meeting, notwithstanding any transfer of any shares on the books of the Company
after any record date so fixed. The Board of Directors may close the books of
the company against transfers of shares during the whole or any part of such
period.

SECTION 13. ORGANIZATION OF MEETINGS.  The Chief Executive Officer will preside
at all meetings of the shareholders, in the absence of the Chief Executive
Officer or if the office of the Chief Executive Officer is vacant, the Treasurer
will preside at meetings of the shareholders. The Secretary will act as
secretary of lal meetings of the shareholders, or in his or her absence any
person appointed by the presiding officer will act as secretary.

SECTION 14. ELECTRONIC CONFERENCES AND PARTICIPATION BY ELECTRONIC MEANS.  A
conference among shareholders conducted by any means of communication through
which the shareholders may simultaneously hear each other during the conference
will constitute a regular or special meeting of shareholders, provided the
notice of the conference is given to every holder of shares entitled to vote
pursuant to sections 3 or 5 of this Article II. A shareholder may participate in
a regular or special meeting of shareholders by any means of communication
through which the shareholder, other shareholders so participating, and all
shareholders physically present at the meeting may simultaneously hear each
other during the meeting. Such participation in a meeting will constitute
presence at the meeting in person or by proxy.

SECTION 15. ACTION WITHOUT A MEETING.  Any action required or permitted to be
taken at a shareholders' meeting may be taken without a meeting if authorized by
a writing or writings signed by all of the holders of shares who would be
entitled to vote on that action. Such action will be effective on the date on
which the last signature is placed on such writing or writings, unless a
different effective date is provided in the written action. If any action so
taken requires a

                            3 of 10


certificate to be filed in the office of the Secretary of State, the
officer signing such certificate will state therein that the action was
effected in the manner aforesaid.

                                    ARTICLE III.
                                 BOARD OF DIRECTORS

SECTION 1. GENERAL POWERS.  The business and affairs of the Company will be
managed by or under its Board of Directors which may exercise all such powers of
the Company and do all such lawful acts and things as are not be statute or by
the Articles of Incorporation or by these Bylaws required to be exercised or
done by the shareholders.

SECTION 2. NUMBER AND TERM OF OFFICE.  The number of directors which will
constitute the whole board will be at least one, or such other number as may be
determined by the Board of Directors or by the shareholders at a regular or
special meeting. Except as otherwise permitted by statute, the directors will be
elected at each regular meeting of the Company's shareholders (or at any special
meeting of the shareholders called for that purpose) by a majority of the voting
power of the shares represented and voting, and each director will be elected to
serve until the next regular meeting of the shareholders and thereafter until a
successor is duly elected and qualified, unless a prior vacancy will occur by
reason of death, resignation, or removal for office. Directors will be natural
persons, but need not be shareholders.

SECTION 3. RESIGNATION AND REMOVAL.  Any director may resign at any time by
giving written notice to the Company. Such resignation will take effect at the
date of the receipt of such notice, or at any later time specified therein, and,
unless otherwise specified therein, the acceptance of such resignation will not
be necessary to make it effective. Any director may be removed at any time, with
or without cause, by the affirmative vote of the holders of a majority of the
voting shares entitled to elect such director.

SECTION 4. VACANCIES.  If the office of any director becomes vacant by reason of
death, resignation, removal, disqualification, or otherwise, the directors then
in office, although less than a quorum, by a majority vote, may choose a
successor who will hold office for the unexpired term in respect of which such
vacancy occurred. With respect to the initial election of a director to fill a
newly created directorship resulting from an increase in the number of directors
by action of the Board of directors in the manner permitted by statute, such
vacancy will be filled by the affirmative vote of a majority of the directors
serving at the time of the increase.

SECTION 5. MEETINGS OF DIRECTORS.  The Board of Directors of the Company may
hold meetings, from time to time, either within or without the State of
Minnesota, at such place as a majority of the members of the Board of Directors
may from time to time appoint. If the Board of Directors fails to select a place
for the meeting, the meeting will be held at the principal executive office of
the Company.

SECTION 6. CALLING MEETINGS.  Meetings of the Board of Directors may be called
by (i) the Chief Executive Officer on 24 hours' notice or (ii) any director on
10 days' notice, to each director, either personally, by telephone or by mail or
telegram. Every such notice will state the date, time

                            4 of 10


and place of the meeting. Notice of a meeting called by a person other than
the Chief Executive Officer will state the purpose of the meeting.

SECTION 7. PARTICIPATION BY ELECTRONIC COMMUNICATIONS.  Directors of the Company
may participate in a meeting of the Board of Directors by means of conference
telephone or by similar means of communication by which all persons
participating in the meeting can simultaneously hear each other. A director so
participating will be deemed present in person at the meeting.

SECTION 8. WAIVER OF NOTICE.  A director may waive notice of a meeting of the
Board of Directors. A waiver of notice by a director entitled to notice is
effective whether given before, at, or after the meeting, and whether given in
writing, orally, or by attendance. Attendance by a director at a meeting is a
waiver of notice of that meeting, except where the director objects at the
beginning of the meeting to the transaction of business because the meeting was
not lawfully called or convened and does not participate thereafter in the
meeting.

SECTION 9. ABSENT DIRECTORS.  A director may give advance written consent or
opposition to a proposal to be acted on at a meeting of the Board of Directors
by actual delivery prior to the meeting of such advance written consent or
opposition to the Chief Executive Officer or a director who is present at the
meeting. If the director is not present at the meeting, advance written consent
or opposition to a proposal will not constitute presence for purposes of
determining the existence of a quorum, but consent or opposition will be counted
as a vote in favor of or against the proposal and will be entered in the minutes
or other record of action at the meeting, if the proposal acted on at the
meeting is substantially the same or has substantially the same effect as the
proposal to which the director has consented or objected.

SECTION 10. QUORUM.  At all meetings of the Board of Directors a majority of the
directors will constitute a quorum for the transaction of business, and the act
of a majority of the directors present at any meeting at which there is a quorum
will be the act of the Board of Directors, except as may be otherwise
specifically provided by applicable statute or by the Articles of Incorporation.
If a quorum will not be present at any meeting of the Board of Directors, the
directors present thereat may adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum is present. If a
quorum is present at the call of a meeting, the directors may continue to
transact business until adjournment notwithstanding the withdrawal of enough
directors to leave less than a quorum.

SECTION 11. ORGANIZATION OF MEETINGS.  The Chief Executive Officer will preside
at all meetings of the Board of Directors, and in his or her absence the
Treasurer will act a presiding officer. The Secretary will act as secretary of
all meetings of the Board of Directors, and in his or her absence any person
appointed by the presiding officer will act as secretary.

SECTION 12. COMMITTEES.  The Board of Directors, by a resolution approved by the
affirmative vote of a majority of the directors then holding office, may
establish one or more committees of one or more persons having the authority of
the Board of Directors in the management of business of the Company to the
extent provided in such resolution. Such committees, however, will at all times
be subject to the direction and control of the Board of Directors. Committee
members need not be directors and will be appointed by the affirmative vote of a
majority of the directors present. A majority of the members of any committee
will constitute a quorum for the

                            5 of 10


transaction of business at a meeting of any such committee. In other matters
of procedure the provisions of these Bylaws will apply to committees and the
members thereof to the same extent they apply to the Board of Directors and
directors, including, without limitation, the provisions with respect to
meetings and notice thereof, absent members, written actions and valid acts.
Each committee will keep regular minutes of its proceedings and report the
same to the Board of Directors.

SECTION 13. ACTION WITHOUT MEETING.  Unless otherwise restricted by the Articles
of Incorporation or these Bylaws, any action required or permitted to be taken
at any meeting of the Board of Directors may be taken without a meeting, if a
written consent thereto is signed by all members of the Board of Directors and
such written consent is filed with the minutes of proceedings of the Board of
Directors. If the proposed action need not be approved by the shareholders and
the Articles of Incorporation so provide, action may be taken by written consent
signed by the number of directors that would be required to take the same action
at a meeting of the Board of Directors at which all directors were present. Such
action will be effective on the date on which the last signature is placed on
such writing or writings, or such other effective date as is set forth therein.

SECTION 14. COMPENSATION OF DIRECTORS.  By resolution of the Board of Directors,
each director may be paid his or her expenses, if any, of attendance at each
meeting of the Board of Directors, and may be paid a stated amount as a director
or a fixed sum for attendance at each meeting of the Board of Directors, or
both. No such payment will preclude a director from serving the Company in any
other capacity and receiving compensation therefor.


                                    ARTICLE IV.
                                      OFFICERS

SECTION 1. NUMBER AND QUALIFICATION.  The officers of the Company will be chosen
by the Board of Directors and include a Chief Executive Officer, a Chief
Financial Officer and a Secretary. The Board of Directors may elect or appoint
such other officers or agents as it deems necessary for the operation and
management of the Company, with such powers, rights, duties and responsibilities
as may be determined by the Board of Directors, including, without limitation,
one or more Vice Presidents, one or more Assistant Secretaries and Assistant
Chief Financial Officers, each of whom will have the powers, rights duties and
responsibilities set for the in these Bylaws unless otherwise determined by the
Board. Any of the offices or functions of those offices may be held or exercised
by the same person.

SECTION 2. ELECTION AND TERM OF OFFICE.  The initial officers of the Company
will be elected by the Board of Directors at its first duly held meeting and all
officers will hold office until their successors have been duly elected, unless
prior thereto such officer will have resigned or been removed from office as
hereinafter provided.

SECTION 3. RESIGNATION, REMOVAL AND VACANCIES.   An officer may resign at any
time by giving written notice to the Company. The resignation is effective
without acceptance when the notice is given to the Company, unless a later
effective date is specified in the notice. Any officer or agent elected or
appointed by the Board of Directors will hold office at the pleasure of the

                            6 of 10


Board of Directors and may be removed, with or without cause, at any time by the
affirmative vote of a majority of the Board of Directors present at a duly held
Board meeting. A vacancy in an office may, or in the case of a vacancy in the
office of the Chief Executive Officer or Chief Financial Officer will, be filled
for the unexpired portion of the term by action of the Board of Directors.

SECTION 4. SALARIES.  The salaries of all officers of the Company will be fixed
by the Board of Directors or by the Chief Executive Officer if authorized by the
Board of Directors.

SECTION 5. CHIEF EXECUTIVE OFFICER.  The Chief Executive Officer will be the
chief executive officer of the Company. Unless provided otherwise by a
resolution adopted by the Board of Directors, the Chief Executive Officer will
have general active management of the business of the Company, will preside at
meetings of the shareholders and Board of Directors, will see that all orders
and resolutions of the Board of Directors are carried into effect, will sign and
deliver in the name of the Company any deeds, mortgages, bonds, contracts, or
other instruments pertaining to the business of the Company, except in cases in
which the authority to sign and deliver is required by law to be exercised by
another person or is expressly delegated by the Articles of Incorporation, these
Bylaws, or the Board of Directors to some other officer or agent of the Company,
will maintain records of and, whenever necessary, certify proceedings of the
Board of Directors and shareholders, and will perform such other duties as may
from time to time be prescribed by the Board of Directors.

SECTION 6. CHIEF FINANCIAL OFFICER.  The Chief Financial Officer will be the
chief financial officer of the Company. The Chief Financial Officer will keep
accurate financial records for the Company, will deposit all moneys, drafts, and
checks in the name of and to the credit of the Company in such banks and
depositories as the Board of Directors will designate from time to time, will
endorse for deposit all notes, checks, and drafts received by the Company as
ordered by the Board of Directors, making proper vouchers therefor, will
disburse corporate funds and issue checks and drafts in the name of the Company
as ordered by the Board of Directors, will render to the Chief Executive Officer
and the Board of Directors, whenever requested, an account of all such officer's
transactions as Chief Financial Officer and of the financial condition of the
Company, and will perform such other duties as may be prescribed by the Board of
Directors from time to time. If required by the Board of Directors, the Chief
Financial Officer will give the Company a bond in such sum and with such surety
or sureties as will be satisfactory to the Board of Directors for the faithful
performance of the duties of his or her office and for the restoration to the
Company, in case of his or her death, resignation, retirement or removal from
office, of all books, papers, vouchers, money and other property of whatever
kind in his or her possession or under his or her control belonging to the
Company.

SECTION 7. SECRETARY.  The Secretary will attend all meetings of the Board of
Directors and all meetings of the shareholders and record all the proceedings of
the meetings of the Company and of the Board of Directors in a book to be kept
for that purpose. He or she will give, or cause to be given, notice of all
meetings of the shareholders and special meetings of the Board of Directors, and
will perform such other duties as may be prescribed by the Board of Directors or
the Chief Executive Officer, under whose supervision he or she will be.

                            7 of 10


SECTION 8. VICE PRESIDENTS.  The Vice President, if any, or if there will be
more than one, the Vice Presidents in the order determined by the Board of
Directors, will, in the absence or disability of the Chief Executive Officer,
perform the duties and exercise the powers of the Chief Executive Officer and
will perform such other duties and have such other powers as the Board of
Directors or the Chief Executive Officer may from time to time prescribe.

SECTION 9. ASSISTANT SECRETARIES.  The Assistant Secretary or, if there be more
than one, the Assistant Secretaries, in the order determined by the Board of
Directors, will, in the absence or disability of the Secretary, perform the
duties and exercise the powers of the Secretary and will perform such other
duties and have such other powers as the Board of Directors or the Chief
Executive Officer may from time to time prescribe.

SECTION 10. AUTHORITY AND DUTIES.  In addition to the foregoing authority and
duties, all officers of the Company will respectively have such authority and
perform such duties in the management of the business of the Company as may be
designated from time to time by the Board of Directors.


                                     ARTICLE V.
                               CERTIFICATES OF STOCK

SECTION 1. CERTIFICATES OF STOCK.  Every holder of stock in the Company will be
entitled to have a certificate signed by, or in the name of the Company by the
Chief Executive Officer or the Secretary or an Assistant Secretary of the
Company, if there be one, certifying the number of shares owned by him or her in
the Company. The certificates of stock of each class will be numbered in the
order of their issue.

SECTION 2. FACSIMILE SIGNATURES.  Where a certificate is signed (1) by a
transfer agent or an assistant transfer agent, or (2) by a transfer clerk acting
on behalf of the Company and a registrar, the signature of any such Chief
Executive Officer, Secretary or Assistant Secretary may be facsimile. In case
any officer or officers who have signed, or whose facsimile signature or
signatures have been used on any such certificate or certificates will cease to
be such officer or officers of the Company before such certificate or
certificates have been delivered by the Company, such certificate or
certificates may nevertheless be adopted by the Company and be issued and
delivered as though the person or persons who signed such certificate or
certificates or whose facsimile signature or signatures have been used thereon
had not ceased to be such officer or officers of the Company.

SECTION 3. LOST OR DESTROYED CERTIFICATES.  The Board of Directors may direct a
new certificate or certificates to be issued in place of any certificate or
certificates issued by the Company alleged to have been lost or destroyed, upon
the making of an affidavit of that fact by the person claiming the certificate
of stock to be lost or destroyed. When authorizing such issue of a new
certificate or certificates, the Board of Directors may, in its discretion and
as a condition precedent to the issuance thereof, require the owner of such lost
or destroyed certificate or certificates, or his or her legal representative, to
advertise the same in such manner as it will require and/or to give the Company
a bond in such sum as it may direct as indemnity against any

                              8 of 10


claim that may be made against the Company with respect to the certificate
alleged to have been lost or destroyed.

SECTION 4. TRANSFERS OF STOCK.  Upon surrender to the Company or the transfer
agent of the Company of a certificate for shares duly endorsed or accompanied by
proper evidence of succession, assignment or authority to transfer, it will be
the duty of the Company to issue a new certificate to the person entitled
thereto, cancel the old certificate and record the transaction upon its books.

SECTION 5. REGISTERED SHAREHOLDERS.  The Company will be entitled to recognize
the exclusive right of a person registered on its books as the owner of shares
to receive dividends, and to vote as such owner, and will be entitled to hold
liable for calls and assessments a person so registered on its books as the
owner of shares, and will not be bound to recognize any equitable or other claim
to or interest in such share or shares on the part of any other person, whether
or not it will have express or other notice thereof, except as otherwise
provided by applicable statute.


                                    ARTICLE VI.
                                  INDEMNIFICATION

SECTION 1. INDEMNIFICATION.  The Company shall indemnify its officers and
directors to the fullest extent permissible under the provisions of Chapter 302A
of the Minnesota Statutes, as amended from time to time, or as required or
permitted by other provisions of law. Any repeal or modification of this Article
[VI] will be prospective only and will not adversely affect any right to
indemnification of a director or officer of the Company existing at the time of
such repeal or modification.

SECTION 2. INSURANCE.  The Company may purchase and maintain insurance on behalf
of any person in such person's official capacity against any liability asserted
against and incurred by such person in or arising from that capacity, whether or
not the Company would otherwise be required to indemnify the person against the
liability.


                                    ARTICLE VII.
                                 GENERAL PROVISIONS

SECTION 1. FISCAL YEAR.  The fiscal year of the Company will be fixed by
resolution of the Board of Directors.

SECTION 2. DIVIDENDS.  Subject to the provisions of the applicable statute and
the Articles of Incorporation, dividends  upon the capital stock of the Company
may be declared by the Board of Directors at any regular or special meeting, and
may be paid in cash, in property, or in shares of the capital stock.

SECTION 3. RESERVES.  Before payment of any dividend, there may be set aside out
of any funds of the Company available for dividends such sum or sums as the
directors from time to time, in their absolute discretion, think proper as a
reserve or reserves to meet contingencies, or for

                                9 of 10


equalizing dividends, or forrepairing or maintaining any property of the
Company, or for such other purposes as the directors will think conducive to
the interest of the Company, and the directors may modify or abolish any such
reserve in the manner in which it was created.

SECTION 4. SEAL.  The Company will not have a corporate seal.

SECTION 5. CHECKS.  All checks or demands for money and notes of the Company
will be signed by such officer or officers or such other person or persons as
the Board of Directors may from time to time designate.

SECTION 6. AMENDMENTS.  The Board of Directors will have the power to adopt,
amend or repeal the Bylaws of the Company, subject to the power of the
shareholders to change or repeal the same, provided, however, that the Board
will not adopt, amend or repeal any Bylaw fixing a quorum for meetings of
shareholders, prescribing procedures for removing directors or filling vacancies
in the Board, or fixing the number of directors or their classifications,
qualifications or terms of office, but may adopt or amend a Bylaw that increases
the number of directors.


                                                                    June 9, 1999











                             10 of 10

EX-3.23

                                       BYLAWS
                                         OF
                             MERRILL INTERNATIONAL INC.


                                     ARTICLE I.

                                      OFFICES

       Section 1.    PRINCIPAL EXECUTIVE OFFICE.  The principal executive office
of the corporation shall be determined from time to time by the Board of
Directors.

       Section 2.    REGISTERED OFFICE.  The registered office of the
Corporation required by Chapter 302A of the Minnesota Statutes to be maintained
in the State of Minnesota is as designated in the Articles of Incorporation.
The Board of Directors of the Corporation may, from time to time, change the
location of the registered office.  On or before the day that such change is to
become effective, a certificate of such change and of the new address of the new
registered office shall be filed with the Secretary of State of the State of
Minnesota.

       Section 3.    OTHER OFFICE.  The Corporation may establish and maintain
such other offices, within or without the State of Minnesota, as are from time
to time authorized by the Board of Directors.

                                    ARTICLE II.

                              MEETINGS OF SHAREHOLDERS

       Section 1.    PLACE OF MEETINGS.  Each meeting of the shareholders shall
be held at the principal executive office of the Corporation or at such other
place as may be designated by the Board of Directors or the President; provided,
however, that any meeting called by or at the demand of a shareholder or
shareholders shall be held in the county where the principal executive office of
the Corporation is located.

       Section 2.    REGULAR MEETINGS.  Regular meetings of the shareholders may
be held on an annual or other less frequent basis as determined by the Board of
Directors; provided, however, that if a regular meeting has not been held during
the immediately preceding 15 months, a shareholder or shareholders holding three
percent or more of the voting power of all shares entitled to vote may demand a
regular meeting of shareholders by written demand given to the President of the
Corporation.  If said officer fails to call and hold such meeting within ninety
(90) days after receipt of the demand, the shareholder making the demand shall
have the right and power to call such meeting.  At each regular meeting the
shareholders shall elect qualified successors for directors who serve for an
indefinite term or whose terms have expired or are due to expire within six
months after the date of the meeting and may transact any other business,
provided, however, that no business with respect to which special notice is
required by law shall be transacted unless such notice shall have been given.

       Section 3.    NOTICE OF REGULAR MEETING.  Unless otherwise required by
law, written notice of the time and place of each regular shareholder meeting
shall be mailed, postage prepaid, at least ten (10) but not more than sixty (60)
days before such meeting, to each shareholder entitled to vote thereat at his or
her address as the same appears upon the books of



the Corporation.

       Section 4.    SPECIAL MEETINGS.  A special meeting of the shareholders
may be called for any purpose or purposes at any time by the President and shall
be called by the President at the request in writing of two or more members of
the Board of Directors or at the request in writing of one or more shareholders
holding not less than ten percent of the voting power of all shares of the
Corporation entitled to vote.  Such request which shall be by registered mail or
delivered in person to the President of the Corporation specifying the purposes
of such meeting.

       Section 5.    NOTICE OF SPECIAL MEETINGS.  Written notice of the time,
place and purpose or purposes of a special meeting shall be mailed, postage
prepaid, at least five (5) but not more than sixty (60) days before such
meeting, to each shareholder entitled to vote at such meeting at his or her
address as the same appears upon the books of the Corporation.

       Section 6.    BUSINESS TO BE TRANSACTED.  No business shall be transacted
at any special meeting of shareholders except that stated in the notice of the
meeting.

       Section 7.    WAIVER OF NOTICE.  A shareholder may waive notice of the
date, time, place and purpose or purposes of a meeting of shareholders.  A
waiver of notice by a shareholder entitled to notice is effective whether given
before, at or after the meeting, and whether given in writing, orally or by
attendance.  Attendance by a shareholder at a meeting is a waiver of notice of
that meeting, unless the shareholder objects at the beginning of the meeting to
the transaction of business because the meeting is not lawfully called or
convened, or objects before a vote on an item of business because the item may
not lawfully be considered at that meeting and does not participate in the
consideration of the item at that meeting.

       Section 8.    QUORUM AND ADJOURNMENT.  The holders of a majority of the
voting power of the shares entitled to vote at a meeting, present in person or
by proxy at the meeting, shall constitute a quorum at all meetings of the
shareholders for the transaction of business except as otherwise provided by
statute or by the Articles of Incorporation.  If, however, such quorum shall not
be present or represented at any meeting of the shareholders, the shareholders
entitled to vote thereat, present in person or represented by proxy, shall have
the power to adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present or represented.  At
such adjourned meeting at which a quorum shall be present or represented any
business may be transacted which might have been transacted at the meeting as
originally noticed.  The shareholders present at a duly called or held meeting
at which a quorum is present may continue to transact business until
adjournment, even though the withdrawal of a number of shareholders originally
present leaves less than the proportion or number otherwise required for a
quorum.

       Section 9.    VOTING RIGHTS.    A shareholder may cast his or her vote in
person or by proxy.  When a quorum is present at the time a meeting is convened,
the affirmative vote of the holders of a majority of the shares entitled to vote
on any question present in person or by proxy shall decide such question unless
the question is one upon which, by express provision of the applicable statute
or the Articles of Incorporation, a different vote is required, in which case
such express provision shall govern and control the decision of such question.

                                    2


       Section 10.   PROXIES.  A shareholder may cast or authorize the casting
of a vote by filing a written appointment of a proxy with an officer of the
Corporation at or before the meeting at which the appointment is to be
effective.  The shareholder may sign or authorize the written appointment by
telegram, cablegram or other means of electronic transmission setting forth or
submitted with information sufficient to determine that the shareholder
authorized such transmission.  Any copy, facsimile, telecommunication or other
reproduction of the original of either the writing or transmission may be used
in lieu of the original, provided that it is a complete and legible reproduction
of the entire original. No proxy shall be valid after eleven (11) months from
its date, unless the proxy expressly provides for a longer period.

       Section 11.   MANNER OF VOTING.  Each shareholder shall at every meeting
of the shareholders be entitled to one vote in person or by proxy for each share
of the capital stock having voting power held by such shareholder and except
where the transfer books of the Corporation have been closed or a date has been
fixed as a record date for the determination of its shareholders entitled to
vote, no share of stock that has been transferred on the books of the
Corporation within twenty (20) days next preceding any election of directors
shall be voted in such election of directors.

       Section 12.   RECORD DATE.  The Board of Directors may fix a date, not
exceeding sixty (60) days preceding the date of any meeting of shareholders, as
a record date for the determination of the shareholders entitled to notice of
and to vote at such meeting, and in such case only shareholders of record on the
date so fixed, or their legal representatives, shall be entitled to notice of
and to vote at such meeting, notwithstanding any transfer of any shares on the
books of the Corporation after any record date so fixed.  The Board of Directors
may close the books of the Corporation against transfers of shares during the
whole or any part of such period.

       Section 13.   ORGANIZATION OF MEETINGS.  The President shall preside at
all meetings of the shareholders, in the absence of the President or if the
office of President is vacant, the Treasurer shall preside at meetings of the
shareholders.  The Secretary shall act as secretary of all meetings of the
shareholders, or in his or her absence any person appointed by the presiding
officer shall act as secretary.

       Section 14.   ELECTRONIC CONFERENCES AND PARTICIPATION BY ELECTRONIC
MEANS.  A conference among shareholders conducted by any means of communication
through which the shareholders may simultaneously hear each other during the
conference shall constitute a regular or special meeting of shareholders,
provided the notice of the conference is given to every holder of shares
entitled to vote pursuant to Sections 3 or 5 hereof.  A shareholder may
participate in a regular or special meeting of shareholders by any means of
communication through which the shareholder, other shareholders so
participating, and all shareholders physically present at the meeting may
simultaneously hear each other during the meeting.  Such participation in a
meeting shall constitute presence at the meeting in person or by proxy.

       Section 15.   ACTION WITHOUT A MEETING.  Any action required or permitted
to be taken at a shareholders' meeting may be taken without a meeting if
authorized by a writing or writings signed by all of the holders of shares who
would be entitled to vote on that action.  Such action shall be effective on the
date on which the last signature is placed on such writing or writings,

                                     3


unless a different effective date is provided in the written action.  If any
action so taken requires a certificate to be filed in the office of the
Secretary of State, the officer signing such certificate shall state therein
that the action was effected in the manner aforesaid.

                                    ARTICLE III.

                                 BOARD OF DIRECTORS

       Section 1.    GENERAL POWERS.  The business and affairs of the
Corporation shall be managed by or under its Board of  Directors which may
exercise all such powers of the Corporation and do all such lawful acts and
things as are not by statute or by the Articles of Incorporation or by these
Bylaws required to be exercised or done by the shareholders.

       Section 2.    NUMBER AND TERM OF OFFICE.  The number of directors which
shall constitute the whole board shall be at least one (1), or such other number
as may be determined by the Board of Directors or by the shareholders at a
regular or special meeting.  Except as otherwise permitted by statute, the
directors shall be elected at each regular meeting of the Corporation's
shareholders (or at any special meeting of the shareholders called for that
purpose) by a majority of the voting power of the shares represented and voting,
and each director shall be elected to serve until the next regular meeting of
the shareholders and thereafter until a successor is duly elected and qualified,
unless a prior vacancy shall occur by reason of death, resignation, or removal
for office.  Directors shall be natural persons, but need not be shareholders.

       Section 3.    RESIGNATION AND REMOVAL.  Any director may resign at any
time by giving written notice to the Corporation.  Such resignation shall take
effect at the date of the receipt of such notice, or at any later time specified
therein, and, unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.  Any director may be
removed at any time, with or without cause, by the affirmative vote of the
holders of a majority of the voting shares entitled to elect such director.

       Section 4.    VACANCIES.  If the office of any director becomes vacant by
reason of death, resignation, removal, disqualification, or otherwise, the
directors then in office, although less than a quorum, by a majority vote, may
choose a successor who shall hold office for the unexpired term in respect of
which such vacancy occurred.  With respect to the initial election of a director
to fill a newly created directorship resulting from an increase in the number of
directors by action of the Board of Directors in the manner permitted by
statute, such vacancy shall be filled by the affirmative vote of a majority of
the directors serving at the time of the increase.

       Section 5.    MEETINGS OF DIRECTORS.  The Board of Directors of the
Corporation may hold meetings, from time to time, either within or without the
State of Minnesota, at such place as a majority of the members of the Board of
Directors may from time to time appoint.  If the Board of Directors fails to
select a place for the meeting, the meeting shall be held at the principal
executive office of the Corporation.

       Section 6.    CALLING MEETINGS.  Meetings of the Board of Directors may
be called by (i) the President and Chief Executive Officer on two (2) days'
notice or (ii) any director on ten (10) days' notice, to each director, either
personally, by telephone or by mail or telegram.  Every such

                                 4


notice shall state the date, time and place of the meeting.  Notice of a
meeting called by a person other than the President and Chief Executive
Officer shall state the purpose of the meeting.

       Section 7.    PARTICIPATION BY ELECTRONIC COMMUNICATIONS.  Directors of
the Corporation may participate in a meeting of the Board of Directors by means
of conference telephone or by similar means of communication by which all
persons participating in the meeting can simultaneously hear each other.  A
director so participating shall be deemed present in person at the meeting.

       Section 8.    WAIVER OF NOTICE.  A director may waive notice of a meeting
of the Board of Directors.  A waiver of notice by a director entitled to notice
is effective whether given before, at, or after the meeting, and whether given
in writing, orally, or by attendance.  Attendance by a director at a meeting is
a waiver of notice of that meeting, except where the director objects at the
beginning of the meeting to the transaction of business because the meeting was
not lawfully called or convened and does not participate thereafter in the
meeting.

       Section 9.    ABSENT DIRECTORS.  A director may give advance written
consent or opposition to a proposal to be acted on at a meeting of the Board of
Directors by actual delivery prior to the meeting of such advance written
consent or opposition to the President or a director who is present at the
meeting.  If the director is not present at the meeting, advance written consent
or opposition to a proposal shall not constitute presence for purposes of
determining the existence of a quorum, but consent or opposition shall be
counted as a vote in favor of or against the proposal and shall be entered in
the minutes or other record of action at the meeting, if the proposal acted on
at the meeting is substantially the same or has substantially the same effect as
the proposal to which the director has consented or objected.

       Section 10.   QUORUM.  At all meetings of the Board of Directors a
majority of the directors shall constitute a quorum for the transaction of
business, and the act of a majority of the directors present at any meeting at
which there is a quorum shall be the act of the Board of Directors, except as
may be otherwise specifically provided by applicable statute or by the Articles
of Incorporation.  If a quorum shall not be present at any meeting of the Board
of Directors, the directors present thereat may adjourn the meeting from time to
time, without notice other than announcement at the meeting, until a quorum is
present.  If a quorum is present at the call of a meeting, the directors may
continue to transact business until adjournment notwithstanding the withdrawal
of enough directors to leave less than a quorum.

       Section 11.   ORGANIZATION OF MEETINGS.  The President shall preside at
all meetings of the Board of Directors and in his or her absence the Treasurer
shall act as presiding officer.  The Secretary shall act as secretary of all
meetings of the Board of Directors, and in his or her absence any person
appointed by the presiding officer shall act as secretary.

       Section 12.   COMMITTEES.  The Board of Directors, by a resolution
approved by the affirmative vote of a majority of the directors then holding
office, may establish one or more committees of one or more persons having
the authority of the Board of Directors in the management of the business of
the corporation to the extent provided in such resolution.  Such committees,
however, shall at all times be subject to the direction and control of the
Board of Directors.  Committee members need not be directors and shall be
appointed by the affirmative

                                   5


vote of a majority of the directors present.  A majority of the members of
any committee shall constitute a quorum for the transaction of business at a
meeting of any such committee.  In other matters of procedure the provisions
of these Bylaws shall apply to committees and the members thereof to the same
extent they apply to the Board of Directors and directors, including, without
limitation, the provisions with respect to meetings and notice thereof,
absent members, written actions, and valid acts.  Each committee shall keep
regular minutes of its proceedings and report the same to the Board of
Directors.

       Section 13.   ACTION WITHOUT MEETING.  Unless otherwise restricted by the
Articles of Incorporation or these Bylaws, any action required or permitted to
be taken at any meeting of the Board of Directors may be taken without a
meeting, if a written consent thereto is signed by all members of the Board of
Directors and such written consent is filed with the minutes of proceedings of
the Board of Directors.  If the proposed action need not be approved by the
shareholders and the Articles of Incorporation so provide, action may be taken
by written consent signed by the number of directors that would be required to
take the same action at a meeting of the Board of Directors at which all
directors were present.  Such action shall be effective on the date on which the
last signature is placed on such writing or writings, or such other effective
date as is set forth therein.

       Section 14.   COMPENSATION OF DIRECTORS.  By resolution of the Board of
Directors, each director may be paid his or her expenses, if any, of attendance
at each meeting of the Board of Directors, and may be paid a stated amount as a
director or a fixed sum for attendance at each meeting of the Board of
Directors, or both.  No such payment shall preclude a director from serving the
Corporation in any other capacity and receiving compensation therefor.

                                    ARTICLE IV.
                                      OFFICERS

       Section 1.    NUMBER AND QUALIFICATION.  The officers of the corporation
shall consists of one or more natural persons duly elected by the Board of
Directors exercising the functions of the offices of chief executive officer,
treasurer and secretary.  The officers designed as the President, Treasurer and
Secretary will exercise the functions of the chief executive officer, treasurer
and secretary, respectively.  The Board of Directors may elect or appoint such
other officers or agents as it deems necessary for the operation and management
of the Corporation, with such powers, rights, duties and responsibilities as may
be determined by the Board of Directors, including, without limitation, one or
more Vice Presidents, one or more Assistant Secretaries and Assistant
Treasurers, each of whom shall have the powers, rights duties and
responsibilities set for the in these Bylaws unless otherwise determined by the
Board.  Any of the offices or functions of those offices may be held or
exercised by the same person.

       Section 2.    ELECTION AND TERM OF OFFICE.  The initial officers of the
Corporation shall be elected by the Board of Directors at its first duly held
meeting and all officers shall hold office until their successors have been duly
elected, unless prior thereto such officer shall have resigned or been removed
from office as hereinafter provided.

       Section 3.    RESIGNATION, REMOVAL AND VACANCIES.   An officer may
resign at any time by giving written notice to the Corporation.  The
resignation is effective without acceptance

                                6


when the notice is given to the Corporation, unless a later effective date is
specified in the notice.  Any officer or agent elected or appointed by the
Board of Directors shall hold office at the pleasure of the Board of
Directors and may be removed, with or without cause, at any time by the
affirmative vote of a majority of the Board of Directors present at a duly
held Board meeting.  A vacancy in an office may, or in the case of a vacancy
in the office of President or Treasurer shall, be filled for the unexpired
portion of the term by action of the Board of Directors.

       Section 4.    SALARIES.  The salaries of all officers of the Corporation
shall be fixed by the Board of Directors or by the President and Chief Executive
Officer if authorized by the Board of Directors.

       Section 5.    THE PRESIDENT.  Unless provided otherwise by a resolution
adopted by the Board of Directors, the President shall have general active
management of the business of the corporation, shall preside at meetings of the
shareholders and Board of Directors, shall see that all orders and resolutions
of the Board of Directors are carried into effect, shall sign and deliver in the
name of the corporation any deeds, mortgages, bonds, contracts, or other
instruments pertaining to the business of the corporation, except in cases in
which the authority to sign and deliver is required by law to be exercised by
another person or is expressly delegated by the Articles of Incorporation, these
Bylaws, or the Board of Directors to some other officer or agent of the
corporation, shall maintain records of and, whenever necessary, certify
proceedings of the Board of Directors and shareholders, and shall perform such
other duties as may from time to time be prescribed by the Board of Directors.

       Section 6.    THE TREASURER.  Unless provided otherwise by a resolution
adopted by the Board of Directors, the Treasurer shall keep accurate financial
records for the corporation, shall deposit all monies, drafts, and checks in the
name of and to the credit of the corporation in such banks and depositories as
the Board of Directors shall designate from time to time, shall endorse for
deposit all notes, checks, and drafts received by the corporation as ordered by
the Board of Directors, making proper vouchers therefor, shall disburse
corporate funds and issue checks and drafts in the name of the corporation as
ordered by the Board of Directors, shall render to the chief executive officer
and the Board of Directors, whenever requested, an account of all such officer's
transactions as Treasurer and of the financial condition of the corporation, and
shall perform such other duties as may be prescribed by the Board of Directors
or the President from time to time.

       Section 7.    THE SECRETARY.  The Secretary shall attend all meetings of
the Board of Directors and all meetings of the shareholders and record all the
proceedings of the meetings of the Corporation and of the Board of Directors in
a book to be kept for that purpose.  He or she shall give, or cause to be given,
notice of all meetings of the shareholders and special meetings of the Board of
Directors, and shall perform such other duties as may be prescribed by the Board
of Directors or President and Chief Executive Officer, under whose supervision
he or she shall be.

       Section 8.    THE VICE PRESIDENT.  The Vice President, if any, or if
there shall be more than one, the Vice Presidents in the order determined by the
Board of Directors, shall, in the absence or disability of the President,
perform the duties and exercise the powers of the President and shall perform
such other duties and have such other powers as the Board of Directors or the

                                    7


President may from time to time prescribe.

       Section 9.    ASSISTANT SECRETARY.  The Assistant Secretary or, if there
be more than one, the Assistant Secretaries, in the order determined by the
Board of Directors, shall, in the absence or disability of the Secretary,
perform the duties and exercise the powers of the Secretary and shall perform
such other duties and have such other powers as the Board of Directors or the
President and Chief Executive Officer may from time to time prescribe.

       Section 10.   AUTHORITY AND DUTIES.  In addition to the foregoing
authority and duties, all officers of the Corporation shall respectively have
such authority and perform such duties in the management of the business of the
Corporation as may be designated from time to time by the Board of Directors.
Unless prohibited by a resolution approved by the affirmative vote of a majority
of the directors present, an officer elected or appointed by the Board may,
without the approval of the Board, delegate some or all of the duties and powers
of an office to other persons.

                                     ARTICLE V.
                               CERTIFICATES OF STOCK

       Section 1.    CERTIFICATES OF STOCK.  Every holder of stock in the
Corporation shall be entitled to have a certificate,  signed by, or in the name
of the Corporation by the President and the Secretary or an Assistant Secretary
of the Corporation, if there be one, certifying the number of shares owned by
him or her in the Corporation.  The certificates of stock of each class shall be
numbered in the order of their issue.

       Section 2.    FACSIMILE SIGNATURES.  Where a certificate is signed (1) by
a transfer agent or an assistant transfer agent, or (2) by a transfer clerk
acting on behalf of the Corporation and a registrar, the signature of any such
President, Secretary or Assistant Secretary may be facsimile.  In case any
officer or officers who have signed, or whose facsimile signature or signatures
have been used on any such certificate or certificates shall cease to be such
officer or officers of the Corporation before such certificate or certificates
have been delivered by the Corporation, such certificate or certificates may
nevertheless be adopted by the Corporation and be issued and delivered as though
the person or persons who signed such certificate or certificates or whose
facsimile signature or signatures have been used thereon had not ceased to be
such officer or officers of the Corporation.

       Section 3.    LOST OR DESTROYED CERTIFICATES.  The Board of Directors may
direct a new certificate or certificates to be issued in place of any
certificate or certificates theretofore issued by the Corporation alleged to
have been lost or destroyed, upon the making of an affidavit of that fact by the
person claiming the certificate of stock to be lost or destroyed.  When
authorizing such issue of a new certificate or certificates, the Board of
Directors may, in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost or destroyed certificate or
certificates, or his or her legal representative, to advertise the same in such
manner as it shall require and/or to give the Corporation a bond in such sum as
it may direct as indemnity against any claim that may be made against the
Corporation with respect to the certificate alleged to have been lost or
destroyed.

                                     8


       Section 4.    TRANSFERS OF STOCK.  Upon surrender to the Corporation or
the transfer agent of the Corporation of a certificate for shares duly endorsed
or accompanied by proper evidence of succession, assignment or authority to
transfer, it shall be the duty of the Corporation to issue a new certificate to
the person entitled thereto, cancel the old certificate and record the
transaction upon its books.

       Section 5.    REGISTERED SHAREHOLDERS.  The Corporation shall be entitled
to recognize the exclusive right of a person registered on its books as the
owner of shares to receive dividends, and to vote as such owner, and shall be
entitled to hold liable for calls and assessments a person so registered on its
books as the owner of shares, and shall not be bound to recognize any equitable
or other claim to or interest in such share or shares on the part of any other
person, whether or not it shall have express or other notice thereof, except as
otherwise provided by applicable statute.

                                    ARTICLE VI.
                                  INDEMNIFICATION

       Section 1.    INDEMNIFICATION.  The Corporation shall indemnify to the
fullest extent permissible under the provisions of Chapter 302A of the Minnesota
Statutes, as amended, (as now or hereafter in effect) any person made or
threatened to be made a party to or witness in any threatened, pending, or
completed civil, criminal, administrative, arbitration, or investigative
proceeding, including a proceeding by or in the right of the Corporation by
reason of the fact that he, his testator or intestate, is or was a director or
officer of the Corporation, or by reason of the fact that such director or
officer, while a director or officer of the Corporation, is or was serving at
the request of the Corporation, or whose duties in that position involved
service as a director, officer, partner, trustee or agent of another
organization or employee benefit plan, against all judgments, penalties, fines,
including, without limitation, excise taxes assessed against the person with
respect to an employee benefit plan, settlements, and reasonable expenses,
including attorneys' fees and disbursements.  Nothing contained herein shall
affect any rights to indemnification to which employees or agents of the
Corporation other than directors and officers may be entitled under the
provisions of Chapter 302A of the Minnesota Statutes, as amended.  Any repeal or
modification of this Article VI shall be prospective only, and shall not
adversely affect any right to indemnification or protection of a director or
officer of the Corporation existing at the time of such repeal or modification.
No amendment to or repeal of this Article shall apply to or have any effect on
the liability of or alleged liability of any director or the Corporation for or
with respect to any acts or omissions of such director occurring prior to such
amendment or repeal.

       Section 2.    INSURANCE.  The Corporation may purchase and maintain
insurance on behalf of any person in such person's official capacity against any
liability asserted against and incurred by such person in or arising from that
capacity, whether or not the Corporation would otherwise be required to
indemnify the person against the liability.

                                        9


                                    ARTICLE VII.
                                 GENERAL PROVISIONS

       Section 1.    FISCAL YEAR.  The fiscal year of the Corporation shall be
fixed by resolution of the Board of Directors.

       Section 2.    DIVIDENDS.  Subject to the provisions of the applicable
statute and the Articles of Incorporation, dividends  upon the capital stock of
the Corporation may be declared by the Board of Directors at any regular or
special meeting, and may be paid in cash, in property, or in shares of the
capital stock.

       Section 3.    RESERVES.  Before payment of any dividend, there may be set
aside out of any funds of the Corporation available for dividends such sum or
sums as the directors from time to time, in their absolute discretion, think
proper as a reserve or reserves to meet contingencies, or for equalizing
dividends, or for repairing or maintaining any property of the Corporation, or
for such other purposes as the directors shall think conducive to the interest
of the Corporation, and the directors may modify or abolish any such reserve in
the manner in which it was created.

       Section 4.    SEAL.  The Corporation shall not have a corporate seal.

       Section 5.    CHECKS.  All checks or demands for money and notes of the
Corporation shall be signed by such officer or officers or such other person or
persons as the Board of Directors may from time to time designate.

       Section 6.    AMENDMENTS.  The Board of Directors shall have the power to
adopt, amend or repeal the Bylaws of the Corporation, subject to the power of
the shareholders to change or repeal the same, provided, however, that the Board
shall not adopt, amend or repeal any Bylaw fixing a quorum for meetings of
shareholders, prescribing procedures for removing directors or filling vacancies
in the Board, or fixing the number of director of their classifications,
qualifications or terms of office, but may adopt or amend a Bylaw that increases
the number of directors.

                                                        Effective as of
                                                        November 30, 1994













                                   10

EX-3.24

                           AMENDED AND RESTATED BYLAWS

                                       OF

                       FMC RESOURCE MANAGEMENT CORPORATION

                            a Washington corporation


                                    ARTICLE I
                             SHAREHOLDERS' MEETINGS

Section 1.    PLACE OF MEETINGS.

       Meetings of the shareholders shall be held at the office of the
corporation or such other place within or outside of the State of Washington as
may be designated from time to time by the Board of Directors or in the notice
of the meeting.


Section 2.    ANNUAL MEETINGS.

       The annual meeting of the shareholders shall be held each year on a day
and at a time as may be determined from time to time by the Board of Directors.
In the absence of such determination, the annual meeting shall be held at the
following time and date:


              Time of Meeting:     10:00 a.m.
              Date of Meeting:     Second Tuesday in November

       If this date shall be a legal holiday, then the meeting shall be held on
the next succeeding business day at the same hour.  At the annual meeting, the
shareholders shall elect a Board of Directors, consider reports of the affairs
of the corporation and transact such other business as may properly be brought
before the meeting.

Section 3.    SPECIAL MEETINGS.

       Special meetings of the shareholders may be called at any time by the
chairman of the board, if any, the president, a majority of the directors, or by
shareholders holding ten percent of the shares entitled to vote at such meeting.


Section 4.    NOTICE OF ANNUAL AND SPECIAL MEETINGS.

       Written notice stating the time and place of any annual or special
meeting of shareholders shall be delivered personally, transmitted by private
carrier, telegraph, teletype or facsimile equipment, or mailed, postage prepaid,
to each shareholder of record entitled to vote at such meeting at the
shareholder's address as it appears in the stock records of the corporation or,
if no


Amended and Restated Bylaws - 1


address appears, at the shareholder's last known place of residence, at least
ten (10) days and not more than sixty (60) days prior to the meeting. If a
purpose of an annual or special shareholders' meeting is to consider action on
an amendment to the Articles of Incorporation, a planned merger or share
exchange, a proposed sale, lease, or other disposition of all or substantially
all of the property of the corporation other than in the regular course of
business, or the dissolution of the corporation, the corporation shall notify
all shareholders, whether or not entitled to vote, at least twenty (20) days and
not more than sixty (60) days prior to the meeting, and the notice must describe
the proposed action with reasonable clarity and contain or be accompanied by a
copy of the proposed amendment, the plan of merger or exchange, or the agreement
of sale or lease, as applicable.


        The notice of special meetings shall include the purpose of the meeting.
No business shall be transacted at a special meeting except as stated in such
notice, unless consented to by all shareholders having the right to vote with
respect to such other business, either in person or by proxy. Notice of all
meetings shall be given to the holder of any proxy filed with the corporation in
the same manner as if such proxy holder were a shareholder.

Section 5.    ACTION WITHOUT A MEETING.

       Any action which may be taken at any annual or special meeting of
shareholders may be taken without a meeting and without prior notice if a
consent in writing, setting forth the action so taken, shall be signed by all
the shareholders with respect to the subject matter of such action.


Section 6.    QUORUM.

       A quorum at any meeting of the shareholders of the corporation is
constituted by the representation in person or by proxy of a majority of shares
entitled to vote at such meeting.


Section 7.    ATTENDANCE BY COMMUNICATIONS EQUIPMENT.

       Meetings of the shareholders may be convened through the use of
conference telephone or similar communications equipment, so long as all
shareholders participating in such meeting can hear one another.


Section 8.    VOTING RIGHTS.

       Except in a situation where a shareholder cannot vote shares held in this
corporation as provided in RCW 23B.07.210, in any matter put to a vote at any
meeting of the shareholders, each shareholder shall be entitled to one vote for
each full share of voting stock standing in the name of such shareholder on the
books of the corporation.


Amended and Restated Bylaws - 2


Section 9.    PROXIES.

       Every shareholder entitled to vote may authorize another person or
persons to act by proxy with respect to such voting rights.

       All proxies shall be in writing, signed by the shareholder granting the
proxy, and shall be filed with the secretary of the corporation.

Section 10.   ORDER OF BUSINESS.

       The following order of business shall be observed at all meetings of the
shareholders, so far as practicable:

       (1)    Calling the roll.

       (2)    Reading, correction and approval of minutes of previous meeting.

       (3)    Reports of officers.

       (4)    Reports of committees.

       (5)    Election of directors.

       (6)    Unfinished business.

       (7)    New business.

Section 11.   ADJOURNMENT.

       An annual or special meeting of shareholders may be adjourned from day to
day or to a designated date and time by majority vote of the shareholders
present as they see fit and no notice of adjournment need be given to absent
shareholders.

                                   ARTICLE II
                       CERTIFICATES AND TRANSFER OF SHARES

Section 1.    CERTIFICATES FOR SHARES.

       Every holder of shares in this corporation shall be entitled to have a
certificate signed in the name of the corporation by the president or a vice
president and by the secretary or any assistant secretary, certifying the number
of shares and the class or series of shares owned by the shareholder.

       Share certificates shall be in the form adopted by the Board of
Directors.

Amended and Restated Bylaws - 3


Section 2.    ISSUANCE.

       Share certificates shall be issued only upon receipt by the corporation
of the consideration determined by the Board of Directors to be paid or
exchanged for such shares.


Section 3.    RECORDS.

       Share certificates shall be numbered consecutively.  The name of the
person owning the shares, together with the number of shares and the date of
issue, shall appear on each certificate and shall be entered on the books of the
corporation.


Section 4.    CANCELLATION.

       All share certificates transferred by endorsement shall be surrendered to
the corporation for cancellation, and new certificates shall be issued to the
transferee.


Section 5.    TRANSFER ON THE BOOKS.

       Upon surrender to the secretary or transfer agent of the corporation of a
certificate for shares duly endorsed or accompanied by proper evidence of
succession, assignment, or authority to transfer, it shall be the duty of the
corporation to issue a new certificate to the person entitled to such
certificate, to cancel the old certificate, and to record the transaction upon
its books.


Section 6.    LOST OR DESTROYED CERTIFICATES.

       The corporation may issue a new certificate for shares or any other
security in the place of any certificate previously issued and alleged to have
been lost, stolen, or destroyed; and the corporation may require the owner of
the lost, stolen or destroyed certificate or the owner's legal representative to
give the corporation a bond (or other adequate security) sufficient to indemnify
it against any claim that may be made against it (including any expense or
liability) on account of the alleged loss, theft, or destruction of any such
certificate or the issuance of such new certificate.


Section 7.    SUBSCRIPTIONS.

       Subscriptions for shares shall be in writing and in such form and content
as the Board of Directors may require.


Amended and Restated Bylaws - 4


                                   ARTICLE III
                                    DIRECTORS

Section 1.    POWERS AND DUTIES.

       The business and affairs of the corporation shall be managed and all
corporate powers shall be exercised by or under the direction of a Board of
Directors.  The Board of Directors may delegate the management of the day-to-day
business operations of the corporation to a management committee or other
person, provided that the business and affairs of the corporation shall be
managed and all corporate powers shall be exercised under the ultimate direction
of the Board of Directors.


Section 2.    NUMBER AND QUALIFICATION.

       The authorized number of directors of the corporation shall be not less
than one (1) person, the exact number being the number duly elected by the
shareholders from time to time or appointed in accordance with the provisions of
these Bylaws.  Directors need not be shareholders of the corporation.


Section 3.    ELECTION AND TERM OF OFFICE.

       At each annual meeting of the shareholders, directors shall be elected to
hold office until the next annual meeting.

       Each director, including a director elected to fill a vacancy, shall hold
office until the expiration of the term for which elected and until a successor
has been elected and qualified.

Section 4.    VACANCIES.

       Vacancies on the Board of Directors by reason of death, resignation or
increase in the number of directors shall be filled by appointment by a majority
of the remaining directors, and such appointee shall hold office until his or
her successor is elected at the next annual meeting of shareholders or at any
prior special meeting called for that purpose.

       If one or more directors shall be removed by the shareholders, such
removal being lawful under the provisions of RCW 23B.08.080, the shareholders
shall elect a successor or successors at the same shareholders' meeting, and
the successor or successors shall serve until the next annual meeting of
shareholders.

Section 5.    PLACE OF MEETINGS OF DIRECTORS.

       Meetings of the Board of Directors may be held at the office of the
corporation or such other place within or outside the State of Washington as may
be designated in the notice of the meeting.


Amended and Restated Bylaws - 5


Section 6.    ANNUAL MEETINGS.

       The annual meeting of the Board of Directors shall be held immediately
following the adjournment of the annual meeting of the shareholders.  Notice of
this meeting shall not be required.

       At such meeting the directors shall elect the officers for the ensuing
year and transact such other business as may properly come before the meeting.

Section 7.    SPECIAL MEETINGS.

       Special meetings of the Board of Directors for any purpose or purposes
may be called by the chairman of the board, if any, the president or a majority
of the directors.  Neither the Articles of Incorporation nor these Bylaws may
dispense with notice of a special meeting, but lack of actual notice to those
present will not invalidate actions taken at a special meeting if a quorum is
present.

Section 8.    NOTICE OF SPECIAL MEETINGS.

       Unless directors waive notice of, or consent to, a special meeting,
notice stating the date, hour and place of any special meeting of directors
shall be given orally or shall be transmitted in writing by means of private
carrier, telegraph, teletype or facsimile equipment, or mailed, postage prepaid,
to each director of record at his or her address as the same appears in the
records of the corporation or, if no address appears, at his or her last known
place of residence, at least two (2) days and not more than twenty (20) days
prior to the meeting.  Notice of any special meeting of directors may, but need
not, state the purpose of such meeting.


Section 9.    ACTION WITHOUT MEETING.

       Any action required or permitted to be taken by the Board of Directors
may be taken without a meeting if all members of the Board shall consent in
writing to the action.  Such action by written consent shall have the same force
and effect as an affirmative vote of the Board of Directors.  Such action by
consent shall be filed in the minute book of the corporation.


Section 10.   QUORUM.

       A majority of the directors constitutes a quorum of the Board of
Directors for the transaction of business.

       Every action taken or decision made by a majority of the directors
present at a meeting, notice of which was given in accordance with the Bylaws
and at which a quorum is present, is a binding act or decision of the entire
Board of Directors.

Amended and Restated Bylaws - 6


Section 11.   ATTENDANCE BY COMMUNICATIONS EQUIPMENT.

       Meetings of the Board of Directors may be convened through the use of
conference telephone or similar communications equipment, so long as all members
participating in such meeting can hear one another.


Section 12.   COMPENSATION OF DIRECTORS.

       The Board of Directors may fix the compensation, if any, of directors.


Section 13.   ADJOURNMENT.

       A majority of the directors present, whether or not constituting a
quorum, may adjourn any meeting to another time and place.


                                   ARTICLE IV
                                    OFFICERS

Section 1.    OFFICERS.

       The officers of the corporation shall be a president, a secretary and a
treasurer.  The corporation may also have, at the discretion of the Board of
Directors, a chairman of the board, one or more vice presidents, one or more
assistant secretaries, one or more assistant treasurers, and such other officers
as may be appointed.


Section 2.    ELECTION AND TERM OF OFFICE.

       The officers shall be elected by the Board of Directors at its first
meeting and thereafter annually at its annual meetings.  The officers shall hold
office until they resign, are removed or otherwise disqualified, are unable to
serve, or until their successors are elected and qualified.


Section 3.    REMOVAL AND RESIGNATION.

       Any officer may be removed by the Board of Directors, with or without
cause, by a majority of the directors at any duly held annual or special meeting
of the Board of Directors at which a quorum is present.  Such removal shall be
without prejudice to any contract rights of the person removed.

       Any officer may resign at any time by giving written or verbal notice
to the corporation.

Amended and Restated Bylaws - 7


Section 4.    VACANCIES.

       A vacancy in any office because of death, resignation, removal,
disqualification or any other cause shall be filled in the manner prescribed in
these Bylaws for regular appointments to such office.


Section 5.    PRESIDENT.

       The president shall be the chief executive officer of the corporation,
shall be subject to the control of the Board of Directors, and shall have
general supervision, direction and control of the business and affairs of the
corporation.  The president may preside at the meetings of shareholders and/or
the Board of Directors.  The president shall be an ex officio member of any
standing committees of the corporation, including the executive committee, if
any.  The president shall have the general powers and duties of management
usually vested in the office of president of a corporation and shall have such
other powers and duties as may be prescribed by the Board of Directors or the
Bylaws.


Section 6.    VICE PRESIDENTS.

       In the absence or disability of the president, the vice president, if
any, or first vice president if there shall be more than one vice president,
shall perform all the duties of the president, and when so acting shall have all
the powers of the president.  The vice president(s) shall have such other powers
and perform such other duties as from time to time may be prescribed for them by
the Board of Directors or the Bylaws.


Section 7.    SECRETARY.

       The secretary shall keep, or cause to be kept, a minute book at the
registered office of the corporation or such other place as the Board of
Directors may order, containing a record of all meetings of directors and
shareholders, indicating the time and place, whether annual or special and, if
special, how authorized, the names of those present, and a summary of all the
proceedings at such meetings.  The record shall include a copy of the notice
given.

       The secretary shall be responsible for giving notice of all the meetings
of the shareholders and of the Board of Directors required to be given by these
Bylaws or by law. The secretary shall have such other powers and perform such
other duties as may be prescribed by the Board of Directors or the Bylaws.

Section 8.    TREASURER.

       The treasurer shall keep and maintain, or cause to be kept and
maintained, adequate and correct accounts of the properties and business
transactions of the corporation, including accounts of its liabilities, assets,
receipts, disbursements, losses and capital.


Amended and Restated Bylaws - 8


       The treasurer shall deposit all corporate funds and other valuables to
the credit of the corporation with such depositaries as may be designated by the
Board of Directors. The treasurer shall disburse the funds of the corporation as
may be authorized by the Board of Directors, shall render to the president and
directors, whenever they request it, an account of all transactions as treasurer
and of the financial condition of the corporation. The treasurer shall have such
other powers and perform such other duties as may be prescribed by the Board of
Directors or the Bylaws.

Section 9.    SALARIES.

       The salaries of all officers and employees of the corporation shall be
fixed by the Board of Directors and may be changed from time to time by the
Board of Directors.

                                    ARTICLE V
                                 CORPORATE SEAL

       The corporate seal, if any, shall be in a form adopted by the Board of
Directors.


                                   ARTICLE VI
                              AMENDMENTS TO BYLAWS

Section 1.    AMENDMENTS BY DIRECTORS.

       The Board of Directors may adopt, amend or repeal any of these Bylaws,
but shall not amend or repeal any Bylaws adopted by the shareholders of the
corporation.


Section 2.    AMENDMENTS BY SHAREHOLDERS.

       The shareholders may adopt, amend or repeal any of these Bylaws by a
majority vote of the shareholders at any annual or special meeting, provided the
text of the intended change in the Bylaws is included in the notice of the
meeting.


Section 3.    RECORD OF AMENDMENT.

       Whenever a Bylaw is amended or a new Bylaw is adopted, it shall be copied
and placed in the minute book of the corporation with the original Bylaws, in
the appropriate place.  If any Bylaw is repealed, the fact of repeal and the
date of the meeting at which the repeal was enacted or written assent was given
shall be filed in the minute book.


Amended and Restated Bylaws - 9


                                   ARTICLE VII
                     AMENDMENTS TO ARTICLES OF INCORPORATION

       The Articles of Incorporation of the corporation may only be amended in
accordance with applicable sections of the Washington Business Corporation Act
in effect at the time of amendment.

                            CERTIFICATE OF SECRETARY

       I certify that the foregoing Amended and Restated Bylaws of this
corporation were duly adopted by the Board of Directors of the corporation on
November 23, 1999.


                                       /s/ Steven J. Machov
                                       -----------------------------------------
                                       Steven J. Machov, Secretary


Amended and Restated Bylaws - 10

EX-3.25

                                       BYLAWS
                                         OF
                         MERRILL TRAINING & TECHNOLOGY, INC.

                                (the "Corporation")

                                     ARTICLE I

                                      OFFICES

       Section 1.    REGISTERED OFFICE.  The registered office of the
Corporation required by Chapter 302A of the Minnesota Statutes to be maintained
in the State of Minnesota is as designated in the Articles of Incorporation.
The Board of Directors of the Corporation may, from time to time, change the
location of the registered office.  On or before the day that such change is to
become effective, a certificate of such change and of the new address of the new
registered office shall be filed with the Secretary of State of the State of
Minnesota.

       Section 2.    OTHER OFFICES.  The Corporation may establish and maintain
such other offices, within or without the State of Minnesota, as are from time
to time authorized by the Board of Directors.

                                     ARTICLE II

                              MEETINGS OF SHAREHOLDERS

       Section 1.    PLACE OF MEETING.  All meetings of the shareholders shall
be held at the registered office of the Corporation in the State of Minnesota or
at such place within or without the state as may be fixed from time to time by
the Board of Directors, provided that a meeting called by or at the demand of a
shareholder shall be held in the county where the principal executive office of
the Corporation is located.

       Section 2.    DATE OF MEETING.  A regular meeting of shareholders may be
held for the purpose of electing directors or for the transaction of any other
business as may come before the meeting.  It shall be the duty of the President
or Treasurer, upon demand of any shareholder holding three percent (3%) or more
of the voting power of all shares entitled to vote to call such meeting if a
regular meeting of shareholders has not been held during the immediately
preceding fifteen (15) months.  If said officers fail to call and hold such
meeting within ninety (90) days after receipt of the demand, the shareholder
making the demand shall have the right and power to call such meeting.

       Section 3.    NOTICE OF REGULAR MEETINGS.  Written notice of the time and
place of each regular shareholder meeting shall be mailed, postage prepaid, at
least ten (10) but not more than sixty (60) days before such meeting, to each
shareholder entitled to vote thereat at his address as the same appears upon the
books of the Corporation.

       Section 4.    SPECIAL MEETINGS.  Special meetings of the shareholders,
for any purpose or purposes, unless otherwise prescribed by statute or by the
Articles of Incorporation, may be called by the President or Treasurer and shall
be called by the President or Treasurer at the request in writing of two or more
members of the Board of Directors, or at the request in writing of shareholders
owning ten percent (10%) or more of the voting power of all shares entitled to



vote.  Such request, which shall be by registered mail or delivered in person to
the President or Treasurer, shall state the purpose or purposes of the proposed
meeting.

       Section 5.    NOTICE OF SPECIAL MEETINGS.  Written notice of the time,
place and purpose or purposes of a special meeting shall be mailed, postage
prepaid, at least five (5) but not more than sixty (60) days before such
meeting, to each shareholder entitled to vote at such meeting at his address as
the same appears upon the books of the Corporation.

       Section 6.    BUSINESS TO BE TRANSACTED.  No business shall be transacted
at any special meeting of shareholders except that stated in the notice of the
meeting.

       Section 7.    WAIVER OF NOTICE.  A shareholder may waive notice of a
meeting of shareholders.  A waiver of notice by a shareholder entitled to notice
is effective whether given before, at, or after the meeting, and whether given
in writing, orally, or by attendance.  Attendance by a shareholder at a meeting
is a waiver of notice of that meeting, except where the shareholder objects at
the beginning of the meeting to the transaction of business because the meeting
is not lawfully called or convened, or objects before a vote on an item of
business because the item may not lawfully be considered at that meeting and
does not participate in the consideration of the item at that meeting.

       Section 8.    QUORUM AND ADJOURNMENT.  The holders of a majority of the
voting power of the shares entitled to vote at a meeting shall constitute a
quorum at all meetings of the shareholders for the transaction of business,
except as otherwise provided by statute or by the Articles of Incorporation.
If, however, such quorum shall not be present or represented at any meeting of
the shareholders, the holders of a majority of the voting power of the shares
entitled to vote thereat, and present in person or represented by proxy, shall
have the power to adjourn the meeting from time to time, without notice other
than announcement at the meeting, until a quorum shall be present or
represented.  At such adjourned meeting at which a quorum shall be present or
represented any business may be transacted which might have been transacted at
the meeting as originally noticed. The shareholders present at a duly called or
held meeting at which a quorum is present may continue to transact business
until adjournment, even though the withdrawal of a number of shareholders
originally present leaves less than the proportion or number otherwise required
for a quorum.

       Section 9.    VOTING RIGHTS.  A shareholder may cast his or her vote in
person or by proxy.  When a quorum is present at the time a meeting is convened,
the vote of the holders of a majority of the shares entitled to vote on any
question present in person or by proxy shall decide such question unless the
question is one upon which, by express provision of the applicable statute or
the Articles of Incorporation, a different vote is required, in which case such
express provision shall govern and control the decision of such question.

       Section 10.   MANNER OF VOTING.  Each shareholder shall at every
meeting of the shareholders be entitled to one vote in person or by proxy for
each share of the capital stock having voting power held by such shareholder,
but no proxy shall be valid after eleven (11) months from its date, unless
the proxy expressly provides for a longer period, and, except where the
transfer books of the Corporation have been closed or a date has been fixed
as a record date for the determination of its shareholders entitled to vote,
no share of stock that has been

                                    2


transferred on the books of the Corporation within twenty (20) days next
preceding any election of directors shall be voted on at such election for
directors.

       Section 11.   RECORD DATE.  The Board of Directors may fix a date, not
exceeding sixty (60) days preceding the date of any meeting of shareholders, as
a record date for the determination of the shareholders entitled to notice of
and to vote at such meeting, and in such case only shareholders of record on the
date so fixed, or their legal representatives, shall be entitled to notice of
and to vote at such meeting, notwithstanding any transfer of any shares on the
books of the Corporation after any record date so fixed.  The Board of Directors
may close the books of the Corporation against transfers of shares during the
whole or any part of such period.

       Section 12.   ORGANIZATION OF MEETINGS.  The  President shall preside at
all meetings of the shareholders, and in his or her absence the Treasurer shall
act as Chairman.  The Secretary shall act as secretary of all meetings of the
shareholders, or in his or her absence any person appointed by the Chairman
shall act as secretary.

       Section 13.   ACTION WITHOUT A MEETING.  Any action required or permitted
to be taken at a shareholders' meeting may be taken without a meeting if
authorized by a writing or writings signed by all of the holders of shares who
would be entitled to vote on that action.  Such action shall be effective at the
time the last signature is placed on such writing or writings, unless a
different effective time is provided in the written action.  If any action so
taken requires a certificate to be filed in the office of the Secretary of
State, the officer signing such certificate shall state therein that the action
was effected in the manner aforesaid.

                                    ARTICLE III

                                 BOARD OF DIRECTORS

       Section 1.    GENERAL POWERS.  The business and affairs of the
Corporation shall be managed by or under its Board of Directors which may
exercise all such powers of the Corporation and do all such lawful acts and
things as are not by statute or by the Articles of Incorporation or by these
Bylaws  required to be exercised or done by the shareholders.

       Section 2.    NUMBER AND TERM OF OFFICE.  The number of directors which
shall constitute the whole board shall be at least one (1), or such other number
as may be determined by the Board of Directors or by the shareholders at a
regular meeting. Except as otherwise permitted by statute, the directors shall
be elected at each regular meeting of the Corporation's shareholders (or at any
special meeting of the shareholders called for that purpose) by a majority of
the voting power of all shares entitled to vote and present in person or by
proxy, and each director shall be elected to serve until the next regular
meeting of the shareholders or until his or her successor shall have been duly
elected and qualified.

       Section 3.    RESIGNATION AND REMOVAL.  Any director may resign at any
time by giving written notice to the Corporation. Such resignation shall take
effect at the date of the receipt of such notice, or at any later time specified
therein, and, unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.  Any director may be

                                  3


removed at any time, with or without cause, by the affirmative vote of the
holders of a majority of the voting shares entitled to elect such director.

       Section 4.    VACANCIES.  If the office of any director becomes vacant by
reason of death, resignation, removal, disqualification, or otherwise, the
directors then in office, although less than a quorum, by a majority vote, may
choose a successor who shall hold office for the unexpired term in respect of
which such vacancy occurred.  With respect to the initial election of a director
to fill a newly created directorship resulting from an increase in the number of
directors by action of the Board of Directors in the manner permitted by
statute, such vacancy shall be filled by the affirmative vote of a majority of
the directors serving at the time of the increase.

       Section 5.    MEETINGS OF DIRECTORS.  The Board of Directors of the
Corporation may hold meetings, from time to time, either within or without the
State of Minnesota, at such place as a majority of the members of the Board of
Directors may from time to time appoint.  If the Board of Directors fails to
select a place for the meeting, the meeting shall be held at the principal
executive office of the Corporation.

       Section 6.    CALLING MEETINGS.  Meetings of the Board of Directors may
be called by (i) the President on two (2) days' notice or (ii) any director on
ten (10) days' notice, to each  director, either personally, by telephone or by
mail or telegram. Every such notice shall state the date, time and place of the
meeting.  Notice of a meeting called by a person other than the President shall
state the purpose of the meeting.

       Section 7.    PARTICIPATION BY CONFERENCE TELEPHONE. Directors of the
Corporation may participate in a meeting of the Board of Directors by means of
conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other, and participation in a
meeting by that means shall constitute presence in person at the meeting.

       Section 8.    WAIVER OF NOTICE.  A director may waive notice of a meeting
of the Board of Directors.  A waiver of notice by a director entitled to notice
is effective whether given before, at, or after the meeting, and whether given
in writing, orally, or by attendance.  Attendance by a director at a meeting is
a waiver of notice of that meeting, except where the director objects at the
beginning of the meeting to the transaction of business because the meeting was
not lawfully called or convened and does not participate thereafter in the
meeting.

       Section 9.    ABSENT DIRECTORS.  A director may give advance written
consent or opposition to a proposal to be acted on at a meeting of the Board of
Directors by actual delivery prior to the meeting of such advance written
consent or opposition to the President or Treasurer or a director who is present
at the meeting.  If the director is not present at the meeting, advance written
consent or opposition to a proposal shall not constitute presence for purposes
of determining the existence of a quorum, but consent or opposition shall be
counted as a vote in favor of or against the proposal and shall be entered in
the minutes or other record of action at the meeting, if the proposal acted on
at the meeting is substantially the same or has substantially the same effect as
the proposal to which the director has consented or objected.

                                    4


       Section 10.   QUORUM.  At all meetings of the Board of Directors a
majority of the directors shall constitute a quorum for the transaction of
business, and the act of a majority of the directors present at any meeting at
which there is a quorum shall be the act of the Board of Directors, except as
may be otherwise specifically provided by applicable statute or by the Articles
of Incorporation.  If a quorum shall not be present at any meeting of the Board
of Directors, the directors present thereat may adjourn the meeting from time to
time, without notice other than announcement at the meeting, until a quorum is
present.  If a quorum is present at the call of a meeting, the directors may
continue to transact business until adjournment notwithstanding the withdrawal
of enough directors to leave less than a quorum.

       Section 11.   ORGANIZATION OF MEETINGS.  The President shall preside at
all meetings of the Board of Directors, and in his or her absence the Treasurer
shall act as Chairman.  The Secretary shall act as secretary of all meetings of
the Board of Directors,  and in his or her absence any person appointed by the
Chairman shall act as secretary.

       Section 12.   ACTION WITHOUT MEETING.  Unless otherwise restricted by the
Articles of Incorporation or these Bylaws, any action required or permitted to
be taken at any meeting of the Board of Directors may be taken without a
meeting, if a written consent thereto is signed by all members of the Board of
Directors and such written consent is filed with the minutes of proceedings of
the Board of Directors.  If the proposed action need not be approved by the
shareholders and the Articles of Incorporation so provide, action may be taken
by written consent signed by the number of directors that would be required to
take the same action at a meeting of the Board of Directors at which all
directors were present.  Such action shall be effective on the date on which the
last signature is placed on such writing or writings, or such other effective
date as is set forth therein.

       Section 13.   COMPENSATION OF DIRECTORS.  By resolution of the Board of
Directors, each director may be paid his or her expenses, if any, of attendance
at each meeting of the Board of Directors, and may be paid a stated amount as a
director or a fixed sum for attendance at each meeting of the Board of
Directors, or both.  No such payment shall preclude a director from serving the
Corporation in any other capacity and receiving compensation therefor.

                                     ARTICLE IV

                                      OFFICERS

       Section 1.    NUMBER.  The officers of the Corporation shall be chosen by
the Board of Directors and shall include a President, a Secretary, and a
Treasurer.  The Board of Directors may also choose one or more Vice Presidents,
and one or more Assistant Secretaries and Assistant Treasurers.  Any number of
offices or functions of those offices may be held or exercised by the same
person.

       Section 2.    ELECTION.  The Board of Directors at its first meeting
after each regular meeting of shareholders shall choose a President, a Secretary
and a Treasurer.

       Section 3.    OTHER OFFICERS AND AGENTS.  The Board of Directors may
appoint such other officers and agents as it shall deem necessary who shall
hold their offices for such terms

                            5


and shall exercise such powers and perform such duties as shall be determined
from time to time by the Board of Directors.

       Section 4.    SALARIES.  The salaries of all officers of the Corporation
shall be fixed by the Board of Directors.

       Section 5.    TERM OF OFFICE.  The officers of the Corporation shall hold
office until their successors are chosen and qualify.  Any officer elected or
appointed by the Board of Directors may be removed with or without cause at any
time by the  affirmative vote of a majority of the Board of Directors.  Any
officer may resign at any time by giving written notice to the President or the
Secretary of the Corporation.  Any vacancy occurring in any office of the
Corporation shall be filled by the Board of Directors.

       Section 6.    THE PRESIDENT.  Powers and Duties.  The President shall be
the chief executive officer of the Corporation, shall preside, when present, at
all meetings of the Board of Directors and the shareholders, shall have general
active management of the business of the Corporation, shall see that all orders
and resolutions of the Board of Directors are carried into effect, and shall
perform such other duties prescribed by the Board of Directors.  He or she shall
execute and deliver in the name of the Corporation any deeds, mortgages, bonds,
contracts or other instruments pertaining to the business of the Corporation,
except in cases in which the authority to sign and deliver is required  by law
to be exercised by another person or is expressly delegated by the Articles or
the Bylaws or the Board of Directors to some other officer or agent of the
Corporation, and shall maintain records of and, whenever necessary, certify all
proceedings of the Board of Directors and the shareholders.

       Section 7.    THE VICE PRESIDENT.  Powers and Duties.  The Vice
President, if any, or if there shall be more than one, the Vice Presidents in
the order determined by the Board of Directors, shall, in the absence or
disability of the President, perform the duties and exercise the powers of the
President and shall perform such other duties and have such other powers as the
Board of Directors or the President may from time to time prescribe.

       Section 8.    THE SECRETARY.  Powers and Duties.  The Secretary shall
attend all meetings of the Board of Directors and all meetings of the
shareholders and record all the proceedings of the meetings of the Corporation
and of the Board of Directors in a book to be kept for that purpose.  He or she
shall give, or cause to be given, notice of all meetings of the shareholders and
special meetings of the Board of Directors, and shall perform such other duties
as may be prescribed by the Board of Directors or President, under whose
supervision he or she shall be.

       Section 9.    ASSISTANT SECRETARY.  Powers and Duties.  The Assistant
Secretary or, if there be more than one, the Assistant Secretaries, in the order
determined by the Board of Directors, shall, in the absence or disability of the
Secretary, perform the duties and exercise the powers of the Secretary and shall
perform such other duties and have such other powers as the Board of Directors
or the President may from time to time prescribe.

       Section 10.   THE TREASURER.  Powers and Duties.  The Treasurer shall
be the chief financial officer of the Corporation.  The Treasurer shall keep
accurate financial records for the

                                  6


Corporation; deposit all money, drafts and checks in the name of and to the
credit of the Corporation in the banks and depositories designated by the
Board of Directors; endorse for deposit all notes, checks and drafts received
by the Board of Directors, making proper vouchers therefore; disburse
corporate funds and issue checks and drafts in the name of the Corporation,
as ordered by the Board of Directors; and perform other duties as prescribed
by the President or the Board of Directors.

       The Treasurer shall render to the President and the Board of Directors,
whenever requested, an account of all his or her transactions and of the
financial condition of the Corporation.

       Section 11.   TREASURER'S BOND.  If required by the Board of Directors,
he or she shall give the Corporation a bond (which shall be renewed every six
(6) years) in such sum and with such surety or sureties as shall be satisfactory
to the Board of Directors for the faithful performance of the duties of his or
her office and for the restoration to the Corporation, in case of his or her
death, resignation, retirement or removal from office, of all books, papers,
vouchers, money and other property of whatever kind in his or her possession or
under his or her control belonging to the Corporation.

       Section 12.   ASSISTANT TREASURER.  Powers and Duties.  The Assistant
Treasurer or, if there shall be more than one, the Assistant Treasurers, in the
order determined by the Board of Directors, shall, in the absence or disability
of the Treasurer, perform the duties and exercise the powers of the Treasurer
and shall perform such other duties and have such other powers as the Board of
Directors or the President may from time to time prescribe.

                                     ARTICLE V

                               CERTIFICATES OF STOCK

       Section 1.    CERTIFICATES OF STOCK.  Every holder of stock in the
Corporation shall be entitled to have a certificate, signed by the President and
the Secretary or an Assistant Secretary of the Corporation, if there be one,
certifying the number of shares owned by each holder of stock in the
Corporation.  The certificates of stock of each class shall be numbered in the
order of their issue.

       Section 2.    FACSIMILE SIGNATURES.  Where a certificate is signed (1) by
a transfer agent or an assistant transfer agent, or (2) by a transfer clerk
acting on behalf of the Corporation and a registrar, the signature of any such
President, Secretary or Assistant Secretary may be facsimile.  In case any
officer or officers who have signed, or whose facsimile signature or signatures
have been used on any such certificate or certificates shall cease to be such
officer or officers of the Corporation before such certificate or certificates
have been delivered by the Corporation, such certificate or certificates may
nevertheless be adopted by the Corporation and be issued and delivered as though
the person or persons who signed such  certificate or certificates or whose
facsimile signature or signatures have been used thereon had not ceased to be
such officer or officers of the Corporation.

       Section 3.    LOST OR DESTROYED CERTIFICATES.  The Board of Directors
may direct a new certificate or certificates to be issued in place of any
certificate or certificates theretofore issued

                               7


by the Corporation alleged to have been lost or destroyed, upon the making of
an affidavit of that fact by the person claiming the certificate of stock to
be lost or destroyed.  When authorizing such issue of a new certificate or
certificates, the Board of Directors may, in its discretion and as a
condition precedent to the issuance thereof, require the owner of such lost
or destroyed certificate or certificates, or his or her legal representative,
to advertise the same in such manner as it shall require and/or to give the
Corporation a bond in such sum as it may direct as indemnity against any
claim that may be made against the Corporation with respect to the
certificate alleged to have been lost or destroyed.

       Section 4.    TRANSFERS OF STOCK.  Upon surrender to the Corporation or
the transfer agent of the Corporation of a certificate for shares duly endorsed
or accompanied by proper evidence of succession, assignment or authority to
transfer, it shall be the duty of the Corporation to issue a new certificate to
the person entitled thereto, cancel the old certificate and record the
transaction upon its books.

       REGISTERED SHAREHOLDERS.  The Corporation shall be entitled to recognize
the exclusive right of a person registered on its books as the owner of shares
to receive dividends, and to vote as such owner, and shall be entitled to hold
liable for calls and assessments a person so registered on its books as the
owner of shares, and shall not be bound to recognize any equitable or other
claim to or interest in such share or shares on the part of any other person,
whether or not it shall have express or other notice thereof, except as
otherwise provided by applicable statute.

                                     ARTICLE VI

                                 GENERAL PROVISIONS

       Section 1.    DIVIDENDS.  Subject to the provisions of the applicable
statute and the Articles of Incorporation, dividends upon the capital stock of
the Corporation may be declared by the Board of Directors at any regular or
special meeting, and may be paid in cash, in property, or in shares of the
capital stock.

       Section 2.    RESERVES.  Before payment of any dividend, there may be set
aside out of any funds of the Corporation available for dividends such sum or
sums as the directors from time to time, in their absolute discretion, think
proper as a reserve or reserves to meet contingencies, or for equalizing
dividends, or for repairing or maintaining any property of the Corporation, or
for such other purposes as the directors shall think conducive to the interest
of the Corporation, and the directors may modify or abolish any such reserve in
the manner in which it was created.

       Section 3.    CHECKS.  All checks or demands for money and notes of the
Corporation shall be signed by such officer or officers or such other person or
persons as the Board of Directors may from time to time designate.

       Section 4.    FISCAL YEAR.  The fiscal year of the Corporation shall be
fixed by resolution of the Board of Directors.

       Section 5.    SEAL.  The Corporation shall not have a corporate seal.

                                 8


                                    ARTICLE VII

                                     AMENDMENTS

       Section 1.    AMENDMENTS.  The power to make, alter, amend or rescind
these Bylaws is vested in the Board of Directors, subject to the power of the
shareholders to adopt, amend or repeal these Bylaws, as permitted by applicable
statute.

                                                      Dated:  February 18, 1997


















                                   9

EX-3.26

                                    ARTICLE I
                                     OFFICES

     SECTION 1.     PRINCIPAL EXECUTIVE OFFICE.  The principal executive office
of the Company will be determined from time to time by the Board of Directors.

     SECTION 2.     REGISTERED OFFICE.  The registered office of the Company
required by Chapter 302A of the Minnesota Statutes to be maintained in the State
of Minnesota is as designated in the Articles of Incorporation.  The Board of
Directors of the Company may, from time to time, change the location of the
registered office.  On or before the day that such change is to become
effective, a certificate of such change and of the new address of the new
registered office will be filed with the Secretary of State of the State of
Minnesota.

     SECTION 3.     OTHER OFFICE.  The Company may establish and maintain such
other offices, within or without the State of Minnesota, as are from time to
time authorized by the Board of Directors.

                                   ARTICLE II
                            MEETINGS OF SHAREHOLDERS.

     SECTION 1.     PLACE OF MEETINGS.  Each meeting of the shareholders will be
held at the principal executive office of the Company or at such other place as
may be designated by the Board of Directors or the President; provided, however,
that any meeting called by or at the demand of a shareholder or shareholders
will be held in the county where the principal executive office of the Company
is located.

     SECTION 2.     REGULAR MEETINGS.  Regular meetings of the shareholders may
be held on an annual or other less frequent basis as determined by the Board of
Directors; provided, however, that if a regular meeting has not been held during
the immediately preceding 15 months, a shareholder or shareholders holding three
percent or more of the voting power of all shares entitled to vote may demand a
regular meeting of shareholders by written demand given to the President of the
Company.  If said officer fails to call and hold such meeting within 90 days
after receipt of the demand, the shareholder making the demand will have the
right and power to call such meeting.  At each regular meeting the shareholders
will elect directors whose terms have expired or are due to expire within six
months after the date of the meeting and may transact such other business as may
properly be brought before the meeting.

     SECTION 3.     NOTICE OF REGULAR MEETING.  Unless otherwise required by
law, written notice of the time and place of each regular shareholder meeting
will be mailed, postage prepaid, at least 10 but not more than 60 days before
such meeting, to each shareholder entitled to vote thereat at his or her address
as the same appears upon the books of the Company.


     SECTION 4.     SPECIAL MEETINGS.  A special meeting of the shareholders may
be called for any purpose or purposes at any time by the President and will be
called by the President at the request in writing of two or more members of the
Board of Directors or at the request in writing of one or more shareholders
holding not less than ten percent of the voting power of all shares of the
Company entitled to vote.  Such request which will be by registered mail or
delivered in person to the President of the Company specifying the purposes of
the proposed meeting.

     SECTION 5.     NOTICE OF SPECIAL MEETINGS.  Written notice of the time,
place and purpose or purposes of a special meeting will be mailed, postage
prepaid, at least five but not more than 60 days before such meeting, to each
shareholder entitled to vote at such meeting at his or her address as the same
appears upon the books of the Company.

     SECTION 6.     BUSINESS TO BE TRANSACTED.  No business will be transacted
at any special meeting of shareholders except that stated in the notice of the
meeting.

     SECTION 7.     WAIVER OF NOTICE.  A shareholder may waive notice of the
date, time, place and purpose or purposes of a meeting of shareholders.  A
waiver of notice by a shareholder entitled to notice is effective whether given
before, at or after the meeting, and whether given in writing, orally or by
attendance.  Attendance by a shareholder at a meeting is a waiver of notice of
that meeting, unless the shareholder objects at the beginning of the meeting to
the transaction of business because the meeting is not lawfully called or
convened, or objects before a vote on an item of business because the item may
not lawfully be considered at that meeting and does not participate in the
consideration of the item at that meeting.

     SECTION 8.     QUORUM AND ADJOURNMENT.  The holders of a majority of the
voting power of the shares entitled to vote at a meeting, present in person or
by proxy at the meeting, will constitute a quorum at all meetings of the
shareholders for the transaction of business except as otherwise provided by
statute or by the Articles of Incorporation.  If, however, such quorum will not
be present or represented at any meeting of the shareholders, the shareholders
entitled to vote thereat, present in person or represented by proxy, will have
the power to adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum will be present or represented.  At
such adjourned meeting at which a quorum will be present or represented any
business may be transacted which might have been transacted at the meeting as
originally noticed.  The shareholders present at a duly called or held meeting
at which a quorum is present may continue to transact business until
adjournment, even though the withdrawal of a number of shareholders originally
present leaves less than the proportion or number otherwise required for a
quorum.

     SECTION 9.     VOTING RIGHTS.    A shareholder may cast his or her vote in
person or by proxy.  When a quorum is present at the time a meeting is convened,
the affirmative vote of the holders of a majority of the shares entitled to vote
on any question present in person or by proxy will decide such question unless
the question is one upon which, by express provision of the applicable statute
or the Articles of Incorporation, a different vote is required, in which case
such express provision will govern and control the decision of such question.


                                       2


     SECTION 10.    PROXIES.  A shareholder may cast or authorize the casting of
a vote by filing a written appointment of a proxy with an officer of the Company
at or before the meeting at which the appointment is to be effective.  The
shareholder may sign or authorize the written appointment by telegram, cablegram
or other means of electronic transmission setting forth or submitted with
information sufficient to determine that the shareholder authorized such
transmission.  Any copy, facsimile, telecommunication or other reproduction of
the original of either the writing or transmission may be used in lieu of the
original, provided that it is a complete and legible reproduction of the entire
original. No proxy will be valid after 11 months from its date, unless the proxy
expressly provides for a longer period.

     SECTION 11.    MANNER OF VOTING.  Each shareholder will at every meeting of
the shareholders be entitled to one vote in person or by proxy for each share of
the capital stock having voting power held by such shareholder and, except where
the transfer books of the Company have been closed or a date has been fixed as a
record date for the determination of its shareholders entitled to vote, no share
of stock that has been transferred on the books of the Company within 20 days
next preceding any election of directors will be voted in such election of
directors.

     SECTION 12.    RECORD DATE.  The Board of Directors may fix a date, not
exceeding 60 days preceding the date of any meeting of shareholders, as a record
date for the determination of the shareholders entitled to notice of and to vote
at such meeting, and in such case only shareholders of record on the date so
fixed, or their legal representatives, will be entitled to notice of and to vote
at such meeting, notwithstanding any transfer of any shares on the books of the
Company after any record date so fixed.  The Board of Directors may close the
books of the Company against transfers of shares during the whole or any part of
such period.

     SECTION 13.    ORGANIZATION OF MEETINGS.  The President will preside at all
meetings of the shareholders, in the absence of the President or if the office
of the President is vacant, the Treasurer will preside at meetings of the
shareholders.  The Secretary will act as secretary of all meetings of the
shareholders, or in his or her absence any person appointed by the presiding
officer will act as secretary.

     SECTION 14.    ELECTRONIC CONFERENCES AND PARTICIPATION BY ELECTRONIC
MEANS.  A conference among shareholders conducted by any means of communication
through which the shareholders may simultaneously hear each other during the
conference will constitute a regular or special meeting of shareholders,
provided the notice of the conference is given to every holder of shares
entitled to vote pursuant to sections 3 or 5 of this Article II.  A shareholder
may participate in a regular or special meeting of shareholders by any means of
communication through which the shareholder, other shareholders so
participating, and all shareholders physically present at the meeting may
simultaneously hear each other during the meeting.  Such participation in a
meeting will constitute presence at the meeting in person or by proxy.

     SECTION 15.    ACTION WITHOUT A MEETING.  Any action required or permitted
to be taken at a shareholders' meeting may be taken without a meeting if
authorized by a writing or writings signed by all of the holders of shares who
would be entitled to vote on that action.  Such action will be effective on the
date on which the last signature is placed on such writing or writings, unless a
different effective date is provided in the written action.  If any action so
taken requires


                                       3


a certificate to be filed in the office of the Secretary of State, the officer
signing such certificate will state therein that the action was effected in the
manner aforesaid.

                                   ARTICLE III
                               BOARD OF DIRECTORS

     SECTION 1.     GENERAL POWERS.  The business and affairs of the Company
will be managed by or under its Board of Directors which may exercise all such
powers of the Company and do all such lawful acts and things as are not by
statute or by the Articles of Incorporation or by these Bylaws required to be
exercised or done by the shareholders.

     SECTION 2.     NUMBER AND TERM OF OFFICE.  The number of directors which
will constitute the whole board will be at least one, or such other number as
may be determined by the Board of Directors or by the shareholders at a regular
or special meeting.  Except as otherwise permitted by statute, the directors
will be elected at each regular meeting of the Company's shareholders (or at any
special meeting of the shareholders called for that purpose) by a majority of
the voting power of the shares represented and voting, and each director will be
elected to serve until the next regular meeting of the shareholders and
thereafter until a successor is duly elected and qualified, unless a prior
vacancy will occur by reason of death, resignation, or removal for office.
Directors will be natural persons, but need not be shareholders.

     SECTION 3.     RESIGNATION AND REMOVAL.  Any director may resign at any
time by giving written notice to the Company.  Such resignation will take effect
at the date of the receipt of such notice, or at any later time specified
therein, and, unless otherwise specified therein, the acceptance of such
resignation will not be necessary to make it effective.  Any director may be
removed at any time, with or without cause, by the affirmative vote of the
holders of a majority of the voting shares entitled to elect such director.

     SECTION 4.     VACANCIES.  If the office of any director becomes vacant by
reason of death, resignation, removal, disqualification, or otherwise, the
directors then in office, although less than a quorum, by a majority vote, may
choose a successor who will hold office for the unexpired term in respect of
which such vacancy occurred.  With respect to the initial election of a director
to fill a newly created directorship resulting from an increase in the number of
directors by action of the Board of Directors in the manner permitted by
statute, such vacancy will be filled by the affirmative vote of a majority of
the directors serving at the time of the increase.

     SECTION 5.     MEETINGS OF DIRECTORS.  The Board of Directors of the
Company may hold meetings, from time to time, either within or without the State
of Minnesota, at such place as a majority of the members of the Board of
Directors may from time to time appoint.  If the Board of Directors fails to
select a place for the meeting, the meeting will be held at the principal
executive office of the Company.

     SECTION 6.     CALLING MEETINGS.  Meetings of the Board of Directors may be
called by (i) the President on 24 hours' notice or (ii) any director on 10 days'
notice, to each director, either personally, by telephone or by mail or
telegram.  Every such notice will state the date, time


                                       4


and place of the meeting. Notice of a meeting called by a person other than the
President will state the purpose of the meeting.

     SECTION 7.     PARTICIPATION BY ELECTRONIC COMMUNICATIONS.  Directors of
the Company may participate in a meeting of the Board of Directors by means of
conference telephone or by similar means of communication by which all persons
participating in the meeting can simultaneously hear each other.  A director so
participating will be deemed present in person at the meeting.

     SECTION 8.     WAIVER OF NOTICE.  A director may waive notice of a meeting
of the Board of Directors.  A waiver of notice by a director entitled to notice
is effective whether given before, at, or after the meeting, and whether given
in writing, orally, or by attendance.  Attendance by a director at a meeting is
a waiver of notice of that meeting, except where the director objects at the
beginning of the meeting to the transaction of business because the meeting was
not lawfully called or convened and does not participate thereafter in the
meeting.

     SECTION 9.     ABSENT DIRECTORS.  A director may give advance written
consent or opposition to a proposal to be acted on at a meeting of the Board of
Directors by actual delivery prior to the meeting of such advance written
consent or opposition to the President or a director who is present at the
meeting.  If the director is not present at the meeting, advance written consent
or opposition to a proposal will not constitute presence for purposes of
determining the existence of a quorum, but consent or opposition will be counted
as a vote in favor of or against the proposal and will be entered in the minutes
or other record of action at the meeting, if the proposal acted on at the
meeting is substantially the same or has substantially the same effect as the
proposal to which the director has consented or objected.

     SECTION 10.    QUORUM.  At all meetings of the Board of Directors a
majority of the directors will constitute a quorum for the transaction of
business, and the act of a majority of the directors present at any meeting at
which there is a quorum will be the act of the Board of Directors, except as may
be otherwise specifically provided by applicable statute or by the Articles of
Incorporation.  If a quorum will not be present at any meeting of the Board of
Directors, the directors present thereat may adjourn the meeting from time to
time, without notice other than announcement at the meeting, until a quorum is
present.  If a quorum is present at the call of a meeting, the directors may
continue to transact business until adjournment notwithstanding the withdrawal
of enough directors to leave less than a quorum.

     SECTION 11.    ORGANIZATION OF MEETINGS.  The President will preside at all
meetings of the Board of Directors and in his or her absence the Treasurer will
act as presiding officer.  The Secretary will act as secretary of all meetings
of the Board of Directors, and in his or her absence any person appointed by the
presiding officer will act as secretary.

     SECTION 12.    COMMITTEES.  The Board of Directors, by a resolution
approved by the affirmative vote of a majority of the directors then holding
office, may establish one or more committees of one or more persons having the
authority of the Board of Directors in the management of the business of the
Company to the extent provided in such resolution.  Such committees, however,
will at all times be subject to the direction and control of the Board of
Directors.  Committee members need not be directors and will be appointed by the
affirmative


                                       5


vote of a majority of the directors present. A majority of the members of any
committee will constitute a quorum for the transaction of business at a meeting
of any such committee. In other matters of procedure the provisions of these
Bylaws will apply to committees and the members thereof to the same extent they
apply to the Board of Directors and directors, including, without limitation,
the provisions with respect to meetings and notice thereof, absent members,
written actions and valid acts. Each committee will keep regular minutes of its
proceedings and report the same to the Board of Directors.

     SECTION 13.    ACTION WITHOUT MEETING.  Unless otherwise restricted by the
Articles of Incorporation or these Bylaws, any action required or permitted to
be taken at any meeting of the Board of Directors may be taken without a
meeting, if a written consent thereto is signed by all members of the Board of
Directors and such written consent is filed with the minutes of proceedings of
the Board of Directors.  If the proposed action need not be approved by the
shareholders and the Articles of Incorporation so provide, action may be taken
by written consent signed by the number of directors that would be required to
take the same action at a meeting of the Board of Directors at which all
directors were present.  Such action will be effective on the date on which the
last signature is placed on such writing or writings, or such other effective
date as is set forth therein.

     SECTION 14.    COMPENSATION OF DIRECTORS.  By resolution of the Board of
Directors, each director may be paid his or her expenses, if any, of attendance
at each meeting of the Board of Directors, and may be paid a stated amount as a
director or a fixed sum for attendance at each meeting of the Board of
Directors, or both.  No such payment will preclude a director from serving the
Company in any other capacity and receiving compensation therefor.

                                   ARTICLE IV
                                    OFFICERS

     SECTION 1.     NUMBER AND QUALIFICATION.  The officers of the Company will
be chosen by the Board of Directors and include a President, a Treasurer and a
Secretary.  The Board of Directors may elect or appoint such other officers or
agents as it deems necessary for the operation and management of the Company,
with such powers, rights, duties and responsibilities as may be determined by
the Board of Directors, including, without limitation, one or more Vice
Presidents, one or more Assistant Secretaries and Assistant Treasurers, each of
whom will have the powers, rights duties and responsibilities set for the in
these Bylaws unless otherwise determined by the Board.  Any of the offices or
functions of those offices may be held or exercised by the same person.

     SECTION 2.     ELECTION AND TERM OF OFFICE.  The initial officers of the
Company will be elected by the Board of Directors at its first duly held meeting
and all officers will hold office until their successors have been duly elected,
unless prior thereto such officer will have resigned or been removed from office
as hereinafter provided.

     SECTION 3.     RESIGNATION, REMOVAL AND VACANCIES.   An officer may resign
at any time by giving written notice to the Company.  The resignation is
effective without acceptance when the notice is given to the Company, unless a
later effective date is specified in the notice.  Any officer or agent elected
or appointed by the Board of Directors will hold office at the pleasure of


                                       6


the Board of Directors and may be removed, with or without cause, at any time by
the affirmative vote of a majority of the Board of Directors present at a duly
held Board meeting. A vacancy in an office may, or in the case of a vacancy in
the office of the President or Treasurer will, be filled for the unexpired
portion of the term by action of the Board of Directors.

     SECTION 4.     SALARIES.  The salaries of all officers of the Company will
be fixed by the Board of Directors or by the President if authorized by the
Board of Directors.

     SECTION 5.     PRESIDENT.  The President will be the chief executive
officer of the Company.  Unless provided otherwise by a resolution adopted by
the Board of Directors, the President will have general active management of the
business of the Company, will preside at meetings of the shareholders and Board
of Directors, will see that all orders and resolutions of the Board of Directors
are carried into effect, will sign and deliver in the name of the Company any
deeds, mortgages, bonds, contracts, or other instruments pertaining to the
business of the Company, except in cases in which the authority to sign and
deliver is required by law to be exercised by another person or is expressly
delegated by the Articles of Incorporation, these Bylaws, or the Board of
Directors to some other officer or agent of the Company, will maintain records
of and, whenever necessary, certify proceedings of the Board of Directors and
shareholders, and will perform such other duties as may from time to time be
prescribed by the Board of Directors.

     SECTION 6.     TREASURER.  The Treasurer will be the chief financial
officer of the Company.  The Treasurer will keep accurate financial records for
the Company, will deposit all moneys, drafts, and checks in the name of and to
the credit of the Company in such banks and depositories as the Board of
Directors will designate from time to time, will endorse for deposit all notes,
checks, and drafts received by the Company as ordered by the Board of Directors,
making proper vouchers therefor, will disburse corporate funds and issue checks
and drafts in the name of the Company as ordered by the Board of Directors, will
render to the President and the Board of Directors, whenever requested, an
account of all such officer's transactions as Treasurer and of the financial
condition of the Company, and will perform such other duties as may be
prescribed by the Board of Directors from time to time.  If required by the
Board of Directors, the Treasurer will give the Company a bond in such sum and
with such surety or sureties as will be satisfactory to the Board of Directors
for the faithful performance of the duties of his or her office and for the
restoration to the Company, in case of his or her death, resignation, retirement
or removal from office, of all books, papers, vouchers, money and other property
of whatever kind in his or her possession or under his or her control belonging
to the Company.

     SECTION 7.     SECRETARY.  The Secretary will attend all meetings of the
Board of Directors and all meetings of the shareholders and record all the
proceedings of the meetings of the Company and of the Board of Directors in a
book to be kept for that purpose.  He or she will give, or cause to be given,
notice of all meetings of the shareholders and special meetings of the Board of
Directors, and will perform such other duties as may be prescribed by the Board
of Directors or the President, under whose supervision he or she will be.

     SECTION 8.     VICE PRESIDENTS.  The Vice President, if any, or if there
will be more than one, the Vice Presidents in the order determined by the Board
of Directors, will, in the absence


                                       7


or disability of the President, perform the duties and exercise the powers of
the President and will perform such other duties and have such other powers as
the Board of Directors or the President may from time to time prescribe.

     SECTION 9.     ASSISTANT SECRETARIES.  The Assistant Secretary or, if there
be more than one, the Assistant Secretaries, in the order determined by the
Board of Directors, will, in the absence or disability of the Secretary, perform
the duties and exercise the powers of the Secretary and will perform such other
duties and have such other powers as the Board of Directors or the President may
from time to time prescribe.

     SECTION 10.    AUTHORITY AND DUTIES.  In addition to the foregoing
authority and duties, all officers of the Company will respectively have such
authority and perform such duties in the management of the business of the
Company as may be designated from time to time by the Board of Directors.

                                    ARTICLE V
                              CERTIFICATES OF STOCK

     SECTION 1.     CERTIFICATES OF STOCK.  Every holder of stock in the Company
will be entitled to have a certificate,  signed by, or in the name of the
Company by the President or the Secretary or an Assistant Secretary of the
Company, if there be one, certifying the number of shares owned by him or her in
the Company.  The certificates of stock of each class will be numbered in the
order of their issue.

     SECTION 2.     FACSIMILE SIGNATURES.  Where a certificate is signed (1) by
a transfer agent or an assistant transfer agent, or (2) by a transfer clerk
acting on behalf of the Company and a registrar, the signature of any such
President, Secretary or Assistant Secretary may be facsimile.  In case any
officer or officers who have signed, or whose facsimile signature or signatures
have been used on any such certificate or certificates will cease to be such
officer or officers of the Company before such certificate or certificates have
been delivered by the Company, such certificate or certificates may nevertheless
be adopted by the Company and be issued and delivered as though the person or
persons who signed such certificate or certificates or whose facsimile signature
or signatures have been used thereon had not ceased to be such officer or
officers of the Company.

     SECTION 3.     LOST OR DESTROYED CERTIFICATES.  The Board of Directors may
direct a new certificate or certificates to be issued in place of any
certificate or certificates issued by the Company alleged to have been lost or
destroyed, upon the making of an affidavit of that fact by the person claiming
the certificate of stock to be lost or destroyed.  When authorizing such issue
of a new certificate or certificates, the Board of Directors may, in its
discretion and as a condition precedent to the issuance thereof, require the
owner of such lost or destroyed certificate or certificates, or his or her legal
representative, to advertise the same in such manner as it will require and/or
to give the Company a bond in such sum as it may direct as indemnity against any
claim that may be made against the Company with respect to the certificate
alleged to have been lost or destroyed.


                                       8


     SECTION 4.     TRANSFERS OF STOCK.  Upon surrender to the Company or the
transfer agent of the Company of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignment or authority to
transfer, it will be the duty of the Company to issue a new certificate to the
person entitled thereto, cancel the old certificate and record the transaction
upon its books.

     SECTION 5.     REGISTERED SHAREHOLDERS.  The Company will be entitled to
recognize the exclusive right of a person registered on its books as the owner
of shares to receive dividends, and to vote as such owner, and will be entitled
to hold liable for calls and assessments a person so registered on its books as
the owner of shares, and will not be bound to recognize any equitable or other
claim to or interest in such share or shares on the part of any other person,
whether or not it will have express or other notice thereof, except as otherwise
provided by applicable statute.

                                   ARTICLE VI
                                 INDEMNIFICATION

     SECTION 1.     INDEMNIFICATION.  The Company shall indemnify its officers
and directors to the fullest extent permissable under the provisions of Chapter
302A of the Minnesota Statutes, as amended from time to time, or as required or
permitted by other provisions of law.  Any repeal or modification of this
Article VI will be prospective only and will not adversely affect any right to
indemnification of a director or officer of the Company existing at the time of
such repeal or modification.

     SECTION 2.     INSURANCE.  The Company may purchase and maintain insurance
on behalf of any person in such person's official capacity against any liability
asserted against and incurred by such person in or arising from that capacity,
whether or not the Company would otherwise be required to indemnify the person
against the liability.

                                   ARTICLE VII
                               GENERAL PROVISIONS

     SECTION 1.     FISCAL YEAR.  The fiscal year of the Company will be fixed
by resolution of the Board of Directors.

     SECTION 2.     DIVIDENDS.  Subject to the provisions of the applicable
statute and the Articles of Incorporation, dividends  upon the capital stock of
the Company may be declared by the Board of Directors at any regular or special
meeting, and may be paid in cash, in property, or in shares of the capital
stock.

     SECTION 3.     RESERVES.  Before payment of any dividend, there may be set
aside out of any funds of the Company available for dividends such sum or sums
as the directors from time to time, in their absolute discretion, think proper
as a reserve or reserves to meet contingencies, or for equalizing dividends, or
for repairing or maintaining any property of the Company, or for such other
purposes as the directors will think conducive to the interest of the Company,
and the directors may modify or abolish any such reserve in the manner in which
it was created.

     SECTION 4.     SEAL.  The Company will not have a corporate seal.


                                       9


     SECTION 5.     CHECKS.  All checks or demands for money and notes of the
Company will be signed by such officer or officers or such other person or
persons as the Board of Directors may from time to time designate.

     SECTION 6.     AMENDMENTS.  The Board of Directors will have the power to
adopt, amend or repeal the Bylaws of the Company, subject to the power of the
shareholders to change or repeal the same, provided, however, that the Board
will not adopt, amend or repeal any Bylaw fixing a quorum for meetings of
shareholders, prescribing procedures for removing directors or filling vacancies
in the Board, or fixing the number of directors or their classifications,
qualifications or terms of office, but may adopt or amend a Bylaw that increases
the number of directors.

                                                                   July 14, 1997


                                       10

EX-3.27

                                       BYLAWS
                                         OF
                               MERRILL/EXECUTECH, INC.
                                  (THE "COMPANY")


                                     ARTICLE I.
                                      OFFICES

SECTION 1.    PRINCIPAL EXECUTIVE OFFICE.  The principal executive office of
the Company will be determined from time to time by the Board of Directors.

SECTION 2.    REGISTERED OFFICE.  The registered office of the Company
required by Chapter 302A of the Minnesota Statutes to be maintained in the
State of Minnesota is as designated in the Articles of Incorporation.  The
Board of Directors of the Company may, from time to time, change the location
of the registered office.  On or before the day that such change is to become
effective, a certificate of such change and of the new address of the new
registered office will be filed with the Secretary of State of the State of
Minnesota.

SECTION 3.    OTHER OFFICE.  The Company may establish and maintain such
other offices, within or without the State of Minnesota, as are from time to
time authorized by the Board of Directors.

                                    ARTICLE II.
                             MEETINGS OF SHAREHOLDERS.

SECTION 1.    PLACE OF MEETINGS.  Each meeting of the shareholders will be
held at the principal executive office of the Company or at such other place
as may be designated by the Board of Directors or the President; provided,
however, that any meeting called by or at the demand of a shareholder or
shareholders will be held in the county where the principal executive office
of the Company is located.

SECTION 2.    REGULAR MEETINGS.  Regular meetings of the shareholders may be
held on an annual or other less frequent basis as determined by the Board of
Directors; provided, however, that if a regular meeting has not been held
during the immediately preceding 15 months, a shareholder or shareholders
holding three percent or more of the voting power of all shares entitled to
vote may demand a regular meeting of shareholders by written demand given to
the President of the Company.  If said officer fails to call and hold such
meeting within 90 days after receipt of the demand, the shareholder making
the demand will have the right and power to call such meeting.  At each
regular meeting the shareholders will elect directors whose terms have
expired or are due to expire within six months after the date of the meeting
and may transact such other business, as may properly be brought before the
meeting.

SECTION 3.    NOTICE OF REGULAR MEETING.  Unless otherwise required by law,
written notice of the time and place of each regular shareholder meeting will
be mailed, postage prepaid, at least 10 but not more than 60 days before such
meeting, to each shareholder entitled to vote thereat at his or her address
as the same appears upon the books of the Company.





SECTION 4.    SPECIAL MEETINGS.  A special meeting of the shareholders may be
called for any purpose or purposes at any time by the President and will be
called by the President at the request in writing of two or more members of
the Board of Directors or at the request in writing of one or more
shareholders holding not less than ten percent of the voting power of all
shares of the Company entitled to vote.  Such request which will be by
registered mail or delivered in person to the President of the Company
specifying the purposes of the proposed meeting.

SECTION 5.    NOTICE OF SPECIAL MEETINGS.  Written notice of the time, place
and purpose or purposes of a special meeting will be mailed, postage prepaid,
at least five but not more than 60 days before such meeting, to each
shareholder entitled to vote at such meeting at his or her address as the
same appears upon the books of the Company.

SECTION 6.    BUSINESS TO BE TRANSACTED.  No business will be transacted at
any special meeting of shareholders except that stated in the notice of the
meeting.

SECTION 7.    WAIVER OF NOTICE.  A shareholder may waive notice of the date,
time, place and purpose or purposes of a meeting of shareholders.  A waiver
of notice by a shareholder entitled to notice is effective whether given
before, at or after the meeting, and whether given in writing, orally or by
attendance. Attendance by a shareholder at a meeting is a waiver of notice of
that meeting, unless the shareholder objects at the beginning of the meeting
to the transaction of business because the meeting is not lawfully called or
convened, or objects before a vote on an item of business because the item
may not lawfully be considered at that meeting and does not participate in
the consideration of the item at that meeting.

SECTION 8.    QUORUM AND ADJOURNMENT.  The holders of a majority of the
voting power of the shares entitled to vote at a meeting, present in person
or by proxy at the meeting, will constitute a quorum at all meetings of the
shareholders for the transaction of business except as otherwise provided by
statute or by the Articles of Incorporation.  If, however, such quorum will
not be present or represented at any meeting of the shareholders, the
shareholders entitled to vote thereat, present in person or represented by
proxy, will have the power to adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum will be present
or represented.  At such adjourned meeting at which a quorum will be present
or represented any business may be transacted which might have been
transacted at the meeting as originally noticed.  The shareholders present at
a duly called or held meeting at which a quorum is present may continue to
transact business until adjournment, even though the withdrawal of a number
of shareholders originally present leaves less than the proportion or number
otherwise required for a quorum.

SECTION 9.    VOTING RIGHTS.    A shareholder may cast his or her vote in
person or by proxy.  When a quorum is present at the time a meeting is
convened, the affirmative vote of the holders of a majority of the shares
entitled to vote on any question present in person or by proxy will decide
such question unless the question is one upon which, by express provision of
the applicable statute or the Articles of Incorporation, a different vote is
required, in which case such express provision will govern and control the
decision of such question.

SECTION 10.   PROXIES.  A shareholder may cast or authorize the casting of a
vote by filing a written appointment of a proxy with an officer of the
Company at or before the meeting at which


                                 2




the appointment is to be effective.  The shareholder may sign or authorize
the written appointment by telegram, cablegram or other means of electronic
transmission setting forth or submitted with information sufficient to
determine that the shareholder authorized such transmission.  Any copy,
facsimile, telecommunication or other reproduction of the original of either
the writing or transmission may be used in lieu of the original, provided
that it is a complete and legible reproduction of the entire original. No
proxy will be valid after 11 months from its date, unless the proxy expressly
provides for a longer period.

SECTION 11.   MANNER OF VOTING.  Each shareholder will at every meeting of
the shareholders be entitled to one vote in person or by proxy for each share
of the capital stock having voting power held by such shareholder and, except
where the transfer books of the Company have been closed or a date has been
fixed as a record date for the determination of its shareholders entitled to
vote, no share of stock that has been transferred on the books of the Company
within 20 days next preceding any election of directors will be voted in such
election of directors.

SECTION 12.   RECORD DATE.  The Board of Directors may fix a date, not
exceeding 60 days preceding the date of any meeting of shareholders, as a
record date for the determination of the shareholders entitled to notice of
and to vote at such meeting, and in such case only shareholders of record on
the date so fixed, or their legal representatives, will be entitled to notice
of and to vote at such meeting, notwithstanding any transfer of any shares on
the books of the Company after any record date so fixed.  The Board of
Directors may close the books of the Company against transfers of shares
during the whole or any part of such period.

SECTION 13.   ORGANIZATION OF MEETINGS.  The President will preside at all
meetings of the shareholders, in the absence of the President or if the
office of the President is vacant, the Treasurer will preside at meetings of
the shareholders.  The Secretary will act as secretary of all meetings of the
shareholders, or in his or her absence any person appointed by the presiding
officer will act as secretary.

SECTION 14.   ELECTRONIC CONFERENCES AND PARTICIPATION BY ELECTRONIC MEANS.
A conference among shareholders conducted by any means of communication
through which the shareholders may simultaneously hear each other during the
conference will constitute a regular or special meeting of shareholders,
provided the notice of the conference is given to every holder of shares
entitled to vote pursuant to sections 3 or 5 of this Article II.  A
shareholder may participate in a regular or special meeting of shareholders
by any means of communication through which the shareholder, other
shareholders so participating, and all shareholders physically present at the
meeting may simultaneously hear each other during the meeting.  Such
participation in a meeting will constitute presence at the meeting in person
or by proxy.

SECTION 15.   ACTION WITHOUT A MEETING.  Any action required or permitted to
be taken at a shareholders' meeting may be taken without a meeting if
authorized by a writing or writings signed by all of the holders of shares
who would be entitled to vote on that action.  Such action will be effective
on the date on which the last signature is placed on such writing or
writings, unless a different effective date is provided in the written
action.  If any action so taken requires a certificate to be filed in the
office of the Secretary of State, the officer signing such certificate will
state therein that the action was effected in the manner aforesaid.


                                  3





                                    ARTICLE III.
                                 BOARD OF DIRECTORS

SECTION 1.    GENERAL POWERS.  The business and affairs of the Company will
be managed by or under its Board of Directors which may exercise all such
powers of the Company and do all such lawful acts and things as are not by
statute or by the Articles of Incorporation or by these Bylaws required to be
exercised or done by the shareholders.

SECTION 2.    NUMBER AND TERM OF OFFICE.  The number of directors which will
constitute the whole board will be at least one, or such other number as may
be determined by the Board of Directors or by the shareholders at a regular
or special meeting.  Except as otherwise permitted by statute, the directors
will be elected at each regular meeting of the Company's shareholders (or at
any special meeting of the shareholders called for that purpose) by a
majority of the voting power of the shares represented and voting, and each
director will be elected to serve until the next regular meeting of the
shareholders and thereafter until a successor is duly elected and qualified,
unless a prior vacancy will occur by reason of death, resignation, or removal
for office. Directors will be natural persons, but need not be shareholders.

SECTION 3.    RESIGNATION AND REMOVAL.  Any director may resign at any time
by giving written notice to the Company.  Such resignation will take effect
at the date of the receipt of such notice, or at any later time specified
therein, and, unless otherwise specified therein, the acceptance of such
resignation will not be necessary to make it effective.  Any director may be
removed at any time, with or without cause, by the affirmative vote of the
holders of a majority of the voting shares entitled to elect such director.

SECTION 4.    VACANCIES.  If the office of any director becomes vacant by
reason of death, resignation, removal, disqualification, or otherwise, the
directors then in office, although less than a quorum, by a majority vote,
may choose a successor who will hold office for the unexpired term in respect
of which such vacancy occurred.  With respect to the initial election of a
director to fill a newly created directorship resulting from an increase in
the number of directors by action of the Board of Directors in the manner
permitted by statute, such vacancy will be filled by the affirmative vote of
a majority of the directors serving at the time of the increase.

SECTION 5.    MEETINGS OF DIRECTORS.  The Board of Directors of the Company
may hold meetings, from time to time, either within or without the State of
Minnesota, at such place as a majority of the members of the Board of
Directors may from time to time appoint.  If the Board of Directors fails to
select a place for the meeting, the meeting will be held at the principal
executive office of the Company.

SECTION 6.    CALLING MEETINGS.  Meetings of the Board of Directors may be
called by (i) the President on 24 hours' notice or (ii) any director on 10
days' notice, to each director, either personally, by telephone or by mail or
telegram.  Every such notice will state the date, time and place of the
meeting. Notice of a meeting called by a person other than the President will
state the purpose of the meeting.


                                 4





SECTION 7.    PARTICIPATION BY ELECTRONIC COMMUNICATIONS.  Directors of the
Company may participate in a meeting of the Board of Directors by means of
conference telephone or by similar means of communication by which all
persons participating in the meeting can simultaneously hear each other.  A
director so participating will be deemed present in person at the meeting.

SECTION 8.    WAIVER OF NOTICE.  A director may waive notice of a meeting of
the Board of Directors.  A waiver of notice by a director entitled to notice
is effective whether given before, at, or after the meeting, and whether
given in writing, orally, or by attendance.  Attendance by a director at a
meeting is a waiver of notice of that meeting, except where the director
objects at the beginning of the meeting to the transaction of business
because the meeting was not lawfully called or convened and does not
participate thereafter in the meeting.

SECTION 9.    ABSENT DIRECTORS.  A director may give advance written consent
or opposition to a proposal to be acted on at a meeting of the Board of
Directors by actual delivery prior to the meeting of such advance written
consent or opposition to the President or a director who is present at the
meeting.  If the director is not present at the meeting, advance written
consent or opposition to a proposal will not constitute presence for purposes
of determining the existence of a quorum, but consent or opposition will be
counted as a vote in favor of or against the proposal and will be entered in
the minutes or other record of action at the meeting, if the proposal acted
on at the meeting is substantially the same or has substantially the same
effect as the proposal to which the director has consented or objected.

SECTION 10.   QUORUM.  At all meetings of the Board of Directors a majority
of the directors will constitute a quorum for the transaction of business,
and the act of a majority of the directors present at any meeting at which
there is a quorum will be the act of the Board of Directors, except as may be
otherwise specifically provided by applicable statute or by the Articles of
Incorporation. If a quorum will not be present at any meeting of the Board of
Directors, the directors present thereat may adjourn the meeting from time to
time, without notice other than announcement at the meeting, until a quorum
is present.  If a quorum is present at the call of a meeting, the directors
may continue to transact business until adjournment notwithstanding the
withdrawal of enough directors to leave less than a quorum.

SECTION 11.   ORGANIZATION OF MEETINGS.  The President will preside at all
meetings of the Board of Directors and in his or her absence the Treasurer
will act as presiding officer.  The Secretary will act as secretary of all
meetings of the Board of Directors, and in his or her absence any person
appointed by the presiding officer will act as secretary.

SECTION 12.   COMMITTEES.  The Board of Directors, by a resolution approved
by the affirmative vote of a majority of the directors then holding office,
may establish one or more committees of one or more persons having the
authority of the Board of Directors in the management of the business of the
Company to the extent provided in such resolution.  Such committees, however,
will at all times be subject to the direction and control of the Board of
Directors.  Committee members need not be directors and will be appointed by
the affirmative vote of a majority of the directors present.  A majority of
the members of any committee will constitute a quorum for the transaction of
business at a meeting of any such committee.  In other matters of procedure
the provisions of these Bylaws will apply to committees and the members
thereof to the same extent they apply to the Board of Directors and
directors, including, without limitation, the provisions


                                5





with respect to meetings and notice thereof, absent members, written actions
and valid acts.  Each committee will keep regular minutes of its proceedings
and report the same to the Board of Directors.

SECTION 13.   ACTION WITHOUT MEETING.  Unless otherwise restricted by the
Articles of Incorporation or these Bylaws, any action required or permitted
to be taken at any meeting of the Board of Directors may be taken without a
meeting, if a written consent thereto is signed by all members of the Board
of Directors and such written consent is filed with the minutes of
proceedings of the Board of Directors.  If the proposed action need not be
approved by the shareholders and the Articles of Incorporation so provide,
action may be taken by written consent signed by the number of directors that
would be required to take the same action at a meeting of the Board of
Directors at which all directors were present.  Such action will be effective
on the date on which the last signature is placed on such writing or
writings, or such other effective date as is set forth therein.

SECTION 14.   COMPENSATION OF DIRECTORS.  By resolution of the Board of
Directors, each director may be paid his or her expenses, if any, of
attendance at each meeting of the Board of Directors, and may be paid a
stated amount as a director or a fixed sum for attendance at each meeting of
the Board of Directors, or both.  No such payment will preclude a director
from serving the Company in any other capacity and receiving compensation
therefor.

                                    ARTICLE IV.
                                      OFFICERS

SECTION 1.    NUMBER AND QUALIFICATION.  The officers of the Company will be
chosen by the Board of Directors and include a President, a Treasurer and a
Secretary.  The Board of Directors may elect or appoint such other officers
or agents as it deems necessary for the operation and management of the
Company, with such powers, rights, duties and responsibilities as may be
determined by the Board of Directors, including, without limitation, one or
more Vice Presidents, one or more Assistant Secretaries and Assistant
Treasurers, each of whom will have the powers, rights duties and
responsibilities set for the in these Bylaws unless otherwise determined by
the Board.  Any of the offices or functions of those offices may be held or
exercised by the same person.

SECTION 2.    ELECTION AND TERM OF OFFICE.  The initial officers of the
Company will be elected by the Board of Directors at its first duly held
meeting and all officers will hold office until their successors have been
duly elected, unless prior thereto such officer will have resigned or been
removed from office as hereinafter provided.

SECTION 3.    RESIGNATION, REMOVAL AND VACANCIES.   An officer may resign at
any time by giving written notice to the Company.  The resignation is
effective without acceptance when the notice is given to the Company, unless
a later effective date is specified in the notice.  Any officer or agent
elected or appointed by the Board of Directors will hold office at the
pleasure of the Board of Directors and may be removed, with or without cause,
at any time by the affirmative vote of a majority of the Board of Directors
present at a duly held Board meeting.  A vacancy in an office may, or in the
case of a vacancy in the office of the President or Treasurer will, be filled
for the unexpired portion of the term by action of the Board of Directors.


                              6





SECTION 4.    SALARIES.  The salaries of all officers of the Company will be
fixed by the Board of Directors or by the President if authorized by the
Board of Directors.

SECTION 5.    PRESIDENT.  The President will be the chief executive officer
of the Company.  Unless provided otherwise by a resolution adopted by the
Board of Directors, the President will have general active management of the
business of the Company, will preside at meetings of the shareholders and
Board of Directors, will see that all orders and resolutions of the Board of
Directors are carried into effect, will sign and deliver in the name of the
Company any deeds, mortgages, bonds, contracts, or other instruments
pertaining to the business of the Company, except in cases in which the
authority to sign and deliver is required by law to be exercised by another
person or is expressly delegated by the Articles of Incorporation, these
Bylaws, or the Board of Directors to some other officer or agent of the
Company, will maintain records of and, whenever necessary, certify
proceedings of the Board of Directors and shareholders, and will perform such
other duties as may from time to time be prescribed by the Board of Directors.

SECTION 6.    TREASURER.  The Treasurer will be the chief financial officer
of the Company.  The Treasurer will keep accurate financial records for the
Company, will deposit all moneys, drafts, and checks in the name of and to
the credit of the Company in such banks and depositories as the Board of
Directors will designate from time to time, will endorse for deposit all
notes, checks, and drafts received by the Company as ordered by the Board of
Directors, making proper vouchers therefor, will disburse corporate funds and
issue checks and drafts in the name of the Company as ordered by the Board of
Directors, will render to the President and the Board of Directors, whenever
requested, an account of all such officer's transactions as Treasurer and of
the financial condition of the Company, and will perform such other duties as
may be prescribed by the Board of Directors from time to time.  If required
by the Board of Directors, the Treasurer will give the Company a bond in such
sum and with such surety or sureties as will be satisfactory to the Board of
Directors for the faithful performance of the duties of his or her office and
for the restoration to the Company, in case of his or her death, resignation,
retirement or removal from office, of all books, papers, vouchers, money and
other property of whatever kind in his or her possession or under his or her
control belonging to the Company.

SECTION 7.    SECRETARY.  The Secretary will attend all meetings of the Board
of Directors and all meetings of the shareholders and record all the
proceedings of the meetings of the Company and of the Board of Directors in a
book to be kept for that purpose.  He or she will give, or cause to be given,
notice of all meetings of the shareholders and special meetings of the Board
of Directors, and will perform such other duties as may be prescribed by the
Board of Directors or the President, under whose supervision he or she will
be.

SECTION 8.    VICE PRESIDENTS.  The Vice President, if any, or if there will
be more than one, the Vice Presidents in the order determined by the Board of
Directors, will, in the absence or disability of the President, perform the
duties and exercise the powers of the President and will perform such other
duties and have such other powers as the Board of Directors or the President
may from time to time prescribe.

SECTION 9.    ASSISTANT SECRETARIES.  The Assistant Secretary or, if there be
more than one, the Assistant Secretaries, in the order determined by the
Board of Directors, will, in the absence or disability of the Secretary,
perform the duties and exercise the powers of the Secretary and will


                                       7





perform such other duties and have such other powers as the Board of
Directors or the President may from time to time prescribe.

SECTION 10.   AUTHORITY AND DUTIES.  In addition to the foregoing authority
and duties, all officers of the Company will respectively have such authority
and perform such duties in the management of the business of the Company as
may be designated from time to time by the Board of Directors.

                                     ARTICLE V.
                               CERTIFICATES OF STOCK

SECTION 1.    CERTIFICATES OF STOCK.  Every holder of stock in the Company
will be entitled to have a certificate,  signed by, or in the name of the
Company by the President or the Secretary or an Assistant Secretary of the
Company, if there be one, certifying the number of shares owned by him or her
in the Company.  The certificates of stock of each class will be numbered in
the order of their issue.

SECTION 2.    FACSIMILE SIGNATURES.  Where a certificate is signed (1) by a
transfer agent or an assistant transfer agent, or (2) by a transfer clerk
acting on behalf of the Company and a registrar, the signature of any such
President, Secretary or Assistant Secretary may be facsimile.  In case any
officer or officers who have signed, or whose facsimile signature or
signatures have been used on any such certificate or certificates will cease
to be such officer or officers of the Company before such certificate or
certificates have been delivered by the Company, such certificate or
certificates may nevertheless be adopted by the Company and be issued and
delivered as though the person or persons who signed such certificate or
certificates or whose facsimile signature or signatures have been used
thereon had not ceased to be such officer or officers of the Company.

SECTION 3.    LOST OR DESTROYED CERTIFICATES.  The Board of Directors may
direct a new certificate or certificates to be issued in place of any
certificate or certificates issued by the Company alleged to have been lost
or destroyed, upon the making of an affidavit of that fact by the person
claiming the certificate of stock to be lost or destroyed.  When authorizing
such issue of a new certificate or certificates, the Board of Directors may,
in its discretion and as a condition precedent to the issuance thereof,
require the owner of such lost or destroyed certificate or certificates, or
his or her legal representative, to advertise the same in such manner as it
will require and/or to give the Company a bond in such sum as it may direct
as indemnity against any claim that may be made against the Company with
respect to the certificate alleged to have been lost or destroyed.

SECTION 4.    TRANSFERS OF STOCK.  Upon surrender to the Company or the
transfer agent of the Company of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignment or authority to
transfer, it will be the duty of the Company to issue a new certificate to
the person entitled thereto, cancel the old certificate and record the
transaction upon its books.

SECTION 5.    REGISTERED SHAREHOLDERS.  The Company will be entitled to
recognize the exclusive right of a person registered on its books as the
owner of shares to receive dividends, and to vote


                               8





as such owner, and will be entitled to hold liable for calls and assessments
a person so registered on its books as the owner of shares, and will not be
bound to recognize any equitable or other claim to or interest in such share
or shares on the part of any other person, whether or not it will have
express or other notice thereof, except as otherwise provided by applicable
statute.

                                    ARTICLE VI.
                                  INDEMNIFICATION

SECTION 1.    INDEMNIFICATION.  The Company shall indemnify its officers and
directors to the fullest extent permissible under the provisions of Chapter
302A of the Minnesota Statutes, as amended from time to time, or as required
or permitted by other provisions of law.  Any repeal or modification of this
Article [VI] will be prospective only and will not adversely affect any right
to indemnification of a director or officer of the Company existing at the
time of such repeal or modification.

SECTION 2.    INSURANCE.  The Company may purchase and maintain insurance on
behalf of any person in such person's official capacity against any liability
asserted against and incurred by such person in or arising from that
capacity, whether or not the Company would otherwise be required to indemnify
the person against the liability.

                                    ARTICLE VII.
                                 GENERAL PROVISIONS

SECTION 1.    FISCAL YEAR.  The fiscal year of the Company will be fixed by
resolution of the Board of Directors.

SECTION 2.    DIVIDENDS.  Subject to the provisions of the applicable statute
and the Articles of Incorporation, dividends  upon the capital stock of the
Company may be declared by the Board of Directors at any regular or special
meeting, and may be paid in cash, in property, or in shares of the capital
stock.

SECTION 3.    RESERVES.  Before payment of any dividend, there may be set
aside out of any funds of the Company available for dividends such sum or
sums as the directors from time to time, in their absolute discretion, think
proper as a reserve or reserves to meet contingencies, or for equalizing
dividends, or for repairing or maintaining any property of the Company, or
for such other purposes as the directors will think conducive to the interest
of the Company, and the directors may modify or abolish any such reserve in
the manner in which it was created.

SECTION 4.    SEAL.  The Company will not have a corporate seal.

SECTION 5.    CHECKS.  All checks or demands for money and notes of the
Company will be signed by such officer or officers or such other person or
persons as the Board of Directors may from time to time designate.

SECTION 6.    AMENDMENTS.  The Board of Directors will have the power to
adopt, amend or repeal the Bylaws of the Company, subject to the power of the
shareholders to change or repeal the same, provided, however, that the Board
will not adopt, amend or repeal any Bylaw fixing a quorum for meetings of
shareholders, prescribing procedures for removing directors or filling


                               9





vacancies in the Board, or fixing the number of directors or their
classifications, qualifications or terms of office, but may adopt or amend a
Bylaw that increases the number of directors.


                                                               January 30, 1998













                                10

EX-3.28

                                       BYLAWS
                                         OF
                               MERRILL DANIELS, INC.
                                  (THE "COMPANY")

                                     ARTICLE I.
                                      OFFICES

SECTION 1.    PRINCIPAL EXECUTIVE OFFICE.  The principal executive office of
the company will be determined from time to time by the Board of Directors.

SECTION 2.    REGISTERED OFFICE.  The registered office of the Company
required by Chapter 302A of the Minnesota Statutes to be maintained in the
State of Minnesota is as designated in the Articles of Incorporation. The
Board of directors of the Company may, from time to time, change the location
of the registered office. On or before the day that such change is to become
effective, a certificate of such change and of the new address of the new
registered office will be filed with the Secretary of State of the State of
Minnesota.

SECTION 3.    OTHER OFFICE.  The company may establish and maintain such
other offices, within or without the State of Minnesota, as are from time to
time authorized by the Board of Directors.

                                    ARTICLE II.
                              MEETINGS OF SHAREHOLDERS

SECTION 1.    PLACE OF MEETINGS.  Each meeting of the shareholders will be
held at the principal executive office of the Company or at such other place
as may be designated by the Board of Directors or the Chief Executive
Officer; provided, however, that any meeting called by or at the demand of a
shareholder or shareholders will be held in the county where the principal
executive office of the company is located.

SECTION 2.    REGULAR MEETINGS.  Regular meetings of the shareholders may be
held on an annual or other less frequent basis as determined by the Board of
Directors; provided, however, that if a regular meeting has not been held
during the immediately preceding 15 months, a shareholder or shareholders
holding three percent or more of the voting power of all shares entitled to
vote may demand a regular meeting of shareholders by written demand given to
the Chief Executive Officer of the company. If said officer fails to call and
hold such meeting within 90 days after receipt of the demand, the shareholder
making the demand will have the right and power to call such meeting. At each
regular meeting the shareholders will elect directors whose terms have
expired or are due to expire within six months after the date of the meeting
and may transact such other business, as may properly be brought before the
meeting.

SECTION 3.    NOTICE OF REGULAR MEETING.  Unless otherwise required by law,
written notice of the time and place of each regular shareholder meeting will
be mailed, postage prepaid, at least 10 but not more than 60 days before such
meeting, to each shareholder entitled to vote thereat at his or her address
as the same appears upon the books of the Company.





SECTION 4.    SPECIAL MEETINGS.  A special meeting of the shareholders may be
called for any purpose or purposes at any time by the Chief Executive Officer
and will be called by the Chief Executive Officer at the request in writing
of two or more members of the Board of directors or at the request in writing
of one or more shareholders holding not less than ten percent of the voting
power of all shares of the company entitled to vote. Such request which will
be by registered mail or delivered in person to the Chief Executive Officer
of the Company specifying the purposes of the proposed meeting.

SECTION 5.    NOTICE OF SPECIAL MEETINGS.  Written notice of the time, place
and purpose or purposes of a special meeting will be mailed, postage prepaid,
at least five but not more than 60 days before such meeting, to each
shareholder entitled to vote at such meeting at his or her address as the
same appears upon the books of the Company.

SECTION 6.    BUSINESS TO BE TRANSACTED.  No business will be transacted at
any special meeting of shareholders except that stated in the notice of the
meeting.

SECTION 7.    WAIVER OF NOTICE.  A shareholder may waive notice of the date,
time, place and purpose or purposes of a meeting of shareholders. A waiver of
notice by a shareholder entitled to notice is effective whether given before,
at or after the meeting, and whether given in writing, orally or by
attendance. Attendance by a shareholder at a meeting is a waiver of notice of
that meeting, unless the shareholder objects at the beginning of the meeting
to the transaction of business because the meeting is not lawfully called or
convened, or objects before a vote on an item of business because the item
may not lawfully be considered at that meeting and does not participate in
the consideration of the item at that meeting.

SECTION 8.    QUORUM AND ADJOURNMENT.  The holders of a majority of the
voting power of the shares entitled to vote at a meeting, present in person
or by proxy at the meeting, will constitute a quorum at all meetings of the
shareholders for the transaction of business except as otherwise provided by
statute or by the Articles of Incorporation. If, however, such quorum will
not be present or represented at any meeting of the shareholders, the
shareholders entitled to vote thereat, present in person or represented by
proxy, will have the power to adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum will be present
or represented. At such adjourned meeting at which a quorum will be present
or represented any business may be transacted which might have been
transacted at the meeting a originally noticed. The shareholders present at a
duly called or held meeting at which a quorum is present may continue to
transact business until adjournment, even though the withdrawal of a number
of shareholders originally present leaves less than the proportion or number
otherwise required for a quorum.

SECTION 9.    VOTING RIGHTS.  A shareholder may cast his or her vote in
person or by proxy. When a quorum is present at the time a meeting is
convened, the affirmative vote of the holders of a majority of the shares
entitled to vote on any question present in person or by proxy will decide
such question unless the question is one upon which, by express provision of
the applicable statute or the Articles of Incorporation, a different vote is
required, in which case such express provision will govern and control the
decision of such question.


                              2 of 10





SECTION 10.   PROXIES.  A shareholder may cast or authorize the casting of a
vote by filing a written appointment of a proxy with an officer of the
Company at or before the meeting at which the appointment is to be effective.
The shareholder may sign or authorize the written appointment by telegram,
cablegram or other means of electronic transmission setting forth or
submitted with information sufficient to determine that the shareholder
authorized such transmission. Any copy, facsimile, telecommunication or other
reproduction of the original of either the writing or transmission may be
used in lieu of the original, provided that it is a complete and legible
reproduction of the entire original. No proxy will be valid after 11 months
from its date, unless the proxy expressly provides for a longer period.

SECTION 11.   MANNER OF VOTING.  Each shareholder will at every meeting of
the shareholders be entitled to one vote in person or by proxy for each share
of the capital stock having voting power held by such shareholder and, except
where the transfer books of the Company have been closed or a date has been
fixed as a record date for the determination of its shareholders entitled to
vote, no share of stock that has been transferred on the books of the Company
within 20 days next preceding any election of directors will be voted in such
election of directors.

SECTION 12.   RECORD DATE.  The Board of Directors may fix a date, not
exceeding 60 days preceding the date of any meeting of shareholders, as a
record date for the determination of the shareholders entitled to notice of
any to vote at such meeting, and in such case only shareholders of record on
the date so fixed, or their legal representatives, will be entitled to notice
of and to vote at such meeting, notwithstanding any transfer of any shares on
the books of the Company after any record date so fixed. The Board of
Directors may close the books of the company against transfers of shares
during the whole or any part of such period.

SECTION 13.   ORGANIZATION OF MEETINGS.  The Chief Executive Officer will
preside at all meetings of the shareholders, in the absence of the Chief
Executive Officer or if the office of the Chief Executive Officer is vacant,
the Treasurer will preside at meetings of the shareholders. The Secretary
will act as secretary of lal meetings of the shareholders, or in his or her
absence any person appointed by the presiding officer will act as secretary.

SECTION 14.   ELECTRONIC CONFERENCES AND PARTICIPATION BY ELECTRONIC MEANS.
A conference among shareholders conducted by any means of communication
through which the shareholders may simultaneously hear each other during the
conference will constitute a regular or special meeting of shareholders,
provided the notice of the conference is given to every holder of shares
entitled to vote pursuant to sections 3 or 5 of this Article II. A
shareholder may participate in a regular or special meeting of shareholders
by any means of communication through which the shareholder, other
shareholders so participating, and all shareholders physically present at the
meeting may simultaneously hear each other during the meeting. Such
participation in a meeting will constitute presence at the meeting in person
or by proxy.

SECTION 15.   ACTION WITHOUT A MEETING.  Any action required or permitted to
be taken at a shareholders' meeting may be taken without a meeting if
authorized by a writing or writings signed by all of the holders of shares
who would be entitled to vote on that action. Such action will be effective
on the date on which the last signature is placed on such writing or
writings, unless a different effective date is provided in the written
action. If any action so taken requires a


                                  3 of 10





certificate to be filed in the office of the Secretary of State, the
officer signing such certificate will state therein that the action was
effected in the manner aforesaid.

                                    ARTICLE III.
                                 BOARD OF DIRECTORS

SECTION 1.    GENERAL POWERS.  The business and affairs of the Company will
be managed by or under its Board of Directors which may exercise all such
powers of the Company and do all such lawful acts and things as are not be
statute or by the Articles of Incorporation or by these Bylaws required to be
exercised or done by the shareholders.

SECTION 2.    NUMBER AND TERM OF OFFICE.  The number of directors which will
constitute the whole board will be at least one, or such other number as may
be determined by the Board of Directors or by the shareholders at a regular
or special meeting. Except as otherwise permitted by statute, the directors
will be elected at each regular meeting of the Company's shareholders (or at
any special meeting of the shareholders called for that purpose) by a
majority of the voting power of the shares represented and voting, and each
director will be elected to serve until the next regular meeting of the
shareholders and thereafter until a successor is duly elected and qualified,
unless a prior vacancy will occur by reason of death, resignation, or removal
for office. Directors will be natural persons, but need not be shareholders.

SECTION 3.    RESIGNATION AND REMOVAL.  Any director may resign at any time
by giving written notice to the Company. Such resignation will take effect at
the date of the receipt of such notice, or at any later time specified
therein, and, unless otherwise specified therein, the acceptance of such
resignation will not be necessary to make it effective. Any director may be
removed at any time, with or without cause, by the affirmative vote of the
holders of a majority of the voting shares entitled to elect such director.

SECTION 4.    VACANCIES.  If the office of any director becomes vacant by
reason of death, resignation, removal, disqualification, or otherwise, the
directors then in office, although less than a quorum, by a majority vote,
may choose a successor who will hold office for the unexpired term in respect
of which such vacancy occurred. With respect to the initial election of a
director to fill a newly created directorship resulting from an increase in
the number of directors by action of the Board of directors in the manner
permitted by statute, such vacancy will be filled by the affirmative vote of
a majority of the directors serving at the time of the increase.

SECTION 5.    MEETINGS OF DIRECTORS.  The Board of Directors of the Company
may hold meetings, from time to time, either within or without the State of
Minnesota, at such place as a majority of the members of the Board of
Directors may from time to time appoint. If the Board of Directors fails to
select a place for the meeting, the meeting will be held at the principal
executive office of the Company.

SECTION 6.    CALLING MEETINGS.  Meetings of the Board of Directors may be
called by (i) the Chief Executive Officer on 24 hours' notice or (ii) any
director on 10 days' notice, to each director, either personally, by
telephone or by mail or telegram. Every such notice will state the date, time


                            4 of 10





and place of the meeting. Notice of a meeting called by a person other than
the Chief Executive Officer will state the purpose of the meeting.

SECTION 7.    PARTICIPATION BY ELECTRONIC COMMUNICATIONS.  Directors of the
Company may participate in a meeting of the Board of Directors by means of
conference telephone or by similar means of communication by which all
persons participating in the meeting can simultaneously hear each other. A
director so participating will be deemed present in person at the meeting.

SECTION 8.    WAIVER OF NOTICE.  A director may waive notice of a meeting of
the Board of Directors. A waiver of notice by a director entitled to notice
is effective whether given before, at, or after the meeting, and whether
given in writing, orally, or by attendance. Attendance by a director at a
meeting is a waiver of notice of that meeting, except where the director
objects at the beginning of the meeting to the transaction of business
because the meeting was not lawfully called or convened and does not
participate thereafter in the meeting.

SECTION 9.    ABSENT DIRECTORS.  A director may give advance written consent
or opposition to a proposal to be acted on at a meeting of the Board of
Directors by actual delivery prior to the meeting of such advance written
consent or opposition to the Chief Executive Officer or a director who is
present at the meeting. If the director is not present at the meeting,
advance written consent or opposition to a proposal will not constitute
presence for purposes of determining the existence of a quorum, but consent
or opposition will be counted as a vote in favor of or against the proposal
and will be entered in the minutes or other record of action at the meeting,
if the proposal acted on at the meeting is substantially the same or has
substantially the same effect as the proposal to which the director has
consented or objected.

SECTION 10.   QUORUM.  At all meetings of the Board of Directors a majority
of the directors will constitute a quorum for the transaction of business,
and the act of a majority of the directors present at any meeting at which
there is a quorum will be the act of the Board of Directors, except as may be
otherwise specifically provided by applicable statute or by the Articles of
Incorporation. If a quorum will not be present at any meeting of the Board of
Directors, the directors present thereat may adjourn the meeting from time to
time, without notice other than announcement at the meeting, until a quorum
is present. If a quorum is present at the call of a meeting, the directors
may continue to transact business until adjournment notwithstanding the
withdrawal of enough directors to leave less than a quorum.

SECTION 11.   ORGANIZATION OF MEETINGS.  The Chief Executive Officer will
preside at all meetings of the Board of Directors, and in his or her absence
the Treasurer will act a presiding officer. The Secretary will act as
secretary of all meetings of the Board of Directors, and in his or her
absence any person appointed by the presiding officer will act as secretary.

SECTION 12.   COMMITTEES.  The Board of Directors, by a resolution approved
by the affirmative vote of a majority of the directors then holding office,
may establish one or more committees of one or more persons having the
authority of the Board of Directors in the management of business of the
Company to the extent provided in such resolution. Such committees, however,
will at all times be subject to the direction and control of the Board of
Directors. Committee members need not be directors and will be appointed by
the affirmative vote of a majority of the directors present. A majority of
the members of any committee will constitute a quorum for the


                            5 of 10





transaction of business at a meeting of any such committee. In other matters
of procedure the provisions of these Bylaws will apply to committees and the
members thereof to the same extent they apply to the Board of Directors and
directors, including, without limitation, the provisions with respect to
meetings and notice thereof, absent members, written actions and valid acts.
Each committee will keep regular minutes of its proceedings and report the
same to the Board of Directors.

SECTION 13.   ACTION WITHOUT MEETING.  Unless otherwise restricted by the
Articles of Incorporation or these Bylaws, any action required or permitted
to be taken at any meeting of the Board of Directors may be taken without a
meeting, if a written consent thereto is signed by all members of the Board
of Directors and such written consent is filed with the minutes of
proceedings of the Board of Directors. If the proposed action need not be
approved by the shareholders and the Articles of Incorporation so provide,
action may be taken by written consent signed by the number of directors that
would be required to take the same action at a meeting of the Board of
Directors at which all directors were present. Such action will be effective
on the date on which the last signature is placed on such writing or
writings, or such other effective date as is set forth therein.

SECTION 14.   COMPENSATION OF DIRECTORS.  By resolution of the Board of
Directors, each director may be paid his or her expenses, if any, of
attendance at each meeting of the Board of Directors, and may be paid a
stated amount as a director or a fixed sum for attendance at each meeting of
the Board of Directors, or both. No such payment will preclude a director
from serving the Company in any other capacity and receiving compensation
therefor.

                                    ARTICLE IV.
                                      OFFICERS

SECTION 1.    NUMBER AND QUALIFICATION.  The officers of the Company will be
chosen by the Board of Directors and include a Chief Executive Officer, a
Chief Financial Officer and a Secretary. The Board of Directors may elect or
appoint such other officers or agents as it deems necessary for the operation
and management of the Company, with such powers, rights, duties and
responsibilities as may be determined by the Board of Directors, including,
without limitation, one or more Vice Presidents, one or more Assistant
Secretaries and Assistant Chief Financial Officers, each of whom will have
the powers, rights duties and responsibilities set for the in these Bylaws
unless otherwise determined by the Board. Any of the offices or functions of
those offices may be held or exercised by the same person.

SECTION 2.    ELECTION AND TERM OF OFFICE.  The initial officers of the
Company will be elected by the Board of Directors at its first duly held
meeting and all officers will hold office until their successors have been
duly elected, unless prior thereto such officer will have resigned or been
removed from office as hereinafter provided.

SECTION 3.    RESIGNATION, REMOVAL AND VACANCIES.   An officer may resign at
any time by giving written notice to the Company. The resignation is
effective without acceptance when the notice is given to the Company, unless
a later effective date is specified in the notice. Any officer or agent
elected or appointed by the Board of Directors will hold office at the
pleasure of the


                                 6 of 10





Board of Directors and may be removed, with or without cause, at any time by
the affirmative vote of a majority of the Board of Directors present at a
duly held Board meeting. A vacancy in an office may, or in the case of a
vacancy in the office of the Chief Executive Officer or Chief Financial
Officer will, be filled for the unexpired portion of the term by action of
the Board of Directors.

SECTION 4.    SALARIES.  The salaries of all officers of the Company will be
fixed by the Board of Directors or by the Chief Executive Officer if
authorized by the Board of Directors.

SECTION 5.    CHIEF EXECUTIVE OFFICER.  The Chief Executive Officer will be
the chief executive officer of the Company. Unless provided otherwise by a
resolution adopted by the Board of Directors, the Chief Executive Officer
will have general active management of the business of the Company, will
preside at meetings of the shareholders and Board of Directors, will see that
all orders and resolutions of the Board of Directors are carried into effect,
will sign and deliver in the name of the Company any deeds, mortgages, bonds,
contracts, or other instruments pertaining to the business of the Company,
except in cases in which the authority to sign and deliver is required by law
to be exercised by another person or is expressly delegated by the Articles
of Incorporation, these Bylaws, or the Board of Directors to some other
officer or agent of the Company, will maintain records of and, whenever
necessary, certify proceedings of the Board of Directors and shareholders,
and will perform such other duties as may from time to time be prescribed by
the Board of Directors.

SECTION 6.    CHIEF FINANCIAL OFFICER.  The Chief Financial Officer will be
the chief financial officer of the Company. The Chief Financial Officer will
keep accurate financial records for the Company, will deposit all moneys,
drafts, and checks in the name of and to the credit of the Company in such
banks and depositories as the Board of Directors will designate from time to
time, will endorse for deposit all notes, checks, and drafts received by the
Company as ordered by the Board of Directors, making proper vouchers
therefor, will disburse corporate funds and issue checks and drafts in the
name of the Company as ordered by the Board of Directors, will render to the
Chief Executive Officer and the Board of Directors, whenever requested, an
account of all such officer's transactions as Chief Financial Officer and of
the financial condition of the Company, and will perform such other duties as
may be prescribed by the Board of Directors from time to time. If required by
the Board of Directors, the Chief Financial Officer will give the Company a
bond in such sum and with such surety or sureties as will be satisfactory to
the Board of Directors for the faithful performance of the duties of his or
her office and for the restoration to the Company, in case of his or her
death, resignation, retirement or removal from office, of all books, papers,
vouchers, money and other property of whatever kind in his or her possession
or under his or her control belonging to the Company.

SECTION 7.    SECRETARY.  The Secretary will attend all meetings of the Board
of Directors and all meetings of the shareholders and record all the
proceedings of the meetings of the Company and of the Board of Directors in a
book to be kept for that purpose. He or she will give, or cause to be given,
notice of all meetings of the shareholders and special meetings of the Board
of Directors, and will perform such other duties as may be prescribed by the
Board of Directors or the Chief Executive Officer, under whose supervision he
or she will be.


                            7 of 10





SECTION 8.    VICE PRESIDENTS.  The Vice President, if any, or if there will
be more than one, the Vice Presidents in the order determined by the Board of
Directors, will, in the absence or disability of the Chief Executive Officer,
perform the duties and exercise the powers of the Chief Executive Officer and
will perform such other duties and have such other powers as the Board of
Directors or the Chief Executive Officer may from time to time prescribe.

SECTION 9.    ASSISTANT SECRETARIES.  The Assistant Secretary or, if there be
more than one, the Assistant Secretaries, in the order determined by the
Board of Directors, will, in the absence or disability of the Secretary,
perform the duties and exercise the powers of the Secretary and will perform
such other duties and have such other powers as the Board of Directors or the
Chief Executive Officer may from time to time prescribe.

SECTION 10.   AUTHORITY AND DUTIES.  In addition to the foregoing authority
and duties, all officers of the Company will respectively have such authority
and perform such duties in the management of the business of the Company as
may be designated from time to time by the Board of Directors.

                                     ARTICLE V.
                               CERTIFICATES OF STOCK

SECTION 1.    CERTIFICATES OF STOCK.  Every holder of stock in the Company
will be entitled to have a certificate signed by, or in the name of the
Company by the Chief Executive Officer or the Secretary or an Assistant
Secretary of the Company, if there be one, certifying the number of shares
owned by him or her in the Company. The certificates of stock of each class
will be numbered in the order of their issue.

SECTION 2.    FACSIMILE SIGNATURES.  Where a certificate is signed (1) by a
transfer agent or an assistant transfer agent, or (2) by a transfer clerk
acting on behalf of the Company and a registrar, the signature of any such
Chief Executive Officer, Secretary or Assistant Secretary may be facsimile.
In case any officer or officers who have signed, or whose facsimile signature
or signatures have been used on any such certificate or certificates will
cease to be such officer or officers of the Company before such certificate
or certificates have been delivered by the Company, such certificate or
certificates may nevertheless be adopted by the Company and be issued and
delivered as though the person or persons who signed such certificate or
certificates or whose facsimile signature or signatures have been used
thereon had not ceased to be such officer or officers of the Company.

SECTION 3.    LOST OR DESTROYED CERTIFICATES.  The Board of Directors may
direct a new certificate or certificates to be issued in place of any
certificate or certificates issued by the Company alleged to have been lost
or destroyed, upon the making of an affidavit of that fact by the person
claiming the certificate of stock to be lost or destroyed. When authorizing
such issue of a new certificate or certificates, the Board of Directors may,
in its discretion and as a condition precedent to the issuance thereof,
require the owner of such lost or destroyed certificate or certificates, or
his or her legal representative, to advertise the same in such manner as it
will require and/or to give the Company a bond in such sum as it may direct
as indemnity against any


                              8 of 10





claim that may be made against the Company with respect to the certificate
alleged to have been lost or destroyed.

SECTION 4.    TRANSFERS OF STOCK.  Upon surrender to the Company or the
transfer agent of the Company of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignment or authority to
transfer, it will be the duty of the Company to issue a new certificate to
the person entitled thereto, cancel the old certificate and record the
transaction upon its books.

SECTION 5.    REGISTERED SHAREHOLDERS.  The Company will be entitled to
recognize the exclusive right of a person registered on its books as the
owner of shares to receive dividends, and to vote as such owner, and will be
entitled to hold liable for calls and assessments a person so registered on
its books as the owner of shares, and will not be bound to recognize any
equitable or other claim to or interest in such share or shares on the part
of any other person, whether or not it will have express or other notice
thereof, except as otherwise provided by applicable statute.

                                    ARTICLE VI.
                                  INDEMNIFICATION

SECTION 1.    INDEMNIFICATION.  The Company shall indemnify its officers and
directors to the fullest extent permissible under the provisions of Chapter
302A of the Minnesota Statutes, as amended from time to time, or as required
or permitted by other provisions of law. Any repeal or modification of this
Article [VI] will be prospective only and will not adversely affect any right
to indemnification of a director or officer of the Company existing at the
time of such repeal or modification.

SECTION 2.    INSURANCE.  The Company may purchase and maintain insurance on
behalf of any person in such person's official capacity against any liability
asserted against and incurred by such person in or arising from that
capacity, whether or not the Company would otherwise be required to indemnify
the person against the liability.

                                    ARTICLE VII.
                                 GENERAL PROVISIONS

SECTION 1.    FISCAL YEAR.  The fiscal year of the Company will be fixed by
resolution of the Board of Directors.

SECTION 2.    DIVIDENDS.  Subject to the provisions of the applicable statute
and the Articles of Incorporation, dividends  upon the capital stock of the
Company may be declared by the Board of Directors at any regular or special
meeting, and may be paid in cash, in property, or in shares of the capital
stock.

SECTION 3.    RESERVES.  Before payment of any dividend, there may be set
aside out of any funds of the Company available for dividends such sum or
sums as the directors from time to time, in their absolute discretion, think
proper as a reserve or reserves to meet contingencies, or for


                          9 of 10





equalizing dividends, or for repairing or maintaining any property of the
Company, or for such other purposes as the directors will think conducive to
the interest of the Company, and the directors may modify or abolish any such
reserve in the manner in which it was created.

SECTION 4.    SEAL.  The Company will not have a corporate seal.

SECTION 5.    CHECKS.  All checks or demands for money and notes of the
Company will be signed by such officer or officers or such other person or
persons as the Board of Directors may from time to time designate.

SECTION 6.    AMENDMENTS.  The Board of Directors will have the power to
adopt, amend or repeal the Bylaws of the Company, subject to the power of the
shareholders to change or repeal the same, provided, however, that the Board
will not adopt, amend or repeal any Bylaw fixing a quorum for meetings of
shareholders, prescribing procedures for removing directors or filling
vacancies in the Board, or fixing the number of directors or their
classifications, qualifications or terms of office, but may adopt or amend a
Bylaw that increases the number of directors.


                                                                 March 11, 1999








                               10 of 10

EX-4.1

                                                              EXECUTION VERSION

==============================================================================





                               MERRILL CORPORATION


                     12 % SENIOR SUBORDINATED NOTES DUE 2009


                  Guaranteed to the extent set forth herein by
                           the Guarantors named herein


                           ---------------------------


                                    INDENTURE


                          Dated as of November 23, 1999


                           ---------------------------


                          NORWEST BANK MINNESOTA, N.A.


                                   as TRUSTEE
                           ---------------------------




===============================================================================



         INDENTURE dated as of November 23, 1999, between Merrill Corporation, a
Minnesota corporation (referred to herein as the "COMPANY"), the guarantors
(each, a "GUARANTOR" and together, the "GUARANTORS"), and Norwest Bank
Minnesota, N.A., as trustee (the "TRUSTEE").

         The Company, Guarantors and the Trustee agree as follows for the
benefit of each other and for the equal and ratable benefit of the Holders of
the 12% Senior Subordinated Notes due 2009 (the "NOTES").

                                    ARTICLE 1
                   DEFINITIONS AND INCORPORATION BY REFERENCE

SECTION 1.01   DEFINITIONS.

         "144A GLOBAL NOTE" means a global Note in substantially the form of
Exhibit A-1 hereto bearing the Global Note Legend and having the "Schedule of
Exchanges of Interests in the Global Note" attached thereto and deposited with
or on behalf of and registered in the name of the Depositary or its nominee,
issued in accordance with Section 2.01(b).

         "ACCOUNTS RECEIVABLE SUBSIDIARY" means an Unrestricted Subsidiary of
the Company to which the Company or any of its Restricted Subsidiaries sells any
of its accounts receivable pursuant to a Receivables Facility.

         "ACQUIRED INDEBTEDNESS" means, with respect to any specified Person,
(a) Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, including,
without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person, and (b) Indebtedness secured by a Lien
encumbering an asset acquired by such specified Person at the time such asset is
acquired by such specified Person.

         "ADDITIONAL NOTES" means Notes (other than the Initial Notes) issued
under this Indenture in accordance with and subject to compliance with Sections
2.02 and 4.09 hereof that (i) are issued as part of the same class as the
Initial Notes and (ii) have the same terms in all respects as the Initial Notes
or the same terms in all respects except for the payment of interest in the
Initial Notes (a) scheduled and paid prior to the date of original issuance of
such additional Notes or (b) payable on the first Interest Payment Date
following such date of original issuance.

         "AFFILIATE" of any specified Person means any other Person which,
directly or indirectly, controls, is controlled by or is under direct or
indirect common control with, such specified Person. For purposes of this
definition, "control," when used with respect to any Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise,
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.

         "AGENT" means any Registrar, Paying Agent or co-registrar.


                                       1


         "APPLICABLE PROCEDURES" means, with respect to any transfer or exchange
of or for beneficial interests in any Global Note, the rules and procedures of
the Depositary, Euroclear and Cedelbank that apply to such transfer or exchange.

         "ASSET SALE" means (a) the sale, lease, conveyance, disposition or
other transfer (a "disposition") of any properties, assets or rights (including,
without limitation, by way of a sale and leaseback) (provided that the sale,
lease, conveyance or other disposition of all or substantially all of the assets
of the Company and its Subsidiaries taken as a whole will be governed by the
Sections 4.14 and/or 5.01 and not by the provisions of Section 4.10), and (b)
the issuance, sale or transfer by the Company or any of its Restricted
Subsidiaries of Equity Interests of any of the Company's Restricted
Subsidiaries, in the case of either clause (a) or (b) above, whether in a single
transaction or a series of related transactions (i) that have a fair market
value in excess of $5.0 million or (ii) for net proceeds in excess of $5.0
million. Notwithstanding the foregoing, the following items shall not be deemed
to be Asset Sales: (a) dispositions in the ordinary course of business; (b) a
disposition of assets by the Company to a Restricted Subsidiary or by a
Restricted Subsidiary to the Company or to another Restricted Subsidiary; (c) a
disposition of Equity Interests by a Restricted Subsidiary to the Company or to
another Restricted Subsidiary; (d) the sale and leaseback of any assets within
90 days of the acquisition thereof; (e) foreclosures on assets; (f) any exchange
of like property pursuant to Section 1031 of the Internal Revenue Code of 1986,
as amended, for use in a Permitted Business; (g) any sale of Equity Interests
in, or Indebtedness or other securities of, an Unrestricted Subsidiary; (h) a
Permitted Investment or a Restricted Payment that is permitted by Section 4.07
hereof; (i) sales of accounts receivable, or participations therein, in
connection with any Receivables Facility; and (j) the licensing or sale of
intellectual property.

         "ATTRIBUTABLE INDEBTEDNESS" in respect of a sale and leaseback
transaction means, at the time of determination, the present value (discounted
at the rate of interest implicit in such transaction, determined in accordance
with GAAP) of the obligation of the lessee for net rental payments during the
remaining term of the lease included in such sale and leaseback transaction
(including, without limitation, any period for which such lease has been
extended or may, at the option of the lessor, be extended).

          "BANKRUPTCY LAW" means Title 11, U.S. Code or any similar federal or
state law for the relief of debtors.

         "BOARD OF DIRECTORS" means the Board of Directors of the Company, or
any authorized committee of the Board of Directors.

         "BUSINESS DAY" means any day other than a Legal Holiday.

         "CAPITAL EXPENDITURE INDEBTEDNESS" means Indebtedness or Disqualified
Stock incurred by any Person to finance the purchase or construction of any
property or assets acquired or constructed by such Person which have a useful
life of more than one year so long as (a) the purchase or construction price for
such property or assets is included in "addition to property, plant or
equipment" in accordance with GAAP, (b) the acquisition or construction of such
property or assets is not part of any acquisition of a Person or line of
business and (c) such Indebtedness or Disqualified Stock is incurred within 90
days of the acquisition or completion of construction of such property or
assets.


                                       2


         "CAPITAL LEASE OBLIGATION" means at the time any determination thereof
is to be made, the amount of the liability in respect of a capital lease that
would at such time be required to be capitalized on a balance sheet in
accordance with GAAP.

         "CAPITAL STOCK" means (a) in the case of a corporation, corporate
stock, (b) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock, (c) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited) and (d) any
other interest or participation that confers on a Person the right to receive a
share of the profits and losses of, or distributions of assets of, the issuing
Person.

         "CASH EQUIVALENTS" means (i) Government Securities, (ii) any
certificate of deposit maturing not more than 365 days after the date of
acquisition issued by, or demand deposit or time deposit of, an Eligible
Institution or any lender under the New Credit Facility, (iii) commercial paper
maturing not more than 365 days after the date of acquisition of an issuer
(other than an Affiliate of the Company) with a rating, at the time as of which
any investment therein is made, of "A-3" (or higher) according to S&P or "P-2"
(or higher) according to Moody's or carrying an equivalent rating by a
nationally recognized rating agency if both of the two named rating agencies
cease publishing ratings of investments, (iv) any bankers acceptances or money
market deposit accounts issued by an Eligible Institution, (v) any fund
investing exclusively in investments of the types described in clauses (i)
through (iv) above and (vi) in the case of any Subsidiary organized or having
its principal place of business outside the United States, investments
denominated in the currency of the jurisdiction in which such Subsidiary is
organized or has its principal place of business which are similar to the items
specified in clauses (i) through (v) above (including, without limitation, any
deposit with a bank that is a lender to any Restricted Subsidiary).

         "CEDELBANK" means Cedelbank, societe anonyme.

         "CHANGE OF CONTROL" means the occurrence of any of the following: (a)
the sale, lease, transfer, conveyance or other disposition (other than by way of
merger or consolidation), in one or a series of related transactions, of all or
substantially all of the assets of the Company and its Subsidiaries, taken as a
whole, to any "person" or "group" (as such terms are used in Section 13(d) of
the Exchange Act), other than the Principals and their Related Parties; (b) the
adoption of a plan for the liquidation or dissolution of the Company; (c) the
consummation of any transaction (including, without limitation, any merger or
consolidation) the result of which is that any "person" or "group" (as such
terms are used in Section 13(d) of the Exchange Act), other than the Principals
and their Related Parties, becomes the "beneficial owner" (as such term is
defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act), directly or
indirectly through one or more intermediaries, of 50% or more of the voting
power of the outstanding voting equity interests of the Company; or (d) the
first day on which a majority of the members of the Board of Directors are not
Continuing Members.

         "COMMISSION" means the Securities and Exchange Commission.

         "COMPANY" means Merrill Corporation, a Minnesota corporation, until a
successor corporation shall have become such pursuant to Section 5.02 and
thereafter "Company" shall mean such successor corporation.


                                       3


         "CONSOLIDATED CASH FLOW" means, with respect to any Person for any
period, the Consolidated Net Income of such Person and its Restricted
Subsidiaries for such period plus, to the extent deducted in computing
Consolidated Net Income, (a) provision for taxes based on income or profits of
such Person and its Restricted Subsidiaries for such period, (b) Fixed Charges
of such Person for such period, (c) depreciation, amortization (including,
without limitation, amortization of goodwill and other intangibles) and all
other non-cash charges (excluding any such non-cash charge, to the extent that
it represents an accrual of or reserve for cash expenses in any future period or
amortization of a prepaid cash expense that was paid in a prior period) of such
Person and its Restricted Subsidiaries for such period, (d) net periodic
post-retirement benefits, (e) other income or expense net as set forth on the
face of such Person's statement of operations, (f) expenses and charges related
to the Merger and the Merger Financing (including, without limitation, the
Financial Advisory Fee and any payments made pursuant to the Merger Agreement),
the New Credit Facility (including, without limitation, commitment, syndication
and arrangement fees payable thereunder) and the Offering (including, without
limitation, underwriting discounts and commissions in connection therewith) and
the application of the proceeds thereof and (g) any non-capitalized transaction
costs incurred in connection with actual, proposed or abandoned financings,
acquisitions or divestitures (including, but not limited to, financing and
refinancing fees and costs incurred in connection with the Merger and Merger
Financing), in each case, on a consolidated basis and determined in accordance
with GAAP. Notwithstanding the foregoing, the provision for taxes based on the
income or profits of, the Fixed Charges of, and the depreciation and
amortization and other non-cash charges of, a Restricted Subsidiary of a Person
shall be added to Consolidated Net Income to compute Consolidated Cash Flow only
to the extent (and in the same proportion) that Net Income of such Restricted
Subsidiary was included in calculating the Consolidated Net Income of such
Person.

         "CONSOLIDATED INTEREST EXPENSE" means, with respect to any Person for
any period, the sum of, without duplication, (a) the interest expense of such
Person and its Restricted Subsidiaries for such period, on a consolidated basis,
determined in accordance with GAAP (including, without limitation, amortization
of original issue discount, non-cash interest payments, the interest component
of all payments associated with Capital Lease Obligations, imputed interest with
respect to Attributable Indebtedness, commissions, discounts and other fees and
charges incurred in respect of letter of credit or bankers' acceptance
financings, and net payments, if any, pursuant to Hedging Obligations; PROVIDED
that in no event shall (i) any amortization of deferred financing costs (ii)
interest expense attributable to any defeased (covenant or legal) Indebtedness
and (iii) any non-cash interest expense on preferred stock or warrants (other
than non-cash interest expense on Disqualified Stock) be included in
Consolidated Interest Expense); and (b) the consolidated capitalized interest of
such Person and its Restricted Subsidiaries for such period, whether paid or
accrued; PROVIDED, HOWEVER, that Receivables Fees shall be deemed not to
constitute Consolidated Interest Expense. Notwithstanding the foregoing, the
Consolidated Interest Expense with respect to any Restricted Subsidiary that is
not a Wholly Owned Restricted Subsidiary shall be included only to the extent
(and in the same proportion) that the net income of such Restricted Subsidiary
was included in calculating Consolidated Net Income.

         "CONSOLIDATED NET INCOME" means, with respect to any Person for any
period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; PROVIDED that (a) the Net Income (or loss) of any Person that is not
a Restricted Subsidiary or that is accounted for by the equity method of
accounting shall be included only to the extent of the amount of dividends or


                                       4


distributions paid in cash to the referent Person or a Restricted Subsidiary
thereof, (b) the Net Income (or loss) of any Restricted Subsidiary other than a
Subsidiary organized or having its principal place of business outside the
United States shall be excluded to the extent that the declaration or payment of
dividends or similar distributions by that Restricted Subsidiary of that Net
Income (or loss) is not at the date of determination permitted without any prior
governmental approval (that has not been obtained) or, directly or indirectly,
by operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to that
Restricted Subsidiary, except for any such restriction existing under or by
reason of the New Credit Facility, (c) the Net Income (or loss) of any Person
acquired in a pooling of interests transaction for any period prior to the date
of such acquisition shall be excluded and (d) the cumulative effect of a change
in accounting principles shall be excluded.

         "CONTINUING MEMBERS" means, as of any date of determination, any member
of the Board of Directors who (a) was a member of such Board of Directors
immediately after consummation of the Merger and the Merger Financing or (b) was
nominated for election or elected to such Board of Directors with the approval
of, or whose election to the Board of Directors was ratified by, at least a
majority of the Continuing Members who were members of such Board of Directors
at the time of such nomination or election or was proposed by DLJ Merchant
Banking funds.

         "CORPORATE TRUST OFFICE OF THE TRUSTEE" shall be at the address of the
Trustee specified in Section 12.02 hereof or such other address as to which the
Trustee may give notice to the Company.

         "CUSTODIAN" means any receiver, trustee, assignee, liquidator or
similar official under any Bankruptcy Law.

         "DEFAULT" means any event that is or with the passage of time or the
giving of notice or both would be an Event of Default.

         "DEFINITIVE NOTE" means a certificated Note registered in the name of
the Holder thereof and issued in accordance with Section 2.06 hereof, in the
form of Exhibit A-1 hereto except that such Note shall not bear the Global Note
Legend and shall not have the "Schedule of Exchanges of Interests in the Global
Note" attached thereto.

         "DEPOSITARY" means DTC or any successor thereto.

         "DESIGNATED NONCASH CONSIDERATION" means the fair market value of
non-cash consideration received by the Company or one of its Restricted
Subsidiaries in connection with an Asset Sale that is so designated as
Designated Noncash Consideration pursuant to an Officers' Certificate, setting
forth the basis of such valuation, executed by the principal executive officer
and the principal financial officer of the Company, less the amount of cash or
Cash Equivalents received in connection with a sale of such Designated Noncash
Consideration.

         "DISQUALIFIED STOCK" means any Capital Stock that, by its terms (or by
the terms of any security into which it is convertible, or for which it is
exchangeable), or upon the happening of any event (other than any event solely
within the control of the issuer thereof), matures or is mandatorily redeemable,
pursuant to a sinking fund obligation or otherwise, is exchangeable for


                                       5


Indebtedness (except to the extent exchangeable at the option of such Person
subject to the terms of any debt instrument to which such Person is a party) or
redeemable at the option of the holder thereof, in whole or in part, on or prior
to the date on which the Notes mature; PROVIDED that any Capital Stock that
would constitute Disqualified Stock solely because the holders thereof have the
right to require the issuer to repurchase such Capital Stock upon the occurrence
of a Change of Control or an Asset Sale shall not constitute Disqualified Stock
if the terms of such Capital Stock provide that the issuer may not repurchase or
redeem any such Capital Stock pursuant to such provisions unless such repurchase
or redemption complies with Section 4.07 hereof; and PROVIDED FURTHER that, if
such Capital Stock is issued to any plan for the benefit of employees of the
Company or its Subsidiaries or by any such plan to such employees, such Capital
Stock shall not constitute Disqualified Stock solely because it may be required
to be repurchased by the Company in order to satisfy applicable statutory or
regulatory obligations.

          "DLJ MERCHANT BANKING FUNDS" means DLJ Merchant Banking Partners II,
L.P. and its Affiliates.

         "DTC" means The Depository Trust Company.

         "DOMESTIC SUBSIDIARY" means a Subsidiary that is organized under the
laws of the United States or any State, district or territory thereof.

         "ELIGIBLE INSTITUTION" means a commercial banking institution that has
combined capital and surplus not less than $100.0 million or its equivalent in
foreign currency, whose short-term debt is rated "A-3" or higher according to
Standard & Poor's Ratings Group ("S&P") or "P-2" or higher according to Moody's
Investor Services, Inc. ("MOODY'S") or carrying an equivalent rating by a
nationally recognized rating agency if both of the two named rating agencies
cease publishing ratings of investments.

         "EQUITY INTERESTS" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).

         "EUROCLEAR" means Morgan Guaranty Trust Company of New York, Brussels
office, as operator of the Euroclear system.

         "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.

         "EXCHANGE NOTES" means the Notes issued in the Exchange Offer pursuant
to Section 2.06(f) hereof.

         "EXCHANGE OFFER" has the meaning set forth in the Registration Rights
Agreement.

          "EXCHANGE OFFER REGISTRATION STATEMENT" has the meaning set forth in
the Registration Rights Agreement.

         "EXISTING INDEBTEDNESS" means Indebtedness or Disqualified Stock of the
Company and its Restricted Subsidiaries (other than Indebtedness under the New
Credit Facility) in existence on the Original Issuance Date, until such amounts
are repaid.


                                       6


         "FAIR MARKET VALUE" means, with respect to any asset or property, the
price which could be negotiated in an arm's-length, free market transaction, for
cash, between a willing seller and a willing and able buyer, neither of whom is
under undue pressure or compulsion to complete the transaction. Unless the TIA
otherwise requires, fair market value shall be determined by the Board of
Directors acting reasonably and in good faith and shall be evidenced by a
resolution of the Board of Directors delivered to the Trustee.

         "FINANCIAL ADVISORY FEE" means the annual advisory fee of $300,000 to
be paid to Donaldson, Lufkin & Jenrette Securities Corporation, as described in
the Company's Offering Memorandum, dated November 18, 1999, relating to the
Offering.

         "FIXED CHARGES" means, with respect to any Person for any period, the
sum, without duplication, of (a) the Consolidated Interest Expense of such
Person for such period and (b) all dividend payments on any series of preferred
stock of such Person (other than dividends payable solely in Equity Interests
that are not Disqualified Stock) and any non-cash dividends on preferred stock
that is not Disqualified Stock, in each case, on a consolidated basis and in
accordance with GAAP.

         "FIXED CHARGE COVERAGE RATIO" means, with respect to any Person for any
period, the ratio of the Consolidated Cash Flow of such Person for such period
(exclusive of amounts attributable to discontinued operations, as determined in
accordance with GAAP, or operations and businesses disposed of prior to the
Calculation Date (as defined)) to the Fixed Charges of such Person for such
period (exclusive of amounts attributable to discontinued operations, as
determined in accordance with GAAP, or operations and businesses disposed of
prior to the Calculation Date). In the event that the referent Person or any of
its Subsidiaries incurs, assumes, guarantees or redeems any Indebtedness (other
than revolving credit borrowings) or issues or redeems preferred stock
subsequent to the commencement of the period for which the Fixed Charge Coverage
Ratio is being calculated but prior to the date on which the event for which the
calculation of the Fixed Charge Coverage Ratio is made (the "Calculation Date"),
then the Fixed Charge Coverage Ratio shall be calculated giving PRO FORMA effect
to such incurrence, assumption, guarantee or redemption of Indebtedness, or such
issuance or redemption of preferred stock and the use of the proceeds therefrom,
as if the same had occurred at the beginning of the applicable four-quarter
reference period. In addition, for purposes of making the computation referred
to above, the Merger, and acquisitions that have been made by the Company or any
of its Subsidiaries, including, without limitation, all mergers or
consolidations and any related financing transactions, during the four-quarter
reference period or subsequent to such reference period and on or prior to the
Calculation Date shall be deemed to have occurred on the first day of the
four-quarter reference period and Consolidated Cash Flow for such reference
period shall be calculated to include the Consolidated Cash Flow of the acquired
entities on a PRO forma basis after giving effect to cost savings reasonably
expected to be realized in connection with such acquisition, as determined in
good faith by an officer of the Company (regardless of whether such cost savings
could then be reflected in PRO FORMA financial statements under GAAP, Regulation
S-X promulgated by the Commission or any other regulation or policy of the
Commission) and without giving effect to clause (c) of the proviso set forth in
the definition of Consolidated Net Income.

         "FOREIGN CREDIT FACILITIES" means any Indebtedness of a Restricted
Subsidiary organized or having its principal place of business outside the
United States.


                                       7


         "GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect on the Original Issuance Date.

         "GLOBAL NOTES" means, individually and collectively, each of the 144A
Global Notes, the Regulation S Temporary Global Notes and the Unrestricted
Global Notes.

         "GLOBAL NOTE LEGEND" means the legend set forth in Section 2.06(h)(ii),
which is required to be placed on all Global Notes issued under this Indenture.

         "GOVERNMENT SECURITIES" means direct obligations of, or obligations
guaranteed by, the United States of America, and the payment for which the
United States pledges its full faith and credit.

         "GUARANTEE" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit or
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness.

         "GUARANTORS" means (i) each Wholly Owned Restricted Subsidiary of the
Company on the date of this Indenture that is a Domestic Subsidiary as set forth
on Schedule A hereto and (ii) any other Subsidiary that executes a guarantee of
the Notes in accordance with provisions of this Indenture.

         "HEDGING OBLIGATIONS" means, with respect to any Person, the
obligations of such Person under (a) interest rate swap agreements, interest
rate cap agreements and interest rate collar agreements, (b) forward foreign
exchange contracts or currency swap agreements, (c) other agreements or
arrangements designed to protect such Person against fluctuations in interest
rates or currency values and (d) agreements designed to protect such Person
against fluctuations in raw material prices, including paper.

         "HOLDER" means a Person in whose name a Note is registered.

         "INDEBTEDNESS" means, with respect to any Person, any indebtedness of
such Person in respect of borrowed money or evidenced by bonds, notes,
debentures or similar instruments or letters of credit (or reimbursement
agreements in respect thereof) or banker's acceptances or representing Capital
Lease Obligations or the balance deferred and unpaid of the purchase price of
any property or representing any Hedging Obligations, except any such balance
that constitutes an accrued expense or trade payable or customer advances, if
and to the extent any of the foregoing Indebtedness (other than letters of
credit and Hedging Obligations) would appear as a liability upon a balance sheet
of such Person prepared in accordance with GAAP, as well as all Indebtedness of
others secured by a Lien on any asset of such Person (whether or not such
Indebtedness is assumed by such Person) and, to the extent not otherwise
included, the guarantee by such Person of any Indebtedness of any other Person;
PROVIDED that Indebtedness shall not include the pledge by the Company of the
Capital Stock of an Unrestricted Subsidiary of the Company to secure
Non-Recourse Debt of such Unrestricted Subsidiary. The amount of any


                                       8


Indebtedness outstanding as of any date shall be (a) the accreted value thereof,
in the case of any Indebtedness that does not require current payments of
interest, and (b) the principal amount thereof (together with any interest
thereon that is more than 30 days past due), in the case of any other
Indebtedness; PROVIDED that the principal amount of any Indebtedness that is
denominated in any currency other than United States dollars shall be the amount
thereof, as determined pursuant to the foregoing provision, converted into
United States dollars at the Spot Rate in effect on the date that such
Indebtedness was incurred (or, if such Indebtedness was incurred prior to the
Original Issuance Date, the Spot Rate in effect on the Original Issuance Date).

          "INDENTURE" means this Indenture, as amended or supplemented from time
to time.

         "INDIRECT PARTICIPANT" means a Person who holds a beneficial interest
in a Global Note through a Participant.

         "INITIAL NOTES" means the first $140,000,000 aggregate principal amount
of Notes issued under this Indenture on the Original Issuance Date.

         "INSTITUTIONAL ACCREDITED INVESTOR" means an institution that is an
"accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act and which is not also a QIB.

         "INVESTMENTS" means, with respect to any Person, all investments by
such Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including, without limitation, guarantees by the referent Person
of, and Liens on any assets of the referent Person securing, Indebtedness or
other obligations of other Persons), advances or capital contributions
(excluding (a) commission, travel and similar advances to officers and employees
made in the ordinary course of business and (b) extensions of trade credit on
commercially reasonable terms in accordance with normal trade practices),
purchases or other acquisitions for consideration of Indebtedness, Equity
Interests or other securities, together with all items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP;
PROVIDED that an investment by the Company for consideration consisting of
common equity securities of the Company shall not be deemed to be an Investment
(other than for purposes of clause (iii) of the definition of "Qualified
Proceeds"). If the Company or any Restricted Subsidiary of the Company sells or
otherwise disposes of any Equity Interests of any direct or indirect Restricted
Subsidiary of the Company such that, after giving effect to any such sale or
disposition, such Person is no longer a Subsidiary of the Company, the Company
shall be deemed to have made an Investment on the date of any such sale or
disposition equal to the fair market value of the Equity Interests of such
Restricted Subsidiary not sold or disposed of in an amount determined as
provided in the final paragraph of Section 4.07 hereof.

         "LEGAL HOLIDAY" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York or the city in which the principal
corporate trust office of the Trustee is located, or at a place of payment, are
authorized by law, regulation or executive order to remain closed. If a payment
date is a Legal Holiday at a place of payment, payment may be made at that place
on the next succeeding day that is not a Legal Holiday, and no interest shall
accrue on such payment for the intervening period.


                                       9


         "LETTER OF TRANSMITTAL" means the letter of transmittal to be prepared
by the Company and sent to all Holders of the Notes for use by such Holders in
connection with the Exchange Offer.

         "LIEN" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including, without limitation, any conditional sale or other title retention
agreement, any lease in the nature thereof, any option or other agreement to
sell or give a security interest in and any filing of or agreement to give any
financing statement under the Uniform Commercial Code (or equivalent statutes)
of any jurisdiction).

         "LIQUIDATED DAMAGES" means all liquidated damages then owing pursuant
to Section 5 of the Registration Rights Agreement.

         "MANAGEMENT LOANS" means one or more loans by the Company to employees,
independent contractors and/or directors of the Company and any of its
Restricted Subsidiaries to finance the purchase by such employees, independent
contractors and directors of common stock of the Company.

         "MERGER" means the merger of Viking, a Minnesota corporation, with and
into the Company pursuant to the terms of the Merger Agreement.

         "MERGER AGREEMENT" means that certain Agreement and Plan of Merger
dated as of July 14, 1999 between the Company and Viking, a company controlled
by DLJ Merchant Banking Partners II, L.P. and its affiliates, as amended.

         "MERGER FINANCING" means (i) the issuance and sale by Viking of its
common stock, warrants to purchase common stock and preferred stock for
consideration; (ii) the issuance and sale by the Company of the Units; and (iii)
the execution and delivery by the Company and certain of its subsidiaries of the
New Credit Facility and the borrowing of loans, if any, and issuance of letters
of credit thereunder; in each case to fund the Merger and related transactions,
including without limitation, the payment of fees and expenses and the
refinancing of outstanding indebtedness of the Company and its subsidiaries.

         "NET INCOME" means, with respect to any Person, the net income (loss)
of such Person, determined in accordance with GAAP and before any reduction in
respect of preferred stock dividends, excluding, however, (a) any gain (or
loss), together with any related provision for taxes on such gain (or loss),
realized in connection with (i) any Asset Sale (including, without limitation,
dispositions pursuant to sale and leaseback transactions) or (ii) the
extinguishment of any Indebtedness of such Person or any of its Restricted
Subsidiaries; and (b) any extraordinary or nonrecurring gain (or loss), together
with any related provision for taxes on such extraordinary or nonrecurring gain
(or loss).

         "NET PROCEEDS" means the aggregate cash proceeds received by the
Company or any of its Restricted Subsidiaries in respect of any Asset Sale
(including, without limitation, any cash received upon the sale or other
disposition of any non-cash consideration received in any Asset Sale), net of,
without duplication, (a) the direct costs relating to such Asset Sale
(including, without limitation, legal, accounting and investment banking fees,
and sales commissions,


                                       10


recording fees, title transfer fees and appraiser fees and cost of preparation
of assets for sale and any relocation expenses incurred as a result thereof, (b)
taxes paid or payable as a result thereof (after taking into account any
available tax credits or deductions and any tax sharing arrangements), (c)
amounts required to be applied to the repayment of Indebtedness (other than
revolving credit Indebtedness incurred pursuant to the New Credit Facility)
secured by a Lien on the asset or assets that were the subject of such Asset
Sale and (d) any reserve established in accordance with GAAP or any amount
placed in escrow, in either case for adjustment in respect of the sale price of
such asset or assets until such time as such reserve is reversed or such escrow
arrangement is terminated, in which case Net Proceeds shall include only the
amount of the reserve so reversed or the amount returned to the Company or its
Restricted Subsidiaries from such escrow arrangement, as the case may be.

         "NEW CREDIT FACILITY" means that certain Credit Agreement, dated as of
November 23, 1999 among Merrill Communications LLC, as borrower, the Company as
guarantor, various financial institutions party thereto and DLJ Capital Funding,
Inc., as syndication agent, including, without limitation, any related notes,
guarantees, collateral documents, instruments and agreements executed in
connection therewith, and, in each case, as amended, modified, renewed,
refunded, replaced or refinanced from time to time, including, without
limitation, any agreement (i) extending or shortening the maturity of any
Indebtedness incurred thereunder or contemplated thereby, (ii) adding or
deleting lenders, borrowers or guarantors thereunder, (iii) increasing the
amount of Indebtedness incurred thereunder or available to be borrowed
thereunder (PROVIDED that on the date such Indebtedness is incurred it would not
be prohibited by Section 4.09 hereof) or (iv) otherwise altering the terms and
conditions thereof.

         "NON-RECOURSE DEBT" means Indebtedness (i) no default with respect to
which (including, without limitation, any rights that the holders thereof may
have to take enforcement action against an Unrestricted Subsidiary) would permit
(upon notice, lapse of time or both) any holder of any other Indebtedness of the
Company or any of its Restricted Subsidiaries to declare a default on such other
Indebtedness or cause the payment thereof to be accelerated or payable prior to
its stated maturity; and (ii) as to which the lenders have been notified in
writing that they will not have any recourse to the stock (other than the stock
of an Unrestricted Subsidiary pledged by the Company to secure debt of such
Unrestricted Subsidiary) or assets of the Company or any of its Restricted
Subsidiaries; PROVIDED that in no event shall Indebtedness of any Unrestricted
Subsidiary fail to be Non-Recourse Debt solely as a result of any default
provisions contained in a guarantee thereof by the Company or any of its
Restricted Subsidiaries if the Company or such Restricted Subsidiary was
otherwise permitted to incur such guarantee pursuant to this Indenture.

         "NON-U.S. PERSON" means a Person who is not a U.S. Person.

         "NOTE CUSTODIAN" means the Trustee, as custodian with respect to the
Global Notes, or any successor entity thereto.

         "NOTE GUARANTEES" means the guarantees by the Guarantors of the
Company's payment obligations under this Indenture and the Notes.

         "NOTES" has the meaning assigned to it in the preamble to this
Indenture. The Initial Notes and the Additional Notes shall be treated as a
single class for all purposes under this Indenture.


                                       11


         "OBLIGATIONS" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.

          "OFFERING" means the offering of the Units issued on the Original
Issuance Date by the Company.

         "OFFICER" means, with respect to any Person, the Chairman of the Board,
the Chief Executive Officer, the President, the Chief Operating Officer, the
Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller,
the Secretary or any Vice-President of such Person.

         "OFFICERS' CERTIFICATE" means a certificate signed on behalf of the
Company by two Officers of the Company, one of whom must be the principal
executive officer, the principal financial officer, the treasurer or the
principal accounting officer of the Company, that meets the requirements of
Sections 12.04 and 12.05 hereof.

         "OPINION OF COUNSEL" means an opinion in form and substance reasonably
satisfactory to the Trustee and from legal counsel who is reasonably acceptable
to the Trustee, that meets the requirements of Sections 12.04 and 12.05 hereof.
The counsel may be an employee of or counsel to the Company, any Subsidiary of
the Company or the Trustee.

         "ORIGINAL ISSUANCE DATE" means November 23, 1999, the date on which
Notes are first issued and authenticated under this Indenture.

         "PARI PASSU INDEBTEDNESS" means Indebtedness of the Company that ranks
PARI PASSU in right of payment to the Notes.

         "PARTICIPANT" means, with respect to the Depositary, Euroclear or
Cedelbank, a Person who has an account with the Depositary, Euroclear or
Cedelbank, respectively (and, with respect to the Depositary, shall include
Euroclear and Cedelbank).

          "PARTICIPATING BROKER-DEALER" has the meaning set forth in the
Registration Rights Agreement.

         "PERMITTED BUSINESS" means any Person engaged directly or indirectly in
the communications and document services business or any business reasonably
related, incidental or ancillary thereto.

         "PERMITTED INVESTMENTS" means (a) any Investment in the Company or in a
Restricted Subsidiary of the Company; (b) any Investment in cash or Cash
Equivalents; (c) any Investment by the Company or any Restricted Subsidiary of
the Company in a Person, if as a result of such Investment (i) such Person
becomes a Restricted Subsidiary of the Company or (ii) such Person is merged,
consolidated or amalgamated with or into, or transfers or conveys substantially
all of its assets to, or is liquidated into, the Company or a Wholly Owned
Restricted Subsidiary of the Company; (d) any Investment made as a result of the
receipt of non-cash consideration from an Asset Sale that was made pursuant to
and in compliance with Section 4.10 hereof; (e) any Investment acquired solely
in exchange for Equity Interests (other than Disqualified Stock) of the


                                       12


Company; (f) any Investment in a Person engaged in a Permitted Business (other
than an Investment in an Unrestricted Subsidiary) having an aggregate fair
market value, taken together with all other Investments made pursuant to this
clause (f) that are at that time outstanding, not to exceed 15% of Total Assets
at the time of such Investment (with the fair market value of each Investment
being measured at the time made and without giving effect to subsequent changes
in value); (g) Investments relating to any special purpose Wholly Owned
Subsidiary of the Company organized in connection with a Receivables Facility
that, in the good faith determination of the Board of Directors, are necessary
or advisable to effect such Receivables Facility; (h) the Management Loans or
Investment in the Company to fund Management Loans; (i) Hedging Obligations
permitted to be incurred under Section 4.09 hereof; and (j) any Investment
acquired in exchange for the license or sale of intellectual property.

         "PERMITTED LIENS" means: (i) Liens on property of a Person existing at
the time such Person is merged into or consolidated with the Company or any
Restricted Subsidiary, PROVIDED that such Liens were not incurred in
contemplation of such merger or consolidation and do not secure any property or
assets of the Company or any Restricted Subsidiary other than the property or
assets subject to the Liens prior to such merger or consolidation; (ii) Liens
existing on the Original Issuance Date; (iii) Liens securing Indebtedness
consisting of Capitalized Lease Obligations, purchase money Indebtedness,
mortgage financings, industrial revenue bonds or other monetary obligations, in
each case incurred solely for the purpose of financing all or any part of the
purchase price or cost of construction or installation of assets used in the
business of the Company or its Restricted Subsidiaries, or repairs, additions or
improvements to such assets; PROVIDED that (A) such Liens secure Indebtedness in
an amount not in excess of the original purchase price or the original cost of
any such assets or repair, additional or improvement thereto (plus an amount
equal to the reasonable fees and expenses in connection with the incurrence of
such Indebtedness), (B) such Liens do not extend to any other assets of the
Company or its Restricted Subsidiaries (and, in the case of repair, addition or
improvements to any such assets, such Lien extends only to the assets (and
improvements thereto or thereon) repaired, added to or improved), (C) the
incurrence of such Indebtedness is permitted by Section 4.09 hereof and (D) such
Liens attach within 365 days of such purchase, construction, installation,
repair, addition or improvement; (iv) Liens to secure any refinancings,
renewals, extensions, modification or replacements (collectively, "refinancing")
(or successive refinancings), in whole or in part, of any Indebtedness secured
by Liens referred to in the clauses above so long as such Lien does not extend
to any other property (other than improvements thereto); (v) Liens securing
letters of credit entered into in the ordinary course of business and consistent
with past business practice; (vi) Liens on and pledges of the capital stock of
any Unrestricted Subsidiary securing Non-Recourse Debt of such Unrestricted
Subsidiary; (vii) Liens securing (A) Indebtedness (including, without
limitation, all Obligations) under the New Credit Facility or any Foreign Credit
Facility and (B) Hedging Obligations payable to a lender under the New Credit
Facility or an Affiliate thereof or to a person that was a lender or Affiliate
thereof at the time the contract was entered into to the extent such Hedging
Obligations are secured by Liens on assets also securing Indebtedness (including
without limitation, all Obligations) under the New Credit Facility; (viii) Liens
created by the defeasance (covenant or legal) of any Indebtedness; and (ix)
other Liens securing Indebtedness that is permitted by the terms of this
Indenture to be outstanding having an aggregate principal amount at any one time
outstanding not to exceed $50.0 million.

         "PERMITTED REFINANCING INDEBTEDNESS" means any Indebtedness or
Disqualified Stock of the Company or any of its Restricted Subsidiaries issued
within 60 days after repayment of, in


                                       13


exchange for, or the net proceeds of which are used to extend, refinance, renew,
replace, defease or refund other Indebtedness or Disqualified Stock of the
Company or any of its Restricted Subsidiaries; PROVIDED that (a) the principal
amount (or accreted value, if applicable) or, in the case of Disqualified Stock,
liquidation preference of such Permitted Refinancing Indebtedness does not
exceed the principal amount of (or accreted value, if applicable) or, in the
case of Disqualified Stock, liquidation preference, plus premium, if any, and
accrued interest on the Indebtedness or Disqualified Stock so extended,
refinanced, renewed, replaced, defeased or refunded (plus the amount of
reasonable expenses incurred in connection therewith), (b) such Permitted
Refinancing Indebtedness has a final maturity date no earlier than the final
maturity date of, and has a Weighted Average Life to Maturity equal to or
greater than the Weighted Average Life to Maturity of, the Indebtedness or
Disqualified Stock being extended, refinanced, renewed, replaced, defeased or
refunded, and (c) in the case of Disqualified Stock or, in the case of
Indebtedness, if the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded is subordinated in right of payment to the Notes, such
Permitted Refinancing Indebtedness is subordinated in right of payment to, the
Notes on terms at least as favorable, taken as a whole, to the Holders of Notes
as those contained in the documentation governing the Disqualified Stock or
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded.

         "PERSON" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization or government or agency or political subdivision
thereof (including, without limitation, any subdivision or ongoing business of
any such entity or substantially all of the assets of any such entity,
subdivision or business).

          "PRINCIPALS" means DLJ Merchant Banking funds, John Castro and Rick
Atterbury.

         "PRIVATE PLACEMENT LEGEND" means the legend set forth in Section
2.06(h)(i) to be placed on all Notes issued under this Indenture except where
otherwise permitted by the provisions of this Indenture.

         "PUBLIC EQUITY OFFERING" means any issuance of common stock or
preferred stock by the Company (other than Disqualified Stock) that is
registered pursuant to the Securities Act, other than issuances registered on
Form S-8 and issuances registered on Form S-4, excluding issuances of common
stock pursuant to employee benefit plans of the Company or otherwise as
compensation to employees of the Company.

         "QUALIFIED PROCEEDS" means any of the following or any combination of
the following: (i) cash; (ii) Cash Equivalents; (iii) assets (other than
Investments) that are used or useful in a Permitted Business; and (iv) the
Capital Stock of any Person engaged in a Permitted Business if, in connection
with the receipt by the Company or any Restricted Subsidiary of the Company of
such Capital Stock, (A) such Person becomes a Restricted Subsidiary of the
Company or any Restricted Subsidiary of the Company or (B) such Person is
merged, consolidated or amalgamated with or into, or transfers or conveys
substantially all of its assets to, or is liquidated into, the Company or any
Restricted Subsidiary of the Company.

         "QIB" means a "qualified institutional buyer" as defined in Rule 144A.


                                       14


         "RECEIVABLES FACILITY" means one or more receivables financing
facilities, as amended from time to time, pursuant to which the Company or any
of its Restricted Subsidiaries sells its accounts receivable to an Accounts
Receivable Subsidiary.

         "RECEIVABLES FEES" means distributions or payments made directly or by
means, of discounts with respect to any participation interests issued or sold
in connection with, and other fees paid to a Person that is not a Restricted
Subsidiary in connection with, any Receivables Facility.

         "REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement, dated as of November 23, 1999, by and among the Company and the other
parties named on the signature pages thereof, as such agreement may be amended,
modified or supplemented from time to time, and, with respect to any Additional
Notes, one or more registration rights agreements between the Company and the
other parties thereto, as such agreement(s) may be amended, modified or
supplemented from time to time, relating to rights given by the Company to the
purchasers of Additional Notes to register such Additional Notes under the
Securities Act.

         "REGULATION S" means Regulation S promulgated under the Securities Act.

         "REGULATION S PERMANENT GLOBAL NOTE" means an Unrestricted Global Note
issued in accordance with Section 2.01(d).

         "REGULATION S TEMPORARY GLOBAL NOTE" means a temporary global Note in
the form of Exhibit A-2 hereto bearing the Global Note Legend and the Private
Placement Legend and having the "Schedule of Exchanges of Interest in the Global
Note" attached thereto and deposited with or on behalf of and registered in the
name of the Depositary or its nominee, issued in accordance with Section
2.01(d).

         "RELATED PARTY" means, with respect to any Principal, (i) any
controlling stockholder or partner of such Principal on the Original Issuance
Date, or (ii) any trust, corporation, partnership or other entity, the
beneficiaries, shareholders, partners, owners or Persons beneficially holding
(directly or through one or more Subsidiaries) a majority of the controlling
interest of which consist of the Principals and/or such other Persons referred
to in the immediately preceding clause (i) or this clause (ii).

         "RESPONSIBLE OFFICER" when used with respect to the Trustee, means any
officer within the Corporate Trust Administration of the Trustee (or any
successor group of the Trustee) or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.

         "RESTRICTED DEFINITIVE NOTE" means a Definitive Note bearing the
Private Placement Legend.

         "RESTRICTED GLOBAL NOTE" means the 144A Global Note or the Regulation S
Temporary Global Note, which Notes shall bear the Private Placement Legend.


                                       15


          "RESTRICTED INVESTMENT" means an Investment other than a Permitted
Investment.

         "RESTRICTED PERIOD" means the 40-day "distribution compliance period"
as defined in Rule 902(f) of Regulation S.

         "RESTRICTED SUBSIDIARY" of a Person means any Subsidiary of the
referent Person that is not an Unrestricted Subsidiary.

         "RULE 144" means Rule 144 promulgated under the Securities Act.

         "RULE 144A" means Rule 144A promulgated under the Securities Act.

         "RULE 903" means Rule 903 promulgated under the Securities Act.

         "RULE 904" means Rule 904 promulgated under the Securities Act.

         "SECURITIES ACT" means the Securities Act of 1933, as amended.

         "SHELF REGISTRATION STATEMENT" means the Shelf Registration Statement
as defined in the Registration Rights Agreement.

         "SIGNIFICANT SUBSIDIARY" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date hereof.

         "SPOT RATE" means, for any currency, the spot rate at which such
currency is offered for sale against United States dollars as determined by
reference to the New York foreign exchange selling rates, as published in The
Wall Street Journal on such date of determination for the immediately preceding
business day or, if such rate is not available, as determined in any publicly
available source of similar market data.

         "STATED MATURITY" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.

         "SUBSIDIARY" means, with respect to any Person, (a) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of that Person (or a combination
thereof) and (b) any partnership or limited liability company (i) the sole
general partner or the managing general partner or managing member of which is
such Person or a Subsidiary of such Person or (ii) the only general partners or
managing members of which are such Person or of one or more Subsidiaries of such
Person (or any combination thereof).

         "TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) as in effect on the date on which this Indenture is qualified
under the TIA.


                                       16


         "TOTAL ASSETS" means the total consolidated assets of the Company and
its Restricted Subsidiaries, as shown on the most recent balance sheet
(excluding the footnotes thereto) of the Company.

         "TRUSTEE" means, except solely for purposes of Section 8.05 as
otherwise specified therein, the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture and
thereafter means, the successor serving hereunder.

         "UNITS" means the units offered in the Offering, consisting of the
Notes and warrants to purchase common shares of Viking (which warrants will
become warrants to purchase class B common stock of the Company upon
consummation of the Merger).

         "UNRESTRICTED DEFINITIVE NOTE" means one or more Definitive Notes not
bearing the Private Placement Legend.

         "UNRESTRICTED GLOBAL NOTE" means a permanent global Note in
substantially the form of Exhibit A-1 hereto bearing the Global Note Legend (but
not the Private Placement Legend) and having the "Schedule of Exchanges of
Interests in the Global Note" attached thereto and deposited with or on behalf
of and registered in the name of the Depositary or its nominee, issued in
accordance with Section 2.01(d), 2.06(b)(v), 2.06(d)(iv) or 2.06(f), as
applicable.

         "UNRESTRICTED SUBSIDIARY" means any Subsidiary that is designated by
the Board of Directors as an Unrestricted Subsidiary pursuant to a board
resolution, but only to the extent that such Subsidiary: (a) has no Indebtedness
other than Non-Recourse Debt; (b) is not party to any agreement, contract,
arrangement or understanding with the Company or any Restricted Subsidiary of
the Company unless the terms of any such agreement, contract, arrangement or
understanding are no less favorable to the Company or such Restricted Subsidiary
than those that might be obtained at the time from Persons who are not
Affiliates of the Company; (c) is a Person with respect to which neither the
Company nor any of its Restricted Subsidiaries has any direct or indirect
obligation (i) to subscribe for additional Equity Interests (other than
Investments described in clause (g) of the definition of Permitted Investments)
or (ii) to maintain or preserve such Person's financial condition or to cause
such Person to achieve any specified levels, of operating results; and (d) has
not guaranteed or otherwise directly or indirectly provided credit support for
any Indebtedness of the Company or any of its Restricted Subsidiaries other than
guarantees that are being released upon designation. Any such designation by the
Board of Directors shall be evidenced to the Trustee by filing with the Trustee
a certified copy of the board resolution giving effect to such designation and
an Officers' Certificate certifying that such designation complied with the
foregoing conditions and was permitted by Section 4.07 hereof. If, at any time,
any Unrestricted Subsidiary would fail to meet the foregoing requirements as an
Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted
Subsidiary for purposes of this Indenture and any Indebtedness of such
Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of the
Company as of such date (and, if such Indebtedness is not permitted to be
incurred as of such date under Section 4.09 hereof, the Company shall be in
default of such covenant). The Board of Directors may at any time designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; PROVIDED that such
designation shall be deemed to be an incurrence of Indebtedness by a Restricted
Subsidiary of the Company of any outstanding Indebtedness of such Unrestricted
Subsidiary and such designation shall only be permitted if (i) such Indebtedness
is


                                       17


permitted under Section 4.09 hereof and (ii) no Default or Event of Default
would be in existence following such designation.

          "U.S. PERSON" means a U.S. person as defined in Rule 902(o) under the
Securities Act.

         "VIKING" means Viking Merger Sub, Inc.

         "WEIGHTED AVERAGE LIFE TO MATURITY" means when applied to any
Indebtedness or Disqualified Stock at any date, the number of years obtained by
dividing (a) the sum of the products obtained by multiplying (i) the amount of
each then remaining installment, sinking fund, serial maturity or other required
payments of principal or in the case of Disqualified Stock, liquidation
preference, including payment at final maturity, in respect thereof, by (ii) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (b) the then outstanding principal
amount of such Indebtedness or Disqualified Stock.

         "WHOLLY OWNED RESTRICTED SUBSIDIARY" of any Person means a Restricted
Subsidiary of such Person all the outstanding Equity Interests or other
ownership interests of which (other than directors' qualifying shares) shall at
the time be owned by such Person or by one or more Wholly Owned Restricted
Subsidiaries of such Person or by such Person and one or more Wholly Owned
Restricted Subsidiaries of such Person.

         "WHOLLY OWNED SUBSIDIARY" of any Person means a Subsidiary of such
Person all of the outstanding Equity Interests or other ownership interests of
which (other than directors' qualifying shares) shall at the time be owned by
such Person or by one or more Wholly Owned Subsidiaries of such Person.

SECTION 1.02   OTHER DEFINITIONS.




Term                                                                                 Defined in Section
- -----                                                                                ------------------
                                                                                  
"ASSET SALE OFFER".................................................................          4.10
"AFFILIATE TRANSACTION"............................................................          4.11
"AUTHENTICATION ORDER".............................................................          2.02
"BANKRUPTCY LAW"...................................................................          4.01
"CHANGE OF CONTROL OFFER"..........................................................          4.14
"CHANGE OF CONTROL PAYMENT"........................................................          4.14
"CHANGE OF CONTROL PAYMENT DATE"...................................................          4.14
"COVENANT DEFEASANCE"..............................................................          8.03
"DESIGNATED SENIOR INDEBTEDNESS"...................................................         10.02
"DISTRIBUTION".....................................................................         10.02
"EVENT OF DEFAULT".................................................................          6.01
"EXCESS PROCEEDS"..................................................................          4.10
"INCUR"............................................................................          4.09
"LEGAL DEFEASANCE".................................................................          8.02
"OFFER AMOUNT".....................................................................          3.09
"OFFER PERIOD".....................................................................          3.09
"PAYING AGENT".....................................................................          2.03
"PAYMENT"..........................................................................         10.02


                                       18


Term                                                                                 Defined in Section
- -----                                                                                ------------------

"PAYMENT BLOCKAGE NOTICE"..........................................................         10.04
"PAYMENT DEFAULT"..................................................................          6.01
"PERMITTED INDEBTEDNESS"...........................................................          4.09
"PERMITTED JUNIOR SECURITIES"......................................................         10.02
"PURCHASE DATE"....................................................................          3.09
"REGISTRAR"........................................................................          2.03
"REPRESENTATIVE"...................................................................         10.02
"RESTRICTED PAYMENTS"..............................................................          4.07
"SENIOR INDEBTEDNESS"..............................................................         10.02
"SUBORDINATED NOTE OBLIGATIONS" ...................................................         10.02


SECTION 1.03   INCORPORATION OF TIA PROVISIONS.

         Whenever this Indenture refers to a provision of the TIA, the provision
is incorporated by reference in and made a part of this Indenture.

         The following TIA terms used in this Indenture have the following
meanings:

         "INDENTURE SECURITIES" means, the Notes;

         "INDENTURE SECURITY HOLDER" means, a Holder of a Note;

         "INDENTURE TO BE QUALIFIED" means, this Indenture;

         "INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means, the Trustee; and

         "OBLIGOR" on the Notes means, the Company and any successor obligor
         upon the Notes.

         All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rule under
the TIA have the meanings so assigned to them.

SECTION 1.04   RULES OF CONSTRUCTION.

         Unless the context otherwise requires:

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

                  (2)      an accounting term not otherwise defined has the
         meaning assigned to it in accordance with GAAP;

                  (3)      "or" is not exclusive;

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

                  (5)      provisions apply to successive events and
         transactions; and


                                       19


                  (6)      references to sections of or rules under the
         Securities Act shall be deemed to include substitute, replacement of
         successor sections or rules adopted by the Commission from time to
         time.

                                    ARTICLE 2
                                    THE NOTES

SECTION 2.01   FORM AND DATING.

         (a)      GENERAL. The Notes and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A hereto. The Notes
may have notations, legends or endorsements required by law, stock exchange rule
or usage. Each Note shall be dated the date of its authentication. The Notes
shall be in denominations of $1,000 and integral multiples thereof.

         The terms and provisions contained in the Notes shall constitute, and
are hereby expressly made, a part of this Indenture and the Company, the
Guarantors and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby. However,
to the extent any provision of any Note conflicts with the express provisions of
this Indenture, the provisions of this Indenture shall govern and be
controlling.

         (b)      144A GLOBAL NOTES. Notes initially offered and sold to QIBs in
reliance on Rule 144A shall be issued initially in global form substantially in
the form of Exhibit A-1 attached hereto (including, without limitation, the
Global Note Legend thereon and the "Schedule of Exchanges of Interests in the
Global Note" attached thereto), which shall be deposited on behalf of the
purchasers of the Notes represented thereby with the Trustee as custodian for
the Depositary, and registered in the name of the Depositary or the nominee of
the Depositary for credit to the accounts of DTC's Participants, duly executed
by the Company and authenticated by the Trustee as hereinafter provided.

         (c)      GLOBAL NOTES. Each Global Note shall represent such of the
outstanding Notes as shall be specified therein and each shall provide that it
shall represent the aggregate principal amount of outstanding Notes from time to
time endorsed thereon and that the aggregate principal amount of outstanding
Notes represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges and redemptions. The aggregate principal
amount of the Global Notes may from time to time be increased or decreased by
adjustments made on the records of the Trustee, as custodian for the Depositary
or its nominee, as the case may be, as herein provided. Any endorsement of a
Global Note to reflect the amount of any increase or decrease in the aggregate
principal amount of outstanding Notes represented thereby shall be made by the
Trustee or the Note Custodian, at the direction of the Trustee, in accordance
with instructions given by the Holder thereof as required by Section 2.06 hereof
or as specified in Section 2.01(d).

         (d)      TEMPORARY GLOBAL NOTES. Notes initially offered and sold in
reliance on Regulation S shall be issued initially in global form substantially
in the form of Exhibit A-2 attached hereto (including, without limitation, the
Global Note Legend and the "Schedule of Exchanges of Interests in the Global
Note" attached thereto), which shall be deposited on behalf of the purchasers of
the Notes represented thereby with the Trustee as custodian for the Depositary,
and registered in the name of the Depositary or the nominee of the Depositary
for the


                                       20


accounts of designated agents holding on behalf of Euroclear or
Cedelbank, duly executed by the Company and authenticated by the Trustee as
hereinafter provided.

         Within a reasonable time period after the expiration of the Restricted
Period, upon the receipt by the Trustee of:

                  (i)      a written certificate from the Depositary, together
         with copies of certificates from Euroclear and Cedelbank certifying
         that they have received certification of non-United States beneficial
         ownership of 100% of the aggregate principal amount of the Regulation S
         Temporary Global Note (except to the extent of any beneficial owners
         thereof who acquired an interest therein during the Restricted Period
         pursuant to another exemption from registration under the Securities
         Act and who will take delivery of a beneficial ownership interest in a
         144A Global Note, all as contemplated by Section 2.06(b)(iii)(A)
         hereof), and

                  (ii)     an Officers' Certificate from the Company,

(x) if at such time an Unrestricted Global Note has not yet been issued, the
Company shall issue and, upon receipt of an Authentication Order in accordance
with Section 2.02, the Trustee shall authenticate one or more Unrestricted
Global Notes in global form in substantially the form of Exhibit A-1 attached
hereto (including, without limitation, the Global Note Legend (but not the
Private Placement Legend) and the "Schedule of Exchanges of Interests in the
Global Note" attached thereto), which shall be deposited with the Trustee as
custodian for the Depositary, and registered in the name of the Depositary or
the nominee of the Depositary, and (y) the Trustee shall increase or cause to be
increased the aggregate principal amount of the Unrestricted Global Note by an
amount equal to the aggregate principal amount of the Regulation S Temporary
Global Note, all pursuant to the Applicable Procedures. Simultaneously with the
authentication of the Unrestricted Global Note and the increase of the principal
amount of the Unrestricted Global Note in the amount of the aggregate principal
amount of the Regulation S Temporary Global Note, the Trustee shall cancel the
Regulation S Temporary Global Note.

         Until the later of the termination of the Restricted Period and the
provision of the certifications required as specified in the preceding
paragraph, beneficial interests in any Regulation S Temporary Global Note may be
held only through Participants acting for and on behalf of Euroclear and
Cedelbank.

         (e)      EUROCLEAR AND CEDELBANK PROCEDURES APPLICABLE. The provisions
of the "Operating Procedures of the Euroclear System" and "Terms and Conditions
Governing Use of Euroclear" and the "General Terms and Conditions of Cedelbank"
and "Customer Handbook" of Cedelbank shall be applicable to transfers of
beneficial interests in the Regulation S Temporary Global Note and the
Unrestricted Global Notes that are held by Participants through Euroclear or
Cedelbank.

         (f)      DEFINITIVE NOTES. Notes issued in definitive form shall be
issued substantially in the form of Exhibit A-1 attached hereto (but without the
Global Note Legend thereon and without the Schedule of Exchanges of Interests in
the Global Note" attached thereto), duly executed by the Company and
authenticated by Trustee as hereinafter provided.


                                       21


SECTION 2.02   EXECUTION AND AUTHENTICATION.

         One Officer shall sign the Notes for the Company by manual or facsimile
signature.

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

         A Note shall not be valid until authenticated by the manual signature
of the Trustee. The signature shall be conclusive evidence that the Note has
been authenticated under this Indenture.

         The Trustee shall, upon a written order of the Company signed by one
Officer (an "AUTHENTICATION ORDER"), authenticate Notes for original issue up to
$140,000,000 in aggregate principal amount plus the aggregate principal amount
of any Additional Notes issued pursuant to this Section 2.02 and in compliance
with Section 4.09 hereof. The aggregate principal amount of Notes outstanding at
any time may not exceed such amount except as provided in Section 2.07 hereof.

         The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Notes. An authenticating agent may authenticate Notes
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with Holders or an
Affiliate of the Company.

SECTION 2.03          REGISTRAR AND PAYING AGENT.

         The Company shall maintain an office or agency where Notes may be
presented for registration of transfer or for exchange ("REGISTRAR") and an
office or agency where Notes may be presented for payment ("PAYING AGENT"). The
Registrar shall keep a register of the Notes and of their transfer and exchange.
The Company may appoint one or more co-registrars and one or more additional
paying agents. The term "Registrar" includes any co-registrar and the term
"Paying Agent" includes any additional paying agent. The Company may change any
Paying Agent or Registrar without notice to any Holder. The Company shall notify
the Trustee in writing of the name and address of any Agent not a party to this
Indenture. If the Company fails to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such. The Company or any of
its Subsidiaries may act as Paying Agent or Registrar.

         The Company initially appoints DTC to act as Depositary with respect to
the Global Notes.

         The Company initially appoints the Trustee to act as the Registrar and
Paying Agent and to act as Note Custodian with respect to the Global Notes.

SECTION 2.04          PAYING AGENT TO HOLD MONEY IN TRUST.

         The Company shall require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent will hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
principal, premium or Liquidated Damages, if any, or interest on the Notes, and
will notify the Trustee of any default by the Company in making any




                                       22


such payment. While any such default continues, the Trustee may require a Paying
Agent to pay all money held by it to the Trustee. The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee. Upon payment
over to the Trustee, the Paying Agent (if other than the Company or a
Subsidiary) shall have no further liability for the money. If the Company or a
Subsidiary acts as Paying Agent, it shall segregate and hold in a separate trust
fund for the benefit of the Holders all money held by it as Paying Agent. Upon
any bankruptcy or reorganization proceedings relating to the Company, the
Trustee shall serve as Paying Agent for the Notes.

SECTION 2.05          HOLDER LISTS.

         The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA Section 312(a). If the Trustee
is not the Registrar, the Company shall furnish to the Trustee at least seven
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of the Holders of
Notes and the Company shall otherwise comply with TIA Section 312(a).

SECTION 2.06          TRANSFER AND EXCHANGE.

         (a)      TRANSFER AND EXCHANGE OF GLOBAL NOTES. A Global Note may not
be transferred as a whole except by the Depositary to a nominee of the
Depositary, by a nominee of the Depositary to the Depositary or to another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary. All Global Notes
will be exchanged by the Company for Definitive Notes if (i) the Company
delivers to the Trustee notice from the Depositary that it is unwilling or
unable to continue as Depositary for the Notes or that it is no longer a
clearing agency registered under the Exchange Act and, in either case, a
successor Depositary is not appointed by the Company within 90 days after the
date of such notice from the Depositary, (ii) the Company, at its option, elects
to cause the Global Notes (in whole but not in part) to be exchanged for
Definitive Notes and delivers a written notice to such effect to the Trustee or
(iii) there shall have occurred and be continuing a Default or Event of Default.
In addition, beneficial interests in a Global Note may be exchanged for
Definitive Notes upon request but only upon at least 20 days' prior written
notice given to the Trustee by or on behalf of DTC in accordance with customary
procedures and subject to compliance with Section 2.06(b)(ii) and Section
2.06(c). Notwithstanding the two preceding sentences, in no event shall the
Regulation S Temporary Global Note be exchanged by the Company for Definitive
Notes prior to (x) the expiration of the Restricted Period and (y) the receipt
by the Registrar of any certificates required pursuant to Rule 903(c)(3)(ii)(B)
under the Securities Act. Upon the occurrence of any of the preceding events
upon which Definitive Notes are to be issued in exchange for any Global Note or
beneficial interests therein as specified above, Definitive Notes shall be
issued in such names and approved denominations as the Depositary shall instruct
the Trustee and, if such Global Note is a Restricted Global Note, shall bear the
Private Placement Legend. Global Notes also may be exchanged or replaced, in
whole or in part, as provided in Sections 2.07 and 2.10 hereof. Every Note
authenticated and delivered in exchange for, or in lieu of, a Global Note or any
portion thereof, pursuant to this Section 2.06 or Section 2.07 or 2.10 hereof,
shall be authenticated and delivered in the form of, and shall be, a Global Note
except as provided in this Section 2.06(a). A Global Note may not be exchanged
for another Note other


                                       23


than as provided in this Section 2.06(a) and Sections 2.07 and 2.10; PROVIDED,
HOWEVER, that, beneficial interests in a Global Note may be transferred and
exchanged for beneficial interests in another Global Note as provided in Section
2.06(b) hereof.

         (b)      TRANSFER AND EXCHANGE OF BENEFICIAL INTERESTS IN GLOBAL NOTES
FOR BENEFICIAL INTERESTS IN GLOBAL NOTES OR FOR DEFINITIVE NOTES. The transfer
and exchange of beneficial interests in the Global Notes shall be effected
through the Depositary, in accordance with the provisions of this Indenture and
the Applicable Procedures. Beneficial interests in the Restricted Global Notes
shall be subject to restrictions on transfer comparable to those set forth
herein to the extent required by the Securities Act. Transfers or exchanges of
beneficial interests in Global Notes for Definitive Notes shall also require
compliance with Section 2.06(a), Section 2.06(b)(ii) below and Section 2.06(c),
and transfers or exchanges of beneficial interests in Global Notes for
beneficial interests in Global Notes also shall require compliance with one or
more of the other following subparagraphs, as applicable:

                  (i)      TRANSFER OF BENEFICIAL INTERESTS IN THE SAME GLOBAL
         NOTE. Beneficial interests in any Restricted Global Note may be
         transferred to Persons who take delivery thereof in the form of a
         beneficial interest in the same Restricted Global Note in accordance
         with the transfer restrictions set forth in the Private Placement
         Legend; PROVIDED, HOWEVER, that, prior to the expiration of the
         Restricted Period, a beneficial interest in the Regulation S Temporary
         Global Note may be transferred to a person who takes delivery in the
         form of an interest in the 144A Global Note only upon receipt by the
         Registrar of the certificate specified in Section 2.06(b)(iii)(A).
         Beneficial interests in any Unrestricted Global Note may be transferred
         to Persons who take delivery thereof in the form of a beneficial
         interest in the same Unrestricted Global Note. No written orders or
         instructions shall be required to be delivered to the Registrar to
         effect the transfers described in this Section 2.06(b)(i).

                  (ii)     ALL OTHER TRANSFERS AND EXCHANGES OF BENEFICIAL
         INTERESTS IN GLOBAL NOTES. In connection with all transfers and
         exchanges of beneficial interests in a Global Note that are not subject
         to Section 2.06(b)(i) above (other than an exchange of beneficial
         interests in a Regulation S Temporary Global Note for beneficial
         interests in an Unrestricted Global Note in accordance with Section
         2.01(d)), the owner of such beneficial interest must deliver to the
         Registrar either (A) (1) a written order from a Participant or an
         Indirect Participant given to the Depositary in accordance with the
         Applicable Procedures directing the Depositary to credit or cause to be
         credited a beneficial interest in another Global Note in an amount
         equal to the beneficial interest to be transferred or exchanged and (2)
         instructions given in accordance with the Applicable Procedures
         containing information regarding the Participant account to be credited
         with such increase or (B) (1) a written order from a Participant or an
         Indirect Participant given to the Depositary in accordance with the
         Applicable Procedures directing the Depositary to cause to be issued a
         Definitive Note in an amount equal to the beneficial interest to be
         transferred or exchanged and (2) instructions given by the Depositary
         to the Registrar containing information regarding the Person in whose
         name such Definitive Note shall be registered to effect the transfer or
         exchange referred to in clause (B)(1) above; PROVIDED, HOWEVER, that in
         no event shall Definitive Notes be issued upon the transfer or exchange
         of beneficial interests in the Regulation S Temporary Global Note prior
         to (x) the expiration of the Restricted Period and (y) the receipt by
         the Registrar of any certificates


                                       24


         required pursuant to Rule 903 under the Securities Act. Upon
         consummation of an Exchange Offer by the Company in accordance with
         Section 2.06(f) hereof, the requirements of this Section 2.06(b)(ii)
         shall be deemed to have been satisfied upon receipt by the Registrar of
         the instructions contained in the Letter of Transmittal delivered by
         the Holder of such beneficial interests in the Restricted Global Notes.
         Upon satisfaction of all of the requirements for transfer or exchange
         of beneficial interests in Global Notes contained in this Indenture and
         the Notes or otherwise applicable under the Securities Act, the Trustee
         shall adjust the principal amount of the relevant Global Note(s)
         pursuant to Section 2.06(i) hereof.

                  (iii)    TRANSFER OF BENEFICIAL INTERESTS IN A RESTRICTED
         GLOBAL NOTE TO BENEFICIAL INTERESTS IN ANOTHER RESTRICTED GLOBAL NOTE.
         Subject to Section 2.01(d), a beneficial interest in any Restricted
         Global Note may be transferred to a Person who takes delivery thereof
         in the form of a beneficial interest in another Restricted Global Note
         if the transfer complies with the requirements of Section 2.06(b)(ii)
         above and the Registrar receives the following:

                           (A)      if the transferee will take delivery in the
                  form of a beneficial interest in the 144A Global Note, then
                  the transferor must deliver a certificate in the form of
                  Exhibit B hereto, including, without limitation, the
                  certifications in item (1) thereof; and

                           (B)      if the transferee will take delivery in the
                  form of a beneficial interest in the Regulation S Temporary
                  Global Note, then the transferor must deliver a certificate in
                  the form of Exhibit B hereto, including, without limitation,
                  the certifications in item (2) thereof.

                  (iv)     TRANSFER AND EXCHANGE OF BENEFICIAL INTERESTS IN A
         RESTRICTED GLOBAL NOTE FOR BENEFICIAL INTERESTS IN THE UNRESTRICTED
         GLOBAL NOTE. A beneficial interest in any Restricted Global Note may be
         exchanged by any holder thereof for a beneficial interest in an
         Unrestricted Global Note or transferred to a Person who takes delivery
         thereof in the form of a beneficial interest in an Unrestricted Global
         Note if the exchange or transfer (x) is an exchange of beneficial
         interests in a Regulation S Temporary Global Note for beneficial
         interests in an Unrestricted Global Note in accordance with Section
         2.01(d) or (y) both (1) complies with the requirements of Section
         2.06(b)(ii) above and (2):

                           (A)      such exchange or transfer is effected
                  pursuant to the Exchange Offer in accordance with the
                  Registration Rights Agreement and the holder of the beneficial
                  interest, in the case of an exchange, or the transferee, in
                  the case of a transfer, certifies in the applicable Letter of
                  Transmittal that it is not (1) a broker-dealer, (2) a Person
                  participating in the distribution of the Exchange Notes or (3)
                  a Person who is an affiliate (as defined in Rule 144) of the
                  Company;

                           (B)      such transfer is effected pursuant to the
                  Shelf Registration Statement in accordance with the
                  Registration Rights Agreement;


                                       25


                           (C)      such transfer is effected by a Participating
                  Broker-Dealer pursuant to the Exchange Offer Registration
                  Statement in accordance with the Registration Rights
                  Agreement; or

                           (D)       the Registrar receives the following:

                                    (1)      if the holder of such beneficial
                           interest in a Restricted Global Note proposes to
                           exchange such beneficial interest for a beneficial
                           interest in an Unrestricted Global Note, a
                           certificate from such holder in the form of Exhibit C
                           hereto, including, without limitation, the
                           certifications in item (1)(a) thereof; or

                                    (2)      if the holder of such beneficial
                           interest in a Restricted Global Note proposes to
                           transfer such beneficial interest to a Person who
                           shall take delivery thereof in the form of a
                           beneficial interest in an Unrestricted Global Note, a
                           certificate from such holder in the form of Exhibit B
                           hereto, including, without limitation, the
                           certifications in item (4) thereof,

                  and, in each such case set forth in this subparagraph (D), if
                  the Registrar so requests or if the Applicable Procedures so
                  require, an Opinion of Counsel in form reasonably acceptable
                  to the Registrar to the effect that such exchange or transfer
                  is in compliance with the Securities Act and that the
                  restrictions on transfer contained herein and in the Private
                  Placement Legend are no longer required in order to maintain
                  compliance with the Securities Act.

                  (v)      ISSUANCE OF UNRESTRICTED GLOBAL NOTE. If any such
         transfer is effected pursuant to Section 2.06(b)(iv) (B) or (D) above
         at a time when the Unrestricted Global Note has not yet been issued,
         the Company shall issue and, upon receipt of an Authentication Order in
         accordance with Section 2.02 hereof, the Trustee shall authenticate one
         or more Unrestricted Global Notes in an aggregate principal amount
         equal to the aggregate principal amount of beneficial interests
         transferred pursuant to subparagraph (B) or (D) above.

         (c)      TRANSFER AND EXCHANGE OF BENEFICIAL INTERESTS IN GLOBAL NOTES
FOR DEFINITIVE NOTES.

                  (i)      BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES TO
         RESTRICTED DEFINITIVE NOTES. Subject to Section 2.06(a), if any holder
         of a beneficial interest in a Restricted Global Note proposes to
         exchange such beneficial interest for a Restricted Definitive Note or
         to transfer such beneficial interest to a Person who takes delivery
         thereof in the form of a Restricted Definitive Note, then, upon receipt
         by the Registrar of the following documentation:

                           (A)      if the holder of such beneficial interest in
                  a Restricted Global Note proposes to exchange such beneficial
                  interest for a Restricted Definitive Note, a certificate from
                  such holder in the form of Exhibit C hereto, including,
                  without limitation, the certifications in item (2)(a) thereof;


                                        26


                           (B)      if such beneficial interest is being
                  transferred to a QIB in accordance with Rule 144A under the
                  Securities Act, a certificate to the effect set forth in
                  Exhibit B hereto, including, without limitation, the
                  certifications in item (1) thereof;

                           (C)      if such beneficial interest is being
                  transferred to a Non-U.S. Person in an offshore transaction in
                  accordance with Rule 903 or Rule 904 under the Securities Act,
                  a certificate to the effect set forth in Exhibit B hereto,
                  including, without limitation, the certifications in item (2)
                  thereof;

                           (D)      if such beneficial interest is being
                  transferred pursuant to an exemption from the registration
                  requirements of the Securities Act in accordance with Rule 144
                  under the Securities Act, a certificate to the effect set
                  forth in Exhibit B hereto, including, without limitation, the
                  certifications in item (3)(a) thereof;

                           (E)      if such beneficial interest is being
                  transferred to an Institutional Accredited Investor in
                  reliance on an exemption from the registration requirements of
                  the Securities Act other than those listed in subparagraphs
                  (B) through (D) above, a certificate to the effect set forth
                  in Exhibit B hereto, including, without limitation, the
                  certifications, certificates and Opinion of Counsel required
                  by item (3)(d) thereof, if applicable;

                           (F)      if such beneficial interest is being
                  transferred to the Company or any of its Subsidiaries, a
                  certificate to the effect set forth in Exhibit B hereto,
                  including, without limitation, the certifications in item
                  (3)(b) thereof; or

                           (G)      if such beneficial interest is being
                  transferred pursuant to an effective registration statement
                  under the Securities Act, a certificate to the effect set
                  forth in Exhibit B hereto, including, without limitation, the
                  certifications in item (3)(c) thereof,

         the Trustee shall cause the aggregate principal amount of the
         applicable Global Note to be reduced accordingly pursuant to Section
         2.06(i) hereof, and the Company shall execute and the Trustee shall
         authenticate and deliver to the Person designated in the instructions a
         Definitive Note in the appropriate principal amount. Any Definitive
         Note issued in exchange for a beneficial interest in a Restricted
         Global Note pursuant to this Section 2.06(c)(i) shall be registered in
         such name or names and in such authorized denomination or denominations
         as the holder of such beneficial interest shall instruct the Registrar
         through instructions from the Depositary and the Participant or
         Indirect Participant. The Trustee shall deliver such Definitive Notes
         to the Persons in whose names such Notes are so registered. Any
         Definitive Note issued in exchange for a beneficial interest in a
         Restricted Global Note pursuant to this Section 2.06(c)(i) shall bear
         the Private Placement Legend and shall be subject to all restrictions
         on transfer contained therein.

                  (ii)     BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES TO
         UNRESTRICTED DEFINITIVE NOTES. Subject to Section 2.06(a), a holder of
         a beneficial interest in a Restricted Global


                                       27


         Note may exchange such beneficial interest for an Unrestricted
         Definitive Note or may transfer such beneficial interest to a Person
         who takes delivery thereof in the form of an Unrestricted Definitive
         Note only if:

                           (A)      such exchange or transfer is effected
                  pursuant to the Exchange Offer in accordance with the
                  Registration Rights Agreement and the holder of such
                  beneficial interest, in the case of an exchange, or the
                  transferee, in the case of a transfer, certifies in the
                  applicable Letter of Transmittal that it is not (1) a
                  broker-dealer, (2) a Person participating in the distribution
                  of the Exchange Notes or (3) a Person who is an affiliate (as
                  defined in Rule 144) of the Company;

                           (B)      such transfer is effected pursuant to the
                  Shelf Registration Statement in accordance with the
                  Registration Rights Agreement;

                           (C)      such transfer is effected by a Participating
                  Broker-Dealer pursuant to the Exchange Offer Registration
                  Statement in accordance with the Registration Rights
                  Agreement; or

                           (D)      the Registrar receives the following:

                                    (1)      if the holder of such beneficial
                           interest in a Restricted Global Note proposes to
                           exchange such beneficial interest for an Unrestricted
                           Definitive Note, a certificate from such holder in
                           the form of Exhibit C hereto, including, without
                           limitation, the certifications in item (1)(b)
                           thereof; or

                                    (2)      if the holder of such beneficial
                           interest in a Restricted Global Note proposes to
                           transfer such beneficial interest to a Person who
                           shall take delivery thereof in the form of an
                           Unrestricted Definitive Note, a certificate from such
                           holder in the form of Exhibit B hereto, including,
                           without limitation, the certifications in item (4)
                           thereof,

                  and, in each such case set forth in this subparagraph (D), if
                  the Registrar so requests or if the Applicable Procedures so
                  require, an Opinion of Counsel in form reasonably acceptable
                  to the Registrar to the effect that such exchange or transfer
                  is in compliance with the Securities Act and that the
                  restrictions on transfer contained herein and in the Private
                  Placement Legend are no longer required in order to maintain
                  compliance with the Securities Act.

                  (iii)    BENEFICIAL INTERESTS IN UNRESTRICTED GLOBAL NOTES TO
         UNRESTRICTED DEFINITIVE NOTES. Subject to Section 2.06(a), if any
         holder of a beneficial interest in an Unrestricted Global Note proposes
         to exchange such beneficial interest for a Definitive Note or to
         transfer such beneficial interest to a Person who takes delivery
         thereof in the form of a Definitive Note, then, upon satisfaction of
         the conditions set forth in Section 2.06(b)(ii) hereof, the Trustee
         shall cause the aggregate principal amount of the applicable Global
         Note to be reduced accordingly pursuant to Section 2.06(i) hereof, and
         the Company shall execute and the Trustee shall authenticate and
         deliver to the Person designated in the instructions a Definitive Note
         in the appropriate principal amount. Any


                                       28


         Definitive Note issued in exchange for a beneficial interest pursuant
         to this Section 2.06(c)(iii) shall be registered in such name or names
         and in such authorized denomination or denominations as the holder of
         such beneficial interest shall instruct the Registrar through
         instructions from the Depositary and the Participant or Indirect
         Participant. The Trustee shall deliver such Definitive Notes to the
         Persons in whose names such Notes are so registered. Any Definitive
         Note issued in exchange for a beneficial interest pursuant to this
         Section 2.06(c)(iii) shall not bear the Private Placement Legend.

                  (iv)     REGULATION S TEMPORARY GLOBAL NOTE RESTRICTION.
         Notwithstanding Sections 2.06(c)(i) and (ii) hereof, a beneficial
         interest in the Regulation S Temporary Global Note may not be exchanged
         for a Definitive Note or transferred to a Person who takes delivery
         thereof in the form of a Definitive Note prior to (x) the expiration of
         the Restricted Period and (y) the receipt by the Registrar of any
         certificates required pursuant to Rule 903(c)(3)(ii)(B) under the
         Securities Act.

         (d)      TRANSFER AND EXCHANGE OF DEFINITIVE NOTES FOR BENEFICIAL
INTERESTS IN GLOBAL NOTES.

                  (i)      RESTRICTED DEFINITIVE NOTES TO BENEFICIAL INTERESTS
         IN RESTRICTED GLOBAL NOTES. If any Holder of a Restricted Definitive
         Note proposes to exchange such Note for a beneficial interest in a
         Restricted Global Note or to transfer such Restricted Definitive Note
         to a Person who takes delivery thereof in the form of a beneficial
         interest in a Restricted Global Note, then, upon receipt by the
         Registrar of the following documentation:

                           (A)      if the Holder of such Restricted Definitive
                  Note proposes to exchange such Note for a beneficial interest
                  in a Restricted Global Note, a certificate from such Holder in
                  the form of Exhibit C hereto, including, without limitation,
                  the certifications in item (2)(b) thereof;

                           (B)      if such Restricted Definitive Note is being
                  transferred to a QIB in accordance with Rule 144A under the
                  Securities Act, a certificate to the effect set forth in
                  Exhibit B hereto, including, without limitation, the
                  certifications in item (1) thereof;

                           (C)      if such Restricted Definitive Note is being
                  transferred to a Non-U.S. Person in an offshore transaction in
                  accordance with Rule 903 or Rule 904 under the Securities Act,
                  a certificate to the effect set forth in Exhibit B hereto,
                  including, without limitation, the certifications in item (2)
                  thereof;

                           (D)      if such Restricted Definitive Note is being
                  transferred pursuant to an exemption from the registration
                  requirements of the Securities Act in accordance with Rule 144
                  under the Securities Act, a certificate to the effect set
                  forth in Exhibit B hereto, including, without limitation, the
                  certifications in item (3)(a) thereof;


                                       29


                           (E)      if such Restricted Definitive Note is being
                  transferred to an Institutional Accredited Investor in
                  reliance on an exemption from the registration requirements of
                  the Securities Act other than those listed in subparagraphs
                  (B) through (D) above, a certificate to the effect set forth
                  in Exhibit B hereto, including, without limitation, the
                  certifications, certificates and Opinion of Counsel required
                  by item (3)(d) thereof, if applicable;

                           (F)      if such Restricted Definitive Note is being
                  transferred to the Company or any of its Subsidiaries, a
                  certificate to the effect set forth in Exhibit B hereto,
                  including, without limitation, the certifications in item
                  (3)(b) thereof; or

                           (G)      if such Restricted Definitive Note is being
                  transferred pursuant to an effective registration statement
                  under the Securities Act, a certificate to the effect set
                  forth in Exhibit B hereto, including, without limitation, the
                  certifications in item (3)(c) thereof,

         the Trustee shall cancel the Restricted Definitive Note and increase or
         cause to be increased the aggregate principal amount of the 144A Global
         Note.

                  (ii)     RESTRICTED DEFINITIVE NOTES TO BENEFICIAL INTERESTS
         IN UNRESTRICTED GLOBAL NOTES. A Holder of a Restricted Definitive Note
         may exchange such Note for a beneficial interest in an Unrestricted
         Global Note or transfer such Restricted Definitive Note to a Person who
         takes delivery thereof in the form of a beneficial interest in an
         Unrestricted Global Note only if:

                           (A)      such exchange or transfer is effected
                  pursuant to the Exchange Offer in accordance with the
                  Registration Rights Agreement and the Holder, in the case of
                  an exchange, or the transferee, in the case of a transfer,
                  certifies in the applicable Letter of Transmittal that it is
                  not (1) a broker-dealer, (2) a Person participating in the
                  distribution of the Exchange Notes or (3) a Person who is an
                  affiliate (as defined in Rule 144) of the Company;

                           (B)      such transfer is effected pursuant to the
                  Shelf Registration Statement in accordance with the
                  Registration Rights Agreement;

                           (C)      such transfer is effected by a Participating
                  Broker-Dealer pursuant to the Exchange Offer Registration
                  Statement in accordance with the Registration Rights
                  Agreement; or

                           (D)      the Registrar receives the following:

                                    (1)      if the Holder of such Definitive
                           Notes proposes to exchange such Notes for a
                           beneficial interest in the Unrestricted Global Note,
                           a certificate from such Holder in the form of Exhibit
                           C hereto, including, without limitation, the
                           certifications in item (1)(c) thereof; or

                                    (2)      if the Holder of such Definitive
                           Notes proposes to transfer such Notes to a Person who
                           shall take delivery thereof in the


                                       30


                           form of a beneficial interest in the Unrestricted
                           Global Note, a certificate from such Holder in the
                           form of Exhibit B hereto, including, without
                           limitation, the certifications in item (4) thereof,

                  and, in each such case set forth in this subparagraph (D), if
                  the Registrar so requests or if the Applicable Procedures so
                  require, an Opinion of Counsel in form reasonably acceptable
                  to the Registrar to the effect that such exchange or transfer
                  is in compliance with the Securities Act and that the
                  restrictions on transfer contained herein and in the Private
                  Placement Legend are no longer required in order to maintain
                  compliance with the Securities Act.

                  Upon satisfaction of the conditions of any of the
         subparagraphs in this Section 2.06(d)(ii), the Trustee shall cancel the
         Definitive Notes and increase or cause to be increased the aggregate
         principal amount of the Unrestricted Global Note.

                  (iii)    UNRESTRICTED DEFINITIVE NOTES TO BENEFICIAL INTERESTS
         IN UNRESTRICTED GLOBAL NOTES. A Holder of an Unrestricted Definitive
         Note may exchange such Note for a beneficial interest in an
         Unrestricted Global Note or transfer such Definitive Note to a Person
         who takes delivery thereof in the form of a beneficial interest in an
         Unrestricted Global Note at any time. Upon receipt of a request for
         such an exchange or transfer, the Trustee shall cancel the applicable
         Unrestricted Definitive Note and increase or cause to be increased the
         aggregate principal amount of one of the Unrestricted Global Notes.

                  (iv)     ISSUANCE OF UNRESTRICTED GLOBAL NOTE. If any such
         exchange or transfer from a Definitive Note to a beneficial interest is
         effected pursuant to Section 2.06(c)(ii)(B), (ii)(D) or (iii) above at
         a time when an Unrestricted Global Note has not yet been issued, the
         Company shall issue and, upon receipt of an Authentication Order in
         accordance with Section 2.02 hereof, the Trustee shall authenticate one
         or more Unrestricted Global Notes in an aggregate principal amount
         equal to the principal amount of Definitive Notes so transferred.

         (e)      TRANSFER AND EXCHANGE OF DEFINITIVE NOTES FOR DEFINITIVE
NOTES. Upon request by a Holder of Definitive Notes and such Holder's compliance
with the provisions of this Section 2.06(e), the Registrar shall register the
transfer or exchange of Definitive Notes. Prior to such registration of transfer
or exchange, the requesting Holder shall present or surrender to the Registrar
the Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by his attorney, duly authorized in writing. In addition, the requesting Holder
shall provide any additional certifications, documents and information, as
applicable, required pursuant to the following provisions of this Section
2.06(e).

                  (i)      RESTRICTED DEFINITIVE NOTES TO RESTRICTED DEFINITIVE
         NOTES. Any Restricted Definitive Note may be transferred to and
         registered in the name of Persons who take delivery thereof in the form
         of a Restricted Definitive Note if the Registrar receives the
         following:


                                       31


                           (A)      if the transfer will be made pursuant to
                  Rule 144A under the Securities Act, then the transferor must
                  deliver a certificate in the form of Exhibit B hereto,
                  including, without limitation, the certifications in item (1)
                  thereof;

                           (B)      if the transfer will be made pursuant to
                  Rule 903 or Rule 904, then the transferor must deliver a
                  certificate in the form of Exhibit B hereto, including,
                  without limitation, the certifications in item (2) thereof;
                  and

                           (C)      if the transfer will be made pursuant to any
                  other exemption from the registration requirements of the
                  Securities Act, then the transferor must deliver a certificate
                  in the form of Exhibit B hereto, including, without
                  limitation, the certifications, certificates and Opinion of
                  Counsel required by item (3) thereof, if applicable.

                  (ii)     RESTRICTED DEFINITIVE NOTES TO UNRESTRICTED
         DEFINITIVE NOTES. Any Restricted Definitive Note may be exchanged by
         the Holder thereof for an Unrestricted Definitive Note or transferred
         to a Person or Persons who take delivery thereof in the form of an
         Unrestricted Definitive Note if:

                           (A)      such exchange or transfer is effected
                  pursuant to the Exchange Offer in accordance with the
                  Registration Rights Agreement and the Holder, in the case of
                  an exchange, or the transferee, in the case of a transfer,
                  certifies in the applicable Letter of Transmittal that it is
                  not (1) a broker-dealer, (2) a Person participating in the
                  distribution of the Exchange Notes or (3) a Person who is an
                  affiliate (as defined in Rule 144) of the Company;

                           (B)      any such transfer is effected pursuant to
                  the Shelf Registration Statement in accordance with the
                  Registration Rights Agreement;

                           (C)      any such transfer is effected by a
                  Participating Broker-Dealer pursuant to the Exchange Offer
                  Registration Statement in accordance with the Registration
                  Rights Agreement; or

                           (D)      the Registrar receives the following:

                                    (1)      if the Holder of such Restricted
                           Definitive Notes proposes to exchange such Notes for
                           an Unrestricted Definitive Note, a certificate from
                           such Holder in the form of Exhibit C hereto,
                           including, without limitation, the certifications in
                           item (1)(d) thereof; or

                                    (2)      if the Holder of such Restricted
                           Definitive Notes proposes to transfer such Notes to a
                           Person who shall take delivery thereof in the form of
                           an Unrestricted Definitive Note, a certificate from
                           such Holder in the form of Exhibit B hereto,
                           including, without limitation, the certifications in
                           item (4) thereof,

                  and, in each such case set forth in this subparagraph (D), if
                  the Registrar so requests, an Opinion of Counsel in form
                  reasonably acceptable to the Company


                                       32


                  to the effect that such exchange or transfer is in compliance
                  with the Securities Act and that the restrictions on transfer
                  contained herein and in the Private Placement Legend are no
                  longer required in order to maintain compliance with the
                  Securities Act.

                  (iii)    UNRESTRICTED DEFINITIVE NOTES TO UNRESTRICTED
         DEFINITIVE NOTES. A Holder of Unrestricted Definitive Notes may
         transfer such Notes to a Person who takes delivery thereof in the form
         of an Unrestricted Definitive Note. Upon receipt of a request to
         register such a transfer, the Registrar shall register the Unrestricted
         Definitive Notes pursuant to the instructions from the Holder thereof.

         (f)      EXCHANGE OFFER. Upon the occurrence of the Exchange Offer in
accordance with the Registration Rights Agreement, (i) if the Exchange Offer is
consummated at a time when an Unrestricted Global Note has not yet been issued,
the Company shall issue and, upon receipt of an Authentication Order in
accordance with Section 2.02, the Trustee shall authenticate one or more
Unrestricted Global Notes, (ii) the Trustee shall increase or cause to be
increased the aggregate principal amount of the Unrestricted Global Note by an
amount equal to the aggregate principal amount of the beneficial interests in
the Restricted Global Notes tendered for acceptance by Persons that certify in
the applicable Letters of Transmittal that (x) they are not broker-dealers, (y)
they are not participating in a distribution of the Exchange Notes and (z) they
are not affiliates (as defined in Rule 144) of the Company, and accepted for
exchange in the Exchange Offer and (iii) the Company shall issue and, upon
receipt of a Authentication Order in accordance with Section 2.02, the Trustee
shall authenticate Definitive Notes in an aggregate principal amount equal to
the principal amount of the Restricted Definitive Notes accepted for exchange in
the Exchange Offer. Concurrently with the issuance of such Notes, the Trustee
shall cause the aggregate principal amount of the applicable Restricted Global
Notes to be reduced accordingly, and the Company shall execute and the Trustee
shall authenticate and deliver to the Persons designated by the Holders of
Definitive Notes so accepted Definitive Notes in the appropriate principal
amount.

         Concurrently with the issuance of Exchange Notes in the Exchange Offer,
the Company shall delivery an Opinion of Counsel to the Trustee to the effect
that the Exchange Notes have been duly authorized and, when executed and
authenticated in accordance with the provisions of the Indenture and delivered
in exchange for Restricted Securities in accordance with the Indenture and the
Exchange Offer, will be entitled to the benefits of the Indenture and will be
valid and binding obligations of the Company, enforceable in accordance with
their terms except as (x) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights generally and
(y) rights of acceleration and the availability of equitable remedies may be
limited by equitable principles of general applicability.

         (g)      TRANSFER OR EXCHANGE OF BENEFICIAL INTERESTS IN AN
UNRESTRICTED GLOBAL NOTE OR UNRESTRICTED DEFINITIVE NOTES FOR BENEFICIAL
INTERESTS IN RESTRICTED GLOBAL NOTE OR RESTRICTIVE DEFINITIVE NOTES. Beneficial
interests in an Unrestricted Global Note or Unrestricted Definitive Notes cannot
be exchanged for, or transferred to Persons who take delivery thereof in the
form of, a beneficial interest in a Restricted Global Note or Restricted
Definitive Notes.


                                       33


         (h)      LEGENDS. The following legends shall appear on the face of all
Global Notes and Definitive Notes issued under this Indenture unless
specifically stated otherwise in the applicable provisions of this Indenture.

                  (i)      PRIVATE PLACEMENT LEGEND.

                           (A)      Except as specified in Section 2.06(h)(i)
                  (B) below, each Global Note and each Definitive Note (and all
                  Notes issued in exchange therefor or upon registration of
                  transfers or replacement thereof) shall bear the legend in
                  substantially the following form:

         "THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE U.S.
         SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND,
         ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
         WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
         PERSONS, EXCEPT AS SET FORTH IN THE NEXT SENTENCE. BY ITS ACQUISITION
         HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER:

         (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS
         DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A "QIB"), (B) IT HAS
         ACQUIRED THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH
         REGULATION S UNDER THE SECURITIES ACT OR (C) IT IS AN INSTITUTIONAL
         "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A) (1), (2), (3) OR (7)
         OF REGULATION D UNDER THE SECURITIES ACT (AN "IAI")),

         (2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS NOTE
         EXCEPT (A) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) TO A PERSON
         WHOM THE SELLER REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN
         ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A TRANSACTION MEETING THE
         REQUIREMENTS OF RULE 144A, (C) IN AN OFFSHORE TRANSACTION MEETING THE
         REQUIREMENTS OF RULE 903 OR 904 OF REGULATION S OF THE SECURITIES ACT,
         (D) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
         SECURITIES ACT, (E) TO AN IAI THAT, PRIOR TO SUCH TRANSFER, FURNISHES
         THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND
         AGREEMENTS RELATING TO THE TRANSFER OF THIS NOTE (THE FORM OF WHICH CAN
         BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN
         AGGREGATE PRINCIPAL AMOUNT OF NOTES LESS THAN $250,000, AN OPINION OF
         COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE
         WITH THE SECURITIES ACT, (F) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM
         THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN
         OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY) OR (G) PURSUANT TO AN
         EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH
         THE APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY
         OTHER APPLICABLE JURISDICTION AND


                                       34


         (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN
         INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF
         THIS LEGEND. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND
         "UNITED STATES" HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF
         REGULATION S UNDER THE SECURITIES ACT.

         THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO
         REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING."

                           (B)      Notwithstanding the foregoing, any Global
                  Note or Definitive Note issued (i) upon registration of
                  transfer or replacement of, or in exchange for, any
                  Unrestricted Global Note or Unrestricted Definitive Note or
                  (ii) pursuant to Section 2.06(b)(iv), (c)(ii), (d)(ii),
                  (e)(ii) or (f), and the Global Note issued in exchange for a
                  Regulation S Temporary Global Note pursuant to clause (x) of
                  the second paragraph of Section 2.01(d), shall not bear the
                  Private Placement Legend.

                  (ii)     GLOBAL NOTE LEGEND. Each Global Note shall bear a
         legend (comprising two paragraphs) in substantially the following form:

         "Unless and until it is exchanged in whole or in part for Notes in
         definitive form, this Note may not be transferred except as a whole by
         the Depositary to a nominee of the Depositary or by a nominee of the
         Depositary to the Depositary or another nominee of the Depositary or by
         the Depositary or any such nominee to a successor Depositary or a
         nominee of such successor Depositary. Unless this certificate is
         presented by an authorized representative of The Depository Trust
         Company (55 Water Street, New York, New York) ("DTC"), to the issuer or
         its agent for registration of transfer, exchange or payment, and any
         certificate issued is registered in the name of Cede & Co. or such
         other name as may be requested by an authorized representative of DTC
         (and any payment is made to Cede & Co. or such other entity as may be
         requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE
         OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
         WRONGFUL in as much as the registered owner hereof, Cede & Co., has an
         interest herein.

         "THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
         INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE
         BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY
         PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE
         SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.07 OF
         THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED PURSUANT TO
         SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE
         DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF
         THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A
         SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF MERRILL
         CORPORATION"


                                       35


                  (iii)    REGULATION S TEMPORARY GLOBAL NOTE LEGEND. The
         Regulation S Temporary Global Note shall bear a legend in substantially
         the following form:

         "THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND
         THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED
         NOTES, ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER
         THE HOLDER NOR THE BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY
         GLOBAL NOTE SHALL BE ENTITLED TO RECEIVE PAYMENT OF INTEREST HEREON."

                  (i)      CANCELLATION OR ADJUSTMENT OF GLOBAL NOTES. At such
         time as all beneficial interests in a particular Global Note have been
         exchanged for Definitive Notes or a particular Global Note has been
         redeemed, repurchased or cancelled in whole and not in part, each such
         Global Note shall be returned to or retained and cancelled by the
         Trustee in accordance with Section 2.11 hereof. At any time prior to
         such cancellation, if any beneficial interest in a Global Note is
         exchanged for or transferred to a Person who will take delivery thereof
         in the form of a beneficial interest in another Global Note or for
         Definitive Notes, the principal amount of Notes represented by such
         Global Note shall be reduced accordingly and an endorsement shall be
         made on such Global Note by the Trustee or by the Depositary at the
         direction of the Trustee to reflect such reduction; and if the
         beneficial interest is being exchanged for or transferred to a Person
         who will take delivery thereof in the form of a beneficial interest in
         another Global Note, such other Global Note shall be increased
         accordingly and an endorsement shall be made on such Global Note by the
         Trustee or by the Depositary at the direction of the Trustee to reflect
         such increase.

         (j)      GENERAL PROVISIONS RELATING TO TRANSFERS AND EXCHANGES.

                  (i)      To permit registrations of transfers and exchanges,
         the Company shall execute and the Trustee shall authenticate Global
         Notes and Definitive Notes upon the Company's order or at the
         Registrar's request.

                  (ii)     No service charge shall be made to a holder of a
         beneficial interest in a Global Note or to a Holder of a Definitive
         Note for any registration of transfer or exchange, but the Company may
         require payment of a sum sufficient to cover any transfer tax or
         similar governmental charge payable in connection therewith (other than
         any such transfer taxes or similar governmental charge payable upon
         exchange or transfer pursuant to Sections 3.06, 3.09, 4.10 and 4.14
         hereof).

                  (iii)    The Registrar shall not be required to register the
         transfer of or exchange any Note selected for redemption in whole or in
         part, except the unredeemed portion of any Note being redeemed in part.

                  (iv)     All Global Notes and Definitive Notes issued upon any
         registration of transfer or exchange of Global Notes or Definitive
         Notes shall be the valid obligations of the Company, evidencing the
         same debt, and entitled to the same benefits under this Indenture, as
         the Global Notes or Definitive Notes surrendered upon such registration
         of transfer or exchange.


                                       36


                  (v)      The Company shall not be required (A) to issue, to
         register the transfer of or to exchange any Notes during a period
         beginning at the opening of business 15 days before the day of any
         selection of Notes for redemption under Section 3.02 hereof and ending
         at the close of business on the day of selection, (B) to register the
         transfer of or to exchange any Note so selected for redemption in whole
         or in part, except the unredeemed portion of any Note being redeemed in
         part or (C) to register the transfer of or to exchange a Note between a
         record date and the next succeeding Interest Payment Date.

                  (vi)     Prior to due presentment for the registration of a
         transfer of any Note, the Trustee, any Agent and the Company may deem
         and treat the Person in whose name any Note is registered as the
         absolute owner of such Note for the purpose of receiving payment of
         principal of and interest and Liquidated Damages, if any, on such Notes
         and for all other purposes, and none of the Trustee, any Agent or the
         Company shall be affected by notice to the contrary.

                  (vii)    The Trustee shall authenticate Global Notes and
         Definitive Notes in accordance with the provisions of Section 2.02
         hereof.

                  (viii)   All certifications, certificates and Opinions of
         Counsel required to be submitted to the Registrar pursuant to this
         Section 2.06 to effect a registration of transfer or exchange may be
         submitted by facsimile.

SECTION 2.07   REPLACEMENT NOTES.

         If any mutilated Note is surrendered to the Trustee or the Company and
the Trustee and the Company receive evidence to their satisfaction of the
destruction, loss or theft of any Note, the Company shall issue and the Trustee,
upon receipt of an Authentication Order, shall authenticate a replacement Note
if the Trustee's requirements are met. If required by the Trustee or the
Company, an indemnity bond must be supplied by the Holder that is sufficient in
the judgment of the Trustee and the Company to protect the Company, the Trustee,
any Agent and any authenticating agent from any loss that any of them may suffer
if a Note is replaced. The Company may charge for its expenses in replacing a
Note.

         Every replacement Note is an additional obligation of the Company and
shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.

SECTION 2.08   OUTSTANDING NOTES.

         The Notes outstanding at any time are all the Notes authenticated by
the Trustee except for those cancelled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Note effected by the
Trustee in accordance with the provisions hereof, and those described in this
Section as not outstanding. Except as set forth in Section 2.09 hereof, a Note
does not cease to be outstanding because the Company or an Affiliate of the
Company holds the Note; PROVIDED, HOWEVER, Notes held by the Company or a
Subsidiary of the Company shall not be deemed to be outstanding for purposes of
Section 3.07 hereof.


                                       37


         If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser.

         If the principal amount of any Note is considered paid under Section
4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue.

         If the Paying Agent (other than the Company, a Subsidiary or an
Affiliate of any thereof) holds, on a redemption date or maturity date, money
sufficient to pay Notes payable on that date, then on and after that date such
Notes shall be deemed to be no longer outstanding and shall cease to accrue
interest.

SECTION 2.09   TREASURY NOTES.

         In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, including, without
limitation, for purposes of Section 9.02, Notes owned by the Company, or by any
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with the Company, shall be considered as though not
outstanding, except that for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Notes that the Trustee knows are so owned shall be so disregarded.

SECTION 2.10   TEMPORARY NOTES.

         Until certificates representing Notes are ready for delivery, the
Company may prepare, and the Trustee, upon receipt of an Authentication Order,
shall authenticate, temporary Notes. Temporary Notes shall be substantially in
the form of certificated Notes but may have variations that the Company
considers appropriate for temporary Notes and as shall be reasonably acceptable
to the Trustee. Without unreasonable delay, the Company shall prepare and the
Trustee shall, as soon as practicable upon receipt of an Authentication Order,
authenticate Definitive Notes in exchange for temporary Notes.

         Holders of temporary Notes shall be entitled to all of the benefits of
this Indenture.

SECTION 2.11   CANCELLATION.

         The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else shall cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation and shall destroy
cancelled Notes (subject to the record retention requirement of the Exchange
Act). Certification of the destruction of all cancelled Notes shall be delivered
to the Company. The Trustee shall provide the Company evidence of all Notes that
have been cancelled from time to time as requested by the Company. The Company
may not issue new Notes to replace Notes that it has paid or that have been
delivered to the Trustee for cancellation.


                                       38


SECTION 2.12   DEFAULTED INTEREST.

         If the Company defaults in a payment of interest on the Notes, it shall
pay the defaulted interest in any lawful manner plus, to the extent lawful,
interest payable on the defaulted interest, to the Persons who are Holders on a
subsequent special record date, in each case at the rate provided in the Notes
and in Section 4.01 hereof. The Company shall notify the Trustee in writing of
the amount of defaulted interest proposed to be paid on each Note and the date
of the proposed payment. The Company shall fix or cause to be fixed each such
special record date and payment date; PROVIDED that no such special record date
shall be less than 10 days prior to the related payment date for such defaulted
interest. At least 15 days before the special record date, the Company (or, upon
the written request of the Company, the Trustee in the name and at the expense
of the Company) shall mail or cause to be mailed to Holders a notice that states
the special record date, the related payment date and the amount of such
interest to be paid.

SECTION 2.13   CUSIP NUMBERS

         The Company in issuing the Notes may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption as a convenience to Holders; PROVIDED that any such notice may
state that no representation is made as to the correctness of such numbers
either as printed on the Notes or as contained in any notice of a redemption and
that reliance may be placed only on the other identification numbers printed on
the Notes, and any such redemption shall not be affected by any defect in or
omission of such numbers. The Company will promptly notify the Trustee of any
change in the "CUSIP" numbers.

                                    ARTICLE 3
                            REDEMPTION AND PREPAYMENT

SECTION 3.01   NOTICES TO TRUSTEE.

         If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, it shall furnish to the Trustee,
at least 30 days but not more than 60 days before a redemption date, an
Officers' Certificate setting forth (i) the clause of this Indenture pursuant to
which the redemption shall occur, (ii) the redemption date, (iii) the principal
amount of Notes to be redeemed and (iv) the redemption price.

SECTION 3.02   SELECTION OF NOTES TO BE REDEEMED.

         If less than all of the Notes are to be redeemed at any time, selection
of Notes for redemption will be made by the Trustee in compliance with the
requirements of the principal national securities exchange, if any, on which the
Notes are listed, or, if the Notes are not so listed, on a pro rata basis, by
lot or by such method as the Trustee shall deem fair and appropriate; PROVIDED
that no Notes of $1,000 or less shall be redeemed in part.

         The Trustee shall promptly notify the Company in writing of the Notes
selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. Notes and portions of
Notes selected shall be in amounts of $1,000 or whole multiples of $1,000;
except that if all of the Notes of a Holder are to be redeemed, the entire
outstanding amount of Notes held by such Holder, even if not a multiple of
$1,000, shall be


                                       39


redeemed. Except as provided in the preceding sentence, provisions of this
Indenture that apply to Notes called for redemption also apply to portions of
Notes called for redemption.

SECTION 3.03   NOTICE OF REDEMPTION.

         Subject to the provisions of Section 3.09 hereof, notices of redemption
shall be mailed by first class mail at least 30 but not more than 60 days before
the redemption date to each Holder of Notes to be redeemed at its registered
address. If any Note is to be redeemed in part only, the notice of redemption
that relates to such Note shall state the portion of the principal amount
thereof to be redeemed. A new Note in principal amount equal to the unredeemed
portion thereof will be issued in the name of the Holder thereof upon
cancellation of the original Note. Notes called for redemption become due on the
date fixed for redemption. On and after the redemption date, interest ceases to
accrue on Notes or portions of them called for redemption.

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

         (a)      the redemption date;

         (b)      the redemption price;

         (c)      if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the redemption date
upon surrender of such Note, a new Note or Notes in principal amount equal to
the unredeemed portion shall be issued upon cancellation of the original Note;

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

         (e)      that Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price;

         (f)      that, unless the Company defaults in making such redemption
payment, interest on Notes called for redemption ceases to accrue on and after
the redemption date;

         (g)      the paragraph of the Notes and/or Section of this Indenture
pursuant to which the Notes called for redemption are being redeemed; and

         (h)      that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or printed on the
Notes.

         At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; PROVIDED, HOWEVER, that the
Company shall have delivered to the Trustee, at least 45 days prior to the
redemption date, an Officers' Certificate requesting that the Trustee give such
notice and setting forth the information to be stated in such notice as provided
in the preceding paragraph.


                                       40


SECTION 3.04   EFFECT OF NOTICE OF REDEMPTION.

         Once notice of redemption is mailed in accordance with Section 3.03
hereof, Notes called for redemption become irrevocably due and payable on the
redemption date at the redemption price. A notice of redemption may not be
conditional.

SECTION 3.05   DEPOSIT OF REDEMPTION PRICE.

         Prior to 11:00 a.m. Eastern Time on the redemption date, the Company
shall deposit with the Trustee or with the Paying Agent money sufficient to pay
the redemption price of and accrued interest on all Notes or the portion thereof
to be redeemed on that date. The Trustee or the Paying Agent shall promptly
return to the Company any money deposited with the Trustee or the Paying Agent
by the Company in excess of the amounts necessary to pay the redemption price
of, and accrued interest on, all Notes to be redeemed.

         If the Company complies with the provisions of the preceding paragraph,
on and after the redemption date, interest shall cease to accrue on the Notes or
the portions of Notes called for redemption. If a Note is redeemed on or after
an interest record date but on or prior to the related interest payment date,
then any accrued and unpaid interest shall be paid to the Person in whose name
such Note was registered at the close of business on such record date. If any
Note called for redemption shall not be so paid upon surrender for redemption
because of the failure of the Company to comply with the preceding paragraph,
interest shall be paid on the unpaid principal, from the redemption date until
such principal is paid, and to the extent lawful on any interest and Liquidated
Damages, if any, not paid on such unpaid principal, in each case at the rate
provided in the Notes and in Section 4.01 hereof.

SECTION 3.06          NOTES REDEEMED IN PART.

         Upon surrender of a Note that is redeemed in part, the Company shall
issue and, upon receipt of the Company's written request, the Trustee shall as
soon as practicable authenticate for the Holder at the expense of the Company a
new Note equal in principal amount to the unredeemed portion of the Note
surrendered.

SECTION 3.07          OPTIONAL REDEMPTION.

         Except as provided below, the Notes will not be redeemable at the
Company's option prior to November 1, 2004. Thereafter, the Notes will be
subject to redemption at any time at the option of the Company, in whole or in
part, upon not less than 30 nor more than 60 days' notice, in cash at the
redemption prices (expressed as percentages of principal amount) set forth
below, plus accrued and unpaid interest and Liquidated Damages, if any, thereon
to the applicable redemption date, if redeemed during the twelve-month period
beginning on November 1 of the years indicated below:




      Year                                                 Percentage
      ----                                                 ----------
                                                        
      2004...............................................        106.000%
      2005...............................................        104.000%
      2006...............................................        102.000%


                                       41


      Year                                                     Percentage
      ----                                                     ----------
      2007 and thereafter................................        100.000%


         Notwithstanding the foregoing, on or prior to November 1, 2002, the
Company may redeem up to 35% of the aggregate principal amount of Notes from
time to time originally issued under this Indenture in cash at a redemption
price of 112.000% of the principal amount thereof, plus accrued and unpaid
interest and Liquidated Damages, if any, thereon to the redemption date, with
the net cash proceeds of one or more Public Equity Offerings; PROVIDED that at
least 65% of the aggregate principal amount of Notes from time to time
originally issued under this Indenture remains outstanding immediately after the
occurrence of any such redemption; and PROVIDED FURTHER that such redemption
shall occur within 90 days of the date of the closing of any such Public Equity
Offering.

         Any redemption pursuant to this Section 3.07 shall be made pursuant to
the provisions of Section 3.01 through 3.06 hereof.

SECTION 3.08   MANDATORY REDEMPTION.

         Except as provided in Sections 4.10 and 4.14, the Company is not
required to make mandatory redemption of, or sinking fund payments with respect
to, the Notes.

SECTION 3.09   OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS.

         In the event that, pursuant to Section 4.10 hereof, the Company shall
be required to commence an Asset Sale Offer, it shall follow the procedures
specified below.

         The Asset Sale Offer shall remain open for a period of 20 Business Days
following its commencement and no longer, except to the extent that a longer
period is required by applicable law (the "OFFER PERIOD"). No later than five
Business Days after the termination of the Offer Period (the "PURCHASE DATE"),
the Company shall purchase the principal amount of Notes required to be
purchased pursuant to Section 4.10 hereof (the "OFFER AMOUNT") or, if less than
the Offer Amount has been tendered, all Notes tendered in response to the Asset
Sale Offer. Payment for any Notes so purchased shall be made in the same manner
as interest payments are made.

         If the Purchase Date is on or after an interest record date and on or
before the related interest payment date, any accrued and unpaid interest shall
be paid to the Person in whose name a Note is registered at the close of
business on such record date, and no additional interest shall be payable to
Holders who tender Notes pursuant to the Asset Sale Offer.

         Upon the commencement of an Asset Sale Offer, the Company shall send,
by first class mail, a notice to the Trustee and each of the Holders, with a
copy to the Trustee. The notice shall contain all instructions and materials
necessary to enable such Holders to tender Notes pursuant to the Asset Sale
Offer. The Asset Sale Offer shall be made to all Holders. The notice, which
shall govern the terms of the Asset Sale Offer, shall state:


                                       42


         (a)      that the Asset Sale Offer is being made pursuant to this
Section 3.09 and Section 4.10 hereof and the length of time the Asset Sale Offer
shall remain open;

         (b)      the Offer Amount, the purchase price and the Purchase Date;

         (c)      that any Note not tendered or accepted for payment shall
continue to accrete or accrue interest;

         (d)      that, unless the Company defaults in making such payment, any
Note accepted for payment pursuant to the Asset Sale Offer shall cease to
accrete or accrue interest after the Purchase Date;

         (e)      that Holders electing to have a Note purchased pursuant to an
Asset Sale Offer may only elect to have all of such Note purchased and may not
elect to have only a portion of such Note purchased;

         (f)      that Holders electing to have a Note purchased pursuant to any
Asset Sale Offer shall be required to surrender the Note, with the form entitled
"Option of Holder to Elect Purchase" on the reverse of the Note completed, or
transfer by book-entry transfer, to the Company, an exchange agent or
depositary, if appointed by the Company, or a Paying Agent at the address
specified in the notice at least three days before the Purchase Date;

         (g)      that Holders shall be entitled to withdraw their election if
the Company, the exchange agent or depositary or the Paying Agent, as the case
may be, receives, not later than the expiration of the Offer Period, a telegram,
telex, facsimile transmission or letter setting forth the name of the Holder,
the principal amount of the Note the Holder delivered for purchase and a
statement that such Holder is withdrawing his election to have such Note
purchased;

         (h)      that, if the aggregate principal amount of Notes surrendered
by Holders exceeds the Offer Amount, the Company shall select the Notes to be
purchased on a pro rata basis (with such adjustments as may be deemed
appropriate by the Company so that only Notes in denominations of $1,000, or
integral multiples thereof, shall be purchased); and

         (i)      that Holders whose Notes were purchased only in part shall be
issued new Notes equal in principal amount to the unpurchased portion of the
Notes surrendered (or transferred by book-entry transfer).

         On or before the Purchase Date, the Company shall, to the extent
lawful, accept for payment, on a pro rata basis to the extent necessary, the
Offer Amount of Notes or portions thereof tendered pursuant to the Asset Sale
Offer, or if less than the Offer Amount has been tendered, all Notes tendered,
and shall deliver to the Trustee an Officers' Certificate stating that such
Notes or portions thereof were accepted for payment by the Company in accordance
with the terms of this Section 3.09. The Company, the Depositary or the Paying
Agent, as the case may be, shall promptly (but in any case not later than five
days after the Purchase Date) mail or deliver to each tendering Holder an amount
equal to the purchase price of the Notes tendered by such Holder and accepted by
the Company for purchase, and the Company shall promptly issue a new Note, and
the Trustee, upon written request from the Company shall authenticate and mail
or deliver such new Note to such Holder, in a principal amount equal to any
unpurchased portion of


                                       43


the Note surrendered. Any Note not so accepted shall be promptly mailed or
delivered by the Company to the Holder thereof. The Company shall publicly
announce the results of the Asset Sale Offer on the Purchase Date.

         Other than as specifically provided in this Section 3.09, any purchase
pursuant to this Section 3.09 shall be made pursuant to the provisions of
Sections 3.01 through 3.06 hereof.

                                    ARTICLE 4
                                    COVENANTS

SECTION 4.01   PAYMENT OF NOTES.

         The Company shall pay or cause to be paid the principal of, premium, if
any, and interest on the Notes on the dates and in the manner provided in the
Notes. Principal, premium, if any, and interest shall be considered paid on the
date due if the Paying Agent, if other than the Company or a Subsidiary thereof,
(i) holds as of 12:00 noon Eastern Time on the due date money deposited by the
Company in immediately available funds and designated for and sufficient to pay
all principal, premium, if any, and interest then due and (ii) is not prohibited
from paying such money to the Holders pursuant to the terms of this Indenture or
the Notes. The Company shall pay all Liquidated Damages, if any, in the same
manner on the dates and in the amounts set forth in the Registration Rights
Agreement.

         The Company shall pay interest (including, without limitation,
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
principal and premium, if any, from time to time on demand at the rate equal to
1% per annum in excess of the rate then in effect on the Notes to the extent
lawful and shall pay interest (including, without limitation, post-petition
interest in any proceeding under any Bankruptcy Law) on overdue installments of
interest and Liquidated Damages (without regard to any applicable grace period)
from time to time on demand at the same rate to the extent lawful.

SECTION 4.02   MAINTENANCE OF OFFICE OR AGENCY.

         The Company shall maintain in the Borough of Manhattan, the City of New
York, an office or agency (which may be an office of the Trustee or an affiliate
of the Trustee, Registrar or co-registrar) where Notes may be surrendered for
registration of transfer or for exchange and where notices and demands to or
upon the Company in respect of the Notes and this Indenture may be served. The
Company shall give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee.

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


                                       44


prompt written notice to the Trustee of any such designation or rescission and
of any change in the location of any such other office or agency.

         The Company hereby designates the Corporate Trust Office of the Trustee
as one such office or agency of the Company in accordance with Section 2.03
hereof.

SECTION 4.03   REPORTS.

         Whether or not required by the rules and regulations of the Commission,
so long as any Notes are outstanding, the Company will furnish to the Holders of
Notes (a) all quarterly and annual financial information that would be required
to be contained in a filing with the Commission on Forms 10-Q and 10-K if the
Company were required to file such Forms, including, without limitation, a
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and, with respect to the annual information only, a report thereon
by the Company's certified independent accountants, and (b) all current reports
that would be required to be filed with the Commission on Form 8-K if the
Company were required to file such reports, in each case, within the time
periods specified in the Commission's rules and regulations. In addition,
following the consummation of the exchange offer contemplated by the
Registration Rights Agreement, whether or not required by the rules and
regulations of the Commission, the Company will file a copy of all such
information and reports referred to in clauses (a) and (b) above with the
Commission for public availability within the time periods specified in the
Commission's rules and regulations (unless the Commission will not accept such a
filing) and make such information available to securities analysts and
prospective investors upon request. In addition, each of the Company and the
Guarantors have agreed that, for so long as any Notes remain outstanding, it
will furnish to the Holders and to securities analysts and prospective
investors, upon their request, the information required to be delivered pursuant
to Rule 144A(d)(4) under the Securities Act during any period in which the
Company or the Guarantors, respectively, are not subject to Section 13 or 15(d)
of the Exchange Act.

SECTION 4.04   COMPLIANCE CERTIFICATE.

         (a)      The Company and the Guarantors (to the extent the Guarantors
are so required under the TIA) shall deliver to the Trustee, within 90 days
after the end of each fiscal year, an Officers' Certificate stating that a
review of the activities of the Company and its Subsidiaries during the
preceding fiscal year have been made under the supervision of the signing
Officers with a view to determining whether the Company and the Guarantors (if
applicable) have kept, observed, performed and fulfilled their obligations under
this Indenture, and further stating, as to each such Officer signing such
certificate, that to the best of his or her knowledge the Company and the
Guarantors (if applicable) have kept, observed, performed and fulfilled each and
every covenant contained in this Indenture and is not in default in the
performance or observance of any of the terms, provisions and conditions of this
Indenture (or, if a Default or Event of Default shall have occurred, describing
all such Defaults or Events of Default of which he or she may have knowledge and
what action the Company and the Guarantors (if applicable) are taking or propose
to take with respect thereto) and that to the best of his or her knowledge no
event has occurred and remains in existence by reason of which payments on
account of the principal of or interest or Liquidated Damages, if any, on the
Notes is prohibited or if such event has occurred, a description of the event
and what action the Company and the Guarantors (if applicable) are taking or
proposes to take with respect thereto.


                                       45


         (b)      So long as not contrary to the then current recommendations of
the American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03(a) above shall be accompanied by a
written statement of the Company's independent public accountants (which shall
be a firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Company has violated
any provisions of Article 4 or Article 5 hereof or, if any such violation has
occurred, specifying the nature and period of existence thereof, it being
understood that such accountants shall not be liable directly or indirectly to
any Person for any failure to obtain knowledge of any such violation.

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

SECTION 4.05   TAXES.

         The Company shall pay, and shall cause each of its Subsidiaries to pay,
prior to delinquency, all material taxes, assessments, and governmental levies
except such as are contested in good faith and by appropriate proceedings or
where the failure to effect such payment is not adverse in any material respect
to the Holders of the Notes.

SECTION 4.06   STAY, EXTENSION AND USURY LAWS.

         Each of the Company and the Guarantors covenants that it shall not at
any time insist upon, plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay, extension or usury law wherever enacted, now
or at any time hereafter in force, that may affect the covenants or the
performance of this Indenture; and each of the Company and the Guarantors hereby
expressly waive all benefit or advantage of any such law, and covenants that it
shall not, by resort to any such law, hinder, delay or impede the execution of
any power herein granted to the Trustee, but shall suffer and permit the
execution of every such power as though no such law has been enacted.

SECTION 4.07   RESTRICTED PAYMENTS.

         The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, (a) declare or pay any dividend or make
any other payment or distribution on account of the Company's or any of its
Restricted Subsidiaries' Equity Interests (other than dividends or distributions
payable in Equity Interests (other than Disqualified Stock) of the Company or
dividends or distributions payable to the Company or any Wholly Owned Restricted
Subsidiary of the Company); (b) purchase, redeem or otherwise acquire or retire
for value any Equity Interests of the Company (other than any such Equity
Interests owned by the Company or any Restricted Subsidiary of the Company); (c)
make any principal payment on or with respect to, or purchase, redeem, defease
or otherwise acquire or retire for value, any Indebtedness of the Company that
is subordinated in right of payment to the Notes, except in accordance with the
mandatory redemption or repayment provisions set forth in the original
documentation governing such Indebtedness (but not pursuant to any mandatory
offer to repurchase upon the occurrence of any event); or (d) make any
Restricted Investment (all such payments and other actions set forth


                                       46


in clauses (a) through (d) above being collectively referred to as "RESTRICTED
PAYMENTS"), unless, at the time of and after giving effect to such Restricted
Payment:

                  (i)      no Default or Event of Default shall have occurred
         and be continuing or would occur as a consequence thereof; and

                  (ii)     the Company would, immediately after giving PRO FORMA
         effect thereto as if such Restricted Payment had been made at the
         beginning of the applicable four-quarter period, have been permitted to
         incur at least $1.00 of additional Indebtedness pursuant to the Fixed
         Charge Coverage Ratio test set forth in the first paragraph of Section
         4.09 hereof; and

                  (iii)    such Restricted Payment, together with the aggregate
         amount of all other Restricted Payments made by the Company and its
         Restricted Subsidiaries after the Original Issuance Date (excluding
         Restricted Payments permitted by clauses (a) (to the extent that the
         declaration of any dividend referred to therein reduces amounts
         available for Restricted Payments pursuant to this clause (iii)), (b)
         through (g), (i), (j), (l), (m), (n) and (p) of the next succeeding
         paragraph), is less than the sum, without duplication, of (A) 50% of
         the Consolidated Net Income of the Company for the period (taken as one
         accounting period) commencing August 1, 1999 to the end of the
         Company's most recently ended fiscal quarter for which internal
         financial statements are available at the time of such Restricted
         Payment (or, if such Consolidated Net Income for such period is a
         deficit, less 100% of such deficit), plus (B) 100% of the Qualified
         Proceeds received by the Company after the Original Issuance Date from
         contributions to the Company's capital or from the issue or sale after
         the Original Issuance Date of Equity Interests of the Company or of
         Disqualified Stock or convertible debt securities of the Company to the
         extent that they have been converted into such Equity Interests (other
         than Equity Interests, Disqualified Stock or convertible debt
         securities sold to a Subsidiary of the Company and other than
         Disqualified Stock or convertible debt securities that have been
         converted into Disqualified Stock), plus (C) the amount equal to the
         net reduction in Investments in Persons after the Original Issuance
         Date who are not Restricted Subsidiaries (other than Permitted
         Investments) resulting from (x) Qualified Proceeds received as a
         dividend, repayment of a loan or advance or other transfer of assets
         (valued at the fair market value thereof) to the Company or any
         Restricted Subsidiary from such Persons, (y) Qualified Proceeds
         received upon the sale or liquidation of such Investment and (z) the
         redesignation of Unrestricted Subsidiaries (excluding any increase in
         the amount available for Restricted Payments pursuant to clause (h) or
         (l) below arising from the redesignation of such Unrestricted
         Subsidiary) whose assets are used or useful in, or which is engaged in,
         one or more Permitted Business as Restricted Subsidiaries (valued
         (proportionate to the Company's equity interest in such Subsidiary) at
         the fair market value of the net assets of such Subsidiary at the time
         of such redesignation).

         The foregoing provisions will not prohibit:

         (a)      the payment of any dividend within 60 days after the date of
declaration thereof, if at said date of declaration such payment would have
complied with the provisions of this Indenture;


                                       47


         (b)      the redemption, repurchase, retirement, defeasance or other
acquisition of any subordinated Indebtedness or Equity Interests of the Company
in exchange for, or out of the net cash proceeds of the substantially concurrent
sale (other than to a Subsidiary of the Company) of other Equity Interests of
the Company (other than any Disqualified Stock); PROVIDED that the amount of any
such net cash proceeds that are utilized for any such redemption, repurchase,
retirement, defeasance or other acquisition shall be excluded from clause
(iii)(B) of the preceding paragraph;

         (c)      the defeasance, redemption, repurchase, retirement or other
acquisition of subordinated Indebtedness of the Company with the net cash
proceeds from an incurrence of, or in exchange for, Permitted Refinancing
Indebtedness;

         (d)      the repurchase, redemption or other acquisition or retirement
for value of any Equity Interests of the Company or held by any employee or
independent contractor of the Company (or any of its Restricted Subsidiaries)
pursuant to any equity subscription agreement or stock option agreement;
PROVIDED that (i) the aggregate price paid for all such repurchased, redeemed,
acquired or retired Equity Interests shall not exceed (x) $7.5 million in any
calendar year, with unused amounts in any calendar year being carried over to
succeeding calendar years subject to a maximum (without giving effect to the
following clause (y)) of $15.0 million in any calendar year, plus (y) the
aggregate net cash proceeds received by the Company during such calendar year
from any reissuance of Equity Interests by the Company to members of management
of the Company and its Restricted Subsidiaries (provided that the amount of any
such net cash proceeds that are used to permit an acquisition or retirement for
value pursuant to this clause (d) shall be excluded from clause (iii)(B) of the
preceding paragraph) and (ii) no Default or Event of Default shall have occurred
and be continuing immediately after such transaction;

         (e)      payments and transactions in connection with the Merger
(including, without limitation, the Financial Advisory Fee and any payments made
pursuant to the Merger Agreement), the Merger Financing, the New Credit Facility
(including, without limitation, commitment, syndication and arrangement fees
payable thereunder), and the Offering and the application of the proceeds
thereof, and the payment of the fees and expenses with respect thereto;

         (f)      the payment of dividends by a Restricted Subsidiary on any
class of common stock of such Restricted Subsidiary if (i) such dividend is paid
pro rata to all holders of such class of common stock and (ii) at least a
majority of such class of common stock is held by the Company or one or more of
its Restricted Subsidiaries;

         (g)      the repurchase of any class of common stock of a Restricted
Subsidiary if (i) such repurchase is made pro rata with respect to such class of
common stock and (ii) at least a majority of such class of common stock is held
by the Company or one or more of its Restricted Subsidiaries;

         (h)      any other Restricted Investment made in a Permitted Business
which, together with all other Restricted Investments made pursuant to this
clause (h) since the Original Issuance Date, does not exceed $25.0 million (in
each case, after giving effect to all subsequent reductions in the amount of any
Restricted Investment made pursuant to this clause (h), either as a result of


                                       48


(i) the repayment or disposition thereof for cash or (ii) the redesignation of
an Unrestricted Subsidiary as a Restricted Subsidiary valued (proportionate to
the Company's equity interest in such Subsidiary at the time of such
redesignation) at the fair market value of the net assets of such Subsidiary at
the time of such redesignation), in the case of clause (i) and (ii), not to
exceed the amount of such Restricted Investment previously made pursuant to this
clause (h); PROVIDED that no Default or Event of Default shall have occurred and
be continuing immediately after making such Restricted Investment;

         (i)      the declaration and payment of dividends to holders of any
class or series of Disqualified Stock of the Company or any Restricted
Subsidiary issued on or after the Original Issuance Date in accordance with
Section 4.09 hereof; PROVIDED that no Default or Event of Default shall have
occurred and be continuing immediately after making such Restricted Payment;

         (j)      repurchases of Equity Interests deemed to occur upon exercise
of stock options if such Equity Interests represent a portion of the exercise
price of such options;

         (k)      the payment of dividends or distributions on the Company's
common stock, following the first public offering of the Company's common stock
after the Original Issuance Date (other than a public offering of the Company's
common stock registered on Form S-8), of up to 6.0% per year of the net proceeds
received by the Company from such public offering of its common stock; PROVIDED
that no Default or Event of Default shall have occurred and be continuing
immediately after any such payment of dividends or distributions;

         (l)      any other Restricted Payment which, together with all other
Restricted Payments made pursuant to this clause (l) since the Original Issuance
Date, does not exceed $25.0 million (in each case, after giving effect to all
subsequent reductions in the amount of any Restricted Investment made pursuant
to this clause (l) either as a result of (i) the repayment or disposition
thereof for cash or (ii) the redesignation of an Unrestricted Subsidiary as a
Restricted Subsidiary valued (proportionate to the Company's equity interest in
such Subsidiary at the time of such redesignation) at the fair market value of
the net assets of such Subsidiary at the time of such redesignation), in the
case of clause (i) and (ii), not to exceed the amount of such Restricted
Investment previously made pursuant to this clause (l); PROVIDED that no Default
or Event of Default shall have occurred and be continuing immediately after
making such Restricted Payment;

         (m)      the pledge by the Company of the Capital Stock of an
Unrestricted Subsidiary of the Company to secure Non-Recourse Debt of such
Unrestricted Subsidiary;

         (n)      the purchase, redemption or other acquisition or retirement
for value of any Equity Interests of any Restricted Subsidiary issued after the
Original Issuance Date; PROVIDED that the aggregate price paid for any such
repurchased, redeemed, acquired or retired Equity Interests shall not exceed the
sum of (x) the amount of cash and Cash Equivalents received by such Restricted
Subsidiary from the issue or sale thereof and (y) any accrued dividends thereon
the payment of which would be permitted pursuant to clause (i) above;

         (o)      any Investment in an Unrestricted Subsidiary that is funded by
Qualified Proceeds received by the Company after the Original Issuance Date from
contributions to the


                                       49


Company's capital or from the issue and sale after the Original Issuance Date of
Equity Interests of the Company or of Disqualified Stock or convertible debt
securities to the extent they have been converted into such Equity Interests
(other than Equity Interests, Disqualified Stock or convertible debt securities
sold to a Subsidiary of the Company and other than Disqualified Stock or
convertible debt securities that have been converted into Disqualified Stock) in
an amount (measured at the time such Investment is made and without giving
effect to subsequent changes in value) that does not exceed the amount of such
Qualified Proceeds (excluding any such Qualified Proceeds to the extent utilized
to permit a prior "Restricted Payment" pursuant to clause (iii)(B) of the
preceding paragraph); and

         (p)      distributions or payments of Receivables Fees.

         The Board of Directors may designate any Restricted Subsidiary to be an
Unrestricted Subsidiary if such designation would not cause a Default. For
purposes of making such designation, all outstanding Investments by the Company
and its Restricted Subsidiaries (except to the extent repaid in cash) in the
Subsidiary so designated will be deemed to be Restricted Payments at the time of
such designation and will reduce the amount available for Restricted Payments
under the first paragraph of this Section 4.07. All such outstanding Investments
will be deemed to constitute Restricted Investments in an amount equal to the
greater of (i) the net book value of such Investments at the time of such
designation and (ii) the fair market value of such Investments at the time of
such designation. Such designation will only be permitted if such Restricted
Investment would be permitted at such time and if such Restricted Subsidiary
otherwise meets the definition of an Unrestricted Subsidiary.

         The amount of (i) all Restricted Payments (other than cash) shall be
the fair market value on the date of the Restricted Payment of the asset(s) or
securities proposed to be transferred or issued by the Company or such
Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment
and (ii) Qualified Proceeds (other than cash) shall be the fair market value on
the date of receipt thereof by the Company of such Qualified Proceeds. The fair
market value of any non-cash Restricted Payment shall be determined by the Board
of Directors whose resolution with respect thereto shall be delivered to the
Trustee. Not later than the date of making any Restricted Payment, the Company
shall deliver to the Trustee an Officers' Certificate stating that such
Restricted Payment is permitted and setting forth the basis upon which the
calculations required by this Section 4.07 were computed.

SECTION 4.08   DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES.

         The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
Restricted Subsidiary to (a)(i) pay dividends or make any other distributions to
the Company or any of its Restricted Subsidiaries (A) on its Capital Stock or
(B) with respect to any other interest or participation in, or measured by, its
profits, or (ii) pay any Indebtedness owed to the Company or any of its
Restricted Subsidiaries, (b) make loans or advances to the Company or any of its
Restricted Subsidiaries or (c) transfer any of its properties or assets to the
Company or any of its Restricted Subsidiaries. However, the foregoing
restrictions will not apply to encumbrances or restrictions existing under or by
reason of (a) Existing Indebtedness as in effect on the Original Issuance Date,
(b) the New Credit Facility as in


                                       50


effect as of the Original Issuance Date, and any amendments, modifications,
restatements, renewals, increases, supplements, refundings, replacements or
refinancings thereof, (c) this Indenture and the Notes, (d) applicable law and
any applicable rule, regulation or order, (e) any agreement or instrument of a
Person acquired by the Company or any of its Restricted Subsidiaries as in
effect at the time of such acquisition (except to the extent created in
contemplation of such acquisition), which encumbrance or restriction is not
applicable to any Person, or the properties or assets of any Person, other than
the Person, or the property or assets of the Person, so acquired; PROVIDED that,
in the case of Indebtedness, such Indebtedness was permitted by the terms of
this Indenture to be incurred, (f) customary non-assignment or subletting
provisions in leases or licenses entered into in the ordinary course of business
and consistent with past practices, (g) purchase money obligations for property
acquired in the ordinary course of business that impose restrictions of the
nature described in clause (e) above on the property so acquired, (h) contracts
for the sale of assets, including, without limitation, customary restrictions
with respect to a Subsidiary pursuant to an agreement that has been entered into
for the sale or disposition of all or substantially all of the Capital Stock or
assets of such Subsidiary, (i) Permitted Refinancing Indebtedness; PROVIDED that
the restrictions contained in the agreements governing such Permitted
Refinancing Indebtedness are, in the good faith judgment of the Board of
Directors, not materially less favorable, taken as a whole, to the Holders of
the Notes than those contained in the agreements governing the Indebtedness
being refinanced, (j) secured Indebtedness otherwise permitted to be incurred
pursuant to Sections 4.09 and 4.12 hereof that limit the right of the debtor to
dispose of the assets securing such Indebtedness, (k) restrictions on cash or
other deposits or net worth imposed by customers under contracts entered into in
the ordinary course of business, (l) other Indebtedness or Disqualified Stock of
Restricted Subsidiaries permitted to be incurred subsequent to the Original
Issuance Date pursuant to the provisions of Section 4.09 hereof, (m) customary
provisions in joint venture agreements and other similar agreements entered into
in the ordinary course of business, and (n) restrictions created in connection
with any Receivables Facility that, in the good faith determination of the Board
of Directors, are necessary or advisable to effect such Receivables Facility.

SECTION 4.09   INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK.

         The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee
or otherwise become directly or indirectly liable, contingently or otherwise,
with respect to (collectively, "INCUR") any Indebtedness (including, without
limitation, Acquired Indebtedness), the Company will not, and will not permit
any of its Restricted Subsidiaries to, issue any shares of Disqualified Stock
and the Company will not permit any of its Restricted Subsidiaries to issue any
shares of preferred stock; PROVIDED that the Company or any Restricted
Subsidiary may incur Indebtedness (including, without limitation, Acquired
Indebtedness) or issue shares of Disqualified Stock if the Fixed Charge Coverage
Ratio for the Company's most recently ended four full fiscal quarters for which
internal financial statements are available immediately preceding the date on
which such additional Indebtedness is incurred or such Disqualified Stock is
issued would have been at least 2.0 to 1, determined on a consolidated PRO FORMA
basis (including, without limitation, a PRO FORMA application of the net
proceeds therefrom), as if the additional Indebtedness had been incurred, or the
Disqualified Stock had been issued, as the case may be, at the beginning of such
four-quarter period.


                                       51


         The provisions of the first paragraph of this Section 4.09 will not
apply to the incurrence of any of the following items of Indebtedness
(collectively, "PERMITTED INDEBTEDNESS"):

                  (i)      the incurrence by the Company and its Restricted
         Subsidiaries of Indebtedness under the New Credit Facility and the
         Foreign Credit Facilities; PROVIDED that the aggregate principal amount
         of all Indebtedness (with letters of credit being deemed to have a
         principal amount equal to the maximum potential liability of the
         Company and such Restricted Subsidiaries thereunder) outstanding under
         the New Credit Facility and the Foreign Credit Facilities does not
         exceed an amount equal to $325.0 million;

                  (ii)     the incurrence by the Company and its Restricted
         Subsidiaries of Existing Indebtedness;

                  (iii)    the incurrence by the Company of Indebtedness
         represented by the Notes and this Indenture and guarantees thereof by
         its Restricted Subsidiaries;

                  (iv)     the incurrence by the Company or any of its
         Restricted Subsidiaries of Indebtedness or Disqualified Stock
         represented by Capital Expenditure Indebtedness, Capital Lease
         Obligations or other obligations, in each case, the proceeds of which
         are used solely for the purpose of financing all or any part of the
         purchase price or cost of construction or improvement of property,
         plant or equipment (including, without limitation, acquisitions of
         Capital Stock of a Person that becomes a Restricted Subsidiary to the
         extent of the fair market value of the property, plant or equipment so
         acquired) used in the business of the Company or such Restricted
         Subsidiary, in an aggregate principal amount (or accreted value, as
         applicable) or, in the case of Disqualified Stock, liquidation
         preference after giving effect to that incurrence, including all
         Permitted Refinancing Indebtedness incurred to refund, refinance or
         replace any Indebtedness or Disqualified Stock incurred pursuant to
         this clause (iv), not to exceed $30.0 million outstanding after giving
         effect to such incurrence;

                  (v)      Indebtedness arising from agreements of the Company
         or any Restricted Subsidiary providing for indemnification, adjustment
         of purchase price or similar obligations, in each case, incurred or
         assumed in connection with the disposition of any business, assets or a
         Subsidiary, other than guarantees of Indebtedness incurred by any
         Person acquiring all or any portion of such business, assets or
         Restricted Subsidiary for the purpose of financing such acquisition;
         PROVIDED that (A) such Indebtedness is not reflected on the balance
         sheet of the Company or any Restricted Subsidiary (contingent
         obligations referred to in a footnote or footnotes to financial
         statements and not otherwise reflected on the balance sheet will not be
         deemed to be reflected on such balance sheet for purposes of this
         clause (A)) and (B) the maximum assumable liability in respect of such
         Indebtedness shall at no time exceed the gross proceeds including,
         without limitation, non-cash proceeds (the fair market value of such
         non-cash proceeds being measured at the time received and without
         giving effect to any subsequent changes in value) actually received by
         the Company and/or such Restricted Subsidiary in connection with such
         disposition;


                                       52


                  (vi)     the incurrence by the Company or any of its
         Restricted Subsidiaries of Permitted Refinancing Indebtedness in
         exchange for, or the net proceeds of which are used to refund,
         refinance or replace Indebtedness (other than intercompany
         Indebtedness) that was permitted by this Indenture to be incurred;

                  (vii)    the incurrence by the Company or any of its
         Restricted Subsidiaries of intercompany Indebtedness or Disqualified
         Stock between or among the Company and/or any of its Restricted
         Subsidiaries; PROVIDED that (i) if the Company is the obligor on such
         Indebtedness or Disqualified Stock, such Indebtedness or Disqualified
         Stock is expressly subordinated to the prior payment in full in cash of
         all Obligations with respect to the Notes and (ii)(A) any subsequent
         issuance or transfer of Equity Interests that results in any such
         Indebtedness or Disqualified Stock being held by a Person other than
         the Company or a Restricted Subsidiary thereof and (B) any sale or
         other transfer of any such Indebtedness or Disqualified Stock to a
         Person that is not either the Company or a Restricted Subsidiary
         thereof shall be deemed, in each case, to constitute an incurrence of
         such Indebtedness or Disqualified Stock by the Company or such
         Restricted Subsidiary, as the case may be, that was not permitted by
         this clause (vii);

                  (viii)   the incurrence by the Company or any of its
         Restricted Subsidiaries of Hedging Obligations that are incurred for
         the purpose of fixing or hedging (A) interest rate risk with respect to
         any floating rate Indebtedness that is permitted by the terms of this
         Indenture to be outstanding; (B) exchange rate risk with respect to
         agreements or Indebtedness of such Person payable denominated in a
         currency other than U.S. dollars; and (C) risk with respect to
         fluctuations in the cost of raw materials, including paper; PROVIDED
         that such agreements do not increase the Indebtedness of the obligor
         outstanding at any time other than as a result of fluctuations in
         foreign currency exchange rates or interest rates or the cost of raw
         materials or by reason of fees, indemnities and compensation payable
         thereunder;

                  (ix)     the guarantee by the Company or any of its Restricted
         Subsidiaries of Indebtedness or Disqualified Stock of the Company or a
         Restricted Subsidiary of the Company that was permitted to be incurred
         by another provision of this Section 4.09;

                  (x)      the incurrence by the Company or any of its
         Restricted Subsidiaries of Indebtedness or Disqualified Stock in
         connection with an acquisition in an aggregate principal amount (or
         accreted value, as applicable) or, in the case of Disqualified Stock,
         liquidation preference after giving effect to that incurrence,
         including all Permitted Refinancing Indebtedness incurred to refund,
         refinance or replace any Indebtedness or Disqualified Stock incurred
         pursuant to this clause (x), not to exceed $30.0 million outstanding
         after giving effect to such incurrence;

                  (xi)     obligations in respect of performance and surety
         bonds and completion guarantees (including, without limitation, related
         letters of credit) provided by the Company or any Restricted Subsidiary
         in the ordinary course of business; and

                  (xii)    the incurrence by the Company or any of its
         Restricted Subsidiaries of additional Indebtedness or Disqualified
         Stock in an aggregate principal amount (or accreted value, as
         applicable) outstanding or, in the case of Disqualified Stock,


                                       53


         liquidation preference after giving effect to such incurrence,
         including, without limitation, all Permitted Refinancing Indebtedness
         incurred to refund, refinance or replace any Indebtedness or
         Disqualified Stock incurred pursuant to this clause (xii), not to
         exceed $30.0 million.

         For purposes of determining compliance with this Section 4.09, in the
event that an item of Indebtedness or Disqualified Stock meets the criteria of
more than one of the categories of Permitted Indebtedness described in clauses
(i) through (xii) above or is entitled to be incurred pursuant to the first
paragraph of this Section 4.09, the Company shall, in its sole discretion,
classify such item of Indebtedness or Disqualified Stock in any manner that
complies with this Section 4.09 and such item of Indebtedness or Disqualified
Stock will be treated as having been incurred pursuant to only one of such
clauses or pursuant to the first paragraph of this Section 4.09. Accrual of
interest or dividends, accretion or amortization of original issue discount will
not be deemed to be an incurrence of Indebtedness or Disqualified Stock for
purposes of this Section 4.09.

SECTION 4.10   ASSET SALES.

         The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless (a) the Company or such
Restricted Subsidiary, as the case may be, receives consideration at the time of
such Asset Sale at least equal to the fair market value (evidenced by a
resolution of the Board of Directors set forth in an Officers' Certificate
delivered to the Trustee) of the assets or Equity Interests issued or sold or
otherwise disposed of and (b) at least 75% of the consideration therefor
received by the Company or such Restricted Subsidiary is in the form of (i) cash
or Cash Equivalents or (ii) property or assets that are used or useful in a
Permitted Business, or the Capital Stock of any Person engaged in a Permitted
Business if, as a result of the acquisition by the Company or any Restricted
Subsidiary thereof, such Person becomes a Restricted Subsidiary. For purposes of
this Section 4.10 each of the following shall be deemed cash: (x) any
liabilities (as shown on the Company's or such Restricted Subsidiary's most
recent balance sheet), of the Company or any Restricted Subsidiary (other than
contingent liabilities and liabilities that are by their terms subordinated to
the Notes or any guarantee thereof) that are assumed by the transferee of any
such assets pursuant to a customary novation agreement that releases the Company
or such Restricted Subsidiary from further liability, (y) any securities, notes
or other obligations received by the Company or any such Restricted Subsidiary
from such transferee that are converted by the Company or such Restricted
Subsidiary into cash or Cash Equivalents within 180 days of their receipt by the
Company or such Restricted Subsidiary, but only to the extent of the cash or
Cash Equivalents received, and (z) any Designated Noncash Consideration received
by the Company or any of its Restricted Subsidiaries in such Asset Sale having
an aggregate fair market value, taken together with all other Designated Noncash
Consideration received pursuant to this clause (z) that is at that time
outstanding, not to exceed 15% of Total Assets at the time of the receipt of
such Designated Noncash Consideration (with the fair market value of each item
of Designated Noncash Consideration being measured at the time received and
without giving effect to subsequent changes in value); PROVIDED that the 75%
limitation referred to in clause (b) above will not apply to any Asset Sale in
which the cash or Cash Equivalents portion of the consideration received
therefrom, determined in accordance with subclauses (x), (y) and (z) above, is
equal to or greater than what the after-tax proceeds would have been had such
Asset Sale complied with the aforementioned 75% limitation.


                                       54


         Within 365 days after the receipt of any Net Proceeds from an Asset
Sale, the Company or such Restricted Subsidiary, as the case may be, shall apply
such Net Proceeds, at its option (or to the extent the Company or Merrill
Communications LLC is required to apply such Net Proceeds pursuant to the terms
of the New Credit Facility), to (a) repay or purchase Senior Indebtedness or
Pari Passu Indebtedness of the Company or any Indebtedness of any Restricted
Subsidiary, as the case may be; PROVIDED that if the Company shall so repay or
purchase Pari Passu Indebtedness of the Company, it will equally and ratably
reduce Indebtedness under the Notes if the Notes are then redeemable, or, if the
Notes may not then be redeemed, the Company shall make an offer (in accordance
with the procedures set forth below for an Asset Sale Offer) to all Holders of
Notes to purchase at a purchase price equal to 100% of the principal amount of
the Notes, plus accrued and unpaid interest and Liquidated Damages, if any,
thereon to the date of purchase, the Notes that would otherwise be redeemed, or
(b) an investment in property, the making of a capital expenditure or the
acquisition of assets that are used or useful in a Permitted Business, or the
acquisition of Capital Stock of any Person primarily engaged in a Permitted
Business if (i) as a result of the acquisition by the Company or any Restricted
Subsidiary thereof, such Person becomes a Restricted Subsidiary or (ii) the
Investment in such Capital Stock is permitted by clause (f) of the definition of
Permitted Investments. Pending the final application of any such Net Proceeds,
the Company may temporarily reduce Indebtedness or otherwise invest such Net
Proceeds in any manner that is not prohibited by this Indenture. Any Net
Proceeds from Asset Sales that are not applied or invested as provided in the
first sentence of this paragraph will be deemed to constitute "EXCESS PROCEEDS".
When the aggregate amount of Excess Proceeds exceeds $15.0 million, the Company
will be required to make an offer to all Holders of Notes (an "ASSET SALE
OFFER") to purchase the maximum principal amount of Notes that may be purchased
out of the Excess Proceeds, at an offer price in cash in an amount equal to 100%
of the principal amount thereof, plus accrued and unpaid interest and Liquidated
Damages, if any, thereon to the date of purchase, in accordance with the
procedures set forth in this Indenture. To the extent that any Excess Proceeds
remain after consummation of an Asset Sale Offer, the Company may use such
Excess Proceeds for any purpose not otherwise prohibited by this Indenture. If
the aggregate principal amount of Notes surrendered by Holders thereof in
connection with an Asset Sale Offer exceeds the amount of Excess Proceeds, the
Trustee shall select the Notes to be purchased as set forth under Sections 3.02
and 3.03 hereof. Upon completion of such offer to purchase, the amount of Excess
Proceeds shall be reset at zero.

         The Company shall comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of the Notes pursuant to an Asset Sale Offer. To the extent that the
provisions of any securities laws or regulations conflict with the provisions of
this Indenture relating to such Asset Sale Offer, the Company shall comply with
the applicable securities laws and regulations and shall not be deemed to have
breached its obligations described in this Indenture by virtue thereof.

SECTION 4.11   TRANSACTIONS WITH AFFILIATES.

         The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into or make or amend any transaction, contract,
agreement, understanding, loan, advance or guarantee with, or for the benefit
of, any Affiliate of the Company (each of the foregoing, an "AFFILIATE
TRANSACTION"), unless (a) such Affiliate


                                       55


Transaction is on terms that are no less favorable to the Company or such
Restricted Subsidiary than those that would have been obtained in a comparable
transaction by the Company or such Restricted Subsidiary with an unrelated
Person and (b) the Company delivers to the Trustee, with respect to any
Affiliate Transaction or series of related Affiliate Transactions involving
aggregate consideration in excess of $7.5 million, either (i) a resolution of
the Board of Directors set forth in an Officers' Certificate certifying that
such Affiliate Transaction complies with clause (a) above and that such
Affiliate Transaction has been approved by a majority of the disinterested
members of the Board of Directors or (ii) an opinion as to the fairness to the
Holders of such Affiliate Transaction from a financial point of view issued by
an accounting, appraisal or investment banking firm of national standing.

         Notwithstanding the foregoing, the following items shall not be deemed
to be Affiliate Transactions: (a) customary directors' fees, indemnification or
similar arrangements or any employment agreement or other compensation plan or
arrangement entered into by the Company or any of its Restricted Subsidiaries in
the ordinary course of business (including, without limitation, ordinary course
loans to employees not to exceed (i) $7.5 million outstanding in the aggregate
at any time and (ii) $2.0 million to any one employee) and consistent with the
past practice of the Company or such Restricted Subsidiary; (b) transactions
between or among the Company and/or its Restricted Subsidiaries; (c) payments of
customary fees by the Company or any of their Restricted Subsidiaries to DLJ
Merchant Banking funds and its Affiliates made for any financial advisory,
financing, underwriting or placement services or in respect of other investment
banking activities, including, without limitation, in connection with
acquisitions or divestitures which are approved by a majority of the Board of
Directors in good faith; (d) any agreement as in effect on the Original Issuance
Date or any amendment thereto (so long as such amendment is not disadvantageous
to the Holders of the Notes in any material respect) or any transaction
contemplated thereby; (e) payments and transactions in connection with the
Merger and the Merger Financing (including, without limitation, the Financial
Advisory Fee and any payments made pursuant to the Merger Agreement), the New
Credit Facility (including, without limitation, commitment, syndication and
arrangement fees payable thereunder) and the Offering (including, without
limitation, underwriting discounts and commissions in connection therewith) and
the application of the proceeds thereof, and the payment of the fees and
expenses with respect thereto; (f) Restricted Payments that are permitted by
Section 4.07 hereof and any Permitted Investments; and (g) sales of accounts
receivable, or participations therein, in connection with any Receivables
Facility.

SECTION 4.12   LIENS.

         The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume or suffer to
exist any Lien, other than a Permitted Lien, that secures obligations under any
Pari Passu Indebtedness or subordinated Indebtedness of the Company on any asset
or property now owned or hereafter acquired by the Company or any of its
Restricted Subsidiaries, or any income or profits therefrom or assign or convey
any right to receive income therefrom, unless the Notes are equally and ratably
secured with the obligations so secured until such time as such obligations are
no longer secured by a Lien; PROVIDED that, in any case involving a Lien
securing subordinated Indebtedness of the Company, such Lien is subordinated to
the Lien securing the Notes to the same extent that such subordinated
Indebtedness is subordinated to the Notes.


                                       56


SECTION 4.13   CORPORATE EXISTENCE.

         Subject to Article 5 hereof, the Company shall do or cause to be done
all things necessary to preserve and keep in full force and effect (i) the
corporate, partnership or other existence of itself and each of its Restricted
Subsidiaries in accordance with the respective organizational documents (as the
same may be amended from time to time) of the Company or any such Restricted
Subsidiary and (ii) the rights (charter and statutory), licenses and franchises
of the Company and its Restricted Subsidiaries; PROVIDED, HOWEVER, that the
Company shall not be required to preserve any such right, license or franchise,
or the corporate, partnership or other existence of itself and any of its
Subsidiaries, if the Board of Directors shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Company and
its Subsidiaries, taken as a whole, and that the loss thereof is not adverse in
any material respect to the Holders of the Notes.

SECTION 4.14   OFFER TO REPURCHASE UPON CHANGE OF CONTROL.

         (a)      Upon the occurrence of a Change of Control, each Holder of
Notes will have the right to require the Company to repurchase all or any part
(equal to $1,000 or an integral multiple thereof) of such Holder's Notes
pursuant to the offer described below (the "CHANGE OF CONTROL OFFER") at an
offer price in cash equal to 101% of the aggregate principal amount thereof,
plus accrued and unpaid interest and Liquidated Damages, if any, thereon to the
date of repurchase (the "CHANGE OF CONTROL PAYMENT"). Within 90 days following
any Change of Control, the Company will (or will cause the Trustee to) mail a
notice to each Holder describing the transaction or transactions that constitute
the Change of Control and offering to repurchase Notes on the date specified in
such notice, which date shall be no earlier than 30 days and no later than 60
days from the date such notice is mailed (the "CHANGE OF CONTROL PAYMENT DATE"),
pursuant to the procedures required by this Indenture and described in such
notice. The Company shall comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of the Notes as a result of a Change of Control. To the extent that
the provisions of any securities laws or regulations conflict with the
provisions of this Indenture relating to such Change of Control Offer, the
Company shall comply with the applicable securities laws and regulations and
shall not be deemed to have breached its obligations described in this Indenture
by virtue thereof.

         On the Change of Control Payment Date, the Company shall, to the extent
lawful, (a) accept for payment all Notes or portions thereof properly tendered
pursuant to the Change of Control Offer, (b) deposit with the Paying Agent an
amount equal to the Change of Control Payment in respect of all Notes or
portions thereof so tendered and (c) deliver or cause to be delivered to the
Trustee the Notes so accepted together with an Officers' Certificate stating the
aggregate principal amount of Notes or portions thereof being purchased by the
Company. The Paying Agent will promptly mail to each Holder of Notes so tendered
the Change of Control Payment for such Notes, and the Trustee will promptly
authenticate and mail (or cause to be transferred by book-entry) to each Holder
a new Note equal in principal amount to any unpurchased portion of the Notes
surrendered, if any; PROVIDED that each such new Note will be in a principal
amount of $1,000 or an integral multiple thereof. Prior to complying with the
provisions of this Section 4.14, but in any event within 90 days following a
Change of Control, the Company shall either repay all outstanding Senior
Indebtedness or obtain the requisite


                                       57


consents, if any, under all agreements governing outstanding Senior Indebtedness
to permit the repurchase of Notes required by this Section 4.14. The Company
shall publicly announce the results of the Change of Control Offer on or as soon
as practicable after the Change of Control Payment Date.

         Notwithstanding anything to the contrary in this Section 4.14, the
Company will not be required to make a Change of Control Offer upon a Change of
Control if a third party makes the Change of Control Offer in the manner, at the
times and otherwise in compliance with the requirements set forth in this
Indenture applicable to a Change of Control Offer made by the Company and
purchases all Notes validly tendered and not withdrawn under such Change of
Control Offer.

SECTION 4.15   NO SENIOR SUBORDINATED INDEBTEDNESS.

         The Company shall not incur any Indebtedness that is subordinate or
junior in right of payment to any Senior Indebtedness and senior in right of
payment to the Notes and no Guarantor shall incur any Indebtedness that is
subordinate or junior in right of payment to any Senior Indebtedness and senior
in any respect in right of payment to such Guarantor's Note Guarantee.

SECTION 4.16   LIMITATION ON SALE AND LEASEBACK TRANSACTIONS.

         The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, enter into any sale and leaseback transaction; PROVIDED that
the Company or any Restricted Subsidiary may enter into a sale and leaseback
transaction if (a) the Company or such Restricted Subsidiary, as the case may
be, could have (i) incurred Indebtedness in an amount equal to the Attributable
Indebtedness relating to such sale and leaseback transaction pursuant to the
Fixed Charge Coverage Ratio test set forth in Section 4.09 hereof and (ii)
incurred a Lien to secure such Indebtedness pursuant to Section 4.12 hereof, (b)
the gross cash proceeds of such sale and leaseback transaction are at least
equal to the fair market value (as determined in good faith by the Board of
Directors and set forth in an Officers' Certificate delivered to the Trustee) of
the property that is the subject of such sale and leaseback transaction and (c)
the transfer of assets in such sale and leaseback transaction is permitted by,
and the Company applies the proceeds of such transaction in compliance with,
Section 4.10 hereof.

SECTION 4.17   PAYMENTS FOR CONSENT.

         Neither the Company nor any of its Subsidiaries shall, directly or
indirectly, pay or cause to be paid any consideration, whether by way of
interest, fee or otherwise, to any Holder of any Notes for or as an inducement
to any consent, waiver or amendment of any of the terms or provisions of this
Indenture or the Notes unless such consideration is offered to be paid or is
paid to all Holders of the Notes that consent, waive or agree to amend in the
time frame set forth in the solicitation documents relating to such consent,
waiver or agreement.

SECTION 4.18   ADDITIONAL NOTE GUARANTEES.

         If the Company or any of its Subsidiaries shall acquire or create a
Wholly Owned Restricted Subsidiary after the date of this Indenture, then such
newly acquired or created Wholly Owned Restricted Subsidiary shall execute a
Note Guarantee in the form of a Supplemental


                                       58


Indenture and deliver an Opinion of Counsel, in accordance with the terms of
this Indenture, except for (i) all Subsidiaries organized outside of the United
States and its territories, (ii) all Subsidiaries that have properly been
designated as Unrestricted Subsidiaries in accordance with this Indenture for so
long as they continue to constitute Unrestricted Subsidiaries and (iii) all
Subsidiaries that have not guaranteed any Indebtedness under the New Credit
Facility.

                                    ARTICLE 5
                                   SUCCESSORS

SECTION 5.01   MERGER, CONSOLIDATION, OR SALE OF ASSETS.

         The Company may not consolidate or merge with or into (whether or not
the Company is the surviving corporation), or sell, assign, transfer, convey or
otherwise dispose of all or substantially all of its properties or assets in one
or more related transactions to, another Person, unless (a) the Company is the
surviving corporation or the Person formed by or surviving any such
consolidation or merger (if other than the Company) or to which such sale,
assignment, transfer, conveyance or other disposition shall have been made is a
corporation organized or existing under the laws of the United States, any state
thereof or the District of Columbia, (b) the Person formed by or surviving any
such consolidation or merger (if other than the Company) or the Person to which
such sale, assignment, transfer, conveyance or other disposition shall have been
made assumes all the obligations of the Company under the Registration Rights
Agreement, the Notes and this Indenture pursuant to a supplemental indenture in
a form reasonably satisfactory to the Trustee, (c) immediately after such
transaction no Default or Event of Default exists and (d) the Company or the
Person formed by or surviving any such consolidation or merger (if other than
the Company), or to which such sale, assignment, transfer, conveyance or other
disposition shall have been made (i) will, at the time of such transaction and
after giving PRO FORMA effect thereto as if such transaction had occurred at the
beginning of the applicable four-quarter period, be permitted to incur at least
$1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio
test set forth in the first paragraph of Section 4.09 hereof or (ii) would
(together with its Restricted Subsidiaries) have a higher Fixed Charge Coverage
Ratio immediately after such transaction (after giving PRO FORMA effect thereto
as if such transaction had occurred at the beginning of the applicable
four-quarter period) than the Fixed Charge Coverage Ratio of the Company and its
Restricted Subsidiaries immediately prior to such transaction. The foregoing
clause (d) will not prohibit the Merger or (i) a merger between the Company and
a Wholly Owned Subsidiary of the Company created for the purpose of holding the
Capital Stock of the Company, (ii) a merger between the Company and a Wholly
Owned Restricted Subsidiary or (iii) a merger between the Company and an
Affiliate incorporated solely for the purpose of reincorporating the Company in
another State of the United States so long as, in the case of clauses (i), (ii),
and (iii), the amount of Indebtedness of the Company and its Restricted
Subsidiaries is not increased thereby. The Company shall not lease all or
substantially all of its assets to any Person.

SECTION 5.02   SUCCESSOR CORPORATION SUBSTITUTED.

         Upon any consolidation of the Company with or any merger of the Company
into another Person, or any sale, assignment, transfer, lease, conveyance or
other disposition of all or substantially all of the assets of the Company in
accordance with Section 5.01 hereof, the successor corporation formed by such
consolidation or into or with which the Company is merged


                                       59


or to which such sale, assignment, transfer, lease, conveyance or other
disposition is made shall succeed to, and be substituted for (so that from and
after the date of such consolidation, merger, sale, lease, conveyance or other
disposition, the provisions of this Indenture referring to the "Company" shall
refer instead to the successor corporation and not to the Company), and may
exercise every right and power of the Company under this Indenture with the same
effect as if such successor Person had been named as the Company herein;
PROVIDED, HOWEVER, that the predecessor Company shall not be relieved from the
obligation to pay the principal of and interest or Liquidated Damages, if any,
on the Notes except in the case of a sale of all of the Company's assets that
meets the requirements of Section 5.01 hereof.

                                    ARTICLE 6
                              DEFAULTS AND REMEDIES

SECTION 6.01   EVENTS OF DEFAULT.

         Each of the following constitutes an Event of Default:

         (a)      default for 30 days in the payment when due of interest on, or
Liquidated Damages with respect to, the Notes (whether or not prohibited by
Article 10 hereof);

         (b)      default in payment when due of the principal of or premium, if
any, on the Notes (whether or not prohibited by Article 10 hereof);

         (c)      failure by the Company or any of its Restricted Subsidiaries
for 30 days after receipt of notice from the Trustee or Holders of at least 25%
in principal amount of the Notes then outstanding to comply with Sections 4.07,
4.09, 4.10 or 4.14 or Article 5 hereof;

         (d)      failure by the Company for 60 days after notice from the
Trustee or the Holders of at least 25% in principal amount of the Notes then
outstanding to comply with any of its other agreements in this Indenture or the
Notes;

         (e)      default under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company or any of its Restricted
Subsidiaries (or the payment of which is guaranteed by the Company or any of its
Restricted Subsidiaries), whether such Indebtedness or guarantee now exists, or
is created after the Original Issuance Date, which default (i) is caused by a
failure to pay Indebtedness at its stated final maturity (after giving effect to
any applicable grace period provided in such Indebtedness) (a "PAYMENT DEFAULT")
or (ii) results in the acceleration of such Indebtedness prior to its stated
final maturity and, in each case, the principal amount of any such Indebtedness,
together with the principal amount of any other such Indebtedness under which
there has been a Payment Default or the maturity of which has been so
accelerated, aggregates $10.0 million or more;

         (f)      failure by the Company or any of its Restricted Subsidiaries
to pay final judgments aggregating in excess of $10.0 million (net of any
amounts with respect to which a reputable and creditworthy insurance company has
acknowledged liability in writing), which judgments are not paid, discharged or
stayed for a period of 60 days;


                                       60


         (g)      except as permitted by this Indenture, any Note Guarantee
shall be held in any judicial proceeding to be unenforceable or invalid or shall
cease for any reason to be in full force and effect or any Guarantor, or any
Person acting on behalf of any Guarantor, shall deny or disaffirm its
obligations under the Note Guarantees;

         (h)      the Company or any of its Restricted Subsidiaries that is a
Significant Subsidiary:

                  (i)      commences a voluntary case under any Bankruptcy Law,

                  (ii)     consents to the entry of an order for relief against
         it in an involuntary case under any Bankruptcy Law,

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

                  (iv)     makes a general assignment for the benefit of its
         creditors, or

                  (v)      generally is not paying its debts as they become due;
         or

         (i)      a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:

                  (i)      is for relief against the Company or any of its
         Restricted Subsidiaries that is a Significant Subsidiary in an
         involuntary case;

                  (ii)     appoints a Custodian of the Company or any of its
         Restricted Subsidiaries that is a Significant Subsidiary or for all or
         substantially all of the property of the Company or any of its
         Restricted Subsidiaries that is a Significant Subsidiary; or

                  (iii)    orders the liquidation of the Company or any of its
         Restricted Subsidiaries that is a Significant Subsidiary;

and the order or decree remains unstayed and in effect for 60 consecutive days.

SECTION 6.02   ACCELERATION.

         If any Event of Default (other than an Event of Default specified in
clause (h) or (i) of Section 6.01 hereof with respect to the Company or any
Restricted Subsidiary that is a Significant Subsidiary) occurs and is
continuing, the Holders of at least 25% in principal amount of the then
outstanding Notes may direct the Trustee to declare all the Notes to be due and
payable immediately. Upon any such declaration, the Notes shall become due and
payable immediately. However, so long as any Indebtedness permitted to be
incurred pursuant to the New Credit Facility shall be outstanding, such
acceleration shall not be effective until the earlier of (i) an acceleration of
any such Indebtedness under the New Credit Facility or (ii) five Business Days
after receipt by the Company and the administrative agent under the New Credit
Facility of written notice of such acceleration. Notwithstanding the foregoing,
if an Event of Default specified in clause (h) or (i) of Section 6.01 hereof
occurs with respect to the Company or any of its Restricted Subsidiaries that is
a Significant Subsidiary, (i) all outstanding Notes shall, IPSO FACTO, be due
and payable immediately without further action or notice and (ii) the Company
shall


                                       61


promptly notify the Trustee of such Event of Default (although the Notes
shall become due and payable immediately upon the occurrence of such Event of
Default as specified in clause (i) regardless of whether the Company so notifies
the Trustee). The Holders of a majority in aggregate principal amount of the
then outstanding Notes by written notice to the Trustee may on behalf of all of
the Holders rescind an acceleration and its consequences if the rescission would
not conflict with any judgment or decree and if all existing Events of Default
(except nonpayment of principal, interest or premium or Liquidated Damages, if
any, that has become due solely because of the acceleration) have been cured or
waived; PROVIDED that in the event of a declaration of acceleration of the Notes
because an Event of Default has occurred and is continuing as a result of the
acceleration of any Indebtedness described in clause (e) of Section 6.01 hereof,
the declaration of acceleration of the Notes shall be automatically annulled if
the holders of any Indebtedness described in clause (e) of Section 6.01 hereof
have rescinded the declaration of acceleration in respect of such Indebtedness
within 30 days of the date of such declaration and if (i) the annulment of the
acceleration of the Notes would not conflict with any judgment or decree of a
court of competent jurisdiction and (ii) all existing Events of Default, except
non-payment of principal or interest on the Notes that became due solely because
of the acceleration of the Notes, have been cured or waived.

SECTION 6.03   OTHER REMEDIES.

         If an Event of Default occurs and is continuing, the Trustee may pursue
any available remedy to collect the payment of principal, premium, if any, and
interest and Liquidated Damages, if any, on the Notes or to enforce the
performance of any provision of the Notes or this Indenture.

         The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder of a Note in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.

SECTION 6.04   WAIVER OF PAST DEFAULTS.

         Holders of not less than a majority in aggregate principal amount of
the then outstanding Notes by notice to the Trustee may on behalf of the Holders
of all of the Notes waive an existing Default or Event of Default and its
consequences hereunder, except a continuing Default or Event of Default in the
payment of the principal of, premium and Liquidated Damages, if any, or interest
on, the Notes (including, without limitation, in connection with an offer to
purchase) (PROVIDED, HOWEVER, that the Holders of a majority in aggregate
principal amount of the then outstanding Notes may rescind an acceleration and
its consequences, including, without limitation, any related payment default
that resulted from such acceleration). Upon any such waiver, such Default shall
cease to exist, and any Event of Default arising therefrom shall be deemed to
have been cured for every purpose of this Indenture; but no such waiver shall
extend to any subsequent or other Default or impair any right consequent
thereon.


                                       62


SECTION 6.05   CONTROL BY MAJORITY.

         Holders of a majority in principal amount of the then outstanding Notes
may direct the time, method and place of conducting any proceeding for
exercising any remedy available to the Trustee or exercising any trust or power
conferred on it. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture that the Trustee determines may be unduly
prejudicial to the rights of other Holders of Notes or that may result in the
incurrence of liability by the Trustee.

SECTION 6.06   LIMITATION ON SUITS.

         A Holder of a Note may pursue a remedy with respect to this Indenture
or the Notes only if:

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

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

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

         (d)      the Trustee does not comply with the request within 60 days
after receipt of the request and the offer and, if requested, the provision of
indemnity; and

         (e)      during such 60-day period the Holders of a majority in
principal amount of the then outstanding Notes do not give the Trustee a
direction inconsistent with the request.

         A Holder of a Note may not use this Indenture to prejudice the rights
of another Holder of a Note or to obtain a preference or priority over another
Holder of a Note.

SECTION 6.07   RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT.

         Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of principal, premium and Liquidated
Damages, if any, and interest on the Note, on or after the respective due dates
expressed in the Note (including, without limitation, in connection with an
offer to purchase), or to bring suit for the enforcement of any such payment on
or after such respective dates, shall not be impaired or affected without the
consent of such Holder.

SECTION 6.08   COLLECTION SUIT BY TRUSTEE.

         If an Event of Default specified in Section 6.01(a) or (b) occurs and
is continuing, the Trustee is authorized to recover judgment in its own name and
as trustee of an express trust against the Company for the whole amount of
principal of, premium and Liquidated Damages, if any, and interest remaining
unpaid on the Notes and interest and Liquidated Damages, if any, on overdue
principal and, to the extent lawful, interest and such further amount as shall
be sufficient


                                       63


to cover the costs and expenses of collection, including, without
limitation, the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel.

SECTION 6.09   TRUSTEE MAY FILE PROOFS OF CLAIM.

         The Trustee is authorized to file such proofs of claim and other papers
or documents as may be necessary or advisable in order to have the claims of the
Trustee (including, without limitation, any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel) and the Holders of the Notes allowed in any judicial proceedings
relative to the Company (or any other obligor upon the Notes), its creditors or
its property and shall be entitled and empowered to collect, receive and
distribute any money or other property payable or deliverable on any such claims
and any custodian in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee, and in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay to
the Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.07 hereof. To the extent that the
payment of any such compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof out of the estate in any such proceeding, shall be denied
for any reason, payment of the same shall be secured by a Lien on, and shall be
paid out of, any and all distributions, dividends, money, securities and other
properties that the Holders may be entitled to receive in such proceeding
whether in liquidation or under any plan of reorganization or arrangement or
otherwise. Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder, or to authorize the Trustee to vote in respect of the
claim of any Holder in any such proceeding.

SECTION 6.10   PRIORITIES.

         If the Trustee collects any money pursuant to this Article 6, it shall
pay out the money in the following order:

         FIRST:  to the Trustee, its agents and attorneys for amounts due under
Section 7.07 hereof, including, without limitation, payment of all compensation,
expense and liabilities incurred, and all advances made, by the Trustee and the
costs and expenses of collection;

         SECOND:  to holders of Senior Indebtedness to the extent required by
Article 10 or Section 11.02 hereof;

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

         FOURTH:  to the Company or to such party as a court of competent
jurisdiction shall direct.

         The Trustee may fix a record date and payment date for any payment to
Holders of Notes pursuant to this Section 6.10.


                                       64


SECTION 6.11   UNDERTAKING FOR COSTS.

         In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including, without
limitation, reasonable attorneys' fees, against any party litigant in the suit,
having due regard to the merits and good faith of the claims or defenses made by
the party litigant. This Section does not apply to a suit by the Trustee, a suit
by a Holder of a Note pursuant to Section 6.07 hereof, or a suit by Holders of
more than 10% in principal amount of the then outstanding Notes.

                                    ARTICLE 7
                                     TRUSTEE

SECTION 7.01   DUTIES OF TRUSTEE.

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

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

                  (i)      the duties of the Trustee shall be determined solely
         by the express provisions of this Indenture and the Trustee need
         perform only those duties that are specifically set forth in this
         Indenture and no others, and no implied covenants or obligations shall
         be read into this Indenture against the Trustee; and

                  (ii)     in the absence of bad faith on its part, the Trustee
         may conclusively rely, as to the truth of the statements and the
         correctness of the opinions expressed therein, upon certificates or
         opinions furnished to the Trustee and conforming to the requirements of
         this Indenture. However, the Trustee shall examine the certificates and
         opinions to determine whether or not they conform to the requirements
         of this Indenture but need not verify the contents thereof.

         (c)      The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:

                  (i)      this paragraph does not limit the effect of paragraph
         (b) of this Section 7.01;

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

                  (iii)    the Trustee shall not be liable with respect to any
         action it takes or omits to take in good faith in accordance with a
         direction received by it pursuant to Sections 6.02, 6.04 or 6.05
         hereof.


                                       65


         (d)      Whether or not therein expressly so PROVIDED, every provision
of this Indenture that in any way relates to the Trustee is subject to
paragraphs (a), (b), (c), (e) and (f) of this Section 7.01 and Section 7.02
hereof.

         (e)      No provision of this Indenture shall require the Trustee to
expend or risk its own funds or incur any liability. The Trustee shall be under
no obligation to exercise any of its rights and powers under this Indenture at
the request of any Holders, unless such Holder shall have offered to the Trustee
security and indemnity satisfactory to it against any loss, liability or
expense.

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

SECTION 7.02   RIGHTS OF TRUSTEE.

         (a)      The Trustee may conclusively rely and shall be fully protected
in acting or refraining from acting upon any document believed by it to be
genuine and to have been signed or presented by the proper Person. The Trustee
need not investigate any fact or matter stated in the document.

         (b)      Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel or both. The Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on such Officers' Certificate or Opinion of Counsel. The Trustee may
consult with counsel and the advice of such counsel or any Opinion of Counsel
shall be full and complete authorization and protection from liability in
respect of any action taken, suffered or omitted by it hereunder in good faith
and in reliance thereon.

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

         (d)      The Trustee shall not be liable for any action it takes or
omits to take in good faith that it believes to be authorized or within the
rights or powers conferred upon it by this Indenture.

         (e)      Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.

         (f)      The Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request or direction
of any of the Holders unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
that might be incurred by it in compliance with such request or direction.

         (g)      Except with respect to Section 4.01 hereof, the Trustee shall
have no duty to inquire as to the performance of the Company's covenants in
Article 4 hereof. In addition, the Trustee shall not be deemed to have knowledge
of any Default or Event of Default except (i) any Event of Default occurring
pursuant to Sections 6.01(a), 6.01(b) and 4.01 or (ii) any Default or


                                       66


Event of Default of which the Trustee shall have received written notification
or obtained actual knowledge.

         (h)      The Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document, but
the Trustee may, in its discretion, make such further inquiry or investigation
into such facts or matters as it may see fit and if the Trustee shall determine
to make such further inquiry or investigation, it shall be entitled to examine
the books, records and premises of the Company personally or by agent or
attorney.

         (i)      The Trustee shall not be required to give any bond or surety
in respect of the performance of its powers and duties hereunder.

         (j)      Delivery of reports, information and documents to the Trustee
under Section 4.03 is for informational purposes only and the Trustee's receipt
of the foregoing shall not constitute constructive notice of any information
contained therein or determinable from information contained therein, including
the Company's compliance with any of their covenants hereunder (as to which the
Trustee is entitled to rely exclusively on Officers' Certificates).

SECTION 7.03   INDIVIDUAL RIGHTS OF TRUSTEE.

         The Trustee may become the owner or pledgee of Notes and may otherwise
deal with the Company or any Affiliate of the Company with the same rights it
would have if it were not Trustee. However, in the event that the Trustee
acquires any conflicting interest it must eliminate such conflict within 90
days, apply to the Commission for permission to continue as trustee or resign.
Any Agent may do the same with like rights and duties. The Trustee is also
subject to Sections 7.10 and 7.11 hereof.

SECTION 7.04   TRUSTEE'S DISCLAIMER.

         The Trustee shall not be responsible for and makes no representation as
to the validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the Company's use of the proceeds from the Notes or any money
paid to the Company or upon the Company's direction under any provision of this
Indenture, it shall not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee, and it shall not be
responsible for any statement or recital herein or any statement in the Notes or
any other document in connection with the sale of the Notes or pursuant to this
Indenture other than its certificate of authentication.

SECTION 7.05   NOTICE OF DEFAULTS.

         If a Default or Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to Holders of Notes a notice of the
Default or Event of Default within 90 days after such Default or Event Default
becomes known to the Trustee. Except in the case of a Default or Event of
Default in payment of principal of, premium, if any, or interest or Liquidated
Damages, if any, on any Note, the Trustee may withhold the notice if and so long
as a committee of its Responsible Officers in good faith determines that
withholding the notice is in the interests of the Holders of the Notes.


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SECTION 7.06   REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES.

         Within 60 days after each March 1 beginning with the March 1 following
the Original Issuance Date, and for so long as Notes remain outstanding, the
Trustee shall mail to the Holders of the Notes a brief report dated as of such
reporting date that complies with TIA Section 313(a) (but if no event described
in TIA Section 313(a) has occurred within the twelve months preceding the
reporting date, no report need be transmitted). The Trustee also shall comply
with TIA Section (b)(2). The Trustee shall also transmit by mail all reports as
required by TIA Section 313(c).

         A copy of each report at the time of its mailing to the Holders of
Notes shall be mailed to the Company and filed with the Commission and each
stock exchange on which the Notes are listed in accordance with TIA Section
313(d). The Company shall promptly notify the Trustee when the Notes are listed
on any stock exchange.

SECTION 7.07   COMPENSATION AND INDEMNITY.

         The Company shall pay the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and services hereunder. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee promptly
upon request for all reasonable disbursements, advances and expenses incurred or
made by it in addition to the compensation for its services. Such expenses shall
include the reasonable compensation, disbursements and expenses of the Trustee's
agents and counsel.

         The Company and the Guarantors shall jointly and severally indemnify
the Trustee and its agents, employees, officers, directors and shareholders for,
and hold the same harmless against, any and all losses, liabilities or expenses
(including, without limitation, reasonable attorneys' fees and expenses)
incurred by it arising out of or in connection with the acceptance or
administration of its duties under this Indenture, including, without
limitation, the costs and expenses of enforcing this Indenture against the
Company (including, without limitation, this Section 7.07) and defending itself
against any claim (whether asserted by the Company or any Holder or any other
person) or liability in connection with the exercise or performance of any of
its powers or duties hereunder, except to the extent any such loss, liability or
expense may be attributable to its negligence or bad faith. The Trustee shall
notify the Company promptly of any claim for which it may seek indemnity.
Failure by the Trustee to so notify the Company shall not relieve the Company of
its obligations hereunder. The Company shall defend the claim with counsel
reasonably satisfactory to the Trustee, and the Trustee shall cooperate in the
defense at the Company's expense. The Trustee may have separate counsel but
shall not be indemnified by the Company or any Guarantor for fees and expenses
of such counsel except to the extent that a conflict exists with respect to the
representation of both parties by the same counsel. The Company need not pay for
any settlement made without its consent, which consent shall not be unreasonably
withheld.

         The obligations of the Company and the Guarantors under this Section
7.07 shall survive the resignation or removal of the Trustee and/or the
satisfaction and discharge or termination of this Indenture.


                                       68


         To secure the Company's payment obligations in this Section, the
Trustee shall have a Lien prior to the Notes on all money or property held or
collected by the Trustee, except that held in trust to pay principal and
interest on particular Notes. Such Lien shall survive the resignation or removal
of the Trustee and/or the satisfaction and discharge or termination of this
Indenture.

         When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(g) or (h) hereof occurs, the expenses and the
compensation for the services (including, without limitation, the fees and
expenses of its agents and counsel) are intended to constitute expenses of
administration under any Bankruptcy Law.

         The Trustee shall comply with the provisions of TIA Section 313(b)(2)
to the extent applicable.

SECTION 7.08   REPLACEMENT OF TRUSTEE.

         A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section.

         The Trustee may resign in writing at any time and be discharged from
the trust hereby created by so notifying the Company. The Holders of Notes of a
majority in principal amount of the then outstanding Notes may remove the
Trustee by so notifying the Trustee and the Company in writing. The Company may
remove the Trustee if:

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

         (b)      the Trustee is adjudged a bankrupt or an insolvent or an order
for relief is entered with respect to the Trustee under any Bankruptcy Law;

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

         (d)      the Trustee becomes incapable of acting.

         If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.

         If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company, or
the Holders of Notes of at least 10% in principal amount of the then outstanding
Notes may petition any court of competent jurisdiction for the appointment of a
successor Trustee.

         If the Trustee, after written request by any Holder of a Note who has
been a Holder of a Note for at least six months, fails to comply with Section
7.10 hereof, such Holder of a Note may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.


                                       69


         A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders of the Notes. The retiring Trustee shall promptly transfer
all property held by it as Trustee to the successor Trustee, provided all sums
owing to the Trustee hereunder have been paid and subject to the Lien provided
for in Section 7.07 hereof. Notwithstanding replacement of the Trustee pursuant
to this Section 7.08, the Company's obligations under Section 7.07 hereof shall
continue for the benefit of the retiring Trustee.

SECTION 7.09   SUCCESSOR TRUSTEE BY MERGER, ETC.

         If the Trustee consolidates, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another corporation,
the successor corporation without any further act shall be the successor
Trustee.

SECTION 7.10   ELIGIBILITY; DISQUALIFICATION.

         There shall at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or state
authorities and that has a combined capital and surplus of at least $100.0
million as set forth in its most recent published annual report of condition.

         This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1), (2) and (5). The Trustee is subject to
TIA Section 310(b).

SECTION 7.11   PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.

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

                                    ARTICLE 8
                    LEGAL DEFEASANCE AND COVENANT DEFEASANCE

SECTION 8.01   OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE.

         The Company may, at the option of its Board of Directors evidenced by a
resolution set forth in an Officers' Certificate, at any time, elect to have
either Section 8.02 or 8.03 hereof be applied to all outstanding Notes upon
compliance with the conditions set forth below in this Article 8.

SECTION 8.02   LEGAL DEFEASANCE AND DISCHARGE.

         Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Company and the Guarantors shall, subject
to the satisfaction of the conditions


                                       70


set forth in Section 8.04 hereof, be deemed to have been discharged from their
obligations with respect to all outstanding Notes and Note Guarantees on the
date the conditions set forth below are satisfied (hereinafter, "LEGAL
DEFEASANCE"). For this purpose, Legal Defeasance means that the Company shall be
deemed to have paid and discharged the entire Indebtedness represented by the
outstanding Notes, which shall thereafter be deemed to be "outstanding" only for
the purposes of Section 8.05 hereof and the other Sections of this Indenture
referred to in (a) and (b) below, and to have satisfied all its other
obligations under such Notes and this Indenture (and the Trustee, on demand of
and at the expense of the Company, shall execute proper instruments
acknowledging the same), except for the following provisions which shall survive
until otherwise terminated or discharged hereunder:

         (a)      the rights of Holders of outstanding Notes to receive payments
in respect of the principal of, premium, if any, and interest and Liquidated
Damages, if any, on such Notes when such payments are due from the trust
referred to below,

         (b)      the Company's obligations with respect to the Notes concerning
issuing temporary Notes, registration of Notes, mutilated, destroyed, lost or
stolen Notes and the maintenance of an office or agency for payment and money
for security payments held in trust,

         (c)      the rights, powers, trusts, duties and immunities of the
Trustee, and the Company's obligations in connection therewith and

         (d)      the Legal Defeasance provisions of this Indenture.

SECTION 8.03   COVENANT DEFEASANCE.

         Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, the Company shall, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be released from its
obligations under the covenants contained in Sections 4.07, 4.08, 4.09, 4.10,
4.11, 4.12, 4.14, 4.15, 4.16 and 4.17 hereof with respect to the outstanding
Notes on and after the date the conditions set forth in Section 8.04 are
satisfied (hereinafter, "COVENANT DEFEASANCE"), and the Notes shall thereafter
be deemed not "outstanding" for the purposes of any direction, waiver, consent
or declaration or act of Holders (and the consequences of any thereof) in
connection with such covenants, but shall continue to be deemed "outstanding"
for all other purposes hereunder (it being understood that such Notes shall not
be deemed outstanding for accounting purposes). For this purpose, Covenant
Defeasance means, that, with respect to the outstanding Notes, the Company may
omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such covenant, whether directly or
indirectly, by reason of any reference elsewhere herein to any such covenant or
by reason of any reference in any such covenant to any other provision herein or
in any other document and such omission to comply shall not constitute a Default
or an Event of Default under Section 6.01 hereof, but, except as specified
above, the remainder of this Indenture and such Notes shall be unaffected
thereby. In addition, upon the Company's exercise under Section 8.01 hereof of
the option applicable to this Section 8.03 hereof, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, Sections 6.01(d) through
6.01(f) hereof shall not constitute Events of Default.


                                       71


SECTION 8.04   CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.

         The following shall be the conditions to the application of either
Section 8.02 or 8.03 hereof to the outstanding Notes:

         In order to exercise either Legal Defeasance or Covenant Defeasance,

         (a)      the Company must irrevocably deposit with the Trustee, in
trust, for the benefit of the Holders of the Notes, cash in U.S. dollars,
non-callable Government Securities, or a combination thereof, in such amounts as
will be sufficient, in the opinion of a nationally recognized firm of
independent public accountants, to pay the principal of, premium, if any, and
interest and Liquidated Damages, if any, on the outstanding Notes on the stated
maturity or on the applicable redemption date, as the case may be, and the
Company must specify whether the Notes are being defeased to maturity or to a
particular redemption date;

         (b)      in the case of Legal Defeasance, the Company shall have
delivered to the Trustee an Opinion of Counsel in the United States reasonably
acceptable to the Trustee confirming that (i) the Company has received from, or
there has been published by, the Internal Revenue Service a ruling or (ii) since
the Original Issuance Date, there has been a change in the applicable federal
income tax law, in either case to the effect that, and based thereon such
Opinion of Counsel shall confirm that, subject to customary assumptions and
exclusions, the Holders of the outstanding Notes will not recognize income, gain
or loss for federal income tax purposes as a result of such Legal Defeasance and
will be subject to federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such Legal Defeasance had
not occurred;

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

         (d)      no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of Default
resulting from the borrowing of funds to be applied to such deposit) or, insofar
as Events of Default from bankruptcy or insolvency events are concerned, at any
time in the period ending on the 123rd day after the date of deposit;

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

         (f)      the Company must have delivered to the Trustee an Opinion of
Counsel to the effect that, subject to customary assumptions and exclusions,
after the 123rd day following the deposit, the trust funds will not be subject
to the effect of Section 547 of the United States Bankruptcy Code or any
analogous New York State law provision or any other applicable federal


                                       72


or New York bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally;

         (g)      the Company must deliver to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the intent
of preferring the Holders of Notes over the other creditors of the Company with
the intent of defeating, hindering, delaying or defrauding creditors of the
Company or others; and

         (h)      the Company must deliver to the Trustee an Officers'
Certificate and an Opinion of Counsel (which opinion may be subject to customary
assumptions and exclusions), each stating that all conditions precedent provided
for relating to the Legal Defeasance or the Covenant Defeasance have been
complied with.

SECTION 8.05   DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST;
               OTHER MISCELLANEOUS PROVISIONS.

         Subject to Section 8.06 hereof, all money and non-callable Government
Securities (including, without limitation, the proceeds thereof) deposited with
the Trustee (or other qualifying trustee, collectively for purposes of this
Section 8.05, the "TRUSTEE") pursuant to Section 8.04 hereof in respect of the
outstanding Notes shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Notes and this Indenture, to the payment,
either directly or through any Paying Agent (including, without limitation, the
Company acting as Paying Agent) as the Trustee may determine, to the Holders of
such Notes of all sums due and to become due thereon in respect of principal,
premium, if any, and interest and Liquidated Damages, if any, but such money
need not be segregated from other funds except to the extent required by law.

         The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash or non-callable Government
Securities deposited pursuant to Section 8.04 hereof or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.

         Anything in this Article 8 to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon the request of the
Company any money or non-callable Government Securities held by it as provided
in Section 8.04 hereof which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee (which may be the opinion delivered under Section
8.04(a) hereof), are in excess of the amount thereof that would then be required
to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.

SECTION 8.06   REPAYMENT TO COMPANY.

         Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of, premium, if any,
or interest or Liquidated Damages, if any, on any Note and remaining unclaimed
for two years after such principal, and premium, if any, or interest or
Liquidated Damages, if any, has become due and payable shall be paid to the
Company on its request or (if then held by the Company) shall be discharged from


                                       73


such trust; and the Holder of such Note shall thereafter, as a secured creditor,
look only to the Company for payment thereof, and all liability of the Trustee
or such Paying Agent with respect to such trust money, and all liability of the
Company as trustees thereof, shall thereupon cease; PROVIDED, HOWEVER, that the
Trustee or such Paying Agent, before being required to make any such repayment,
may at the expense of the Company cause to be published once, in the NEW YORK
TIMES and THE WALL STREET JOURNAL (national edition), notice that such money
remains unclaimed and that, after a date specified therein, which shall not be
less than 30 days from the date of such notification or publication, any
unclaimed balance of such money then remaining will be repaid to the Company.

SECTION 8.07   REINSTATEMENT.

         If the Trustee or Paying Agent is unable to apply any United States
dollars or non-callable Government Securities in accordance with Section 8.02 or
8.03 hereof, as the case may be, by reason of any order or judgment of any court
or governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 8.02 or 8.03 hereof until such time as the Trustee or Paying Agent is
permitted to apply all such money in accordance with Section 8.02 or 8.03
hereof, as the case may be; PROVIDED, HOWEVER, that, if the Company makes any
payment of principal of, premium, if any, or interest or Liquidated Damages, if
any, on any Note following the reinstatement of its obligations, the Company
shall be subrogated to the rights of the Holders of such Notes to receive such
payment from the money held by the Trustee or Paying Agent.

                                    ARTICLE 9
                        AMENDMENT, SUPPLEMENT AND WAIVER

SECTION 9.01   WITHOUT CONSENT OF HOLDERS OF NOTES.

         Notwithstanding Section 9.02 of this Indenture, the Company, the
Guarantors and the Trustee may amend or supplement this Indenture, the
Guarantees or the Notes without the consent of any Holder of a Note:

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

         (b)      to provide for uncertificated Notes in addition to or in place
of certificated Notes or to alter the provisions of Article 2 hereof (including,
without limitation, the related definitions) in a manner that does not
materially adversely affect any Holder;

         (c)      to provide for the assumption of the Company's or any
Guarantor's obligations to the Holders of the Notes by a successor to the
Company or such Guarantor pursuant to Article 5 hereof;

         (d)      to make any change that would provide any additional rights or
benefits to the Holders of the Notes or that does not adversely affect the legal
rights hereunder of any Holder of the Note;


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         (e)      to comply with requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the TIA;

         (f)      to provide for guarantees of the Notes; or

         (g)      to evidence and provide acceptance of the appointment of a
successor Trustee under the Indenture.

         Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon receipt by the Trustee of the documents described in Section
7.02 hereof, the Trustee shall join with the Company in the execution of any
amended or supplemental Indenture authorized or permitted by the terms of this
Indenture and to make any further appropriate agreements and stipulations that
may be therein contained, but the Trustee shall not be obligated to enter into
such amended or supplemental Indenture that affects its own rights, duties or
immunities under this Indenture or otherwise.

SECTION 9.02   WITH CONSENT OF HOLDERS OF NOTES.

         Except as provided below in this Section 9.02, the Company, the
Guarantors and the Trustee may amend or supplement this Indenture (including,
without limitation, Section 3.09, 4.10 and 4.14 hereof), the Guarantees and the
Notes with the consent of the Holders of at least a majority in principal amount
of the Notes (including, without limitation, Additional Notes, if any) then
outstanding voting as a single class (including, without limitation, consents
obtained in connection with a purchase of, or tender offer or exchange offer
for, the Notes), and, subject to Sections 6.04 and 6.07 hereof, any existing
Default or Event of Default (other than a Default or Event of Default in the
payment of the principal of, premium, if any, or interest or Liquidated Damages,
if any, on the Notes, except a payment default resulting from an acceleration
that has been rescinded) or compliance with any provision of this Indenture, the
Note Guarantees or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes (including, without
limitation, Additional Notes, if any) voting as a single class (including,
without limitation, consents obtained in connection with the purchase of, or
tender offer or exchange offer for, the Notes). Notwithstanding the foregoing,
any (i) amendment to or waiver of Section 4.14 hereof, and (ii) amendment to
Article 10 herein will require the consent of the Holders of at least two-thirds
in aggregate principal amount of the Notes then outstanding if such amendment
would materially adversely affect the rights of Holders of Notes. Sections 2.08
and 2.09 hereof shall determine which Notes are considered to be "outstanding"
for purposes of this Section 9.02.

         Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by
the Trustee of the documents described in Section 7.02 hereof, the Trustee shall
join with the Company in the execution of such amended or supplemental Indenture
unless such amended or supplemental Indenture directly affects the Trustee's own
rights, duties or immunities under this Indenture or otherwise, in which case
the Trustee may in its discretion, but shall not be obligated to, enter into
such amended or supplemental Indenture.


                                       75


         It shall not be necessary for the consent of the Holders of Notes under
this Section 9.02 to approve the particular form of any proposed amendment or
waiver, but it shall be sufficient if such consent approves the substance
thereof.

         After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Company shall mail to the Holders of Notes affected
thereby a notice briefly describing the amendment, supplement or waiver. Any
failure of the Company to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such amended or
supplemental Indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the
Holders of a majority, or at least two-thirds, as the case may be, in aggregate
principal amount of the Notes (including, without limitation, Additional Notes,
if any) then outstanding voting as a single class may waive compliance in a
particular instance by the Company with any provision of this Indenture or the
Notes. However, without the consent of each Holder affected, an amendment or
waiver under this Section 9.02 may not (with respect to any Notes held by a
non-consenting Holder):

         (a)      reduce the principal amount of Notes whose Holders must
consent to an amendment, supplement or waiver,

         (b)      reduce the principal of or change the fixed maturity of any
Note or alter the provisions with respect to the redemption of the Notes (other
than Sections 4.10 and 4.14 hereof),

         (c)      reduce the rate of or extend the time for payment of interest
on any Note,

         (d)      waive a Default or Event of Default in the payment of
principal of or premium, if any, or interest or Liquidated Damages, if any, on
the Notes (except a rescission of acceleration of the Notes by the Holders of at
least a majority in aggregate principal amount of the Notes and a waiver of the
payment default that resulted from such acceleration),

         (e)      make any Note payable in money other than that stated in the
Notes,

         (f)      make any change in the provisions of this Indenture relating
to waivers of past Defaults,

         (g)      waive a redemption payment with respect to any Note (other
than Sections 4.10 and 4.14 hereof), or

         (h)      release any Guarantor from its obligations under its Guarantee
or this Indenture, except in accordance with the terms of this Indenture; or

         (i)      make any change in the foregoing amendment and waiver
provisions.

SECTION 9.03   COMPLIANCE WITH TRUST INDENTURE ACT.

         Every amendment or supplement to this Indenture or the Notes shall be
set forth in an amended or supplemental Indenture that complies with the TIA as
then in effect.


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SECTION 9.04   REVOCATION AND EFFECT OF CONSENTS.

         Until an amendment, supplement or waiver becomes effective, a consent
to it by a Holder of a Note is a continuing consent by the Holder of a Note and
every subsequent Holder of a Note or portion of a Note that evidences the same
debt as the consenting Holder's Note, even if notation of the consent is not
made on any Note. However, any such Holder of a Note or subsequent Holder of a
Note may revoke the consent as to its Note if the Trustee receives written
notice of revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.

SECTION 9.05   NOTATION ON OR EXCHANGE OF NOTES.

         The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Company in
exchange for all Notes may issue and the Trustee shall, upon receipt of an
Authentication Order, authenticate new Notes that reflect the amendment,
supplement or waiver.

         Failure to make the appropriate notation or issue a new Note shall not
affect the validity and effect of such amendment, supplement or waiver.

SECTION 9.06   TRUSTEE TO SIGN AMENDMENTS, ETC.

         The Trustee shall sign any amended or supplemental Indenture authorized
pursuant to this Article 9 if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. The Company
may not sign an amendment or supplemental Indenture until its Board of Directors
approves it. In executing any amended or supplemental indenture, the Trustee
shall be entitled to receive and (subject to Section 7.01 hereof) shall be fully
protected in relying upon, in addition to the documents required by Section
11.04 hereof, an Officer's Certificate and an Opinion of Counsel stating that
the execution of such amended or supplemental indenture is authorized or
permitted by this Indenture.

                                   ARTICLE 10
                                  SUBORDINATION

SECTION 10.01  AGREEMENT TO SUBORDINATE.

         The Company agrees, and each Holder by accepting a Note agrees, that
the payment of Subordinated Note Obligations are subordinated in right of
payment, to the extent and in the manner set forth in this Article 10, to the
prior payment in full in cash or Cash Equivalents of all Senior Indebtedness,
whether outstanding on the Original Issuance Date or thereafter incurred and
that the subordination is for the benefit of the holders of Senior Indebtedness.
The provisions of this Article 10 shall constitute a continuing offer to all
Persons that, in reliance upon such provisions, become holders of, or continue
to hold Senior Indebtedness, and they or each of them may enforce the rights of
holders of Senior Indebtedness hereunder, subject to the terms and provisions
hereof.


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SECTION 10.02  CERTAIN DEFINITIONS.

         "DESIGNATED SENIOR INDEBTEDNESS" means (a) any Indebtedness outstanding
under the New Credit Facility and (b) any other Senior Indebtedness permitted
under this Indenture the principal amount of which is $25.0 million or more and
that has been designated by the Company in writing to the Trustee as "Designated
Senior Indebtedness."

         "PERMITTED JUNIOR SECURITIES" means Equity Interests in the Company or
unsecured debt securities of the Company that are subordinated to all Senior
Indebtedness (and any debt securities issued in exchange for Senior
Indebtedness) to substantially the same extent as, or to a greater extent than,
the Notes are subordinated to Senior Indebtedness that have a final maturity
date and a Weighted Average Life to Maturity which is at least six months
greater than the final maturity of the Senior Indebtedness (and any debt
securities issued in exchange for Senior Indebtedness).

         "REPRESENTATIVE" means the indenture trustee or other trustee, agent or
representative for any Senior Indebtedness.

         "SENIOR INDEBTEDNESS" means, with respect to any Person, (a) all
Obligations of such Person outstanding under the New Credit Facility and all
Hedging Obligations payable to a lender or an Affiliate thereof or to a Person
that was a lender or an Affiliate thereof at the time the contract was entered
into under the New Credit Facility or any of its Affiliates, including, without
limitation, interest accruing subsequent to the filing of, or which would have
accrued but for the filing of, a petition for bankruptcy, whether or not such
interest is an allowable claim in such bankruptcy proceeding, (b) any other
Indebtedness, unless the instrument under which such Indebtedness is incurred
expressly provides that it is subordinated in right of payment to any other
Senior Indebtedness of such Person and (c) all Obligations with respect to the
foregoing. Notwithstanding anything to the contrary in the foregoing, Senior
Indebtedness will not include (i) any liability for federal, state, local or
other taxes, (ii) any Indebtedness of such Person (other than pursuant to the
New Credit Facility) to any of its Subsidiaries or other Affiliates, (iii) any
trade payables or (iv) any Indebtedness that is incurred in violation of this
Indenture.

         "SUBORDINATED NOTE OBLIGATIONS" means all Obligations with respect to
the Notes, including, without limitation, principal, premium, if any, interest
and Liquidated Damages, if any, payable pursuant to the terms of the Notes
(including, without limitation, upon the acceleration or redemption thereof),
together with and including, without limitation, any amounts received or
receivable upon the exercise of rights of rescission or other rights of action
(including, without limitation, claims for damages) or otherwise.

         A "DISTRIBUTION" or "PAYMENT" may consist of a distribution, payment or
other transfer of assets by or on behalf of the Company (including, without
limitation, a redemption, repurchase or other acquisition of the Notes) from any
source, of any kind or character, whether in cash, securities or other property,
by set-off or otherwise.

SECTION 10.03  LIQUIDATION; DISSOLUTION; BANKRUPTCY.

         Upon any distribution to creditors of the Company in a liquidation or
dissolution of the Company or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding


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relating to the Company or its property, an assignment for the benefit of
creditors or any marshaling of the Company's assets and liabilities, (a) the
holders of Senior Indebtedness will be entitled to receive payment in full in
cash or Cash Equivalents of all Obligations due in respect of such Senior
Indebtedness (including, without limitation, interest after the commencement of
any such proceeding, whether or not allowable as a claim in such proceeding, at
the rate specified in the applicable Senior Indebtedness) before the Holders of
Notes will be entitled to receive any payment with respect to the Subordinated
Note Obligations, and (b) until all Obligations with respect to Senior
Indebtedness are paid in full in cash or Cash Equivalents, any distribution to
which the Holders of Notes would be entitled but for this Article 10 shall be
made to the holders of Senior Indebtedness, except that in the case of either
(a) or (b), Holders of Notes may receive and retain Permitted Junior Securities
and payments and other distributions made from the trust described in Section
8.04 hereof.

SECTION 10.04  DEFAULT ON DESIGNATED SENIOR INDEBTEDNESS.

         The Company may not make any payment or distribution to the Trustee or
any Holder upon or in respect of the Subordinated Note Obligations (except in
Permitted Junior Securities or from the trust described in Section 8.04 hereof)
until Obligations with respect to Senior Indebtedness have been paid in full in
cash or Cash Equivalents, if

         (a)      a default in the payment of the principal (including, without
limitation, reimbursement obligations in respect of letters of credit) of,
premium, if any, or interest on or commitment, letter of credit or
administrative fees relating to, Designated Senior Indebtedness occurs and is
continuing beyond any applicable period of grace in the agreement, indenture or
other document governing such Designated Senior Indebtedness, or

         (b)      any other default occurs and is continuing with respect to
Designated Senior Indebtedness that permits holders of the Designated Senior
Indebtedness as to which such default relates to accelerate its maturity and the
Trustee receives a notice of such default (a "PAYMENT BLOCKAGE NOTICE") from the
Company or the holders of any Designated Senior Indebtedness (or their
Representative).

         Payments on the Notes may and shall be resumed (a) in the case of a
payment default, upon the date on which such default is cured or waived and (b)
in case of a nonpayment default, the earlier of the date on which such
nonpayment default is cured or waived or 179 days after the date on which the
applicable Payment Blockage Notice is received, unless a Payment Default on
Designated Senior Indebtedness then exists. No new period of payment blockage
may be commenced unless and until 360 days have elapsed since the effectiveness
of the immediately prior Payment Blockage Notice. No nonpayment default that
existed or was continuing on the date of delivery of any Payment Blockage Notice
to the Trustee shall be, or be made, the basis for a subsequent Payment Blockage
Notice unless such default shall have been waived or cured for a period of not
less than 90 days.

SECTION 10.05  ACCELERATION OF SECURITIES.

         If payment of the Notes is accelerated because of an Event of Default,
the Company shall promptly notify holders of Senior Indebtedness of the
acceleration.


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SECTION 10.06  WHEN DISTRIBUTION MUST BE PAID OVER.

         In the event that the Trustee or any Holder receives any payment of any
Subordinated Note Obligations at a time when the Trustee or such Holder, as
applicable, has actual knowledge that such payment is prohibited by Section
10.03 or 10.04 hereof, such payment shall be held by the Trustee or such Holder,
in trust for the benefit of, and shall be paid forthwith over and delivered,
upon written request, to, the holders of Senior Indebtedness as their interests
may appear or their Representative under the indenture or other agreement (if
any) pursuant to which Senior Indebtedness may have been issued, as their
respective interests may appear, for application to the payment of all
Obligations with respect to Senior Indebtedness remaining unpaid to the extent
necessary to pay such Obligations in full in accordance with their terms, after
giving effect to any concurrent payment or distribution to or for the holders of
Senior Indebtedness.

         With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform only such obligations on the part of the Trustee as are
specifically set forth in this Article 10, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness, and shall not be
liable to any such holders if the Trustee shall pay over or distribute to or on
behalf of Holders or the Company or any other Person money or assets to which
any holders of Senior Indebtedness shall be entitled by virtue of this Article
10, except if such payment is made as a result of the willful misconduct or
gross negligence of the Trustee.

SECTION 10.07  NOTICE BY COMPANY.

         The Company shall promptly notify the Trustee and the Paying Agent of
any facts known to the Company that would cause a payment of any Obligations
with respect to the Notes to violate this Article 10, but failure to give such
notice shall not affect the subordination of the Notes to the Senior
Indebtedness as provided in this Article 10.

SECTION 10.08  SUBROGATION.

         After all Senior Indebtedness is paid in full in cash or Cash
Equivalents and until the Notes are paid in full, Holders of Notes shall be
subrogated (equally and ratably with all other Indebtedness pari passu with the
Notes) to the rights of holders of Senior Indebtedness to receive distributions
applicable to Senior Indebtedness to the extent that distributions otherwise
payable to the Holders of Notes have been applied to the payment of Senior
Indebtedness. A distribution made under this Article 10 to holders of Senior
Indebtedness that otherwise would have been made to Holders of Notes is not, as
between the Company and Holders, a payment by the Company on the Notes.

SECTION 10.09  RELATIVE RIGHTS.

         This Article 10 defines the relative rights of Holders of Notes and
holders of Senior Indebtedness. Nothing in this Indenture shall:


                                       80


                  (1)      impair, as between the Company and holders of notes,
         the obligation of the Company, which is absolute and unconditional, to
         pay principal of and interest and Liquidated Damages, if any, on the
         Notes in accordance with their terms;

                  (2)      affect the relative rights of Holders of Notes and
         creditors of the Company other than their rights in relation to holders
         of Senior Indebtedness; or

                  (3)      prevent the Trustee or any Holder of Notes from
         exercising its available remedies upon a Default or Event of Default,
         subject to the rights of holders and owners of Senior Indebtedness to
         receive distributions and payments otherwise payable to Holders of
         Notes.

         If the Company fails because of this Article 10 to pay principal of or
interest or Liquidated Damages, if any, on a Note on the due date, the failure
is still a Default or Event of Default.

SECTION 10.10  SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY.

         No right of any holder of Senior Indebtedness to enforce the
subordination of the Indebtedness evidenced by the Notes shall be impaired by
any act or failure to act by the Company or any Holder or by the failure of the
Company or any Holder to comply with this Indenture.

SECTION 10.11  DISTRIBUTION OR NOTICE TO REPRESENTATIVE.

         Whenever a distribution is to be made or a notice given to holders of
Senior Indebtedness, the distribution may be made and the notice given to their
Representative.

         Upon any payment or distribution of assets of the Company referred to
in this Article 10, the Trustee and the Holders of Notes shall be entitled to
rely upon any order or decree made by any court of competent jurisdiction or
upon any certificate of such Representative or of the liquidating trustee or
agent or other Person making any distribution to the Trustee or to the Holders
of Notes for the purpose of ascertaining the Persons entitled to participate in
such distribution, the holders of the Senior Indebtedness and other Indebtedness
of the Company, the amount thereof or payable thereon, the amount or amounts
paid or distributed thereon and all other facts pertinent thereto or to this
Article 10.

SECTION 10.12  RIGHTS OF TRUSTEE AND PAYING AGENT.

         Notwithstanding the provisions of this Article 10 or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts that would prohibit the making of any payment or
distribution by the Trustee, and the Trustee and the Paying Agent may continue
to make payments on the Notes, unless the Trustee shall have received at its
Corporate Trust Office at least five Business Days prior to the date of such
payment written notice of facts that would cause the payment of any Obligations
with respect to the Notes to violate this Article 10. Only the Company or a
Representative may give the notice. Nothing in this Article 10 shall impair the
claims of, or payments to, the Trustee under or pursuant to Section 7.07 hereof.


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         The Trustee may hold Senior Indebtedness with the same rights it would
have if it were not Trustee. Any Agent may do the same with like rights.

SECTION 10.13  AUTHORIZATION TO EFFECT SUBORDINATION.

         Each Holder of Notes, by the Holder's acceptance thereof, authorizes
and directs the Trustee on such Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination as provided in this
Article 10, and appoints the Trustee to act as such Holder's attorney-in-fact
for any and all such purposes. If the Trustee does not file a proper proof of
claim or proof of debt in the form required in any proceeding referred to in
Section 6.09 hereof at least 30 days before the expiration of the time to file
such claim, the Representative is hereby authorized to file an appropriate claim
for and on behalf of the Holders of the Notes.

SECTION 10.14  NO WAIVER OF SUBORDINATION PROVISIONS.

         (a)      No right of any present or future holder of any Senior
Indebtedness to enforce subordination as herein provided shall at any time in
any way be prejudiced or impaired by any act or failure to act by any such
holder.

         (b)      Without in any way limiting the generality of paragraph (a) of
this Section 10.14, the holders of Senior Indebtedness may, at any time and from
time to time, without the consent of or notice to the Trustee or any Holder,
without incurring responsibility to any Holder and without impairing or
releasing the subordination provided in this Article 10 or the obligations
hereunder of the Holders to the holders of Senior Indebtedness, do any one or
more of the following: (i) change the manner, place or terms of payment or
extend the time of payment of, or renew or alter, any Senior Indebtedness or any
instrument evidencing the same or any agreement under which Senior Indebtedness
is outstanding; (ii) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing Senior Indebtedness; (iii) release any
Person liable in any manner for the collection of Senior Indebtedness; and (iv)
exercise or refrain from exercising any rights against either Company or any
other Person.

SECTION 10.15  AMENDMENTS.

         The provisions of this Article 10 (and the definitions used herein)
shall not be amended or modified without the written consent of a majority of
the holders of all Senior Indebtedness.

SECTION 10.16  TRUSTEE'S COMPENSATION NOT PREJUDICED.

         Nothing in this Article 10 shall apply to amounts due to the Trustee
pursuant to other sections of this Indenture.

                                   ARTICLE 11
                                 NOTE GUARANTEES

SECTION 11.01  GUARANTEES.

         Subject to this Article 11, each Guarantor hereby unconditionally
guarantees to each Holder of a Note authenticated and delivered by the Trustee
and to the Trustee and its successors


                                       82


and assigns, irrespective of the validity and enforceability of this Indenture,
the Notes or the obligations of the Company hereunder and thereunder, that: (a)
the principal of and interest and Liquidated Damages, if any, on the Notes will
be promptly paid in full when due, whether at maturity, by acceleration,
redemption or otherwise, and interest on the overdue principal of and interest
and Liquidated Damages, if any, on the Notes, if any, if lawful, and all other
obligations of the Company to the Holders and the Trustee hereunder or
thereunder will be promptly paid in full or performed, all in accordance with
the terms hereof and thereof; and (b) in case of any extension of time of
payment or renewal of any Notes or any of such other obligations, that the same
will be promptly paid in full when due or performed in accordance with the terms
of the extension or renewal, whether at stated maturity, by acceleration or
otherwise. Failing payment when due of any amount so guaranteed or any
performance so guaranteed for whatever reason, each Guarantor shall be obligated
to pay the same immediately. Each Guarantor agrees that this is a guarantee of
payment and not a guarantee of collection.

         Each Guarantor hereby agrees that its obligations hereunder shall be
unconditional, irrespective of the validity, regularity or enforceability of the
Notes or this Indenture, the absence of any action to enforce the same, any
waiver or consent by any Holder of the Notes with respect to any provisions
hereof or thereof, the recovery of any judgment against the Company, any action
to enforce the same or any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of such Guarantor. Each Guarantor hereby
waives diligence, presentment, demand of payment, filing of claims with a court
in the event of insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice and all demands whatsoever
and covenant that the Note Guarantees shall not be discharged except by complete
performance of the obligations contained in the Notes and this Indenture.

         If any Holder or the Trustee is required by any court or otherwise to
return to the Company, any Guarantor or any custodian, trustee, liquidator or
other similar official acting in relation to either the Company or any
Guarantor, any amount paid by either to the Trustee or such Holder, the Note
Guarantees, to the extent theretofore discharged, shall be reinstated in full
force and effect.

         Each Guarantor agrees that it shall not be entitled to any right of
subrogation in relation to the Holders in respect of any obligations guaranteed
hereby until payment in full of all obligations guaranteed hereby. Each
Guarantor further agrees that, as between such Guarantor, on the one hand, and
the Holders and the Trustee, on the other hand, (x) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article 6 hereof
for the purposes of the Note Guarantees, notwithstanding any stay, injunction or
other prohibition prevention such acceleration in respect of the obligations
guaranteed hereby, and (y) in the event of any declaration of acceleration of
such obligations as proved in Article 6 hereof, such obligations (whether or not
due and payable) shall forthwith become due and payable by such Guarantor for
the purpose of the Note Guarantees.

SECTION 11.02  SUBORDINATION OF NOTE GUARANTEES.

         Each Guarantor agrees, and each Holder by accepting a Note agrees, that
its Obligations under the Note Guarantees pursuant to this Article 11 shall be
junior and subordinated to prior payment in full in cash or Cash Equivalents of
all the Senior Indebtedness of such Guarantor, including such Guarantor's
borrowings under, or guarantee of, the New Credit Facility, on the


                                       83


same basis as the Notes are junior and subordinated to Senior Indebtedness of
the Company as provided in Article 10 hereof. For the purposes of the foregoing
sentence, the Trustee and the Holders shall have the right to receive and/or
retain payments by the Guarantors only at such times as they may receive and/or
retain payments in respect of the Notes pursuant to this Indenture, including
Section 4.15 hereof.

SECTION 11.03  LIMITATION ON GUARANTORS LIABILITY.

         Each Guarantor and, by its acceptance of the Notes, each Holder, hereby
confirms that it is the intention of all such parties that the Note Guarantees
not constitute a fraudulent transfer or conveyance for purposes of Bankruptcy
Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act
or any similar federal or state laws to the extent applicable to the Note
Guarantees. To effectuate the foregoing intention, the Trustee, the Holders and
the Guarantors hereby irrevocably agree that the obligations of the Guarantors
under the Note Guarantees and this Article 11 shall be limited to the maximum
amounts as will, after giving effect to such maximum amount and all other
contingent and fixed liabilities including, without limitation, liabilities
under the New Credit Facility or guarantees of the New Credit Facility, of the
Guarantors that are relevant under such laws (specifically excluding however,
any liabilities of the undersigned (x) in respect of intercompany indebtedness
to the Company or other affiliates of the Company to the extent that such
indebtedness would be discharged in an amount equal to the amount paid by the
undersigned hereunder and (y) under any guarantee of subordinated indebtedness
which guarantee contains a limitation as to maximum amount similar to that set
forth in this paragraph, pursuant to which liability of the undersigned
hereunder is included in the liabilities taken into account in determining such
maximum amount) and after giving effect as assets to the value (as determined
under the applicable provisions of the Fraudulent Transfer Laws) of any rights
of subrogation, reimbursement, indemnification or contribution of the
undersigned pursuant to applicable law or pursuant to the terms of any agreement
(including any such right of contribution under this paragraph). The undersigned
desire to allocate among themselves (collectively, the "Contributing
Guarantors"), in a fair and equitable manner, their obligations arising under
this Guarantee. Accordingly, in the event any payment or distribution is made on
any date by any of the undersigned under this Guarantee (a "Funding Guarantor")
that exceeds its Fair Share (as defined below) as of such date, that Funding
Guarantor shall be entitled to a contribution from each of the other
Contributing Guarantors in the amount of such other Contributing Guarantor's
Fair Share Shortfall (as defined below) as of such date with the result that all
such contributions will cause each Contributing Guarantor's Aggregate Payments
(as defined below) to equal its Fair Share as of such date. "Fair Share" means,
with respect to an undersigned as of any date of determination, an amount equal
to (i) the ratio of (x) the Adjusted Maximum Amounts (as defined below) with
respect to such undersigned to (y) the aggregate of the Adjusted Maximum Amounts
with respect to all of the undersigned MULTIPLIED BY (ii) the aggregate amount
paid or distributed on or before such date by all Funding Guarantors under this
Guarantee in respect to the obligations guaranteed. "Fair Share Shortfall"
means, with respect to a Contributing Guarantor as of any date of determination,
the excess, if any, of the Fair Share of such Contributing Guarantor over the
Aggregate Payments of such Contributing Guarantor. "Adjusted Maximum Amount"
means, with respect to a Contributing Guarantor as of any date of determination,
the maximum aggregate amount of the obligations of such Contributing Guarantor
under this Guarantee determined as of such date in accordance with this
paragraph; PROVIDED that, solely for purposes of calculating the "Adjusted
Maximum Amount" with respect to any Contributing Guarantor for purposes of this
paragraph, any assets or liabilities of such


                                       84


Contributing Guarantor arising by virtue of any rights to subrogation,
reimbursement or indemnification or any rights to or obligations of contribution
hereunder shall not be considered as assets or liabilities of such Contributing
Guarantor. "Aggregate Payments" means, with respect to a Contributing Guarantor
as of any date of determination, an amount equal to (i) the aggregate amount of
all payments and distributions made on or before such date by such Contributing
Guarantor in respect of this Guarantee MINUS (ii) the aggregate amount of all
payments received on or before such date by such Contributing Guarantor from the
other Contributing Guarantors as contributions under this paragraph. The amounts
payable as contributions hereunder shall be determined as of the date on which
the related payment or distribution is made by the applicable Funding Guarantor.
The allocation among Contributing Guarantors of their obligations as set forth
in this paragraph shall not be construed in any way to limit the liability of
any Contributing Guarantor hereunder.

SECTION 11.04  EXECUTION AND DELIVERY OF NOTE GUARANTEES.

         To evidence the Note Guarantees set forth in Section 11.01, each
Guarantor hereby agrees that this Indenture shall be executed on its behalf by
the president or one of its vice presidents.

         If an officer whose signature is on this Indenture no longer holds that
office at the time the Trustee authenticates the Notes, the Note Guarantees
shall be valid nevertheless.

         The delivery of any Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Note Guarantees set
forth in this Indenture on behalf of the Guarantors.

SECTION 11.05  GUARANTORS MAY CONSOLIDATE, ETC. ON CERTAIN TERMS.

         No Guarantor shall consolidate with or merge with or into (whether or
not such Guarantor is the surviving Person) another Person whether or not
affiliated with such Guarantor unless:

         (a)      subject to Section 11.06 hereof, the Person formed by or
surviving any such consolidation or merger (if other than such Guarantor or the
Company) unconditionally assumes all of the obligations of such Guarantor,
pursuant to a supplemental indenture in form and substance reasonably
satisfactory to the Trustee, under the Indenture, the Registration Rights
Agreement and the Note Guarantees on the terms set forth herein or therein; and

         (b)      immediately after giving effect to such transaction, no
Default or Event of Default exists.

         In case of any such consolidation, merger, sale or conveyance and upon
the assumption by the successor Person, by supplemental indenture, executed and
delivered to the Trustee and satisfactory in form and substance to the Trustee,
of the Note Guarantees and the due and punctual performance of all of the
covenants and conditions of this Indenture to be performed by any Guarantor,
such successor Person shall succeed to and be substituted for such Guarantor
with the same effect as if it had been named herein as a Guarantor. All of the
Note Guarantees so issued shall in all respects have the same legal rank and
benefit under this Indenture as the Note


                                       85


Guarantees theretofore and thereafter issued in accordance with the terms of
this Indenture as though all of the Note Guarantees had been issued at the date
of the execution hereof.

SECTION 11.06  RELEASES OF NOTE GUARANTEE.

         In the event of (i) a sale or other disposition of all or substantially
all of the assets of any Guarantor, by way of merger, consolidation or
otherwise, if such Guarantor applied the Net Proceeds of such sale in accordance
with the applicable provisions of this Indenture, including, without limitation,
Section 4.10 hereof, (ii) a sale or other disposition of all of the capital
stock of such Guarantor if the Net Proceeds of such sale are applied in
accordance with the applicable provisions of this Indenture, including, without
limitation, Section 4.10 hereof, or (iii) the designation of any Restricted
Subsidiary that is a Guarantor as an Unrestricted Subsidiary in accordance with
the applicable provisions of this Indenture, then such Guarantor (in the event
of a sale or other disposition, by way of merger, consolidation or otherwise, of
all of the capital stock of such Guarantor or the designation of any Restricted
Subsidiary as an Unrestricted Subsidiary) or the corporation acquiring the
property (in the event of a sale or other disposition of all or substantially
all of the assets of such Guarantor) will be released and relieved of any
obligations under the Note Guarantees. Upon delivery by the Company to the
Trustee of an Officers' Certificate and an Opinion of Counsel to the foregoing
effect, the Trustee shall execute any documents reasonably required in order to
evidence the release the relevant Guarantor from its obligations under the Note
Guarantees.

SECTION 11.07  TRUSTEE'S COMPENSATION NOT PREJUDICED.

         Nothing in Section 11.02 shall apply to amounts due to the Trustee
pursuant to other sections of this Indenture.

                                   ARTICLE 12
                                  MISCELLANEOUS

SECTION 12.01  TRUST INDENTURE ACT CONTROLS.

         If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by TIA Section 318(c), the imposed duties shall control.

SECTION 12.02  NOTICES.

         Any notice or communication by the Company, the Guarantors or the
Trustee to the others is duly given if in writing and delivered in Person or
mailed by first class mail (registered or certified, return receipt requested),
telex, telecopier or overnight air courier guaranteeing next day delivery, to
the others' address.


                                       86


         If to the Company or to the Guarantors:

                  Merrill Corporation
                  One Merrill Circle
                  St. Paul, Minnesota
                  Telecopier No.: (651) 659-7986
                  Attention:  Chief Financial Officer

         With a copy to:

                  Davis Polk & Wardwell
                  450 Lexington Avenue
                  New York, New York 10017
                  Telecopier No.: (212) 450-4800
                  Attention:  Richard D. Truesdell, Jr., Esq.

         and to:

                  Oppenheimer Wolff & Donnelly LLP
                  45 South Seventh Street
                  Plaza VII, Suite 3400
                  Minneapolis, Minnesota  55402
                  Telecopier No.: (612) 607-7100
                  Attention:  Bruce A. Machmeier, Esq.

         If to the Trustee:

                  Norwest Bank Minnesota, N.A.,
                  Norwest Center
                  MAC #N9303-120
                  Sixth and Marquette
                  Minneapolis, MN  55479
                  Telecopier No.:  (612) 667-9825
                  Attention:  James R. Bryant

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

         All notices and communications (other than those sent to Holders) shall
be deemed to have been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when receipt acknowledged, if telecopied; and the next
Business Day after timely delivery to the courier, if sent by overnight air
courier guaranteeing next day delivery.

         Any notice or communication to a Holder shall be mailed by first class
mail, certified or registered, return receipt requested, or by overnight air
courier guaranteeing next day delivery to its address shown on the register kept
by the Registrar. Any notice or communication shall also be so mailed to any
Person described in TIA Section 313(c), to the extent required by the TIA.
Failure


                                       87


to mail a notice or communication to a Holder or any defect in it shall
not affect its sufficiency with respect to other Holders.

         If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.

         If the Company mails a notice or communication to Holders, it shall
mail a copy to the Trustee and each Agent at the same time.

SECTION 12.03  COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF NOTES.

         Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Notes. The
Company, the Trustee, the Registrar and anyone else shall have the protection of
TIA Section 312(c).

SECTION 12.04  CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.

         Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:

         (a)      an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 12.05 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been satisfied; and

         (b)      an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 12.05 hereof) stating that, in the opinion of such counsel, all such
conditions precedent and covenants have been satisfied.

SECTION 12.05  STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.

         Each certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA Section 314(a)(4)) shall comply with the provisions of TIA
Section 314(e) and shall include:

         (a)      a statement that the Person making such certificate or opinion
has read such covenant or condition;

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

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

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



                                       88


SECTION 12.06  RULES BY TRUSTEE AND AGENTS.

         The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.

SECTION 12.07  NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
SHAREHOLDERS; CONSENT TO SHAREHOLDER PAYMENT.

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

SECTION 12.08  GOVERNING LAW.

         THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE AND THE NOTES WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF
ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

SECTION 12.09  NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.

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

SECTION 12.10  SUCCESSORS.

         All agreements of the Company in this Indenture and the Notes shall
bind its successors. All agreements of the Trustee in this Indenture shall bind
its successors.

SECTION 12.11  SEVERABILITY.

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

SECTION 12.12  COUNTERPART ORIGINALS.

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


                                       89


SECTION 12.13         TABLE OF CONTENTS, HEADINGS, ETC.

         The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part of this Indenture and shall in
no way modify or restrict any of the terms or provisions hereof.

[Signatures on following page]


                                       90





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




                                        MERRILL CORPORATION


                                        By: /s/ Rick Atterbury
                                           ----------------------------------
                                                 Name:  Rick Atterbury


                                          Title:     Executive Vice President




                                        THE GUARANTORS,
                                        named in Schedule A hereto


                                        By: /s/ Rick Atterbury
                                           ----------------------------------
                                                 Name:  Rick Atterbury


                                          Title:     Attorney-in-fact




                                        NORWEST BANK MINNESOTA, N.A.,
                                            as trustee


                                        By: /s/ Timothy P. Mowdy
                                           ----------------------------------
                                                 Name:  Timothy P. Mowdy


                                         Title:      Corporate Trust Officer





                                   SCHEDULE A


                                   Guarantors
                                   ----------

                        Merrill Real Estate Company

                        Merrill/Magnus Publishing Corporation

                        Merrill/New York Company

                        Merrill/May Inc.

                        Merrill/Alternatives, Inc.

                        Merrill International

                        FMC Resource Management Corporation

                        Merrill Training & Technology, Inc.

                        Merrill/Global, Inc.

                        Merrill/Executech, Inc.

                        Merrill/Daniels, Inc.

                        Merrill Communications LLC


                                        1




                                   EXHIBIT A-1
                       (Face of Global or Definitive Note)


================================================================================




                                                              CUSIP ____________

                    ____% Senior Subordinated Notes due 2009

No. _____                                                           $___________

                               MERRILL CORPORATION

promises to pay to _______________, or registered assigns, the principal sum of
___________ Dollars on November 1, 2009.

Interest Payment Dates:             May 1 and November 1

Record Dates:                       April 15 and October 15


[INSERT THE GLOBAL NOTE LEGEND, IF APPLICABLE, PURSUANT TO SECTION 2.06(h)(ii)
OF THE INDENTURE]

[INSERT THE PRIVATE PLACEMENT LEGEND, IF APPLICABLE, PURSUANT TO SECTION 2.06(h)
(i) OF THE INDENTURE]

         Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.

                                       Dated:


                                       MERRILL CORPORATION


                                       By:________________________________
                                          Name:___________________________
                                          Title:__________________________


This is one of the Notes referred to
in the within-mentioned Indenture:

NORWEST BANK MINNESOTA, N.A.
as Trustee
     By:_______________________________
         Name:_________________________
         Title:________________________


================================================================================


                                     A1-F-1



                                 (Back of Note)
                     12% Senior Subordinated Notes due 2009

Capitalized terms used herein shall have the meanings assigned to them in the
Indenture referred to below unless otherwise indicated.

         1.       INTEREST. Merrill Corporation, a Minnesota corporation (the
"COMPANY"), promises to pay interest on the principal amount of this Note at 12%
per annum from November 23, 1999 until maturity and shall pay the Liquidated
Damages payable pursuant to Section 5 of the Registration Rights Agreement
referred to below. The Company will pay interest and Liquidated Damages
semi-annually on May 1 and November 1, of each year, or if any such day is not a
Business Day, on the next succeeding Business Day (each, an "INTEREST PAYMENT
DATE"). Interest on the Notes will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from the date of
issuance; PROVIDED that if there is no existing Default in the payment of
interest, and if this Note is authenticated between a record date referred to on
the face hereof and the next succeeding Interest Payment Date, interest shall
accrue from such next succeeding Interest Payment Date; and PROVIDED FURTHER
that the first Interest Payment Date shall be May 1, 2000. The Company shall pay
interest (including, without limitation, post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal and premium, if any,
from time to time on demand at a rate that is 1% per annum in excess of the rate
then in effect to the extent lawful; it shall pay interest (including, without
limitation, post-petition interest in any proceeding under any Bankruptcy Law)
on overdue installments of interest and Liquidated Damages (without regard to
any applicable grace periods) from time to time on demand at the same rate to
the extent lawful. Interest will be computed on the basis of a 360-day year of
twelve 30-day months.

         2.       METHOD OF PAYMENT. The Company will pay interest on the Notes
(except defaulted interest) and Liquidated Damages to the Persons who are
registered Holders of Notes at the close of business on the April 15 or October
15 next preceding the Interest Payment Date, even if such Notes are cancelled
after such record date and on or before such Interest Payment Date, except as
provided in Section 2.12 of the Indenture with respect to defaulted interest.
The Notes will be payable as to principal, premium and Liquidated Damages, if
any, and interest at the office of the Paying Agent and Registrar. Holders of
Notes must surrender their Notes to the Paying Agent to collect principal
payments, and the Company may pay principal and interest and Liquidated Damages,
if any, by check and may mail checks to a Holder's registered address; PROVIDED
that all payments with respect to Global Notes will be paid by wire transfer of
immediately available funds to the account of the Depositary. Such payment shall
be in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts.

         3.       PAYING AGENT AND REGISTRAR. Initially, Norwest Bank Minnesota,
N.A., the Trustee under the Indenture, will act as Paying Agent and Registrar.
The Company may change any Paying Agent or Registrar without notice to any
Holder. The Company or any of its Subsidiaries may act in any such capacity.

         4.       INDENTURE. The Company issued the Notes under an Indenture
dated as of November 23, 1999 ("INDENTURE"), among the Company, the Guarantors
and the Trustee. The terms of the Notes include those stated in the Indenture
and those made part of the Indenture by reference to the Trust Indenture Act of
1939, as amended (15 U.S. Code Sections 77aaa-77bbbb). The Notes are subject to
all such terms, and Holders are referred to the Indenture and such Act for a
statement of such terms. To the extent any provision of this Note conflicts with
the express provisions of the Indenture, the provisions of the Indenture shall
govern and be controlling. The Notes are obligations of the Company limited in
aggregate principal amount to $140,000,000 plus the aggregate principal amount
of any Additional Notes issued pursuant to Section 2.02 of the Indenture and in
compliance with Section 4.09 thereof.


                                     A1-R-1



         5.   OPTIONAL REDEMPTION.

                  (a)      Except as provided in subparagraph (b) of this
         Paragraph 5, the Notes will not be redeemable at the Company's option
         prior to May 1, 2004. Thereafter, the Notes will be subject to
         redemption at any time at the option of the Company, in whole or in
         part, upon not less than 30 nor more than 60 days' notice, in cash at
         the redemption prices (expressed as percentages of principal amount)
         set forth below, plus accrued and unpaid interest and Liquidated
         Damages, if any, thereon to the applicable redemption date, if redeemed
         during the twelve-month period beginning on November 1 of the years
         indicated below:




         YEAR                                                   PERCENTAGE
         ----                                                   ----------
                                                             
         2004................................................    106.000%
         2005................................................    104.000%
         2006................................................    102.000%
         2007 and thereafter.................................    100.000%


                  (b)      Notwithstanding the provisions of subparagraph (a) of
         this Paragraph 5, on or prior to November 1, 2002, the Company may
         redeem up to 35% of the aggregate principal amount of Notes from time
         to time originally issued under the Indenture in cash at a redemption
         price of 112.000% of the principal amount thereof, plus accrued and
         unpaid interest and Liquidated Damages, if any, thereon to the
         redemption date, with the net cash proceeds of one or more Public
         Equity Offerings; PROVIDED that at least 65% of the aggregate principal
         amount of Notes from time to time originally issued under the Indenture
         remains outstanding immediately after the occurrence of any such
         redemption; and PROVIDED FURTHER that such redemption shall occur
         within 90 days of the date of the closing of any such Public Equity
         Offering.

                  (c)      Any redemption pursuant to this subparagraph 5 shall
         be made pursuant to the provisions of Section 3.01 through 3.06 of the
         Indenture.

         6.       MANDATORY REDEMPTION. Except as set forth in paragraph 7
below, the Company shall not be required to make mandatory redemption payments
with respect to the Notes.

         7.       REPURCHASE AT OPTION OF HOLDER.

                  (a)      Upon the occurrence of a Change of Control, each
         Holder of Notes will have the right to require the Company to
         repurchase all or any part (equal to $1,000 or an integral multiple
         thereof) of such Holder's Notes pursuant to the offer described in
         Section 4.14 of the Indenture (the "CHANGE OF CONTROL OFFER") at an
         offer price in cash equal to 101% of the aggregate principal amount
         thereof plus accrued and unpaid interest and Liquidated Damages, if
         any, thereon to the date of repurchase (the "CHANGE OF CONTROL
         PAYMENT"). Within 90 days following any Change of Control, the Company
         will (or will cause the Trustee to) mail a notice to each Holder
         describing the transaction or transactions that constitute the Change
         of Control and offering to repurchase Notes on the date specified in
         such notice, which date shall be no earlier than 30 days and no later
         than 60 days from the date such notice is mailed, pursuant to the
         procedures required by the Indenture and described in such notice.

                  (b)      Within 365 days after the receipt of any Net Proceeds
         from an Asset Sale, the Company or Restricted Subsidiary, as the case
         may be, shall apply such Net Proceeds, at its option (or the extent the
         Company is required to apply such Net Proceeds pursuant to the terms of
         the New Credit Facility), to (a) repay or repurchase Senior
         Indebtedness or Pari Passu Indebtedness of the Company or any
         Indebtedness of any Restricted Subsidiary, as the case may be, PROVIDED
         that, if the Company shall so repay or purchase Pari Passu Indebtedness
         of the Company, it will equally and ratably reduce Indebtedness under
         the Notes if the Notes are then


                                     A1-R-2


         redeemable, or, if the Notes may not then be redeemed, the Company
         shall make an offer (in accordance with the procedures set forth below
         for an Asset Sale Offer) to all Holders of Notes to purchase at a
         purchase price equal to 100% of the principal amount of the Notes, plus
         accrued and unpaid interest and Liquidated Damages, if any, thereon to
         the date of purchase, the Notes that would otherwise be redeemed, or
         (b) an investment in property, the making of a capital expenditure or
         the acquisition of assets that are used or useful in a Permitted
         Business, or Capital Stock of any Person primarily engaged in a
         Permitted Business if (i) as a result of the acquisition by the Company
         or any Restricted Subsidiary thereof, such Person becomes a Restricted
         Subsidiary or (ii) the Investment in such Capital Stock is permitted by
         clause (f) of the definition of Permitted Investments. Pending the
         final application of any such Net Proceeds, the Company may temporarily
         reduce Indebtedness or otherwise invest such Net Proceeds in any manner
         that is not prohibited by the Indenture. Any Net Proceeds from Asset
         Sales that are not applied or invested as provided in the first
         sentence of this paragraph will be deemed to constitute "EXCESS
         PROCEEDS". When the aggregate amount of Excess Proceeds exceeds $15.0
         million, the Company will be required to make an offer to all Holders
         of Notes (an "ASSET SALE OFFER") to purchase the maximum principal
         amount of Notes that may be purchased out of the Excess Proceeds, at an
         offer price in cash in an amount equal to 100% of the principal amount
         thereof, plus accrued and unpaid interest and Liquidated Damages, if
         any, thereon to the date of purchase, in accordance with the procedures
         set forth in the Indenture. To the extent that any Excess Proceeds
         remain after consummation of an Asset Sale Offer, the Company may use
         any remaining Excess Proceeds for any purpose not otherwise prohibited
         by the Indenture. If the aggregate principal amount of Notes
         surrendered by Holders thereof in connection with an Asset Sale Offer
         exceeds the amount of Excess Proceeds, the Trustee shall select the
         Notes to be purchased as set forth in Sections 3.02 and 3.03 of the
         Indenture. Upon completion of such offer to purchase, the amount of
         Excess Proceeds shall be reset at zero. Holders of Notes that are the
         subject of an offer to purchase may elect to have such Notes purchased
         by completing the form entitled "Option of Holder to Elect Purchase" on
         the reverse of the Notes.

         8.       NOTICE OF REDEMPTION. Notice of redemption will be mailed by
first class mail at least 30 days but not more than 60 days before the
redemption date to each Holder of Notes to be redeemed at its registered
address. Notes in denominations larger than $1,000 may be redeemed in part but
only in whole multiples of $1,000, unless all of the Notes held by a Holder are
to be redeemed. On and after the redemption date interest ceases to accrue on
Notes or portions thereof called for redemption.

         9.       DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered
form without coupons in denominations of $1,000 and integral multiples of
$1,000. The transfer of Notes may be registered and Notes may be exchanged as
provided in the Indenture. The Registrar and the Trustee may require a Holder,
among other things, to furnish appropriate endorsements and transfer documents
and the Company may require a Holder to pay any taxes and fees required by law
or permitted by the Indenture. The Company need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part. Also, the Company
need not exchange or register the transfer of any Notes for a period of 15 days
before a selection of Notes to be redeemed or during the period between a record
date and the corresponding Interest Payment Date.

         10.      PERSONS DEEMED OWNERS. The registered Holder of a Note may be
treated as its owner for all purposes.

         11.      AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain
exceptions, the Indenture or the Notes may be amended or supplemented with the
consent of the Holders of at least a majority in principal amount of the then
outstanding Notes and any existing Default or compliance with any provision of
the Indenture or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes. Without the consent
of any Holder of a Note, the Indenture or the Notes may be amended or
supplemented to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Notes in addition to or in place of certificated Notes in a
manner that does


                                     A1-R-3



not materially adversely affect any Holder, to provide for the assumption of the
Company's or Guarantors' obligations to Holders of the Notes by a successor to
the Company or the Guarantors in case of a merger or consolidation, to make any
change that would provide any additional rights or benefits to the Holders of
the Notes or that does not adversely affect the legal rights under the Indenture
of any such Holder, to comply with the requirements of the Commission in order
to effect or maintain the qualification of the Indenture under the Trust
Indenture Act, or to provide for additional guarantees of the Notes.

         12.      DEFAULTS AND REMEDIES. Each of the following constitutes an
"EVENT OF DEFAULT": (a) default for 30 days in the payment when due of interest
on, or Liquidated Damages with respect to, the Notes (whether or not prohibited
by Article 10 of the Indenture); (b) default in payment when due of the
principal of or premium, if any, on the Notes (whether or not prohibited by
Article 10 of the Indenture); (c) failure by the Company or any of its
Restricted Subsidiaries for 30 days after receipt of notice from the Trustee or
Holders of at least 25% in principal amount of the Notes then outstanding to
comply with Sections 4.07, 4.09, 4.10 or 4.14 or Article 5 of the Indenture; (d)
failure by the Company for 60 days after notice from the Trustee or the Holders
of at least 25% in principal amount of the Notes then outstanding to comply with
any of its other agreements in the Indenture or the Notes; (e) default under any
mortgage, indenture or instrument under which there may be issued or by which
there may be secured or evidenced any Indebtedness for money borrowed by the
Company or any of its Restricted Subsidiaries (or the payment of which is
guaranteed by the Company or any of its Restricted Subsidiaries), whether such
Indebtedness or guarantee now exists, or is created after the Original Issuance
Date, which default (i) is caused by a failure to pay Indebtedness at its stated
final maturity (after giving effect to any applicable grace period provided in
such Indebtedness) (a "PAYMENT DEFAULT") or (ii) results in the acceleration of
such Indebtedness prior to its stated final maturity and, in each case, the
principal amount of any such Indebtedness, together with the principal amount of
any other such Indebtedness under which there has been a Payment Default or the
maturity of which has been so accelerated, aggregates $10.0 million or more; (f)
failure by the Company or any of its Restricted Subsidiaries to pay final
judgments aggregating in excess of $10.0 million (net of any amounts with
respect to which a reputable and creditworthy insurance company has acknowledged
liability in writing), which judgments are not paid, discharged or stayed for a
period of 60 days; (g) except as permitted by the Indenture, the Note Guarantees
shall be held in any judicial proceeding to be unenforceable or invalid or shall
cease for any reason to be in full force any effect or the Guarantors, or any
Person acting on behalf of the Guarantors, shall deny or disaffirm its
obligations under the Note Guarantees; and (h) certain events of bankruptcy or
insolvency as described in the Indenture.

         If any Event of Default (other than certain events of bankruptcy or
insolvency) occurs and is continuing, the Holders of at least 25% in principal
amount of the then outstanding Notes may direct the Trustee to declare all the
Notes to be due and payable immediately. Upon any such declaration, the Notes
shall become due and payable immediately. However, so long as any Indebtedness
permitted to be incurred pursuant to the New Credit Facility shall be
outstanding, such acceleration shall not be effective until the earlier of (i)
an acceleration under any such Indebtedness under the New Credit Facility or
(ii) five Business Days after receipt by the Company and the administrative
agent under the New Credit Facility of written notice of such acceleration.
Notwithstanding the foregoing, in the case of an Event of Default arising from
certain events of bankruptcy or insolvency, all outstanding Notes shall be due
and payable immediately without further action or notice. The Holders of a
majority in aggregate principal amount of the then outstanding Notes by written
notice to the Trustee may on behalf of all of the Holders rescind an
acceleration and its consequences if the rescission would not conflict with any
judgment or decree and if all existing Events of Default (except nonpayment of
principal, interest or premium or Liquidated Damages, if any, that has become
due solely because of the acceleration) have been cured or waived; PROVIDED that
in the event of a declaration of acceleration of the Notes because an Event of
Default has occurred and is continuing as a result of the acceleration of any
Indebtedness described in clause (e) of Section 6.01 of the Indenture, the
declaration of acceleration of the Notes shall be automatically annulled if the
holders of any Indebtedness described in clause (e) of Section 6.01 of the
Indenture have rescinded the declaration of acceleration in respect of such
Indebtedness within 30 days of


                                     A1-R-4



the date of such declaration and if (i) the annulment of the acceleration of the
Notes would not conflict with any judgment or decree of a court of competent
jurisdiction and (ii) all existing Events of Default, except non-payment of
principal or interest on the Notes that became due solely because of the
acceleration of the Notes, have been cured or waived. The Company is required to
deliver to the Trustee annually a statement regarding compliance with the
Indenture, and the Company is required upon becoming aware of any Default or
Event of Default to deliver to the Trustee a statement specifying such Default
or Event of Default.

         13.      SUBORDINATION. The payment of Subordinated Note Obligations
will be subordinated in right of payment, as set forth in the Indenture, to the
prior payment in full in cash or Cash Equivalents of all Senior Indebtedness,
whether outstanding on the Original Issuance Date or thereafter incurred. The
Company agrees, and each Holder by accepting a Note agrees, that the payment of
principal of, premium and interest and Liquidated Damages, if any, on the Notes
is subordinated in right of payment, to the extent and in the manner provided in
the Indenture, to the prior payment in full in cash or Cash Equivalents of all
Senior Indebtedness (whether outstanding on the date hereof or thereafter
created, incurred, assumed or guaranteed), and that the subordination is for the
benefit of the holders of Senior Indebtedness.

         14.      TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual
or any other capacity, may make loans to, accept deposits from, and perform
services for the Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not the Trustee.

         15.      NO RECOURSE AGAINST OTHERS. No member, director, officer,
employee or incorporator of the Company, as such, shall have any liability for
any obligations of the Company under the Notes or the Indenture or for any claim
based on, in respect of, or by reason of, such obligations or their creation.
Each Holder by accepting a Note waives and releases all such liability. The
waiver and release are part of the consideration for the issuance of the Notes.

         16.      AUTHENTICATION. This Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent.

         17.      ABBREVIATIONS. Customary abbreviations may be used in the name
of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).

         18.      ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES AND
RESTRICTED DEFINITIVE NOTES. In addition to the rights provided to Holders of
Notes under the Indenture, Holders of Restricted Global Notes and Restricted
Definitive Notes shall have all the rights set forth in the Registration Rights
Agreement.

         19.      CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.


                                     A1-R-5



         The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture or the Registration Rights Agreement. Requests
may be made to:

                  MERRILL CORPORATION
                  One Merrill Circle
                  St. Paul, Minnesota 55108
                  Telecopier No.: (651) 659-7986
                  Attention:  Kay A. Barber


                                     A1-R-6


                                 ASSIGNMENT FORM


To assign this Note, fill in the form below: (I) or (we) assign and transfer
this Note to

(Insert assignee's soc. sec. or tax I.D. no.)

________________________________________________________________________________

________________________________________________________________________________
(Print or type assignee's name, address and zip code)

and irrevocably appoint_________________________________________________________
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.


Date:                           Your Signature:_________________________________
                                (Sign exactly as your name appears on the Note)


                                Tax Identification No:__________________________




Signature Guarantee.


                                     A1-R-7



                       OPTION OF HOLDER TO ELECT PURCHASE


         If you want to elect to have this Note purchased by the Company
pursuant to Section 4.10 or 4.14 of the Indenture, check the box below:

         / / Section 4.10                    / / Section 4.14

         If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.10 or Section 4.14 of the Indenture, state the
amount you elect to have purchased: $________

Date:                          Your Signature:__________________________________
                               (Sign exactly as your name appears on the Note)


                               Tax Identification No:___________________________




Signature Guarantee.


                                     A1-R-8



              SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE


         The following exchanges of a part of this Global Note for an interest
in another Global Note or for a Definitive Note, or exchanges of a part of
another Global Note or a Definitive Note for an interest in this Global Note,
have been made:



                                                                        Principal Amount of this      Signature of
                        Amount of decrease in   Amount of increase in    Global Note following    authorized officer
                          Principal Amount       Principal Amount of       such decrease (or      of Trustee or Note
   Date of Exchange      of this Global Note      this Global Note             increase)               Custodian
- ---------------------  -----------------------  ----------------------  ------------------------  -------------------
                                                                                      






                                     A1-R-9



                                 NOTE GUARANTEE

         Merrill Real Estate Company, Merrill/Magnus Publishing Corporation,
Merrill/New York Company, Merrill/May Inc., Merrill/Alternatives, Inc., Merrill
International, Inc., FMC Resource Management Corporation, Merrill Training &
Technology, Inc., Merrill/Global, Inc., Merrill/Executech, Inc.,
Merrill/Daniels, Inc. and Merrill Communications LLC (the "Guarantors") hereby
unconditionally guarantee, jointly and severally, to the fullest extent
permitted by law, (i) the due and punctual payment of the principal of, interest
and Liquidated Damages, if any, on the Notes, whether at the maturity or of the
principal of, interest and Liquidated Damages, if any, on the Notes, whether at
the maturity or interest payment date, by acceleration, call for redemption or
otherwise, and of interest on the overdue principal of, interest and Liquidated
Damages, if any, on the Notes and all other obligations of the Issuer to the
Holders or the Trustee under the Indenture or the Notes and (ii) in case of any
extension of time of payment or renewal of any Notes or any of such other
obligations, that the same will be promptly paid in full when due or performed
in accordance with the terms of the extension or renewal, whether at maturity,
by acceleration or otherwise.

         The obligations of the Guarantors to the Holders and to the Trustee
pursuant to this Note Guarantee and the Indenture are as expressly set forth in
Article 11 of the Indenture and in such other provisions of the Indenture as are
applicable to the Guarantors, and reference is hereby made to such Indenture for
the precise terms of this Note Guarantee. The terms of Article 11 of the
Indenture (including, without limitation, Section 11.03 of the Indenture) and
such other provisions of the Indenture as are applicable to the Guarantors are
incorporated herein by reference.

         This is a continuing guarantee and shall remain in full forces and
effect and shall be binding upon the Guarantors and their successors and assigns
until full and final payment of all of the Company's obligations under the Notes
and the Indenture and shall inure to the benefit of the successors and assigns
of the Trustee and the Holders and, in the event of any transfer or assignment
of rights by any Holder or the Trustee, the rights and privileges herein
conferred upon that party shall automatically extend to and be vested in such
transferee or assignee, all subject to the terms and conditions hereof. This is
a guarantee of payment and not a guarantee of collection.

         This Note Guarantee shall not be valid or obligatory for any purpose
until the certificate of authentication on the Note upon which this Note
Guarantee is noted shall have been executed by the Trustee under the Indenture
by the manual signature of one of its authorized officers.

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

         THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE
THIS NOTE GUARANTEE WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS
OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF OTHER JURISDICTION
WOULD BE REQUIRED THEREBY.

                                    THE GUARANTORS, as named above


                                    By:_________________________________________
                                       Name:
                                       Title:   Attorney-in-Fact


                                    A1-R-10



                                   EXHIBIT A-2
                  (Face of Regulation S Temporary Global Note)

================================================================================

                                                              CUSIP ____________

                       % Senior Subordinated Notes due 2009

No. _____                                                           $___________

                               MERRILL CORPORATION

promises to pay to _______________, or registered assigns, the principal sum of
___________ Dollars on November 1, 2009.

Interest Payment Dates:             May 1 and November 1

Record Dates:                       April 15 and October 15


[INSERT THE REGULATION S TEMPORARY GLOBAL NOTE LEGEND PURSUANT TO SECTION
2.06(h)(iii) OF THE INDENTURE]

[INSERT THE GLOBAL NOTE LEGEND PURSUANT TO SECTION 2.06(h)(ii) OF THE INDENTURE]

[INSERT THE PRIVATE PLACEMENT LEGEND PURSUANT TO SECTION 2.06(h)(i) OF THE
INDENTURE]

         Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.

                                      Dated:


                                      MERRILL CORPORATION


                                      By:__________________________________
                                         Name:_____________________________
                                         Title:____________________________


This is one of the Notes referred to
in the within-mentioned Indenture:

NORWEST BANK MINNESOTA, N.A.,
as Trustee
     By:_________________________________
         Name:___________________________
         Title:__________________________


================================================================================


                                     A2-F-1



                  (Back of Regulation S Temporary Global Note)

                     12% Senior Subordinated Notes due 2009

         Capitalized terms used herein shall have the meanings assigned to them
in the Indenture referred to below unless otherwise indicated.

         1.       INTEREST. Merrill Corporation, a Minnesota corporation (the
"COMPANY"), promises to pay interest on the principal amount of this Note at 12%
per annum from November 23, 1999 until maturity and shall pay the Liquidated
Damages payable pursuant to Section 5 of the Registration Rights Agreement
referred to below. The Company will pay interest and Liquidated Damages
semi-annually on November 1 and May 1 of each year, or if any such day is not a
Business Day, on the next succeeding Business Day (each, an "INTEREST PAYMENT
DATE"). Interest on the Notes will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from the date of
issuance; PROVIDED that if there is no existing Default in the payment of
interest, and if this Note is authenticated between a record date referred to on
the face hereof and the next succeeding Interest Payment Date, interest shall
accrue from such next succeeding Interest Payment Date; and PROVIDED FURTHER
that the first Interest Payment Date shall be May 1, 2000. The Company shall pay
interest (including, without limitation, post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal and premium, if any,
from time to time on demand at a rate that is 1% per annum in excess of the rate
then in effect to the extent lawful; it shall pay interest (including, without
limitation, post-petition interest in any proceeding under any Bankruptcy Law)
on overdue installments of interest and Liquidated Damages (without regard to
any applicable grace periods) from time to time on demand at the same rate to
the extent lawful. Interest will be computed on the basis of a 360-day year of
twelve 30-day months.

         2.       METHOD OF PAYMENT. The Company will pay interest on the Notes
(except defaulted interest) and Liquidated Damages to the Persons who are
registered Holders of Notes at the close of business on the April 15 or October
15 next preceding the Interest Payment Date, even if such Notes are cancelled
after such record date and on or before such Interest Payment Date, except as
provided in Section 2.12 of the Indenture with respect to defaulted interest.
The Notes will be payable as to principal, premium and Liquidated Damages, if
any, and interest at the office of the Paying Agent and Registrar. Holders of
Notes must surrender their Notes to the Paying Agent to collect principal
payments, and the Company may pay principal and interest and Liquidated Damages,
if any, by check and may mail checks to a Holder's registered address; PROVIDED
that all payments with respect to Global Notes will be paid by wire transfer of
immediately available funds to the account of the Depositary. Such payment shall
be in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts.

         3.       PAYING AGENT AND REGISTRAR. Initially, Norwest Bank Minnesota,
N.A., the Trustee under the Indenture, will act as Paying Agent and Registrar.
The Company may change any Paying Agent or Registrar without notice to any
Holder. The Company or any of its Subsidiaries may act in any such capacity.

         4.       INDENTURE. The Company issued the Notes under an Indenture
dated as of November 23, 1999 ("INDENTURE"), between the Company, the Guarantors
and the Trustee. The terms of the Notes include those stated in the Indenture
and those made part of the Indenture by reference to the Trust Indenture Act of
1939, as amended (15 U.S. Code Sections 77aaa-77bbbb). The Notes are subject to
all such terms, and Holders are referred to the Indenture and such Act for a
statement of such terms. To the extent any provision of this Note conflicts with
the express provisions of the Indenture, the provisions of the Indenture shall
govern and be controlling. The Notes are obligations of the Company limited in
aggregate


                                     A2-R-1



principal amount to $140,000,000 plus the aggregate principal of any
Additional Notes issued pursuant to Section 2.02 of the Indenture in compliance
with Section 4.09 thereof.

         5.       OPTIONAL REDEMPTION. Except as provided in subparagraph (b) of
this Paragraph 5, the Notes will not be redeemable at the Company's option prior
to November 1, 2004. Thereafter, the Notes will be subject to redemption at any
time at the option of the Company, in whole or in part, upon not less than 30
nor more than 60 days' notice, in cash at the redemption prices (expressed as
percentages of principal amount) set forth below, plus accrued and unpaid
interest and Liquidated Damages, if any, thereon to the applicable redemption
date, if redeemed during the twelve-month period beginning on November 1 of the
years indicated below:



                  YEAR                                              PERCENTAGE
                  ----                                              ----------
                                                                 
                  2004...........................................    106.000%
                  2005...........................................    104.000%
                  2006...........................................    102.000%
                  2007 and thereafter............................    100.000%


                  (b)      Notwithstanding the provisions of subparagraph (a) of
         this Paragraph 5, on or prior to November 1, 2002, the Company may
         redeem up to 35% of the aggregate principal amount of Notes from time
         to time originally issued under the Indenture in cash at a redemption
         price of 112.000% of the principal amount thereof, plus accrued and
         unpaid interest and Liquidated Damages, if any, thereon to the
         redemption date, with the net cash proceeds of one or more Public
         Equity Offerings; PROVIDED that at least 65% of the aggregate principal
         amount of Notes from time to time originally issued under the Indenture
         remains outstanding immediately after the occurrence of any such
         redemption; and PROVIDED FURTHER that such redemption shall occur
         within 90 days of the date of the closing of any such Public Equity
         Offering.

                  (c)      Any redemption pursuant to this subparagraph 5 shall
         be made pursuant to the provisions of Section 3.01 through 3.06 of the
         Indenture.

         6.       MANDATORY REDEMPTION. Except as set forth in paragraph 7
below, the Company shall not be required to make mandatory redemption payments
with respect to the Notes.

         7.       REPURCHASE AT OPTION OF HOLDER.

                  (a)      Upon the occurrence of a Change of Control, each
         Holder of Notes will have the right to require the Company to
         repurchase all or any part (equal to $1,000 or an integral multiple
         thereof) of such Holder's Notes pursuant to the offer described in
         Section 4.14 of the Indenture (the "CHANGE OF CONTROL OFFER") at an
         offer price in cash equal to 101% of the aggregate principal amount
         thereof plus accrued and unpaid interest and Liquidated Damages, if
         any, thereon to the date of repurchase (the "CHANGE OF CONTROL
         PAYMENT"). Within 90 days following any Change of Control, the Company
         will (or will cause the Trustee to) mail a notice to each Holder
         describing the transaction or transactions that constitute the Change
         of Control and offering to repurchase Notes on the date specified in
         such notice, which date shall be no earlier than 30 days and no later
         than 60 days from the date such notice is mailed, pursuant to the
         procedures required by the Indenture and described in such notice.

                  (b)      Within 365 days after the receipt of any Net Proceeds
         from an Asset Sale, the Company or Restricted Subsidiary, as the case
         may be, shall apply such Net Proceeds, at its option (or the extent the
         Company is required to apply such Net Proceeds pursuant to the terms of
         the New Credit Facility), to (a) repay or repurchase Senior
         Indebtedness or Pari Passu Indebtedness of the Company or any
         Indebtedness of any Restricted Subsidiary, as the case may be, PROVIDED
         that, if the Company shall so repay or purchase Pari Passu Indebtedness
         of the Company, it will equally and ratably reduce Indebtedness under
         the Notes if the Notes are then

                                     A2-R-2


         redeemable, or, if the Notes may not then be redeemed, the Company
         shall make an offer (in accordance with the procedures set forth below
         for an Asset Sale Offer) to all Holders of Notes to purchase at a
         purchase price equal to 100% of the principal amount of the Notes, plus
         accrued and unpaid interest and Liquidated Damages, if any, thereon to
         the date of purchase, the Notes that would otherwise be redeemed, or
         (b) an investment in property, the making of a capital expenditure or
         the acquisition of assets that are used or useful in a Permitted
         Business, or Capital Stock of any Person primarily engaged in a
         Permitted Business if (i) as a result of the acquisition by the Company
         or any Restricted Subsidiary thereof, such Person becomes a Restricted
         Subsidiary or (ii) the Investment in such Capital Stock is permitted by
         clause (f) of the definition of Permitted Investments. Pending the
         final application of any such Net Proceeds, the Company may temporarily
         reduce Indebtedness or otherwise invest such Net Proceeds in any manner
         that is not prohibited by the Indenture. Any Net Proceeds from Asset
         Sales that are not applied or invested as provided in the first
         sentence of this paragraph will be deemed to constitute "EXCESS
         PROCEEDS". When the aggregate amount of Excess Proceeds exceeds $15.0
         million, the Company will be required to make an offer to all Holders
         of Notes (an "ASSET SALE OFFER") to purchase the maximum principal
         amount of Notes that may be purchased out of the Excess Proceeds, at an
         offer price in cash in an amount equal to 100% of the principal amount
         thereof, plus accrued and unpaid interest and Liquidated Damages, if
         any, thereon to the date of purchase, in accordance with the procedures
         set forth in the Indenture. To the extent that any Excess Proceeds
         remain after consummation of an Asset Sale Offer, the Company may use
         any remaining Excess Proceeds for any purpose not otherwise prohibited
         by the Indenture. If the aggregate principal amount of Notes
         surrendered by Holders thereof in connection with an Asset Sale Offer
         exceeds the amount of Excess Proceeds, the Trustee shall select the
         Notes to be purchased as set forth in Sections 3.02 and 3.03 of the
         Indenture. Upon completion of such offer to purchase, the amount of
         Excess Proceeds shall be reset at zero. Holders of Notes that are the
         subject of an offer to purchase may elect to have such Notes purchased
         by completing the form entitled "Option of Holder to Elect Purchase" on
         the reverse of the Notes.

         8.       NOTICE OF REDEMPTION. Notice of redemption will be mailed by
first class mail at least 30 days but not more than 60 days before the
redemption date to each Holder of Notes to be redeemed at its registered
address. Notes in denominations larger than $1,000 may be redeemed in part but
only in whole multiples of $1,000, unless all of the Notes held by a Holder are
to be redeemed. On and after the redemption date interest ceases to accrue on
Notes or portions thereof called for redemption.

         9.       DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered
form without coupons in denominations of $1,000 and integral multiples of
$1,000. The transfer of Notes may be registered and Notes may be exchanged as
provided in the Indenture. The Registrar and the Trustee may require a Holder,
among other things, to furnish appropriate endorsements and transfer documents
and the Company may require a Holder to pay any taxes and fees required by law
or permitted by the Indenture. The Company need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part. Also, the Company
need not exchange or register the transfer of any Notes for a period of 15 days
before a selection of Notes to be redeemed or during the period between a record
date and the corresponding Interest Payment Date.

         10.      PERSONS DEEMED OWNERS. The registered Holder of a Note may be
treated as its owner for all purposes.

         11.      AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain
exceptions, the Indenture or the Notes may be amended or supplemented with the
consent of the Holders of at least a majority in principal amount of the then
outstanding Notes and any existing Default or compliance with any provision of
the Indenture or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes. Without the consent
of any Holder of a Note, the Indenture or the Notes may be amended or
supplemented to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Notes in addition to or in place of certificated Notes in a
manner that does not materially adversely affect any Holder, to provide for the
assumption of the Company's or the



                                     A2-R-3


Guarantors' obligations to Holders of the Notes by a successor to the Company or
the Guarantors in case of a merger or consolidation, to make any change that
would provide any additional rights or benefits to the Holders of the Notes or
that does not adversely affect the legal rights under the Indenture of any such
Holder, to comply with the requirements of the Commission in order to effect or
maintain the qualification of the Indenture under the Trust Indenture Act, or to
provide for additional guarantees of the Notes.

         12.      DEFAULTS AND REMEDIES. Each of the following constitutes an
"EVENT OF DEFAULT": (a) default for 30 days in the payment when due of interest
on, or Liquidated Damages with respect to, the Notes (whether or not prohibited
by Article 10 of the Indenture); (b) default in payment when due of the
principal of or premium, if any, on the Notes (whether or not prohibited by
Article 10 of the Indenture); (c) failure by the Company or any of its
Restricted Subsidiaries for 30 days after receipt of notice from the Trustee or
Holders of at least 25% in principal amount of the Notes then outstanding to
comply with Sections 4.07, 4.09, 4.10 or 4.14 or Article 5 of the Indenture; (d)
failure by the Company for 60 days after notice from the Trustee or the Holders
of at least 25% in principal amount of the Notes then outstanding to comply with
any of its other agreements in the Indenture or the Notes; (e) default under any
mortgage, indenture or instrument under which there may be issued or by which
there may be secured or evidenced any Indebtedness for money borrowed by the
Company or any of its Restricted Subsidiaries (or the payment of which is
guaranteed by the Company or any of its Restricted Subsidiaries), whether such
Indebtedness or guarantee now exists, or is created after the Original Issuance
Date, which default (i) is caused by a failure to pay Indebtedness at its stated
final maturity (after giving effect to any applicable grace period provided in
such Indebtedness) (a "PAYMENT DEFAULT") or (ii) results in the acceleration of
such Indebtedness prior to its stated final maturity and, in each case, the
principal amount of any such Indebtedness, together with the principal amount of
any other such Indebtedness under which there has been a Payment Default or the
maturity of which has been so accelerated, aggregates $10.0 million or more; (f)
failure by the Company or any of its Restricted Subsidiaries to pay final
judgments aggregating in excess of $10.0 million (net of any amounts with
respect to which a reputable and creditworthy insurance company has acknowledged
liability in writing), which judgments are not paid, discharged or stayed for a
period of 60 days; (g) except as permitted by the Indenture, the Note Guarantees
shall be held in any judicial proceeding to be unenforceable or invalid or shall
cease for any reason to be in full force any effect or the Guarantors, or any
Person acting on behalf of the Guarantors, shall deny or disaffirm its
obligations under the Note Guarantees; and (h) certain events of bankruptcy or
insolvency as described in the Indenture.

                  If any Event of Default (other than certain events of
bankruptcy or insolvency) occurs and is continuing, the Holders of at least 25%
in principal amount of the then outstanding Notes may direct the Trustee to
declare all the Notes to be due and payable immediately. However, so long as any
Indebtedness permitted to be incurred pursuant to the New Credit Facility shall
be outstanding, such acceleration shall not be effective until the earlier of
(i) an acceleration under any such Indebtedness under the New Credit Facility or
(ii) five Business Days after receipt by the Company and the administrative
agent under the New Credit Facility of written notice of such acceleration. Upon
any such declaration, the Notes shall become due and payable immediately.
Notwithstanding the foregoing, in the case of an Event of Default arising from
certain events of bankruptcy or insolvency, all outstanding Notes shall be due
and payable immediately without further action or notice. The Holders of a
majority in aggregate principal amount of the then outstanding Notes by written
notice to the Trustee may on behalf of all of the Holders rescind an
acceleration and its consequences if the rescission would not conflict with any
judgment or decree and if all existing Events of Default (except nonpayment of
principal, interest or premium or Liquidated Damages, if any, that has become
due solely because of the acceleration) have been cured or waived; PROVIDED that
in the event of a declaration of acceleration of the Notes because an Event of
Default has occurred and is continuing as a result of the acceleration of any
Indebtedness described in clause (e) of Section 6.01 hereof, the declaration of
acceleration of the Notes shall be automatically annulled if the holders of any
Indebtedness described in clause (e) of Section 6.01 hereof have rescinded the
declaration of acceleration in respect of such Indebtedness within 30 days of
the date of such declaration and if (i) the annulment of the acceleration of the
Notes would not conflict with any


                                     A2-R-4


judgment or decree of a court of competent jurisdiction and (ii) all existing
Events of Default, except non-payment of principal or interest on the Notes that
became due solely because of the acceleration of the Notes, have been cured or
waived.

The Company is required to deliver to the Trustee annually a statement regarding
compliance with the Indenture, and the Company is required upon becoming aware
of any Default or Event of Default to deliver to the Trustee a statement
specifying such Default or Event of Default.

         13.      SUBORDINATION. The payment of Subordinated Note Obligations
will be subordinated in right of payment, as set forth in the Indenture, to the
prior payment in full in cash or Cash Equivalents of all Senior Indebtedness,
whether outstanding on the date of the Indenture or thereafter incurred. The
Company agrees, and each Holder by accepting a Note agrees, that the payment of
principal of, premium and interest and Liquidated Damages, if any, on the Notes
is subordinated in right of payment, to the extent and in the manner provided in
the Indenture, to the prior payment in full in cash or Cash Equivalents of all
Senior Indebtedness (whether outstanding on the date hereof or thereafter
created, incurred, assumed or guaranteed), and that the subordination is for the
benefit of the holders of Senior Indebtedness.

         14.      TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual
or any other capacity, may make loans to, accept deposits from, and perform
services for the Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not the Trustee.

         15.      NO RECOURSE AGAINST OTHERS. No member, director, officer,
employee or incorporator of the Company, as such, shall have any liability for
any obligations of the Company under the Notes or the Indenture or for any claim
based on, in respect of, or by reason of, such obligations or their creation.
Each Holder by accepting a Note waives and releases all such liability. The
waiver and release are part of the consideration for the issuance of the Notes.

         16.      AUTHENTICATION. This Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent.

         17.      ABBREVIATIONS. Customary abbreviations may be used in the name
of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).

         18.      ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES AND
RESTRICTED DEFINITIVE NOTES. In addition to the rights provided to Holders of
Notes under the Indenture, Holders of Restricted Global Notes and Restricted
Definitive Notes shall have all the rights set forth in the Registration Rights
Agreement.

         19.      CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.


                                     A2-R-5


         The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture or the Registration Rights Agreement. Requests
may be made to:

                  MERRILL CORPORATION
                  One Merrill Circle
                  St. Paul, Minnesota 55108
                  Telecopier No.: (651) 659-7986
                  Attention:  Kay A. Barber


                                     A2-R-6



                                 ASSIGNMENT FORM


To assign this Note, fill in the form below: (I) or (we) assign and transfer
this Note to

(Insert assignee's soc. sec. or tax I.D. no.)

________________________________________________________________________________

________________________________________________________________________________
(Print or type assignee's name, address and zip code)

and irrevocably appoint_________________________________________________________
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.


Date:                           Your Signature:_________________________________
                                (Sign exactly as your name appears on the Note)


                                Tax Identification No:__________________________



Signature Guarantee.


                                     A2-R-7


                       OPTION OF HOLDER TO ELECT PURCHASE


         If you want to elect to have this Note purchased by the Company
pursuant to Section 4.10 or 4.14 of the Indenture, check the box below:

         / / Section 4.10                   / / Section 4.14

         If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.10 or Section 4.14 of the Indenture, state the
amount you elect to have purchased: $________

Date:                           Your Signature:_________________________________
                                (Sign exactly as your name appears on the Note)


                                Tax Identification No:__________________________


Signature Guarantee.


                                     A2-R-8



         SCHEDULE OF EXCHANGES OF INTERESTS IN THE TEMPORARY GLOBAL NOTE


         The following exchanges of a part of this Global Note for an interest
in another Global Note or for a Definitive Note, or exchanges of a part of
another Global Note or a Definitive Note for an interest in this Global Note,
have been made:



                                                                       Principal Amount of this      Signature of
                        Amount of decrease in   Amount of increase in    Global Note following    authorized officer
                         Principal Amount of     Principal Amount of       such decrease (or      of Trustee or Note
   Date of Exchange       this Global Note        this Global Note             increase)               Custodian
- ---------------------  -----------------------  ---------------------- ------------------------  --------------------
                                                                                     




                                     A2-R-9


                                 NOTE GUARANTEE

         Merrill Real Estate Company, Merrill/Magnus Publishing Corporation,
Merrill/New York Company, Merrill/May Inc., Merrill/Alternatives, Inc., Merrill
International, Inc., FMC Resource Management Corporation, Merrill Training &
Technology, Inc., Merrill/Global, Inc., Merrill/Executech, Inc.,
Merrill/Daniels, Inc. and Merrill Communications LLC (the "Guarantors"), hereby
unconditionally guarantee, jointly and severally, to the fullest extent
permitted by law, (i) the due and punctual payment of the principal of, interest
and Liquidated Damages, if any, on the Notes, whether at the maturity or of the
principal of, interest and Liquidated Damages, if any, on the Notes, whether at
the maturity or interest payment date, by acceleration, call for redemption or
otherwise, and of interest on the overdue principal of, interest and Liquidated
Damages, if any, on the Notes and all other obligations of the Issuer to the
Holders or the Trustee under the Indenture or the Notes and (ii) in case of any
extension of time of payment or renewal of any Notes or any of such other
obligations, that the same will be promptly paid in full when due or performed
in accordance with the terms of the extension or renewal, whether at maturity,
by acceleration or otherwise.

         The obligations of the Guarantors to the Holders and to the Trustee
pursuant to this Note Guarantee and the Indenture are as expressly set forth in
Article 11 of the Indenture and in such other provisions of the Indenture as are
applicable to the Guarantors, and reference is hereby made to such Indenture for
the precise terms of this Note Guarantee. The terms of Article 11 of the
Indenture (including, without limitation, Section 11.03 of the Indenture) and
such other provisions of the Indenture as are applicable to the Guarantors are
incorporated herein by reference.

         This is a continuing guarantee and shall remain in full forces and
effect and shall be binding upon the Guarantors and its successors and assigns
until full and final payment of all of the Company's obligations under the Notes
and the Indenture and shall inure to the benefit of the successors and assigns
of the Trustee and the Holders and, in the event of any transfer or assignment
of rights by any Holder or the Trustee, the rights and privileges herein
conferred upon that party shall automatically extend to and be vested in such
transferee or assignee, all subject to the terms and conditions hereof. This is
a guarantee of payment and not a guarantee of collection.

         This Note Guarantee shall not be valid or obligatory for any purpose
until the certificate of authentication on the Note upon which this Note
Guarantee is noted shall have been executed by the Trustee under the Indenture
by the manual signature of one of its authorized officers.

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

         THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE
THIS NOTE GUARANTEE WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS
OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF OTHER JURISDICTION
WOULD BE REQUIRED THEREBY.

                                  THE GUARANTORS, as named above



                                  By:_________________________________________
                                     Name:
                                     Title:


                                    A2-R-10



                                    EXHIBIT B

                         FORM OF CERTIFICATE OF TRANSFER


MERRILL CORPORATION
One Merrill Circle
St. Paul, Minnesota 55108
Telecopier No.: (651) 659-7986
Attention:  Kay A. Barber

NORWEST BANK MINNESOTA, N.A.,
Norwest Center
MAC #N9303-120
Sixth and Marquette
Minneapolis, MN  55479
Telecopier No.:  (612) 667.9825
Attention:  James R. Bryant



Re:  12% Senior Subordinated Notes due 2009

         Reference is hereby made to the Indenture, dated as of November 23,
1999 (the "INDENTURE"), between Merrill Corporation (the "COMPANY"), as issuer,
the guarantors named therein, and Norwest Bank Minnesota, N.A., as trustee.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Indenture.

         ______________, (the "TRANSFEROR") owns and proposes to transfer the
Note[s] or interest in such Note[s] specified in Annex A hereto, in the
principal amount of $___________ in such Note[s] or interests (the "Transfer"),
to __________ (the "TRANSFEREE"), as further specified in Annex A hereto. In
connection with the Transfer, the Transferor hereby certifies that:

[CHECK ALL THAT APPLY]

         1.       / / CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL
INTEREST IN THE 144A GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO RULE 144A. The
Transfer is being effected pursuant to and in accordance with Rule 144A under
the United States Securities Act of 1933, as amended (the "Securities Act"),
and, accordingly, the Transferor hereby further certifies that the beneficial
interest or Definitive Note is being transferred to a Person that the Transferor
reasonably believed and believes is purchasing the beneficial interest or
Definitive Note for its own account, or for one or more accounts with respect to
which such Person exercises sole investment discretion, and such Person and each
such account is a "qualified institutional buyer" within the meaning of Rule
144A in a transaction meeting the requirements of Rule 144A and such Transfer is
in compliance with any applicable blue sky securities laws of any state of the
United States. Upon consummation of the proposed Transfer in accordance with the
terms of the Indenture, the transferred beneficial interest or Definitive Note
will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the 144A Global Note and/or the Definitive Note and
in the Indenture and the Securities Act.


                                      B-1


         2.       / / CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL
INTEREST IN THE REGULATION S TEMPORARY GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT
TO REGULATION S. The Transfer is being effected pursuant to and in accordance
with Rule 903 or Rule 904 under the Securities Act and, accordingly, the
Transferor hereby further certifies that (i) the Transfer is not being made to a
Person in the United States and (x) at the time the buy order was originated,
the Transferee was outside the United States or such Transferor and any Person
acting on its behalf reasonably believed and believes that the Transferee was
outside the United States or (y) the transaction was executed in, on or through
the facilities of a designated offshore securities market and neither such
Transferor nor any Person acting on its behalf knows that the transaction was
prearranged with a buyer in the United States, (ii) no directed selling efforts
have been made in contravention of the requirements of Rule 903(b) or Rule
904(b) of Regulation S under the Securities Act and (iii) the transaction is not
part of a plan or scheme to evade the registration requirements of the
Securities Act and (iv) if the proposed transfer is being made prior to the
expiration of the Restricted Period, the transfer is not being made to a U.S.
Person or for the account or benefit of a U.S. Person (other than an Initial
Purchaser). Upon consummation of the proposed transfer in accordance with the
terms of the Indenture, the transferred beneficial interest or Definitive Note
will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Regulation S Temporary Global Note and/or the
Definitive Note and in the Indenture and the Securities Act.

         3.       / / CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A
BENEFICIAL INTEREST IN A RESTRICTED DEFINITIVE NOTE PURSUANT TO ANY PROVISION OF
THE SECURITIES ACT OTHER THAN RULE 144A OR REGULATION S. The Transfer is being
effected in compliance with the transfer restrictions applicable to beneficial
interests in Restricted Global Notes and Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act and any applicable blue
sky securities laws of any state of the United States, and accordingly the
Transferor hereby further certifies that (check one):

                  (a)      / / such Transfer is being effected pursuant to and
in accordance with Rule 144 under the Securities Act;

                                       or

                  (b)      / / such Transfer is being effected to the Company or
a subsidiary thereof;

                                       or

                  (c)      / / such Transfer is being effected pursuant to an
effective registration statement under the Securities Act and in compliance with
the prospectus delivery requirements of the Securities Act;

                                       or

                  (d)      / / such Transfer is being effected to an
Institutional Accredited Investor and pursuant to an exemption from the
registration requirements of the Securities Act other than Rule 144A, Rule 144
or Rule 904, and the Transferor hereby further certifies that it has not engaged
in any general solicitation within the meaning of Regulation D under the
Securities Act and the Transfer complies with the transfer restrictions
applicable to beneficial interests in a Restricted Global Note or Restricted
Definitive Notes and the requirements of the exemption claimed, which
certification is supported by (1) a certificate executed by the Transferee in
the form of Exhibit D to the Indenture and (2) if such Transfer is in respect of
a principal amount of Notes at the time of transfer of less than $250,000, an
Opinion of Counsel provided by the Transferor or the Transferee (a copy of which
the Transferor has attached to this certification), to the effect that such
Transfer is in compliance with the Securities Act.


                                      B-2


         Upon consummation of the proposed Transfer in accordance with the terms
of the Indenture, the transferred beneficial interest or Definitive Note will be
subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the Restricted Definitive Notes and in the Indenture and the
Securities Act.

         4.       Check if Transferee will take delivery of a beneficial
interest in an Unrestricted Global Note or of an Unrestricted Definitive Note.

                  (a)      / / CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i)
The Transfer is being effected pursuant to and in accordance with Rule 144 under
the Securities Act and in compliance with the transfer restrictions contained in
the Indenture and any applicable blue sky securities laws of any state of the
United States and (ii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will no longer be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the Restricted
Global Notes, on Restricted Definitive Notes and in the Indenture.

                  (b)      / / CHECK IF TRANSFER IS PURSUANT TO REGULATION S.
(i) The Transfer is being effected pursuant to and in accordance with Rule 903
or Rule 904 under the Securities Act and in compliance with the transfer
restrictions contained in the Indenture and any applicable blue sky securities
laws of any state of the United States and (ii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not required in
order to maintain compliance with the Securities Act. Upon consummation of the
proposed Transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Definitive Note will no longer be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the Restricted Global Notes, on Restricted Definitive Notes and in the
Indenture.

                  (c)      / / CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION.
(i) The Transfer is being effected pursuant to and in compliance with an
exemption from the registration requirements of the Securities Act other than
Rule 144, Rule 903 or Rule 904 and in compliance with the transfer restrictions
contained in the Indenture and any applicable blue sky securities laws of any
state of the United States and (ii) the restrictions on transfer contained in
the Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act. Upon consummation of the proposed
Transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Definitive Note will not be subject to the restrictions
on transfer enumerated in the Private Placement Legend printed on the Restricted
Global Notes, on Restricted Definitive Notes and in the Indenture.

         This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.


                                      _______________________________________
                                            [Insert Name of Transferor]


                                      By:____________________________________
                                         Name:
                                         Title:


Dated:   __________, ____


                                      B-3


                       ANNEX A TO CERTIFICATE OF TRANSFER


1.       The Transferor owns and proposes to transfer the following:

                            [CHECK ONE OF (a) OR (b)]

         (a)      / /  a beneficial interest in the:

                  (i)      / /  144A Global Note (CUSIP _________________), or

                  (ii)     / /  Regulation S Temporary Global Note (CUSIP
                           ___________________), or

         (b)      / /  a Restricted Definitive Note.

2. After the Transfer the Transferee will hold:

                                   [CHECK ONE]

         (a)      / /  a beneficial interest in the:

                  (i)      / /  144A Global Note (CUSIP ___________________), or

                  (ii)     / /  Regulation S Temporary Global Note (CUSIP
                           ___________________), or

                  (iii)    / /  Unrestricted Global Note (CUSIP ______________),
or

         (b)      / /  a Restricted Definitive Note, or

         (c)      / /  a Unrestricted Definitive Note,

         in accordance with the terms of the Indenture.


                                      B-4


                                    EXHIBIT C

                         FORM OF CERTIFICATE OF EXCHANGE


MERRILL CORPORATION
One Merrill Circle
St. Paul, Minnesota 55108
Telecopier No.: (651) 659-7986
Attention:  Kay A. Barber


Norwest Bank Minnesota, N.A.,
Norwest Center
MAC #N9303-120
Sixth and Marquette
Minneapolis, MN  55479
Telecopier No.:  (612) 667.9825
Attention:  James R. Bryant



Re:  12% Senior Subordinated Notes due 2009

         Reference is hereby made to the Indenture, dated as of November 23,
1999 (the "INDENTURE"), between Merrill Corporation (the "COMPANY"), as issuer,
the guarantors named therein , and Norwest Bank Minnesota, N.A., as trustee.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Indenture.

         ____________, (the "OWNER") owns and proposes to exchange the Note[s]
or interest in such Note[s] specified herein, in the principal amount of
$____________ in such Note[s] or interests (the "EXCHANGE"). In connection with
the Exchange, the Owner hereby certifies that:

         1.       / /  Exchange of Restricted Definitive Notes or Beneficial
Interests in a Restricted Global Note for Unrestricted Definitive Notes or
Beneficial Interests in an Unrestricted Global Note

         (a)      / / CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A
RESTRICTED GLOBAL NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In
connection with the Exchange of the Owner's beneficial interest in a Restricted
Global Note for a beneficial interest in an Unrestricted Global Note in an equal
principal amount, the Owner hereby certifies (i) the beneficial interest is
being acquired for the Owner's own account without transfer, (ii) such Exchange
has been effected in compliance with the transfer restrictions applicable to the
Global Notes and pursuant to and in accordance with the United States Securities
Act of 1933, as amended (the "SECURITIES ACT"), (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
beneficial interest in an Unrestricted Global Note is being acquired in
compliance with any applicable blue sky securities laws of any state of the
United States.

         (b)      / / CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A
RESTRICTED GLOBAL NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with the
Exchange of the Owner's beneficial interest in a Restricted Global Note for an
Unrestricted Definitive Note, the Owner hereby certifies (i) the Definitive


                                      C-1


Note is being acquired for the Owner's own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Global Notes and pursuant to and in accordance with
the Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the Definitive Note is being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States.

         (c)      / / CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with the
Owner's Exchange of a Restricted Definitive Note for a beneficial interest in an
Unrestricted Global Note, the Owner hereby certifies (i) the beneficial interest
is being acquired for the Owner's own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to Restricted Definitive Notes and pursuant to and in accordance with
the Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest is being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States.

         (d)      / / CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
UNRESTRICTED DEFINITIVE NOTE. In connection with the Owner's Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the Unrestricted Definitive Note is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
Unrestricted Definitive Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.

         2.       / /  Exchange of Restricted Definitive Notes or Beneficial
Interests in Restricted Global Notes for Restricted Definitive Notes or
Beneficial Interests in Restricted Global Notes

         (a)      / / CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A
RESTRICTED GLOBAL NOTE TO RESTRICTED DEFINITIVE NOTE. In connection with the
Exchange of the Owner's beneficial interest in a Restricted Global Note for a
Restricted Definitive Note with an equal principal amount, the Owner hereby
certifies that the Restricted Definitive Note is being acquired for the Owner's
own account without transfer. Upon consummation of the proposed Exchange in
accordance with the terms of the Indenture, the Restricted Definitive Note
issued will continue to be subject to the restrictions on transfer enumerated in
the Private Placement Legend printed on the Restricted Definitive Note and in
the Indenture and the Securities Act.

         (b)      / / CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE. In connection with the Exchange
of the Owner's Restricted Definitive Note for a beneficial interest in the
[CHECK ONE] / / "144A Global Note" or / / "Regulation S Temporary Global
Note", with an equal principal amount, the Owner hereby certifies (i) the
beneficial interest is being acquired for the Owner's own account without
transfer and (ii) such Exchange has been effected in compliance with the
transfer restrictions applicable to the Restricted Global Notes and pursuant to
and in accordance with the Securities Act, and in compliance with any applicable
blue sky securities laws of any state of the United States. Upon consummation of
the proposed Exchange in accordance with the terms of the Indenture, the
beneficial interest issued will be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the relevant Restricted
Global Note and in the Indenture and the Securities Act.


                                      C-2


         This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.




                                      ________________________________________
                                            [Insert Name of Transferor]


                                      By:_____________________________________
                                         Name:
                                         Title:


Dated:   __________, ____


                                      C-3


                                    EXHIBIT D

                            FORM OF CERTIFICATE FROM
                   ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR


MERRILL CORPORATION
One Merrill Circle
St. Paul, Minnesota 55108
Telecopier No.: (651) 659-7986
Attention:  Kay A. Barber

Norwest Bank Minnesota, N.A.,
Norwest Center
MAC #N9303-120
Sixth and Marquette
Minneapolis, MN  55479
Telecopier No.:  (612) 667.9825
Attention:  James R. Bryant



Re:      12% Senior Subordinated Notes due 2009

         Reference is hereby made to the Indenture, dated as of November 23,
1999 (the "INDENTURE"), among Merrill Corporation (the "COMPANY"), as issuer,
the guarantors named therein, and Norwest Bank Minnesota, N.A., as trustee.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Indenture.

         In connection with our proposed purchase of $____________ aggregate
principal amount of:


         (a)      / /   a beneficial interest in a Global Note, or

         (b)      / /   a Definitive Note,

         we confirm that:

         1.       We understand that any subsequent transfer of the Notes or any
interest therein is subject to certain restrictions and conditions set forth in
the Indenture and the undersigned agrees to be bound by, and not to resell,
pledge or otherwise transfer the Notes or any interest therein except in
compliance with, such restrictions and conditions and the United States
Securities Act of 1933, as amended (the "SECURITIES ACT").

         2.       We understand that the offer and sale of the Notes have not
been registered under the Securities Act, and that the Notes and any interest
therein may not be offered or sold except as permitted in the following
sentence. We agree, on our own behalf and on behalf of any accounts for which we
are acting as hereinafter stated, that if we should sell the Notes or any
interest therein, we will do so only (A) to the Company or any subsidiary
thereof, (B) in accordance with Rule 144A under the Securities Act to a
"qualified institutional buyer" (as defined therein), (C) to an institutional
"accredited investor" (as defined


                                      D-1


below) that, prior to such transfer, furnishes (or has furnished on its behalf
by a U.S. broker-dealer) to you and to the Company a signed letter substantially
in the form of this letter and, if such transfer is in respect of a principal
amount of Notes, at the time of transfer of less than $250,000, an Opinion of
Counsel in form reasonably acceptable to the Company to the effect that such
transfer is in compliance with the Securities Act, (D) outside the United States
in accordance with Rule 904 of Regulation S under the Securities Act, (E)
pursuant to the provisions of Rule 144(k) under the Securities Act or (F)
pursuant to an effective registration statement under the Securities Act, and we
further agree to provide to any person purchasing the Definitive Note or
beneficial interest in a Global Note from us in a transaction meeting the
requirements of clauses (A) through (E) of this paragraph a notice advising such
purchaser that resales thereof are restricted as stated herein.

         3.       We understand that, on any proposed resale of the Notes or
beneficial interest therein, we will be required to furnish to you and the
Company such certifications, legal opinions and other information as you and the
Company may reasonably require to confirm that the proposed sale complies with
the foregoing restrictions. We further understand that the Notes purchased by us
will bear a legend to the foregoing effect. We further understand that any
subsequent transfer by us of the Notes or beneficial interest therein acquired
by us must be effected through one of the Placement Agents.

         4.       We are an institutional "accredited investor" (as defined in
Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and
have such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the Notes, and
we and any accounts for which we are acting are each able to bear the economic
risk of our or its investment.

         5.       We are acquiring the Notes or beneficial interest therein
purchased by us for our own account or for one or more accounts (each of which
is an institutional "accredited investor") as to each of which we exercise sole
investment discretion.

You and the Company are entitled to rely upon this letter and are irrevocably
authorized to produce this letter or a copy hereof to any interested party in
any administrative or legal proceedings or official inquiry with respect to the
matters covered hereby.


                                    __________________________________________
                                         [Insert Name of Transferor]


                                    By:_______________________________________
                                       Name:
                                       Title:


Dated:   __________, ____


                                      D-2


                             CROSS-REFERENCE TABLE*

                          -----------------------------




Trust Indenture Act Section                                  Indenture Section
- ---------------------------                                  -----------------
                                                          
310   (a)(1)..........................................................7.10
      (a)(2) .........................................................7.10
      (a)(3)..........................................................N.A.
      (a)(4)..........................................................N.A.
      (a)(5)..........................................................7.10
      (b).............................................................7.10
      (c).............................................................N.A.
311   (a).............................................................7.11
      (b).............................................................7.11
      (c).............................................................N.A.
312   (a).............................................................2.05
      (b)............................................................11.03
      (c)............................................................10.03
313   (a).............................................................7.06
      (b)(1)..........................................................N.A.
      (b)(2)....................................................7.06; 7.07
      (c)......................................................7.06; 11.02
      (d).............................................................7.06
314   (a)............................................................11.05
      (b).............................................................N.A.
      (c)(1).........................................................11.04
      (c)(2).........................................................11.04
      (c)(3)..........................................................N.A.
      (d).............................................................N.A.
      (e)............................................................11.05
      (f).............................................................N.A.
315   (a).............................................................7.01
      (b)......................................................7.05; 10.02
      (c).............................................................7.01
      (d).............................................................7.01
      (e).............................................................6.11
316   (a)(last sentence)..............................................2.09
      (a)(1)(A).......................................................6.05
      (a)(1)(B).......................................................6.04
      (a)(2)..........................................................N.A.
      (b).............................................................6.07
      (c).............................................................2.12
317   (a)(1)..........................................................6.08
      (a)(2)..........................................................6.09
      (b).............................................................2.04
318   (a)............................................................10.01
      (b).............................................................N.A.
      (c)............................................................10.01


N.A. means, not applicable.
*This Cross-Reference Table is not part of the Indenture.





                                TABLE OF CONTENTS




                                                                                                      PAGE
                                                                                                   
ARTICLE 1             DEFINITIONS AND INCORPORATION BY REFERENCE........................................1

         SECTION 1.01          DEFINITIONS..............................................................1

         SECTION 1.02          OTHER DEFINITIONS.......................................................18

         SECTION 1.03          INCORPORATION OF TIA PROVISIONS.........................................19

         SECTION 1.04          RULES OF CONSTRUCTION...................................................19

ARTICLE 2             THE NOTES........................................................................20

         SECTION 2.01          FORM AND DATING.........................................................20

         SECTION 2.02          EXECUTION AND AUTHENTICATION............................................22

         SECTION 2.03          REGISTRAR AND PAYING AGENT..............................................22

         SECTION 2.04          PAYING AGENT TO HOLD MONEY IN TRUST.....................................22

         SECTION 2.05          HOLDER LISTS............................................................23

         SECTION 2.06          TRANSFER AND EXCHANGE...................................................23

         SECTION 2.07          REPLACEMENT NOTES.......................................................37

         SECTION 2.08          OUTSTANDING NOTES.......................................................37

         SECTION 2.09          TREASURY NOTES..........................................................38

         SECTION 2.10          TEMPORARY NOTES.........................................................38

         SECTION 2.11          CANCELLATION............................................................38

         SECTION 2.12          DEFAULTED INTEREST......................................................39

         SECTION 2.13          CUSIP NUMBERS...........................................................39

ARTICLE 3             REDEMPTION AND PREPAYMENT........................................................39

         SECTION 3.01          NOTICES TO TRUSTEE......................................................39

         SECTION 3.02          SELECTION OF NOTES TO BE REDEEMED.......................................39

         SECTION 3.03          NOTICE OF REDEMPTION....................................................40

         SECTION 3.04          EFFECT OF NOTICE OF REDEMPTION..........................................41

         SECTION 3.05          DEPOSIT OF REDEMPTION PRICE.............................................41

         SECTION 3.06          NOTES REDEEMED IN PART..................................................41

         SECTION 3.07          OPTIONAL REDEMPTION.....................................................41

         SECTION 3.08          MANDATORY REDEMPTION....................................................42

         SECTION 3.09          OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS.....................42

ARTICLE 4             COVENANTS........................................................................44

         SECTION 4.01          PAYMENT OF NOTES........................................................44


                                        i



                               TABLE OF CONTENTS
                                  (CONTINUED)

                                                                                                      PAGE

         SECTION 4.02          MAINTENANCE OF OFFICE OR AGENCY.........................................44

         SECTION 4.03          REPORTS.................................................................45

         SECTION 4.04          COMPLIANCE CERTIFICATE..................................................45

         SECTION 4.05          TAXES...................................................................46

         SECTION 4.06          STAY, EXTENSION AND USURY LAWS..........................................46

         SECTION 4.07          RESTRICTED PAYMENTS.....................................................46

         SECTION 4.08          DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES..........50

         SECTION 4.09          INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK..............51

         SECTION 4.10          ASSET SALES.............................................................54

         SECTION 4.11          TRANSACTIONS WITH AFFILIATES............................................55

         SECTION 4.12          LIENS...................................................................56

         SECTION 4.13          CORPORATE EXISTENCE.....................................................57

         SECTION 4.14          OFFER TO REPURCHASE UPON CHANGE OF CONTROL..............................57

         SECTION 4.15          NO SENIOR SUBORDINATED INDEBTEDNESS.....................................58

         SECTION 4.16          LIMITATION ON SALE AND LEASEBACK TRANSACTIONS...........................58

         SECTION 4.17          PAYMENTS FOR CONSENT....................................................58

         SECTION 4.18          ADDITIONAL NOTE GUARANTEES..............................................58

ARTICLE 5             SUCCESSORS.......................................................................59

         SECTION 5.01          MERGER, CONSOLIDATION, OR SALE OF ASSETS................................59

         SECTION 5.02          SUCCESSOR CORPORATION SUBSTITUTED.......................................59

ARTICLE 6             DEFAULTS AND REMEDIES............................................................60

         SECTION 6.01          EVENTS OF DEFAULT.......................................................60

         SECTION 6.02          ACCELERATION............................................................61

         SECTION 6.03          OTHER REMEDIES..........................................................62

         SECTION 6.04          WAIVER OF PAST DEFAULTS.................................................62

         SECTION 6.05          CONTROL BY MAJORITY.....................................................63

         SECTION 6.06          LIMITATION ON SUITS.....................................................63

         SECTION 6.07          RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT...........................63


                                       ii


                               TABLE OF CONTENTS
                                  (CONTINUED)

                                                                                                      PAGE

         SECTION 6.08          COLLECTION SUIT BY TRUSTEE..............................................63

         SECTION 6.09          TRUSTEE MAY FILE PROOFS OF CLAIM........................................64

         SECTION 6.10          PRIORITIES..............................................................64

         SECTION 6.11          UNDERTAKING FOR COSTS...................................................65

ARTICLE 7             TRUSTEE..........................................................................65

         SECTION 7.01          DUTIES OF TRUSTEE.......................................................65

         SECTION 7.02          RIGHTS OF TRUSTEE.......................................................66

         SECTION 7.03          INDIVIDUAL RIGHTS OF TRUSTEE............................................67

         SECTION 7.04          TRUSTEE'S DISCLAIMER....................................................67

         SECTION 7.05          NOTICE OF DEFAULTS......................................................67

         SECTION 7.06          REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES..............................68

         SECTION 7.07          COMPENSATION AND INDEMNITY..............................................68

         SECTION 7.08          REPLACEMENT OF TRUSTEE..................................................69

         SECTION 7.09          SUCCESSOR TRUSTEE BY MERGER, ETC........................................70

         SECTION 7.10          ELIGIBILITY; DISQUALIFICATION...........................................70

         SECTION 7.11          PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.......................70

ARTICLE 8             LEGAL DEFEASANCE AND COVENANT DEFEASANCE.........................................70

         SECTION 8.01          OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE................70

         SECTION 8.02          LEGAL DEFEASANCE AND DISCHARGE..........................................71

         SECTION 8.03          COVENANT DEFEASANCE.....................................................71

         SECTION 8.04          CONDITIONS TO LEGAL OR COVENANT DEFEASANCE..............................72

         SECTION 8.05          DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST; OTHER
                               MISCELLANEOUS PROVISIONS................................................73

         SECTION 8.06          REPAYMENT TO COMPANY....................................................74

         SECTION 8.07          REINSTATEMENT...........................................................74

ARTICLE 9             AMENDMENT, SUPPLEMENT AND WAIVER.................................................74

         SECTION 9.01          WITHOUT CONSENT OF HOLDERS OF NOTES.....................................74

         SECTION 9.02          WITH CONSENT OF HOLDERS OF NOTES........................................75

         SECTION 9.03          COMPLIANCE WITH TRUST INDENTURE ACT.....................................77


                                      iii


                               TABLE OF CONTENTS
                                  (CONTINUED)

                                                                                                      PAGE

         SECTION 9.04          REVOCATION AND EFFECT OF CONSENTS.......................................77

         SECTION 9.05          NOTATION ON OR EXCHANGE OF NOTES........................................77

         SECTION 9.06          TRUSTEE TO SIGN AMENDMENTS, ETC.........................................77

ARTICLE 10            SUBORDINATION....................................................................77

         SECTION 10.01         AGREEMENT TO SUBORDINATE................................................77

         SECTION 10.02         CERTAIN DEFINITIONS.....................................................78

         SECTION 10.03         LIQUIDATION; DISSOLUTION; BANKRUPTCY....................................79

         SECTION 10.04         DEFAULT ON DESIGNATED SENIOR INDEBTEDNESS...............................79

         SECTION 10.05         ACCELERATION OF SECURITIES..............................................80

         SECTION 10.06         WHEN DISTRIBUTION MUST BE PAID OVER.....................................80

         SECTION 10.07         NOTICE BY COMPANY.......................................................80

         SECTION 10.08         SUBROGATION.............................................................80

         SECTION 10.09         RELATIVE RIGHTS.........................................................81

         SECTION 10.10         SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY............................81

         SECTION 10.11         DISTRIBUTION OR NOTICE TO REPRESENTATIVE................................81

         SECTION 10.12         RIGHTS OF TRUSTEE AND PAYING AGENT......................................81

         SECTION 10.13         AUTHORIZATION TO EFFECT SUBORDINATION...................................82

         SECTION 10.14         NO WAIVER OF SUBORDINATION PROVISIONS...................................82

         SECTION 10.15         AMENDMENTS..............................................................82

         SECTION 10.16         TRUSTEE'S COMPENSATION NOT PREJUDICED...................................82

ARTICLE 11            NOTE GUARANTEES..................................................................83

         SECTION 11.01         GUARANTEES..............................................................83

         SECTION 11.02         SUBORDINATION OF NOTE GUARANTEES........................................84

         SECTION 11.03         LIMITATION ON GUARANTORS LIABILITY......................................84

         SECTION 11.04         EXECUTION AND DELIVERY OF NOTE GUARANTEES...............................85

         SECTION 11.05         GUARANTORS MAY CONSOLIDATE, ETC. ON CERTAIN TERMS.......................85

         SECTION 11.06         RELEASES FOLLOWING SALE FOR ASSETS......................................86

         SECTION 11.07         TRUSTEE'S COMPENSATION NOT PREJUDICED...................................86


                                       iv


                               TABLE OF CONTENTS
                                  (CONTINUED)

                                                                                                      PAGE

ARTICLE 12            MISCELLANEOUS....................................................................86

         SECTION 12.01         TRUST INDENTURE ACT CONTROLS............................................86

         SECTION 12.02         NOTICES.................................................................87

         SECTION 12.03         COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF NOTES...........88

         SECTION 12.04         CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT......................88

         SECTION 12.05         STATEMENTS REQUIRED IN CERTIFICATE OR OPINION...........................88

         SECTION 12.06         RULES BY TRUSTEE AND AGENTS.............................................89

         SECTION 12.07         NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND SHAREHOLDERS;
                               CONSENT TO SHAREHOLDER PAYMENT..........................................89

         SECTION 12.08         GOVERNING LAW...........................................................89

         SECTION 12.09         NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS...........................89

         SECTION 12.10         SUCCESSORS..............................................................89

         SECTION 12.11         SEVERABILITY............................................................90

         SECTION 12.12         COUNTERPART ORIGINALS...................................................90

         SECTION 12.13         TABLE OF CONTENTS, HEADINGS, ETC........................................90



                                       v

EX-4.2

                                                              EXECUTION VERSION

- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------



                                  A/B EXCHANGE
                          REGISTRATION RIGHTS AGREEMENT


                               MERRILL CORPORATION
                                    as Issuer

                         and the Guarantors named herein


                                  $140,000,000
                     12% SENIOR SUBORDINATED NOTES DUE 2009

                          Dated as of November 23, 1999

                           ------------------------

                          DONALDSON, LUFKIN & JENRETTE
                             SECURITIES CORPORATION


- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------



                  This Registration Rights Agreement (this "AGREEMENT") is made
and entered into as of November 23, 1999, by and among Merrill Corporation, a
Minnesota corporation (the "COMPANY"), each of the guarantors listed on Schedule
A hereto, as guarantors (each, a "GUARANTOR" and together, the "GUARANTORS") and
Donaldson, Lufkin & Jenrette Securities Corporation (the "INITIAL PURCHASER")
which has agreed to purchase $140,000,000 aggregate principal amount of the
Company's 12% Senior Subordinated Notes due 2009 (the "SERIES A NOTES") pursuant
to the Purchase Agreement (as defined below).

                  This Agreement is made pursuant to the Purchase Agreement,
dated as of November 18, 1999, (the "PURCHASE AGREEMENT"), by and among the
Company, Viking Merger Sub, Inc., the Guarantor(s) and the Initial Purchaser. In
order to induce the Initial Purchaser to purchase the Series A Notes, the
Company has agreed to provide the registration rights set forth in this
Agreement. The execution and delivery of this Agreement is a condition to the
obligations of the Initial Purchaser set forth in Section 3 of the Purchase
Agreement. Capitalized terms used herein and not otherwise defined shall have
the meaning assigned to them in the Indenture (the "INDENTURE"), dated as of
November 23, 1999, between the Company and Norwest Bank Minnesota, N.A., as
Trustee, relating to the Series A Notes and the Series B Notes (as defined
below).

                  The parties hereby agree as follows:

SECTION 1.                 DEFINITIONS

                  As used in this Agreement, the following capitalized terms
shall have the folowing meanings:

                  ACT:  The Securities Act of 1933, as amended.

                  AFFILIATE:  As defined in Rule 144 of the Act.

                  AFFILIATED MARKET MAKER: A Broker-Dealer who is (or who, in
the reasonable judgment of such Broker-Dealer or its counsel, may be) (i) deemed
to be an Affiliate of the Company or (ii) otherwise required to deliver a
prospectus in connection with sales or market-making activities involving
securities of the Company.

                  BROKER-DEALER: Any broker or dealer registered under the
Exchange Act.

                  CERTIFICATED SECURITIES: Definitive Notes, as defined in the
Indenture.

                  CLOSING DATE:  The date hereof.

                  COMMISSION:  The Securities and Exchange Commission.

                  CONSUMMATE: An Exchange Offer shall be deemed "Consummated"
for purposes of this Agreement upon the occurrence of (a) the filing and
effectiveness under the Act of the Exchange Offer Registration Statement
relating to the Series B Notes to be issued in the Exchange Offer, (b) the



maintenance of such Exchange Offer Registration Statement continuously effective
and the keeping of the Exchange Offer open for a period not less than the period
required pursuant to Section 3(b) hereof and (c) the delivery by the Company to
the Registrar under the Indenture of Series B Notes in the same aggregate
principal amount as the aggregate principal amount of Series A Notes tendered by
Holders thereof pursuant to the Exchange Offer.

                  CONSUMMATION DEADLINE:  As defined in Section 3(b) hereof.

                  EFFECTIVENESS DEADLINE: As defined in Sections 3(a) and 4(a)
hereof.

                  EXCHANGE ACT: The Securities Exchange Act of 1934, as amended.

                  EXCHANGE OFFER: The exchange and issuance by the Company of a
principal amount of Series B Notes (which shall be registered pursuant to the
Exchange Offer Registration Statement) equal to the outstanding principal amount
of Series A Notes that are tendered by such Holders in connection with such
exchange and issuance.

                  EXCHANGE OFFER REGISTRATION STATEMENT: The Registration
Statement relating to the Exchange Offer, including the related Prospectus.

                  EXEMPT RESALES: The transactions in which the Initial
Purchaser proposes to sell the Series A Notes to certain "qualified
institutional buyers," as such term is defined in Rule 144A under the Act and
pursuant to Regulation S under the Act.

                  FILING DEADLINE:  As defined in Sections 3(a) and 4(a) hereof.

                  HOLDERS:  As defined in Section 2 hereof.

                  PROSPECTUS: The prospectus included in a Registration
Statement at the time such Registration Statement is declared effective, as
amended or supplemented by any prospectus supplement and by all other amendments
thereto, including post-effective amendments, and all material incorporated by
reference into such Prospectus.

                  RECOMMENCEMENT DATE:  As defined in Section 6(d) hereof.

                  REGISTRATION DEFAULT:  As defined in Section 5 hereof.

                  REGISTRATION STATEMENT: Any registration statement of the
Company and the Guarantors relating to (a) an offering of Series B Notes
pursuant to an Exchange Offer or (b) the registration for resale of Transfer
Restricted Securities pursuant to the Shelf Registration Statement, in each
case, (i) that is filed pursuant to the provisions of this Agreement and (ii)
including the Prospectus included therein, all amendments and supplements
thereto (including post-effective amendments) and all exhibits and material
incorporated by reference therein.


                                       2


                  REGULATION S:  Regulation S promulgated under the Act.

                  RULE 144:  Rule 144 promulgated under the Act.

                  SERIES B NOTES: The Company's 12% Senior Subordinated Notes
due 2009 to be issued pursuant to the Indenture: (i) in the Exchange Offer or
(ii) as contemplated by Section 4 hereof.

                  SHELF REGISTRATION STATEMENT: As defined in Section 6(b)
hereof.

                  SUSPENSION NOTICE:  As defined in Section 6(d) hereof.

                  TIA: The Trust Indenture Act of 1939 (15 U.S.C. Section
77aaa-77bbbb) as in effect on the date of the Indenture.

                  TRANSFER RESTRICTED SECURITIES: Each Series A Note, until the
earliest to occur of (a) the date on which such Series A Note is exchanged in
the Exchange Offer for a Series B Note which is entitled to be resold to the
public by the Holder thereof without complying with the prospectus delivery
requirements of the Act, (b) the date on which such Series A Note has been
disposed of in accordance with a Shelf Registration Statement (and the
purchasers thereof have been issued Series B Notes), or (c) the date on which
such Series A Note is distributed to the public pursuant to Rule 144 under the
Act (and purchasers thereof have been issued Series B Notes) and each Series B
Note issued to a Broker-Dealer until the date on which such Series B Note is
disposed of by a Broker-Dealer pursuant to the "Plan of Distribution"
contemplated by the Exchange Offer Registration Statement (including the
delivery of the Prospectus contained therein).

                  In addition, unless the context otherwise requires, each
reference herein to a Series A Note or Series B Note shall be deemed to include
the related Guarantees thereof.

SECTION 2.                 HOLDERS

                  A Person is deemed to be a holder of Transfer Restricted
Securities (each, a "HOLDER") whenever such Person is the holder of record of
Transfer Restricted Securities.


SECTION 3.                 REGISTERED EXCHANGE OFFER

                  (a) Unless the Exchange Offer shall not be permitted by
applicable federal law (after the procedures set forth in Section 6(a)(i) below
have been complied with), the Company and the Guarantors shall use their
respective reasonable best efforts to (i) cause the Exchange Offer Registration
Statement to be filed with the Commission as soon as practicable after the
Closing Date, but in no event later than 90 days after the Closing Date (such
90th day being the "FILING DEADLINE"), (ii) cause such Exchange Offer
Registration Statement to become effective at the earliest possible time, but in
no event

                                       3


later than 180 days after the Closing Date (such 180th day being the
"EFFECTIVENESS DEADLINE"), (iii) in connection with the foregoing, (A) file
all pre-effective amendments to such Exchange Offer Registration Statement as
may be necessary in order to cause it to become effective, (B) file, if
applicable, a post-effective amendment to such Exchange Offer Registration
Statement pursuant to Rule 430A under the Act and (C) subject to the proviso
in section 6(c)(xii) cause all necessary filings, if any, in connection with
the registration and qualification of the Series B Notes to be made under the
Blue Sky laws of such jurisdictions as are necessary to permit Consummation
of the Exchange Offer, and (iv) upon the effectiveness of such Exchange Offer
Registration Statement, commence and Consummate the Exchange Offer. The
Exchange Offer shall be on the appropriate form permitting (i) registration
of the Series B Notes to be offered in exchange for the Series A Notes that
are Transfer Restricted Securities and (ii) resales of Series B Notes by
Broker-Dealers that tendered into the Exchange Offer Series A Notes that such
Broker-Dealer acquired for its own account as a result of market-making
activities or other trading activities (other than Series A Notes acquired
directly from the Company or any of its Affiliates) as contemplated by
Section 3(c) below.

                  (b) The Company and the Guarantors shall use their respective
reasonable best efforts to cause the Exchange Offer Registration Statement to be
effective continuously, and shall keep the Exchange Offer open for a period of
not less than the minimum period required under applicable federal and state
securities laws to Consummate the Exchange Offer; PROVIDED, HOWEVER, that in no
event shall such period be less than 20 business days. The Company and the
Guarantors shall cause the Exchange Offer to comply with all applicable federal
and state securities laws. No securities other than the Series B Notes shall be
included in the Exchange Offer Registration Statement. The Company and the
Guarantors shall use their respective best efforts to cause the Exchange Offer
to be Consummated within 30 business days after the Exchange Offer Registration
Statement has become effective, but in no event later than 40 business days
thereafter (such 40th business day being the "CONSUMMATION DEADLINE").

                  (c) The Company shall include a "Plan of Distribution" section
in the Prospectus contained in the Exchange Offer Registration Statement and
indicate therein that any Broker-Dealer who holds Transfer Restricted Securities
that were acquired for the account of such Broker-Dealer as a result of
market-making activities or other trading activities (other than Series A Notes
acquired directly from the Company or any Affiliate of the Company), may
exchange such Transfer Restricted Securities pursuant to the Exchange Offer.
Such "Plan of Distribution" section shall also contain all other information
with respect to such sales by such Broker-Dealers that the Commission may
require in order to permit such sales pursuant thereto, but such "Plan of
Distribution" shall not name any such Broker-Dealer or disclose the amount of
Transfer Restricted Securities held by any such Broker-Dealer, except to the
extent required by the Commission as a result of a change in policy, rules or
regulations after the date of this Agreement. See the SHEARMAN & STERLING
no-action letter (available July 2, 1993).

                  Because such Broker-Dealer may be deemed to be an
"underwriter" within the meaning of the Act and must, therefore, deliver a
prospectus meeting the requirements of the Act in connection with its initial
sale of any Series B Notes received by such Broker-Dealer in the Exchange Offer,
the Company and the Guarantors shall permit the use of the Prospectus contained
in the Exchange Offer

                                       4


Registration Statement by such Broker-Dealer to satisfy such prospectus
delivery requirement for a period of 90 days from the Consummation Date. To
the extent necessary to ensure that the Prospectus contained in the Exchange
Offer Registration Statement is available for sales of Series B Notes by
Broker-Dealers, the Company and the Guarantors agree to use their respective
reasonable best efforts to keep the Exchange Offer Registration Statement
continuously effective, supplemented, amended and current as required by and
subject to the provisions of Sections 6(a) and 6(c) hereof and in conformity
with the requirements of this Agreement, the Act and the policies, rules and
regulations of the Commission as announced from time to time, for a period of
90 days from the Consummation Deadline or such shorter period as will
terminate when all Transfer Restricted Securities covered by such
Registration Statement have been sold pursuant thereto. The Company and the
Guarantors shall provide sufficient copies of the latest version of such
Prospectus to such Broker-Dealers, promptly upon request at any time during
such period.

SECTION 4.                 SHELF REGISTRATION

                  (a) SHELF REGISTRATION. If (i) the Exchange Offer is not
permitted by applicable law (after the Company and the Guarantors have complied
with the procedures set forth in Section 6(a)(i) below) or (ii) if any Holder of
Transfer Restricted Securities shall notify the Company within 20 business days
following the Consummation Deadline that (A) based on an opinion of counsel,
such Holder was prohibited by law or Commission policy from participating in the
Exchange Offer or (B) such Holder is a Broker-Dealer and holds Series A Notes
acquired directly from the Company or any of its Affiliates, then the Company
and the Guarantors shall:

                  (x) cause to be filed, on or prior to 90 days after the
         earlier of (i) the date on which the Company determines that the
         Exchange Offer Registration Statement cannot be filed as a result of
         clause (a)(i) above and (ii) the date on which the Company receives the
         notice specified in clause (a)(ii) above, (such earlier date, the
         "FILING DEADLINE"), a shelf registration statement pursuant to Rule 415
         under the Act (which may be an amendment to the Exchange Offer
         Registration Statement (the "SHELF REGISTRATION STATEMENT")), relating
         to all Transfer Restricted Securities, in the case of clause (a)(i)
         above, or to the Transfer Restricted Securities specified in any notice
         delivered pursuant to clause (a)(ii) above, as the case may be, and

                  (y) shall use its reasonable best efforts to cause such Shelf
         Registration Statement to become effective on or prior to 180 days
         after the Filing Deadline for the Shelf Registration Statement (such
         180th day the "EFFECTIVENESS DEADLINE").

                  If, after the Company has filed an Exchange Offer Registration
Statement that satisfies the requirements of Section 3(a) above, the Company is
required to file and make effective a Shelf Registration Statement solely
because the Exchange Offer is not permitted under applicable federal law (i.e.,
clause (a)(i) above), then the filing of the Exchange Offer Registration
Statement shall be deemed to satisfy the requirements of clause (x) above;
PROVIDED that, in such event, the Company shall remain obligated to meet the
Effectiveness Deadline set forth in clause (y).

                                       5


                  To the extent necessary to ensure that the Shelf Registration
Statement is available for sales of Transfer Restricted Securities by the
Holders thereof entitled to the benefit of this Section 4(a) and the other
securities required to be registered therein pursuant to Section 6(b)(ii)
hereof, the Company and the Guarantors shall use their respective reasonable
best efforts to keep any Shelf Registration Statement required by this Section
4(a) continuously effective, supplemented, amended and current as required by
and subject to the provisions of Sections 6(b) and (c) hereof and in conformity
with the requirements of this Agreement, the Act and the policies, rules and
regulations of the Commission as announced from time to time, until the later of
(a) the date on which the Initial Purchaser is no longer deemed an Affiliate of
the Company and (b) the earlier of the second anniversary of the Closing Date
(as extended pursuant to Section 6(d)) and such earlier date when no Transfer
Restricted Securities covered by such Shelf Registration Statement remain
outstanding.

                  (b) PROVISION BY HOLDERS OF CERTAIN INFORMATION IN CONNECTION
WITH THE SHELF REGISTRATION STATEMENT. No Holder of Transfer Restricted
Securities may include any of its Transfer Restricted Securities in any Shelf
Registration Statement pursuant to this Agreement unless and until such Holder
furnishes to the Company in writing, within 20 days after receipt of a request
therefor, the information specified in Item 507 or 508 of Regulation S-K, as
applicable, of the Act for use in connection with any Shelf Registration
Statement or Prospectus or preliminary Prospectus included therein. No Holder of
Transfer Restricted Securities shall be entitled to liquidated damages pursuant
to Section 5 hereof unless and until such Holder shall have provided all such
information. Each selling Holder agrees to promptly furnish additional
information required to be disclosed in order to make the information previously
furnished to the Company by such Holder not materially misleading.

                  (c) EXPIRATION OF RIGHTS. Holders of Transfer Restricted
Securities that do not give the written notice within the 20 business day period
set forth in Section 4(a)(ii) hereof, if required to be given, will no longer
have any registration rights pursuant to this Section 4 and will not be entitled
to any liquidated damages pursuant to Section 5 hereof in respect of the
Company's obligations with respect to the Shelf Registration Statement.


SECTION 5.                 LIQUIDATED DAMAGES

                  If (i) any Registration Statement required by this Agreement
is not filed with the Commission on or prior to the applicable Filing Deadline,
(ii) any such Registration Statement has not been declared effective by the
Commission on or prior to the applicable Effectiveness Deadline, (iii) the
Exchange Offer has not been Consummated on or prior to the Consummation Deadline
or (iv) any Registration Statement required by this Agreement is filed and
declared effective but shall thereafter cease to be effective or fail to be
usable for its intended purpose without being succeeded promptly by a
post-effective amendment to such Registration Statement that cures such failure
and that is itself declared effective within 10 business days of filing such
post-effective amendment to such Registration Statement (each such event
referred to in clauses (i) through (iv), a "REGISTRATION DEFAULT"), then the
Company and each Guarantor hereby jointly and severally agree to pay to each
Holder of Transfer Restricted

                                       6


Securities affected thereby liquidated damages in an amount equal to $.05 per
week per $1,000 in principal amount of Transfer Restricted Securities held by
such Holder for each week or portion thereof that the Registration Default
continues for the first 90-day period immediately following the occurrence of
such Registration Default. The amount of the liquidated damages shall
increase by an additional $.05 per week per $1,000 in principal amount of
Transfer Restricted Securities with respect to each subsequent 90-day period
until all Registration Defaults have been cured, up to a maximum amount of
liquidated damages of $.25 per week per $1,000 in principal amount of
Transfer Restricted Securities; PROVIDED that the Company and the Guarantors
shall in no event be required to pay liquidated damages for more than one
Registration Default at any given time. Notwithstanding anything to the
contrary set forth herein, (1) upon filing of the Exchange Offer Registration
Statement (and/or, if applicable, the Shelf Registration Statement), in the
case of (i) above, (2) upon the effectiveness of the Exchange Offer
Registration Statement (and/or, if applicable, the Shelf Registration
Statement), in the case of (ii) above, (3) upon Consummation of the Exchange
Offer, in the case of (iii) above, (4) upon the filing of a post-effective
amendment to the Registration Statement or an additional Registration
Statement that causes the Exchange Offer Registration Statement (and/or, if
applicable, the Shelf Registration Statement) to again be declared effective
or made usable in the case of (iv) above, or (5) if sooner, upon the first
date on which no Transfer Restricted Securities remain outstanding, in the
case of clauses (i) through (iv) above, the liquidated damages payable with
respect to the Transfer Restricted Securities as a result of such clause (i),
(ii), (iii) or (iv), as applicable, shall cease.

                  All accrued liquidated damages shall be paid to the Holders
entitled thereto, in the manner provided for the payment of interest in the
Indenture, on each Interest Payment Date, as more fully set forth in the
Indenture and the Notes. Notwithstanding the fact that any securities for which
liquidated damages are due cease to be Transfer Restricted Securities, all
obligations of the Company and the Guarantors to pay liquidated damages that
accrued prior to the time such securities ceased to be Transfer Restricted
Securities shall survive until such time as such obligations with respect to
such securities shall have been satisfied in full.


SECTION 6.                 REGISTRATION PROCEDURES

                  (a) EXCHANGE OFFER REGISTRATION STATEMENT. In connection with
the Exchange Offer, the Company and the Guarantors shall (x) comply with all
applicable provisions of Section 6(c) below, (y) use their respective reasonable
best efforts to effect such exchange and to permit the resale of Series B Notes
by Broker-Dealers that tendered in the Exchange Offer Series A Notes that such
Broker-Dealer acquired for its own account as a result of its market-making
activities or other trading activities (other than Series A Notes acquired
directly from the Company or any of its Affiliates) being sold in accordance
with the intended method or methods of distribution thereof, and (z) comply with
all of the following provisions:

                  (i) If, following the date hereof there has been announced a
change in Commission policy with respect to exchange offers, such as the
Exchange Offer, that in the reasonable opinion of counsel to the Company raises
a substantial question as to whether the Exchange Offer is permitted by

                                       7


applicable federal law, the Company and the Guarantors hereby agree to seek a
no-action letter or other favorable decision from the Commission allowing the
Company and the Guarantors to Consummate an Exchange Offer for such Transfer
Restricted Securities. The Company and the Guarantors hereby agree to use their
reasonable best efforts in pursuing the issuance of such a decision to the
Commission staff level.

                  (ii) As a condition to its participation in the Exchange
Offer, each Holder (including, without limitation, any Holder who is a Broker
Dealer) shall furnish, upon the request of the Company, prior to the
Consummation of the Exchange Offer, a written representation to the Company and
the Guarantors (which may be contained in the letter of transmittal contemplated
by the Exchange Offer Registration Statement) to the effect that, at the time of
Consummation of the Exchange Offer, (A) any Series B Notes received by such
Holder will be acquired in the ordinary course of its business, (B) such Holder
will have no arrangement or understanding with any person to participate in the
distribution of the Series A Notes or the Series B Notes within the meaning of
the Act, (C) if the Holder is not a Broker-Dealer or is a Broker-Dealer but will
not receive Series B Notes for its own account in exchange for Series A Notes,
neither the Holder nor any such other Person is engaged in or intends to
participate in a distribution of the Series B Notes, and (D) that such Holder is
not an Affiliate of the Company. If the Holder is a Broker-Dealer that will
receive Series B Notes for its own account in exchange for Series A Notes, it
will represent that the Series A Notes to be exchanged for the Series B Notes
were acquired by it as a result of market-making activities or other trading
activities, and will acknowledge that it will deliver a prospectus meeting the
requirements of the Act in connection with any resale of such Series B Notes. It
is understood that, by acknowledging that it will deliver, and by delivering, a
prospectus meeting the requirements of the Act in connection with any resale of
such Series B Notes, the Holder is not admitting that it is an "underwriter"
within the meaning of the Act.

                  (iii) Prior to effectiveness of the Exchange Offer
Registration Statement, the Company and the Guarantors shall provide a
supplemental letter to the Commission (A) stating that the Company and the
Guarantors are registering the Exchange Offer in reliance on the position of the
Commission enunciated in EXXON CAPITAL HOLDINGS CORPORATION (available May 13,
1988), MORGAN STANLEY AND CO., INC. (available June 5, 1991) as interpreted in
the Commission's letter to SHEARMAN & STERLING dated July 2, 1993, and, if
applicable, any no-action letter obtained pursuant to clause (i) above, (B)
including a representation that neither the Company nor any of the Guarantors
has entered into any arrangement or understanding with any Person to distribute
the Series B Notes to be received in the Exchange Offer and that, to the best of
the Company's and the Guarantors' information and belief, each Holder
participating in the Exchange Offer is acquiring the Series B Notes in its
ordinary course of business and has no arrangement or understanding with any
Person to participate in the distribution of the Series B Notes received in the
Exchange Offer and (C) any other undertaking or representation required by the
Commission as set forth in any no-action letter obtained pursuant to clause (i)
above, if applicable.

                  (b) SHELF REGISTRATION STATEMENT. In connection with the Shelf
Registration Statement, the Company and the Guarantors shall:

                                       8


                  (i) comply with all the provisions of Section 6(c) below and
use their respective reasonable best efforts to effect such registration to
permit the sale of the Transfer Restricted Securities being sold in accordance
with the intended method or methods of distribution thereof (as indicated in the
information furnished to the Company pursuant to Section 4(b) hereof), and
pursuant thereto the Company and the Guarantors will prepare and file with the
Commission a Registration Statement relating to the registration on any
appropriate form under the Act, which form shall be available for the sale of
the Transfer Restricted Securities in accordance with the intended method or
methods of distribution thereof within the time periods and otherwise in
accordance with the provisions hereof.

                           (ii) issue, upon the request of any Holder or
purchaser of Series A Notes covered by any Shelf Registration Statement
contemplated by this Agreement, Series B Notes having an aggregate principal
amount equal to the aggregate principal amount of Series A Notes sold pursuant
to the Shelf Registration Statement and surrendered to the Company for
cancellation; the Company shall register Series B Notes on the Shelf
Registration Statement for this purpose and issue the Series B Notes to the
purchaser(s) of securities subject to the Shelf Registration Statement in the
names as such purchaser(s) shall designate.

                  (c) GENERAL PROVISIONS. In connection with any Registration
Statement and any related Prospectus required by this Agreement, the Company and
the Guarantors shall:

                           (i)  use their respective reasonable best efforts to
keep such Registration Statement continuously effective and provide all
requisite financial statements for the period specified in Section 3 or 4 of
this Agreement, as applicable. Upon the occurrence of any event that would cause
any such Registration Statement or the Prospectus contained therein (A) to
contain an untrue statement of material fact or omit to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading or (B) not to be effective and usable
for resale of Transfer Restricted Securities during the period required by this
Agreement, the Company and the Guarantors shall file promptly an appropriate
amendment to such Registration Statement or a supplement to the Prospectus, as
applicable, curing such defect, and, if Commission review is required, use their
respective best efforts to cause such amendment to be declared effective as soon
as practicable;

                           (ii) prepare and file with the Commission such
amendments and post-effective amendments to the applicable Registration
Statement as may be necessary to keep such Registration Statement effective for
the applicable period set forth in Section 3 or 4 hereof, as the case may be;
cause the Prospectus to be supplemented by any required prospectus supplement,
and as so supplemented to be filed pursuant to Rule 424 under the Act, and to
comply fully with Rules 424, 430A and 462, as applicable, under the Act in a
timely manner; and comply with the provisions of the Act with respect to the
disposition of all securities covered by such Registration Statement during the
applicable period in accordance with the intended method or methods of
distribution by the sellers thereof set forth in such Registration Statement or
supplement to the Prospectus;

                                       9


                           (iii) promptly advise each Holder whose Transfer
Restricted Securities have been included in a Shelf Registration Statement (in
the case of a Shelf Registration Statement) (a "Relevant Holder"), and each
Affiliated Market Maker (in the case of an Exchange Offer Registration Statement
containing a prospectus required to be delivered by an Affiliated Market Maker)
(a "Relevant Affiliated Market Maker") and, in each case, if requested by such
Person, confirm such advice in writing, (A) when the Prospectus or any
prospectus supplement or post-effective amendment has been filed, and, with
respect to any applicable Registration Statement or any post-effective amendment
thereto, when the same has become effective, (B) of any request by the
Commission for amendments to the Registration Statement or amendments or
supplements to the Prospectus or for additional information relating thereto,
(C) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement under the Act or of the suspension
by any state securities commission of the qualification of the Transfer
Restricted Securities for offering or sale in any jurisdiction, or the
initiation of any proceeding for any of the preceding purposes, and (D) of the
existence of any fact or the happening of any event that makes any statement of
a material fact made in the Registration Statement, the Prospectus, any
amendment or supplement thereto or any document incorporated by reference
therein untrue, or that requires the making of any additions to or changes in
the Registration Statement in order to make the statements therein not
misleading, or that requires the making of any additions to or changes in the
Prospectus in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. If at any time the
Commission shall issue any stop order suspending the effectiveness of the
Registration Statement, or any state securities commission or other regulatory
authority shall issue an order suspending the qualification or exemption from
qualification of the Transfer Restricted Securities under state securities or
Blue Sky laws, the Company and the Guarantors shall use their respective
reasonable best efforts to obtain the withdrawal or lifting of such order at the
earliest possible time;

                           (iv) subject to Section 6(c)(i), if any fact or event
contemplated by Section 6(c)(iii)(D) above shall exist or have occurred, prepare
a supplement or post-effective amendment to the Registration Statement or
related Prospectus or any document incorporated therein by reference or file any
other required document so that, as thereafter delivered to the purchasers of
Transfer Restricted Securities, the Prospectus will not contain an untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading;

                           (v) furnish to each Relevant Holder and each Relevant
Affiliated Market Maker, if any, before filing with the Commission, copies of
any Registration Statement or any Prospectus included therein or any amendments
or supplements to any such Registration Statement or Prospectus (including all
documents incorporated by reference after the initial filing of such
Registration Statement), which documents will be subject to the review and
comment of such Persons in connection with such sale, if any, for a period of at
least five business days, and the Company will not file any such Registration
Statement or Prospectus or any amendment or supplement to any such Registration
Statement or Prospectus (including all such documents incorporated by reference)
to which such Persons shall reasonably object within five business days after
the receipt thereof. Such Persons shall be deemed to have reasonably objected to
such filing if such Registration Statement, amendment, Prospectus or

                                       10


supplement, as applicable, as proposed to be filed, contains an untrue
statement of a material fact or omits to state any material fact necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading or fails to comply with the applicable
requirements of the Act;

                           (vi) promptly prior to the filing of any document
that is to be incorporated by reference into a Registration Statement or
Prospectus, provide copies of such document to each Relevant Holder and each
Relevant Affiliated Market Maker, if any, make the Company's and the Guarantors'
representatives available for discussion of such document and other customary
due diligence matters, and include such information in such document prior to
the filing thereof as such Persons may reasonably request;

                           (vii) make available, at reasonable times, for
inspection by each Relevant Holder and each Relevant Affiliated Market Maker and
any attorney or accountant retained by such Persons, all financial and other
records, pertinent corporate documents of the Company and the Guarantors and
cause the Company's and the Guarantors' officers, directors and employees to
supply all information reasonably requested by any such Persons, attorney or
accountant in connection with such Registration Statement or any post-effective
amendment thereto subsequent to the filing thereof and prior to its
effectiveness, other than the inspection of any records, documents or
information which would have an adverse effect on the Company's competitive
position; PROVIDED, HOWEVER, that any records, documents or information which
are necessary to avoid or correct a material misstatement or omission in such
Registration Statement or which are necessary to enable a Relevant Holder or
Relevant Affiliated Market Maker and any attorney or accountant retained by any
such Persons to exercise any applicable due diligence responsibilities will be
released to such Relevant Holder or Relevant Affiliated Market Maker.

                           (viii) if requested by any Relevant Holder or any
Relevant Affiliated Market Maker, promptly include in any Registration Statement
or Prospectus, pursuant to a supplement or post-effective amendment if
necessary, such information as such Persons may reasonably request to have
included therein, including, without limitation, information relating to the
"Plan of Distribution" of the Transfer Restricted Securities and the use of the
Registration Statement or Prospectus for market-making activities; and make all
required filings of such prospectus supplement or post-effective amendment as
soon as practicable after the Company is notified of the matters to be included
in such prospectus supplement or post-effective amendment;

                           (ix) furnish to each Relevant Holder and each
Relevant Affiliated Market Maker, upon request, without charge, at least one
copy of the Registration Statement, as first filed with the Commission, and of
each amendment thereto, including all documents incorporated by reference
therein and all exhibits (including exhibits incorporated therein by reference);

                           (x) deliver to each Relevant Holder and each relevant
Affiliated Market Maker, without charge, as many copies of the Prospectus
(including each preliminary prospectus) and any amendment or supplement thereto
as such Persons reasonably may request; the Company and the Guarantors

                                       11


hereby consent to the use (in accordance with law) of the Prospectus and any
amendment or supplement thereto by each Person in connection with the
offering and the sale of the Transfer Restricted Securities covered by the
Prospectus or any amendment or supplement thereto and all market-making
activities of such Affiliated Market Maker, as the case may be;

                           (xi) upon the request of any Relevant Holder or any
Relevant Affiliated Market Maker, enter into such agreements (including
underwriting agreements) as are customary in comparable offerings and make such
representations and warranties and take all such other appropriate actions in
connection therewith in order to expedite or facilitate the disposition of the
Transfer Restricted Securities pursuant to any applicable Registration Statement
contemplated by this Agreement as may be reasonably requested by any Person in
connection with any sale or resale pursuant to any applicable Registration
Statement. In such connection, and also in connection with market-making
activities by any Affiliated Market Maker, the Company and the Guarantors shall:

                           (A) upon request of any Person, furnish (or in the
case of paragraphs (2) and (3), use its reasonable best efforts to cause to be
furnished) to each Person, upon Consummation of the Exchange Offer or upon the
effectiveness of the Shelf Registration Statement, as the case may be:

                                    (1)  a certificate, dated such date, signed
on behalf of the Company and each Guarantor by (x) the President or any Vice
President and (y) a principal financial or accounting officer of the Company and
such Guarantor, confirming, as of the date thereof, the matters set forth in
Sections 6(y), 9(a) and 9(b) of the Purchase Agreement and such other similar
matters as such Person may reasonably request;

                                    (2) an opinion, dated the date of
Consummation of the Exchange Offer or the date of effectiveness of the Shelf
Registration Statement, as the case may be, of counsel for the Company and the
Guarantors covering matters similar to those set forth in paragraphs (e) and (f)
of Section 9 of the Purchase Agreement and such other matters as such Person may
reasonably request, and in any event including a statement to the effect that
such counsel has participated in conferences with officers and other
representatives of the Company and the Guarantors, representatives of the
independent public accountants for the Company and the Guarantors and have
considered the matters required to be stated therein and the statements
contained therein, although such counsel has not independently verified the
accuracy, completeness or fairness of such statements; and that such counsel
advises that, on the basis of the foregoing no facts came to such counsel's
attention that caused such counsel to believe that the applicable Registration
Statement, at the time such Registration Statement or any post-effective
amendment thereto became effective and, in the case of the Exchange Offer
Registration Statement, as of the date of Consummation of the Exchange Offer,
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading, or that the Prospectus contained in such Registration Statement
as of its date and, in the case of the opinion dated the date of Consummation of
the Exchange Offer, as of the date of Consummation, contained an untrue
statement of a material fact or omitted to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. Without limiting the foregoing, such
counsel may state further that such

                                       12


counsel assumes no responsibility for, and has not independently verified,
the accuracy, completeness or fairness of the financial statements, notes and
schedules and other financial data included in any Registration Statement
contemplated by this Agreement or the related Prospectus; and

                                    (3) a customary comfort letter, dated the
date of Consummation of the Exchange Offer, or as of the date of effectiveness
of the Shelf Registration Statement, as the case may be, from the Company's
independent accountants, in the customary form and covering matters of the type
customarily covered in comfort letters to underwriters in connection with
underwritten offerings, and affirming the matters set forth in the comfort
letters delivered pursuant to Section 9(g) of the Purchase Agreement; and

                           (B) deliver such other documents and certificates as
may be reasonably requested by such Persons to evidence compliance with the
matters covered in clause (A) above and with any customary conditions contained
in any agreement entered into by the Company and the Guarantors pursuant to this
clause (xi);

                           (xii) prior to any public offering of Transfer
Restricted Securities, cooperate with the selling Holders and their counsel in
connection with the registration and qualification of the Transfer Restricted
Securities under the securities or Blue Sky laws of such jurisdictions as the
selling Holders may request and do any and all other acts or things necessary or
advisable to enable the disposition in such jurisdictions of the Transfer
Restricted Securities covered by the applicable Registration Statement;
PROVIDED, HOWEVER, that neither the Company nor the Guarantors shall be required
to register or qualify as a foreign corporation where it is not now so qualified
or to take any action that would subject it to the service of process in suits
or to taxation, other than as to matters and transactions relating to the
Registration Statement, in any jurisdiction where it is not now so subject;

                           (xiii) in connection with any sale of Transfer
Restricted Securities that will result in such securities no longer being
Transfer Restricted Securities, cooperate with the selling Holders to facilitate
the timely preparation and delivery of certificates representing Transfer
Restricted Securities to be sold and not bearing any restrictive legends; and to
register such Transfer Restricted Securities in such denominations and such
names as the selling Holders may request at least two business days prior to
such sale of Transfer Restricted Securities;

                           (xiv) use their respective reasonable best efforts to
cause the disposition of the Transfer Restricted Securities covered by the
Registration Statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary to enable the seller or
sellers thereof to consummate the disposition of such Transfer Restricted
Securities, subject to the proviso contained in clause (xii) above;

                           (xv) provide a CUSIP number for all Transfer
Restricted Securities not later than the effective date of a Registration
Statement covering such Transfer Restricted Securities and provide the Trustee
under the Indenture with printed certificates for the Transfer Restricted
Securities which are in a form eligible for deposit with The Depository Trust
Company;

                                       13


                           (xvi) otherwise use their reasonable best efforts to
comply with all applicable rules and regulations of the Commission so long as
any provision of this Agreement shall be applicable, and make generally
available to its security holders with regard to any applicable Registration
Statement, as soon as practicable, a consolidated earnings statement meeting the
requirements of Rule 158 (which need not be audited) covering a 12-month period
beginning after the effective date of the Registration Statement (as such term
is defined in paragraph (c) of Rule 158 under the Act);

                           (xvii) cause the Indenture to be qualified under the
TIA not later than the effective date of the first Registration Statement
required by this Agreement and, in connection therewith, cooperate with the
Trustee and the Holders to effect such changes to the Indenture as may be
required for such Indenture to be so qualified in accordance with the terms of
the TIA; and execute and use their reasonable best efforts to cause the Trustee
to execute, all documents that may be required to effect such changes and all
other forms and documents required to be filed with the Commission to enable
such Indenture to be so qualified in a timely manner; and

                           (xviii) provide promptly to each Holder and
Affiliated Market Maker, upon request, each document filed after the date of
this Agreement with the Commission pursuant to the requirements of Section 13 or
Section 15(d) of the Exchange Act.

                  (d) RESTRICTIONS ON HOLDERS. Each Holder agrees by acquisition
of a Transfer Restricted Security and the Affiliated Market Maker agrees that,
upon receipt of the notice referred to in Section 6(c)(iii)(C) or any notice
from the Company of the existence of any fact of the kind described in Section
6(c)(iii)(D) hereof (in each case, a "SUSPENSION NOTICE"), such Person will
forthwith discontinue disposition of Transfer Restricted Securities pursuant to
the applicable Registration Statement until (i) such Person has received copies
of the supplemented or amended Prospectus contemplated by Section 6(c)(iv)
hereof, or (ii) such Person is advised in writing by the Company that the use of
the Prospectus may be resumed, and has received copies of any additional or
supplemental filings that are incorporated by reference in the Prospectus (in
each case, the "RECOMMENCEMENT DATE"). Each Person receiving a Suspension Notice
hereby agrees that it will either (i) destroy any Prospectuses, other than
permanent file copies, then in such Person's possession which have been replaced
by the Company with more recently dated Prospectuses or (ii) deliver to the
Company (at the Company's expense) all copies, other than permanent file copies,
then in such Person's possession of the Prospectus covering such Transfer
Restricted Securities that was current at the time of receipt of the Suspension
Notice. The time period regarding the effectiveness of such Registration
Statement set forth in Section 3 or 4 hereof, as applicable, shall be extended
by a number of days equal to the number of days in the period from and including
the date of delivery of the Suspension Notice to the Recommencement Date.


SECTION 7.                 REGISTRATION EXPENSES

                  (a) All expenses incident to the Company's and the Guarantors'
performance of or compliance with this Agreement will be borne by the Company,
regardless of whether a Registration

                                       14


Statement becomes effective, including without limitation: (i) all
registration and filing fees and expenses; (ii) all fees and expenses of
compliance with federal securities and state Blue Sky or securities laws;
(iii) all expenses of printing (including printing certificates for the
Series B Notes to be issued in the Exchange Offer and printing of
Prospectuses whether for exchanges, sales, market-making or otherwise),
messenger and delivery services and telephone; (iv) all fees and
disbursements of counsel for the Company and the Guarantors; (v) all
application and filing fees in connection with listing the Series B Notes on
a national securities exchange or automated quotation system pursuant to the
requirements hereof; and (vi) all fees and disbursements of independent
certified public accountants of the Company and the Guarantors (including the
expenses of any special audit and comfort letters required by or incident to
such performance).

                  The Company will, in any event, bear its and the Guarantors'
internal expenses (including, without limitation, all salaries and expenses of
their respective officers and employees performing legal or accounting duties),
the expenses of any annual audit and the fees and expenses of any Person,
including special experts, retained by the Company and the Guarantors.

                  (b) In connection with any Registration Statement required by
this Agreement (including, without limitation, the Exchange Offer Registration
Statement and the Shelf Registration Statement), the Company and the Guarantors
will reimburse the Initial Purchasers and the Holders of Transfer Restricted
Securities who are tendering Series A Notes in the Exchange Offer and/or selling
or reselling Series A Notes or Series B Notes pursuant to the "Plan of
Distribution" contained in the Exchange Offer Registration Statement or the
Shelf Registration Statement, as applicable, for the reasonable fees and
disbursements of not more than one counsel, who shall be Cleary, Gottlieb, Steen
& Hamilton, unless another firm shall be chosen by the Holders of a majority in
principal amount of the Transfer Restricted Securities for whose benefit such
Registration Statement is being prepared.


SECTION 8.                 INDEMNIFICATION

                  (a) The Company and each Guarantor agrees, jointly and
severally, to indemnify and hold harmless each Holder, its directors, officers
and each Person, if any, who controls such Holder (within the meaning of Section
15 of the Act or Section 20 of the Exchange Act), from and against any and all
losses, claims, damages, liabilities, judgments, (including without limitation,
any legal or other expenses incurred in connection with investigating or
defending any matter, including any action that could give rise to any such
losses, claims, damages, liabilities or judgments) caused by any untrue
statement or alleged untrue statement of a material fact contained in any
Registration Statement, preliminary prospectus or Prospectus (or any amendment
or supplement thereto) provided by the Company to any Holder or any prospective
purchaser of Series B Notes or registered Series A Notes, or caused by any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages, liabilities or judgments are
caused by an untrue statement or omission or alleged untrue statement or
omission that is based upon information relating to any of the Holders furnished
in writing to the Company by any of the Holders.

                                       15


                  (b) Each Holder of Transfer Restricted Securities agrees,
severally and not jointly, to indemnify and hold harmless the Company and the
Guarantors, and their directors and officers, and each person, if any, who
controls (within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act) the Company or the Guarantors, to the same extent as the foregoing
indemnity from the Company and the Guarantors set forth in Section 8(a) above,
but only with reference to information relating to such Holder furnished in
writing to the Company by such Holder expressly for use in any Registration
Statement. In no event shall any Holder, its directors, officers or any Person
who controls such Holder be liable or responsible for any amount in excess of
the amount by which the total amount received by such Holder with respect to its
sale of Transfer Restricted Securities pursuant to a Registration Statement
exceeds (i) the amount paid by such Holder for such Transfer Restricted
Securities and (ii) the amount of any damages that such Holder, its directors,
officers or any Person who controls such Holder has otherwise been required to
pay by reason of such untrue or alleged untrue statement or omission or alleged
omission.

                  (c) In case any action shall be commenced involving any person
in respect of which indemnity may be sought pursuant to Section 8(a) or 8(b)
hereof (the "INDEMNIFIED PARTY"), the indemnified party shall promptly notify
the person against whom such indemnity may be sought (the "INDEMNIFYING PERSON")
in writing and the indemnifying party shall assume the defense of such action,
including the employment of counsel reasonably satisfactory to the indemnified
party and the payment of all fees and expenses of such counsel, as incurred
(except that in the case of any action in respect of which indemnity may be
sought pursuant to both Sections 8(a) and 8(b), a Holder shall not be required
to assume the defense of such action pursuant to this Section 8(c), but may
employ separate counsel and participate in the defense thereof, but the fees and
expenses of such counsel, except as provided below, shall be at the expense of
the Holder). Any indemnified party shall have the right to employ separate
counsel in any such action and participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of the indemnified party
unless (i) the employment of such counsel shall have been specifically
authorized in writing by the indemnifying party, (ii) the indemnifying party
shall have failed to assume the defense of such action or employ counsel
reasonably satisfactory to the indemnified party or (iii) the named parties to
any such action (including any impleaded parties) include both the indemnified
party and the indemnifying party, and the indemnified party shall have been
advised by such counsel that there may be one or more legal defenses available
to it which are different from or additional to those available to the
indemnifying party (in which case the indemnifying party shall not have the
right to assume the defense of such action on behalf of the indemnified party).
In any such case, the indemnifying party shall not, in connection with any one
action or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one separate firm of attorneys (in
addition to any local counsel) for all indemnified parties and all such fees and
expenses shall be reimbursed as they are incurred. Such firm shall be designated
in writing by a majority of the Holders, in the case of the parties indemnified
pursuant to Section 8(a), and by the Company and the Guarantors, in the case of
parties indemnified pursuant to Section 8(b). The indemnifying party shall
indemnify and hold harmless the indemnified party from and against any and all
losses, claims, damages, liabilities and judgments by reason of any settlement
of any action (i) effected with its written consent or (ii) effected

                                       16


without its written consent if the settlement is entered into more than
twenty business days after the indemnifying party shall have received a
request from the indemnified party for reimbursement for the fees and
expenses of counsel (in any case where such fees and expenses are at the
expense of the indemnifying party) and, prior to the date of such settlement,
the indemnifying party shall have failed to comply with such reimbursement
request. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement or compromise of, or consent to
the entry of judgment with respect to, any pending or threatened action in
respect of which the indemnified party is or could have been a party and
indemnity or contribution may be or could have been sought hereunder by the
indemnified party, unless such settlement, compromise or judgment (i)
includes an unconditional release of the indemnified party from all liability
on claims that are or could have been the subject matter of such action and
(ii) does not include a statement as to or an admission of fault, culpability
or a failure to act, by or on behalf of the indemnified party.

                  (d) To the extent that the indemnification provided for in
this Section 8 is unavailable to an indemnified party in respect of any losses,
claims, damages, liabilities or judgments referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities or judgments (i) in such proportion
as is appropriate to reflect the relative benefits received by the Company and
the Guarantors, on the one hand, and the Holders, on the other hand, from their
sale of Transfer Restricted Securities or (ii) if the allocation provided by
clause 8(d)(i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause
8(d)(i) above but also the relative fault of the Company and the Guarantors, on
the one hand, and of the Holder, on the other hand, in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or judgments, as well as any other relevant equitable
considerations. The relative fault of the Company and the Guarantors, on the one
hand, and of the Holder, on the other hand, shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company or such Guarantor, on the one hand, or by
the Holder, on the other hand, and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.

                  The Company, the Guarantors and each Holder agree that it
would not be just and equitable if contribution pursuant to this Section 8(d)
were determined by pro rata allocation (even if the Holders were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, liabilities or judgments referred to in
the immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses incurred by such
indemnified party in connection with investigating or defending any matter,
including any action that could have given rise to such losses, claims, damages,
liabilities or judgments. Notwithstanding the provisions of this Section 8, no
Holder, its directors, its officers or any Person, if any, who controls such
Holder shall be required to contribute, in the aggregate, any amount in excess
of the amount by which the total received by such Holder with respect to the
sale of Transfer Restricted Securities pursuant to a Registration Statement
exceeds (i) the

                                       17


amount paid by such Holder for such Transfer Restricted Securities and (ii)
the amount of any damages which such Holder has otherwise been required to
pay by reason of such untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation. The
Holders' obligations to contribute pursuant to this Section 8(d) are several
in proportion to the respective principal amount of Transfer Restricted
Securities held by each Holder hereunder and not joint.

         (e) The Company and the Guarantors agree that the indemnity and
contribution provisions of this Section 8 shall apply to Affiliated Market
Makers to the same extent, on the same conditions, as it applies to Holders.


SECTION 9.            RULE 144A and RULE 144

                  The Company and the Guarantors agree with each Holder, for so
long as any Transfer Restricted Securities remain outstanding and during any
period in which the Company or such Guarantors (i) is not subject to Section 13
or 15(d) of the Exchange Act, to make available, upon request of any Holder, to
such Holder or beneficial owner of Transfer Restricted Securities in connection
with any sale thereof and any prospective purchaser of such Transfer Restricted
Securities designated by such Holder or beneficial owner, the information
required by Rule 144A(d)(4) under the Act in order to permit resales of such
Transfer Restricted Securities pursuant to Rule 144A, and (ii) is subject to
Section 13 or 15 (d) of the Exchange Act, to make all filings required thereby
in a timely manner in order to permit resales of such Transfer Restricted
Securities pursuant to Rule 144.

SECTION 10.           MISCELLANEOUS

                  (a) REMEDIES. The Company and the Guarantors acknowledge and
agree that any failure by the Company and the Guarantor(s) to comply with their
respective obligations under Sections 3 and 4 hereof may result in material
irreparable injury to the Initial Purchasers, the Holders or the Affiliated
Market Makers for which there is no adequate remedy at law, that it will not be
possible to measure damages for such injuries precisely and that, in the event
of any such failure, the Initial Purchasers or any Holder or Affiliated Market
Makers may obtain such relief as may be required to specifically enforce the
Company's and the Guarantors' obligations under Sections 3 and 4 hereof. The
Company and the Guarantors further agree to waive the defense in any action for
specific performance that a remedy at law would be adequate.

                  (b) NO INCONSISTENT AGREEMENTS. Neither the Company nor any
Guarantor will, on or after the date of this Agreement, enter into any agreement
with respect to its securities that is inconsistent with the rights granted to
the Holders in this Agreement or otherwise conflicts with the provisions hereof.
Neither the Company nor any Guarantor has previously entered into any agreement
granting any registration rights with respect to its securities to any Person,
except for the Warrant Registration Rights Agreement, dated as of the date
hereof, with respect to certain warrants to purchase shares of the

                                       18


Issuer's Class B Common Stock, and that certain Investors' Agreement dated
the date hereof among the Company and certain persons named therein. The
rights granted to the Holders hereunder do not in any way conflict with and
are not inconsistent with the rights granted to the holders of the Company's
and the Guarantors' securities under any agreement in effect on the date
hereof.

                  (c) AMENDMENTS AND WAIVERS. The provisions of this Agreement
may not be amended, modified or supplemented, and waivers or consents to or
departures from the provisions hereof may not be given unless (i) in the case of
Section 5 hereof and this Section 10(c)(i), the Company has obtained the written
consent of Holders of all outstanding Transfer Restricted Securities and (ii) in
the case of all other provisions hereof, the Company has obtained the written
consent of Holders of a majority of the outstanding principal amount of Transfer
Restricted Securities (excluding Transfer Restricted Securities held by the
Company or its Affiliates). Notwithstanding the foregoing, a waiver or consent
to departure from the provisions hereof that relates exclusively to the rights
of Holders whose Transfer Restricted Securities are being tendered pursuant to
the Exchange Offer, and that does not affect directly or indirectly the rights
of other Holders whose Transfer Restricted Securities are not being tendered
pursuant to such Exchange Offer, may be given by the Holders of a majority of
the outstanding principal amount of Transfer Restricted Securities subject to
such Exchange Offer.

                  (d) THIRD PARTY BENEFICIARY. The Holders and any Affiliated
Market Maker shall be third party beneficiaries to the agreements made hereunder
between the Company and the Guarantors, on the one hand, and the Initial
Purchaser, on the other hand, and shall have the right to enforce such
agreements directly to the extent they may deem such enforcement necessary or
advisable to protect its rights or the rights of Holders and any Affiliated
Market Maker hereunder.

                  (e) NOTICES. All notices and other communications provided for
or permitted hereunder shall be made in writing by hand-delivery, first-class
mail (registered or certified, return receipt requested), telex, telecopier, or
air courier guaranteeing overnight delivery:

                           (i)  if to a Holder, at the address set forth on the
records of the Registrar under the Indenture, with a copy to the Registrar under
the Indenture; and

                           (ii)  if to the Company or the Guarantors:

                                 Merrill Corporation
                                 One Merrill Circle
                                 St. Paul, MN 55108
                                 Telecopier No.: (615) 632-4141
                                 Attention: General Counsel

                             With a copy to:

                                 Oppenheimer Wolff & Donnelly LLP
                                 45 South Seventh Street

                                       19


                                 Suite 3400
                                 Minneapolis, MN 55402
                                 Telecopier No.: (612) 607-7100
                                 Attention:  Bruce A. Machmeier, Esq.

                  All such notices and communications shall be deemed to have
been duly given: at the time delivered by hand, if personally delivered; five
business days after being deposited in the mail, postage prepaid, if mailed;
when receipt acknowledged, if telecopied; and on the next business day, if
timely delivered to an air courier guaranteeing overnight delivery.

                  Copies of all such notices, demands or other communications
shall be concurrently delivered by the Person giving the same to the Trustee at
the address specified in the Indenture.

                  Upon the date of filing of the Exchange Offer or a Shelf
Registration Statement, as the case may be, notice shall be delivered to the
Initial Purchaser (in the form attached hereto as Exhibit A) and shall be
addressed to: Attention: Louise Guarneri (Compliance Department), 277 Park
Avenue, New York, New York 10172.

                  (f) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties, including without limitation and without the need for an express
assignment, subsequent Holders; PROVIDED that nothing herein shall be deemed to
permit any assignment, transfer or other disposition of Transfer Restricted
Securities in violation of the terms hereof or of the Purchase Agreement or the
Indenture. If any transferee of any Holder shall acquire Transfer Restricted
Securities in any manner, whether by operation of law or otherwise, such
Transfer Restricted Securities shall be held subject to all of the terms of this
Agreement, and by taking and holding such Transfer Restricted Securities such
Person shall be conclusively deemed to have agreed to be bound by and to perform
all of the terms and provisions of this Agreement, including the restrictions on
resale set forth in this Agreement and, if applicable, the Purchase Agreement,
and such Person shall be entitled to receive the benefits hereof.

                  (g) COUNTERPARTS. This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

                  (h) HEADINGS. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.

                  (i) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO THE CONFLICT OF LAW RULES THEREOF.

                  (j) SEVERABILITY. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and

                                       20


enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.

                  (k) ENTIRE AGREEMENT. This Agreement is intended by the
parties as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties hereto
in respect of the subject matter contained herein. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein with respect to the registration rights granted with respect to the
Transfer Restricted Securities. This Agreement supersedes all prior agreements
and understandings between the parties with respect to such subject matter.


                                       21


                  IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.

                                   MERRILL CORPORATION


                                   By:     /s/ Rick R. Atterbury
                                        -------------------------------------
                                        Name:  Rick R. Atterbury
                                        Title: Executive Vice President

                                   The Guarantors named in Schedule A hereto


                                   By:     /s/ Rick R. Atterbury
                                        -------------------------------------
                                               Attorney-in-Fact


DONALDSON, LUFKIN & JENRETTE
    SECURITIES CORPORATION


By:        /s/ Omar Karame
     -------------------------------------
         Name:  Omar Karame
         Title: Vice President


                                        22


                                   SCHEDULE A

                                   GUARANTORS

                      Merrill Communications LLC

                      Merrill Real Estate Company

                      Merrill/Magnus Publishing Corporation

                      Merrill/New York Company

                      Merrill/May Inc.

                      Merrill/ Alternatives, Inc.

                      Merrill International

                      FMC Resource Management Corporation

                      Merrill Training & Technology, Inc.

                      Merrill/Global, Inc.

                      Merrill/ Executech, Inc.

                      Merrill/Daniels, Inc.


                                      23


                                    EXHIBIT A

                               NOTICE OF FILING OF
                    A/B EXCHANGE OFFER REGISTRATION STATEMENT


To:      Donaldson, Lufkin & Jenrette Securities Corporation
         277 Park Avenue
         New York, New York  10172
         Attention:  Louise Guarneri (Compliance Department)
         Fax:  (212) 892-7272

From:    Merrill Corporation
         12% Senior Subordinated Notes due 2009


Date:    _____________________________

         For your information only (NO ACTION REQUIRED):

         Today, ____________________, we filed [an A/B Exchange Registration
Statement/a Shelf Registration Statement] with the Securities and Exchange
Commission. We currently expect this registration statement to be declared
effective within o business days of the date hereof.

                                      24

EX-4.3

                                                              EXECUTION VERSION

- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------


                                      WARRANT
                           REGISTRATION RIGHTS AGREEMENT



                                MERRILL CORPORATION



                      ________________________________________


                140,000 Warrants to Purchase Shares of Common Stock

                      ________________________________________


                           Dated as of November 23, 1999

                                ___________________




                            DONALDSON, LUFKIN & JENRETTE
                               SECURITIES CORPORATION








- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------



     This Warrant Registration Rights Agreement (this "AGREEMENT") is made and
entered into as of November 23, 1999, between Merrill Corporation, a Minnesota
corporation (the "ISSUER" or the "COMPANY"), and Donaldson, Lufkin & Jenrette
Securities Corporation (the "INITIAL PURCHASER").

     The Issuer and the Initial Purchaser have entered into a Purchase
Agreement, dated November 18, 1999 (the "PURCHASE AGREEMENT"), the Guarantors
(as defined in the Purchase Agreement) and Viking Merger Sub, Inc. ("VIKING").
The Purchase Agreement provides for the offering by the Company of 140,000
Units, each consisting of $1,000 principal amount at maturity of the Company's
12% Senior Subordinated Notes due 2009 (the "NOTES") and one warrant initially
representing the right to purchase 1.22987 Common Shares, par value $0.01 per
share, of Viking ("VIKING COMMON SHARES").

     Pursuant to the Purchase Agreement, Viking has entered into a Warrant
Agreement (the "WARRANT AGREEMENT") with Norwest Bank Minnesota, N.A., as
warrant agent (the "WARRANT AGENT") providing for the issuance of 140,000
warrants (the "WARRANTS") each initially representing the right to purchase
1.22987 shares of Viking Common Shares.

     The Company and Viking have entered into an Agreement and Plan of Merger
dated as of July 14, 1999 pursuant to which Viking will merger (the "MERGER")
with and into the Company.  Upon consummation of the Merger, each Viking Common
Share will become one share of Class B Common Stock of the Company, par value
$0.01 per share, and each Warrant by its terms will become exercisable to
initially purchase 1.22987 shares of such Class B Common Stock of the Company
and the Company will succeed to all obligations of Viking under the Warrant
Agreement and with respect to the Warrants.  In addition, the Company will enter
into a Warrant Assumption Agreement in accordance with Section 8(l) of the
Warrant Agreement providing for its assumption of the obligations of Viking
thereunder.

     In order to induce the Initial Purchaser to purchase the Warrants, the
Company has agreed to provide the registration rights set forth in this
Agreement.  The execution and delivery of this Agreement is a condition to the
obligations of the Initial Purchaser set forth in Section 9 of the Purchase
Agreement.

     Capitalized terms used herein and not otherwise defined shall have the
meaning assigned to them in the Warrant Agreement.

     The parties hereby agree as follows:

1.  DEFINITIONS

     As used in this Agreement, the following capitalized terms shall have the
following meanings:

     ACT:  The Securities Act of 1933, as amended.

     AFFILIATE:  As defined in Rule 144.

     BLACK OUT NOTICE:  As defined in Section 4(b) hereof.

     BLACK OUT PERIOD:  As defined in Section 3(a) hereof.

     CLOSING DATE:  The date hereof.

     COMMISSION:  The Securities and Exchange Commission.

                                      2


     EXCHANGE ACT:  The Securities Exchange Act of 1934, as amended.

     EXPIRATION DATE: 5:00 p.m. New York City time on May 1, 2009.

     HOLDERS:  As defined in Section 2 hereof.

     PROSPECTUS:  The prospectus included in a Registration Statement at the
time such Registration Statement is declared effective, as amended or
supplemented by any prospectus supplement and by all other amendments thereto,
including post-effective amendments, and all material incorporated by reference
into such Prospectus.

     REGISTRATION STATEMENT:  Any registration statement of the Issuer
relating to the registration for resale of Transfer Restricted Securities
that is filed pursuant to the provisions of this Agreement and including the
Prospectus included therein, all amendments and supplements thereto
(including post-effective amendments) and all exhibits and material
incorporated by reference therein.

     RULE 144:  Rule 144 promulgated under the Act.

     TRANSFER RESTRICTED SECURITIES: (a) Each Warrant and Warrant Share held by
an Affiliate of the Issuer and (b) each other Warrant and Warrant Share until
the earlier to occur of (i) the date on which such Warrant or Warrant Share
(other than any Warrant Share issued upon exercise of a Warrant in accordance
with a Registration Statement) has been disposed of in accordance with a
Registration Statement and (ii) the date on which such Warrant or Warrant Share
(or the related Warrant) is distributed to the public pursuant to Rule 144 under
the Act.

2.  HOLDERS

     A Person is deemed to be a holder of Transfer Restricted Securities (each,
a "HOLDER") whenever such Person is the holder of record of Transfer Restricted
Securities.

3.  SHELF REGISTRATION

     (a)       SHELF REGISTRATION.  The Issuer shall prepare and cause to be
filed with the Commission on or before 120 days from the Closing Date pursuant
to Rule 415 under the Securities Act a Registration Statement on the appropriate
form relating to resales of Transfer Restricted Securities by the Holders
thereof and the issuance of Warrant Shares upon the exercise of the Warrants
sold pursuant to such Registration Statement.  The Company shall use its
reasonable best efforts to cause the Registration Statement to be declared
effective by the Commission on or before 180 days after the Closing Date.

     To the extent necessary to ensure that the Registration Statement is
available for sales of Transfer Restricted Securities by the Holders thereof
entitled to the benefit of this Section 3(a), the Issuer shall use its
reasonable best efforts to keep any Registration Statement required by this
Section 3(a) continuously effective, supplemented, amended and current as
required by and subject to the provisions of Section 4(a) hereof and in
conformity with the requirements of this Agreement, the Act and the policies,
rules and regulations of the Commission as announced from time to time, until
the later of (i) the second anniversary of the effective date of the
Registration Statement and (ii) the earlier of (A) the Expiration Date and (B)
the first date as of which all Warrants have been exercised by the Holders
thereof; PROVIDED that such obligation shall expire before such date if the
Issuer delivers to the Warrant Agent a written opinion of counsel to the Issuer
(which opinion of counsel shall be satisfactory to the Initial Purchaser) that
all Holders (other than Affiliates of the Issuer) of Warrants and Warrant Shares
may resell the

                                      3


Warrants and the Warrant Shares without registration under the Act and
without restriction as to the manner, timing or volume of any such sale; and
PROVIDED, FURTHER, that notwithstanding the foregoing, any Affiliate of the
Issuer may, with notice to the Issuer, require the Issuer to keep the
Registration Statement continuously effective for resales by such Affiliate
for so long as such Affiliate holds Warrants or Warrant Shares, including as
a result of any market-making activities or other trading activities of such
Affiliate.  Notwithstanding the foregoing, the Issuer shall not be required
to amend or supplement the Registration Statement, any related prospectus or
any document incorporated therein by reference, for a period (a "BLACK OUT
PERIOD") not to exceed, for so long as this Agreement is in effect, an
aggregate of 60 days in any calendar year, in the event that (i) an event
occurs and is continuing as a result of which the Registration Statement, any
related prospectus or any document incorporated therein by reference as then
amended or supplemented would, in the Issuer's good faith judgment, contain
an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and (ii)(A) the
Issuer determines in its good faith judgment that the disclosure of such
event at such time would have a material adverse effect on the business,
operations or prospects of the Issuer or (B) the disclosure otherwise relates
to a material business transaction which has not yet been publicly disclosed;
PROVIDED that such Black Out Period shall be extended for any period, not to
exceed an aggregate of 30 days in any calendar year, during which the
Commission is reviewing any proposed amendment or supplement to the
Registration Statement, any related prospectus or any document incorporated
therein by reference which has been filed by the Issuer; and PROVIDED,
FURTHER, that no Black Out Period may be in effect during the three months
prior to the Expiration Date.

     (b)       PROVISION BY HOLDERS OF CERTAIN INFORMATION IN CONNECTION WITH
THE REGISTRATION STATEMENT.  No Holder of Transfer Restricted Securities may
include any of its Transfer Restricted Securities in any Registration Statement
pursuant to this Agreement unless and until such Holder furnishes to the Issuer
in writing, within 20 days after receipt of a request therefor, the information
specified in Item 507 or 508 of Regulation S-K, as applicable, of the Act for
use in connection with any Registration Statement or Prospectus or preliminary
Prospectus included therein.  Each selling Holder agrees to promptly furnish
additional information required to be disclosed in order to make the information
previously furnished to the Issuer by such Holder not materially misleading.

4.  REGISTRATION PROCEDURES

     (a)       In connection with the Registration Statement and any related
Prospectus required by this Agreement, the Issuer shall:

               (i)            Comply with all the provisions of this Section
     4(a) and use its reasonable best efforts to effect such registration to
     permit the sale of the Transfer Restricted Securities being sold in
     accordance with the intended method or methods of distribution thereof (as
     indicated in the information furnished to the Issuer pursuant to Section
     3(b) hereof), and pursuant thereto the Issuer will prepare and file with
     the Commission a Registration Statement relating to the registration on any
     appropriate form under the Act, which form shall be available for the sale
     of the Transfer Restricted Securities in accordance with the intended
     method or methods of distribution thereof within the time periods and
     otherwise in accordance with the provisions hereof;

               (ii)           use its reasonable best efforts to keep such
     Registration Statement continuously effective and provide all requisite
     financial statements for the period specified in Section 3 of this
     Agreement.  Upon the occurrence of any event that would cause any such
     Registration Statement or the Prospectus contained therein (A) to contain
     an untrue

                                      4


     statement of material fact or omit to state any material fact necessary
     to make the statements therein, in the light of the circumstances
     under which they were made, not misleading or (B) not to be effective and
     usable for resale of Transfer Restricted Securities during the period
     required by this Agreement, the Issuer shall, subject to Section 3(a), file
     promptly an appropriate amendment to such Registration Statement or a
     supplement to the Prospectus, as applicable, curing such defect, and, in
     the case of an amendment, use its reasonable best efforts to cause such
     amendment to be declared effective as soon as practicable;

               (iii)          prepare and file with the Commission such
     amendments and post-effective amendments to the applicable Registration
     Statement as may be necessary to keep such Registration Statement effective
     for the applicable period set forth in Section 3; cause the Prospectus to
     be supplemented by any required Prospectus supplement, and as so
     supplemented to be filed pursuant to Rule 424 under the Act, and to comply
     fully with Rules 424, 430A and 462, as applicable, under the Act in a
     timely manner; and comply with the provisions of the Act with respect to
     the disposition of all securities covered by such Registration Statement
     during the applicable period in accordance with the intended method or
     methods of distribution by the sellers thereof set forth in such
     Registration Statement or supplement to the Prospectus;

               (iv)           promptly advise each Holder whose Transfer
     Restricted Securities have been included in the Registration Statement
     (each, a "RELEVANT HOLDER") and the Initial Purchaser and, if requested by
     such Person, confirm such advice in writing, (A) when the Prospectus or any
     Prospectus supplement or post-effective amendment has been filed, and, with
     respect to any applicable Registration Statement or any post-effective
     amendment thereto, when the same has become effective, (B) of any request
     by the Commission for amendments to the Registration Statement or
     amendments or supplements to the Prospectus or for additional information
     relating thereto, (C) of the issuance by the Commission of any stop order
     suspending the effectiveness of the Registration Statement under the Act or
     of the suspension by any state securities commission of the qualification
     of the Transfer Restricted Securities for offering or sale in any
     jurisdiction, or the initiation of any proceeding for any of the preceding
     purposes, and (D) of the existence of any fact or the happening of any
     event that makes any statement of a material fact made in the Registration
     Statement, the Prospectus, any amendment or supplement thereto or any
     document incorporated by reference therein untrue, or that requires the
     making of any additions to or changes in the Registration Statement in
     order to make the statements therein not misleading, or that requires the
     making of any additions to or changes in the Prospectus in order to make
     the statements therein, in the light of the circumstances under which they
     were made, not misleading.  If at any time the Commission shall issue any
     stop order suspending the effectiveness of the Registration Statement, or
     any state securities commission or other regulatory authority shall issue
     an order suspending the qualification or exemption from qualification of
     the Transfer Restricted Securities under state securities or Blue Sky laws,
     the Issuer shall use its reasonable best efforts to obtain the withdrawal
     or lifting of such order at the earliest possible time;

               (v)            subject to Section 4(a)(ii), if any fact or event
     contemplated by Section 4(a)(iv)(D) hereof shall exist or have occurred,
     prepare a supplement or post-effective amendment to the Registration
     Statement or related Prospectus or any document incorporated therein by
     reference or file any other required document so that, as thereafter
     delivered to the purchasers of Transfer Restricted Securities, the
     Prospectus will not contain an untrue statement of a material fact or omit
     to state any material fact necessary to make the statements therein, in the
     light of the circumstances under which they were made, not misleading;

                                      5


               (vi)           furnish to each Relevant Holder and the Initial
     Purchaser, before filing with the Commission, copies of any Registration
     Statement or any Prospectus included therein or any amendments or
     supplements to any such Registration Statement or Prospectus (including all
     documents incorporated by reference after the initial filing of such
     Registration Statement), which documents will be subject to the review and
     comment of such Persons in connection with such sale, if any, for a period
     of at least five Business Days, and the Issuer will not file any such
     Registration Statement or Prospectus or any amendment or supplement to any
     such Registration Statement or Prospectus (including all such documents
     incorporated by reference) to which such Person shall reasonably object
     within five Business Days after the receipt thereof.  Such Person shall be
     deemed to have reasonably objected to such filing if such Registration
     Statement, amendment, Prospectus or supplement, as applicable, as proposed
     to be filed, contains an untrue statement of a material fact or omits to
     state any material fact necessary to make the statements therein, in the
     light of the circumstances under which they were made, not misleading or
     fails to comply with the applicable requirements of the Act;

               (vii)          promptly prior to the filing of any document that
     is to be incorporated by reference into a Registration Statement or
     Prospectus, provide copies of such document to each Relevant Holder and the
     Initial Purchaser, make the Issuer's representatives available for
     discussion of such document and other customary due diligence matters, and
     include such information in such document prior to the filing thereof as
     such Persons may reasonably request;

               (viii)         make available, at reasonable times, for
     inspection by each Relevant Holder and the Initial Purchaser and any
     attorney or accountant retained by the such Person, all financial and other
     records, pertinent corporate documents of the Issuer and cause the Issuer's
     officers, directors and employees to supply all information reasonably
     requested by any such Person, attorney or accountant in connection with
     such Registration Statement or any post-effective amendment thereto
     subsequent to the filing thereof and prior to its effectiveness, other than
     the inspection of any records, documents or information which would have an
     adverse effect on the Issuer's competitive position; PROVIDED, HOWEVER,
     that any records, documents or information which are necessary to avoid or
     correct a material misstatement or omission in such Registration Statement
     or which are necessary to enable a Holder or the Initial Purchaser and any
     attorney or accountant retained by any such Persons to exercise any
     applicable due diligence responsibilities will be released to such Holder
     or the Initial Purchaser.

               (ix)           if requested any Relevant Holder or by the Initial
     Purchaser, promptly include in any Registration Statement or Prospectus,
     pursuant to a supplement or post-effective amendment if necessary, such
     information as any such Person reasonably requests to have included
     therein, including, without limitation, information relating to the "Plan
     of Distribution" of the Transfer Restricted Securities and the use of the
     Registration Statement or Prospectus for market-making activities; and make
     all required filings of such Prospectus supplement or post-effective
     amendment as soon as practicable after the Issuer is notified of the
     matters to be included in such Prospectus supplement or post-effective
     amendment;

               (x)            furnish to the Initial Purchaser and each Relevant
     Holder upon request, without charge, at least one copy of the Registration
     Statement, as first filed with the Commission, and of each amendment
     thereto, including all documents incorporated by reference therein and all
     exhibits (including exhibits incorporated therein by reference);

                                      6


               (xi)           deliver to the Initial Purchaser and each Relevant
     Holder, without charge, as many copies of the Prospectus (including each
     preliminary prospectus) and any amendment or supplement thereto as such
     Persons reasonably may request; the Issuer hereby consents to the use (in
     accordance with law) of the Prospectus and any amendment or supplement
     thereto by each Person in connection with the offering and the sale of the
     Transfer Restricted Securities covered by the Prospectus or any amendment
     or supplement thereto and all market-making activities of the Initial
     Purchaser, as the case may be;

               (xii)          upon the request of any Relevant Holder or the
     Initial Purchaser, enter into such agreements (including underwriting
     agreements) as are customary in comparable offerings and make such
     representations and warranties and take all such other actions in
     connection therewith in order to expedite or facilitate the disposition of
     the Transfer Restricted Securities pursuant to any applicable Registration
     Statement contemplated by this Agreement as may be reasonably requested by
     any Person in connection with any sale or resale pursuant to any applicable
     Registration Statement.  In such connection, and also in connection with
     market-making activities by the Initial Purchaser, the Issuer shall:

               (A)       upon request of any Person, furnish (or in the case of
          paragraphs (2) and (3), use its reasonable best efforts to cause to be
          furnished) to each Person, upon the effectiveness of the Registration
          Statement:

                    (1)    a certificate, dated such date, signed on behalf of
               the Issuer by (x) the President or any Vice President and (y) a
               principal financial or accounting officer of the Issuer,
               confirming, as of the date thereof, the matters set forth in
               Sections 10(a) and 10(b) of the Purchase Agreement and such other
               similar matters as such Person may reasonably request;

                    (2)    an opinion, dated the date of effectiveness of the
               Registration Statement, of counsel for the Issuer covering
               matters similar to those set forth in Sections 10(f), (g) and (h)
               of the Purchase Agreement and such other matters as such Person
               may reasonably request, and in any event including a statement to
               the effect that such counsel has participated in conferences with
               officers and other representatives of the Issuer, representatives
               of the independent public accountants for the Issuer and have
               considered the matters required to be stated therein and the
               statements contained therein, although such counsel has not
               independently verified the accuracy, completeness or fairness of
               such statements; and that such counsel advises that, on the basis
               of the foregoing, no facts came to such counsel's attention that
               caused such counsel to believe that the applicable Registration
               Statement, at the time such Registration Statement or any
               post-effective amendment thereto became effective, contained an
               untrue statement of a material fact or omitted to state a
               material fact required to be stated therein or necessary to make
               the statements therein not misleading, or that the Prospectus
               contained in such Registration Statement as of its date contained
               an untrue statement of a material fact or omitted to state a
               material fact necessary in order to make the statements therein,
               in the light of the circumstances under which they were made, not
               misleading.  Without limiting the foregoing, such counsel may
               state further that such counsel assumes no responsibility for,
               and has not independently verified, the accuracy, completeness or
               fairness of the financial statements, notes and schedules and
               other financial data included in any

                                      7


               Registration Statement contemplated by this Agreement or the
               related Prospectus; and

                    (3)    a customary comfort letter, dated the date of
               effectiveness of the Registration Statement, from the Issuer's
               independent accountants, in the customary form and covering
               matters of the type customarily covered in comfort letters to
               underwriters in connection with underwritten offerings, and
               affirming the matters set forth in the comfort letters delivered
               pursuant to Section 10(l) of the Purchase Agreement; and

               (B)       deliver such other documents and certificates as may be
          reasonably requested by such Person to evidence compliance with the
          matters covered in clause (A) above and with any customary conditions
          contained in any agreement entered into by the Issuer pursuant to this
          clause;

               (xiii)         prior to any public offering of Transfer
     Restricted Securities, cooperate with the selling Holders and their counsel
     in connection with the registration and qualification of the Transfer
     Restricted Securities under the securities or Blue Sky laws of such
     jurisdictions as the selling Holders may request and do any and all other
     acts or things necessary or advisable to enable the disposition in such
     jurisdictions of the Transfer Restricted Securities covered by the
     applicable Registration Statement; PROVIDED, HOWEVER, that the Issuer shall
     not be required to register or qualify as a foreign corporation where it is
     not now so qualified or to take any action that would subject it to the
     service of process in suits or to taxation, other than as to matters and
     transactions relating to the Registration Statement, in any jurisdiction
     where it is not now so subject;

               (xiv)          in connection with any sale of Transfer Restricted
     Securities that will result in such securities no longer being Transfer
     Restricted Securities, cooperate with the selling Holders to facilitate the
     timely preparation and delivery of certificates representing Transfer
     Restricted Securities to be sold and not bearing any restrictive legends;
     and to register such Transfer Restricted Securities in such denominations
     and such names as the selling Holders may request at least two business
     days prior to such sale of Transfer Restricted Securities;

               (xv)           use its reasonable best efforts to cause the
     disposition of the Transfer Restricted Securities covered by the
     Registration Statement to be registered with or approved by such other
     governmental agencies or authorities as may be necessary to enable the
     seller or sellers thereof to consummate the disposition of such Transfer
     Restricted Securities, subject to the proviso contained in clause (xiii)
     above;

               (xvi)          provide a CUSIP number for all Transfer Restricted
     Securities not later than the effective date of a Registration Statement
     covering such Transfer Restricted Securities and provide the Warrant Agent
     with printed certificates for the Transfer Restricted Securities which are
     in a form eligible for deposit with The Depository Trust Company;

               (xvii)         otherwise use its reasonable best efforts to
     comply with all applicable rules and regulations of the Commission so long
     as any provision of this Agreement shall be applicable, and make generally
     available to its security holders with regard to any applicable
     Registration Statement, as soon as practicable, a consolidated earnings
     statement meeting the requirements of Rule 158 (which need not be audited)
     covering a twelve-month

                                      8


     period beginning after the effective date of the Registration Statement
     (as such term is defined in Rule 158(c) under the Act); and

               (xviii)        provide promptly to each Holder and the Initial
     Purchaser, upon request, each document filed after the date of this
     Agreement with the Commission pursuant to the requirements of Section 13 or
     Section 15(d) of the Exchange Act.

     (b)       RESTRICTIONS ON HOLDERS.  Each Holder agrees by acquisition of a
Transfer Restricted Security and the Initial Purchaser agrees that, upon receipt
of the notice from the Issuer of the commencement of a Black Out Period (in each
case, a "BLACK OUT NOTICE"), such Person will forthwith discontinue disposition
of Transfer Restricted Securities pursuant to the applicable Registration
Statement (i) such Person has received copies of the supplemented or amended
Prospectus referred to in Section 4(a)(v) hereof, or (ii) until such Person is
advised in writing that the use of the Prospectus may be resumed, and has
received copies of any additional or supplemental filings that are incorporated
by reference in the Prospectus.  Each Person receiving a Black Out Notice hereby
agrees that it will either (i) destroy any Prospectuses, other than permanent
file copies, then in such Person's possession which have been replaced by the
Issuer with more recently dated Prospectuses or (ii) deliver to the Issuer (at
the Issuer's expense) all copies, other than permanent file copies, then in such
Person's possession of the Prospectus covering such Transfer Restricted
Securities that was current at the time of receipt of the Black Out Notice.  The
time period regarding the effectiveness of such Registration Statement set forth
in Section 3 hereof shall be extended by a number of days equal to the number of
days in the period from and including the date of delivery of the Suspension
Notice to the Recommencement Date.

5.  REGISTRATION EXPENSES

     All expenses incident to the Issuer's performance of or compliance with
this Agreement will be borne by the Issuer, regardless of whether a Registration
Statement becomes effective, including, without limitation: (i) all registration
and filing fees and expenses; (ii) all fees and expenses of compliance with
federal securities and state Blue Sky or securities laws; (iii) all expenses of
printing (including printing Prospectuses (whether for sales, market-making or
otherwise)), messenger and delivery services and telephone; (iv) all fees and
disbursements of counsel for the Issuer; (v) all application and filing fees in
connection with listing the Warrant Shares on a national securities exchange or
automated quotation system pursuant to the requirements hereof; and (vi) all
fees and disbursements of independent certified public accountants of the Issuer
(including the expenses of any special audit and comfort letters required by or
incident to such performance).

     The Issuer will, in any event, bear its internal expenses (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expenses of any annual audit and the
fees and expenses of any Person, including special experts, retained by the
Issuer.

6.  INDEMNIFICATION

     (a)       The Issuer agrees to indemnify and hold harmless each Holder, its
directors, officers and each Person, if any, who controls such Holder (within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act), from
and against any and all losses, claims, damages, liabilities, judgments,
(including, without limitation, any legal or other expenses incurred in
connection with investigating or defending any matter, including any action that
could give rise to any such losses, claims, damages, liabilities or judgments)
caused by any untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement, preliminary prospectus or Prospectus
(or any amendment or supplement thereto) provided by the Issuer to any Holder or
any prospective purchaser of Transfer

                                       9


Restricted Securities, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, except insofar as such losses, claims,
damages, liabilities or judgments are caused by an untrue statement or
omission or alleged untrue statement or omission that is based upon
information relating to a Holder furnished in writing to the Issuer by such
Holder.

     (b)       Each Holder of Transfer Restricted Securities agrees, severally
and not jointly, to indemnify and hold harmless the Issuer, its directors and
officers, and each person, if any, who controls (within the meaning of Section
15 of the Act or Section 20 of the Exchange Act) the Issuer, to the same extent
as the foregoing indemnity from the Issuer set forth in Section 6(a) hereof, but
only with reference to information relating to such Holder furnished in writing
to the Issuer by such Holder expressly for use in any Registration Statement.
In no event shall any Holder, its directors, officers or any Person who controls
such Holder be liable or responsible for any amount in excess of the amount by
which the total amount received by such Holder with respect to its sale of
Transfer Restricted Securities pursuant to a Registration Statement exceeds (i)
the amount paid by such Holder for such Transfer Restricted Securities and (ii)
the amount of any damages that such Holder, its directors, officers or any
Person who controls such Holder has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission.

     (c)       In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant to Section 6(a) or 6(b) (the
"INDEMNIFIED PARTY"), the indemnified party shall promptly notify the person
against whom such indemnity may be sought (the "INDEMNIFYING PARTY") in writing,
and the indemnifying party shall assume the defense of such action, including
the employment of counsel reasonably satisfactory to the indemnified party and
the payment of all fees and expenses of such counsel, as incurred (except that,
in the case of any action in respect of which indemnity may be sought pursuant
to both Sections 6(a) and 6(b), a Holder shall not be required to assume the
defense of such action pursuant to this Section 6(c), but may employ separate
counsel and participate in the defense thereof, but the fees and expenses of
such counsel, except as provided below, shall be at the expense of the Holder).
Any indemnified party shall have the right to employ separate counsel in any
such action and participate in the defense thereof, but the fees and expenses of
such counsel shall be at the expense of the indemnified party, unless (i) the
employment of such counsel shall have been specifically authorized in writing by
the indemnifying party, (ii) the indemnifying party shall have failed to assume
the defense of such action or employ counsel reasonably satisfactory to the
indemnified party or (iii) the named parties to any such action (including any
impleaded parties) include both the indemnified party and the indemnifying
party, and the indemnified party shall have been advised by such counsel that
there may be one or more legal defenses available to it which are different from
or additional to those available to the indemnifying party (in which case the
indemnifying party shall not have the right to assume the defense of such action
on behalf of the indemnified party).  In any such case, the indemnifying party
shall not, in connection with any one action or separate but substantially
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the fees and expenses of
more than one separate firm of attorneys (in addition to any local counsel) for
all indemnified parties and all such fees and expenses shall be reimburse as
they are incurred.  Such firm shall be designated in writing by a majority of
the Holders, in the case of the parties indemnified pursuant to Section 6(a),
and by the Issuer, in the case of parties indemnified pursuant to Section 6(b).
The indemnifying party shall indemnify and hold harmless the indemnified party
from and against any and all losses, claims, damages, liabilities and judgments
by reason of any settlement of any action (i) effected with its written consent
or (ii) effected without the indemnifying party's written consent if the
settlement is entered into more than twenty Business Days after the indemnified
party shall have received a request from the indemnified party for reimbursement
for the fees and expenses of counsel (in any case where such fees and expenses
are at the expense of the indemnifying party) and, prior to the date of such

                                       10


settlement, the indemnifying party shall have failed to comply with such
reimbursement request.  The indemnifying party shall not, without the prior
written consent of the indemnified party, effect any settlement or compromise
of, or consent to the entry of judgment with respect to, any pending or
threatened action in respect of which the indemnified party is or could have
been a party and indemnity or contribution may be or could have been sought
hereunder by the indemnified party, unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from all
liability on claims that are or could have been the subject matter of such
action and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of the indemnified party.

     (d)       To the extent that the indemnification provided for in this
Section 6 is unavailable to an indemnified party in respect of any losses,
claims, damages, liabilities or judgments referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities or judgments (i) in such proportion
as is appropriate to reflect the relative benefits received by the Issuer, on
the one hand, and the Holders, on the other hand, from their sale of Transfer
Restricted Securities or (ii) if the allocation provided by clause 6(d)(i) is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause 6(d)(i) hereof but also the
relative fault of the Issuer, on the one hand, and of the Holder, on the other
hand, in connection with the statements or omissions which resulted in such
losses, claims, damages, liabilities or judgments, as well as any other relevant
equitable considerations.  The relative fault of the Issuer, on the one hand,
and of the Holder, on the other hand, shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Issuer, on the one hand, or by the Holder, on the
other hand, and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.

     The Issuer and each Holder agree that it would not be just and equitable if
contribution pursuant to this Section 6(d) were determined by PRO RATA
allocation (even if the Holders were treated as one entity for such purpose) or
by any other method of allocation which does not take account of the equitable
considerations referred to in the immediately preceding paragraph.  The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages, liabilities or judgments referred to above shall be deemed to include,
subject to the limitations set forth in the second paragraph of Section 6(a),
any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any matter, including any action that
could have given rise to such losses, claims, damages liabilities or judgments.
Notwithstanding the provisions of this Section 6, no Holder, its directors, its
officers or any Person, if any, who controls such Holder shall be required to
contribute, in the aggregate, any amount in excess of the amount by which the
total received by such Holder with respect to the sale of Transfer Restricted
Securities pursuant to a Registration Statement exceeds (i) the amount paid by
such Holder for such Transfer Restricted Securities and (ii) the amount of any
damages which such Holder has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission.  No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation.  The Holders' obligations to contribute
pursuant to this Section 6(d) are several in proportion to the respective
principal amount of Transfer Restricted Securities held by each Holder hereunder
and not joint.

     (e)       The Issuer agrees that the indemnity and contribution provisions
of this Section 6 shall apply to the Initial Purchaser to the same extent, on
the same conditions, as it applies to Holders.

                                       11


7.  RULE 144

     The Issuer agrees with each Holder, for so long as any Transfer Restricted
Securities remain outstanding and during any period in which the Issuer (i) is
not subject to Section 13 or 15(d) of the Exchange Act, to make available, upon
request of any Holder, to such Holder or beneficial owner of Transfer Restricted
Securities in connection with any sale thereof and any prospective purchaser of
such Transfer Restricted Securities designated by such Holder or beneficial
owner, the information required by Rule 144A(d)(4) under the Act in order to
permit resales of such Transfer Restricted Securities pursuant to Rule 144A, and
(ii) is subject to Section 13 or 15(d) of the Exchange Act, to make all filings
required thereby in a timely manner in order to permit resales of such Transfer
Restricted Securities pursuant to Rule 144.

8.  MISCELLANEOUS

     (a)       REMEDIES.  The Issuer acknowledges and agrees that any failure by
the Issuer to comply with its obligations under Section 3 hereof may result in
material irreparable injury to the Initial Purchaser or the Holders for which
there is no adequate remedy at law, that it will not be possible to measure
damages for such injuries precisely and that, in the event of any such failure,
the Initial Purchaser or any Holder may obtain such relief as may be required to
specifically enforce the Issuer's obligations under Section 3 hereof.  The
Issuer further agrees to waive the defense in any action for specific
performance that a remedy at law would be adequate.

     (b)       NO INCONSISTENT AGREEMENTS.  The Issuer will not, on or after the
date of this Agreement, enter into any agreement with respect to its securities
that is inconsistent with the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions hereof.  The Issuer has not previously
entered into any agreement granting any registration rights with respect to its
securities to any Person that is currently effective other than the Registration
Rights Agreement, dated as of the date hereof, with respect to the Issuer's 12%
Senior Subordinated Notes due 2009, and that certain Investors Agreement, dated
as of the date hereof, among the Issuer and certain persons named therein.  The
rights granted to the Holders hereunder do not in any way conflict with and are
not inconsistent with the rights granted to the holders of the Issuer's
securities under any agreement in effect on the date hereof.

     (c)       AMENDMENTS AND WAIVERS.  The provisions of this Agreement may not
be amended, modified or supplemented, and waivers or consents to or departures
from the provisions hereof may not be given unless (i) in the case of this
Section 8(c)(i), the Issuer has obtained the written consent of Holders of all
outstanding Transfer Restricted Securities, and (ii) in the case of all other
provisions hereof, the Issuer has obtained the written consent of Holders of a
majority of the outstanding principal amount of Transfer Restricted Securities
(excluding Transfer Restricted Securities held by the Issuer or its Affiliates);
PROVIDED that this Agreement may be amended without the consent of any Holder
pursuant to Section 8(l) of the Warrant Agreement.

     (d)       THIRD PARTY BENEFICIARY.  The Holders shall be third party
beneficiaries to the agreements made hereunder between the Issuer, on the one
hand, and the Initial Purchaser, on the other hand, and shall have the right to
enforce such agreements directly to the extent they may deem such enforcement
necessary or advisable to protect its rights or the rights of Holders hereunder.

     (e)       NOTICES.  All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telex, telecopier, or air
courier guaranteeing overnight delivery:

                                       12


               (i)            if to a Holder, at the address set forth on the
     records of the Warrant Agent, with a copy to the Warrant Agent; and

               (ii)           if to the Issuer:

                    Merrill Corporation
                    One Merrill Circle
                    St. Paul, MN  55108
                    Telecopier No.: (615) 632-4141
                    Attention:  General Counsel


                    With a copy to:

                    Oppenheimer Wolff & Donnelly LLP
                    45 South Seventh Street
                    Suite 3400
                    Minneapolis, MN  55402
                    Telecopier No.: (612) 607-7100
                    Attention:  Bruce A. Machmeier, Esq.

     All such notices and communications shall be deemed to have been duly
given:  at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when receipt
acknowledged, if telecopied; and on the next Business Day, if timely delivered
to an air courier guaranteeing overnight delivery.

     Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Warrant Agent at the
address specified in Warrant Agreement.  Upon the date of filing a Shelf
Registration Statement, notice shall be delivered to the Initial Purchaser (in
the form attached hereto as Exhibit A) and shall be addressed to:  Attention:
Louise Guarneri (Compliance Department), 277 Park Avenue, New York, New York
10172.

     (f)       SUCCESSORS AND ASSIGNS.  This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties, including, without limitation, and without the need for an express
assignment, subsequent Holders; PROVIDED that nothing herein shall be deemed to
permit any assignment, transfer or other disposition of Transfer Restricted
Securities in violation of the terms hereof or of the Purchase Agreement or the
Warrant Agreement.  If any transferee of any Holder shall acquire Transfer
Restricted Securities in any manner, whether by operation of law or otherwise,
such Transfer Restricted Securities shall be held subject to all of the terms of
this Agreement, and by taking and holding such Transfer Restricted Securities
such Person shall be conclusively deemed to have agreed to be bound by and to
perform all of the terms and provisions of this Agreement, including the
restrictions on resale set forth in this Agreement and, if applicable, the
Purchase Agreement, and such Person shall be entitled to receive the benefits
hereof.

     (g)       COUNTERPARTS.  This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

                                       13


     (h)       HEADINGS.  The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

     (i)       GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICT OF LAW RULES THEREOF.

     (j)       SEVERABILITY.  In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.

     (k)       ENTIRE AGREEMENT.  This Agreement is intended by the parties as a
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein.  There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted with respect to the Transfer
Restricted Securities.  This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.

                                       14


     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.


                              MERRILL CORPORATION


                              By:     /s/ Rick R. Atterbury
                                   -----------------------------------
                                   Name:  Rick R. Atterbury
                                   Title:    Executive Vice President



DONALDSON, LUFKIN & JENRETTE
    SECURITIES CORPORATION


By:       /s/ Omar Karame
     -------------------------------
     Name:  Omar Karame
     Title:    Vice President



                                                                 EXHIBIT A


                                     EXHIBIT A

                                NOTICE OF FILING OF
                           WARRANT REGISTRATION STATEMENT


To:       Donaldson, Lufkin & Jenrette Securities Corporation
          277 Park Avenue
          New York, New York  10172
          Attention:  Louise Guarneri (Compliance Department)
          Fax:  (212) 892-7272

From:     Merrill Corporation
          Warrants to Purchase Shares of Class B Common Stock


Date:  _____________________________

     For your information only (NO ACTION REQUIRED):

     Today, ________________________, we filed a Shelf Registration Statement
with the Securities and Exchange Commission.  We currently expect this
registration statement to be declared effective within ___ business days of the
date hereof.


                                          1

EX-4.4

                                                             EXECUTION VERSION


===============================================================================





                             VIKING MERGER SUB, INC.





                                140,000 Warrants
                                   to Purchase
                                  Common Shares





                                WARRANT AGREEMENT





                          Dated as of November 23, 1999





                          NORWEST BANK MINNESOTA, N.A.

                                  Warrant Agent






===============================================================================



                  WARRANT AGREEMENT, dated as of November 23, 1999, between
Viking Merger Sub, Inc., a Delaware corporation ("VIKING"), and Norwest Bank
Minnesota, N.A., as warrant agent (the "WARRANT AGENT").

                  WHEREAS, Viking proposes to issue 140,000 warrants (the
"WARRANTS") to initially purchase up to an aggregate of 172,182 Common Shares,
par value $0.01 per share (the "VIKING COMMON SHARES") (the Viking Common Shares
issuable on exercise of the Warrants being referred to herein as the "VIKING
WARRANT SHARES") in connection with a Purchase Agreement (the "PURCHASE
AGREEMENT") dated November 18, 1999, among Viking, Merrill Corporation
("MERRILL") and Donaldson, Lufkin & Jenrette Securities Corporation, as initial
purchaser, providing for the offering (the "OFFERING") by Merrill of 140,000
Units, each consisting of $1,000 principal amount at maturity of Merrill's 12%
Senior Subordinated Notes due 2009 (the "NOTES") and one warrant initially
representing the right to purchase 1.22987 Viking Common Shares;

                  WHEREAS, the Company has entered into an Agreement and Plan of
Merger with Merrill dated as of July 14, 1999 (as amended to the date hereof,
the "MERGER AGREEMENT") pursuant to which the Company will merge (the "MERGER")
with and into Merrill and, upon consummation of the Merger, Merrill will assume
all obligations of the Company under this Agreement;

                  WHEREAS, at the effective time of the Merger, each Viking
Common Share will become one share of Class B Common Stock of Merrill, par value
$0.01 per share ("MERRILL COMMON STOCK"), each Warrant by its terms will become
exercisable to initially purchase 1.22987 shares of Merrill Common Stock (the
"MERRILL WARRANT Shares") and Merrill will succeed to the obligations of Viking
under this Agreement and with respect to the Warrants;

                  WHEREAS, the Company desires the Warrant Agent to act on
behalf of the Company, and the Warrant Agent is willing so to act in connection
with the issuance of Warrant Certificates (as defined) and other matters as
provided herein;

                  NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereto agree as follows:

SECTION 1.        CERTAIN DEFINITIONS.

                  As used in this Agreement, the following terms shall have the
following respective meanings:

                  "144A GLOBAL WARRANT" means a Global Warrant bearing the
Private Placement Legend, initially representing beneficial interests in
Warrants sold in reliance on Rule 144A.

                  "AFFILIATE" of any Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such Person. For purposes of this definition, "control" (including,
with correlative meanings, the terms "controlling," "controlled by" and "under
common control with"), as used with respect to any Person shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such specified Person, whether
through the ownership of voting securities, by agreement or otherwise; PROVIDED
that beneficial ownership of 10% or more of the voting securities of a Person
shall be deemed to be control.



                  "APPLICABLE PROCEDURES" means, with respect to any transfer or
exchange of or for beneficial interests in any Global Warrant, the rules and
procedures of the Depositary, Euroclear and Cedelbank that apply to such
transfer or exchange.

                  "BUSINESS DAY" means any day other than a Legal Holiday.

                  "CEDELBANK" means Cedelbank, a limited liability company (a
societe anonyme) organized under Luxembourg law.

                  "CLOSING DATE" means the date hereof.

                  "COMMISSION" means the Securities and Exchange Commission.

                  "DEFINITIVE WARRANTS" means Warrants issued in definitive form
and represented by a Warrant Certificate that does not bear the Global Warrant
Legend and that does not have the "Schedule of Exchanges of Interests in the
Global Warrant" attached thereto.

                  "DEPOSITARY" means, with respect to the Warrants issuable or
issued in whole or in part in global form, the Person specified in Section 3.3
hereof as the Depositary with respect to the Warrants, and any and all
successors thereto appointed as Depositary hereunder and having become such
pursuant to the applicable provision of the Indenture.

                  "EUROCLEAR" means Morgan Guaranty Trust Company of New York,
Brussels office, as operator of the Euroclear system.

                  "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.

                  "GLOBAL WARRANTS" means Warrants issued in global form and
represented by a Warrant Certificate that bears the Global Warrant Legend and
that has the "Schedule of Exchanges of Interests in the Global Warrant" attached
thereto, which is deposited with or on behalf of and registered in the name of
the Depositary.

                  "GLOBAL WARRANT LEGEND" means the legend set forth in Section
3.5(g)(ii), which is required to be placed on all Warrants issued in global form
under this Warrant Agreement.

                  "HOLDER" means a person who is listed as the record owner of a
Warrant.

                  "INDENTURE" means the indenture, dated the date hereof,
between Merrill, the Guarantors that are party thereto and Norwest Bank
Minnesota, N.A., as trustee relating to the Notes.

                  "INDIRECT PARTICIPANT" means a Person who holds a beneficial
interest in a Global Warrant through a Participant.

                  "INITIAL PURCHASER" means Donaldson, Lufkin & Jenrette
Securities Corporation.

                  "INSTITUTIONAL ACCREDITED INVESTOR" means an institution that
is an "accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under
the Securities Act, which is not also a QIB.


                                       2


                  "LEGAL HOLIDAY" means a Saturday, a Sunday or a day on which
banking institutions in the City of New York or the city in which the principal
corporate trust office or the Warrant Agent is located or at a place of payment
are authorized by law, regulation or executive order to remain closed. If a
payment date is a Legal Holiday at a place of payment, payment may be made at
that place on the next succeeding day that is not a Legal Holiday, and no
interest shall accrue on such payment for the intervening period.

                  "NON-U.S. PERSON" means a Person who is not a U.S. Person.

                  "OFFICER" means, with respect to any Person, the Chairman of
the Board, the Chief Executive Officer, the President, the Chief Operating
Officer, the Chief Financial Officer, the Treasurer, any Assistant Treasurer,
the Controller, the Secretary or any Vice-President of such Person.

                  "ONE-YEAR RESTRICTED PERIOD" means the one-year "distribution
compliance period" as defined in Rule 902(f) of Regulation S.

                  "OPINION OF COUNSEL" means an opinion from legal counsel who
is reasonably acceptable to the Warrant Agent in form and substance reasonably
acceptable to the Warrant Agent. The counsel may be an employee of or counsel to
the Company, any subsidiary of the Company or the Warrant Agent.

                  "PARTICIPANT" means, with respect to the Depositary, Euroclear
or Cedelbank, a Person who has an account with the Depositary, Euroclear or
Cedelbank, respectively (and, with respect to The Depository Trust Company,
shall include Euroclear and Cedelbank).

                  "PERSON" means any individual, corporation, limited liability
company, partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof, including any subdivision or ongoing business of any such entity or
substantially all of the assets of any such entity, subdivision or business.

                  "PRIVATE PLACEMENT LEGEND" means the legend set forth in
Section 3.5(g)(i) to be placed on all Warrants issued under this Warrant
Agreement except where otherwise permitted by the provisions of this Warrant
Agreement.

                  "QIB" means a "qualified institutional buyer" as defined in
Rule 144A.

                  "REGULATION S" means Regulation S promulgated under the
Securities Act.

                  "REGULATION S TEMPORARY GLOBAL WARRANT" means a Global Warrant
bearing the Private Placement Legend initially representing beneficial interests
in Warrants offered and sold in reliance on Regulation S.

                  "REGULATION S PERMANENT GLOBAL WARRANT" means a permanent
Global Warrant issued in accordance with Section 3.1(d).

                  "RESTRICTED DEFINITIVE WARRANT" means a Definitive Warrant
that bears the Private Placement Legend.


                                       3


                  "RESTRICTED GLOBAL WARRANT" means a 144A Global Warrant or a
Regulation S Temporary Global Warrant or both, as the context may require.

                  "RULE 144" means Rule 144 promulgated under the Securities
Act.

                  "RULE 144A" means Rule 144A promulgated under the Securities
Act.

                  "RULE 903" means Rule 903 promulgated under the Securities
Act.

                  "RULE 904" means Rule 904 promulgated under the Securities
Act.

                  "SECURITIES ACT" means the Securities Act of 1933, as amended.

                  "SEPARATION DATE" means the earliest of (i) 180 days after the
closing of the Offering, (ii) the date on which a registration statement with
respect to a registered exchange offer for the Notes is declared effective under
the Securities Act, (iii) the date a shelf registration statement with respect
to the Notes or the Warrants is declared effective under the Securities Act,
(iv) such date as Donaldson, Lufkin & Jenrette Securities Corporation in its
sole discretion shall determine and (v) the date the Company gives the notice
required by the Indenture upon the occurrence of a Change of Control (as defined
in the Indenture).

                  "TRANSFER RESTRICTED SECURITIES" shall mean (a) each Warrant
and Warrant Share held by an Affiliate of the Company and (b) each other Warrant
and Warrant Share until the earlier to occur of (i) the date on which such
Warrant or Warrant Share (other than any Warrant Share issued upon exercise of a
Warrant in accordance with a Registration Statement (as defined in the Warrant
Registration Rights Agreement)) has been disposed of in accordance with a
Registration Statement and (ii) the date on which such Warrant or Warrant Share
(or the related Warrant) is distributed to the public pursuant to Rule 144 under
the Act.

                  "TRUSTEE" means the trustee under the Indenture.

                  "UNRESTRICTED GLOBAL WARRANT" means a Global Warrant that does
not bear and is not required to bear the Private Placement Legend (other than
the Regulation S Permanent Global Warrant).

                  "UNRESTRICTED DEFINITIVE WARRANT" means a Definitive Warrant
that does not bear and is not required to bear the Private Placement Legend.

                  "U.S. PERSON" means a U.S. person as defined in Rule 902(o)
under the Securities Act.

                  "WARRANT CERTIFICATE" means a certificate, in global or
definitive form, substantially in the form of Exhibit A hereto, representing
Warrants.

                  "WARRANT REGISTRATION RIGHTS AGREEMENT" means the registration
rights agreement, dated as of November 23, 1999, between Merrill and the Initial
Purchaser relating to the Warrants and the Warrant Shares.

                  In addition, as used herein, the "COMPANY" shall refer to
Viking prior to the effective time of the Merger and to Merrill from and after
the effective time of the Merger; "COMMON STOCK" shall refer to Viking Common
Shares prior to the effective time of the Merger and to Merrill Common


                                       4


Stock from and after the effective time of the Merger; and "WARRANT SHARES"
shall refer to Viking Warrant Shares prior to the effective time of the Merger
and to Merrill Warrant Shares from and after the effective time of the Merger.

SECTION 2.        APPOINTMENT OF WARRANT AGENT.

                  The Company hereby appoints the Warrant Agent to act as agent
for the Company in accordance with the instructions set forth hereinafter in
this Agreement and the Warrant Agent hereby accepts such appointment.

SECTION 3.        ISSUANCE OF WARRANTS; WARRANT CERTIFICATES.

         3.1.     FORM AND DATING.

                  (a)      GENERAL.

                  The Warrants shall be issued substantially in the form of
Exhibit A hereto. The Warrants may have notations, legends or endorsements
required by law, stock exchange rule or usage. Each Warrant shall be dated the
date of the countersignature.

                  The terms and provisions contained in the Warrants shall
constitute, and are hereby expressly made, a part of this Warrant Agreement. The
Company and the Warrant Agent, by their execution and delivery of this Warrant
Agreement, expressly agree to such terms and provisions and to be bound thereby.
However, to the extent any provision of any Warrant conflicts with the express
provisions of this Warrant Agreement, the provisions of this Warrant Agreement
shall govern and be controlling.

                  (b)      GLOBAL WARRANTS.

                  Global Warrants shall be substantially in the form of Exhibit
A attached hereto (including the Global Warrant Legend thereon and the "Schedule
of Exchanges of Interests in the Global Warrant" attached thereto). Each Global
Warrant shall represent such of the outstanding Warrants as shall be specified
therein and each shall provide that it shall represent the number of outstanding
Warrants from time to time endorsed thereon and that the number of outstanding
Warrants represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges and redemptions. Any endorsement of a Global
Warrant to reflect the amount of any increase or decrease in the number of
outstanding Warrants represented thereby shall be made by the Warrant Agent in
accordance with instructions given by the Holder thereof as required by Section
3.5 hereof.

                  (c)      144A GLOBAL WARRANTS.

                  Warrants initially offered and sold to QIBs in reliance on
Rule 144A shall be issued initially in the form of 144A Global Warrants, which
shall be deposited on behalf of the purchasers of the Warrants represented
thereby with the Warrant Agent, as custodian for the Depositary, and registered
in the name of the Depositary or the nominee of the Depositary for credit to the
accounts of DTC's Participants, duly executed by the Company and countersigned
by the Warrant Agent as hereinafter provided.


                                       5


                  (d)      REGULATION S TEMPORARY GLOBAL WARRANTS.

                  Warrants initially offered and sold in reliance on Regulation
S shall be issued initially in the form of Regulation S Temporary Global
Warrants, which shall be deposited on behalf of the purchasers of the Warrants
represented thereby with the Warrant Agent, as custodian for the Depositary, and
registered in the name of the Depositary or the nominee of the Depositary for
the accounts of designated agents holding on behalf of Euroclear or Cedelbank,
duly executed by the Company and countersigned by the Warrant Agent as
hereinafter provided.

                  Within a reasonable time period after the expiration of the
One-Year Restricted Period, upon the receipt by the Warrant Agent of a written
certificate from the Depositary, together with copies of certificates from
Euroclear and Cedelbank certifying that they have received certification of
non-United States beneficial ownership of all Warrants represented by the
Regulation S Temporary Global Warrant (except to the extent of any beneficial
owners thereof who acquired an interest therein during the One-Year Restricted
Period pursuant to another exemption from registration under the Securities Act
and who will take delivery of a beneficial ownership interest in a 144A Global
Note), the Company shall issue and the Warrant Agent shall countersign as
hereinafter provided a Regulation S Permanent Global Warrant representing a
number of Warrants equal to the number of Warrants then represented by the
Regulation S Temporary Global Warrant, which shall be deposited with the Warrant
Agent, as custodian for the Depositary, and registered in the name of the
Depositary or the nominee of the Depositary, all pursuant to the Applicable
Procedures. Simultaneously with the countersignature of the Regulation S
Permanent Global Warrant as described above, the Warrant Agent shall cancel the
Regulation S Temporary Global Warrant.

                  Until the later of the termination of the One-Year Restricted
Period and the provision of the certifications required as specified in the
preceding paragraph, beneficial interests in any Regulation S Temporary Global
Warrant may be held only through Participants acting for and on behalf of
Euroclear and Cedelbank.

                  (e)      EUROCLEAR AND CEDELBANK PROCEDURES APPLICABLE.

                  The provisions of the "Operating Procedures of the Euroclear
System" and "Terms and Conditions Governing Use of Euroclear" and the "General
Terms and Conditions of Cedelbank" and "Customer Handbook" of Cedelbank shall be
applicable to transfers of beneficial interests in the Regulation S Global
Warrant that are held by Participants through Euroclear or Cedelbank.

                  (f)      DEFINITIVE WARRANTS.

                  Definitive Warrants shall be substantially in the form of
Exhibit A attached hereto (but without the Global Warrant Legend thereon and
without the "Schedule of Exchanges of Interests in the Global Warrant" attached
thereto).

         3.2.     EXECUTION.

                  An Officer shall sign the Warrants for the Company by manual
or facsimile signature.

                  If the Officer whose signature is on a Warrant no longer holds
that office at the time a Warrant is countersigned, the Warrant shall
nevertheless be valid.


                                       6


                  A Warrant shall not be valid until countersigned by the manual
signature of the Warrant Agent. The signature shall be conclusive evidence that
the Warrant has been properly issued under this Warrant Agreement.

                  The Warrant Agent shall, upon a written order of the Company
signed by an Officer (a "WARRANT COUNTERSIGNATURE ORDER"), countersign Warrants
for original issue up to the number stated in the preamble hereto.

                  The Warrant Agent may appoint an agent acceptable to the
Company to countersign Warrants. Such an agent may countersign Warrants whenever
the Warrant Agent may do so. Each reference in this Warrant Agreement to a
countersignature by the Warrant Agent includes a countersignature by such agent.
Such an agent has the same rights as the Warrant Agent to deal with the Company
or an Affiliate of the Company.

         3.3.     WARRANT REGISTRAR.

                  The Company shall maintain an office or agency where Warrants
may be presented for registration of transfer or for exchange ("WARRANT
REGISTRAR"). The Warrant Registrar shall keep a register of the Warrants and of
their transfer and exchange. The Company may appoint one or more co-Warrant
Registrars. The term "Warrant Registrar" includes any co-Warrant Registrar. The
Company may change any Warrant Registrar without notice to any holder. The
Company shall notify the Warrant Agent in writing of the name and address of any
agent not a party to this Warrant Agreement. If the Company fails to appoint or
maintain another entity as Warrant Registrar, the Warrant Agent shall act as
such. The Company or any of its subsidiaries may act as Warrant Registrar.

                  The Company initially appoints The Depository Trust Company
("DTC") to act as Depositary with respect to the Global Warrants.

                  The Company initially appoints the Warrant Agent to act as the
Warrant Registrar with respect to the Global Warrants.

         3.4.     HOLDER LISTS.

                  The Warrant Agent shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of all Holders. If the Warrant Agent is not the Warrant Registrar, the
Company shall promptly furnish to the Warrant Agent at such times as the Warrant
Agent may request in writing, a list in such form and as of such date as the
Warrant Agent may reasonably require of the names and addresses of the Holders.

         3.5.     TRANSFER AND EXCHANGE.

                  (a)      TRANSFER AND EXCHANGE OF GLOBAL WARRANTS.

                  A Global Warrant may not be transferred as a whole except by
the Depositary to a nominee of the Depositary, by a nominee of the Depositary to
the Depositary or to another nominee of the Depositary, or by the Depositary or
any such nominee to a successor Depositary or a nominee of such successor
Depositary. All Global Warrants will be exchanged by the Company for Definitive
Warrants if (i) the Company delivers to the Warrant Agent notice from the
Depositary that it is unwilling or unable to continue to act as Depositary or
that it is no longer a clearing agency registered under the Exchange


                                       7


Act and, in either case, a successor Depositary is not appointed by the Company
within 120 days after the date of such notice from the Depositary or (ii) the
Company in its sole discretion determines that the Global Warrants (in whole but
not in part) should be exchanged for Definitive Warrants and delivers a written
notice to such effect to the Warrant Agent. Upon the occurrence of either of the
preceding events in (i) or (ii) above, Definitive Warrants shall be issued in
such names as the Depositary shall instruct the Warrant Agent. Global Warrants
also may be exchanged or replaced, in whole or in part, as provided in Sections
3.6 and 3.7 hereof. A Global Warrant may not be exchanged for another Warrant
other than as provided in this Section 3.5(a), however, beneficial interests in
a Global Warrant may be transferred and exchanged as provided in Section 3.5(b),
(c) or (f) hereof.

                  (b)      TRANSFER AND EXCHANGE OF BENEFICIAL INTERESTS IN THE
GLOBAL WARRANTS.

                  The transfer and exchange of beneficial interests in the
Global Warrants shall be effected through the Depositary, in accordance with the
provisions of this Warrant Agreement and the Applicable Procedures. Beneficial
interests in the Restricted Global Warrants shall be subject to restrictions on
transfer comparable to those set forth herein to the extent required by the
Securities Act. Transfers of beneficial interests in the Global Warrants also
shall require compliance with either subparagraph (i) or (ii) below, as
applicable, as well as one or more of the other following subparagraphs, as
applicable:

                  (i) TRANSFER OF BENEFICIAL INTERESTS IN THE SAME GLOBAL
         WARRANT. Beneficial interests in any Restricted Global Warrant may be
         transferred to Persons who take delivery thereof in the form of a
         beneficial interest in the same Restricted Global Warrant in accordance
         with the transfer restrictions set forth in the Private Placement
         Legend. Beneficial interests in any Unrestricted Global Warrant may be
         transferred to Persons who take delivery thereof in the form of a
         beneficial interest in the same Unrestricted Global Warrant. No written
         orders or instructions shall be required to be delivered to the Warrant
         Registrar to effect the transfers described in this Section 3.5(b)(i).

                 (ii) ALL OTHER TRANSFERS AND EXCHANGES OF BENEFICIAL INTERESTS
         IN GLOBAL WARRANTS. In connection with all transfers and exchanges of
         beneficial interests in a Global Warrant that are not subject to
         Section 3.5(b)(i) above (other than an exchange of beneficial interests
         in the Regulation S Temporary Global Warrant for beneficial interests
         in the Regulation S Permanent Global Warrant in accordance with Section
         3.1(d)), the transferor of such beneficial interest must deliver to the
         Warrant Registrar either (A) (1) a written order from a Participant or
         an Indirect Participant given to the Depositary in accordance with the
         Applicable Procedures directing the Depositary to credit or cause to be
         credited a beneficial interest in another Global Warrant in an amount
         equal to the beneficial interest to be transferred or exchanged and (2)
         instructions given in accordance with the Applicable Procedures
         containing information regarding the Participant account to be credited
         with such increase or (B) (1) a written order from a Participant or an
         Indirect Participant given to the Depositary in accordance with the
         Applicable Procedures directing the Depositary to cause to be issued a
         Definitive Warrant in an amount equal to the beneficial interest to be
         transferred or exchanged and (2) instructions given by the Depositary
         to the Warrant Registrar containing information regarding the Person in
         whose name such Definitive Warrant shall be registered; PROVIDED,
         HOWEVER, that in no event shall Definitive Warrants be issued upon the
         transfer or exchange of beneficial interests in the Regulation S
         Temporary Global Note prior to (x) the expiration of the One-Year
         Restricted Period and (y) the receipt by the Warrant Registrar of any
         certificates required pursuant to Rule 903 under the Securities Act.
         Upon effectiveness of the Registration Statement (as defined in the
         Warrant


                                       8


         Registration Rights Agreement) in accordance with Section 3.5(f)
         hereof, the requirements of this Section 3.5(b)(ii) shall be deemed to
         have been satisfied upon receipt by the Warrant Registrar of a
         certification required by the Company in connection with such
         Registration Statement delivered by the Holder of such beneficial
         interests in the Restricted Global Warrants. Upon satisfaction of all
         of the requirements for transfer or exchange of beneficial interests in
         Global Warrants contained in this Agreement and the Warrants or
         otherwise applicable under the Securities Act, the Warrant Agent shall
         adjust the principal amount of the relevant Global Warrant(s) pursuant
         to Section 3.5(h) hereof.

                  (iii) TRANSFER OF BENEFICIAL INTERESTS TO ANOTHER RESTRICTED
         GLOBAL WARRANT. A beneficial interest in any Restricted Global Warrant
         may be transferred to a Person who takes delivery thereof in the form
         of a beneficial interest in another Restricted Global Warrant if the
         transfer complies with the requirements of Section 3.5(b)(ii) above and
         the Warrant Registrar receives the following:

                           (A) if the transferee will take delivery in the form
                  of a beneficial interest in the 144A Global Warrant, then the
                  transferor must deliver a certificate in the form of Exhibit B
                  hereto, including the certifications in item (1) or (3)
                  thereof; and

                           (B) if the transferee will take delivery in the form
                  of a beneficial interest in the Regulation S Temporary Global
                  Warrant, then the transferor must deliver a certificate in the
                  form of Exhibit B hereto, including the certifications in item
                  (2) thereof.

                  (iv) TRANSFER AND EXCHANGE OF BENEFICIAL INTERESTS IN A
         RESTRICTED GLOBAL WARRANT FOR BENEFICIAL INTERESTS IN THE UNRESTRICTED
         GLOBAL WARRANT. A beneficial interest in any Restricted Global Warrant
         may be exchanged by any holder thereof for a beneficial interest in an
         Unrestricted Global Warrant or transferred to a Person who takes
         delivery thereof in the form of a beneficial interest in an
         Unrestricted Global Warrant if the exchange or transfer complies with
         the requirements of Section 3.5(b)(ii) above and:

                           (A) such transfer is effected pursuant to the
                  Registration Statement in accordance with the Warrant
                  Registration Rights Agreement; or

                           (B) the Warrant Registrar receives the following:

                                    (1) if the holder of such beneficial
                           interest in a Restricted Global Warrant proposes to
                           exchange such beneficial interest for a beneficial
                           interest in the Unrestricted Global Warrant, a
                           certificate from such holder in the form of Exhibit C
                           hereto, including the certifications in item (1)(a)
                           thereof; or

                                    (2) if the holder of such beneficial
                           interest in a Restricted Global Warrant proposes to
                           transfer such beneficial interest to a Person who
                           shall take delivery thereof in the form of a
                           beneficial interest in the Unrestricted Global
                           Warrant, a certificate from such holder in the form
                           of Exhibit B hereto, including the certifications in
                           item (4) thereof;

         and, in each such case set forth in this subparagraph (B), if the
         Warrant Registrar so requests or if the Applicable Procedures so
         require, an Opinion of Counsel in form reasonably acceptable to


                                       9


         the Warrant Registrar to the effect that such exchange or transfer is
         in compliance with the Securities Act and that the restrictions on
         transfer contained herein and in the Private Placement Legend are no
         longer required in order to maintain compliance with the Securities
         Act.

                  If any such transfer is effected pursuant to subparagraph (B)
above at a time when an Unrestricted Global Warrant has not yet been issued, the
Company shall issue and, upon receipt of an Warrant Countersignature Order in
accordance with Section 3.2 hereof, the Warrant Agent shall countersign one or
more Unrestricted Global Warrants in the number equal to the number of
beneficial interests transferred pursuant to subparagraph (B) above.

                  (c) TRANSFER AND EXCHANGE OF BENEFICIAL INTERESTS FOR
         DEFINITIVE WARRANTS.

                  (i) BENEFICIAL INTERESTS IN RESTRICTED GLOBAL WARRANTS TO
         RESTRICTED DEFINITIVE WARRANTS. If any holder of a beneficial interest
         in a Restricted Global Warrant proposes to exchange such beneficial
         interest for a Restricted Definitive Warrant or to transfer such
         beneficial interest to a Person who takes delivery thereof in the form
         of a Restricted Definitive Warrant, then, upon receipt by the Warrant
         Registrar of the following documentation:

                           (A) if the holder of such beneficial interest in a
                  Restricted Global Warrant proposes to exchange such beneficial
                  interest for a Restricted Definitive Warrant, a certificate
                  from such holder in the form of Exhibit C hereto, including
                  the certifications in item (2)(a) thereof;

                           (B) if such beneficial interest is being transferred
                  to a QIB in accordance with Rule 144A under the Securities
                  Act, a certificate to the effect set forth in Exhibit B
                  hereto, including the certifications in item (1) thereof;

                           (C) if such beneficial interest is being transferred
                  to a Non-U.S. Person in an offshore transaction in accordance
                  with Rule 903 or Rule 904 under the Securities Act, a
                  certificate to the effect set forth in Exhibit B hereto,
                  including the certifications in item (2) thereof;

                           (D) if such beneficial interest is being transferred
                  pursuant to an exemption from the registration requirements of
                  the Securities Act in accordance with Rule 144 under the
                  Securities Act, a certificate to the effect set forth in
                  Exhibit B hereto, including the certifications in item (3)(a)
                  thereof;

                           (E) if such beneficial interest is being transferred
                  to an Institutional Accredited Investor in reliance on an
                  exemption from the registration requirements of the Securities
                  Act other than those listed in subparagraphs (B) through (D)
                  above, a certificate to the effect set forth in Exhibit B
                  hereto, including the certifications, certificates and Opinion
                  of Counsel required by item (3) thereof, if applicable;

                           (F) if such beneficial interest is being transferred
                  to the Company or any of its Subsidiaries, a certificate to
                  the effect set forth in Exhibit B hereto, including the
                  certifications in item (3)(b) thereof; or


                                       10


                           (G) if such beneficial interest is being transferred
                  pursuant to an effective registration statement under the
                  Securities Act, a certificate to the effect set forth in
                  Exhibit B hereto, including the certifications in item (3)(c)
                  thereof,

the Warrant Agent shall cause, in accordance with the standing instructions and
procedures existing between the Depositary and the Warrant Agent, the number of
Warrants represented by the Global Warrant to be reduced by the number of
Warrants to be represented by the Definitive Warrant pursuant to Section 3.5(h)
hereof, and the Company shall execute and the Warrant Agent shall countersign
and deliver to the Person designated in the instructions a Definitive Warrant in
the appropriate amount. Any Definitive Warrant issued in exchange for a
beneficial interest in a Restricted Global Warrant pursuant to this Section
3.5(c) shall be registered in such name or names as the holder of such
beneficial interest shall instruct the Warrant Registrar through instructions
from the Depositary and the Participant or Indirect Participant. The Warrant
Agent shall deliver such Definitive Warrants to the Persons in whose names such
Warrants are so registered. Any Definitive Warrant issued in exchange for a
beneficial interest in a Restricted Global Warrant pursuant to this Section
3.5(c)(i) shall bear the Private Placement Legend and shall be subject to all
restrictions on transfer contained therein.

                  (ii) BENEFICIAL INTERESTS IN RESTRICTED GLOBAL WARRANTS TO
         UNRESTRICTED DEFINITIVE WARRANTS. A holder of a beneficial interest in
         a Restricted Global Warrant may exchange such beneficial interest for
         an Unrestricted Definitive Warrant or may transfer such beneficial
         interest to a Person who takes delivery thereof in the form of an
         Unrestricted Definitive Warrant (but in the case of any transfer or
         exchange of a beneficial interest in the Regulation S Temporary Global
         Note, only after the expiration of the One-Year Restricted Period),
         only if:

                           (A) such transfer is effected pursuant to the
                  Registration Statement in accordance with the Warrant
                  Registration Rights Agreement; or

                           (B) the Warrant Registrar receives the following:

                                    (1) if the holder of such beneficial
                           interest in a Restricted Global Warrant proposes to
                           exchange such beneficial interest for a Definitive
                           Warrant that does not bear the Private Placement
                           Legend, a certificate from such holder in the form of
                           Exhibit C hereto, including the certifications in
                           item (1)(b) thereof; or

                                    (2) if the holder of such beneficial
                           interest in a Restricted Global Warrant proposes to
                           transfer such beneficial interest to a Person who
                           shall take delivery thereof in the form of a
                           Definitive Warrant that does not bear the Private
                           Placement Legend, a certificate from such holder in
                           the form of Exhibit B hereto, including the
                           certifications in item (4) thereof;

                  and, in each such case set forth in this subparagraph (B), if
                  the Warrant Registrar so requests or if the Applicable
                  Procedures so require, an Opinion of Counsel in form
                  reasonably acceptable to the Warrant Registrar to the effect
                  that such exchange or transfer is in compliance with the
                  Securities Act and that the restrictions on transfer contained
                  herein and in the Private Placement Legend are no longer
                  required in order to maintain compliance with the Securities
                  Act.


                                       11


                  (iii) BENEFICIAL INTERESTS IN UNRESTRICTED GLOBAL WARRANTS OR
         REGULATION S PERMANENT GLOBAL WARRANTS TO UNRESTRICTED DEFINITIVE
         WARRANTS. If any holder of a beneficial interest in an Unrestricted
         Global Warrant or Regulation S Permanent Global Warrant proposes to
         exchange such beneficial interest for a Definitive Warrant or to
         transfer such beneficial interest to a Person who takes delivery
         thereof in the form of a Definitive Warrant, then, upon satisfaction of
         the conditions set forth in Section 3.5(b)(ii) hereof, the Warrant
         Agent shall cause the amount of the applicable Global Warrant to be
         reduced accordingly pursuant to Section 3.5(h) hereof, and the Company
         shall execute and the Warrant Agent shall countersign and deliver to
         the Person designated in the instructions a Definitive Warrant in the
         appropriate principal amount. Any Definitive Warrant issued in exchange
         for a beneficial interest pursuant to this Section 3.5(c)(iii) shall be
         registered in such name or names and in such authorized denomination or
         denominations as the holder of such beneficial interest shall instruct
         the Warrant Registrar through instructions from the Depositary and the
         Participant or Indirect Participant. The Warrant Agent shall deliver
         such Definitive Warrants to the Persons in whose names such Warrants
         are so registered. Any Definitive Warrant issued in exchange for a
         beneficial interest pursuant to this Section 3.5(c)(iii) shall not bear
         the Private Placement Legend.

                  (d) TRANSFER AND EXCHANGE OF DEFINITIVE WARRANTS FOR
BENEFICIAL INTERESTS IN GLOBAL WARRANTS.

                  (i) RESTRICTED DEFINITIVE WARRANTS TO BENEFICIAL INTERESTS IN
         RESTRICTED GLOBAL WARRANTS. If any Holder of a Restricted Definitive
         Warrant proposes to exchange such Warrant for a beneficial interest in
         a Restricted Global Warrant or to transfer such Restricted Definitive
         Warrants to a Person who takes delivery thereof in the form of a
         beneficial interest in a Restricted Global Warrant, then, upon receipt
         by the Warrant Registrar of the following documentation:

                           (A) if the Holder of such Restricted Definitive
                  Warrant proposes to exchange such Warrant for a beneficial
                  interest in a Restricted Global Warrant, a certificate from
                  such Holder in the form of Exhibit C hereto, including the
                  certifications in item (2)(b) thereof;

                           (B) if such Restricted Definitive Warrant is being
                  transferred to a QIB in accordance with Rule 144A under the
                  Securities Act, a certificate to the effect set forth in
                  Exhibit B hereto, including the certifications in item (1)
                  thereof;

                           (C) if such Restricted Definitive Warrant is being
                  transferred to a Non-U.S. Person in an offshore transaction in
                  accordance with Rule 903 or Rule 904 under the Securities Act,
                  a certificate to the effect set forth in Exhibit B hereto,
                  including the certifications in item (2) thereof;

                           (D) if such Restricted Definitive Warrant is being
                  transferred pursuant to an exemption from the registration
                  requirements of the Securities Act in accordance with Rule 144
                  under the Securities Act, a certificate to the effect set
                  forth in Exhibit B hereto, including the certifications in
                  item (3)(a) thereof;

                           (E) if such Restricted Definitive Warrant is being
                  transferred to an Institutional Accredited Investor in
                  reliance on an exemption from the registration


                                       12


                  requirements of the Securities Act other than those listed
                  in subparagraphs (B) through (D) above, a certificate to the
                  effect set forth in Exhibit B hereto, including the
                  certifications, certificates and Opinion of Counsel required
                  by item (3) thereof, if applicable; or

                           (F) if such Restricted Definitive Warrant is being
                  transferred to the Company or any of its Subsidiaries, a
                  certificate to the effect set forth in Exhibit B hereto,
                  including the certifications in item (3)(b) thereof,

         the Warrant Agent shall cancel the Restricted Definitive Warrant and
         increase or cause to be increased the amount of the appropriate
         Restricted Global Warrant.

                  (ii) RESTRICTED DEFINITIVE WARRANTS TO BENEFICIAL INTERESTS IN
         UNRESTRICTED GLOBAL WARRANTS. A Holder of a Restricted Definitive
         Warrant may exchange such Warrant for a beneficial interest in an
         Unrestricted Global Warrant or transfer such Restricted Definitive
         Warrant to a Person who takes delivery thereof in the form of a
         beneficial interest in an Unrestricted Global Warrant only if:

                           (A) such transfer is effected pursuant to the
                  Registration Statement in accordance with the Registration
                  Rights Agreement; or

                           (B) the Warrant Registrar receives the following:

                                    (1) if the Holder of such Definitive
                           Warrants proposes to exchange such Warrants for a
                           beneficial interest in the Unrestricted Global
                           Warrant, a certificate from such Holder in the form
                           of Exhibit C hereto, including the certifications in
                           item (1)(c) thereof; or

                                    (2) if the Holder of such Definitive
                           Warrants proposes to transfer such Warrants to a
                           Person who shall take delivery thereof in the form of
                           a beneficial interest in the Unrestricted Global
                           Warrant, a certificate from such Holder in the form
                           of Exhibit B hereto, including the certifications in
                           item (4) thereof;

                  and, in each such case set forth in this subparagraph (D), if
                  the Warrant Registrar so requests or if the Applicable
                  Procedures so require, an Opinion of Counsel in form
                  reasonably acceptable to the Warrant Registrar to the effect
                  that such exchange or transfer is in compliance with the
                  Securities Act and that the restrictions on transfer contained
                  herein and in the Private Placement Legend are no longer
                  required in order to maintain compliance with the Securities
                  Act.

         Upon satisfaction of the conditions of any of the subparagraphs in this
         Section 3.5(d)(ii), the Warrant Agent shall cancel the Definitive
         Warrants and increase or cause to be increased the aggregate principal
         amount of the Unrestricted Global Warrant.

                  (iii) UNRESTRICTED DEFINITIVE WARRANTS TO BENEFICIAL INTERESTS
         IN UNRESTRICTED GLOBAL WARRANTS. A Holder of an Unrestricted Definitive
         Warrant may exchange such Warrant for a beneficial interest in an
         Unrestricted Global Warrant or transfer such Definitive Warrants to a


                                       13


         Person who takes delivery thereof in the form of a beneficial interest
         in an Unrestricted Global Warrant at any time. Upon receipt of a
         request for such an exchange or transfer, the Warrant Agent shall
         cancel the applicable Unrestricted Definitive Warrant and increase or
         cause to be increased the amount of one of the Unrestricted Global
         Warrants.

         If any such exchange or transfer from a Definitive Warrant to a
         beneficial interest is effected pursuant to subparagraphs (ii)(B) or
         (iii) above at a time when an Unrestricted Global Warrant has not yet
         been issued, the Company shall issue and, upon receipt of an Warrant
         Countersignature Order in accordance with Section 3.2 hereof, the
         Warrant Agent shall countersign one or more Unrestricted Global
         Warrants in the number equal to the number of beneficial interests of
         Definitive Warrants so transferred.

                  (e) TRANSFER AND EXCHANGE OF DEFINITIVE WARRANTS FOR
DEFINITIVE WARRANTS.

                  Upon request by a Holder of Definitive Warrants and such
Holder's compliance with the provisions of this Section 3.5(e), the Warrant
Registrar shall register the transfer or exchange of Definitive Warrants. Prior
to such registration of transfer or exchange, the requesting Holder shall
present or surrender to the Warrant Registrar the Definitive Warrants duly
endorsed or accompanied by a written instruction of transfer in form
satisfactory to the Warrant Registrar duly executed by such Holder or by its
attorney, duly authorized in writing. In addition, the requesting Holder shall
provide any additional certifications, documents and information, as applicable,
required pursuant to the following provisions of this Section 3.5(e).

                  (i) RESTRICTED DEFINITIVE WARRANTS TO RESTRICTED DEFINITIVE
         WARRANTS. Any Restricted Definitive Warrant may be transferred to and
         registered in the name of Persons who take delivery thereof in the form
         of a Restricted Definitive Warrant if the Warrant Registrar receives
         the following:

                           (A) if the transfer will be made pursuant to Rule
                  144A under the Securities Act, then the transferor must
                  deliver a certificate in the form of Exhibit B hereto,
                  including the certifications in item (1) thereof;

                           (B) if the transfer will be made pursuant to Rule 903
                  or Rule 904, then the transferor must deliver a certificate in
                  the form of Exhibit B hereto, including the certifications in
                  item (2) thereof; or

                           (C) if the transfer will be made pursuant to any
                  other exemption from the registration requirements of the
                  Securities Act, then the transferor must deliver a certificate
                  in the form of Exhibit B hereto, including the certifications,
                  certificates and Opinion of Counsel required by item (3)
                  thereof, if applicable.

                  (ii) RESTRICTED DEFINITIVE WARRANTS TO UNRESTRICTED DEFINITIVE
         WARRANTS. Any Restricted Definitive Warrant may be exchanged by the
         Holder thereof for an Unrestricted Definitive Warrant or transferred to
         a Person or Persons who take delivery thereof in the form of an
         Unrestricted Definitive Warrant if:

                           (A) any such transfer is effected pursuant to the
                  Registration Statement in accordance with the Warrant
                  Registration Rights Agreement; or


                                       14


                           (B) the Warrant Registrar receives the following:

                                    (1) if the Holder of such Restricted
                           Definitive Warrants proposes to exchange such
                           Warrants for an Unrestricted Definitive Warrant, a
                           certificate from such Holder in the form of Exhibit C
                           hereto, including the certifications in item (1)(d)
                           thereof; or

                                    (2) if the Holder of such Restricted
                           Definitive Warrants proposes to transfer such
                           Warrants to a Person who shall take delivery thereof
                           in the form of an Unrestricted Definitive Warrant, a
                           certificate from such Holder in the form of Exhibit B
                           hereto, including the certifications in item (4)
                           thereof;

                  and, in each such case set forth in this subparagraph (B), if
                  the Warrant Registrar so requests, an Opinion of Counsel in
                  form reasonably acceptable to the Company to the effect that
                  such exchange or transfer is in compliance with the Securities
                  Act and that the restrictions on transfer contained herein and
                  in the Private Placement Legend are no longer required in
                  order to maintain compliance with the Securities Act.

                  (iii) UNRESTRICTED DEFINITIVE WARRANTS TO UNRESTRICTED
         DEFINITIVE WARRANTS. A Holder of Unrestricted Definitive Warrants may
         transfer such Warrants to a Person who takes delivery thereof in the
         form of an Unrestricted Definitive Warrant. Upon receipt of a request
         to register such a transfer, the Warrant Registrar shall register the
         Unrestricted Definitive Warrants pursuant to the instructions from the
         Holder thereof.

                  (f)      REGISTRATION STATEMENT.

                  Upon the effectiveness of the Registration Statement and sales
of Warrants in connection therewith in accordance with the Warrant Registration
Rights Agreement, the Company shall issue and, upon receipt of a Warrant
Countersignature Order in accordance with Section 3.2, the Warrant Agent shall
countersign (i) one or more Unrestricted Global Warrants in an amount equal to
the amount of the beneficial interests in the Restricted Global Warrants sold
under such Registration Statement and (ii) Definitive Warrants in an amount
equal to the amount of the beneficial interests of the Restricted Definitive
Warrants sold under such Registration Statement. Concurrently with the issuance
of such Warrants, the Warrant Agent shall cause the amount of the applicable
Restricted Global Warrants to be reduced accordingly, and the Company shall
execute and the Warrant Agent shall countersign and deliver to the Persons
designated by the Holders of Definitive Warrants so accepted Definitive Warrants
in the appropriate amount.

                  (g)      LEGENDS.

                  The following legends shall appear on the face of all Global
Warrants and Definitive Warrants issued under this Warrant Agreement unless
specifically stated otherwise in the applicable provisions of this Warrant
Agreement.


                                       15


                  (i)      PRIVATE PLACEMENT LEGEND.

                           (A) Except as permitted by subparagraph (B) below,
                  each Global Warrant and each Definitive Warrant (and all
                  Warrants issued in exchange therefor or substitution thereof)
                  shall bear the legend in substantially the following form:

                           "THIS SECURITY (OR ITS PREDECESSOR) AND THE WARRANT
         SHARES TO BE ISSUED UPON ITS EXERCISE HAVE NOT BEEN REGISTERED UNDER
         THE SECURITIES ACT, AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED
         OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE
         ACCOUNT OR BENEFIT OF, UNITED STATES PERSONS, EXCEPT AS SET FORTH IN
         THE NEXT SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL
         INTEREST HEREIN, THE HOLDER:

                           (1) REPRESENTS THAT (A) IT IS A "QUALIFIED
                  INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
                  SECURITIES ACT) (A "QIB"), (B) IT HAS ACQUIRED THIS SECURITY
                  IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S
                  UNDER THE SECURITIES ACT OR (C) IT IS AN INSTITUTIONAL
                  "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1),(2), (3)
                  OR (7) OF REGULATION D UNDER THE SECURITIES ACT) (AN "IAI"),

                           (2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE
                  TRANSFER THIS SECURITY EXCEPT (A) TO THE COMPANY OR ANY OF ITS
                  SUBSIDIARIES, (B) TO A PERSON WHOM THE SELLER REASONABLY
                  BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
                  ACCOUNT OF A QIB IN A TRANSACTION MEETING THE REQUIREMENTS OF
                  RULE 144A, (C) IN AN OFFSHORE TRANSACTION MEETING THE
                  REQUIREMENTS OF RULE 903 OR RULE 904 OF REGULATION S OF THE
                  SECURITIES ACT, (D) IN A TRANSACTION MEETING THE REQUIREMENTS
                  OF RULE 144 UNDER THE SECURITIES ACT, (E) TO AN IAI THAT,
                  PRIOR TO SUCH TRANSFER, FURNISHES THE WARRANT AGENT A SIGNED
                  LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
                  RELATING TO THE TRANSFER OF THIS SECURITY (THE FORM OF WHICH
                  CAN BE OBTAINED FROM THE WARRANT AGENT) AND, IF SUCH TRANSFER
                  IS IN RESPECT OF AN AGGREGATE PURCHASE AMOUNT OF LESS THAN
                  $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT
                  SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (F) IN
                  ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
                  REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION
                  OF COUNSEL ACCEPTABLE TO THE COMPANY) OR (G) PURSUANT TO AN
                  EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN
                  ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OF
                  THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION,

                           (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO
                  WHOM THIS SECURITY OR AN INTEREST HEREIN IS TRANSFERRED A
                  NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.


                                       16


                           AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND
         "UNITED STATES" HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF
         REGULATION S UNDER THE SECURITIES ACT. THE WARRANT AGREEMENT CONTAINS A
         PROVISION REQUIRING THE WARRANT AGENT TO REFUSE TO REGISTER ANY
         TRANSFER OF THIS SECURITY IN VIOLATION OF THE FOREGOING."

                           (B) Notwithstanding the foregoing, any Global Warrant
                  or Definitive Warrant issued pursuant to subparagraphs
                  (b)(iv), (c)(ii), (c)(iii), (d)(ii), (d)(iii), (e)(ii),
                  (e)(iii) or (f) to this Section 3.5 (and all Warrants issued
                  in exchange therefor or substitution thereof) shall not bear
                  the Private Placement Legend.

                  (ii) GLOBAL WARRANT LEGEND. Each Global Warrant shall bear a
         legend in substantially the following form:

                           "THIS GLOBAL WARRANT IS HELD BY THE DEPOSITARY (AS
         DEFINED IN THE WARRANT AGREEMENT GOVERNING THIS WARRANT) OR ITS NOMINEE
         IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT
         TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE
         WARRANT AGENT MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
         PURSUANT TO SECTION 3.5 OF THE WARRANT AGREEMENT, (II) THIS GLOBAL
         WARRANT MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION
         3.5(a) OF THE WARRANT AGREEMENT, (III) THIS GLOBAL WARRANT MAY BE
         DELIVERED TO THE WARRANT AGENT FOR CANCELLATION PURSUANT TO SECTION 3.8
         OF THE WARRANT AGREEMENT AND (IV) THIS GLOBAL WARRANT MAY BE
         TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF
         [VIKING MERGER SUB, INC.] [MERRILL CORPORATION] (THE "COMPANY")."

                  (iii) UNIT LEGEND. Each Warrant issued prior to the Separation
         Date shall bear a legend in substantially the following form:

                           "THE WARRANTS EVIDENCED BY THIS CERTIFICATE ARE
         INITIALLY ISSUED AS PART OF AN ISSUANCE OF UNITS (THE "UNITS"), EACH OF
         WHICH CONSIST OF $1,000 PRINCIPAL AMOUNT AT MATURITY OF THE 12% SENIOR
         SUBORDINATED NOTES DUE 2009 (THE "NOTES") OF MERRILL CORPORATION AND
         ONE WARRANT (THE "WARRANTS") INITIALLY ENTITLING THE HOLDER THEREOF TO
         PURCHASE 1.22987 [COMMON SHARES, PAR VALUE $0.01 PER SHARE, OF VIKING
         MERGER SUB, INC.] [SHARES, PAR VALUE $0.01 PER SHARE, OF MERRILL
         CORPORATION CLASS B COMMON STOCK]

                           PRIOR TO THE EARLIEST TO OCCUR OF (I) 180 DAYS AFTER
         THE CLOSING OF THE OFFERING OF THE UNITS, (II) THE DATE ON WHICH A
         REGISTRATION STATEMENT WITH RESPECT TO A REGISTERED EXCHANGE OFFER FOR
         THE NOTES IS DECLARED EFFECTIVE UNDER THE UNITED STATES SECURITIES ACT
         OF 1933 (THE "SECURITIES ACT"), (III) THE DATE A SHELF REGISTRATION
         STATEMENT WITH RESPECT TO THE NOTES OR THE WARRANTS IS DECLARED
         EFFECTIVE UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED
         (THE "SECURITIES ACT"), (IV) SUCH DATE AS DONALDSON, LUFKIN &


                                       17


         JENRETTE SECURITIES CORPORATION IN ITS SOLE DISCRETION SHALL DETERMINE
         AND (V) THE DATE ON WHICH THE ISSUER OF the NOTES GIVES THE NOTICE
         REQUIRED BY THE INDENTURE GOVERNING THE NOTES UPON THE OCCURRENCE OF A
         CHANGE OF CONTROL (AS DEFINED IN THE INDENTURE GOVERNING THE NOTES),
         THE WARRANTS EVIDENCED BY THIS CERTIFICATE MAY NOT BE TRANSFERRED OR
         EXCHANGED SEPARATELY FROM, BUT MAY BE TRANSFERRED OR EXCHANGED ONLY
         TOGETHER WITH, THE NOTES."

                  (h)      CANCELLATION AND/OR ADJUSTMENT OF GLOBAL WARRANTS.

                  At such time as all beneficial interests in a particular
Global Warrant have been exercised or exchanged for Definitive Warrants or a
particular Global Warrant has been exercised, redeemed, repurchased or canceled
in whole and not in part, each such Global Warrant shall be returned to or
retained and canceled by the Warrant Agent in accordance with Section 3.8
hereof. At any time prior to such cancellation, if any beneficial interest in a
Global Warrant is exercised or exchanged for or transferred to a Person who will
take delivery thereof in the form of a beneficial interest in another Global
Warrant or for Definitive Warrants, the amount of Warrants represented by such
Global Warrant shall be reduced accordingly and an endorsement shall be made on
such Global Warrant by the Warrant Agent or by the Depositary at the direction
of the Warrant Agent to reflect such reduction; and if the beneficial interest
is being exchanged for or transferred to a Person who will take delivery thereof
in the form of a beneficial interest in another Global Warrant, such other
Global Warrant shall be increased accordingly and an endorsement shall be made
on such Global Warrant by the Warrant Agent or by the Depositary at the
direction of the Warrant Agent to reflect such increase.

                  (i) GENERAL PROVISIONS RELATING TO TRANSFERS AND EXCHANGES.

                  (i) To permit registrations of transfers and exchanges, the
         Company shall execute and the Warrant Agent shall countersign Global
         Warrants and Definitive Warrants upon the Company's order or at the
         Warrant Registrar's request.

                  (ii) No service charge shall be made to a holder of a
         beneficial interest in a Global Warrant or to a holder of a Definitive
         Warrant for any registration of transfer or exchange, but the Company
         may require payment of a sum sufficient to cover any transfer tax or
         similar governmental charge payable in connection therewith .

                  (iii) All Global Warrants and Definitive Warrants issued upon
         any registration of transfer or exchange of Global Warrants or
         Definitive Warrants shall be the duly authorized, executed and issued
         warrants for Common Stock of the Company, not subject to any preemptive
         rights, and entitled to the same benefits under this Warrant Agreement,
         as the Global Warrants or Definitive Warrants surrendered upon such
         registration of transfer or exchange.

                  (iv) Prior to due presentment for the registration of a
         transfer of any Warrant, the Warrant Agent, and the Company may deem
         and treat the Person in whose name any Warrant is registered as the
         absolute owner of such Warrant for all purposes and none of the Warrant
         Agent, or the Company shall be affected by notice to the contrary.

                  (v) The Warrant Agent shall countersign Global Warrants and
         Definitive Warrants in accordance with the provisions of Section 3.2
         hereof.


                                       18


                  (j)      FACSIMILE SUBMISSIONS TO WARRANT AGENT.

                  All certifications, certificates and Opinions of Counsel
required to be submitted to the Warrant Registrar pursuant to this Section 3.5
to effect a registration of transfer or exchange may be submitted by facsimile.

                  Notwithstanding anything herein to the contrary, as to any
certificates and/or certifications delivered to the Warrant Registrar pursuant
to this Section 3.5, the Warrant Registrar's duties shall be limited to
confirming that any such certifications and certificates delivered to it are in
the form of Exhibits B and C attached hereto. The Warrant Registrar shall not be
responsible for confirming the truth or accuracy of representations made in any
such certifications or certificates. As to any Opinions of Counsel delivered
pursuant to this Section 3.5, the Warrant Registrar may rely upon, and be fully
protected in relying upon, such opinions.

         3.6.     REPLACEMENT WARRANTS.

                  If any mutilated Warrant is surrendered to the Warrant Agent
or the Company and the Warrant Agent receives evidence to its satisfaction of
the destruction, loss or theft of any Warrant, the Company shall issue and the
Warrant Agent, upon receipt of a Warrant Countersignature Order, shall
countersign a replacement Warrant if the Warrant Agent's requirements are met.
If required by the Warrant Agent or the Company, an indemnity bond must be
supplied by the Holder that is sufficient in the judgment of the Warrant Agent
and the Company to protect the Company, the Warrant Agent, any Agent and any
agent for purposes of the countersignature from any loss that any of them may
suffer if a Warrant is replaced. The Company may charge for its expenses in
replacing a Warrant.

                  Every replacement Warrant is an additional warrant of the
Company and shall be entitled to all of the benefits of this Warrant Agreement
equally and proportionately with all other Warrants duly issued hereunder.

         3.7.     TEMPORARY WARRANTS.

                  Until certificates representing Warrants are ready for
delivery, the Company may prepare and the Warrant Agent, upon receipt of a
Warrant Countersignature Order, shall issue temporary Warrants. Temporary
Warrants shall be substantially in the form of certificated Warrants but may
have variations that the Company considers appropriate for temporary Warrants
and as shall be reasonably acceptable to the Warrant Agent. Without unreasonable
delay, the Company shall prepare and the Warrant Agent, as soon as practicable
upon receipt of the written order of the Company signed by an officer of the
Company, shall countersign definitive Warrants in exchange for temporary
Warrants.

                  Holders of temporary Warrants shall be entitled to all of the
benefits of this Warrant Agreement.

         3.8.     CANCELLATION.

                  Subject to Section 3.5(h) hereof, the Company at any time may
deliver Warrants to the Warrant Agent for cancellation. The Warrant Registrar
and Warrant Paying Agent shall forward to the Warrant Agent any Warrants
surrendered to them for registration of transfer, exchange or exercise. The
Warrant Agent and no one else shall cancel all Warrants surrendered for
registration of transfer,


                                       19


exchange, exercise, replacement or cancellation and shall destroy canceled
Warrants (subject to the record retention requirement of the Exchange Act).
Certification of the destruction of all canceled Warrants shall be delivered to
the Company. The Company may not issue new Warrants to replace Warrants that
have been exercised or that have been delivered to the Warrant Agent for
cancellation.

SECTION 4. SEPARATION OF WARRANTS; TERMS OF WARRANTS; EXERCISE OF
           WARRANTS.

                  (a) The Notes and Warrants will not be separately transferable
until the Separation Date. Subject to the terms of this Agreement, each Warrant
holder shall have the right, which may be exercised during the period commencing
at the opening of business on November 1, 2001 and until 5:00 p.m., New York
City time on May 1, 2009 (the "EXERCISE PERIOD"), to receive from the Company
the number of fully paid and nonassessable Warrant Shares which the holder may
at the time be entitled to receive on exercise of such Warrants and payment of
the exercise price (the "EXERCISE PRICE") (i) by tendering Notes having an
aggregate principal amount at maturity, plus accrued and unpaid interest, if any
thereon to the date of exercise or (ii) in cash, by wire transfer or by
certified or official check payable to the order of the Company, in each case,
equal to the Exercise Price then in effect for such Warrant Shares; PROVIDED
that holders shall be able to exercise their Warrants only if a registration
statement relating to the Warrant Shares is then in effect, or the exercise of
such Warrants is exempt from the registration requirements of the Securities Act
of 1933, as amended (the "SECURITIES ACT"), and such securities are qualified
for sale or exempt from qualification under the applicable securities laws of
the states in which the various holders of the Warrants or other persons to whom
it is proposed that the Warrant Shares be issued on exercise of the Warrants
reside. Each Warrant not exercised prior to 5:00 p.m., New York City time, on
May 1, 2009 (the "EXPIRATION DATE") shall become void and all rights thereunder
and all rights in respect thereof under this agreement shall cease as of such
time. No adjustments as to dividends will be made upon exercise of the Warrants.

                  (b) In order to exercise Warrants, the holder thereof must (i)
deliver to the Warrant Agent at its corporate trust office set forth in Section
15 hereof (x) in the case of Warrants represented by a Definitive Warrant, the
relevant the Warrant Certificate and the form of election to purchase on the
reverse thereof which is set forth in the form of Warrant Certificate attached
hereto as Exhibit A, duly filled in and signed, which signature shall be
medallion guaranteed by an institution which is a member of a Securities
Transfer Association recognized signature guarantee program, and (y) in the case
of Warrants represented by a Global Warrant, such customary documentation as the
Warrant Agent and the Company may require, and (ii) pay to the Warrant Agent for
the account of the Company the Exercise Price, as adjusted as herein provided,
for the number of Warrant Shares in respect of which such Warrants are then
exercised, which payment shall be made (x) in cash, by wire transfer or by
certified or official bank check payable to the order of the Company or (y) by
tendering Notes in the manner provided in Section 4(a) hereof.

                  (c) Subject to the provisions of Section 5 hereof, upon
compliance with clause (b) above, the Warrant Agent shall deliver or cause to be
delivered with all reasonable dispatch, to or upon the written order of the
holder and in such name or names as the Warrant holder may designate, a
certificate or certificates for the number of whole Warrant Shares issuable upon
the exercise of such Warrants or other securities or property to which such
holder is entitled hereunder, together with cash as provided in Section 9
hereof; provided that if any consolidation, merger or lease or sale of assets is
proposed to be effected by the Company as described in Section 8(m) hereof, or a
tender offer or an exchange offer for shares of Common Stock shall be made, upon
such surrender of Warrants and


                                       20


payment of the Exercise Price as aforesaid, the Warrant Agent shall, as soon as
possible, but in any event not later than two business days thereafter, deliver
or cause to be delivered the full number of Warrant Shares issuable upon the
exercise of such Warrants in the manner described in this sentence or other
securities or property to which such holder is entitled hereunder, together with
cash as provided in Section 9 hereof. Such certificate or certificates shall be
deemed to have been issued and any person so designated to be named therein
shall be deemed to have become a holder of record of such Warrant Shares as of
the date of the surrender of such Warrants and payment of the Exercise Price.

                  (d) The Warrants shall be exercisable, at the election of the
holders thereof, either in full or from time to time in part. If less than all
the Warrants represented by a Warrant Certificate are exercised, such Warrant
Certificate shall be surrendered and a new Warrant Certificate of the same tenor
and for the number of Warrants which were not exercised shall be executed by the
Company and delivered to the Warrant Agent and the Warrant Agent shall
countersign the new Warrant Certificate, registered in such name or names as may
be directed in writing by the holder, and shall deliver the new Warrant
Certificate to the Person or Persons entitled to receive the same.

                  (e) All Warrant Certificates surrendered upon exercise of
Warrants shall be cancelled by the Warrant Agent. Such cancelled Warrant
Certificates shall then be disposed of by the Warrant Agent in accordance with
its standard practices. The Warrant Agent shall account promptly to the Company
with respect to Warrants exercised and concurrently pay to the Company all
monies received by the Warrant Agent for the purchase of the Warrant Shares
through the exercise of such Warrants.

                  (f) The Warrant Agent shall keep copies of this Agreement and
any notices given or received hereunder available for inspection by the holders
during normal business hours at its office. The Company shall supply the Warrant
Agent from time to time with such numbers of copies of this Agreement as the
Warrant Agent may request.

SECTION 5.        PAYMENT OF TAXES.

                  The Company will pay all documentary stamp taxes attributable
to the initial issuance of Warrant Shares upon the exercise of Warrants;
provided that the Company shall not be required to pay any tax or taxes which
may be payable in respect of any transfer involved in the issue of any Warrant
Certificates or any certificates for Warrant Shares in a name other than that of
the registered holder of a Warrant Certificate surrendered upon the exercise of
a Warrant, and the Company shall not be required to issue or deliver such
Warrant Certificates unless or until the person or persons requesting the
issuance thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been paid.

SECTION 6.        RESERVATION OF WARRANT SHARES.

                  (a) The Company will at all times reserve and keep available,
free from preemptive rights, out of the aggregate of its authorized but unissued
Common Stock, for the purpose of enabling it to satisfy any obligation to issue
Warrant Shares upon exercise of Warrants, the maximum number of shares of Common
Stock which may then be deliverable upon the exercise of all outstanding
Warrants.

                  (b) The Company or, if appointed, the transfer agent for the
Common Stock (the "TRANSFER AGENT") and every subsequent transfer agent for any
shares of the Company's capital stock


                                       21


issuable upon the exercise of any of the rights of purchase aforesaid will be
irrevocably authorized and directed at all times to reserve such number of
authorized shares as shall be required for such purpose. The Company will keep a
copy of this Agreement on file with the Transfer Agent and with every subsequent
transfer agent for any shares of the Company's capital stock issuable upon the
exercise of the rights of purchase represented by the Warrants. The Warrant
Agent is hereby irrevocably authorized to requisition from time to time from
such Transfer Agent the stock certificates required to honor outstanding
Warrants upon exercise thereof in accordance with the terms of this Agreement.
The Company will supply such Transfer Agent with duly executed certificates for
such purposes and will provide or otherwise make available any cash which may be
payable as provided in Section 9 hereof. The Company will furnish such Transfer
Agent a copy of all notices of adjustments, and certificates related thereto,
transmitted to each holder pursuant to Section 11 hereof.

                  (c) Before taking any action which would cause an adjustment
pursuant to Section 8 hereof to reduce the Exercise Price below the then par
value (if any) of the Warrant Shares, the Company will take any corporate action
which may, in the opinion of its counsel (which may be counsel employed by the
Company), be necessary in order that the Company may validly and legally issue
fully paid and nonassessable Warrant Shares at the Exercise Price as so
adjusted.

                  (d) The Company covenants that all Warrant Shares which may be
issued upon exercise of Warrants will, upon issue, be fully paid, nonassessable,
free of preemptive rights and free from all taxes, liens, charges and security
interests with respect to the issuance thereof.

SECTION 7.        OBTAINING STOCK EXCHANGE LISTINGS.

                  The Company will from time to time take all action which may
be necessary so that the Warrant Shares, immediately upon their issuance upon
the exercise of Warrants, will be listed on the principal securities exchanges,
automated quotation systems or other markets within the United States of
America, if any, on which other shares of Common Stock are then listed, if any.

SECTION 8.        ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES
                  ISSUABLE.

                  The Exercise Price and the number of Warrant Shares issuable
upon the exercise of each Warrant are subject to adjustment from time to time
upon the occurrence of the events enumerated in this Section 8. For purposes of
this Section 8, "COMMON STOCK" means shares now or hereafter authorized of any
class of common stock of the Company and any other stock of the Company, however
designated, that has the right (subject to any prior rights of any class or
series of preferred stock) to participate in any distribution of the assets or
earnings of the Company without limit as to per share amount.

                  (a)      ADJUSTMENT FOR CHANGE IN CAPITAL STOCK.

                  If the Company (i) pays a dividend or makes a distribution on
its Common Stock in shares of its Common Stock, (ii) subdivides its outstanding
shares of Common Stock into a greater number of shares, (iii) combines its
outstanding shares of Common Stock into a smaller number of shares, (iv) makes a
distribution on its Common Stock in shares of its capital stock other than
Common Stock or (v) issues by reclassification of its Common Stock any shares of
its capital stock, then the Exercise Price in effect immediately prior to such
action shall be proportionately adjusted so that the holder of any Warrant
thereafter exercised may receive the aggregate number and kind of shares of


                                       22


capital stock of the Company which he would have owned immediately following
such action if such Warrant had been exercised immediately prior to such action.

                  The adjustment shall become effective immediately after the
record date in the case of a dividend or distribution and immediately after the
effective date in the case of a subdivision, combination or reclassification.
If, after an adjustment, a holder of a Warrant upon exercise of it may receive
shares of two or more classes of capital stock of the Company, the Company shall
determine, in good faith, the allocation of the adjusted Exercise Price between
the classes of capital stock. After such allocation, the exercise privilege and
the Exercise Price of each class of capital stock shall thereafter be subject to
adjustment on terms comparable to those applicable to Common Stock in this
Section 8. Such adjustment shall be made successively whenever any event listed
above shall occur.

                  (b)      ADJUSTMENT FOR RIGHTS ISSUE.
                  If the Company distributes any rights, options or warrants to
all holders of its Common Stock entitling them for a period expiring within 45
days after the record date mentioned below to purchase shares of Common Stock at
a price per share less than the Fair Value (as defined herein) per share on that
record date, the Exercise Price shall be adjusted in accordance with the
formula:


                                      O    +    N x P
                                              ---------
               E'   =    E     x                    M
                                   -------------------------
                                       O + N
where:

                  E'       =        the adjusted Exercise Price.

                  E        =        the current Exercise Price.

                  O        =        the number of shares of Common Stock
                                    outstanding on the record date.

                  N        =        the number of additional shares of Common
                                    Stock issued pursuant to such rights,
                                    options or warrants.

                  P        =        the aggregate price per share of the
                                    additional shares.

                  M        =        the Fair Value per share of Common Stock
                                    on the record date.

                  The adjustment shall be made successively whenever any such
rights, options or warrants are issued and shall become effective immediately
after the record date for the determination of stockholders entitled to receive
the rights, options or warrants. If at the end of the period during which such
rights, options or warrants are exercisable, not all rights, options or warrants
shall have been exercised, the Exercise Price shall be immediately readjusted to
what it would have been if "N" in the above formula had been the number of
shares actually issued.


                                       23


                  (c)      ADJUSTMENT FOR OTHER DISTRIBUTIONS.

                  If the Company distributes to all holders of its Common Stock
any of its assets or debt securities or any rights or warrants to purchase debt
securities of the Company, the Exercise Price shall be adjusted in accordance
with the formula:

                                                M    -    F
                     E'   =    E     x      ----------------
                                                    M
where:

                  E'       =        the adjusted Exercise Price.

                  E        =        the current Exercise Price.

                  M        =        the Fair Value per share of Common Stock
                                    on the record date mentioned below.

                  F        =        the fair market value on the record date
                                    of the assets, securities, rights or
                                    warrants to be distributed in respect of one
                                    share of Common Stock as determined in good
                                    faith by the Board of Directors of the
                                    Company (the "Board of Directors").

                  The adjustment shall be made successively whenever any such
distribution is made and shall become effective immediately after the record
date for the determination of stockholders entitled to receive the distribution.

                  This Section 8(c) does not apply to cash dividends or cash
distributions paid out of consolidated current or retained earnings as shown on
the books of the Company prepared in accordance with generally accepted
accounting principles. Also, this Section 8(c) does not apply to rights, options
or warrants referred to in Section 8(b) hereof.

                  (d)      ADJUSTMENT FOR COMMON STOCK ISSUE.

                  If the Company issues shares of Common Stock for a
consideration per share less than the Fair Value per share on the date the
Company fixes the offering price of such additional shares, the Exercise Price
shall be adjusted in accordance with the formula:

                                                    P
                                                  -----
                   E'   =    E     x      O    +    M
                                          -------------------
                                                A
where:

                  E'       =        the adjusted Exercise Price.

                  E        =        the then current Exercise Price.


                                       24


                  O        =        the number of shares outstanding
                                    immediately prior to the issuance of such
                                    additional shares.

                  P        =        the aggregate consideration received for
                                    the issuance of such additional shares.

                  M        =        the Fair Value per share on the date of
                                    issuance of such additional shares.

                  A        =        the number of shares outstanding
                                    immediately after the issuance of such
                                    additional shares.

                  The adjustment shall be made successively whenever any such
issuance is made, and shall become effective immediately after such issuance.

                  This subsection (d) does not apply to:

                           (1) any of the transactions described in subsections
         (a), (b) and (c) of this Section 8,

                           (2) the exercise of Warrants, or the conversion or
         exchange of other securities convertible or exchangeable for Common
         Stock the issuance of which caused an adjustment to be made under
         Section 8(e),

                           (3) Common Stock issued to the Company's employees,
         independent contractors or directors (or employees, independent
         contractors or directors of its subsidiaries) under bona fide employee
         benefit plans adopted by the Board of Directors and approved by the
         holders of Common Stock when required by law, if such Common Stock
         would otherwise be covered by this subsection (d) (but only to the
         extent that the aggregate number of shares excluded hereby and issued
         after the date of this Warrant Agreement shall not exceed 5% of the
         Common Stock outstanding at the time of the adoption of each such plan,
         exclusive of anti-dilution adjustments thereunder),

                           (4) Common Stock issued to shareholders of any person
         which merges into the Company, or with a subsidiary of the Company, in
         proportion to their stock holdings of such person immediately prior to
         such merger, upon such merger, provided that if such person is an
         Affiliate of the Company, the Board of Directors shall have obtained a
         fairness opinion from a nationally recognized investment banking,
         appraisal or valuation firm, which is not an Affiliate of the Company,
         stating that the consideration received in such merger is fair to the
         Company from a financial point of view,

                           (5) the issuance of shares of Common Stock pursuant
         to rights, options or warrants which were originally issued in a
         Non-Affiliate Sale (as defined below) together with one or more other
         securities as part of a unit at a price per unit.

                           (6) Common Stock issued to employees, independent
         contractors or directors of the Company and any of its Restricted
         Subsidiaries (as defined in the Indenture) within six months of the
         Closing Date.


                                       25


                  (e)      ADJUSTMENT FOR CONVERTIBLE SECURITIES ISSUE.

                  If the Company issues any securities convertible into or
exchangeable for Common Stock (other than securities issued in transactions
described in subsections (a), (b) and (c) of this Section 8) for a consideration
per share of Common Stock initially deliverable upon conversion or exchange of
such securities less than the Fair Value per share on the date of issuance of
such securities, the Exercise Price shall be adjusted in accordance with this
formula:

                                                      P
                                                     -----
                                              O    +    M
                    E'   =    E     x      ----------------
                                              O    +     D
where:

                  E'       =        the adjusted Exercise Price.

                  E        =        the then current Exercise Price.

                  O        =        the number of shares outstanding
                                    immediately prior to the issuance of such
                                    securities.

                  P        =        the aggregate consideration received for the
                                    issuance of such securities.

                  M        =        the Fair Value per share on the date of
                                    issuance of such securities.

                  D        =        the maximum number of shares deliverable
                                    upon conversion or in exchange for such
                                    securities at the initial conversion or
                                    exchange rate.

                  The adjustment shall be made successively whenever any such
                  issuance is made, and shall become effective immediately after
                  such issuance.

                  If all of the Common Stock deliverable upon conversion or
exchange of such securities have not been issued when such securities are no
longer outstanding, then the Exercise Price shall promptly be readjusted to the
Exercise Price which would then be in effect had the adjustment upon the
issuance of such securities been made on the basis of the actual number of
shares of Common Stock issued upon conversion or exchange of such securities.

                  This subsection (e) does not apply to:

                           (1) convertible securities issued to shareholders of
any person which merges into the Company, or with a subsidiary of the Company,
in proportion to their stock holdings of such person immediately prior to such
merger, upon such merger, provided that if such person is an Affiliate of the
Company, the Board of Directors shall have obtained a fairness opinion from a
nationally recognized investment banking, appraisal or valuation firm, which is
not an Affiliate of the Company, stating that the consideration received in such
merger is fair to the Company from a financial point of view or


                                       26


                           (2) options to purchase Common Stock issued to
employees, independent contractors or directors of the Company and any of its
Restricted Subsidiaries (as defined in the Indenture) within six months of the
Closing Date.

                  (f)      CONSIDERATION RECEIVED.

                  For purposes of any computation respecting consideration
received pursuant to subsections (d), and (e) of this Section 8, the following
shall apply:

                           (1) in the case of the issuance of shares of Common
         Stock for cash, the consideration shall be the amount of such cash,
         provided that in no case shall any deduction be made for any
         commissions, discounts or other expenses incurred by the Company for
         any underwriting of the issue or otherwise in connection therewith;

                           (2) in the case of the issuance of shares of Common
         Stock for a consideration in whole or in part other than cash, the
         consideration other than cash shall be deemed to be the fair market
         value thereof as determined in good faith by the Board of Directors
         (irrespective of the accounting treatment thereof), whose determination
         shall be conclusive, and described in a Board resolution which shall be
         filed with the Warrant Agent;

                           (3) in the case of the issuance of securities
         convertible into or exchangeable for shares, the aggregate
         consideration received therefor shall be deemed to be the consideration
         received by the Company for the issuance of such securities plus the
         additional minimum consideration, if any, to be received by the Company
         upon the conversion or exchange thereof (the consideration in each case
         to be determined in the same manner as provided in clauses (1) and (2)
         of this subsection); and

                           (4) in the case of the issuance of shares of Common
         Stock pursuant to rights, options or warrants which rights, options or
         warrants were originally issued together with one or more other
         securities as part of a unit at a price per unit, the consideration
         shall be deemed to be the fair value of such rights, options or
         warrants at the time of issuance thereof as determined in good faith by
         the Board of Directors whose determination shall be conclusive and
         described in a Board resolution which shall be filed with the Warrant
         Agent plus the additional minimum consideration, if any, to be received
         by the Company upon the exercise, conversion or exchange thereof (as
         determined in the same manner as provided in clauses (1) and (2) of
         this subsection).

                  (g)      FAIR VALUE.

                  In Sections 8(d) and (e) hereof, the "Fair Value" per security
at any date of determination shall be (1) in connection with a sale by the
Company to a party that is not an Affiliate of the Company in an arm's-length
transaction (a "NON-AFFILIATE SALE"), the price per security at which such
security is sold and (2) in connection with any sale by the Company to an
Affiliate of the Company, (a) the last price per security at which such security
was sold in a Non-Affiliate Sale within the three-month period preceding such
date of determination (it being understood that the sale of Common Stock of the
Company to DLJ Merchant Banking Partners II, L.P. and its Affiliates on November
23, 1999 was a sale to a party not then an Affiliate of the Company and
therefore a Non-Affiliate Sale) or (b) if clause (a) is not applicable, the fair
market value of such security determined in good faith by (i) a


                                       27


majority of the Board of Directors, including a majority of the Disinterested
Directors, and approved in a Board resolution delivered to the Warrant Agent or
(ii) a nationally recognized investment banking, appraisal or valuation firm,
which is not an Affiliate of the Company, in each case, taking into account,
among all other factors deemed relevant by the Board of Directors or such
investment banking, appraisal or valuation firm, the trading price and volume of
such security on any national securities exchange or automated quotation system
on which such security is traded. Notwithstanding the foregoing, any sale to
Donaldson, Lufkin & Jenrette Securities Corporation (or any successor thereto)
pursuant to an underwritten public offering registered under the Securities Act
shall be deemed to be and treated as a Non-Affiliate Sale.

                  In Sections 8(b) and (c) hereof, the "Fair Value" per security
at any date of determination shall be (a) the last price per security at which
such security was sold by the Company in a Non-Affiliate Sale within the
three-month period preceding such date of determination or (b) if clause (a) is
not applicable, the fair market value of such security determined in good faith
by (i) a majority of the Board of Directors, including a majority of the
Disinterested Directors, and approved in a Board resolution delivered to the
Warrant Agent or (ii) a nationally recognized investment banking, appraisal or
valuation firm, which is not an Affiliate of the Company, in each case, taking
into account, among all other factors deemed relevant by the Board of Directors
or such investment banking, appraisal or valuation firm, the trading price and
volume of such security on any national securities exchange or automated
quotation system on which such security is traded.

                  For purposes of this Section 8(g), "Disinterested Director"
means, in connection with any issuance of securities that gives rise to a
determination of the Fair Value thereof, each member of the Board of Directors
who is not an officer, employee, director or other Affiliate of the party to
whom the Company is proposing to issue the securities giving rise to such
determination.

                  For purposes of this Section 8(g), "Affiliate" of any
specified Person means (A) any other Person directly or indirectly controlling
or controlled by or under direct or indirect common control with such specified
Person and (B) any director, officer or employee of such specified person. For
purposes of this definition "CONTROL" (including, with correlative meanings, the
terms "CONTROLLING," "CONTROLLED BY" and "UNDER COMMON CONTROL WITH") as used
with respect to any Person, shall mean the possession, directly or indirectly,
of the power to direct or cause the direction of the management or policies of
such Person, whether through the ownership of voting securities, by agreement or
otherwise.

                  (h)      WHEN DE MINIMIS ADJUSTMENT MAY BE DEFERRED.

                  No adjustment in the Exercise Price need be made unless the
adjustment would require an increase or decrease of at least 1% in the Exercise
Price. Any adjustments that are not made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Section 8
shall be made to the nearest cent or to the nearest 1/10,000th of a share, as
the case may be, it being understood that no such rounding shall be made under
subsection (p).

                  (i)      WHEN NO ADJUSTMENT REQUIRED.

                  No adjustment need be made for a transaction referred to
Section 8(a), (b), (c), (d), (e) or (f) hereof, if Warrant holders are to
participate (without being required to exercise their Warrants) in the
transaction on a basis and with notice that the Board of Directors determines to
be fair and appropriate in light of the basis and notice on which holders of
Common Stock participate in the transaction. No


                                       28


adjustment need be made for (i) rights to purchase Common Stock pursuant to a
Company plan for reinvestment of dividends or interest, (ii) a change in the par
value or no par value of the Common Stock or (iii) the issuance by the Company
of warrants in connection with the Company's 14.5% Senior Preferred Stock due
2011 on or about November 23, 1999 or upon the exercise of such warrants. To the
extent the Warrants become convertible into cash, no adjustment need be made
thereafter as to the cash. Interest will not accrue on the cash.

                  (j)      NOTICE OF ADJUSTMENT.

                  Whenever the Exercise Price is adjusted, the Company shall
provide the notices required by Section 10 hereof.

                  (k)      NOTICE OF CERTAIN TRANSACTIONS.

                  If (i) the Company takes any action that would require an
adjustment in the Exercise Price pursuant to Section 8(a), (b), (c), (d), (e) or
(f) hereof and if the Company does not arrange for Warrant holders to
participate pursuant to Section 8(i) hereof, (ii) the Company takes any action
that would require a supplemental Warrant Agreement pursuant to Section 8(l)
hereof or (iii) there is a liquidation or dissolution of the Company, then the
Company shall mail to Warrant holders a notice stating the proposed record date
for a dividend or distribution or the proposed effective date of a subdivision,
combination, reclassification, consolidation, merger, transfer, lease,
liquidation or dissolution. The Company shall mail the notice at least 15 days
before such date. Failure to mail the notice or any defect in it shall not
affect the validity of the transaction.

                  (l)      REORGANIZATION OF COMPANY.

                  Immediately after the date hereof, if the Company consolidates
or merges with or into, or transfers or leases all or substantially all its
assets to, any person, upon consummation of such transaction the Warrants shall
automatically become exercisable for the kind and amount of securities, cash or
other assets which the holder of a Warrant would have owned immediately after
the consolidation, merger, transfer or lease if the holder had exercised the
Warrant immediately before the effective date of the transaction. Concurrently
with the consummation of such transaction, the corporation formed by or
surviving any such consolidation or merger if other than the Company, or the
person to which such sale or conveyance shall have been made, shall enter into
(i) a supplemental Warrant Agreement so providing and further providing for
adjustments which shall be as nearly equivalent as may be practical to the
adjustments provided for in this Section 8(l) and (ii) a supplement to the
Warrant Registration Rights Agreement providing for the assumption of the
Company's obligations thereunder. The successor Company shall mail to Warrant
holders a notice describing the supplemental Warrant Agreement and Warrant
Registration Rights Agreement. If the issuer of securities deliverable upon
exercise of Warrants under the supplemental Warrant Agreement is an affiliate of
the formed, surviving, transferee or lessee corporation, that issuer shall join
in the supplemental Warrant Agreement and Warrant Registration Rights Agreement.
If this Section 8(l) applies, Sections 8(a), (b), (c), (d), (e) and (f) hereof
do not apply.

                  (m)      COMPANY DETERMINATION FINAL.

                  Any determination that the Company or the Board of Directors
must make pursuant to Section 8(a), (c), (d), (e), (f), (g), (h) or (i) hereof
is conclusive.


                                       29


                  (n)      WARRANT AGENT'S DISCLAIMER.

                  The Warrant Agent has no duty to determine when an adjustment
under this Section 8 should be made, how it should be made or what it should be.
The Warrant Agent has no duty to determine whether any provisions of a
supplemental Warrant Agreement under Section 8(l) hereof are correct. The
Warrant Agent makes no representation as to the validity or value of any
securities or assets issued upon exercise of Warrants. The Warrant Agent shall
not be responsible for the Company's failure to comply with this Section 8.

                  (o)      WHEN ISSUANCE OR PAYMENT MAY BE DEFERRED.

                  In any case in which this Section 8 shall require that an
adjustment in the Exercise Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event (i) issuing to the holder of any Warrant exercised after such record date
the Warrant Shares and other capital stock of the Company, if any, issuable upon
such exercise over and above the Warrant Shares and other capital stock of the
Company, if any, issuable upon such exercise on the basis of the Exercise Price
and (ii) paying to such holder any amount in cash in lieu of a fractional share
pursuant to Section 10 hereof; provided that the Company shall deliver to such
holder a due bill or other appropriate instrument evidencing such holder's right
to receive such additional Warrant Shares, other capital stock and cash upon the
occurrence of the event requiring such adjustment.

                  (p)      ADJUSTMENT IN NUMBER OF SHARES.

                  Upon each adjustment of the Exercise Price pursuant to this
Section 8, each Warrant outstanding prior to the making of the adjustment in the
Exercise Price shall thereafter evidence the right to receive upon payment of
the adjusted Exercise Price that number of shares of Common Stock (calculated to
the nearest hundredth) obtained from the following formula:

                           N'   =    N     x     E
                                               ---
                                                E'
where:

                  N'       =        the adjusted number of Warrant Shares
                                    issuable upon exercise of a Warrant by
                                    payment of the adjusted Exercise Price.

                  N        =        the number or Warrant Shares previously
                                    issuable upon exercise of a Warrant by
                                    payment of the Exercise Price prior to
                                    adjustment.

                  E'       =        the adjusted Exercise Price.

                  E        =        the Exercise Price prior to adjustment.

                  (q)      FORM OF WARRANTS.

                  Irrespective of any adjustments in the Exercise Price or the
number or kind of shares purchasable upon the exercise of the Warrants, Warrants
theretofore or thereafter issued may continue to


                                       30


express the same price and number and kind of shares as are stated in the
Warrants initially issuable pursuant to this Agreement.

SECTION 9.        FRACTIONAL INTERESTS.

                  The Company shall not be required to issue fractional Warrant
Shares on the exercise of Warrants. If more than one Warrant shall be presented
for exercise in full at the same time by the same holder, the number of full
Warrant Shares which shall be issuable upon the exercise thereof shall be
computed on the basis of the aggregate number of Warrant Shares purchasable on
exercise of the Warrants so presented. If any fraction of a Warrant Share would,
except for the provisions of this Section 9, be issuable on the exercise of any
Warrants (or specified portion thereof), the Company shall pay an amount in cash
equal to the Fair Value per Warrant Share, as determined on the day immediately
preceding the date the Warrant is presented for exercise, multiplied by such
fraction, computed to the nearest whole U.S. cent.

SECTION 10.       NOTICES TO WARRANT HOLDERS.

                  (a) Upon any adjustment of the Exercise Price pursuant to
Section 8 hereof, the Company shall promptly thereafter (i) cause to be filed
with the Warrant Agent a certificate of a firm of independent public accountants
of recognized standing selected by the Board of Directors of the Company (who
may be the regular auditors of the Company) setting forth the Exercise Price
after such adjustment and setting forth in reasonable detail the method of
calculation and the facts upon which such calculations are based and setting
forth the number of Warrant Shares (or portion thereof) issuable after such
adjustment in the Exercise Price, upon exercise of a Warrant and payment of the
adjusted Exercise Price, which certificate shall be conclusive evidence of the
correctness of the matters set forth therein, and (ii) cause to be given to each
of the registered holders of Warrants at the address appearing on the Warrant
register for each such registered holder written notice of such adjustments by
first-class mail, postage prepaid. Where appropriate, such notice may be given
in advance and included as a part of the notice required to be mailed under the
other provisions of this Section 10.

                  (b)      In case:

                  (i) the Company shall authorize the issuance to all holders of
         shares of Common Stock of rights, options or warrants to subscribe for
         or purchase shares of Common Stock or of any other subscription rights
         or warrants;

                  (ii) the Company shall authorize the distribution to all
         holders of shares of Common Stock of evidences of its indebtedness or
         assets (other than dividends or cash distributions paid out of
         consolidated current or retained earnings as shown on the books of the
         Company prepared in accordance with generally accepted accounting
         principles or dividends payable in shares of Common Stock or
         distributions referred to in Section 10(a) hereof);

                  (iii) of any consolidation or merger to which the Company is a
         party and for which approval of any stockholders of the Company is
         required, or of the conveyance or transfer of the properties and assets
         of the Company substantially as an entirety, or of any reclassification
         or change of Common Stock issuable upon exercise of the Warrants (other
         than a change in par value, or from par value to no par value, or from
         no par value to par value, or as a result of a subdivision or
         combination), or a tender offer or exchange offer for shares of Common
         Stock;


                                       31


                  (iv) of the voluntary or involuntary dissolution, liquidation
         or winding up of the Company; or

                  (v) the Company proposes to take any action (other than
         actions of the character described in Section 8(a) hereof) which would
         require an adjustment of the Exercise Price pursuant to Section 8
         hereof;

then the Company shall cause to be filed with the Warrant Agent and shall cause
to be given to each of the registered holders of Warrants at his address
appearing on the Warrant register, at least 20 days (or 10 days in any case
specified in clauses (i) or (ii) above) prior to the applicable record date
hereinafter specified, or promptly in the case of events for which there is no
record date, by first-class mail, postage prepaid, a written notice stating (x)
the date as of which the holders of record of shares of Common Stock to be
entitled to receive any such rights, options, warrants or distribution are to be
determined, (y) the initial expiration date set forth in any tender offer or
exchange offer for shares of Common Stock, or (z) the date on which any such
consolidation, merger, conveyance, transfer, dissolution, liquidation or winding
up is expected to become effective or consummated, and the date as of which it
is expected that holders of record of shares of Common Stock shall be entitled
to exchange such shares for securities or other property, if any, deliverable
upon such reclassification, consolidation, merger, conveyance, transfer,
dissolution, liquidation or winding up. The failure to give the notice required
by this Section 11 or any defect therein shall not affect the legality or
validity of any distribution, right, option, warrant, consolidation, merger,
conveyance, transfer, dissolution, liquidation or winding up, or the vote upon
any action.

                  (c) Nothing contained in this Agreement or in any of the
Warrant Certificates shall be construed as conferring upon the holders of
Warrants the right to vote or to consent or to receive notice as stockholders in
respect of the meetings of stockholders or the election of directors of the
Company or any other matter, or any rights whatsoever as stockholders of the
Company.

SECTION 11.       MERGER, CONSOLIDATION OR CHANGE OF NAME OF WARRANT AGENT.

                  (a) Any corporation into which the Warrant Agent may be merged
or with which it may be consolidated, or any corporation resulting from any
merger or consolidation to which the Warrant Agent shall be a party, or any
corporation succeeding to the business of the Warrant Agent, shall be the
successor to the Warrant Agent hereunder without the execution or filing of any
paper or any further act on the part of any of the parties hereto, provided that
such corporation would be eligible for appointment as a successor warrant agent
under the provisions of Section 13 hereof. In case at the time such successor to
the Warrant Agent shall succeed to the agency created by this Agreement, and in
case at that time any of the Warrant Certificates shall have been countersigned
but not delivered, any such successor to the Warrant Agent may adopt the
countersignature of the original Warrant Agent; and in case at that time any of
the Warrant Certificates shall not have been countersigned, any successor to the
Warrant Agent may countersign such Warrant Certificates either in the name of
the predecessor Warrant Agent or in the name of the successor to the Warrant
Agent; and in all such cases such Warrant Certificates shall have the full force
and effect provided in the Warrant Certificates and in this Agreement.

                  (b) In case at any time the name of the Warrant Agent shall be
changed and at such time any of the Warrant Certificates shall have been
countersigned but not delivered, the Warrant Agent


                                       32


whose name has been changed may adopt the countersignature under its prior name,
and in case at that time any of the Warrant Certificates shall not have been
countersigned, the Warrant Agent may countersign such Warrant Certificates
either in its prior name or in its changed name, and in all such cases such
Warrant Certificates shall have the full force and effect provided in the
Warrant Certificates and in this Agreement.

SECTION 12.       WARRANT AGENT.

                  The Warrant Agent undertakes the duties and obligations
imposed by this Agreement upon the following terms and conditions, by all of
which the Company and the holders of Warrants, by their acceptance thereof,
shall be bound:

                  (a) The statements contained herein and in the Warrant
Certificates shall be taken as statements of the Company and the Warrant Agent
assumes no responsibility for the correctness of any of the same except such as
describe the Warrant Agent or action taken or to be taken by it. The Warrant
Agent assumes no responsibility with respect to the distribution of the Warrant
Certificates except as herein otherwise provided.

                  (b) The Warrant Agent shall not be responsible for any failure
of the Company to comply with any of the covenants contained in this Agreement
or in the Warrant Certificates to be complied with by the Company.

                  (c) The Warrant Agent may consult at any time with counsel
satisfactory to it (who may be counsel for the Company) and the Warrant Agent
shall incur no liability or responsibility to the Company or to any holder of
any Warrant Certificate in respect of any action taken, suffered or omitted by
it hereunder in good faith and in accordance with the opinion or the advice of
such counsel.

                  (d) The Warrant Agent shall incur no liability or
responsibility to the Company or to any holder of any Warrant Certificate for
any action taken in reliance on any Warrant Certificate, certificate of shares,
notice, resolution, waiver, consent, order, certificate, or other paper,
document or instrument believed by it to be genuine and to have been signed,
sent or presented by the proper party or parties. The Warrant Agent need not
investigate any fact or matter stated in such document.

                  (e) The Company agrees to pay to the Warrant Agent reasonable
compensation for all services rendered by the Warrant Agent in the execution of
this Agreement, to reimburse the Warrant Agent for all expenses, taxes and
governmental charges and other charges of any kind and nature incurred by the
Warrant Agent in the execution of this Agreement. The Company shall indemnify
the Warrant Agent and its agents, employees, officers, directors and
shareholders for, and hold same harmless against, any and all losses,
liabilities or expenses (including without limitation reasonable attorney's fees
and expenses) incurred by it arising out of or in connection with the acceptance
or administration of its duties under this Warrant Agreement, including the
costs and expenses of enforcing this Warrant Agreement against the Company and
defending itself against any claim (whether asserted by the Company or any
Holder or any other person) or liability in connection with the exercise or
performance of any of its powers or duties hereunder, except to the extent any
such loss, liability or expense may be attributable to its negligence or bad
faith. The Warrant Agent shall notify the Company promptly of any claim for
which it may seek indemnity. Failure by the Warrant Agent to so notify the
Company shall not relieve the Company of its obligations hereunder. At the
Warrant Agent's sole discretion, the Company shall defend the claim and the
Warrant Agent shall cooperate in the defense at


                                       33


the Company's expense. The Warrant Agent may have separate counsel and the
Company shall pay the reasonable fees and expenses of such counsel. The Company
need not pay for any settlement made without its consent, which consent shall
not be unreasonably withheld.

                  (f) The Warrant Agent shall be under no obligation to
institute any action, suit or legal proceeding or to take any other action
likely to involve expense unless the Company or one or more registered holders
of Warrants shall furnish the Warrant Agent with reasonable security and
indemnity for any costs and expenses which may be incurred, but this provision
shall not affect the power of the Warrant Agent to take such action as it may
consider proper, whether with or without any such security or indemnity. All
rights of action under this Agreement or under any of the Warrants may be
enforced by the Warrant Agent without the possession of any of the Warrant
Certificates or the production thereof at any trial or other proceeding relative
thereto, and any such action, suit or proceeding instituted by the Warrant Agent
shall be brought in its name as Warrant Agent and any recovery of judgment shall
be for the ratable benefit of the registered holders of the Warrants, as their
respective rights or interests may appear.

                  (g) The Warrant Agent, and any stockholder, director, officer
or employee of it, may buy, sell or deal in any of the Warrants or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Warrant Agent
under this Agreement. Nothing herein shall preclude the Warrant Agent from
acting in any other capacity for the Company or for any other legal entity.

                  (h) The Warrant Agent shall act hereunder solely as agent for
the Company, and its duties shall be determined solely by the provisions hereof.
The Warrant Agent shall not be liable for anything which it may do or refrain
from doing in connection with this Agreement except for its own negligence or
bad faith.

                  (i) The Warrant Agent shall not at any time be under any duty
or responsibility to any holder of any Warrant Certificate to make or cause to
be made any adjustment of the Exercise Price or number of the Warrant Shares or
other securities or property deliverable as provided in this Agreement, or to
determine whether any facts exist which may require any of such adjustments, or
with respect to the nature or extent of any such adjustments, when made, or with
respect to the method employed in making the same. The Warrant Agent shall not
be accountable with respect to the validity or value or the kind or amount of
any Warrant Shares or of any securities or property which may at any time be
issued or delivered upon the exercise of any Warrant or with respect to whether
any such Warrant Shares or other securities will when issued be validly issued
and fully paid and nonassessable, and makes no representation with respect
thereto.

SECTION 13.       CHANGE OF WARRANT AGENT.

                  If the Warrant Agent shall become incapable of acting as
Warrant Agent, the Company shall appoint a successor to such Warrant Agent. If
the Company shall fail to make such appointment within a period of 30 days after
it has been notified in writing of such incapacity by the Warrant Agent or by
the registered holder of a Warrant Certificate, then the registered holder of
any Warrant may apply to any court of competent jurisdiction for the appointment
of a successor to the Warrant Agent. Pending appointment of a successor to such
Warrant Agent, either by the Company or by such a court, the duties of the
Warrant Agent shall be carried out by the Company. The holders of a majority of
the unexercised


                                       34


Warrants shall be entitled at any time to remove the Warrant Agent and appoint a
successor to such Warrant Agent. Such successor to the Warrant Agent need not be
approved by the Company or the former Warrant Agent. After appointment the
successor to the Warrant Agent shall be vested with the same powers, rights,
duties and responsibilities as if it had been originally named as Warrant Agent
without further act or deed; provided that the former Warrant Agent shall
deliver and transfer to the successor to the Warrant Agent any property at the
time held by it hereunder and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Failure to give any notice
provided for in this Section 13, however, or any defect therein, shall not
affect the legality or validity of the appointment of a successor to the Warrant
Agent.

SECTION 14.       REPORTS.

                  (a) Whether or not required by the rules and regulations of
the Commission, so long as any Warrants or the Warrant Shares are outstanding,
the Company shall furnish to the Warrant Agent and the holders of Warrants or
Warrant Shares (i) all quarterly and annual financial information that would be
required to be contained in a filing with the Commission on Forms 10-Q and 10-K
if the Company were required to file such Forms, including a "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and,
with respect to the annual information only, a report thereon by the Company's
certified independent accountants and (ii) all current reports that would be
required to be filed with the Commission on Form 8-K if the Company were
required to file such reports. In addition, whether or not required by the rules
and regulations of the Commission, the Company shall file a copy of all such
information and reports with the Commission for public availability (unless the
Commission shall not accept such a filing) and make such information available
to securities analysts and prospective investors upon request.

                  (b) The Company shall provide the Warrant Agent with a
sufficient number of copies of all such reports that the Warrant Agent may be
required to deliver to the holders of the Warrants and the Warrant Shares under
this Section 14.

SECTION 15.       NOTICES TO COMPANY AND WARRANT AGENT.

                  Any notice or demand authorized by this Agreement to be given
or made by the Warrant Agent or by the registered holder of any Warrant to or on
the Company shall be sufficiently given or made when received if deposited in
the mail, first class or registered, postage prepaid, addressed (until another
address is filed in writing by the Company with the Warrant Agent) as follows:

                                    Viking Merger Sub, Inc.
                                    c/o DLJ Merchant Banking Partners II, L.P.
                                    277 Park Avenue
                                    New York, New York 10172
                                    Telecopier No.: (212) 892-7272
                                    Attention:  William Dawson, Jr.


                                       35


                           and
                                    Merrill Corporation
                                    One Merrill Circle
                                    St. Paul, Minnesota 55108
                                    Telecopier No.: (651) 632-4141
                                    Attention:  General Counsel

                           With a copy to:

                                    Davis Polk & Wardwell
                                    450 Lexington Avenue
                                    New York, New York 10017
                                    Telecopier No.: (212) 450-4800
                                    Attention: Richard Truesdell, Jr., Esq.

                           and
                                    Oppenheimer Wolff & Donnelly, LLP
                                    45 South Seventh Street
                                    Plaza VII, Suite 3400
                                    Minneapolis, Minnesota  55402
                                    Telecopier No.:  (612) 607-7100
                                    Attention:  Bruce A. Machmeier, Esq.

                  In case the Company shall fail to maintain such office or
agency or shall fail to give such notice of the location or of any change in the
location thereof, presentations may be made and notices and demands may be
served at the principal office of the Warrant Agent.

                  Any notice pursuant to this Agreement to be given by the
Company or by the registered holder(s) of any Warrant to the Warrant Agent shall
be sufficiently given when and if deposited in the mail, first-class or
registered, postage prepaid, addressed (until another address is filed in
writing by the Warrant Agent with the Company) to the Warrant Agent as follows:

                           Norwest Bank Minnesota, N.A.
                           Norwest Center
                           Mac #N903-120
                           Sixth and Marquette
                           Minneapolis, MN 55479
                           Telecopier No.: (612) 667-9825
                           Attention:  James R. Bryant


SECTION 16.       SUPPLEMENTS AND AMENDMENTS.

                  The Company and the Warrant Agent may from time to time
supplement or amend this Agreement without the approval of any holders of
Warrants in order to cure any ambiguity or to correct or supplement any
provision contained herein which may be defective or inconsistent with any other
provision herein, or to make any other provisions in regard to matters or
questions arising hereunder which the Company and the Warrant Agent may deem
necessary or desirable and which shall not in any


                                       36


way adversely affect the interests of the holders of Warrants. Any amendment or
supplement to this Agreement that has an adverse effect on the interests of the
holders of Warrants shall require the written consent of the holders of a
majority of the then outstanding Warrants (excluding Warrants held by the
Company or any of its affiliates). The consent of each holder of Warrants
affected shall be required for any amendment pursuant to which the Exercise
Price would be increased or the number of Warrant Shares purchasable upon
exercise of Warrants would be decreased (other than pursuant to adjustments
provided in this Agreement).

SECTION 17.       SUCCESSORS.

                  All the covenants and provisions of this Agreement by or for
the benefit of the Company or the Warrant Agent shall bind and inure to the
benefit of their respective successors and assigns hereunder.

SECTION 18.       TERMINATION.

                  This Agreement shall terminate at 5:00 p.m., New York City
time on May 1, 2009. Notwithstanding the foregoing, this Agreement will
terminate on any earlier date if all Warrants have been exercised. The
provisions of Section 12 shall survive such termination.

SECTION 19.       GOVERNING LAW.

                  This Agreement and each Warrant Certificate issued hereunder
shall be deemed to be a contract made under the laws of the State of New York
and for all purposes shall be construed in accordance with the internal laws of
said State.

SECTION 20.       BENEFITS OF THIS AGREEMENT.

                  Nothing in this Agreement shall be construed to give to any
person or corporation other than the Company, the Warrant Agent and the
registered holders of Warrants any legal or equitable right, remedy or claim
under this Agreement; but this Agreement shall be for the sole and exclusive
benefit of the Company, the Warrant Agent and the registered holders of
Warrants.

SECTION 21.        COUNTERPARTS.

                  This Agreement may be executed in any number of counterparts
and each of such counterparts shall for all purposes be deemed to be an
original, and all such counterparts shall together constitute but one and the
same instrument.

                            [Signature Page Follows]


                                       37


                  IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, as of the day and year first above written.

                                 VIKING MERGER SUB, INC.


                                 By:  /s/ Keith Palumbo
                                    --------------------------------------------
                                    Name:  Keith Palumbo
                                    Title:  Vice President


                                 NORWEST BANK MINNESOTA, N.A. as Warrant Agent


                                 By:    /S/ Timothy P. Mowdy
                                    --------------------------------------------
                                    Name:  Timothy P. Mowdy
                                    Title:  Corporate Trust Officer





                                    EXHIBIT A

                          [Form of Warrant Certificate]

                                     [Face]

[INSERT THE PRIVATE PLACEMENT LEGEND, IF APPLICABLE (SECTION 3.5(g)(i) OF THE
WARRANT AGREEMENT)]

[INSERT THE GLOBAL NOTE LEGEND, IF APPLICABLE (SECTION 3.5(g(ii) OF THE WARRANT
AGREEMENT)]

[INSERT THE UNIT LEGEND, IF APPLICABLE (SECTION 3.5(g)(iii) OF THE WARRANT
AGREEMENT)]

No. ___________                                                      ___Warrants
CUSIP No. ________

                               Warrant Certificate

                             VIKING MERGER SUB, INC.

                  This Warrant Certificate certifies that Cede & Co., or its
registered assigns, is the registered holder of Warrants expiring May 1, 2009
(the "Warrants") to purchase [Common Shares] [Class B Common Stock], par value
$.01 (the "Common Stock"), of [Viking Merger Sub, Inc.] [Merrill Corporation], a
Minnesota corporation. Each Warrant entitles the registered holder upon exercise
at any time from the opening of business on November 1, 2001 (the "Exercise
Date") until 5:00 p.m. New York City Time on May 1, 2009, to receive from the
Company 1.22987 fully paid and nonassessable [Common Shares] [shares of Common
Stock] (the "Warrant Shares") at the initial exercise price (the "Exercise
Price") of $22.00 per share payable upon surrender of this Warrant Certificate
and payment of the Exercise Price at the office or agency of the Warrant Agent,
but only subject to the conditions set forth herein and in the Warrant Agreement
referred to on the reverse hereof. The Exercise Price and number of Warrant
Shares issuable upon exercise of the Warrants are subject to adjustment upon the
occurrence of certain events set forth in the Warrant Agreement.

                  No Warrant may be exercised after 5:00 p.m., New York City
Time on May 1, 2009, and to the extent not exercised by such time such Warrants
shall become void.

                  Reference is hereby made to the further provisions of this
Warrant Certificate set forth on the reverse hereof and such further provisions
shall for all purposes have the same effect as though fully set forth at this
place.

                  This Warrant Certificate shall not be valid unless
countersigned by the Warrant Agent, as such term is used in the Warrant
Agreement.

                  This Warrant Certificate shall be governed by and construed in
accordance with the internal laws of the State of New York.


                                       1




                  IN WITNESS WHEREOF, the Company has caused this Warrant
Certificate to be signed below.





DATED: [                ], 1999

                                  [VIKING MERGER SUB, INC.]
                                  [MERRILL CORPORATION]





                                  By:
                                     -------------------------------------------
                                     Name:
                                     Title:


Countersigned:

NORWEST BANK MINNESOTA, N.A.
as Warrant Agent




By:_____________________________________
         Authorized Signature


                                       2




                        [Reverse of Warrant Certificate]

                  The Warrants evidenced by this Warrant Certificate are part of
a duly authorized issue of Warrants expiring at 5:00 p.m. New York City time on
May 1, 2009 entitling the holder on exercise to receive shares of Common Stock,
and are issued or to be issued pursuant to a Warrant Agreement dated as of
November 23, 1999 (the "Warrant Agreement"), duly executed and delivered by the
Company to Norwest Bank Minnesota, N.A., as warrant agent (the "Warrant Agent"),
which Warrant Agreement is hereby incorporated by reference in and made a part
of this instrument and is hereby referred to for a description of the rights,
limitation of rights, obligations, duties and immunities thereunder of the
Warrant Agent, the Company and the holders (the words "holders" or "holder"
meaning the registered holders or registered holder) of the Warrants. A copy of
the Warrant Agreement may be obtained by the holder hereof upon written request
to the Company.

                  Warrants may be exercised at any time on or after November 1,
2001 and on or before 5:00 p.m. New York City time on May 1, 2009; provided that
holders shall be able to exercise their Warrants only if a registration
statement relating to the Warrants Shares is then in effect, or the exercise of
such Warrants is exempt from the registration requirements of the Securities Act
of 1933, as amended (the "Securities Act"), and such securities are qualified
for sale or exempt from qualification under the applicable securities laws of
the states in which the various holders of the Warrants or other persons to whom
it is proposed that the Warrant Shares be issued on exercise of the Warrants
reside. In order to exercise Warrants, the holder thereof must (i) deliver to
the Warrant Agent at its corporate trust office set forth in Section 15 of the
Warrant Agreement (x) in the case of Warrants represented by a Definitive
Warrant, this Warrant Certificate and the form of election to purchase on the
reverse hereof, duly filled in and signed, which signature shall be medallion
guaranteed by an institution which is a member of a Securities Transfer
Association recognized signature guarantee program, and (y) in the case of
Warrants represented by a Global Warrant, such customary documentation as the
Warrant Agent and the Company may require, and (ii) pay to the Warrant Agent for
the account of the Company of the Exercise Price, as adjusted as provided in the
Warrant Agreement, for the number of Warrant Shares in respect of which such
Warrants are then exercised. No adjustment shall be made for any dividends on
any Common Stock issuable upon exercise of this Warrant.

                  The Warrant Agreement provides that upon the occurrence of
certain events the Exercise Price set forth on the face hereof may, subject to
certain conditions, be adjusted. If the Exercise Price is adjusted, the Warrant
Agreement provides that the number of shares of Common Stock issuable upon the
exercise of each Warrant shall be adjusted. No fractions of a share of Common
Stock will be issued upon the exercise of any Warrant, but the Company will pay
the cash value thereof determined as provided in the Warrant Agreement.

                  The Company has agreed pursuant to a Warrant Registration
Rights Agreement dated as of November 23, 1999 (the "Warrant Registration Rights
Agreement") to file within 120 days after the issuance of the Warrants and use
its reasonable best efforts to make effective on or before 180 days after such
date a shelf registration statement on the appropriate form under the Securities
Act, and to use its reasonable best efforts to keep such registration statement
continuously effective under the Securities Act in order to permit the resale of
the Warrants and Warrant Shares by the holders thereof for the period of time
referred to in the immediately preceding sentence.


                                      A-1


                  Warrant Certificates, when surrendered at the office of the
Warrant Agent by the registered holder thereof in person or by legal
representative or attorney duly authorized in writing, may be exchanged, in the
manner and subject to the limitations provided in the Warrant Agreement, but
without payment of any service charge, for another Warrant Certificate or
Warrant Certificates of like tenor evidencing in the aggregate a like number of
Warrants.

                  Upon due presentation for registration of transfer of this
Warrant Certificate at the office of the Warrant Agent a new Warrant Certificate
or Warrant Certificates of like tenor and evidencing in the aggregate a like
number of Warrants shall be issued to the transferee(s) in exchange for this
Warrant Certificate, subject to the limitations provided in the Warrant
Agreement, without charge except for any tax or other governmental charge
imposed in connection therewith.

                  The Company and the Warrant Agent may deem and treat the
registered holder(s) thereof as the absolute owner(s) of this Warrant
Certificate (notwithstanding any notation of ownership or other writing hereon
made by anyone), for the purpose of any exercise hereof, of any distribution to
the holder(s) hereof, and for all other purposes, and neither the Company nor
the Warrant Agent shall be affected by any notice to the contrary. Neither the
Warrants nor this Warrant Certificate entitles any holder hereof to any rights
of a stockholder of the Company.


                                      A-2




                         [Form of Election to Purchase]

                    (To Be Executed Upon Exercise Of Warrant)

                  The undersigned hereby irrevocably elects to exercise the
right, represented by this Warrant Certificate, to receive _____________ [Common
Shares][shares of Common Stock] and herewith tenders payment for such shares to
the order of [VIKING MERGER SUB, INC.][MERRILL CORPORATION], in the amount of
$__________ in accordance with the terms hereof. The undersigned requests that a
certificate for such shares be registered in the name of _______________, whose
address is __________________ and that such shares be delivered to ___________,
whose address is ____________________________. If said number of shares is less
than all of the [Common Shares][shares of Common Stock] purchasable hereunder,
the undersigned requests that a new Warrant Certificate representing the
remaining balance of such shares be registered in the name of
______________________, whose address is ____________________, and that such
Warrant Certificate be delivered to whose address is ____________________.


                                    ----------------------------------------
                                    Signature


Date:




                                    ----------------------------------------
                                    Signature Guaranteed


Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Warrant Agent, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Warrant Agent in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.


                                      A-3


              SCHEDULE OF EXCHANGES OF INTERESTS OF GLOBAL WARRANTS

The following exchanges of a part of this Global Warrant have been made:




                                                                         Number of Warrants
                          Amount of decrease                             in this Global
                          in Number of           Amount of increase in   Warrant following      Signature of
                          warrants in this       Number of Warrants in   such decrease or       authorized officer
Date of Exchange          Global Warrant         this Global Warrant     increase               of Warrant Agent
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------







                                      A-4



                                    EXHIBIT B

                         FORM OF CERTIFICATE OF TRANSFER

[Viking Merger Sub, Inc.
c/o DLJ Merchant Banking Partners, II, L.P.
277 Park Avenue
New York, New York 10172]

[Merrill Corporation
One Merrill Circle
St. Paul, Minnesota 55108]

Norwest Bank Minnesota, N.A.
Norwest Center
Mac #N903-120
Sixth and Marquette
Minneapolis, MN 55479


              Re:  Warrants

                  Reference is hereby made to the Warrant Agreement, dated as of
November 23, 1999 (the "WARRANT AGREEMENT"), relating to Warrants of [Viking
Merger Sub, Inc.] [Merrill Corporation] (the "COMPANY"), under which Norwest
Bank Minnesota, N.A. is acting as warrant agent. Capitalized terms used but not
defined herein shall have the meanings given to them in the Warrant Agreement.

                  ___________________, (the "TRANSFEROR") owns and proposes to
transfer the Warrant[s] or interest in such Warrant[s] specified in Annex A
hereto (the "TRANSFER"), to ___________________________ (the "TRANSFEREE"), as
further specified in Annex A hereto. In connection with the Transfer, the
Transferor hereby certifies that:

                             [CHECK ALL THAT APPLY]

                  1. / /  CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A
BENEFICIAL INTEREST IN THE 144A GLOBAL WARRANT OR A DEFINITIVE WARRANT PURSUANT
TO RULE 144A. The Transfer is being effected pursuant to and in accordance with
Rule 144A under the United States Securities Act of 1933, as amended (the
"Securities Act"), and, accordingly, the Transferor hereby further certifies
that the beneficial interest or Definitive Warrant is being transferred to a
Person that the Transferor reasonably believed and believes is purchasing the
beneficial interest or Definitive Warrant for its own account, or for one or
more accounts with respect to which such Person exercises sole investment
discretion, and such Person and each such account is a "qualified institutional
buyer" within the meaning of Rule 144A in a transaction meeting the requirements
of Rule 144A and such Transfer is in compliance with any applicable blue sky
securities laws of any state of the United States. Upon consummation of the
proposed Transfer in accordance with the terms of the Warrant Agreement, the
transferred beneficial interest or Definitive Warrant will be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the 144A Global Warrant and/or the Definitive Warrant and in the Warrant
Agreement and the Securities Act.


                                      B-1


                  2. / /  CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A
BENEFICIAL INTEREST IN THE REGULATIONS GLOBAL WARRANT OR A DEFINITIVE WARRANT
PURSUANT TO REGULATION S. The Transfer is being effected pursuant to and in
accordance with Rule 903 or Rule 904 under the Securities Act and, accordingly,
the Transferor hereby further certifies that (i) the Transfer is not being made
to a person in the United States and (x) at the time the buy order was
originated, the Transferee was outside the United States or such Transferor and
any Person acting on its behalf reasonably believed and believes that the
Transferee was outside the United States or (y) the transaction was executed in,
on or through the facilities of a designated offshore securities market and
neither such Transferor nor any Person acting on its behalf knows that the
transaction was prearranged with a buyer in the United States, (ii) no directed
selling efforts have been made in contravention of the requirements of Rule
903(b) or Rule 904(b) of Regulation S under the Securities Act, (iii) the
transaction is not part of a plan or scheme to evade the registration
requirements of the Securities Act and (iv) if the proposed transfer is being
made prior to the expiration of the Restricted Period, the transfer is not being
made to a U.S. Person or for the account or benefit of a U.S. Person (other than
an Initial Purchaser). Upon consummation of the proposed transfer in accordance
with the terms of the Warrant Agreement, the transferred beneficial interest or
Definitive Warrant will be subject to the restrictions on Transfer enumerated in
the Private Placement Legend printed on the Regulation S Global Warrant and/or
the Definitive Warrant and in the Warrant Agreement and the Securities Act.

                  3. / /  CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY
OF A BENEFICIAL INTEREST IN the 144A GLOBAL WARRANT OR A DEFINITIVE WARRANT
PURSUANT TO ANY PROVISION OF THE SECURITIES ACT OTHER THAN RULE 144A OR
REGULATION S. The Transfer is being effected in compliance with the transfer
restrictions applicable to beneficial interests in Restricted Global Warrants
and Restricted Definitive Warrants and pursuant to and in accordance with the
Securities Act and any applicable blue sky securities laws of any state of the
United States, and accordingly the Transferor hereby further certifies that
(check one):

       (a) / /  such Transfer is being effected pursuant to and in accordance
       with Rule 144 under the Securities Act;

                                       or

       (b) / /  such Transfer is being effected to the Company or a subsidiary
thereof;

                                       or

       (c) / /  such Transfer is being effected pursuant to an effective
       registration statement under the Securities Act and in compliance with
       the prospectus delivery requirements of the Securities Act;

                                       or

       (d) / /  such Transfer is being effected to an Institutional Accredited
       Investor and pursuant to an exemption from the registration requirements
       of the Securities Act other than Rule 144A, Rule 144 or Rule 904, and the
       Transferor hereby further certifies that it has not engaged in any
       general solicitation within the meaning of Regulation D under the
       Securities Act and the Transfer complies with the transfer restrictions
       applicable to beneficial interests in a Restricted Global Warrant or
       Restricted Definitive Warrants and the requirements of the exemption
       claimed, which certification is supported by (1) a certificate executed
       by the Transferee in the form of Exhibit D to the Warrant Agreement and
       (2) if the Company requests, an Opinion of Counsel provided by the
       Transferor or


                                      B-2


       the Transferee (a copy of which the Transferor has attached to this
       certification), to the effect that such Transfer is in compliance with
       the Securities Act. Upon consummation of the proposed transfer in
       accordance with the terms of the Warrant Agreement, the transferred
       beneficial interest or Definitive Warrant will be subject to the
       restrictions on transfer enumerated in the Private Placement Legend
       printed on the the Definitive Warrants and in the Warrant Agreement and
       the Securities Act.

                  4. / /  CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A
BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL WARRANT OR OF AN UNRESTRICTED
DEFINITIVE WARRANT.

       (a) / /  CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The Transfer is
       being effected pursuant to and in accordance with Rule 144 under the
       Securities Act and in compliance with the transfer restrictions contained
       in the Warrant Agreement and any applicable blue sky securities laws of
       any state of the United States and (ii) the restrictions on transfer
       contained in the Warrant Agreement and the Private Placement Legend are
       not required in order to maintain compliance with the Securities Act.
       Upon consummation of the proposed Transfer in accordance with the terms
       of the Warrant Agreement, the transferred beneficial interest or
       Definitive Warrant will no longer be subject to the restrictions on
       transfer enumerated in the Private Placement Legend printed on the
       Restricted Global Warrants, on Restricted Definitive Warrants and in the
       Warrant Agreement.

       (b) / /  CHECK IF TRANSFER IS PURSUANT TO REGULATION S. (i) The Transfer
       is being effected pursuant to and in accordance with Rule 903 or Rule 904
       under the Securities Act and in compliance with the transfer restrictions
       contained in the Warrant Agreement and any applicable blue sky securities
       laws of any state of the United States and (ii) the restrictions on
       transfer contained in the Warrant Agreement and the Private Placement
       Legend are not required in order to maintain compliance with the
       Securities Act. Upon consummation of the proposed Transfer in accordance
       with the terms of the Warrant Agreement, the transferred beneficial
       interest or Definitive Warrant will no longer be subject to the
       restrictions on transfer enumerated in the Private Placement Legend
       printed on the Restricted Global Warrants, on Restricted Definitive
       Warrants and in the Warrant Agreement.

       (c) / /  CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i) The
       Transfer is being effected pursuant to and in compliance with an
       exemption from the registration requirements of the Securities Act other
       than Rule 144, Rule 903 or Rule 904 and in compliance with the transfer
       restrictions contained in the Warrant Agreement and any applicable blue
       sky securities laws of any State of the United States and (ii) the
       restrictions on transfer contained in the Warrant Agreement and the
       Private Placement Legend are not required in order to maintain compliance
       with the Securities Act. Upon consummation of the proposed Transfer in
       accordance with the terms of the Warrant Agreement, the transferred
       beneficial interest or Definitive Warrant will not be subject to the
       restrictions on transfer enumerated in the Private Placement Legend
       printed on the Restricted Global Warrants or Restricted Definitive
       Warrants and in the Warrant Agreement.


                                      B-3



                  This certificate and the statements contained herein are made
for your benefit and the benefit of the Company.


                                  ----------------------------------------------
                                            [Insert Name of Transferor]


                                  By:
                                      ------------------------------------------
                                      Name:
                                      Title:

Dated:
      ---------------------


                                     B-4




                       ANNEX A TO CERTIFICATE OF TRANSFER

1. The Transferor owns and proposes to transfer the following:

                            [CHECK ONE OF (a) OR (b)]

       (a)   / /      a beneficial interest in the:

             (i)  / /          144A Global Warrant, or

             (ii) / /          Regulation S Temporary Global Warrant, or

             (iii) / /         Regulation S Permanent Global Warrant, or

             (iv) / /          Unrestricted Global Warrant; or

       (b)   / /      a Restricted Definitive Warrant; or

       (c)  / /       an Unrestricted Definitive Warrant.

2. After the Transfer the Transferee will hold:

                                   [CHECK ONE]

       (a)   / /     a beneficial interest in the:

             (i)  / /         144A Global Warrant, or

             (ii) / /         Regulation S Temporary Global Warrant, or

             (iii) / /        Regulation S Permanent Global Warrant, or

             (iv)  / /        Unrestricted Global Warrant; or

       (b)   / /      a Restricted Definitive Warrant; or

       (c)   / /      an Unrestricted Definitive Warrant,

       in accordance with the terms of the Warrant Agreement.


                                      B-5







                                    EXHIBIT C
                         FORM OF CERTIFICATE OF EXCHANGE

[Viking Merger Sub, Inc.
c/o DLJ Merchant Banking Partners, II, L.P.
277 Park Avenue
New York, New York 10172]

[Merrill Corporation
One Merrill Circle
St. Paul, Minnesota  55108]

Norwest Bank Minnesota, N.A.
Norwest Center
Mac #N903-120
Sixth and Marquette
Minneapolis, MN 55479


              Re:  Warrants

                              (CUSIP ____________)

                  Reference is hereby made to the Warrant Agreement, dated as of
November 23, 1999 (the "WARRANT AGREEMENT"), relating to Warrants of [Viking
Merger Sub, Inc.] [Merrill Corporation] (the "COMPANY"), under which Norwest
Bank Minnesota, N.A. is acting as warrant agent. Capitalized terms used but not
defined herein shall have the meanings given to them in the Warrant Agreement.

                  __________________________, (the "OWNER") owns and proposes to
exchange the Warrant[s] or interest in such Warrant[s] specified herein, in the
amount of $____________ in such Warrant[s] or interests (the "EXCHANGE"). In
connection with the Exchange, the Owner hereby certifies that:

                  1. EXCHANGE OF RESTRICTED DEFINITIVE WARRANTS OR BENEFICIAL
INTERESTS IN A RESTRICTED GLOBAL WARRANT FOR UNRESTRICTED DEFINITIVE WARRANTS OR
BENEFICIAL INTERESTS IN AN UNRESTRICTED GLOBAL WARRANT

       (a) / /   Check if Exchange is from beneficial interest in a Restricted
       Global Warrant to beneficial interest in an Unrestricted Global Warrant.
       In connection with the Exchange of the Owner's beneficial interest in a
       Restricted Global Warrant for a beneficial interest in an Unrestricted
       Global Warrant in an equal principal amount, the Owner hereby certifies
       (i) the beneficial interest is being acquired for the Owner's own account
       without transfer, (ii) such Exchange has been effected in compliance with
       the transfer restrictions applicable to the Global Warrants and pursuant
       to and in accordance with the United States Securities Act of 1933, as
       amended (the "SECURITIES ACT"), (iii) the restrictions on transfer
       contained in the Warrant Agreement and the Private Placement Legend are
       not required in order to maintain compliance


                                      C-1


       with the Securities Act and (iv) the beneficial interest in an
       Unrestricted Global Warrant is being acquired in compliance with any
       applicable blue sky securities laws of any state of the United States.

       (b) / /   CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
       GLOBAL WARRANT TO UNRESTRICTED DEFINITIVE WARRANT. In connection with the
       Exchange of the Owner's beneficial interest in a Restricted Global
       Warrant for an Unrestricted Definitive Warrant, the Owner hereby
       certifies (i) the Definitive Warrant is being acquired for the Owner's
       own account without transfer, (ii) such Exchange has been effected in
       compliance with the transfer restrictions applicable to the Restricted
       Global Warrants and pursuant to and in accordance with the Securities
       Act, (iii) the restrictions on transfer contained in the Warrant
       Agreement and the Private Placement Legend are not required in order to
       maintain compliance with the Securities Act and (iv) the Definitive
       Warrant is being acquired in compliance with any applicable blue sky
       securities laws of any state of the United States.

       (c) / /   CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE WARRANT TO
       BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL WARRANT. In connection with
       the Owner's Exchange of a Restricted Definitive Warrant for a beneficial
       interest in an Unrestricted Global Warrant, the Owner hereby certifies
       (i) the beneficial interest is being acquired for the Owner's own account
       without transfer, (ii) such Exchange has been effected in compliance with
       the transfer restrictions applicable to Restricted Definitive Warrants
       and pursuant to and in accordance with the Securities Act, (iii) the
       restrictions on transfer contained in the Warrant Agreement and the
       Private Placement Legend are not required in order to maintain compliance
       with the Securities Act and (iv) the beneficial interest is being
       acquired in compliance with any applicable blue sky securities laws of
       any state of the United States.

       (d) / /   CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE WARRANT TO
       UNRESTRICTED DEFINITIVE WARRANT. In connection with the Owner's Exchange
       of a Restricted Definitive Warrant for an Unrestricted Definitive
       Warrant, the Owner hereby certifies (i) the Unrestricted Definitive
       Warrant is being acquired for the Owner's own account without transfer,
       (ii) such Exchange has been effected in compliance with the transfer
       restrictions applicable to Restricted Definitive Warrants and pursuant to
       and in accordance with the Securities Act, (iii) the restrictions on
       transfer contained in the Warrant Agreement and the Private Placement
       Legend are not required in order to maintain compliance with the
       Securities Act and (iv) the Unrestricted Definitive Warrant is being
       acquired in compliance with any applicable blue sky securities laws of
       any state of the United States.

                  2. EXCHANGE OF RESTRICTED DEFINITIVE WARRANTS OR BENEFICIAL
INTERESTS IN RESTRICTED GLOBAL WARRANTS FOR RESTRICTED DEFINITIVE WARRANTS OR
BENEFICIAL INTERESTS IN RESTRICTED GLOBAL WARRANTS

       (a) / /   CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
       GLOBAL WARRANT TO RESTRIcted DEFINITIVE WARRANT. In connection with the
       Exchange of the Owner's beneficial interest in a Restricted Global
       Warrant for a Restricted Definitive Warrant in a number equal to the
       number of beneficial interests exchanged, the Owner hereby certifies that
       the Restricted Definitive Warrant is being acquired for the Owner's own
       account without transfer. Upon consummation of the proposed Exchange in
       accordance with the terms of the Warrant Agreement, the Restricted


                                      C-2


       Definitive Warrant issued will continue to be subject to the restrictions
       on transfer enumerated in the Private Placement Legend printed on the
       Restricted Definitive Warrant and in the Warrant Agreement and the
       Securities Act.

       (b) CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE WARRANT TO BENEFICIAL
       INTEREST IN A RESTRICTED GLOBAL WARRANT. In connection with the Exchange
       of the Owner's Restricted Definitive Warrant for a beneficial interest in
       the [CHECK ONE] / /  144A Global Warrant  / /  Regulation S Temporary
       Global Warrant in a numBer equal to the number of beneficial interests
       exchanged, the Owner hereby certifies (i) the beneficial interest is
       being acquired for the Owner's own account without transfer and (ii) such
       Exchange has been effected in compliance with the transfer restrictions
       applicable to the Restricted Global Warrants and pursuant to and in
       accordance with the Securities Act, and in compliance with any applicable
       blue sky securities laws of any state of the United States. Upon
       consummation of the proposed Exchange in accordance with the terms of the
       Warrant Agreement, the beneficial interest issued will be subject to the
       restrictions on transfer enumerated in the Private Placement Legend
       printed on the relevant Restricted Global Warrant and in the Warrant
       Agreement and the Securities Act.

                  This certificate and the statements contained herein are made
for your benefit and the benefit of the Company.


                                   ---------------------------------------------
                                             [Insert Name of Transferor]


                                   By:
                                      ------------------------------------------
                                      Name:
                                      Title:


Dated:
      -------------------------


                                      C-3




                                    EXHIBIT D
                            FORM OF CERTIFICATE FROM
                   ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR

[Viking Merger Sub, Inc.
c/o DLJ Merchant Banking Partners II, L.P.
277 Park Avenue
New York, New York 10172]

[Merrill Corporation
One Merrill Circle
St. Paul, Minnesota  55108]

Norwest Bank Minnesota, N.A.
Norwest Center
Mac #N903-120
Sixth and Marquette
Minneapolis, MN 55479]

              Re: Warrants

                  Reference is hereby made to the Warrant Agreement, dated as of
November 23, 1999 (the "WARRANT AGREEMENT"), relating to Warrants of [Viking
Merger Sub, Inc.] [Merrill Corporation] (the "COMPANY"), under which Norwest
Bank Minnesota, N.A. is acting as warrant agent. Capitalized terms used but not
defined herein shall have the meanings given to them in the Warrant Agreement.

                  In connection with our proposed purchase of ____________
Warrants represented by:

       (a)   / /      a beneficial interest in a Global Warrant, or

       (b)   / /      a Definitive Warrant,

                      we confirm that:

                  1. We understand that any subsequent transfer of the Warrants
or any interest therein is subject to certain restrictions and conditions set
forth in the Warrant Agreement and the undersigned agrees to be bound by, and
not to resell, pledge or otherwise transfer the Warrants or any interest therein
except in compliance with, such restrictions and conditions and the United
States Securities Act of 1933, as amended (the "SECURITIES ACT").

                  2. We understand that the offer and sale of the Warrants have
not been registered under the Securities Act, and that the Warrants and any
interest therein may not be offered or sold except as permitted in the following
sentence. We agree, on our own behalf and on behalf of any accounts for which we
are acting as hereinafter stated, that if we should sell the Warrants or any
interest therein, we will do so only (A) to the Company or any subsidiary
thereof, (B) in accordance with Rule 144A under the Securities Act to a
"qualified institutional buyer" (as defined therein), (C) to an institutional


                                      D-1


"accredited investor" (as defined below) that, prior to such transfer, furnishes
(or has furnished on its behalf by a U.S. broker-dealer) to you and to the
Company a signed letter substantially in the form of this letter and, if
requested by the Company, an Opinion of Counsel in form reasonably acceptable to
the Company to the effect that such transfer is in compliance with the
Securities Act, (D) outside the United States in accordance with Rule 904 of
Regulation S under the Securities Act, (E) pursuant to the provisions of Rule
144(k) under the Securities Act or (F) pursuant to an effective registration
statement under the Securities Act, and we further agree to provide to any
person purchasing the Definitive Warrant or beneficial interest in a Global
Warrant from us in a transaction meeting the requirements of clauses (A) through
(E) of this paragraph a notice advising such purchaser that resales thereof are
restricted as stated herein.

                  3. We understand that, on any proposed resale of the Warrants
or beneficial interest therein, we will be required to furnish to you and the
Company such certifications, legal opinions and other information as you and the
Company may reasonably require to confirm that the proposed sale complies with
the foregoing restrictions. We further understand that the Warrants purchased by
us will bear a legend to the foregoing effect.

                  4. We are an institutional "accredited investor" (as defined
in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and
have such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the Warrants,
and we and any accounts for which we are acting are each able to bear the
economic risk of our or its investment.

                  5. We are acquiring the Warrants or beneficial interest
therein purchased by us for our own account or for one or more accounts (each of
which is an institutional "accredited investor") as to each of which we exercise
sole investment discretion.

                  We agree not to engage in any hedging transactions with regard
to the Warrants unless such hedging transactions are in compliance with the
Securities Act.

                  You and the Company are entitled to rely upon this letter and
are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby.


                                   ---------------------------------------------
                                             [Insert Name of Transferor]


                                   By:
                                      ------------------------------------------
                                      Name:
                                      Title:


Dated:
      -----------------------


                                      D-2




                                    EXHIBIT E

                  FORM OF WARRANT REGISTRATION RIGHTS AGREEMENT


                                      E-1

EX-4.5

                              VIKING MERGER SUB, INC.



                        FORM OF WARRANT FOR THE PURCHASE OF
                      COMMON SHARES OF VIKING MERGER SUB, INC.


NO. __                                                       WARRANT TO PURCHASE
                                                                   ______ SHARES




       THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
       AS AMENDED, OR ANY STATE SECURITIES LAWS AND MAY NOT BE OFFERED OR SOLD
       EXCEPT IN COMPLIANCE THEREWITH.  THIS SECURITY IS ALSO SUBJECT TO
       ADDITIONAL RESTRICTIONS ON TRANSFER, VOTING AND OTHER MATTERS AS SET
       FORTH IN THE INVESTORS' AGREEMENT (AS HEREIN DEFINED), COPIES OF WHICH
       ARE ON FILE AT THE PRINCIPAL EXECUTIVE OFFICES OF THE COMPANY OR ANY
       SUCCESSOR THERETO.


       FOR VALUE RECEIVED, VIKING MERGER SUB, INC., a Minnesota corporation (the
"COMPANY"), hereby certifies that _________________, its successor or permitted
assigns (the "Holder"), is entitled, subject to the provisions of this Warrant,
to purchase from the Company, at the times specified herein, _____ fully paid
and non-assessable shares of common stock of the Company, par value $ 0.01 per
share (the "WARRANT SHARES"), at a purchase price per share equal to the
Exercise Price (as hereinafter defined).  The number of Warrant Shares to be
received upon the exercise of this Warrant and the price to be paid for a
Warrant Share are subject to adjustment from time to time as hereinafter set
forth.

       (a) DEFINITIONS.

       (1) The following terms, as used herein, have the following meanings:

       "AFFILIATE" shall have the meaning given to such term in Rule 12b-2
promulgated under the Securities and Exchange Act of 1934, as amended.



       "BUSINESS DAY" means any day except a Saturday, Sunday or other day on
which commercial banks in The City of New York are authorized by law to close.

       "COMMON SHARE" means a Common Share, par value $0.01, of the Company or
other capital stock of the Company that is not preferred as to liquidation or
dividends.

       "DULY ENDORSED" means duly endorsed in blank by the Person or Persons in
whose name a stock certificate is registered or accompanied by a duly executed
stock assignment separate from the certificate with the signature(s) thereon
guaranteed by a commercial bank or trust company or a member of a national
securities exchange or of the National Association of Securities Dealers, Inc.

       "EXERCISE PRICE" means $0.01 per Warrant Share, as such Exercise Price is
adjusted from time to time as provided herein.

       "EXPIRATION DATE" means November 15, 2011 at 5:00 p.m. New York City
time.

       "FAIR MARKET VALUE" means, with respect to one Common Share on any date,
the Current Market Price Per Common Share for purposes of paragraph (h)(6)
hereof.

       "INVESTORS AGREEMENT" means the Investors Agreement dated as of the date
hereof among Viking Merger Sub, Inc., DLJ Merchant Banking Partners II, L.P.,
DLJ Merchant Banking Partners II-A, L.P., DLJ Offshore Partners II, C.V., DLJ
Diversified Partners, L.P., DLJ Diversified Partners-A, L.P., DLJ Millennium
Partners, L.P., DLJ Millennium Partners-A, L.P., DLJ Funding II, Inc., DLJ EAB
Partners, L.P., DLJ ESC II L.P., DLJ First ESC, L.P., DLJ Investment Partners
II, L.P., DLJ Investment Funding II, Inc. and the other stockholders listed on
the signature pages thereto.

       "PERSON" means an individual, partnership, corporation, limited liability
company, trust, joint stock company, association, joint venture, or any other
entity or organization, including a government or political subdivision or an
agency or instrumentality thereof.

       "PRINCIPAL HOLDERS" means, on any date, the holders of at least 25% of
the Warrants.

       "SENIOR NOTE WARRANTS" means the warrants attached to the Senior Discount
Notes due 2009 of Merrill Corporation issued on or about November 23, 1999.

       "TRANSFER" shall have the meaning assigned to such term in the Investors'
Agreement.

                                       2



       "WARRANTS" means the Warrants issued to the subscriber under the
Subscription Agreement dated as of the date hereof among the Company and the
subscribers listed on the signature pages thereof.

       (2) Capitalized terms used but not defined herein shall have the meanings
assigned to such terms in the Investors' Agreement.

       (b) EXERCISE OF WARRANT.

                     (1) The Holder is entitled to exercise this Warrant in
              whole or in part at any time, or from time to time, until the
              Expiration Date or, if such day is not a Business Day, then on the
              next succeeding day that shall be a Business Day.  To exercise
              this Warrant, the Holder shall execute and deliver to the Company
              a Warrant Exercise Subscription Form forming a part hereof duly
              executed by the Holder and payment of the applicable Exercise
              Price for each Warrant Share subject to such exercise.  Upon such
              delivery and payment, the Holder shall be deemed to be the holder
              of record of the Warrant Shares subject to such exercise,
              notwithstanding that the stock transfer books of the Company shall
              then be closed or that certificates representing such Warrant
              Shares shall not then be actually delivered to the Holder.
              Notwithstanding anything herein to the contrary, in lieu of
              payment in cash of the applicable Exercise Price, the Holder may
              elect (i) to receive upon exercise of this Warrant, the number of
              Warrant Shares reduced by a number of Common Shares having the
              aggregate Fair Market Value equal to the aggregate Exercise Price
              for the Warrant Shares, (ii) to deliver as payment, in whole or in
              part of the aggregate Exercise Price, Common Shares having the
              aggregate Fair Market Value equal to the aggregate Exercise Price
              for the Warrant Shares in respect of which the Exercise Price is
              not being paid in cash or (iii) to deliver as payment, in whole or
              in part of the aggregate Exercise Price, such number of Warrants
              which, if exercised, would result in a number of Common Shares
              having an aggregate Fair Market Value equal to the aggregate
              Exercise Price for the Warrant Shares in respect of which the
              Exercise Price is not being paid in cash.  Notwithstanding
              anything to the contrary in this paragraph (b)(1), if the
              aggregate Fair Market Value of the Common Shares applied or
              delivered pursuant to (i), (ii) or (iii) above exceeds the
              aggregate Exercise Price, in no event shall the Holder be entitled
              to receive any amounts from he Company.

                     (2) The Exercise Price may be paid in cash or by certified
              or official bank check or bank cashier's check payable to the
              order of the Company or by any combination of such cash or check.
              The

                                       3



              Company shall pay any and all documentary, stamp or similar
              issue or transfer taxes payable in respect of the issue or
              delivery of the Warrant Shares.

                     (3) If the Holder exercises this Warrant in part, this
              Warrant Certificate shall be surrendered by the Holder to the
              Company and a new Warrant Certificate of the same tenor and for
              the unexercised number of Warrant Shares shall be executed by the
              Company.  The Company shall register the new Warrant Certificate
              in the name of the Holder or in such name or names of its
              transferee pursuant to paragraph (f) hereof as may be directed in
              writing by the Holder and deliver the new Warrant Certificate to
              the Person or Persons entitled to receive the same.

                     (4) Upon surrender of this Warrant Certificate in
              conformity with the foregoing provisions, the Company shall
              transfer to the Holder of this Warrant Certificate appropriate
              evidence of ownership of Common Shares or other securities or
              property (including any money) to which the Holder is entitled,
              registered or otherwise placed in, or payable to the order of, the
              name or names of the Holder or such transferee as may be directed
              in writing by the Holder, and shall deliver such evidence of
              ownership and any other securities or property (including any
              money) to the Person or Persons entitled to receive the same,
              including an amount in cash in lieu of any fraction of a share as
              provided in paragraph (e) below.

       (c) RESTRICTIVE LEGEND.  Certificates representing Common Shares issued
pursuant to this Warrant shall bear a legend substantially in the form of the
legend set forth on the first page of this Warrant Certificate to the extent
that and for so long as such legend is required pursuant to the Investors'
Agreement or applicable securities laws.

       (d) RESERVATION OF SHARES.  The Company hereby agrees that at all times
there shall be reserved for issuance and delivery upon exercise of this Warrant
such number of its authorized but unissued Common Shares or other securities of
the Company from time to time issuable upon exercise of this Warrant as will be
sufficient to permit the exercise in full of this Warrant.  All such shares
shall be duly authorized and, when issued upon such exercise, shall be validly
issued, fully paid and non-assessable, free and clear of all liens, security
interests, charges and other encumbrances or restrictions on sale and free and
clear of all preemptive rights, except to the extent set forth in the Investors'
Agreement.

       (e) FRACTIONAL SHARES.  No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant and in lieu
of

                                       4



delivery of any such fractional share upon any exercise hereof, the Company
shall pay to the Holder an amount in cash equal to such fraction multiplied by
the Current Market Price Per Common Share (as defined in paragraph (h)(6)) at
the date of such exercise.

       The Company further agrees that it will not change the par value of the
Common Shares to any higher par value which exceeds the Exercise Price then in
effect, and will reduce the par value of the Common Shares upon any event
described in paragraph (h) that (i) provides for an increase in the number of
Common Shares subject to purchase upon exercise of this Warrant, in inverse
proportion to and effective at the same time as such number of shares is
increased, but only to the extent that such increase in the number of shares,
together with all other such increases after the date hereof, causes the
aggregate Exercise Price of all Warrants (without giving effect to any exercise
thereof) to be greater than $3,442.63 or (ii) would, but for this provision,
reduce the Exercise Price below the par value of the Common Stock.

       (f) EXCHANGE, TRANSFER OR ASSIGNMENT OF WARRANT.

                     (1) This Warrant and the Warrant Shares are subject to the
              provisions of the Investors' Agreement, including the applicable
              restrictions on transfer.  Each taker and holder of this Warrant
              Certificate by taking or holding the same, consents and agrees
              that the registered holder hereof may be treated by the Company
              and all other persons dealing with this Warrant Certificate as the
              absolute owner hereof for any purpose and as the person entitled
              to exercise the rights represented hereby.  The Holder, by its
              acceptance of this Warrant, will be subject to the provisions of,
              and will have the benefits of, the Investors' Agreement to the
              extent set forth therein, including the applicable transfer
              restrictions and the registration rights included therein.

                     (2) Subject to compliance with the transfer restrictions
              set forth in the Investors' Agreement and with applicable
              securities laws, upon surrender of this Warrant to the Company,
              together with the attached Warrant Assignment Form duly executed,
              the Company shall, without charge, execute and deliver a new
              Warrant in the name of the assignee or assignees named in such
              instrument of assignment and, if the Holder's entire interest is
              not being assigned, in the name of the Holder and this Warrant
              shall promptly be canceled.

       (g) LOSS OR DESTRUCTION OF WARRANT.  Upon receipt by the Company of
evidence satisfactory to it (in the exercise of its reasonable discretion) of
the loss, theft, destruction or mutilation of this Warrant Certificate,

                                       5



and (in the case of loss, theft or destruction) of reasonably satisfactory
indemnification, and upon surrender and cancellation of this Warrant
Certificate, if mutilated, the Company shall execute and deliver a new
Warrant Certificate of like tenor and date.

       (h) ANTI-DILUTION PROVISIONS.  The Exercise Price of this Warrant and the
number of Common Shares for which this Warrant may be exercised shall be subject
to adjustment from time to time upon the occurrence of certain events as
provided in this paragraph (h).

                     (1) In case the Company shall at any time after the date
              hereof (i) declare a dividend or make a distribution on Common
              Shares payable in Common Shares, (ii) subdivide or split the
              outstanding Common Shares, (iii) combine or reclassify the
              outstanding Common Shares into a smaller number of shares, or (iv)
              issue any shares of its capital stock in a reclassification of
              Common Shares (including any such reclassification in connection
              with a consolidation or merger in which the Company is the
              continuing corporation), the Exercise Price in effect at the time
              of the record date for such dividend or distribution or of the
              effective date of such subdivision, split, combination or
              reclassification shall be proportionately adjusted so that, giving
              effect to paragraph (h)(9), the exercise of this Warrant after
              such time shall entitle the holder to receive the aggregate number
              of Common Shares or other securities of the Company (or shares of
              any security into which such shares of Common Stock have been
              reclassified pursuant to clause (iii) or (iv) above) which, if
              this Warrant had been exercised immediately prior to such time,
              such holder would have owned upon such exercise and been entitled
              to receive by virtue of such dividend, distribution, subdivision,
              split, combination or reclassification.  Such adjustment shall be
              made successively whenever any event listed above shall occur.

                     (2) In case the Company shall issue or sell any Common
              Shares (other than Common Shares issued (I) upon exercise of the
              Warrants or the Senior Note Warrants, (II) pursuant to any stock
              option, co-investment or other stock related employee compensation
              plan of the Company approved by the Company's Board of Directors,
              (III) upon exercise or conversion of any security the issuance of
              which caused an adjustment under paragraphs (h)(3) or (h)(4)
              hereof or (IV) in any bona fide registered public offering), the
              Exercise Price to be in effect after such issuance or sale shall
              be determined by multiplying the Exercise Price in effect
              immediately prior to such issuance or sale by a fraction, the
              numerator of which shall be the sum of (x) the

                                       6



              number of Common Shares outstanding immediately prior to the
              time of such issuance or sale multiplied by the Current Market
              Price Per Common Share immediately prior to such issuance or
              sale and (y) the aggregate consideration, if any, to be
              received by the Company upon such issuance or sale, and the
              denominator of which shall be the product of the aggregate
              number of Common Shares outstanding immediately after such
              issuance or sale and the Current Market Price Per Common Share
              immediately prior to such issuance or sale but in no event will
              such fraction exceed 1.  In case any portion of the
              consideration to be received by the Company shall be in a form
              other than cash, the fair market value of such noncash
              consideration shall be utilized in the foregoing computation.
              Such fair market value shall be determined by the Board of
              Directors of the Company; PROVIDED that if the Principal
              Holders shall object to any such determination, the Board of
              Directors shall retain an independent appraiser reasonably
              satisfactory to the Principal Holders to determine such fair
              market value.  The Holder shall be notified promptly of any
              consideration other than cash to be received by the Company and
              furnished with a description of the consideration and the fair
              market value thereof, as determined by the Board of Directors.

                     (3) In case the Company shall fix a record date for the
              issuance of rights, options or warrants to the holders of its
              Common Shares or other securities entitling such holders to
              subscribe for or purchase for a period expiring within 60 days of
              such record date Common Shares (or securities convertible into
              Common Shares) at a price per Common Share (or having a conversion
              price per share of Common Share, if a security convertible into
              Common Shares) less than the Current Market Price Per Common Share
              on such record date, the maximum number of Common Shares issuable
              upon exercise of such rights, options or warrants (or conversion
              of such convertible securities) shall be deemed to have been
              issued and outstanding as of such record date and the Exercise
              Price shall be adjusted pursuant to paragraph (h)(2) hereof, as
              though such maximum number of Common Shares had been so issued for
              the aggregate consideration payable by the holders of such rights,
              options, warrants or convertible securities prior to their receipt
              of such Common Shares.  In case any portion of such consideration
              shall be in a form other than cash, the fair market value of such
              noncash consideration shall be determined as set forth in
              paragraph (h)(2) hereof.  Such adjustment shall be made
              successively whenever such record date is fixed; and in the event
              that such rights, options or warrants are not so issued or expire
              unexercised, or in the event

                                       7



              of a change in the number of Common Shares to which the holders
              of such rights, options or warrants are entitled (other than
              pursuant to adjustment provisions therein which are no more
              favorable in their entirety than those contained in this
              paragraph (h)), the Exercise Price shall again be adjusted to
              be the Exercise Price which would then be in effect if such
              record date had not been fixed, in the former event, or the
              Exercise Price which would then be in effect if such holder had
              initially been entitled to such changed number of Common
              Shares, in the latter event.

                     (4) In case the Company shall sell or issue rights, options
              (other than options issued pursuant to a plan described in clause
              II of paragraph (h)(2)) or warrants (other than Senior Notes
              Warrants) entitling the holders thereof to subscribe for or
              purchase Common Shares (or securities convertible into Common
              Shares) or shall issue convertible securities and the price per
              Common Share of such rights, options, warrants or convertible
              securities (including, in the case of rights, options, warrants or
              convertible securities, the price at which they may be exercised
              or converted) is less than the Current Market Price Per Common
              Share, the maximum number of Common Shares issuable upon exercise
              of such rights, options or warrants or upon conversion of such
              convertible securities shall be deemed to have been issued and
              outstanding as of the date of such sale or issuance, and the
              Exercise Price shall be adjusted pursuant to paragraph (h)(2)
              hereof as though such maximum number of Common Shares had been so
              issued for an aggregate consideration equal to the aggregate
              consideration paid for such rights, options, warrants or
              convertible securities and the aggregate consideration payable by
              the holders of such rights, options, warrants or convertible
              securities prior to their receipt of such Common Shares.  In case
              any portion of such consideration shall be in a form other than
              cash, the fair market value of such noncash consideration shall be
              determined as set forth in paragraph (h)(2) hereof.  Such
              adjustment shall be made successively whenever such rights,
              options, warrants or convertible securities are issued; and in the
              event that such rights, options or warrants expire unexercised, or
              in the event of a change in the number of shares of Common Shares
              to which the holders of such rights, options, warrants or
              convertible securities are entitled (other than pursuant to
              adjustment provisions therein which are no more favorable in their
              entirety than those contained in this paragraph (h)), the Exercise
              Price shall again be adjuted to be the Exercise Price which would
              then be in effect if such rights, options, warrants or convertible
              securities had not been issued, in the former event, or the
              Exercise Price which would then be in effect if such holders

                                       8



              had initially been entitled to such changed number of Common
              Shares, in the latter event.  No adjustment of the Exercise
              Price shall be made pursuant to this paragraph (h)(4) to the
              extent that the Exercise Price shall have been adjusted
              pursuant to paragraph (h)(3) upon the setting of any record
              date relating to such rights, options, warrants or convertible
              securities and such adjustment fully reflects the number of
              Common Shares to which the holders of such rights, options,
              warrants or convertible securities are entitled and the price
              payable therefor.

                     (5) In case the Company shall fix a record date for the
              making of a distribution to holders of Common Shares (including
              any such distribution made in connection with a consolidation or
              merger, other than the merger referred to in paragraph (o), in
              which the Company is the continuing corporation) of evidences of
              indebtedness, cash, assets or other property (other than dividends
              payable in Common Shares or rights, options or warrants referred
              to in, and for which an adjustment is made pursuant to, paragraphs
              (h)(3) or (h)(4) hereof), the Exercise Price to be in effect after
              such record date shall be determined by multiplying the Exercise
              Price in effect immediately prior to such record date by a
              fraction, the numerator of which shall be the Current Market Price
              Per Common Share on such record date, less the fair market value
              (determined as set forth in paragraph (h)(2) hereof) of the
              portion of the assets, cash, other property or evidence of
              indebtedness so to be distributed which is applicable to one
              Common Share, and the denominator of which shall be such Current
              Market Price Per Common Share.  Such adjustments shall be made
              successively whenever such a record date is fixed; and in the
              event that such distribution is not so made, the Exercise Price
              shall again be adjusted to be the Exercise Price which would then
              be in effect if such record date had not been fixed.

                     (6) For the purpose of any computation under paragraph (e)
              or paragraph (h)(2), (3), (4) or (5) hereof, on any determination
              date, the Current Market Price Per Common Share shall be deemed to
              be the average (weighted by daily trading volume) of the Daily
              Prices (as defined below) per Common Share for the 20 consecutive
              trading days ending three days prior to such date. "DAILY PRICE"
              means (1) if the Common Shares then are listed and traded on the
              New York Stock Exchange, Inc. ("NYSE"), the closing price on such
              day as reported on the NYSE Composite Transactions Tape; (2) if
              the Common Shares then are not listed and traded on the NYSE, the
              closing price on such day as reported by the principal national
              securities exchange on which the shares

                                       9



              are listed and traded; (3) if the Common Shares then are not
              listed and traded on any such securities exchange, the last
              reported sale price on such day on the National Market of the
              National Association of Securities Dealers, Inc. Automated
              Quotation System ("NASDAQ"); (4) if the Common Shares then are
              not listed and traded on any such securities exchange and not
              traded on the NASDAQ National Market, the average of the
              highest reported bid and lowest reported asked price on such
              day as reported by NASDAQ; or (5) if such shares are not listed
              and traded on any such securities exchange, not traded on the
              NASDAQ National Market and bid and asked prices are not
              reported by NASDAQ, then the average of the closing bid and
              asked prices, as reported by The Wall Street Journal for the
              over-the-counter market.  If on any determination date the
              Common Shares are not quoted by any such organization, the
              Current Market Price Per Common Share shall be the fair market
              value of such shares on such determination date as determined
              by the Board of Directors, without regard to considerations of
              the lack of liquidity, applicable regulatory restrictions or
              any of the transfer restrictions or other obligations imposed
              on such shares set forth in the Investors' Agreement.  If the
              Principal Holders shall object to any determination by the
              Board of Directors of the Current Market Price Per Common
              Share, the Current Market Price Per Common Share shall be the
              fair market value per Common Share as determined by an
              independent appraiser retained by the Company at its expense
              and reasonably acceptable to the Principal Holders. For
              purposes of any computation under this paragraph (h), the
              number of Common Shares outstanding at any given time shall not
              include shares owned or held by or for the account of the
              Company.

                     (7) No adjustment in the Exercise Price shall be required
              unless such adjustment would require an increase or decrease of at
              least one percent in such price; PROVIDED that any adjustments
              which by reason of this paragraph (h)(7) are not required to be
              made shall be carried forward and taken into account in any
              subsequent adjustment.  All calculations under this paragraph (h)
              shall be made to the nearest one hundredth of a cent or to the
              nearest hundredth of a share, as the case may be.

                     (8) In the event that, at any time as a result of the
              provisions of this paragraph (h), the holder of this Warrant upon
              subsequent exercise shall become entitled to receive any shares of
              capital stock or other securities of the Company other than Common
              Shares, the number of such other shares so receivable upon
              exercise of this Warrant shall thereafter be subject to

                                       10




              adjustment from time to time in a manner and on terms as nearly
              equivalent as practicable to the provisions contained herein.

                     (9) Upon each adjustment of the Exercise Price as a result
              of the calculations made in paragraphs (h)(1), (2), (3), (4) or
              (5) hereof, the number of shares for which this Warrant is
              exercisable immediately prior to the making of such adjustment
              shall thereafter evidence the right to purchase, at the adjusted
              Exercise Price, that number of Common Shares obtained by (i)
              multiplying the number of shares covered by this Warrant
              immediately prior to this adjustment of the number of shares by
              the Exercise Price in effect immediately prior to such adjustment
              of the Exercise Price and (ii) dividing the product so obtained by
              the Exercise Price in effect immediately after such adjustment of
              the Exercise Price.

                     (10) The Company shall notify all Holders of the fixing of
              a record date for the purpose of payment of a cash dividend to
              holders of Common Shares as soon as reasonably practicable, but in
              no event less than 20 days prior to any such record date.

                     (11) Not less than 10 nor more than 30 days prior to the
              record date or effective date, as the case may be, of any action
              which requires or might require an adjustment or readjustment
              pursuant to this paragraph (h), the Company shall forthwith file
              in the custody of this Secretary or an Assistant Secretary at its
              principal executive office and with its stock transfer agent or
              its warrant agent, if any, an officers' certificate showing the
              adjusted Exercise Price determined as herein provided, setting
              forth in reasonable detail the facts requiring such adjustment and
              the manner of computing such adjustment.  Each such officers'
              certificate shall be signed by the chairman, president or chief
              financial officer of the Company and by the secretary or any
              assistant secretary of the Company.  Each such officers'
              certificate shall be made available at all reasonable times for
              inspection by the Holder or any holder of a Warrant executed and
              delivered pursuant to paragraph (f) and the Company shall,
              forthwith after each such adjustment, mail a copy, by first-class
              mail, of such certificate to the Holder.

                     (12) The Holder shall, at its option, be entitled to
              receive, in lieu of the adjustment pursuant to paragraph (h)(5)
              otherwise required thereof, on the date of exercise of the
              Warrants, the evidences of indebtedness, other securities, cash,
              property or other assets which such Holder would have been
              entitled to receive if it had exercised its Warrants for Common
              Shares immediately prior


                                       11


              to the record date with respect to such distribution.  The
              Holder may exercise its option under this paragraph (h)(12) by
              delivering to the Company a written notice of such exercise
              within seven days of its receipt of the certificate of
              adjustment required pursuant to paragraph (h)(11) to be
              delivered by the Company in connection with such distribution.

       (i) CONSOLIDATION, MERGER, OR SALE OF ASSETS.  In case of any
consolidation of the Company with, or merger of the Company into, any other
Person, any merger of another Person into the Company (other than a merger which
does not result in any reclassification, conversion, exchange or cancellation of
outstanding Common Shares) or any sale or transfer of all or substantially all
of the assets of the Company or of the Person formed by such consolidation or
resulting from such merger or which acquires such assets, as the case may be,
the Holder shall have the right thereafter to exercise this Warrant for the kind
and amount of securities, cash and other property receivable upon such
consolidation, merger, sale or transfer by a holder of the number of Common
Shares for which this Warrant may have been exercised immediately prior to such
consolidation, merger, sale or transfer, assuming (i) such holder of Common
Shares is not a Person with which the Company consolidated or into which the
Company merged or which merged into the Company or to which such sale or
transfer was made, as the case may be ("CONSTITUENT PERSON"), or an Affiliate of
a constituent Person and (ii) in the case of a consolidation, merger, sale or
transfer which includes an election as to the consideration to be received by
the holders, such holder of Common Shares failed to exercise its rights of
election, as to the kind or amount of securities, cash and other property
receivable upon such consolidation, merger, sale or transfer (provided that if
the kind or amount of securities, cash and other property receivable upon such
consolidation, merger, sale or transfer is not the same for each Common Share
held immediately prior to such consolidation, merger, sale or transfer by a
Person other than a constituent Person or an Affiliate thereof and in respect of
which such rights of election shall not have been exercised ("NON-ELECTING
SHARE"), then for the purpose of this paragraph (i) the kind and amount of
securities, cash and other property receivable upon such consolidation, merger,
sale or transfer for each non-electing share shall be deemed to be the kind and
amount so receivable per share by a plurality of the non-electing shares).
Adjustments for events subsequent to the effective date of such a consolidation,
merger and sale of assets shall be as nearly equivalent as may be practicable to
the adjustments provided for in this Warrant.  In any such event, effective
provisions shall be made in the certificate or articles of incorporation of the
resulting or surviving corporation, in any contract of sale, conveyance, lease
or transfer, or otherwise so that the provisions set forth herein for the
protection of the rights of the Holder shall thereafter continue to be
applicable; and any such resulting or surviving corporation shall expressly
assume the obligation to deliver, upon exercise, such shares of stock, other
securities, cash and property.  The provisions of this paragraph (i) shall
similarly apply to


                                       12



successive consolidations, mergers, sales, leases or transfers.
Notwithstanding the foregoing provisions of this paragraph (i), the treatment
of this Warrant in connection with the merger of the Company with and into
Merrill Corporation shall be governed by paragraph (o).

       (j) NOTICES.  Any notice, demand or delivery authorized by this Warrant
Certificate shall be in writing and shall be given to the Holder or the Company
as the case may be, at its address (or telecopier number) set forth below, or
such other address (or telecopier number) as shall have been furnished to the
party giving or making such notice, demand or delivery:

          If to the Company:    Viking Merger Sub, Inc.
                                c/o   DLJ Merchant Banking Partners II, L.P.
                                277 Park Avenue
                                New York, NY 10172
                                Telecopy: 212-892-7272
                                Attention: William F. Dawson, Jr.

         If to the Holder:      To the address of such holder set forth on
                                the signature page hereof.

       Each such notice, demand or delivery shall be effective (i) if given by
telecopy, when such telecopy is transmitted to the telecopy number specified
herein and the intended recipient confirms the receipt of such telecopy or (ii)
if given by any other means, when received at the address specified herein.

       (k) RIGHTS OF THE HOLDER.  Prior to the exercise of any Warrant, the
Holder shall not, by virtue hereof, be entitled to any rights of a shareholder
of the Company, including, without limitation, the right to vote, to receive
dividends or other distributions or to receive any notice of meetings of
shareholders or any notice of any proceedings of the Company except as may be
specifically provided for herein.

       (l) REGISTRATION RIGHTS.  The Holder of this Warrant is entitled to the
registration rights relating to the Warrants and the Warrant Shares set forth in
the Investors' Agreement.

       (m) GOVERNING LAW. THIS WARRANT CERTIFICATE AND ALL RIGHTS ARISING
HEREUNDER SHALL BE CONSTRUED AND DETERMINED IN ACCORDANCE WITH THE INTERNAL LAWS
OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS AND
THE PERFORMANCE THEREOF SHALL BE GOVERNED AND ENFORCED IN ACCORDANCE WITH SUCH
LAWS.


                                       13


       (n) AMENDMENTS; WAIVERS.  Any provision of this Warrant Certificate may
be amended or waived if, and only if, such amendment or waiver is in writing and
signed, in the case of an amendment, by the Holder and the Company, or in the
case of a waiver, by the party against whom the waiver is to be effective.  No
failure or delay by either party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege.  The rights and remedies herein provided
shall be cumulative and not exclusive of any rights or remedies provided by law.

       (o) CONVERSION UPON MERGER.  In lieu of the provisions of paragraph (i),
upon the consummation of the merger of the Company with and into Merrill
Corporation on the date hereof pursuant to the Agreement and Plan of Merger
dated as of July 14, 1999 between the Company and Merrill Corporation, as
amended, this Warrant shall automatically and without further action on the part
of the Holder constitute a Warrant to acquire shares of voting Class B common
stock $.01 per share of Merrill Corporation on the terms and conditions as are
set forth herein.

                                       14



       IN WITNESS WHEREOF, the Company has duly caused this Warrant Certificate
to be signed by its duly authorized officer and to be dated as of November 23,
1999.


                            VIKING MERGER SUB, INC.



                            By:___________________________
                            Name:
                            Title:



Acknowledged and Agreed:

[HOLDER]


By: ___________________________
       Name:
       Title:

      [Address]



                              WARRANT SUBSCRIPTION FORM



To:    Viking Merger Sub, Inc.

       The undersigned irrevocably exercises the Warrant for the purchase of
___________ Common Shares (the "SHARES"), par value $0.01 per share, of Viking
Merger Sub, Inc. (the "COMPANY") at $_____ per Share (the Exercise Price
currently in effect pursuant to the Warrant) and herewith makes payment of
$___________ (such payment being made in cash or by certified or official bank
or bank cashier's check payable to the order of the Company or by any permitted
combination of such cash or check), all on the terms and conditions specified in
the within Warrant Certificate, surrenders this Warrant Certificate and all
right, title and interest therein to the Company and directs that the Shares
deliverable upon the exercise of this Warrant be registered or placed in the
name and at the address specified below and delivered thereto.

                                         -OR-

       The undersigned irrevocably exercises the Warrant for the purchase of
___________ Common Shares (the "SHARES"), par value $0.01 per share, of Viking
Merger Sub, Inc. (the "COMPANY") at $_____ per Share (the Exercise Price
currently in effect pursuant to the Warrant) (provided that in lieu of payment
of $_________, the undersigned will receive a number of Shares reduced by a
number of Common Shares having an aggregate Fair Market Value (as defined in the
Warrant) equal to the aggregate Exercise Price for the Shares), all on the terms
and conditions specified in the within Warrant Certificate, surrenders this
Warrant Certificate and all right, title and interest therein to the Company and
directs that the Shares deliverable upon the exercise of this Warrant be
registered or placed in the name and at the address specified below and
delivered thereto.

                                         -OR-

       The undersigned irrevocably exercises the Warrant for the purchase
__________ Common Shares (the "SHARES"), par value $0.01 per share, of Viking
Merger Sub, Inc. (the "COMPANY") at $_______ per Share (the Exercise Price
currently in effect pursuant to the Warrant),  and herewith makes payment of
$_____ of  the aggregate Exercise Price for the Shares in cash, certified or
official bank or bank cashier's check (or a combination of cash and check), and
herewith delivers as payment of  $____ of the aggregate Exercise Price that
number of Common Shares having an aggregate Fair Market Value (as defined in the
Warrant) equal to such non-cash portion of the aggregate Exercise Price for the
Shares, all on the terms and conditions specified in the within Warrant
Certificate, surrenders this Warrant Certificate and all right, title and
interest therein to the




Company and directs that the Shares deliverable upon the exercise of this
Warrant be registered or placed in the name and at the address specified
below and delivered thereto.

                                         -OR-

       The undersigned irrevocably exercises the Warrant for the purchase of
__________ Common Shares, par value $0.01 per share, of Viking Merger Sub, Inc.
(the "COMPANY") at $____ per share (the Exercise Price currently in effect
pursuant to the Warrant),  and herewith makes payment of  $_____ of  the
aggregate Exercise Price for the Shares in cash, certified or official bank or
bank cashier's check (or a combination of cash and check), and herewith delivers
as payment of  $____ of the aggregate Exercise Price that number of Warrants
which, if exercised, would result in a number of Common Shares having an
aggregate Fair Market Value (as defined in the Warrant) equal to such non-cash
portion of the aggregate Exercise Price for the Shares, all on the terms and
conditions specified in the within Warrant Certificate, surrenders this Warrant
Certificate and all right, title and interest therein to the Company and directs
that the Shares deliverable upon the exercise of this Warrant be registered or
placed in the name and at the address specified below and delivered thereto.


       Date: __________ __, ____.


                            ________________________________
                                   (Signature of Owner)
                            ________________________________
                                   (Street Address)
                            ________________________________
                                   (City) (State) (Zip Code)




       Securities and/or check to be issued to:

       Please insert social security or identifying number:

       Name:

       Street Address:

       City, State and Zip Code:

       Any unexercised portion of the Warrant evidenced by the

       within Warrant Certificate to be issued to:


       Please insert social security or identifying number:

       Name:

       Street Address:

       City, State and Zip Code:



                               WARRANT ASSIGNMENT FORM


                                                       Dated__________________


       FOR VALUE RECEIVED,____________________________________________________


       hereby sells, assigns and transfers unto,

       _______________________________________________________(the "ASSIGNEE"),
       (please type or print in block letters)


       ________________________________________________________________________
       (insert address)


       its right to purchase up to _____ Common Shares represented by this
       Warrant and does hereby irrevocably constitute and appoint
       _______________________ Attorney, to transfer the same on the books of
       the Company, with full power of substitution in the premises.




                              Signature _________________________________

EX-5.1

                  [Oppenheimer Wolff & Donnelly LLP Letterhead]

February 11, 2000

Merrill Corporation
One Merrill Circle
St. Paul, Minnesota 55108

RE:      REGISTRATION STATEMENT ON FORM S-4

Ladies and Gentlemen:

         We have acted as counsel to Merrill Corporation, a Minnesota
corporation (the "Company"), in connection with the preparation of a
Registration Statement on Form S-4 (the "Registration Statement") filed by the
Company and its subsidiary guarantors named as additional registrants in the
Registration Statement (the "Guarantors") with the Securities and Exchange
Commission with respect to up to $140,000,000 aggregate principal amount of the
Company's 12% Series B Senior Subordinated Notes due 2009 (the "Exchange Notes")
which will be offered in exchange for the Company's issued and outstanding 12%
Series A Senior Subordinated Notes due 2009 (the "Old Notes") as described in
the Registration Statement.

         The Exchange Notes are to be issued in exchange for the Old Notes
pursuant to an indenture (the "Indenture") dated as of November 23, 1999 between
the Company, the Guarantors and Norwest Bank Minnesota, N.A., as Trustee (the
"Trustee") and the related A/B Exchange Registration Rights Agreement among the
Company, the Guarantors and Donaldson, Lufkin & Jenrette Securities Corporation
(the "Registration Rights Agreement").

         In so acting, we have examined and relied upon such records, documents
and other instruments as in our judgment are necessary or appropriate in order
to express the opinion hereinafter set forth and have assumed the genuineness of
all signatures, the authenticity of all documents submitted to us as originals,
and the conformity to original documents of all documents submitted to us as
certified or photostatic copies.

         Based upon and subject to the foregoing, we are of the opinion that the
Exchange Notes, when duly executed and authenticated in accordance with the
terms of the Indenture, and delivered in exchange for the Old Notes in
accordance with the terms of the Indenture, will have been validly issued and
will be legally binding obligations of the Company, subject to (a) the effect of
bankruptcy, insolvency, reorganization, arrangement, moratorium, fraudulent
conveyance, fraudulent transfer and other similar laws relating to or affecting
the rights of creditors generally and (b) general principles of equity
(including, without limitation, concepts of materiality, reasonableness, good
faith and fair dealing and the possible unavailability of specific




Merrill Corporation
February 11, 2000
Page 2

performance, injunctive relief or other equitable remedies), regardless of
whether considered in a proceeding at law or in equity.

         We express no opinion herein other than as to the laws of the State of
New York, State of Minnesota and the federal laws of the United States.

         We hereby consent to the reference to our law firm in the Registration
Statement under the caption "Legal Matters" and to the use of this opinion as an
exhibit to the Registration Statement.

                                        Very truly yours,

                                        OPPENHEIMER WOLFF & DONNELLY LLP

                                        /s/ Oppenheimer Wolff & Donnelly LLP

EX-10.1

                                                               EXECUTION VERSION


                                 PURCHASE AGREEMENT


                                MERRILL CORPORATION
                                        and
                              VIKING MERGER SUB, INC.
                                     as Issuers

                          and the Guarantors named herein


                                   140,000 UNITS
                                   consisting of
                       12% SENIOR SUBORDINATED NOTES DUE 2009
                                        AND
                    WARRANTS TO PURCHASE SHARES OF COMMON STOCK
                           Dated as of November 18, 1999


                           DONALDSON, LUFKIN & JENRETTE
                               SECURITIES CORPORATION


- --------------------------------------------------------------------------------



                                   140,000 Units
                                   consisting of
                12% Series A Senior Subordinated Notes due 2009 and
                    Warrants to Purchase Shares of Common Stock

                                 PURCHASE AGREEMENT

                                                               November 18, 1999

DONALDSON, LUFKIN & JENRETTE
  SECURITIES CORPORATION
277 Park Avenue
New York, New York  10172

Ladies and Gentlemen:

          Merrill Corporation, a Minnesota corporation (the "COMPANY"), and
Viking Merger Sub, Inc., a Minnesota corporation ("VIKING" and, together with
the Company, the "ISSUERS"), propose to issue and sell to Donaldson, Lufkin &
Jenrette Securities Corporation (the "INITIAL PURCHASER") 140,000 units (the
"UNITS"), each consisting of $1,000 in aggregate principal amount of the
Company's 12% Senior Subordinated Notes due 2009 (the "SERIES A NOTES"),
together with the Subsidiary Guarantees described below, and one warrant
(collectively, the "WARRANTS") initially to purchase 1.22987 Common Shares of
Viking, par value $0.01 per share (the "WARRANT SHARES"), subject to the terms
and conditions set forth herein.  The Units, the Notes and the Warrants are
sometimes collectively referred to herein as the "SECURITIES"

          The Units are being issued and sold in connection with the merger
(the "MERGER") of Viking, with and into the Company, pursuant to an Agreement
and Plan of Merger (as amended to the date hereof, the "MERGER AGREEMENT"),
dated as of July 14, 1999, between the Company and Viking.  Unless the context
otherwise requires, the "COMPANY" shall refer to Merrill Corporation both
before and after giving effect to the Merger.  It is understood and agreed that
upon effectiveness of the Merger the Company will be the surviving corporation
and Viking will cease to exist, and the Company will assume all of Viking's
obligations under this Agreement.

          The Series A Notes are to be issued pursuant to the provisions of an
indenture (the "INDENTURE"), to be dated as of the Closing Date (as defined
below), among the Company, the Guarantors (as defined below) and Norwest Bank
Minnesota, N.A., as trustee (the "TRUSTEE").  The Series A Notes and the Series
B Notes (as defined below) issuance in exchange therefor are collectively
referred to herein as the "NOTES."  The Notes will be guaranteed (the
"SUBSIDIARY NOTE GUARANTEES") by each of the entities listed on Schedule A
hereto (each, a "GUARANTOR" and collectively the "GUARANTORS").  Unless the
context otherwise requires, each reference




herein to a Series A Note or Series B Note shall be deemed to include the
related Subsidiary Note Guarantees thereof.

          The Warrants will be issued pursuant to a warrant agreement (the
"WARRANT AGREEMENT"), to be dated as of the Closing Date, between Viking and
Norwest Minnesota Bank, N.A., as warrant agent (the "WARRANT AGENT").  Upon the
effectiveness of the Merger (as defined below), the obligations of Viking under
the Warrants and the Warrant Agreement, by operation of law and otherwise in
accordance with an assumption agreement dated as of the Closing Date between
the Company and Viking (the "WARRANT ASSUMPTION AGREEMENT"), will be assumed by
the Company, and each Warrant will thereby become exercisable for 1.22987
shares of the Company's Class B Stock, par value $0.01 per share (the "CLASS B
COMMON STOCK").  Accordingly, as the context requires, references herein to the
Warrants, the Units and the Warrant Agreement shall be deemed to refer to the
Warrants, the Units and the Warrant Agreement following their assumption by the
Company, and references herein to the Warrant Shares shall be deemed to refer
to the shares of Class B Common Stock issuable on exercise of the Warrants
following the assumption of the Warrants and the Warrant Agreement by the
Company.

          In connection with the Merger, (i) Merrill Communications LLC, a
wholly owned subsidiary of the Company, will enter into a syndicated senior
secured loan facility pursuant to the credit agreement, to be dated the Closing
Date, by and among the Company, as guarantor, Merrill Communications LLC, as
borrower, DLJ Capital Funding, Inc., as syndication agent, Wells Fargo Bank,
N.A., as documentation agent, U.S. Bank National Association, as administrative
agent and DLJ Capital Funding, Inc., as lead arranger, and the various
financial institutions named therein, as lenders (including any agreements
related thereto, the "CREDIT AGREEMENT") and (ii) certain affiliates of the
Initial Purchaser and other persons will purchase shares of capital stock of
Viking (the "INVESTMENT"), in each case as defined and specified in the Merger
Agreement and as described in the Offering Memorandum (as defined below).

          Capitalized terms used but not defined herein shall have the meanings
given to such terms in the Indenture or, if not defined therein, the Merger
Agreement.

          1.     OFFERING MEMORANDUM.  The Units will be offered and sold to
the Initial Purchaser pursuant to one or more exemptions from the registration
requirements under the Securities Act of 1933, as amended (the "ACT").  The
Issuers and the Guarantors have prepared a preliminary offering memorandum,
dated November 3, 1999 (the "PRELIMINARY OFFERING MEMORANDUM") relating to the
Notes, and a final offering memorandum, dated November 18, 1999 (the "OFFERING
MEMORANDUM"), relating to the Units.

          Upon original issuance thereof, and until such time as the same is no
longer required pursuant to the Indenture and Warrant Agreement, as the case
may be, the Securities (and all securities issued in exchange therefor, in
substitution thereof or upon conversion thereof) shall bear the following
legend:

                 "THIS [NOTE] [SECURITY] (OR ITS PREDECESSOR) [AND THE WARRANT
          SHARES TO BE ISSUED UPON ITS EXERCISE HAVE] [HAS] NOT BEEN REGISTERED
          UNDER THE UNITED STATES SECURITIES


                                       2



          ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY
          NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE
          UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, UNITED STATES
          PERSONS, EXCEPT AS SET FORTH IN THE NEXT SENTENCE, BY ITS ACQUISITION
          HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER:

                 (1)    REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
          BUYER" (As defined in Rule 144A under the Securities Act)(A "QIB"),
          (B) IT HAS ACQUIRED THIS [NOTE] [SECURITY] IN AN OFFSHORE TRANSACTION
          IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT OR (C) IT IS
          AN INSTITUTIONAL "ACCREDITED INVESTOR" (as defined in Rule 501(A)(1),
          (2), (3) or (7) of Regulation D under the Securities Act (AN "IAI"),

                 (2)    AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER
          THIS [NOTE] [SECURITY] EXCEPT (A) TO THE COMPANY OR ANY OF ITS
          SUBSIDIARIES, (B) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
          QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A
          TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (C) IN AN OFFSHORE
          TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR 904 OF REGULATION
          S OF THE SECURITIES ACT, (D) IN A TRANSACTION MEETING THE REQUIREMENTS
          OF RULE 144 UNDER THE SECURITIES ACT, (E) TO AN IAI THAT, PRIOR TO
          SUCH TRANSFER, FURNISHES THE [TRUSTEE] [WARRANT AGENT] A SIGNED LETTER
          CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
          TRANSFER OF THIS [NOTE] [SECURITY] (the form of which can be obtained
          from the [Trustee] [Warrant Agent]) AND, IF SUCH TRANSFER IS IN
          RESPECT OF AN AGGREGATE [PRINCIPAL] [PURCHASE] AMOUNT OF [NOTES]
          [SECURITIES] LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO
          THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES
          ACT, (F) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
          REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF
          COUNSEL ACCEPTABLE TO THE COMPANY) OR (G) PURSUANT TO AN EFFECTIVE
          REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE
          APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY
          OTHER APPLICABLE JURISDICTION, AND

                 (3)    AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS
          [NOTE] [SECURITY] OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE
          SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.


                                       3



          AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND "UNITED STATES"
          HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE
          SECURITIES ACT.  THE [INDENTURE] [WARRANT AGREEMENT] CONTAINS A
          PROVISION REQUIRING THE [TRUSTEE] [WARRANT AGENT] TO REFUSE TO
          REGISTER ANY TRANSFER OF THIS [NOTE] [SECURITY] IN VIOLATION OF THE
          FOREGOING."

          Until such time as the Warrants become separately transferable
according to the terms of the Warrant Agreement, the Warrants shall bear the
following additional legend:

                 "THE WARRANTS EVIDENCED BY THIS CERTIFICATE ARE INITIALLY
          ISSUED AS PART OF AN ISSUANCE OF UNITS (THE "UNITS"), EACH OF WHICH
          CONSISTS OF $1,000 PRINCIPAL AMOUNT AT MATURITY OF THE 12% SENIOR
          SUBORDINATED NOTES DUE 2009 (THE "NOTES") OF MERRILL CORPORATION AND
          ONE WARRANT TO PURCHASE 1.22987 SHARES, PAR VALUE $0.01 PER SHARE, OF
          MERRILL CORPORATION CLASS B COMMON STOCK.

                 PRIOR TO THE EARLIEST TO OCCUR OF (I) 180 DAYS AFTER THE
          CLOSING OF THE OFFERING OF THE UNITS, (II) THE DATE ON WHICH A
          REGISTRATION STATEMENT WITH RESPECT TO A REGISTERED EXCHANGE OFFER FOR
          THE NOTES IS DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (III) THE
          DATE A SHELF REGISTRATION STATEMENT WITH RESPECT TO THE NOTES OR THE
          WARRANTS IS DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (IV) SUCH
          DATE AS DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION IN ITS
          SOLE DISCRETION SHALL DETERMINE AND (V) IN THE EVENT OF A CHANGE OF
          CONTROL (AS DEFINED IN THE INDENTURE GOVERNING THE NOTES), THE DATE
          MERRILL CORPORATION MAILS THE REQUISITE NOTICE TO THE HOLDERS, THE
          WARRANTS EVIDENCED BY THIS CERTIFICATE MAY NOT BE TRANSFERRED OR
          EXCHANGED SEPARATELY FROM, BUT MAY BE TRANSFERRED OR EXCHANGED ONLY
          TOGETHER WITH, THE NOTES."

          2.     AGREEMENTS TO SELL AND PURCHASE.  On the basis of the
representations, warranties and covenants contained in this Agreement, and
subject to the terms and conditions contained herein, the Issuers agree to issue
and sell to the Initial Purchaser, and the Initial Purchaser agrees to purchase
from the Issuers, all of the Units initially at a purchase price equal to
$943.36 per Unit (the "PURCHASE PRICE").

          3.     TERMS OF OFFERING.  The Initial Purchaser has advised the
Issuers that the Initial Purchaser will make offers (the "EXEMPT RESALES") of
the Units purchased hereunder on the terms set forth in the Offering
Memorandum, as amended or supplemented, solely to persons whom the Initial
Purchaser reasonably believes to be "qualified institutional buyers" as defined
in Rule 144A under the Act ("QIBS") (such persons being referred to herein as
the "ELIGIBLE


                                       4



PURCHASERS").  The Initial Purchaser will offer the Units to Eligible
Purchasers initially at a price equal to $972.54 per Unit.  Such price may be
changed at any time without notice.

          Holders (including subsequent transferees) of the Series A Notes will
have the registration rights set forth in the registration rights agreement
(the "REGISTRATION RIGHTS AGREEMENT"), to be dated the Closing Date, in
substantially the form of Exhibit A hereto, for so long as such Series A Notes
constitute "TRANSFER RESTRICTED SECURITIES" (as defined in the Registration
Rights Agreement).  Pursuant to the Registration Rights Agreement, the Company
and the Guarantors will agree to file with the Securities and Exchange
Commission (the "COMMISSION") under the circumstances set forth therein, (i) a
registration statement under the Act (the "EXCHANGE OFFER REGISTRATION
STATEMENT") relating to the Company's 12% Senior Subordinated Notes due 2009
(the "SERIES B NOTES"), to be offered in exchange for the Series A Notes (such
offer to exchange being referred to as the "EXCHANGE OFFER") or (ii) a shelf
registration statement pursuant to Rule 415 under the Act (the "SHELF
REGISTRATION STATEMENT" and, together with the Exchange Offer Registration
Statement, the "REGISTRATION STATEMENTS") relating to the resale by certain
holders of the Series A Notes and to use their respective reasonable best
efforts to cause such Registration Statements to be declared and remain
effective and usable for the periods specified in the Registration Rights
Agreement and to consummate the Exchange Offer.

          Holders (including subsequent transferees) of the Warrants and the
Warrant Shares will have the rights set forth in the warrant registration
rights agreement (the "WARRANT REGISTRATION RIGHTS AGREEMENT"), to be dated the
Closing Date, in substantially the form attached as Exhibit B hereto.  Pursuant
to the Warrant Registration Rights Agreement, the Company will agree to file a
shelf registration statement (the "WARRANT REGISTRATION STATEMENT") covering
resales of the Warrants, the issuance of Warrant Shares upon exercise of
Warrants sold pursuant to such Warrant Registration Statement and resales of
Warrant Shares, and to use its reasonable best efforts to have such Warrant
Registration Statement declared and remain effective and usable for the periods
specified in the Registration Rights Agreement.

          This Agreement, the Indenture, the Notes, the Subsidiary Note
Guarantees, the Registration Rights Agreement, the Warrant Agreement, the
Warrants, the Warrant Assumption Agreement, the Warrant Registration Rights
Agreement, the Merger Agreement, the Voting Agreement and Irrevocable Proxy,
the Credit Agreement, the LLC Assignment/Assumption Agreement and the LLC
Services Agreement (as defined below) are sometimes referred to collectively as
the "OPERATIVE DOCUMENTS."

          4.     DELIVERY AND PAYMENT.

          (a)    Delivery of, and payment of the Purchase Price for, the Units
shall be made at the offices of Davis Polk & Wardwell, New York, New York, or
such other location as may be mutually acceptable.  Such delivery and payment
shall be made at 11:00 a.m. New York City time, on November 23, 1999 or at such
other time on the same date or such other date as shall be agreed upon by the
Initial Purchaser and the Issuers in writing.  The time and date of such
delivery and the payment for the Series A Notes are herein called the "CLOSING
DATE."


                                       5



          (b)    One or more Series A Notes and one or more Warrants, in
definitive global form, registered in the name of Cede & Co., as nominee of The
Depository Trust Company ("DTC"), having an aggregate principal amount or
purchase amount corresponding to the aggregate principal amount and purchase
amount of the Series A Notes and Warrants, respectively, sold pursuant to
Exempt Resales (collectively, the "GLOBAL SECURITIES"), shall be delivered by
the Issuers to the Initial Purchaser (or as the Initial Purchaser directs) in
each case with any transfer taxes thereon duly paid by the Issuers against
payment by the Initial Purchaser of the Purchase Price thereof by wire transfer
in immediately available funds to or upon the order of the Issuers.  The Global
Securities shall be made available to the Initial Purchaser for inspection not
later than 9:30 a.m., New York City time, on the business day immediately
preceding the Closing Date.

          5.     AGREEMENTS OF THE ISSUERS AND THE GUARANTORS.  As of the date
hereof, the Company, the Guarantors and Viking hereby agree with the Initial
Purchaser as follows:

          (a)    To advise the Initial Purchaser promptly and, if requested by
the Initial Purchaser, confirm such advice in writing, (i) of the issuance by
any state securities commission of any stop order suspending the qualification
or exemption from qualification of any Securities for offering or sale in any
jurisdiction designated by the Initial Purchaser pursuant to Section 5(e)
hereof, or the initiation of any proceeding by any state securities commission
or any other federal or state regulatory authority for such purpose and (ii) of
the happening of any event during the period referred to in Section 5(c) below
that makes any statement of a material fact made in the Preliminary Offering
Memorandum or the Offering Memorandum untrue or that requires any additions to
or changes in the Preliminary Offering Memorandum or the Offering Memorandum in
order to make the statements therein not misleading.  The Issuers and the
Guarantors shall use their best efforts to prevent the issuance of any stop
order or order suspending the qualification or exemption of any Securities
under any state securities or Blue Sky laws and, if at any time any state
securities commission or other federal or state regulatory authority shall
issue an order suspending the qualification or exemption of any Securities
under any state securities or Blue Sky laws, the Issuers and the Guarantors
shall use their best efforts to obtain the withdrawal or lifting of such order
at the earliest possible time; PROVIDED, HOWEVER, that neither the Issuers nor
the any of the Guarantors shall be required in connection therewith to qualify
as a foreign corporation in any jurisdiction in which it is not now so
qualified or to take any action that would subject it to general consent to
service of process or taxation, other than as to matters and transactions
relating to the Preliminary Offering Memorandum, the Offering Memorandum or
Exempt Resales, in any jurisdiction in which it is not now so subject.

          (b)    To furnish the Initial Purchaser and those persons identified
by the Initial Purchaser to the Issuers as many copies of the Preliminary
Offering Memorandum and the Offering Memorandum, and any amendments or
supplements thereto, as the Initial Purchaser may reasonably request for the
time period specified in Section 5(c).  Subject to the Initial Purchaser's
compliance with its representations and warranties and agreements set forth in
Section 8 hereof, each of the Issuers, the Guarantors and Viking consents to
the use of the Preliminary Offering Memorandum, and any amendments and
supplements thereto required pursuant hereto, by the Initial Purchaser in
connection with Exempt Resales.


                                       6



          (c)    During such period as in the opinion of counsel for the Initial
Purchaser, an Offering Memorandum is required by law to be delivered in
connection with Exempt Resales by the Initial Purchaser and in connection with
market-making activities of the Initial Purchaser for so long as any Series A
Notes or Warrants are outstanding, (i) not to make any amendment or supplement
to the Offering Memorandum of which the Initial Purchaser shall not previously
have been advised or to which the Initial Purchaser shall reasonably object
after being so advised and (ii) to prepare promptly upon the Initial Purchaser's
reasonable request, any amendment or supplement to the Offering Memorandum which
may be necessary or advisable in connection with such Exempt Resales or such
market-making activities.

          (d)    If, during the period referred to in Section 5(c) above, any
event shall occur or condition shall exist as a result of which, in the opinion
of counsel to the Initial Purchaser, it becomes necessary to amend or supplement
the Offering Memorandum in order to make the statements therein, in the light of
the circumstances when such Offering Memorandum is delivered to an Eligible
Purchaser, not misleading, or if, in the opinion of counsel to the Initial
Purchaser, it is necessary to amend or supplement the Offering Memorandum to
comply with any applicable law, forthwith to prepare an appropriate amendment or
supplement to such Offering Memorandum so that the statements therein, as so
amended or supplemented, will not, in the light of the circumstances when it is
so delivered, be misleading, or so that such Offering Memorandum will comply
with applicable law, and to furnish to the Initial Purchaser and such other
persons as the Initial Purchaser may designate such number of copies thereof as
the Initial Purchaser may reasonably request.

          (e)    Prior to the sale of all Units pursuant to Exempt Resales as
contemplated hereby, to cooperate with the Initial Purchaser and counsel to the
Initial Purchaser in connection with the registration or qualification of the
Units for offer and sale to the Initial Purchaser and pursuant to Exempt Resales
under the securities or Blue Sky laws of such jurisdictions as the Initial
Purchaser may request and to continue such registration or qualification in
effect so long as required for Exempt Resales and to file such consents to
service of process or other documents as may be necessary in order to effect
such registration or qualification; PROVIDED, HOWEVER, that none of the Issuers,
the Guarantors or Viking shall be required in connection therewith to qualify as
a foreign corporation in any jurisdiction in which it is not now so qualified or
to take any action that would subject it to general consent to service of
process or taxation other than as to matters and transactions relating to the
Preliminary Offering Memorandum, the Offering Memorandum or Exempt Resales, in
any jurisdiction in which it is not now so subject.

          (f)    So long as the Notes or Warrants are outstanding, (i) to mail
or, with the affirmative consent of any record holder of any of the Notes or
Warrants to whom such transmittal is sent, to transmit via email or, with such
party's affirmative consent, otherwise make electronically available, and to
make generally available as soon as practicable after the end of each fiscal
year to the record holders of the Notes or Warrants, as applicable, a financial
report of the Company and its subsidiaries on a consolidated basis (and a
similar financial report of all unconsolidated subsidiaries, if any), all such
financial reports to include a consolidated balance sheet, a consolidated
statement of operations, a consolidated statement of cash flows and a
consolidated statement of shareholders' equity as of the end of and for such
fiscal year, together with comparable information as of the end of and for the
preceding year, certified by the Company's independent public accountants, and
(ii) to mail or, with the affirmative consent of


                                       7


any record holder of any of the Notes or Warrants to whom such transmittal is
sent, to transmit via email or, with such party's affirmative consent,
otherwise make electronically available, and to and make generally available
as soon as practicable after the end of each quarterly period (except for the
last quarterly period of each fiscal year) to such holders, a consolidated
balance sheet, a consolidated statement of operations and a consolidated
statement of cash flows as of the end of and for such period, and for the
period from the beginning of such year to the close of such quarterly period,
together with comparable information for the corresponding periods of the
preceding year.

          (g)    So long as the Notes or Warrants are outstanding, to furnish to
the Initial Purchaser as soon as available copies of all reports or other
communications furnished by the Issuers or the Guarantors to their respective
security holders or furnished to or filed with the Commission or any national
securities exchange on which any class of securities of either of the Issuers or
any of the Guarantors is listed and such other publicly available information
concerning the Issuers and/or their subsidiaries as the Initial Purchaser may
reasonably request.

          (h)    So long as any of the Series A Notes or the Warrants remain
outstanding and during any period in which the Company or any of the Guarantors
is not subject to Section 13 or 15(d) of the Securities Exchange Act of 1934, as
amended (the "EXCHANGE ACT"), to make available to any holder thereof in
connection with any sale thereof and any prospective purchaser thereof from such
holder, the information ("RULE 144A INFORMATION") required by Rule 144A(d)(4)
under the Act.

          (i)    Whether or not the transactions contemplated in this Agreement
are consummated or this Agreement is terminated, to pay or cause to be paid all
expenses incident to the performance of the obligations of the Issuers and the
Guarantors under this Agreement, including:  (i) the fees, disbursements and
expenses of counsel to the Issuers and the Guarantors and accountants of the
Issuers and the Guarantors in connection with the sale and delivery of the Units
to the Initial Purchaser and pursuant to Exempt Resales, and all other fees and
expenses in connection with the preparation, printing, filing and distribution
of the Preliminary Offering Memorandum, the Offering Memorandum and all
amendments and supplements to any of the foregoing (including financial
statements), including the mailing and delivering of copies thereof to the
Initial Purchaser and persons designated by it in the quantities specified
herein, (ii) all costs and expenses related to the transfer and delivery of the
Units to the Initial Purchaser and pursuant to Exempt Resales, including any
transfer or other taxes payable thereon, (iii) all costs of printing or
producing this Agreement, the other Operative Documents and any other agreements
or documents in connection with the offering, purchase, sale or delivery of the
Units, (iv) all expenses in connection with the registration or qualification of
the Units for offer and sale under the securities or Blue Sky laws of the
several states and all costs of printing or producing any preliminary and
supplemental Blue Sky memoranda in connection therewith (including the filing
fees and reasonable fees and disbursements of counsel for the Initial Purchaser
in connection with such registration or qualification and memoranda relating
thereto), (v) the cost of printing certificates representing the Series A Notes
and the Warrants, (vi) all expenses and listing fees in connection with the
application for quotation of the Series A Notes, the Warrants and the Units in
the National Association of Securities Dealers, Ic. ("NASD") Automated Quotation
System - PORTAL ("PORTAL"), (vii) the fees and expenses of the Trustee and the
Trustee's counsel in connection with the Indenture, the Notes and the Subsidiary
Guarantees,


                                       8


(viii) the costs and charges of any transfer agent, registrar and/or
depositary (including DTC), (ix) any fees charged by rating agencies for the
rating of the Notes, (x) all costs and expenses of the Exchange Offer and any
Registration Statement, as set forth in the Registration Rights Agreement,
(xi) the fees and expenses of the Warrant Agent and the Warrant Agent's
counsel in connection with the Warrant Agreement, and the Warrants (xii) all
costs and expenses of the Warrant Registration Statement, as set forth in the
Warrant Registration Rights Agreement, and (xiii) all other costs and
expenses incident to the performance of the obligations of the Issuers and
the Guarantors hereunder for which provision is not otherwise made in this
Section. Notwithstanding the foregoing, the Issuers shall not be required (A)
to pay for any fees and disbursements of counsel for the Initial Purchaser
(other than those paid in connection with the registration or qualification
of the Units for offer and sale under the securities or Blue Sky laws and the
preparation of any preliminary and supplemental Blue Sky memoranda in
connection therewith) or (B) in connection with any "road show," to reimburse
the Initial Purchaser for the expense of chartering any aircraft or any
out-of-pocket expenses of personnel of the Initial Purchaser in connection
with the road show.

          (j)    To use its reasonable best efforts to effect the inclusion of
the Series A Notes, the Warrants and the Units in PORTAL and to maintain the
listing of such Securities on PORTAL for so long as they are outstanding or, in
the case of the Warrants, until disposed of pursuant to an effective
Registration Statement or distributed to the public pursuant to Rule 144 under
the Act.

          (k)    To use its reasonable best efforts to obtain the approval of
DTC for "book-entry" transfer of the Notes and the Warrants, and to comply with
all of its agreements set forth in the representation letters to DTC relating to
the approval of the Notes and the Warrants by DTC for "book-entry" transfer.

          (l)    During the period beginning on the date hereof and continuing
to and including the Closing Date, not to offer, sell, contract to sell or
otherwise transfer or dispose of any debt securities or common stock of the
Issuers or any of the Guarantors or any warrants, rights or options to purchase
or otherwise acquire debt securities or common stock of the Issuers or the
Guarantors substantially similar to the Notes, the Warrants or the Warrant
Shares (other than (i) the Units and (ii) commercial paper issued in the
ordinary course of business), without the prior written consent of the Initial
Purchaser.

          (m)     Not to sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any security (as defined in the Act) that
would be integrated with the sale of the Units to the Initial Purchaser or
pursuant to Exempt Resales in a manner that would require the registration of
any such sale of the Units under the Act.

          (n)    Not to voluntarily claim, and to actively resist any attempts
to claim, the benefit of any usury laws against the holders of any Notes.

          (o)    To cause the Exchange Offer to be made in the appropriate form
to permit Series B Notes to be offered in exchange for the Series A Notes to
comply with all applicable federal and state securities laws in connection with
the Exchange Offer.


                                       9


          (p)    To comply with all of its agreements set forth in the
Registration Rights Agreement and the Warrant Registration Rights Agreement.

          (q)    To cause the Merger to be consummated (subject to the terms and
conditions set forth in the Merger Agreement) on the Closing Date concurrently
with the closing hereunder of the offering of the Units.

          (r)    To use its reasonable best efforts to do and perform all things
required or necessary to be done and performed under this Agreement by it prior
to the Closing Date and to satisfy all conditions precedent to the delivery of
the Units.

          (s)    For so long as any of the Securities are outstanding and if, in
the reasonable judgment of the Initial Purchaser or its counsel, the Initial
Purchaser or any of its affiliates (as defined in the rules and regulations
under the Securities Act) is required to deliver a prospectus (any such
prospectus, a "MARKET MAKING PROSPECTUS") in connection with sales of the
Securities, to (i) provide the Initial Purchaser, without charge, as many copies
of the Market Making Prospectus as the Initial Purchaser may reasonably request,
(ii) periodically amend the Registration Statement or the Warrant Registration
Statement so that the information contained in the Registration Statement
complies with the requirements of Section 10(a) of the Securities Act, (iii)
amend the Registration Statement, the Warrant Registration Statement or amend or
supplement the Market Making Prospectus when necessary to reflect any material
changes in the information provided therein and promptly file such amendment or
supplement with the Commission, (iv) provide the Initial Purchaser with copies
of each amendment or supplement so filed and such other documents, including
opinions of counsel and "comfort" letters, as the Initial Purchaser may
reasonably request and (v) indemnify the Initial Purchaser with respect to any
Market Making Prospectus and, if applicable, contribute to any amount paid or
payable by the Initial Purchaser in a manner substantially identical to that
specified in Section 9 hereof (with appropriate modifications).  The Issuers and
the Guarantors consent to the use, subject to the provisions of the Securities
Act and the state securities or Blue Sky laws of the jurisdictions in which the
Units are offered by the Initial Purchaser, of each Market Making Prospectus.

          6.     REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY AND
THE GUARANTORS.  As of the date hereof, each of the Company and the Guarantors
represents and warrants to, and agrees with, of the Initial Purchaser that:

          (a)    The Preliminary Offering Memorandum as of its date did not, and
the Offering Memorandum as of the date hereof and the Closing Date does not and
will not, and any supplement or amendment to them will not, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that the
representations and warranties contained in this paragraph (a) shall not apply
to statements in or omissions from the Preliminary Offering Memorandum or the
Offering Memorandum (or any supplement or amendment thereto) based upon
information relating to the Initial Purchaser furnished to the Company in
writing by the Initial Purchaser expressly for use therein.  No stop order
preventing the use of the Preliminary Offering Memorandum or the Offering
Memorandum, or any amendment or supplement thereto, or any order asserting that
any


                                      10


of the transactions contemplated by this Agreement are subject to the
registration requirements of the Act, has been issued.

          (b)    Each of the Company and its subsidiaries has been duly
organized, is validly existing as a company in good standing under the laws of
its jurisdiction of organization and has the requisite  power and authority to
carry on its business as described in the Preliminary Offering Memorandum and
the Offering Memorandum and to own, lease and operate its properties, and each
is duly qualified and is in good standing as a foreign entity authorized to do
business in each jurisdiction in which the nature of its business or its
ownership or leasing of property requires such qualification, except where the
failure to be so qualified would not (i) have a material adverse effect on the
business, prospects, financial condition or results of operations of the Company
and its subsidiaries, taken as a whole, or (ii) in any manner draw into question
the validity of this Agreement or any of the other Operative Documents (the
events referred to in clauses (i) or (ii), each a "MATERIAL ADVERSE EFFECT").

          (c)    All equity interests of the Company have been duly authorized
and validly issued and are fully paid and, if applicable, non-assessable and not
subject to any preemptive or similar rights.

          (d)    The entities listed on Schedule A hereto are the only
subsidiaries, direct or indirect, of the Company.  All of the outstanding equity
interests of each of the Company's subsidiaries have been duly authorized and
validly issued and are fully paid and non-assessable, and are owned by the
Company (except as otherwise described on Schedule A), directly or indirectly
through one or more subsidiaries, free and clear of any security interest,
claim, lien, encumbrance or adverse interest of any nature (each, a "LIEN")
(other than any Liens arising under the Credit Agreement).

          (e)    This Agreement has been duly authorized, executed and delivered
by the Company and each of the Guarantors.

          (f)    The Indenture has been duly authorized by the Company and each
of the Guarantors and, on the Closing Date, will have been validly executed and
delivered by the Company and each of the Guarantors.  When the Indenture has
been duly executed and delivered by the Company and each of the Guarantors, the
Indenture will be a valid and binding agreement of the Company and each of the
Guarantors, enforceable against the Company and each of the Guarantors in
accordance with its terms except as (i) the enforceability thereof may be
limited by bankruptcy, insolvency or similar laws affecting creditors' rights
generally and (ii) rights of acceleration and the availability of equitable
remedies may be limited by equitable principles of general applicability.  On
the Closing Date, the Indenture will conform in all material respects to the
requirements of the Trust Indenture Act of 1939, as amended (the "TIA" or "TRUST
INDENTURE ACT"), and the rules and regulations of the Commission applicable to
an indenture which is qualified thereunder.

          (g)    The Series A Notes have been duly authorized and, on the
Closing Date, will have been validly executed and delivered by the Company.
When the Series A Notes have been issued, executed and authenticated in
accordance with the provisions of the Indenture and delivered to and paid for by
the Initial Purchaser in accordance with the terms of this Agreement,


                                      11


the Series A Notes will be entitled to the benefits of the Indenture and will
be valid and binding obligations of the Company, enforceable against the
Company in accordance with their terms except as (i) the enforceability
thereof may be limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and (ii) rights of acceleration and the
availability of equitable remedies may be limited by equitable principles of
general applicability.  On the Closing Date, the Series A Notes will conform
in all material respects as to legal matters to the description thereof
contained in the Offering Memorandum.

          (h)    On the Closing Date, the Series B Notes will have been duly
authorized by the Company.  When the Series B Notes are issued, executed and
authenticated in accordance with the terms of the Exchange Offer and the
Indenture, the Series B Notes will be entitled to the benefits of the Indenture
and will be the valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally and (ii) rights of acceleration and the
availability of equitable remedies may be limited by equitable principles of
general applicability.

          (i)    The Subsidiary Note Guarantees in respect of the Series A Notes
have been duly authorized by each Guarantor and, on the Closing Date, will have
been duly executed and delivered by each such Guarantor.  When the Series A
Notes have been issued, executed and authenticated in accordance with the
Indenture and delivered to and paid for by the Initial Purchaser in accordance
with the terms of this Agreement, the Subsidiary Note Guarantees will be
entitled to the benefits of the Indenture and will be the valid and binding
obligation of each Guarantor, enforceable against each such Guarantor in
accordance with its terms, except as (i) the enforceability thereof may be
limited by bankruptcy, insolvency or similar laws affecting creditors' rights
generally and (ii) rights of acceleration and the availability of equitable
remedies may be limited by equitable principals of general applicability.  On
the Closing Date, the Subsidiary Note Guarantees will conform in all material
respects as to legal matters to the description thereof contained in the
Offering Memorandum.

          (j)    The Subsidiary Note Guarantees in respect of the Series B Notes
have been duly authorized by each Guarantor and, when the Series B Notes have
been issued, will have been duly executed and delivered by each such Guarantor.
When the Series B Notes have been issued, executed and authenticated in
accordance with the terms of the Exchange Offer and the Indenture, the
Subsidiary Note Guarantees will be entitled to the benefits of the Indenture and
will be the valid and binding obligation of each Guarantor, enforceable against
each such Guarantor in accordance with its terms, except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally and (ii) rights of acceleration and the
availability of equitable remedies may be limited by equitable principles of
general applicability.  When the Series B Notes are issued, authenticated and
delivered, the Subsidiary Note Guarantees in respect of the Series B Notes will
conform in all material respects as to legal matters to the description thereof
in the Offering Memorandum.

          (k)    The Registration Rights Agreement has been duly authorized by
the Company and the Guarantors and, on the Closing Date, will have been duly
executed and delivered by the Company and the Guarantors.  When the Registration
Rights Agreement has been duly executed and delivered, the Registration Rights
Agreement will be a valid and binding agreement of the


                                      12


Company and the Guarantors, enforceable against the Company and the
Guarantors in accordance with its terms except as (i) the enforceability
thereof may be limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and (ii) rights of acceleration and the
availability of equitable remedies may be limited by equitable principles of
general applicability.  On the Closing Date, the Registration Rights
Agreement will conform in all material respects as to legal matters to the
description thereof in the Offering Memorandum.

          (l)    Upon the effectiveness of the Merger, the Company will succeed
to and assume all of the obligations of Viking under this Agreement, the Warrant
Agreement and the Warrants, and each of this Agreement, the Warrant Agreement
and the Warrants will be the valid and binding agreement or obligations, as the
case may be, of the Company, enforceable against the Company in accordance with
its or their terms except as (i) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights generally and
(ii) rights of acceleration and the availability of equitable remedies may be
limited by equitable principles of general applicability.  On the Closing Date,
the Warrant Agreement and the Warrants will conform in all material respects as
to legal matters to the description thereof in the Offering Memorandum.

          (m)     Each of the Warrant Assumption Agreement and the Warrant
Registration Rights Agreement has been duly authorized by the Company, and, on
the Closing Date, will have been duly executed and delivered by the Company.
When the Warrant Assumption Agreement and the Warrant Registration Rights
Agreement have been duly executed and delivered, each will be a valid and
binding agreement of the Company, enforceable against the Company in accordance
with its terms, except as (i) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights generally and
(ii) the availability of equitable remedies may be limited by equitable
principles of general applicability.  On the Closing Date, the Warrant
Registration Rights Agreement will conform in all material respects as to legal
matters to the description thereof in the Offering Memorandum.

          (n)    The Company has duly authorized and reserved for issuance the
Warrant Shares to be issued upon the exercise of the Warrants and, when issued
and delivered upon the exercise of the Warrants against payment of the exercise
price as provided in the Warrant Agreement, the Warrant Shares will have been
validly issued and will be fully paid and non assessable, and the issuance of
the Warrant Shares will not be subject to any preemptive or similar rights.  On
the Closing date, the Warrant Shares will conform in all material respects as to
legal matters to the description thereof in the Offering Memorandum.

          (o)    The Bill of Sale, Contribution and Assignment/Assumption
Agreement of Operating Assets and Liabilities (the "LLC Assignment/Assumption
Agreement") between the Company and Merrill Communications LLC (the "LLC") and
the Administrative Services Agreement (the "LLC Services Agreement") between the
Company and Merrill Communications LLC (together, the LLC Agreements") have been
duly authorized by the Company and Merrill Communications LLC and, on the
Closing Date, will have been duly executed and delivered by the Company and
Merrill Communications LLC.  When the LLC Agreements have been duly executed and
delivered, the LLC Agreements will be valid and binding agreements of the
Company and Merrill Communications LLC, enforceable against the Company and
Merrill Communications LLC in accordance with its terms, except as (i) the
enforceability thereof may


                                      13


be limited by bankruptcy, insolvency or similar laws affecting creditors'
rights generally and (ii) rights of acceleration and the availability of
equitable remedies may be limited by equitable principles of general
applicability.

          (p)    All indebtedness of the Company that will be repaid with the
proceeds of the issuance and sale of the Units was incurred, and the
indebtedness represented by the Series A Notes is being incurred, for proper
purposes and in good faith; and the Company was, at the time of the incurrence
of such indebtedness that will be repaid with the proceeds of the issuance and
sale of the Units, and will be on the Closing Date (after giving effect to the
application of the proceeds from the issuance of the Units) solvent, and had at
the time of the incurrence of such indebtedness that will be repaid with the
proceeds of the issuance and sale of the Units and will have on the Closing Date
(after giving effect to the application of the proceeds from the issuance of the
Units) sufficient capital for carrying on its respective business and was, at
the time of the incurrence of such indebtedness that will be repaid with the
proceeds of the issuance and sale of the Units, and will be on the Closing Date
(after giving effect to the application of the proceeds from the issuance of the
Units) able to pay its respective debts as they mature.

          (q)    Neither the Company nor any of its subsidiaries is in violation
of its respective charter or by-laws or in default in the performance of any
obligation, agreement, covenant or condition contained in any indenture, loan
agreement, mortgage, lease or other agreement or instrument that is material to
the Company and its subsidiaries, taken as a whole, to which the Company or any
of its subsidiaries is a party or by which the Company or any of its
subsidiaries or their respective property is bound, except for such defaults
which, singly or in the aggregate, would not have a Material Adverse Effect.

          (r)    The execution, delivery and performance of this Agreement and
the other Operative Documents by the Company and the Guarantors, to the extent
each is a party hereto and thereto, and compliance by the Company and the
Guarantors with all provisions hereof and thereof and the consummation of the
transactions contemplated hereby and thereby will not (i) require any consent,
approval, authorization or other order of, or qualification with, any court or
governmental body or agency (except such as may be required under federal or
state securities or Blue Sky laws or such as have been or prior to the Closing
Date will be obtained), (ii) conflict with or constitute a breach of any of the
terms or provisions of, or a default under, (A) the charter or by-laws of the
Company or any of its subsidiaries or (B) any indenture, loan agreement,
mortgage, lease or other agreement or instrument that is material to the Company
and its subsidiaries, taken as a whole, to which the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries or
their respective property is bound, (iii) violate or conflict with any
applicable law or any rule, regulation, judgment, order or decree of any court
or any governmental body or agency having jurisdiction over the Company, any of
its subsidiaries or their respective property, (iv) result in the imposition or
creation of (or the obligation to create or impose) a Lien under, any agreement
or instrument to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries or their respective property is
bound (other than any liens arising under the Credit Agreement), or (v) result
in the termination, suspension or revocation of any Authorization (as defined
below) of the Company or any of its subsidiaries or result in any other
impairment of the rights of the holder of any such Authorization; except in the
case of clauses (i), (ii)(B), (iv) and (v) as would not, singly or in the
aggregate, have a Material Adverse Effect or an adverse effect on the validity
of the obligations


                                      14


of the Company or the Guarantors under this Agreement, the Indenture, the
Notes, the Subsidiary Note Guarantees, the Registration Rights Agreement, the
Warrant Agreement, the Warrant Registration Rights Agreement or the Warrant
Assumption Agreement, or the ability of the Company or the Guarantors to
perform such obligations.

          (s)    No action has been taken and no law, statute, rule or
regulation or order has been enacted, adopted or issued by any governmental
agency or body which prevents the execution, delivery and performance of any of
the Operative Documents or the issuance of the Units or suspends the sale of the
Units in any jurisdiction referred to in Section 5(e); and no injunction,
restraining order or other order or relief of any nature by a federal or state
court or other tribunal of competent jurisdiction has been issued with respect
to the Company or any of its subsidiaries which would prevent or suspend the
issuance or sale of the Units in any jurisdiction referred to in Section 5(e).

          (t)    Except as disclosed in the Offering Memorandum, there are no
legal or governmental proceedings pending or, to the Company's knowledge,
threatened to which the Company or any of its subsidiaries is or could be a
party or to which any of their respective property is or could be subject, which
would be reasonably expected to result, singly or in the aggregate, in a
Material Adverse Effect.

          (u)    Neither the Company nor any of its subsidiaries has violated
any foreign, federal, state or local law or regulation relating to the
protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants ("ENVIRONMENTAL LAWS"), any
provisions of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), any provisions of the Foreign Corrupt Practices Act or the rules and
regulations promulgated thereunder or any provisions of the Truth in
Negotiations Act or the rules and regulations promulgated thereunder, except for
such violations which, singly or in the aggregate, would not have a Material
Adverse Effect.

          (v)    Except as disclosed in the Offering Memorandum, there are no
costs or liabilities associated with Environmental Laws (including, without
limitation, any capital or operating expenditures required for clean-up, closure
of properties or compliance with Environmental Laws or any Authorization, any
related constraints on operating activities and any potential liabilities to
third parties) which would, singly or in the aggregate, have a Material Adverse
Effect.

          (w)    Each of the Company and its subsidiaries has such permits,
licenses, consents, exemptions, franchises, authorizations and other approvals
(each, an "AUTHORIZATION") of, and has made all filings with and notices to, all
governmental or regulatory authorities and self-regulatory organizations and all
courts and other tribunals, including without limitation, under any applicable
Environmental Laws, as are necessary to own, lease, license and operate its
respective properties and to conduct its business, except where the failure to
have any such Authorization or to make any such filing or notice would not,
singly or in the aggregate, have a Material Adverse Effect.  Each such
Authorization is valid and in full force and effect and each of the Company and
its subsidiaries is in compliance with all the terms and conditions thereof and
with the rules and regulations of the authorities and governing bodies having
jurisdiction with respect thereto; and no event has occurred (including, without
limitation, the receipt of any


                                      15


notice from any authority or governing body) which allows or, after notice or
lapse of time or both, would allow, revocation, suspension or termination of
any such Authorization or results or, after notice or lapse of time or both,
would result in any other impairment of the rights of the holder of any such
Authorization; and such Authorizations contain no restrictions that are
burdensome to the Company or any of its subsidiaries; except where such
failure to be valid and in full force and effect or to be in compliance, the
occurrence of any such event or the presence of any such restriction would
not, singly or in the aggregate, have a Material Adverse Effect.

          (x)    The Company and its subsidiaries own or possess, or can acquire
on reasonable terms, all patents, patent rights, licenses, inventions,
copyrights, know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or procedures),
trademarks, service marks and trade names ("INTELLECTUAL PROPERTY") currently
employed by them in connection with the business now operated by them except
where the failure to own or possess or otherwise be able to acquire such
intellectual property would not, singly or in the aggregate, have a Material
Adverse Effect; and neither the Company nor, to the Company's knowledge, any of
its subsidiaries has received any notice of infringement of or conflict with
asserted rights of others with respect to any of such intellectual property
which, singly or in the aggregate, would have a Material Adverse Effect.

          (y)    There is no (i) significant unfair labor practice complaint,
grievance or arbitration proceeding pending or, to the Company's knowledge,
threatened against the Company or any of its subsidiaries before the National
Labor Relations Board or any state or local labor relations board, (ii) strike,
labor dispute, slowdown or stoppage pending or, to the Company's knowledge,
threatened against the Company or any of its subsidiaries or (iii) union
representation question existing with respect to the employees of the Company or
any of its subsidiaries, except in the case of clauses (i), (ii) and (iii) for
such actions which, singly or in the aggregate, would not have a Material
Adverse Effect.  To the best knowledge of the Company, no collective bargaining
organizing activities are taking place with respect to the Company or any of its
subsidiaries.

          (z)    The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are executed in
accordance with management's general or specific authorizations; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain asset accountability; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.

          (aa)   The accountants, PricewaterhouseCoopers LLP, that have
certified the financial statements and supporting schedules included in the
Preliminary Offering Memorandum and the Offering Memorandum are independent
public accountants with respect to the Company and the Guarantors, as required
by the Act and the Exchange Act.

          (bb)   The historical financial statements, together with related
schedules and notes forming part of the Offering Memorandum (and any amendment
or supplement thereto), present fairly the consolidated financial position,
results of operations and changes in financial position


                                      16


of the Company and its subsidiaries on the basis stated in the Offering
Memorandum at the respective dates or for the respective periods to which
they apply; such statements and related schedules and notes have been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, except as disclosed
therein; and the other financial and statistical information and data set
forth in the Offering Memorandum (and any amendment or supplement thereto)
are, in all material respects, accurately presented and prepared on a basis
consistent with such financial statements and the books and records of the
Company.

          (cc)   The pro forma financial statements included in the
Preliminary Offering Memorandum and the Offering Memorandum have been
prepared on a basis consistent with the historical financial statements of
the Company and its subsidiaries and give effect to assumptions used in the
preparation thereof on a reasonable basis and in good faith and present
fairly the historical and proposed transactions contemplated by the
Preliminary Offering Memorandum and the Offering Memorandum; and such pro
forma financial statements comply as to form in all material respects with
the requirements applicable to pro forma financial statements included in
registration statements on Form S-1 under the Act.  The other pro forma
financial and statistical information and data included in the Offering
Memorandum are, in all material respects, accurately presented and prepared
on a basis consistent with the pro forma financial statements.

          (dd)   Neither the Company nor the Guarantors is or, after giving
effect to the offering and sale of the Units and the application of the net
proceeds thereof as described in the Offering Memorandum, will be, an
"investment company," as such term is defined in the Investment Company Act
of 1940, as amended.

          (ee)   Except as otherwise disclosed in the Offering Memorandum and
except for any agreement described in the Merger Agreement that will have
terminated at or prior to the Closing Date, there are no contracts,
agreements or understandings between the Company or the Guarantors and any
person granting such person the right to require the Company or the
Guarantors to file a registration statement under the Act with respect to any
securities of the Company or the Guarantors or to require the Company or the
Guarantors to include such securities with the Units registered pursuant to
any Registration Statement or Warrant Registration Statement.

          (ff)   Neither the Company nor any of its subsidiaries nor any
agent thereof acting on the behalf of them has taken, and none of them will
take, any action that might cause this Agreement or the issuance or sale of
the Units to violate Regulation T (12 C.F.R. Part 220), Regulation U (12
C.F.R. Part 221) or Regulation X (12 C.F.R. Part 224) of the Board of
Governors of the Federal Reserve System.

          (gg)   No "nationally recognized statistical rating organization"
as such term is defined for purposes of Rule 436(g)(2) under the Act (i) has
imposed (or has informed the Company or the Guarantors that it is considering
imposing) any condition (financial or otherwise) on the Company's or any
Guarantor's retaining any rating assigned to the Company or the Guarantors or
any securities of the Company or the Guarantors or (ii) has indicated to the
Company or the Guarantors that it is considering (a) the downgrading,
suspension, or withdrawal of, or any review for a possible change that does
not indicate the direction of the possible change

                                       17



in, any rating so assigned or (b) any change in the outlook for any rating of
the Company or the Guarantors or any securities of the Company or the
Guarantors.

          (hh)   Since the respective dates as of which information is given
in the Offering Memorandum other than as set forth in the Offering Memorandum
(exclusive of any amendments or supplements thereto subsequent to the date of
this Agreement), (i) there has not occurred any material adverse change or
any development involving a prospective material adverse change in the
condition, financial or otherwise, or the earnings, business, management or
operations of the Company and its subsidiaries, taken as a whole, (ii) there
has not been any material adverse change or any development involving a
prospective material adverse change in the capital stock or in the long-term
debt of the Company or any of its subsidiaries and (iii) neither the Company
nor any of its subsidiaries has incurred any material liability or
obligation, direct or contingent.

          (ii)   Except as described in the Offering Memorandum, each of the
Preliminary Offering and the Offering Memorandum, as of its date, contains
all the information specified in, and meeting the requirements of, Rule
144A(d)(4) under the Act.

          (jj)   When the Series A Notes are issued and delivered pursuant to
this Agreement, the Series A Notes will not be of the same class (within the
meaning of Rule 144A under the Act) as any security of the Company or the
Guarantors that is listed on a national securities exchange registered under
Section 6 of the Exchange Act or that is quoted in a United States automated
inter-dealer quotation system.

          (kk)   No form of general solicitation or general advertising (as
defined in Regulation D under the Act) was used by the Company or the
Guarantors or any of their representatives (other than the Initial Purchaser,
as to whom the Company and the Guarantors make no representation) in
connection with the offer and sale of the Units contemplated hereby,
including, but not limited to, articles, notices or other communications
published in any newspaper, magazine, or similar medium or broadcast over
television or radio, or any seminar or meeting whose attendees have been
invited by any general solicitation or general advertising.  No securities of
the same class as the Series A Notes or the Warrants have been issued and
sold by the Company or the Guarantors within the six-month period immediately
prior to the date hereof which is or will be integrated with the sale of the
Securities in a manner that would require the registration under the Act of
the offering contemplated by the Offering Memorandum.

          (ll)   Prior to the effectiveness of any Registration Statement,
the Indenture is not required to be qualified under the TIA, assuming the
accuracy of the Initial Purchaser's representations and warranties, and that
there has been no breach by the Initial Purchaser of its agreements, set
forth in Section 8 hereof.

          (mm)   Neither the Company, the Guarantors nor any of their
respective affiliates or any person acting on its or their behalf (other than
the Initial Purchaser, as to whom the Company and the Guarantors make no
representation) has engaged or will engage in any directed selling efforts
within the meaning of Regulation S under the Act ("REGULATION S") with
respect to the Units.

                                       18



          (nn)   No registration under the Act is required for the sale of
the Units to the Initial Purchaser as contemplated hereby or for the Exempt
Resales assuming the accuracy of the Initial Purchaser's representations and
warranties, and that there has been no breach by the Initial Purchaser of its
agreements, set forth in Section 8 hereof.

          (oo)   Each of the representations and warranties set forth in
clauses (a) through (nn) of this Section 6 will be true and correct as of the
Effective Time upon consummation of the Merger.

          (pp)   Each certificate signed by any officer of the Company and
the Guarantors and delivered to the Initial Purchaser or counsel for the
Initial Purchaser shall be deemed to be a representation and warranty by the
Company and the Guarantors to the Initial Purchaser as to the matters covered
thereby.

          The Company acknowledges that the Initial Purchaser and, for
purposes of the opinions to be delivered to the Initial Purchaser pursuant to
Section 10 hereof, counsel to the Company and the Guarantors and counsel to
the Initial Purchaser will rely upon the accuracy and truth of the foregoing
representations and hereby consents to such reliance.  The Company further
acknowledges that Viking will rely upon the accuracy and truth of the
foregoing representations and hereby consents to such reliance.

          7.     REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF VIKING.  As of
the date hereof, Viking represents and warrants to, and agrees with, the
Initial Purchaser that

          (a)    The Offering Memorandum as of the date hereof and the
Closing Date does not and will not, and any supplement or amendment to it
will not, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, except that the representations and warranties
contained in this paragraph (a) shall not apply to statements in or omissions
from the Offering Memorandum (or any supplement or amendment thereto) based
upon information relating to the Initial Purchaser furnished to Viking in
writing by the Initial Purchaser expressly for use therein.  No stop order
preventing the use of the Offering Memorandum, or any amendment or supplement
thereto, or any order asserting that any of the transactions contemplated by
this Agreement are subject to the registration requirements of the Act, has
been issued.

          (b)    Viking has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Minnesota.

          (c)    As of the date hereof and the Closing Date there are no
subsidiaries, direct or indirect, of Viking.

          (d)    This Agreement has been duly authorized, executed and
delivered by Viking.

          (e)    The Warrant Agreement has been duly authorized by Viking
and, on the Closing Date, will have been validly executed and delivered by
Viking. When the Warrant Agreement has been duly executed and delivered by
Viking, the Warrant Agreement will be a valid and binding agreement of
Viking, enforceable against it in accordance with its terms,

                                       19



except as (i) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally, and (ii)
rights of acceleration and the availability of equitable remedies may be
limited by equitable principles of general applicability.  On the Closing
Date, the Warrant Agreement will conform in all material respects as to legal
matters to the description thereof in the Offering Memorandum.

          (f)    All equity interests of Viking have been duly authorized and
validly issued and are fully paid and, if applicable, non-assessable and,
except as disclosed in the Offering Memorandum, not subject to any preemptive
or similar rights.

          (g)    The Warrants have been duly authorized by Viking and, on the
Closing Date, will have been validly executed and delivered by Viking.  When
the Warrants are duly issued and countersigned, the Warrants will be a valid
and binding obligations of Viking, enforceable against Viking in accordance
with their terms, except as (i) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights generally,
and (ii) rights of acceleration and the availability of equitable remedies
may be limited by equitable principles of general applicability.  On the
Closing Date, the Warrants will conform in all material respects as to legal
matters to the description thereof in the Offering Memorandum.

          (h)    Viking is not in violation of its charter or by-laws or in
default in the performance of any obligation, agreement, covenant or
condition contained in any indenture, loan agreement, mortgage, lease or
other agreement or instrument that is material to Viking, to which Viking is
a party or by which Viking or its property is bound, except for such defaults
which, singly or in the aggregate, would not have a Material Adverse Effect.

          (i)    The execution, delivery and performance of this Agreement
and the other Operative Documents to which Viking is a party by Viking and
compliance by Viking with all provisions hereof and thereof and the
consummation of the transactions contemplated hereby and thereby will not (i)
require any consent, approval, authorization or other order of, or
qualification with, any court or governmental body or agency (except such as
may be required under federal or state securities or Blue Sky laws or such as
have been or prior to the Closing Date will be obtained), (ii) conflict with
or constitute a breach of any of the terms or provisions of, or a default
under, (A) the charter or by-laws of Viking or (B) any indenture, loan
agreement, mortgage, lease or other agreement or instrument that is material
to Viking, to which Viking is a party or by which Viking or its property is
bound, (iii) violate or conflict with any applicable law or any rule,
regulation, judgment, order or decree of any court or any governmental body
or agency having jurisdiction over Viking or its property, (iv) result in the
imposition or creation of (or the obligation to create or impose) a Lien
under, any agreement or instrument to which Viking is a party or by which
Viking or its property is bound, or (v) result in the termination, suspension
or revocation of any Authorization of Viking or result in any other
impairment of the rights of the holder of any such Authorization; except in
the case of clauses (i), (ii)(B), (iv) and (v) as would not, singly or in the
aggregate, have a Material Adverse Effect or an adverse effect on the
validity of the obligations of Viking under this Agreement or the other
Operative Documents to which Viking is a party, or the ability of Viking to
perform such obligations.

          (j)    No action has been taken and no law, statute, rule or
regulation or order has been enacted, adopted or issued by any governmental
agency or body which prevents the

                                       20



execution, delivery and performance by Viking of any of the Operative
Documents to which it is a party or the issuance of the Units or suspends the
sale of the Units in any jurisdiction referred to in Section 5(e); and no
injunction, restraining order or other order or relief of any nature by a
federal or state court or other tribunal of competent jurisdiction has been
issued with respect to Viking which would prevent or suspend the issuance or
sale of the Units in any jurisdiction referred to in Section 5(e).

          (k)    There are no legal or governmental proceedings pending or,
to Viking's knowledge, threatened to which Viking is or could be a party or
to which any of its property is or could be subject, which would be
reasonably expected to result, singly or in the aggregate, in a Material
Adverse Effect.

          (l)    Viking is not, and after giving effect to the offering and
sale of the Units as described in the Offering Memorandum, will not be, an
"investment company," as such term is defined in the Investment Company Act
of 1940, as amended.

          (m)    Except as disclosed in the Offering Memorandum, there are no
contracts, agreements or understandings between Viking and any person
granting such person the right to require Viking to file a registration
statement under the Act with respect to any securities of Viking or to
require Viking to include such securities with the Units registered pursuant
to any Registration Statement.

          (n)    Neither Viking nor any agent thereof acting on its behalf
has taken, and none of them will take, any action that might cause this
Agreement or the issuance or sale of the Units to violate Regulation T (12
C.F.R. Part 220), Regulation U (12 C.F.R. Part 221) or Regulation X (12
C.F.R. Part 224) of the Board of Governors of the Federal Reserve System.

          (o)    When the Warrants are issued pursuant to the Warrant
Agreement, the Warrants will not be of the same class (within the meaning of
Rule 144A under the Act) as any security of Viking that is listed on a
national securities exchange registered under Section 6 of the Exchange Act
or that is quoted in a United States automated inter-dealer quotation system.
 So long as any of the Warrants remains outstanding, Viking will make
available to any holder thereof in connection with any sale thereof and any
prospective purchaser thereof from such holder, Rule 144A Information with
respect to Viking.

          (p)    Since the respective dates as of which information is given
in the Offering Memorandum other than as set forth in the Offering Memorandum
(exclusive of any amendments or supplements thereto subsequent to the date of
this Agreement), (i) there has not occurred any material adverse change or
any development involving a prospective material adverse change in the
condition, financial or otherwise, or the earnings, business, management or
operations of Viking, (ii) there has not been any material adverse change or
any development involving a prospective material adverse change in the
capital stock or in the long-term debt of Viking and (iii) Viking has not
incurred any material liability or obligation, direct or contingent.

          (q)    No form of general solicitation or general advertising (as
defined in Regulation D under the Act) was used by Viking or any of its
representatives (other than the Initial Purchaser, as to whom Viking makes no
representation) in connection with the offer and

                                       21



sale of the Units contemplated hereby, including, but not limited to,
articles, notices or other communications published in any newspaper,
magazine, or similar medium or broadcast over television or radio, or any
seminar or meeting whose attendees have been invited by any general
solicitation or general advertising.  No securities of the same class as the
Warrants, Warrant Shares or the Units have been issued and sold by Viking
within the six-month period immediately prior to the date hereof which is or
will be integrated with the sale of the Securities in a manner that would
require the registration under the Act of the offering contemplated by the
Offering Memorandum.

          (r)    Neither Viking, any of its affiliates or any person acting
on its behalf 9other than the Initial Purchaser, as to whom Viking makes not
representation) has engaged or will engage in any directed selling efforts
within the meaning of Regulation S with respect to the Units.

          (s)    No registration under the Act is required for the sale of
Units to the Initial Purchaser as contemplated hereby or for the Exempt
Resales assuming the accuracy of the Initial Purchaser's representations and
warranties, and that there has been no breach by the Initial Purchaser of its
agreements, set forth in Section 8 hereof.

          (t)    Each of the representations and warranties set forth in
clauses (a) through (s) of this Section 8 will be true and correct as of the
Effective Time upon consummation of the Merger.

          (u)    Each certificate signed by any officer of Viking and
delivered to the Initial Purchaser or counsel for the Initial Purchaser shall
be deemed to be a representation and warranty by Viking to the Initial
Purchaser as to the matters covered thereby.

          Viking acknowledges that the Initial Purchaser and, for purposes of
the opinions to be delivered to the Initial Purchaser pursuant to Section 10
hereof, counsel to Viking and counsel to the Initial Purchaser will rely upon
the accuracy and truth of the foregoing representations and the Initial
Purchaser hereby consents to such reliance.

          8.     INITIAL PURCHASER'S REPRESENTATIONS AND WARRANTIES.  The
Initial Purchaser represents and warrants to the Issuers and the Guarantors,
and agrees that:

          (a)    The Initial Purchaser is a QIB with such knowledge and
experience in financial and business matters as is necessary in order to
evaluate the merits and risks of an investment in the Units.

          (b)    The Initial Purchaser (A) is not acquiring the Units with a
view to any distribution thereof or with any present intention of offering or
selling any of the Units in a transaction that would violate the Act or the
securities laws of any state of the United States or any other applicable
jurisdiction and (B) will be reoffering and reselling the Units only to QIBs
in reliance on the exemption from the registration requirements of the Act
provided by Rule 144A.

          (c)    The Initial Purchaser agrees that no form of general
solicitation or general advertising (within the meaning of Regulation D under
the Act) has been or will be used by the

                                       22



Initial Purchaser or any of its representatives in connection with the offer
and sale of the Units pursuant hereto, including, but not limited to,
articles, notices or other communications published in any newspaper,
magazine or similar medium or broadcast over television or radio, or any
seminar or meeting whose attendees have been invited by any general
solicitation or general advertising.

          (d)    The Initial Purchaser agrees that, in connection with Exempt
Resales, the Initial Purchaser will solicit offers to buy the Units only
from, and will offer to sell the Units only to, Eligible Purchasers.  The
Initial Purchaser further agrees that it will offer to sell the Units only
to, and will solicit offers to buy the Units only from, Eligible Purchasers
that agree that (x) the Units purchased by them may be resold, pledged or
otherwise transferred within the time period referred to under Rule 144(k)
(taking into account the provisions of Rule 144(d) under the Act, if
applicable) under the Act, as in effect on the date of the transfer of such
Units, only (I) to the Company or any of its subsidiaries, (II) to a person
whom the seller reasonably believes is a QIB purchasing for its own account
or for the account of a QIB in a transaction meeting the requirements of Rule
144A under the Act, (III) in an offshore transaction (as defined in Rule 902
under the Act) meeting the requirements of Rule 904 of the Act, (IV) in a
transaction meeting the requirements of Rule 144 under the Act, (V) to an
institutional "accredited investor," as defined in Rule 501(a)(1), (2), (3),
or (7) of Regulation D under the Act, that, prior to such transfer, furnishes
the Trustee and/or the Warrant Agent, as the case may be, a signed letter
containing certain representations and agreements relating to the
registration of transfer of the relevant Securities (the form of which may be
obtained from the Trustee or Warrant Agent, as the case may be) and, if such
transfer is in respect of an aggregate purchase amount of Units less than
$250,000, an opinion of counsel acceptable to the Company that such transfer
is in compliance with the Act, (VI) in accordance with another exemption from
the registration requirements of the Act (and based upon an opinion of
counsel acceptable to the Company) or (VII) pursuant to an effective
registration statement and, in each case, in accordance with the applicable
securities laws of any state of the United States or any other applicable
jurisdiction and (y) they will deliver to each person to whom such Units or
an interest therein is transferred a notice substantially to the effect of
the foregoing.

          (e)    The Initial Purchaser and its affiliates or any person
acting on its or their behalf have not engaged or will not engage in any
directed selling efforts within the meaning of Regulation S with respect to
the Units.

          The Initial Purchaser acknowledges that the Issuers, the Guarantors
and, for purposes of the opinions to be delivered to the Initial Purchaser
pursuant to Section 10 hereof, counsel to the Issuers and the Guarantors, and
counsel to the Initial Purchaser will rely upon the accuracy and truth of the
foregoing representations and the Initial Purchaser hereby consents to such
reliance.

          9.     INDEMNIFICATION.

          (a)    The Issuers and the Guarantors agree, jointly and severally, to
indemnify and hold harmless the Initial Purchaser, its directors, its officers
and each person, if any, who controls the Initial Purchaser within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act, from and against any
and all losses, claims, damages, liabilities and judgments

                                       23



(including, without limitation, any legal or other expenses incurred in
connection with investigating or defending any matter, including any action,
that could give rise to any such losses, claims, damages, liabilities or
judgments) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Offering Memorandum (or any amendment or
supplement thereto), the Preliminary Offering Memorandum or any Rule 144A
Information provided by the Issuers or the Guarantors to any holder or
prospective purchaser of Securities pursuant to Section 5(h) or Section 7(o)
or caused by any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages,
liabilities or judgments are caused by any such untrue statement or omission
or alleged untrue statement or omission based upon information relating to
the Initial Purchaser furnished in writing to the Issuers by the Initial
Purchaser; PROVIDED, HOWEVER, that the foregoing indemnity agreement with
respect to any Preliminary Offering Memorandum shall not inure to the benefit
of the Initial Purchaser who failed to deliver an Offering Memorandum (as
then amended or supplemented, so long as the Offering Memorandum and any
amendment or supplement thereto was provided by the Issuers to the Initial
Purchaser in the requisite quantity and on a timely basis to permit proper
delivery on or prior to the Closing Date) to the person asserting any losses,
claims, damages and liabilities and judgements caused by any untrue statement
or alleged untrue statement of a material fact contained in any Preliminary
Offering Memorandum, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, if such material misstatement or
omission or alleged material misstatement or omission was cured in the
Offering Memorandum.

          (b)    The Initial Purchaser agrees to indemnify and hold harmless
the Issuers and the Guarantors and their respective directors and officers
and each person, if any, who controls (within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act) the Issuers or the Guarantors, to
the same extent as the foregoing indemnity from the Issuers and the
Guarantors to the Initial Purchaser but only with reference to information
relating to the Initial Purchaser furnished in writing to either of the
Issuers by the Initial Purchaser expressly for use in the Preliminary
Offering Memorandum or the Offering Memorandum.  The Issuers and the
Guarantors acknowledge that the following statements set forth in the
Preliminary Offering Memorandum and Offering Memorandum constitute the only
information furnished in writing by the Initial Purchaser for use in the
Preliminary Offering Memorandum or the Offering Memorandum:  the name of the
Initial Purchaser; the first two sentences of the third paragraph under "Risk
Factors-We are controlled by principal shareholders whose interests may
differ from your interest"; the first two sentences of the third paragraph
under "Plan of Distribution"; the fifth sentence of the eight paragraph under
"Plan of Distribution"; and the tenth paragraph under "Plan of Distribution."

          (c)    In case any action shall be commenced involving any person
in respect of which indemnity may be sought pursuant to Section 9(a) or 9(b)
(the "INDEMNIFIED PARTY"), the indemnified party shall promptly notify the
person against whom such indemnity may be sought (the "INDEMNIFYING PARTY")
in writing and the indemnifying party shall assume the defense of such
action, including the employment of counsel reasonably satisfactory to the
indemnified party and the payment of all fees and expenses of such counsel,
as incurred (except that, in the case of any action in respect of which
indemnity may be sought pursuant to both Sections 9(a) and 9(b), no Initial
Purchaser shall be required to assume the defense of such action pursuant to

                                       24



this Section 9(c), but may employ separate counsel and participate in the
defense thereof, but the fees and expenses of such counsel, except as
provided below, shall be at the expense of the Initial Purchaser.  Any
indemnified party shall have the right to employ separate counsel in any such
action and participate in the defense thereof, but the fees and expenses of
such counsel shall be at the expense of the indemnified party unless (i) the
employment of such counsel shall have been specifically authorized in writing
by the indemnifying party, (ii) the indemnifying party shall have failed to
assume the defense of such action or employ counsel reasonably satisfactory
to the indemnified party or (iii) the named parties to any such action
(including any impleaded parties) include both the indemnified party and the
indemnifying party, and the indemnified party shall have been advised by such
counsel that there may be one or more legal defenses available to it which
are different from or additional to those available to the indemnifying party
(in which case the indemnifying party shall not have the right to assume the
defense of such action on behalf of the indemnified party). In any such case,
the indemnifying party shall not, in connection with any one action or
separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one separate firm of attorneys
(in addition to any local counsel) for all indemnified parties and all such
fees and expenses shll be reimbursed as they are incurred.  Such firm shall
be designated in writing by the Initial Purchaser, in the case of the parties
indemnified pursuant to Section 9(a), and by the Company, in the case of
parties indemnified pursuant to Section 9(b).  The indemnifying party shall
indemnify and hold harmless the indemnified party from and against any and
all losses, claims, damages, liabilities and judgments by reason of any
settlement of any action (i) effected with its written consent or (ii)
effected without its written consent if the settlement is entered into more
than twenty business days after the indemnifying party shall have received a
request from the indemnified party for reimbursement for the fees and
expenses of counsel (in any case where such fees and expenses are at the
expense of the indemnifying party) and, prior to the date of such settlement,
the indemnifying party shall have failed to comply with such reimbursement
request.  No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement or compromise of, or consent to
the entry of judgment with respect to, any pending or threatened action in
respect of which the indemnified party is or could have been a party and
indemnity or contribution may be or could have been sought hereunder by the
indemnified party, unless such settlement, compromise or judgment (i)
includes an unconditional release of the indemnified party from all liability
on claims that are or could have been the subject matter of such action and
(ii) does not include a statement as to or an admission of fault, culpability
or a failure to act, by or on behalf of the indemnified party.

          (d)    To the extent the indemnification provided for in this Section
9 is unavailable to an indemnified party or insufficient in respect of any
losses, claims, damages, liabilities or judgments referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities and judgments (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Issuers and the Guarantors, on the one hand, and the Initial Purchaser, on the
other hand, from the offering of the Units or (ii) if the allocation provided by
clause 9(d)(i) above is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in clause
9(d)(i) above but also the relative fault of the Issuers and the Guarantors, on
the one hand, and the Initial Purchaser, on the other hand, in connection with
the statements or omissions which resulted in

                                       25



such losses, claims, damages, liabilities or judgments, as well as any other
relevant equitable considerations.  The relative benefits received by the
Issuers and the Guarantors, on the one hand and the Initial Purchaser, on the
other hand, shall be deemed to be in the same proportion as the total net
proceeds from the offering of the Units (after underwriting discounts and
commissions, but before deducting expenses) received by the Issuers, and the
total discounts and commissions received by the Initial Purchaser bear to the
total price to investors of the Units, in each case as set forth in the
Offering Memorandum. The relative fault of the Issuers and the Guarantors, on
the one hand, and the Initial Purchaser, on the other hand, shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the Issuers or the
Guarantors, on the one and, or the Initial Purchaser, on the other hand, and
the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.

          The Issuers and the Guarantors and the Initial Purchaser agree that
it would not be just and equitable if contribution pursuant to this Section
9(d) were determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable considerations
referred to in the immediately preceding paragraph.  The amount paid or
payable by an indemnified party as a result of the losses, claims, damages,
liabilities or judgments referred to in the immediately preceding paragraph
shall be deemed to include, subject to the limitations set forth above, any
legal or other expenses incurred by such indemnified party in connection with
investigating or defending any matter, including any action, that could have
given rise to such losses, claims, damages, liabilities or judgments.
Notwithstanding the provisions of this Section 9, no Initial Purchaser shall
be required to contribute any amount in excess of the amount by which the
total discounts and commissions received by the Initial Purchaser exceeds the
amount of any damages which the Initial Purchaser has otherwise been required
to pay by reason of such untrue or alleged untrue statement or omission or
alleged omission.   No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation.

          (e)    The remedies provided for in this Section 9 are not
exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.

          10.    CONDITIONS OF INITIAL PURCHASER'S OBLIGATIONS.  The
obligations of the Initial Purchaser to purchase the Units under this
Agreement are subject to the satisfaction of each of the following
conditions:

          (a)    All the representations and warranties of the Issuers and
the Guarantors contained in this Agreement shall be true and correct on the
Closing Date with the same force and effect as if made on and as of the
Closing Date.

          (b)    On or after the date hereof, (i) there shall not have occurred
any downgrading, suspension or withdrawal of, nor shall any notice have been
given of any potential or intended downgrading, suspension or withdrawal of, or
of any review (or of any potential or intended review) for a possible change
that does not indicate the direction of the possible change in, any

                                       26



rating of the Company or any Guarantors or any securities of the Company or
any Guarantors (including, without limitation, the placing of any of the
foregoing ratings on credit watch with negative or developing implications or
under review with an uncertain direction) by any "nationally recognized
statistical rating organization" as such term is defined for purposes of Rule
436(g)(2) under the Act, (ii) there shall not have occurred any change, nor
shall any notice have been given of any potential or intended change, in the
outlook for any rating of the Company or any Guarantors or any securities of
the Company or any Guarantors by any such rating organization and (iii) no
such rating organization shall have given notice that it has assigned (or is
considering assigning) a lower rating to the Notes than that on which the
Notes were marketed.

          (c)    Since the respective dates as of which information is given
in the Offering Memorandum other than as set forth in the Offering Memorandum
(exclusive of any amendments or supplements thereto subsequent to the date of
this Agreement), (i) there shall not have occurred any change or any
development involving a prospective change in the condition, financial or
otherwise, or the earnings, business, management or operations of the Company
and its subsidiaries, taken as a whole, (ii) there shall not have been any
change or any development involving a prospective change in the capital stock
or in the long-term debt of the Company or any of its subsidiaries and (iii)
neither the Company nor any of its subsidiaries shall have incurred any
liability or obligation, direct or contingent, the effect of which, in any
such case described in clause 10(c)(i), 10(c)(ii) or 10(c)(iii), in the
judgment of the Initial Purchaser, is material and adverse and, in the
judgment of the Initial Purchaser, makes it impracticable to market the Units
on the terms and in the manner contemplated in the Offering Memorandum.

          (d)    The Initial Purchaser shall have received on the Closing
Date a certificate, dated the Closing Date, signed by the president and the
chief financial officer of the Company, and certificates, dated the Closing
Date, signed by the Chief Executive Officer, Chairman of the Board, President
or a Vice President and the chief financial officer, principal accounting
officer or equivalent financial officer responsible for the financial
statements, of each of the Guarantors, (i) confirming the matters set forth
in Sections 6(hh), 10(a) (with respect to the Company or the relevant
Guarantor) and 10(b) and stating that the Company or the relevant Guarantor
has complied with all the agreements and satisfied all of the conditions
herein contained and required to be complied with or satisfied on or prior to
the Closing Date and (ii) substantially in the form of Exhibit C hereto,
respectively.

          (e)    The Initial Purchaser shall have received on the Closing
Date a certificate, dated the Closing Date, signed by the president and the
vice president of Viking, (i) confirming the matters set forth in Sections
7(p) and 10(a) (with respect to Viking) and stating that Viking has complied
with all the agreements and satisfied all of the conditions herein contained
and required to be complied with or satisfied on or prior to the Closing Date
and (ii) substantially in the form of Exhibit D hereto, respectively.

          (f)    The Initial Purchaser shall have received on the Closing
Date an opinion (reasonably satisfactory to the Initial Purchaser and counsel
for the Initial Purchaser), dated the Closing Date, of Steven J. Machov,
General Counsel for the Company, to the effect that:

                                       27



          (i)    the Company and each of the Guarantors (other than Merrill
     Communications LLC, as to which such counsel need express no opinion) is
     (and, upon consummation of the Merger as of the Effective Time, will be)
     validly existing as a corporation in good standing under the laws of its
     jurisdiction of incorporation and has (and, upon consummation of the Merger
     as of the Effective Time, will have) the corporate power and authority to
     carry on its business as described in the Offering Memorandum and to own,
     lease and operate its properties;

          (ii)   the Company is in good standing as a foreign corporation
     authorized to do business in each jurisdictions in which the nature of the
     business of the Company or its ownership or leasing of property requires
     such qualification, except where the failure to be so qualified would not
     have a Material Adverse Effect);

          (iii)  all the outstanding shares of capital stock of the Company,
     upon consummation of the Merger as of the Effective Time, will have been
     duly authorized and validly issued and will be fully paid and non-
     assessable;

          (iv)   the Series A Notes and the Series B Notes have been duly
     authorized by the Company;

          (v)    the Subsidiary Note Guarantees have been duly authorized by
     each of the Guarantors (other than Merrill Communications LLC, as to which
     such counsel need express no opinion);

          (vi)   each of the Indenture, this Agreement and the Registration
     Rights Agreement has been duly authorized and, insofar as such matters are
     governed by the laws of Minnesota or Washington, as the case may be,
     executed and delivered by the Company and each of the Guarantors (other
     than Merrill Communications LLC, as to which such counsel need express no
     opinion);

          (vii)  the LLC Agreements have been duly authorized by the Company and
     duly executed and delivered by the Company and Merrill Communications LLC
     and (assuming due authorization by Merrill Communications LLC) will be
     valid and binding agreements of the Company and Merrill Communications LLC,
     enforceable against the Company and Merrill Communications LLC in
     accordance with their terms, except (x) as such enforcement may be limited
     by bankruptcy, insolvency, fraudulent conveyance or similar laws affecting
     creditors' rights generally, (y) as such enforcement is subject to general
     principles of equity (regardless of whether such enforceability is
     considered in a proceeding in equity or at law) and (z) as rights to
     indemnity and contribution thereunder may be limited by applicable law;

          (viii) each of the Warrant Assumption Agreement and the Warrant
     Registration Rights Agreement has been duly authorized and, insofar as such
     matters are governed by the laws of Minnesota, executed and delivered by
     the Company;

                                       28



          (ix)   the execution, delivery and performance (as applicable) of this
     Agreement, the Indenture, the Registration Rights Agreement, the Notes, the
     Subsidiary Note Guarantees, the LLC Agreements, the Warrant Agreement, the
     Warrants, the Warrant Registration Rights Agreement and the Warrant
     Assumption Agreement by such of the Company and the Guarantors as is a
     party thereto, the compliance by the Company and the Guarantors with all
     applicable provisions hereof and thereof and the consummation of the
     transactions contemplated hereby and thereby do not and will not (i)
     require any consent, approval, authorization or other order of, or
     qualification with, any court or governmental body or agency (other than
     those required under federal securities and state "blue sky" laws, or the
     laws of any foreign jurisdiction, as to which counsel need express no
     opinion), (ii) conflict with or constitute a breach of any of the terms or
     provisions of, or a default under, the charter or by-laws of the Company or
     the Guarantors (other than Merrill Communications LLC, as to which counsel
     need express no opinion) or any indenture, loan agreement, mortgage, lease
     or other agreement or instrument (other than any Operative Document) which
     is (or, upon consummation of the Merger as of the Effective Time, will be)
     material to the Company and the Guarantors, taken as a whole, to which the
     Company or the Guarantors is (or, upon consummation of the Merger as of the
     Effective Time, will be) a party or by which the Company or the Guarantors
     or their respective property is (or, upon consummation of the Merger as of
     the Effective Time, will be) bound, (iii) violate or conflict with any
     applicable federal law, rule or regulation of the State of Minnesota or
     Washington, (iv) to the best of such counsel's knowledge, result in the
     imposition or creation of (or the obligation to create or impose) a Lien
     under, any such agreement or instrument deemed material in clause (ii)
     above, (v) to the best of such counsel's knowledge, result in the
     termination, suspension or revocation of any Authorization (as defined
     below) of the Company or the Guarantors or result in any other impairment
     of the rights of the holder of any such Authorization or (vi) to the best
     of such counsel's knowledge, conflict with any judgment, writ, injunction,
     decree, order or ruling or any court or governmental authority binding on
     the Company or the Guarantors;

          (x)    except as otherwise described in the Offering Memorandum, such
     counsel does not know of any legal or governmental proceedings pending or
     threatened to which the Company or the Guarantors is a party or to which
     any of their respective property is subject, which would reasonably be
     expected to result, singly or in the aggregate, in a Material Adverse
     Effect;

          (xi)   to the best of such counsel's knowledge, there are (and, upon
     consummation of the Merger as of the Effective Time, will be) no contracts,
     agreements or understandings between the Company or the Guarantors and any
     person (other than the Registration Rights Agreement and the Warrant
     Registration Rights Agreement) granting such person the right to require
     the Company or the Guarantors to file a registration statement under the
     Act with respect to any securities of the Company or the Guarantors (except
     as otherwise described in the Offering Memorandum) or to require the
     Company or the Guarantors to include such securities with the Notes and the
     Subsidiary Note Guarantees registered pursuant to any registration
     statement; and

                                       29



          (xii)  the statements in the Offering Memorandum under the caption
     "Description of Capital Stock" insofar as such statements constitute a
     summary of the legal matters or documents referred to therein, fairly
     summarize in all material respects such legal matters or documents.

          In addition, such counsel shall state that he has participated in
the preparation of the Offering Memorandum and any amendments or supplements
thereto, if applicable, and that although such counsel has not independently
verified the accuracy, completeness or fairness of the statements contained
therein, except as stated, no facts have come to such counsel's attention to
cause him to believe that, as of the date of the Offering Memorandum or as of
the Closing Date, the Offering Memorandum, as amended or supplemented, if
applicable (except for the financial statements and other financial or
statistical data included therein or omitted therefrom, as to which such
counsel need not express any belief) contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading.

          In rendering the above opinions with respect to FMC Resource
Management Corporation, such counsel may rely on an opinion of Washington
counsel, and the opinion may so state therein.

          The opinion of such counsel described in Section 10(f) above shall
be rendered to the Initial Purchaser at the request of the Company and the
Guarantors and shall so state therein.

          (g)    The Initial Purchaser shall have received on the Closing
Date an opinion (reasonably satisfactory to the Initial Purchaser and counsel
for the Initial Purchaser), dated the Closing Date, of Oppenheimer, Wolff &
Donnelly LLP, to the effect that:

          (i)    The Company is (and, upon consummation of the Merger as of the
     Effective Time, will be) validly existing as a corporation in good standing
     under the laws of the State of Minnesota and has (and, upon consummation of
     the Merger as of the Effective Time, will have) the corporate power and
     authority to carry on its business as described in the Offering Memorandum
     and to own, lease and operate its properties;

          (ii)   Each of Merrill/New York Company ("Merrill/New York") and
     Merrill/May Inc. ("Merrill/May") is validly existing as a corporation in
     good standing under the laws of Minnesota;

          (iii)  Merrill Communications LLC has been duly organized and is
     validly existing as a limited liability company in good standing under the
     laws of Delaware and has (and, upon consummation of the Merger as of the
     Effective Time, will have) company power and authority to carry on its
     business as described in the Offering Memorandum and to own, lease and
     operate its properties;

          (iv)   each of the Indenture, this Agreement, the Registration Rights
     Agreement, the Warrant Registration Rights Agreement and the Warrant
     Assumption Agreement has been duly authorized and, insofar as such matters
     are governed by the laws of Minnesota, executed and delivered by the
     Company;

                                       30



          (v)    each of the Indenture, this Agreement and the Registration
     Rights Agreement has been duly authorized and, insofar as such matters are
     governed by the laws of Delaware, executed and delivered by Merrill
     Communications LLC;

          (vi)   the LLC Agreements have been duly authorized, executed and
     delivered by the Company and Merrill Communications LLC and are valid and
     binding agreements of the Company and Merrill Communications LLC,
     enforceable against the Company and Merrill Communications LLC in
     accordance with their terms, except (x) as such enforcement may be limited
     by bankruptcy, insolvency, fraudulent conveyance or similar laws affecting
     creditors' rights generally, (y) as such enforcement is subject to general
     principles of equity (regardless of whether such enforceability is
     considered in a proceeding in equity or at law) and (z) as rights to
     indemnity and contribution thereunder may be limited by applicable law;

          (vii)  the Series A Notes and the Series B Notes have been duly
     authorized by the Company;

          (viii) Merrill Communications LLC has duly authorized its Subsidiary
     Note Guarantee;

          (ix)   upon effectiveness of the Merger, the Company will succeed to
     and assume all of the obligations of Viking under this Agreement, the
     Warrant Agreement and the Warrants;

          (x)    the Company has duly authorized and reserved for issuance the
     Warrant Shares to be issued upon exercise of the Warrants and, the Warrant
     Shares, upon issuance, delivery and payment therefor in accordance with the
     terms of the Warrants will have been validly issued and will be fully paid
     and non assessable, and the issuance of the Warrant Shares is, as of the
     Closing Date, not subject to any preemptive or similar rights under
     Minnesota law or the charter or by-laws of the Company;

          (xi)   the execution, delivery and performance (as applicable) of this
     Agreement, the Indenture, the Registration Rights Agreement, the Notes, the
     LLC Agreements, the Warrant Agreement, the Warrants, the Warrant
     Registration Rights Agreement and the Warrant Assumption Agreement by the
     Company, the compliance by the Company with all applicable provisions
     hereof and thereof and the consummation of the transactions contemplated
     hereby and thereby do not (w) require any consent, approval, authorization
     or other order of, or qualification with, any Minnesota or federal court or
     Minnesota or federal governmental body or agency (other than those required
     under federal securities and state "blue sky" laws, or the laws of any
     foreign jurisdiction, as to which counsel need express no opinion), (x)
     conflict with or constitute a breach of any of the terms or provisions of,
     or a default under, the articles of incorporation or by-laws of the Company
     or the LLC Agreements, (y) violate or conflict with any applicable
     Minnesota or federal law, rule or regulation or (z) to such counsel's
     knowledge, based solely upon inquiry of appropriate officers of the
     Company, conflict with, constitute a default

                                       31



     under or violate any judgment, writ, injunction, decree, order or ruling of
     any Minnesota or federal court or governmental authority binding on the
     Company, of which such counsel is aware;

          (xii)  the execution, delivery and performance of this Agreement, the
     Indenture, the Registration Rights Agreement, the Notes and the LLC
     Agreements by Merrill Communications LLC, the compliance by Merrill
     Communications LLC with all applicable provisions hereof and thereof and
     the consummation of the transactions contemplated hereby and thereby do not
     (w) require any consent, approval, authorization or other order of, or
     qualification with, Delaware or federal court or Delaware or federal
     governmental body or agency, (x) conflict with or constitute a breach of
     any of the terms or provisions of, or a default under, the constitutive
     documents of Merrill Communications LLC or the LLC Agreements, (y) violate
     or conflict with any applicable Delaware corporate or federal law, rule or
     regulation or (z) to such counsel's knowledge, based solely upon inquiry of
     appropriate officers of Merrill Communications LLC, conflict with,
     constitute a default under or violate any judgment, writ, injunction,
     decree, order or ruling of any Delaware or federal court or governmental
     authority binding on, Merrill Communications LLC, of which such counsel is
     aware;

          (xiii) the statements in the Offering Memorandum under the caption
     "Description of Capital Stock" insofar as such statements constitute a
     summary of the legal matters or documents referred to therein, fairly
     summarize in all material respects such legal matters or documents.

          The opinion of such counsel described in Section 10(g) above shall
be rendered to the Initial Purchaser at the request of the Company and the
Guarantors and shall so state therein.

          (h)    The Initial Purchaser shall have received on the Closing
Date an opinion (reasonably satisfactory to the Initial Purchaser and counsel
for the Initial Purchaser), dated the Closing Date, of Davis Polk & Wardwell
to the effect that:

          (i)    assuming the Series A Notes have been duly authorized by the
     Company, when executed and authenticated in accordance with the provisions
     of the Indenture and delivered to and paid for by the Initial Purchaser in
     accordance with the terms of this Agreement and upon consummation of the
     Merger as of the Effective Time, the Series A Notes will be entitled to the
     benefits of the Indenture and will be valid and binding obligations of the
     Company, enforceable against the Company in accordance with their terms,
     except (x) as such enforcement may be limited by bankruptcy, insolvency,
     fraudulent conveyance or similar laws affecting creditors' rights
     generally, (y) as such enforcement is subject to general principles of
     equity (regardless of whether such enforceability is considered in a
     proceeding in equity or at law) and (z) to the extent that a waiver of
     rights under any usury or stay law may be unenforceable; such counsel need
     express no opinion, however, as to the applicability (and, if applicable,
     the effect) of Section 548 of the United States Bankruptcy Code or any
     comparable provision of state law to the questions addressed above or on
     the conclusions expressed with respect thereto;

                                       32



          (ii)   assuming the Subsidiary Note Guarantees have been duly
     authorized, executed and delivered by each Guarantor and, assuming the
     Series A Notes have been duly authorized by the Company, when the Series A
     Notes are executed and authenticated in accordance with the provisions of
     the Indenture and delivered to and paid for by the Initial Purchaser in
     accordance with the terms of this Agreement and upon consummation of the
     Merger as of the Effective Time, the Subsidiary Note Guarantees will be
     valid and binding obligations of each Guarantor, enforceable against each
     such Guarantor in accordance with their terms except (x) as such
     enforcement may be limited by bankruptcy, insolvency, fraudulent conveyance
     or similar laws affecting creditors' rights generally, (y) as such
     enforcement is subject to general principles of equity (regardless of
     whether such enforceability is considered in a proceeding in equity or at
     law) and (z) to the extent that a waiver of rights under any usury or stay
     law may be unenforceable; such counsel need express no opinion, however, as
     to the applicability (and, if applicable, the effect) of Section 548 of the
     United States Bankruptcy Code or any comparable provision of state law to
     the questions addressed above or on the conclusions expressed with respect
     thereto;

          (iii)  assuming the Indenture has been duly authorized, executed and
     delivered by the Company and each of the Guarantors, the Indenture is (and,
     upon consummation of the Merger as of the Effective Time, will be) a valid
     and binding agreement of the Company and each of the Guarantors,
     enforceable against the Company and each such Guarantor in accordance with
     its terms, except (x) as such enforcement may be limited by bankruptcy,
     insolvency, fraudulent conveyance or similar laws affecting creditors'
     rights generally, (y) as such enforcement is subject to general principles
     of equity (regardless of whether such enforceability is considered in a
     proceeding in equity or at law) and (z) to the extent that a waiver of
     rights under any usury or stay law may be unenforceable; such counsel need
     express no opinion, however, as to the applicability (and, if applicable,
     the effect) of Section 548 of the United States Bankruptcy Code or any
     comparable provision of state law to the questions addressed above or on
     the conclusions expressed with respect thereto;

          (iv)   assuming the Registration Rights Agreement has been duly
     authorized, executed and delivered by the Company and each of the
     Guarantors, the Registration Rights Agreement is (and, upon consummation of
     the Merger as of the Effective Time, will be) a valid and binding agreement
     of the Company and each of the Guarantors, enforceable against the Company
     and each such Guarantor in accordance with its terms, except (x) as such
     enforcement may be limited by bankruptcy, insolvency, fraudulent conveyance
     or similar laws effecting creditors' rights generally, (y) as such
     enforcement is subject to general principles of equity (regardless of
     whether such enforceability is considered in a proceeding in equity or at
     law) and (z) as rights to indemnity and contribution thereunder may be
     limited by applicable law;

          (v)    assuming the Warrant Agreement has been duly authorized,
     executed and delivered by Viking, the Warrant Agreement is a valid and
     binding agreement

                                       33



     of Viking, enforceable against Viking in accordance with its terms,
     except (x) as such enforcement may be limited by bankruptcy, insolvency,
     fraudulent conveyance or similar laws effecting creditors' rights
     generally, (y) as such enforcement is subject to general principles of
     equity (regardless of whether such enforceability is considered in a
     proceeding in equity or at law) and (z) as rights to indemnity and
     contribution thereunder may be limited by applicable law;

          (vi)   assuming the Warrants have been duly authorized by Viking, when
     executed and countersigned in accordance with the provisions of the Warrant
     and delivered to and paid for by the Initial Purchaser in accordance with
     the terms of this Agreement, the Warrants will be the valid and binding
     obligations of Viking, enforceable against Viking in accordance with its
     terms, except (i) as such enforcement may be limited by bankruptcy,
     insolvency, fraudulent conveyance or similar laws effecting creditors'
     rights generally and (ii) as such enforcement is subject to general
     principles of equity (regardless of whether such enforceability is
     considered in a proceeding in equity or at law);

          (vii)  assuming the Warrant Registration Rights Agreement has been
     duly authorized, executed and delivered by the Company, the Warrant
     Registration Rights Agreement is (and, upon consummation of the Merger as
     of the Effective Time, will be) a valid and binding agreement of the
     Company, enforceable against the Company in accordance with its terms,
     except (x) as such enforcement may be limited by bankruptcy, insolvency,
     fraudulent conveyance or similar laws effecting creditors' rights
     generally, (y) as such enforcement is subject to general principles of
     equity (regardless of whether such enforceability is considered in a
     proceeding in equity or at law) and (z) as rights to indemnity and
     contribution thereunder may be limited by applicable law;

          (viii) assuming the Warrant Assumption Agreement has been duly
     authorized, executed and delivered by the Company, the Warrant Agreement as
     amended by the Warrant Assumption Agreement is a valid and binding
     agreement of the Company, enforceable against the Company in accordance
     with its terms, except (x) as such enforcement may be limited by
     bankruptcy, insolvency, fraudulent conveyance or similar laws effecting
     creditors' rights generally, (y) as such enforcement is subject to general
     principles of equity (regardless of whether such enforceability is
     considered in a proceeding in equity or at law) and (z) as rights to
     indemnity and contribution thereunder may be limited by applicable law;

          (ix)   assuming the Warrant Assumption Agreement has been duly
     authorized, executed and delivered by the Company, and assuming the
     Warrants have been duly authorized by the Company, when executed and
     countersigned in accordance with the provisions of the Warrant Agreement
     and delivered to and paid for by the Initial Purchaser in accordance with
     the terms of this Agreement, the Warrants will be valid and binding
     obligations of the Company, enforceable against the Company in accordance
     with its terms, except (x) as such enforcement may be limited by
     bankruptcy, insolvency, fraudulent conveyance or similar laws effecting
     creditors' rights generally, (y) as such enforcement is subject to general
     principles

                                       34



     of equity (regardless of whether such enforceability is
     considered in a proceeding in equity or at law) and (z) as rights to
     indemnity and contribution thereunder may be limited by applicable law;

          (x)    the execution and delivery of this Agreement and the other
     Operative Documents (other than the Credit Agreement and the LLC
     Agreements) and compliance by the Company and the Guarantors to the extent
     a party thereto with the provisions thereof will not conflict with,
     constitute a default under or violate (x) any of the terms, conditions or
     provisions of any of the Operative Documents, or (y) any Delaware
     corporate, New York or federal law or regulation that in our experience is
     normally applicable to general business corporations in relation to
     transactions of the type contemplated by those documents (other than
     federal and state securities or blue sky laws, as to which such counsel
     need express no opinion);

          (xi)   no consent, approval, waiver, license or authorization or other
     action by or filing with any governmental body or agency under Delaware
     corporate, New York or federal law that in our experience is normally
     applicable to general business corporations in relation to transactions of
     the type contemplated by the Operative Documents (other than the Credit
     Agreement and the LLC Agreements) is required in connection with the
     execution and delivery by the Company or the Guarantors of this Agreement
     and the other Operative Documents (other than the Credit Agreement and the
     LLC Agreements) to the extent a party thereto or the consummation by the
     Company or the Guarantors of its obligations thereunder, except for (x) the
     applicable requirements of federal and state securities or blue sky laws,
     as to which we express no opinion, and (y) those already obtained or made
     and which are in full force and effect;

          (xii)  none of the Company, any of the Guarantors or Viking is or,
     after giving effect to the offering and sale of the Units and the
     application of the net proceeds therefrom as described in the Offering
     Memorandum and upon consummation of the Merger as of the Effective Time,
     will be, an "investment company" as such term is defined in the Investment
     Company Act of 1940, as amended;

          (xiii) the statements in the Offering Memorandum under the captions
     "Certain Relationships and Related Party Transactions," "Description of New
     Credit Facility," "Description of Units," "Description of Notes,"
     "Description of Warrants," "Description of Certain Provisions Applicable to
     All Securities," "Certain Federal Income Tax Consequences" and "Plan of
     Distribution" insofar as such statements or descriptions constitute a
     summary of the legal matters or documents referred to therein, fairly
     summarize in all material respects such legal matters or documents;

          (xiv)  the Indenture complies as to form in all material respects with
     the requirements of the TIA, and the rules and regulations of the
     Commission applicable to an indenture which is qualified thereunder;

                                       35



          (xv)   it is not necessary in connection with the offer, sale and
     delivery of the Units to the Initial Purchaser in the manner contemplated
     by this Agreement or in connection with the initial placement of the Units
     by the Initial Purchaser in the manner contemplated by the Offering
     Memorandum pursuant to Exempt Resales to qualify the Indenture under the
     TIA, and no registration under the Securities Act of the Securities is
     required for the sale of the Units to the Initial Purchaser as contemplated
     by this Agreement or for the initial placement of the Units by the Initial
     Purchaser in the manner contemplated by the Offering Memorandum pursuant to
     Exempt Resales assuming (i) the Initial Purchaser is a QIB, (ii) the
     accuracy of, and compliance with, the Initial Purchaser's representations
     and agreements contained in Section 8 of this Agreement, and (iii) the
     accuracy of the agreements and representations of the Company set forth in
     Sections 5(h) and (m) and 6(ii), (jj), (kk) and (mm) of this Agreement and
     (iv) the accuracy of the agreements and representations of Viking set forth
     in Sections 7(o), 7(q) and 7(r) of this Agreement; and such counsel need
     express no opinion as to any other offer or sale.

          In addition, such counsel shall state that it has participated in
the preparation of the Offering Memorandum and any amendments or supplements
thereto, if applicable, and that although such counsel has not independently
verified the accuracy, completeness or fairness of the statements contained
therein, except as stated, no facts have come to such counsel's attention to
cause it to believe that, as of the date of the Offering Memorandum or as of
the Closing Date, the Offering Memorandum, as amended or supplemented, if
applicable (except for the financial statements and other financial or
statistical data included therein or omitted therefrom, as to which such
counsel need not express any belief) contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading.

          The opinion of such counsel described in this Section 10(h) shall
be rendered to the Initial Purchaser at the request of the Company, the
Guarantors and Viking and shall so state therein.

          (i)    The Initial Purchaser shall have received on the Closing
Date an opinion (reasonably satisfactory to the Initial Purchaser and counsel
for the Initial Purchaser), dated the Closing Date, of Dorsey & Whitney LLP,
to the effect that:

          (i)    Viking is a corporation duly incorporated, validly existing and
     in good standing under the laws of Minnesota;

          (ii)   the execution and delivery of this Agreement, the Warrant
     Agreement and the Warrants have been duly authorized by Viking; and

          (iii)  the execution, delivery and performance of this Agreement, the
     Warrant Agreement and the Warrants do not conflict with or constitute a
     breach of any of the terms or provisions of, or a default under, the
     articles of incorporation or by-laws of Viking.

                                       36



          The opinion of such counsel described in this Section 10(i) shall
be rendered to the Initial Purchaser at the request of Viking and shall so
state therein.

          (j)    On the Closing Date, the Initial Purchaser shall have
received copies of all opinions rendered in connection with the Merger
Agreement or the Credit Agreement, addressed (in the case of opinions
rendered in connection with the Credit Agreement) to the Initial Purchaser.

          (k)    The Initial Purchaser shall have received on the Closing
Date an opinion, dated the Closing Date, of Cleary, Gottlieb, Steen &
Hamilton, counsel for the Initial Purchaser, in form and substance reasonably
satisfactory to the Initial Purchaser.

          (l)    The Initial Purchaser shall have received, at the time this
Agreement is executed and at the Closing Date, letters dated the date hereof
or the Closing Date, as the case may be, in form and substance reasonably
satisfactory to the Initial Purchaser from PricewaterhouseCoopers LLP,
independent public accountants, containing the information and statements of
the type ordinarily included in accountants' "comfort letters" to the Initial
Purchaser with respect to the financial statements and certain financial
information contained in the Offering Memorandum.

          (m)    The Initial Purchaser shall have received, on the Closing
Date, an opinion (reasonably satisfactory to the Initial Purchaser and
counsel for the Initial Purchaser), dated the Closing Date, of Valuation
Research Company with respect to the solvency of the Company after giving
effect to the Investment, the Merger, and the other transactions contemplated
by the Operative Documents.

          (n)    Each condition to closing contemplated by the Credit
Agreement (other than the issuance and sale of the Series A Notes and the
Warrants pursuant hereto) shall have been satisfied or waived.  There shall
exist at and as of the Closing Date (after giving effect to the transactions
contemplated by this Agreement and the other Operative Documents) no
conditions that would constitute a default (or an event that with notice or
the lapse of time, or both, would constitute a default) under the Credit
Agreement.  On the Closing Date, the closing under the Credit Agreement shall
have been consummated on terms that conform in all material respects to the
description thereof in the Offering Memorandum and the Initial Purchaser
shall have received evidence satisfactory to it of the consummation thereof.

          (o)    Each condition to closing contemplated by the Merger
Agreement (other than the issuance and sale of the Series A Notes and the
Warrants pursuant hereto) shall have been satisfied or waived.  There shall
exist at and as of the Closing Date (after giving effect to the transactions
contemplated by this Agreement and the other Operative Documents) no
conditions that would constitute a default (or an event that with notice or
the lapse of time, or both, would constitute a default) under the Merger
Agreement.  The Company shall have delivered to the Initial Purchaser copies
of the Articles of Merger required under the Minnesota Business Corporation
Act ("MBCA") to be filed by the Secretary of State of the State of Minnesota
in the office thereof in order to effect the Merger, together with evidence
satisfactory to each of them as to the receipt thereof by the Secretary of
State of the State of Minnesota for such filing, and such Articles of Merger
shall, in accordance with the MBCA, specify that the Merger shall

                                       37



become effective as of the Closing Date.  On the Closing Date, the Merger
shall have been consummated on terms that conform in all material respects to
the description thereof in the Offering Memorandum, and the Initial Purchaser
shall have received evidence reasonably satisfactory to it of the
consummation thereof.

          (p)    On the Closing Date, the Investment shall have been consummated
on terms that conform in all material respects to the description thereof in the
Offering Memorandum, and the Initial Purchaser shall have received evidence
satisfactory to it of the consummation thereof.

          (q)    The Units, Notes and Warrants shall have been approved by the
NASD for trading and duly listed in PORTAL.

          (r)    The Initial Purchaser shall have received a counterpart,
conformed as executed, of (i) the Indenture which shall have been entered
into by the Company, the Guarantors and the Trustee, (ii) the Warrant
Agreement which shall have been entered into by Viking and the Warrant Agent
and (iii) the Warrant Assumption Agreement which shall have been entered into
by the Company and the Warrant Agent.

          (s)    The Company and the Guarantors shall have executed the
Registration Rights Agreement, and the Company shall have executed the
Warrant Registration Rights Agreement, and the Initial Purchaser shall have
received duly executed original copies thereof.

          (t)    Neither the Company nor the Guarantors shall have failed at
or prior to the Closing Date to perform or comply with any of the agreements
herein contained and required to be performed or complied with by the Company
or the Guarantors, as the case may be, at or prior to the Closing Date.

          11.    EFFECTIVENESS OF AGREEMENT AND TERMINATION.  This Agreement
shall become effective upon the execution and delivery of this Agreement by
the parties hereto.  This Agreement may be terminated at any time on or prior
to the Closing Date by the Initial Purchaser by written notice to the Issuers
if any of the following has occurred:  (i) any outbreak or escalation of
hostilities or other national or international calamity or crisis or change
in economic conditions or in the financial markets of the United States or
elsewhere that, in the Initial Purchaser's judgment, is material and adverse
and, in the Initial Purchaser's judgment, makes it impracticable to market
the Units on the terms and in the manner contemplated in the Offering
Memorandum, (ii) the suspension or material limitation of trading in
securities or other instruments on the New York Stock Exchange, the American
Stock Exchange, the Chicago Board of Options Exchange, the Chicago Mercantile
Exchange, the Chicago Board of Trade or the Nasdaq National Market or
limitation on prices for securities or other instruments on any such exchange
or the Nasdaq National Market, (iii) the suspension of trading of any
securities of the Company or the Guarantors on any exchange or in the
over-the-counter market, (iv) the enactment, publication, decree or other
promulgation of any federal or state statute, regulation, rule or order of
any court or other governmental authority which in the opinion of the Initial
Purchaser materially and adversely affects, or will materially and adversely
affect, the business, prospects, financial condition or results of operations
of the Company and its subsidiaries, taken as a whole, (v) the declaration of
a banking moratorium by either federal or New York State authorities or (vi)
the taking of any action by any federal, state or local government or agency
in

                                       38



respect of its monetary or fiscal affairs which in the opinion of the Initial
Purchaser has a material adverse effect on the financial markets in the
United States.

          12.    MISCELLANEOUS.  Notices given pursuant to any provision of
this Agreement shall be addressed as follows:  (i) if to the Company or the
Guarantors, to Merrill Corporation, One Merrill Circle, St. Paul, Minnesota
55108 Attention: General Counsel; (ii) if to Viking, to Viking Merger Sub,
Inc. c/o DLJ Merchant Banking Partners II, L.P., 277 Park Avenue, New York,
NY 10172, Attention:  William F. Dawson, Jr. and (iii) if to the Initial
Purchaser, c/o Donaldson, Lufkin & Jenrette Securities Corporation, 277 Park
Avenue, New York, New York 10172, Attention:  Syndicate Department, or in any
case to such other address as the person to be notified may have requested in
writing.

          The respective indemnities, contribution agreements,
representations, warranties and other statements of the Issuers, the
Guarantors and the Initial Purchaser set forth in or made pursuant to this
Agreement shall remain operative and in full force and effect, and will
survive delivery of and payment for the Units, regardless of (i) any
investigation, or statement as to the results thereof, made by or on behalf
of the Initial Purchaser, the officers or directors of the Initial Purchaser,
any person controlling an Initial Purchaser, either Issuer, the Guarantors,
the officers or directors of either Issuer or the Guarantors, or any person
controlling the Issuers or the Guarantors, (ii) acceptance of the Units and
payment for them hereunder and (iii) termination of this Agreement.

          If for any reason the Units are not delivered by or on behalf of
the Company as provided herein (other than as a result of any termination of
this Agreement pursuant to Section 11), the Issuers and the Guarantors agree
to reimburse the Initial Purchaser for all out-of-pocket expenses (including
the reasonable fees and disbursements of counsel) incurred by them.
Notwithstanding any termination of this Agreement, the Issuers shall be
liable for all expenses which they have agreed to pay pursuant to Section
5(i) hereof.  The Issuers and the Guarantors also agree to reimburse the
Initial Purchaser and its officers, directors and each person, if any, who
controls the Initial Purchaser within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act for any and all fees and expenses (including
without limitation the fees and expenses of counsel) incurred by them in
connection with enforcing their rights under this Agreement (including
without limitation its rights under Section 9).

          Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Issuers, the
Guarantors, the Initial Purchaser, the Initial Purchaser's directors and
officers, any controlling persons referred to herein, the directors of the
Issuers and the Guarantors and their respective successors and assigns, all
as and to the extent provided in this Agreement, and no other person shall
acquire or have any right under or by virtue of this Agreement.  The term
"successors and assigns" shall not include a purchaser of any of the Units
from the Initial Purchaser merely because of such purchase.

          This Agreement shall be governed and construed in accordance with
the laws of the State of New York.

          This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.

                                       39



          Please confirm that the foregoing correctly sets forth the
agreement among the Company, Viking, the Guarantors and the Initial Purchaser.

                                      Very truly yours,

                                      MERRILL CORPORATION

                                      By: /s/ Rick R. Atterbury
                                         -------------------------------------
                                      Name:  Rick R. Atterbury
                                      Title:    Executive Vice President

                                      VIKING MERGER SUB, INC.

                                      By: /s/ Keith Palumbo
                                         -------------------------------------
                                      Name:  Keith Palumbo
                                      Title:    Vice President

                                      THE GUARANTORS NAMED
                                      IN SCHEDULE A HERETO

                                      By: /s/ Rick R. Atterbury
                                         -------------------------------------
                                      Name:  Rick R. Atterbury
                                      Title:    Attorney-in-Fact

DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION

By:   /s/ Omar Karame
- -------------------------------------
Name:  Omar Karame
Title:    Vice President



                                      SCHEDULE A

                            SUBSIDIARIES AND GUARANTORS

                        *Merrill Communications LLC

                        *Merrill Real Estate Company

                        *Merrill/Magnus Publishing Corporation

                        *Merrill/New York Company

                        *Merrill/May Inc.

                        *Merrill/ Alternatives, Inc.

                        *Merrill International Inc.

                        Merrill Corporation, Canada

                        793473 Ontario Ltd.

                        *FMC Resource Management Corporation

                        *Merrill Training & Technology, Inc.

                        *Merrill/Global, Inc.

                        Merrill Limited (UK)

                        Merrill France S.A.R.L. (France)

                        *Merrill/ Executech, Inc.

                        *Merrill/Daniels, Inc.

                        Document.com, Inc.

                        Cetara Corporation (80% ownership)


                        *Indicates subsidiaries that are Guarantors

EX-10.2

                                 U.S. $270,000,000

                                 CREDIT AGREEMENT,

                           dated as of November 23, 1999,

                                       among

                                MERRILL CORPORATION,

                                  as a Guarantor,

                            MERRILL COMMUNICATIONS LLC,

                                  as the Borrower,

                          VARIOUS FINANCIAL INSTITUTIONS,

                                  as the Lenders,

                             DLJ CAPITAL FUNDING, INC.,

                     as the Syndication Agent for the Lenders,

                               WELLS FARGO BANK, N.A.

                     as the Documentation Agent for the Lenders

                                        and

                           U.S. BANK NATIONAL ASSOCIATION

                    as the Administrative Agent for the Lenders

                                   LEAD ARRANGER:

                             DLJ CAPITAL FUNDING, INC.






                                  CREDIT AGREEMENT

     THIS CREDIT AGREEMENT, dated as of  November 23, 1999 is among MERRILL
CORPORATION, a Minnesota corporation, as a guarantor ("HOLDCO"), MERRILL
COMMUNICATIONS LLC, a Delaware limited liability company, as the borrower (the
"COMPANY"), the various financial institutions as are or may become parties
hereto (collectively, the "LENDERS"), DLJ CAPITAL FUNDING, INC. ("DLJ"), as
syndication agent for the Lenders (the "SYNDICATION AGENT"), WELLS FARGO BANK,
N.A., as documentation agent for the Lenders (the "DOCUMENTATION AGENT"), and
U.S. BANK NATIONAL ASSOCIATION, as administrative agent for the Lenders (the
"ADMINISTRATIVE AGENT"; the Syndication Agent and the Administrative Agent are
sometimes referred to herein as the "AGENTS" and each as an "AGENT").

                                W I T N E S S E T H:

     WHEREAS, DLJ Merchant Banking Partners II, L.P. owns all of the issued and
outstanding Capital Stock of Viking Merger Sub, Inc., a Minnesota corporation
("MERGER SUB");

     WHEREAS, DLJ Merchant Banking Partners II, L.P., DLJ Offshore Partners II,
C.V., DLJ Diversified Partners, L.P., DLJMB Funding II, Inc., DLJ EAB Partners,
L.P., DLJ Diversified Partners-A, L.P., DLJ First ESC II, L.P., DLJ First ESC,
L.P., DLJ Millennium Partners, L.P., DLJ Millennium Partners-A, L.P. and DLJ
Merchant Banking Partners II-A, L.P. (collectively the "DLJMB ENTITIES") and
certain current equity owners and employees of Holdco (such owners, employees
and the DLJMB Entities being, collectively, the "EQUITY INVESTORS") intend to
consummate a leveraged recapitalization (the "RECAPITALIZATION") of Holdco,
whereby, among other things, (i) Merger Sub will merge (the "MERGER") with and
into Holdco and (ii) immediately upon the effectiveness of the Merger, Holdco
will contribute (the "ASSET CONTRIBUTION") all or substantially all of its
assets to the Company, a wholly-owned Subsidiary of Holdco, other than (A)
leases, contract rights and other assets the transfer of which require the
consent or approval of (or give rise to any right of termination by or any right
to a penalty in favor of) any third party or governmental authority, (B) certain
litigation and (C) prior to January 1, 2000, its employees and related employee
benefit plans and arrangements (collectively, such retained assets, rights,
operations, liabilities, obligations and other interests of whatsoever kind or
nature being hereinafter referred to as the "RETAINED INTERESTS"), and will
enter into the Administrative Services Agreement with Company pursuant to which
Holdco will provide the benefits of substantially all such Retained Interests to
the Company and the Company will assume substantially all performance
obligations and other liabilities with respect to such Retained Interests in
accordance with the terms and conditions set forth therein;

     WHEREAS, Holdco will be the corporation surviving the Merger, and, after
giving effect to the Merger, the Equity Investors will be the holders in the
aggregate of 100% of the issued and outstanding Capital Stock (other than the
Preferred Stock and the Warrants) of Holdco;

     WHEREAS, in connection with the Transaction, and pursuant to the
Transaction Documents, the following capital-raising transactions will be
consummated prior to or contemporaneously with the consummation of the Merger
and the making of the initial Credit


                                      1


Extensions hereunder:  Merger Sub, and by virtue of the consummation of the
Merger, Holdco shall receive (i) a common equity contribution (the "COMMON
EQUITY CONTRIBUTION") of not less than $92,100,000 from the Equity Investors,
of which not less than $70,600,000 will consist of shares of the common stock
of Merger Sub purchased for cash or in exchange for shares of common stock of
Holdco purchased for cash by the DLJMB Entities and converted pursuant to the
Merger into the common stock of Holdco, and not less than $21,500,000 will be
provided by members of the Company's management by the retention of existing
Shares of Holdco's Capital Stock valued at the Merger consideration value per
share, and (ii) a preferred equity contribution (the "PREFERRED EQUITY
CONTRIBUTION") of not less than $40,000,000 consisting of shares of the
preferred stock of Merger Sub and warrants to purchase common stock of Merger
Sub purchased for cash by the DLJMB Entities and/or other investors, and
converted pursuant to the Merger into shares of the preferred stock of Holdco
and warrants to purchase common stock of Holdco;

     WHEREAS, on the Closing Date, after giving effect to the Common Equity
Contribution, the Preferred Equity Contribution, the Senior Subordinated
Notes or the Senior Subordinated Bridge Notes, the Loans made on the Closing
Date and the Intercompany Loan, Holdco shall have sufficient cash on hand in
the amount required to consummate the Transaction;

     WHEREAS, in connection with the Transaction and prior to or
contemporaneously with the consummation of the Merger and the making of the
initial Credit Extensions hereunder, Holdco will issue for cash, $140,000,000 in
aggregate principal amount of its Senior Subordinated Notes and warrants to
purchase common stock of Holdco in a public offering or a Rule 144A private
placement, or in lieu thereof, $140,000,000 in aggregate principal amount of its
Senior Subordinated Bridge Notes;

     WHEREAS, in connection with the Transaction and the ongoing working capital
and general corporate needs of the Company and its Subsidiaries, including
permitted acquisitions hereunder, the Company desires to obtain the following
financing facilities from the Lenders:

          (a)  a Term-A Loan Commitment pursuant to which Borrowings of Term-A
     Loans will be made to the Company on the Closing Date, in an aggregate
     maximum, original principal amount not to exceed $65,000,000;

          (b)  a Term-B Loan Commitment pursuant to which Borrowings of Term-B
     Loans will be made to the Company on the Closing Date, in an aggregate
     maximum, original principal amount not to exceed $155,000,000;

          (c)  a Revolving Loan Commitment (to include availability for
     Revolving Loans, Swing Line Loans and Letters of Credit) pursuant to
     which Borrowings of Revolving Loans will be made to the Company from time
     to time on and subsequent to the Closing Date but prior to the Revolving
     Loan Commitment Termination Date and in a maximum aggregate principal
     amount (together with (x) the Letter of Credit Outstandings, and (y) all
     Swing Line Loans) not to exceed, subject to the terms and provisions
     hereof, the then existing Revolving Loan Commitment Amount; PROVIDED,
     HOWEVER, that not more than $6,500,000 of the proceeds from Revolving Loans
     may be


                                      2


     used for purposes of consummating the Transaction, including the
     payment of Expense Payments;

          (d)  a Letter of Credit Commitment pursuant to which the Issuers will
     issue Letters of Credit for the account of the Company and its Subsidiaries
     from time to time on and subsequent to the Closing Date but prior to the
     Revolving Loan Commitment Termination Date in a maximum aggregate Stated
     Amount at any one time outstanding not to exceed $15,000,000; and

          (e)  a Swing Line Loan Commitment pursuant to which Borrowings of
     Swing Line Loans in an aggregate outstanding principal amount not to exceed
     $10,000,000 will be made to the Company on and subsequent to the Closing
     Date but prior to the Revolving Loan Commitment Termination Date;

     WHEREAS, on the Closing Date, contemporaneously with the consummation of
the Merger, the Common Equity Contribution, the Preferred Equity Contribution,
the issuance of the Senior Subordinated Bridge Notes or the Senior Subordinated
Notes, as the case may be, and the initial Borrowing of Term Loans and Revolving
Loans hereunder, the Company shall make an intercompany loan (the "INTERCOMPANY
LOAN") and/or declare a dividend (the "CLOSING DATE DIVIDEND"), the aggregate
amount of such Intercompany Loan and Closing Date Dividend to be in an amount
equal to all of the net proceeds of the initial Borrowing of Term Loans and
Revolving Loans (other than any such proceeds used by the Company to pay fees
and expenses related to the Transaction) for purposes of consummating the
Merger, which Intercompany Loan, if any, shall be evidenced by a promissory note
issued by Holdco to the Company (the "INTERCOMPANY NOTE");

     WHEREAS, the Lenders are willing, on the terms and subject to the
conditions hereinafter set forth (including ARTICLE V), to extend the
Commitments and make the Loans described herein to the Company and issue (or
participate in) Letters of Credit for the account of the Company and its
Subsidiaries;

     NOW, THEREFORE, the parties hereto agree as follows:

                                     ARTICLE I
                          DEFINITIONS AND ACCOUNTING TERMS

          SECTION 1.1    DEFINED TERMS.  The following terms (whether or not
underscored) when used in this Agreement, including its preamble and recitals,
shall, except where the context otherwise requires, have the following meanings
(such meanings to be equally applicable to the singular and plural forms
thereof):

     "ACQUIRED CONTROLLED PERSON" means any Person (i) in which Holdco, the
Company or any of its Restricted Subsidiaries has made an Investment permitted
under SUBCLAUSE (y) of CLAUSE (m) of SECTION 7.2.5 and (ii) as to which Holdco,
the Company or such Restricted Subsidiary exercises control.  For purposes
hereof, "control" means the power to appoint a majority of the board of
directors (or other equivalent governing body) of such Person or to


                                      3


otherwise direct or cause the direction of the management or policies of such
Person, whether by contractual arrangement or otherwise.

     "ADMINISTRATIVE AGENT" is defined in the PREAMBLE and includes each other
Person as shall have subsequently been appointed as the successor Administrative
Agent pursuant to SECTION 9.4.

     "ADMINISTRATIVE AGENT FEE LETTER" means the confidential fee letter between
the Company and the Administrative Agent.

     "ADMINISTRATIVE SERVICES AGREEMENT" means that certain Administrative
Services Agreement between Holdco and the Company pursuant to which the benefits
and burdens of certain contracts of Holdco are provided to and undertaken by the
Company, as in effect on the date of execution of this Agreement and as such
agreement may be amended from time to time thereafter to the extent permitted
under Section 7.2.10.

     "AFFILIATE" of any Person means any other Person which, directly or
indirectly, controls, is controlled by or is under common control with such
Person (excluding any trustee under, or any committee with responsibility for
administering, any Plan).  A Person shall be deemed to be "controlled by" any
other Person if such other Person possesses, directly or indirectly, power
(i) to vote 10% or more of the securities (on a fully diluted basis) having
ordinary voting power for the election of directors or managing general
partners, or (ii) to direct or cause the direction of the management and
policies of such Person whether by contract or otherwise.

     "AGENTS" is defined in the PREAMBLE.

     "AGREEMENT" means, on any date, this Credit Agreement as originally in
effect on the Closing Date and as thereafter from time to time amended,
supplemented, amended and restated, or otherwise modified and in effect on such
date.

     "ALTERNATE BASE RATE" means, for any day and with respect to all Base Rate
Loans, the higher of:  (a) 0.50% per annum above the latest Federal Funds Rate;
and (b) the rate of interest in effect for such day as most recently publicly
announced or established by the Administrative Agent in Minneapolis, Minnesota
as its reference rate for U.S. Dollar obligations.  The reference rate is a rate
set by the Administrative Agent based upon various factors including the
Administrative Agent's costs and desired return, general economic conditions and
other factors, and is used as a reference point for pricing some loans, which
may be priced at, above or below such announced rate.  Any change in the
reference rate established or announced by the Administrative Agent shall take
effect at the opening of business on the day of such establishment or
announcement.

     "ANNUALIZED" means (i) with respect to the end of the first Fiscal Quarter
of the Company ending after the Closing Date, the applicable amount for such
Fiscal Quarter multiplied by four, (ii) with respect to the second Fiscal
Quarter of the Company ending after the Closing Date, the applicable amount for
such Fiscal Quarter and the immediately preceding Fiscal Quarter multiplied by
two, and (iii) with respect to the third Fiscal Quarter of the Company ending
after the Closing Date, the applicable amount for such Fiscal Quarter and the
immediately preceding two Fiscal Quarters multiplied by one and one-third.


                                      4


     "APPLICABLE COMMITMENT FEE" means, (i) for each day from the Closing Date
through (but excluding) the date upon which the Compliance Certificate for the
second full Fiscal Quarter ending after the Closing Date is delivered or
required to be delivered by the Company to the Administrative Agent pursuant to
CLAUSE (c) of SECTION 7.1.1, a fee which shall accrue at a rate of 1/2 of 1% per
annum, and (ii) for each day thereafter, a fee which shall accrue at the
applicable rate per annum set forth below under the column entitled "Applicable
Commitment Fee", determined by reference to the applicable Leverage Ratio
referred to below:



                                                     Applicable
                      Leverage Ratio               Commitment Fee
                ---------------------------      ------------------
                                              
                     greater than 3.5:1               0.500%

                less than or equal to 3.5:1           0.375%


The Leverage Ratio used to compute the Applicable Commitment Fee for any date
referred to in CLAUSE (ii) above shall be the Leverage Ratio set forth in the
Compliance Certificate most recently delivered by the Company to the
Administrative Agent on or prior to such day pursuant to CLAUSE (c) of SECTION
7.1.1.  Changes in the Applicable Commitment Fee resulting from a change in the
Leverage Ratio shall become effective (as of the first day following the Fiscal
Quarter in respect of which such Compliance Certificate was required to be
delivered) upon delivery by the Company to the Administrative Agent of a new
Compliance Certificate pursuant to CLAUSE (c) of SECTION 7.1.1.  In the event
such Compliance Certificate indicates a Leverage Ratio that would result in an
Applicable Commitment Fee which is greater or lesser than the Applicable
Commitment Fee theretofore in effect, then (A) such greater or lesser Applicable
Commitment Fee shall be deemed to have been in effect for all purposes of this
Agreement from the first day following the Fiscal Quarter in respect of which
such Compliance Certificate was required to be delivered by the Company to the
Administrative Agent pursuant to CLAUSE (c) of SECTION 7.1.1 and (B) if the
Company shall have theretofore made any payment of commitment fees in respect of
the period from the first day following the Fiscal Quarter in respect of which
such Compliance Certificate was required to be delivered by the Company to the
Administrative Agent pursuant to CLAUSE (c) of SECTION 7.1.1, then, on the next
Quarterly Payment Date, either (x) if the new Applicable Commitment Fee is
greater than the Applicable Commitment Fee theretofore in effect, the Company
shall pay, as a supplemental payment of commitment fees, an amount which equals
the difference between the amount of commitment fees that would otherwise have
been paid based on such new Leverage Ratio and the amount of such commitment
fees actually so paid, or (y) if the new Applicable Commitment Fee is less than
the Applicable Commitment Fee theretofore in effect, an amount shall be deducted
from the interest on Revolving Loans and commitment fees and Letter of Credit
fees under the first sentence of SECTION 3.3.3 then otherwise payable in an
amount which equals the difference between the amount of commitment fees so paid
and the amount of commitment fees that would otherwise have been paid based on
such new Leverage Ratio (or, if no such payment is owed by the Company to the
Revolving Lenders on such next Quarterly Payment Date, or if such amount owed by
the Company is less than such difference, the Revolving Lenders shall pay to the
Company on such next Quarterly Payment Date the amount of such difference less
the amount, if any, owed by the Company to such Lenders on such Quarterly
Payment Date); PROVIDED that, if the Company shall fail to deliver a Compliance
Certificate within the number of days required


                                      5


pursuant to CLAUSE (c) of SECTION 7.1.1 (without giving effect to any grace
period), the Applicable Commitment Fee from and including the first day after
the date on which such Compliance Certificate was required to be delivered to
but not including the date the Company delivers to the Administrative Agent
an appropriately completed Compliance Certificate shall conclusively equal
the highest Applicable Commitment Fee set forth above.

     "APPLICABLE MARGIN" means at all times during the applicable periods set
forth below,

          (a)  from the Closing Date through (but excluding) the date upon which
     the Compliance Certificate for the second full Fiscal Quarter ending after
     the Closing Date is delivered by the Company to the Administrative Agent
     pursuant to CLAUSE (c) of SECTION 7.1.1, with respect to the unpaid
     principal amount of each (i) Swing Line Loan (which shall be borrowed and
     maintained only as a Base Rate Loan) and each Revolving Loan and Term-A
     Loan maintained as a Base Rate Loan, 1.75% per annum and (ii) Revolving
     Loan and Term-A Loan maintained as a LIBOR Loan, 3.00% per annum; and

          (b)  at all times after the date of such delivery of the Compliance
     Certificate described in CLAUSE (a) above, with respect to the unpaid
     principal amount of each Swing Line Loan (which shall be borrowed and
     maintained only as a Base Rate Loan) and each Revolving Loan and Term-A
     Loan, by reference to the applicable Leverage Ratio and at the applicable
     percentage per annum set forth below under the column entitled "Applicable
     Margin for Base Rate Loans", in the case of Base Rate Loans, or by
     reference to the applicable Leverage Ratio and at the applicable percentage
     per annum set forth below under the column entitled "Applicable Margin for
     LIBOR Loans", in the case of LIBOR Loans:

     APPLICABLE MARGIN FOR REVOLVING LOANS, SWING LINE LOANS AND TERM-A LOANS



                             Applicable           Applicable
                           Margin For Base     Margin For LIBOR
      Leverage Ratio         Rate Loans             Loans
- ------------------------   ---------------     ----------------
                                         
    greater than 4.5:1          1.75%               3.00%

  greater than 4.0:1 and        1.50%               2.75%
  less than or equal to
          4.5:1

  greater than 3.5:1 and        1.25%               2.50%
  less than or equal to
          4.0:1

  greater than 3.0:1 and        1.00%               2.25%
  less than or equal to
          3.5:1

  less than or equal to         0.75%               2.00%
          3.0:1


     (c)  at all times with respect to the unpaid principal amount of each (i)
Term-B Loan maintained as a Base Rate Loan, 2.50% per annum, and (ii) Term-B
Loan maintained as a LIBOR Loan, 3.75% per annum.


                                      6


The Leverage Ratio used to compute the Applicable Margin for Swing Line Loans,
Revolving Loans and Term-A Loans for any day referred to in CLAUSE (b) above
shall be the Leverage Ratio set forth in the Compliance Certificate most
recently delivered by the Company to the Administrative Agent on or prior to
such day pursuant to CLAUSE (c) of SECTION 7.1.1.  Changes in the Applicable
Margin for Swing Line Loans, Revolving Loans and Term-A Loans resulting from a
change in the Leverage Ratio shall become effective (as of the first day
following the Fiscal Quarter in respect of which such Compliance Certificate was
required to be delivered) upon delivery by the Company to the Administrative
Agent of a new Compliance Certificate pursuant to CLAUSE (c) of SECTION 7.1.1.
In the event such Compliance Certificate indicates a Leverage Ratio that would
result in an Applicable Margin which is greater or lesser than the Applicable
Margin theretofore in effect, then (A) such greater or lesser Applicable Margin
shall be deemed to be in effect for all purposes of this Agreement from the
first day following the Fiscal Quarter in respect of which such Compliance
Certificate was required to be delivered by the Company to the Administrative
Agent pursuant to CLAUSE (c) of SECTION 7.1.1 and (B) if the Company shall have
theretofore made any payment of interest in respect of Swing Line Loans,
Revolving Loans or Term-A Loans, or of Letter of Credit fees pursuant to the
first sentence of SECTION 3.3.3, in any such case in respect of the period from
the first day following the Fiscal Quarter in respect of which such Compliance
Certificate was required to be delivered to the actual date of delivery of such
Compliance Certificate, then, on the next Quarterly Payment Date, either (x) if
the new Applicable Margin is greater than the Applicable Margin theretofore in
effect, the Company shall pay as a supplemental payment of interest and/or
Letter of Credit fees, an amount which equals the difference between the amount
of interest and Letter of Credit fees that would otherwise have been paid based
on such new Leverage Ratio and the amount of such interest and Letter of Credit
fees actually so paid, or (y) if the new Applicable Margin is less than the
Applicable Margin theretofore in effect, an amount shall be deducted from the
interest on Revolving Loans, commitment fees and Letter of Credit fees (in the
case of differences in respect of interest on Revolving Loans and Letter of
Credit fees) or from the interest on Term-A Loans (in the case of differences in
respect of interest on Term-A Loans) thereafter payable by the Company in an
amount which equals the difference between the amount of interest and Letter of
Credit fees so paid and the amount of interest and Letter of Credit fees that
would otherwise have been paid based on such new Leverage Ratio (or, if no
payment by the Company to the Revolving Lenders or Term-A Lenders, as the case
may be, will thereafter accrue hereunder, or if the amount that so accrues is
less than such difference, the Revolving Lenders or Term-A Lenders, as the case
may be, will promptly pay to the Company an amount equal to such difference less
the amount, if any, of such accrued and unpaid payments); PROVIDED, that if the
Company shall fail to deliver a Compliance Certificate within the number of days
required pursuant to CLAUSE (c) of SECTION 7.1.1 (without giving effect to any
grace period), the Applicable Margin for all Revolving Loans, Term-A Loans and
Letters of Credit from and including the first day after the date on which such
Compliance Certificate was required to be delivered to but not including the
date the Company delivers to the Administrative Agent a Compliance Certificate
shall conclusively equal the highest Applicable Margin for the relevant type of
Loan set forth in CLAUSE (b) above.

     "APPROVED FUND" means, with respect to any Lender that is a fund that
invests in bank loans, any other fund that invests in bank loans and is advised
or managed by the same investment advisor as such Lender or by an Affiliate of
such investment advisor.


                                      7


     "ARRANGER" means DLJ.

     "ASSET CONTRIBUTION" is defined in the SECOND RECITAL.

     "ASSIGNEE LENDER" is defined in SECTION 11.11.1.

     "ASSIGNOR LENDER" is defined in SECTION 11.11.1.

     "ASSUMED INDEBTEDNESS" means Indebtedness of a Person which (i) is in
existence at the time such Person becomes a Restricted Subsidiary of Holdco or
the Company or (ii) is assumed in connection with an Investment in or
acquisition of such Person, and has not been incurred or created by such Person
in connection with, or in anticipation or contemplation of, such Person becoming
a Restricted Subsidiary of Holdco or the Company.

     "AUTHORIZED OFFICER" means, relative to any Obligor, the president, chief
executive officer, treasurer, assistant treasurer, controller or chief financial
officer whose signatures and incumbency shall have been certified to the
Administrative Agent and the Lenders pursuant to SECTION 5.1.1.

     "BASE FINANCIAL STATEMENTS" is defined in clause (a) of SECTION 5.1.9.

     "BASE RATE LOAN" means a Loan bearing interest at a fluctuating rate
determined by reference to the Alternate Base Rate.

     "BORROWING" means, as the context may require, Loans of the same type and
Tranche (and, in the case of LIBOR Loans, having the same Interest Period) made
by the relevant Lenders on the same Business Day and pursuant to the same
Borrowing Request in accordance with SECTION 2.1.

     "BORROWING REQUEST" means a loan request and certificate duly executed by
an Authorized Officer of the Company, substantially in the form of EXHIBIT B-1
hereto.

     "BRIDGE WARRANTS" means the warrants to purchase common stock of Holdco
that may be issued pursuant to the Senior Subordinated Bridge Note Agreement.

     "BUSINESS DAY" means any day which is neither a Saturday or Sunday nor a
legal holiday on which banks are authorized or required to be closed in New York
City and, with respect to Borrowings of, Interest Periods with respect to,
payments of principal and interest in respect of, and conversions of Base Rate
Loans into, LIBOR Loans, on which dealings are carried on in the London
interbank market.

     "CAPITAL EXPENDITURES" means for any period, the sum, without duplication,
of (i) the aggregate amount of all expenditures of Holdco and its Restricted
Subsidiaries for fixed or capital assets made during such period which, in
accordance with GAAP, would be classified as capital expenditures, and (ii) to
the extent not included in CLAUSE (i) above, the aggregate amount of the
principal component of all Capitalized Lease Liabilities incurred during such
period by Holdco and its Restricted Subsidiaries; PROVIDED that Capital
Expenditures shall not include (i) any such expenditures or any such principal
component funded with (x) any Casualty


                                      8


Proceeds, as permitted under CLAUSE (e) of  SECTION 3.1.1, or (y) any Net
Disposition Proceeds of any asset sale permitted under CLAUSE (c) of SECTION
7.2.9 or any asset sale of obsolete or worn out equipment permitted under
SUBCLAUSE (a)(i) of SECTION 7.2.9 or (ii) any Investment made under SECTION
7.2.5 (other than pursuant to CLAUSE (d) thereof).

     "CAPITAL STOCK" means, with respect to any Person, (i) any and all shares,
interests, participations, rights or other equivalents of or interests in
(however designated) corporate or capital stock, including, without limitation,
shares of preferred or preference stock of such Person, (ii) all partnership
interests (whether general or limited) in such Person, (iii) all membership
interests or limited liability company interests in such Person, and (iv) all
other equity or ownership interests in such Person of any other type.

     "CAPITALIZED LEASE LIABILITIES" means, without duplication, all monetary
obligations of Holdco or any of its Restricted Subsidiaries under any leasing or
similar arrangement which, in accordance with GAAP, would be classified as
capitalized leases, and, for purposes of this Agreement and each other Loan
Document, the amount of such obligations shall be the capitalized amount
thereof, determined in accordance with GAAP, and the stated maturity thereof
shall be the date of the last payment of rent or any other amount due under such
lease prior to the first date upon which such lease may be terminated by the
lessee without payment of a penalty.

     "CASH EQUIVALENT INVESTMENT" means, at any time:

          (a)  any evidence of Indebtedness, maturing not more than one year
     after such time, issued directly by the United States of America or any
     agency thereof or guaranteed by the United States of America or any agency
     thereof;

          (b)  commercial paper, maturing not more than nine months from the
     date of issue, which is (i) rated at least A-l by S&P or P-l by Moody's, or
     (ii) issued by any Lender (or its holding company);

          (c)  any time deposit, certificate of deposit or bankers acceptance,
     maturing not more than one year after such time, maintained with or issued
     by either (i) a commercial banking institution (including U.S. branches of
     foreign banking institutions) that is a member of the Federal Reserve
     System and has a combined capital and surplus and undivided profits of not
     less than $500,000,000, or (ii) any Lender;

          (d)  short-term tax-exempt securities rated not lower than MIG-1/1+ by
     either Moody's or S&P with provisions for liquidity or maturity
     accommodations of 183 days or less;

          (e)  repurchase agreements which (i) are entered into with any entity
     referred to in CLAUSE (b) or (c) above or any other financial institution
     whose unsecured long-term debt (or the unsecured long-term debt of whose
     holding company) is rated at least A- or better by S&P or Baa1 or better by
     Moody's and maturing not more than one year after such time and (ii) are
     secured by a fully perfected security interest in securities of the type
     referred to in CLAUSE (a) above which have a market value at the time such
     repurchase agreement is entered into of not less than 100% of the
     repurchase obligation


                                      9


     of such counterparty entity with whom such repurchase agreement has been
     entered into; or

          (f)  any money market or similar fund not less than 95% of the assets
     of which are comprised of any of the items specified in CLAUSES (a) through
     (e) above and as to which withdrawals are permitted at least every 90 days;
     or

          (g)  in the case of any Restricted Subsidiary of Holdco organized or
     having its principal place of business outside the United States,
     investments denominated in the currency of the jurisdiction in which such
     Subsidiary is organized or has its principal place of business which are
     similar to the items specified in CLAUSES (a) through (f) above.

     "CASUALTY EVENT" means the damage, destruction or condemnation, as the case
may be, of property of Holdco or any of its Restricted Subsidiaries.

     "CASUALTY PROCEEDS" means, with respect to any Casualty Event, the amount
of any insurance proceeds or condemnation awards received by Holdco or any of
its Restricted Subsidiaries in connection therewith, but excluding any proceeds
or awards required to be paid to a creditor (other than the Lenders) which holds
a Lien on the property which is the subject of such Casualty Event which Lien
(x) is permitted by SECTION 7.2.3 and (y) has priority over the Liens securing
the Obligations.

     "CERCLA" means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended.

     "CERCLIS" means the Comprehensive Environmental Response Compensation and
Liability Information System List.

     "CERTIFICATE OF MERGER" means the Certificate of Merger relating to the
Merger of Holdco and Merger Sub, as filed with the Secretary of State of
Minnesota on the Closing Date.

     "CHANGE IN CONTROL" means (i) the failure of Holdco at any time to own,
directly or indirectly, free and clear of all Liens and encumbrances (other than
Liens of the types permitted to exist under CLAUSES (b), (d) and (g) of SECTION
7.2.3), all right, title and interest in 100% of the Voting Stock of the
Company; (ii) the failure of the Equity Investors and their Affiliates and
officers, directors, employees and Independent Contractors of Holdco and its
Restricted Subsidiaries to own at least 51% (on a fully diluted basis) of the
economic and voting interests in the Voting Stock of Holdco; (iii) the failure
of the Equity Investors and their Affiliates and officers, directors, employees
and Independent Contractors of Holdco and its Restricted Subsidiaries at any
time to have the right to designate or nominate at least 51% of the Board of
Directors of Holdco; (iv) the occurrence of a "change of control" as defined in
the Senior Subordinated Bridge Note Agreement or the Senior Subordinated Note
Indenture; or (v) the failure of the DLJMB Entities and their Affiliates to
continue to own at least 50% of the economic and voting interests in the Voting
Stock of Holdco owned by the DLJMB Entities and their Affiliates on the Closing
Date.

     "CLOSING DATE" means the date of the initial Credit Extension, not to be
later than December 31, 1999.


                                      10


     "CLOSING DATE CERTIFICATE" means a certificate of an Authorized Officer of
the Company substantially in the form of EXHIBIT D hereto, delivered pursuant to
SECTION 5.1.4.

     "CLOSING DATE DIVIDEND" is defined in the EIGHTH RECITAL.

     "CODE" means the Internal Revenue Code of 1986, as amended.

     "COMMITMENT" means, as the context may require, a Lender's Term-A Loan
Commitment, Term-B Loan Commitment, Revolving Loan Commitment, Letter of Credit
Commitment or the Swing Line Lender's Swing Line Loan Commitment.

     "COMMITMENT AMOUNT" means, as the context may require, the Term-A Loan
Commitment Amount, the Term-B Loan Commitment Amount, the Revolving Loan
Commitment Amount, the Letter of Credit Commitment Amount or the Swing Line Loan
Commitment Amount.

     "COMMITMENT LETTER" means the commitment letter, dated July 14, 1999, among
the DLJMB Entities, the Arranger, the Syndication Agent and DLJ Bridge Finance,
Inc., including all annexes and exhibits thereto.

     "COMMITMENT TERMINATION DATE" means, as the context may require, the
Revolving Loan Commitment Termination Date or the Term Loan Commitment
Termination Date.

     "COMMITMENT TERMINATION EVENT" means (i) the occurrence of any Event of
Default described in CLAUSES (b) through (d) of SECTION 8.1.9 with respect to
any Obligor (other than Immaterial Subsidiaries), or (ii) the occurrence and
continuance of any other Event of Default and either (x) the declaration of the
Loans or other Obligations to be due and payable pursuant to SECTION 8.3, or (y)
in the absence of such declaration, the giving of notice by the Administrative
Agent, acting at the direction of the Required Lenders, to the Company that the
Commitments have been terminated.

     "COMMON EQUITY CONTRIBUTION" is defined in the fourth recital.

     "COMPANY" is defined in the PREAMBLE.

     "COMPANY PLEDGE AGREEMENT" means the Pledge Agreement executed and
delivered by an Authorized Officer of the Company pursuant to CLAUSE (a) of
SECTION 5.1.7, substantially in the form of EXHIBIT G-1 hereto, as amended,
supplemented, amended and restated or otherwise modified from time to time.

     "COMPLIANCE CERTIFICATE" means a certificate duly completed and executed by
an Authorized Officer of the Company, substantially in the form of EXHIBIT E
hereto.

     "CONTINGENT LIABILITY" means any agreement, undertaking or arrangement by
which any Person guarantees, endorses or otherwise becomes or is contingently
liable upon (by direct or indirect agreement, contingent or otherwise, to
provide funds for payment, to supply funds to, or otherwise to invest in, a
debtor, or otherwise to assure a creditor against loss) the indebtedness,
obligation or any other liability of any other Person (other than by
endorsements of instruments


                                      11


in the course of collection), or guarantees the payment of dividends or other
distributions upon the shares of any other Person. The amount of any Person's
obligation under any Contingent Liability shall (subject to any limitation
set forth therein) be deemed to be the outstanding principal amount of the
debt, obligation or other liability guaranteed thereby.

     "CONTINUATION/CONVERSION NOTICE" means a notice of continuation or
conversion and certificate duly executed by an Authorized Officer of the
Company, substantially in the form of EXHIBIT C hereto.

     "CONTROLLED GROUP" means all members of a controlled group of corporations
and all members of a controlled group of trades or businesses (whether or not
incorporated) under common control which, together with Holdco, are treated as a
single employer under SECTION 414(b) OR 414(c) of the Code or Section 4001 of
ERISA, or, for purposes of SECTION 412 of the Code, Section 414(m) or Section
414(o) of the Code.

     "CREDIT EXTENSION" means, as the context may require, (i) the making of a
Loan by a Lender, or (ii) the issuance of any Letter of Credit, or the extension
of any Stated Expiry Date of any previously issued Letter of Credit, by an
Issuer.

     "CREDIT EXTENSION REQUEST" means, as the context may require, any Borrowing
Request or Issuance Request.

     "CURRENT ASSETS" means, on any date, without duplication, all assets which,
in accordance with GAAP, would be included as current assets on a consolidated
balance sheet of Holdco and its Restricted Subsidiaries at such date as current
assets (excluding, however, amounts due and to become due from Affiliates of
Holdco which have arisen from transactions which are other than arm's-length and
in the ordinary course of its business).

     "CURRENT LIABILITIES" means, on any date, without duplication, all amounts
which, in accordance with GAAP, would be included as current liabilities on a
consolidated balance sheet of Holdco and its Restricted Subsidiaries at such
date, excluding current maturities of Indebtedness.

     "DEBT" means, without duplication, the outstanding principal amount of all
Indebtedness of Holdco and its Restricted Subsidiaries that (i) is of the type
referred to in CLAUSE (a), (b) (other than undrawn trade letters of credit and
undrawn letters of credit in respect of workers' compensation, insurance,
performance and surety bonds and similar obligations, in each case incurred in
the ordinary course of business) or (c) of the definition of "Indebtedness" and
(ii) any Contingent Liability in respect of any of the foregoing types of
Indebtedness.

     "DEFAULT" means any Event of Default or any condition, occurrence or event
which, after notice or lapse of time or both, would, unless cured or waived,
constitute an Event of Default.

     "DISBURSEMENT" is defined in SECTION 2.6.2.

     "DISBURSEMENT DATE" is defined in SECTION 2.6.2.

     "DISBURSEMENT DUE DATE" is defined in SECTION 2.6.2.


                                      12


     "DISCLOSURE SCHEDULE" means the Disclosure Schedule attached hereto as
SCHEDULE I, as it may be amended, supplemented or otherwise modified from time
to time by the Company with the written consent of the Required Lenders.

     "DLJ" is defined in the PREAMBLE.

     "DLJMB ENTITIES" is defined in the second recital.

     "DLJMB FEE LETTER" means the confidential fee letter, dated as of July 14,
1999, among the DLJMB Entities, the Arranger, the Syndication Agent and DLJ
Bridge Finance, Inc.

     "DOCUMENTATION AGENT" means Wells Fargo Bank, N.A., in its capacity as
documentation agent under this Agreement.

     "EBITDA" means, for any applicable period, subject to CLAUSE (B) of SECTION
1.4, the sum (without duplication) for Holdco and its Restricted Subsidiaries on
a consolidated basis of

          (a)  Net Income,

     PLUS

          (b)  the amount deducted in determining Net Income representing
     (i) net periodic post-retirement benefits paid in cash and (ii) non-cash
     charges or expenses, including depreciation and amortization (excluding any
     non-cash charges representing an accrual of or reserve for cash charges to
     be paid within the next twelve months and any non-cash charges representing
     reversals of items increasing Net Income in any prior period),

     PLUS

          (c)  the amount deducted in determining Net Income representing income
     taxes (whether paid or deferred),

     PLUS

          (d)  the amount deducted in determining Net Income representing (i)
     Interest Expense, (ii) the payment of management bonuses and the purchase
     of stock options on or prior to April 30, 2000 in connection with the
     Transaction, and (iii) other fees, expenses and financing costs incurred in
     connection with the Transaction,

     PLUS

          (e)  the amount deducted in determining Net Income representing any
     net loss realized in connection with any sale, lease, conveyance or other
     disposition of any asset (other than in the ordinary course of business or
     from Holdco or any of its Restricted Subsidiaries to Holdco or any of its
     Restricted Subsidiaries) or any extraordinary or non-recurring loss,


                                      13


     MINUS

          (f)  the amount included in determining Net Income representing any
     net gain realized in connection with any sale, lease, conveyance or other
     disposition of any asset (other than in the ordinary course of business or
     from Holdco or any of its Restricted Subsidiaries to Holdco or any of its
     Restricted Subsidiaries) or any extraordinary gain.

     "ENVIRONMENTAL LAWS" means all applicable federal, state or local statutes,
laws, ordinances, codes, rules and regulations (including consent decrees and
administrative orders) relating to the protection of the environment or the
effect of the environment on human health and safety, all as amended or
hereafter amended.

     "EQUITY INVESTORS" is defined in the second recital.

     "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.

     "EVENT OF DEFAULT" is defined in SECTION 8.1.

     "EXCESS CASH FLOW" means, for any applicable period, the excess (if any),
of

          (a)  EBITDA for such applicable period;

     OVER

          (b)  the sum, without duplication (for such applicable period) of

               (i)    the cash portion of Interest Expense (net of interest
     income) for such applicable period;

     PLUS

               (ii)   scheduled payments, to the extent actually made, of the
     principal amount of the Term Loans and scheduled payments and optional and
     mandatory prepayments of the principal of any other funded Debt (including
     Capitalized Lease Liabilities) and mandatory prepayments of the principal
     amount of Revolving Loans pursuant to CLAUSE (f) of SECTION 3.1.1 in
     connection with a reduction of any Revolving Loan Commitment Amount, in
     each case to the extent actually made and for such applicable period;

     PLUS

               (iii)  all federal, state and foreign income taxes actually paid
     in cash by Holdco and its Restricted Subsidiaries for such applicable
     period;

     PLUS

               (iv)   Capital Expenditures actually made during such applicable
     period pursuant to CLAUSE (a) of SECTION 7.2.7 (excluding Capital
     Expenditures constituting Capitalized Lease Liabilities and by way of the
     incurrence of Indebtedness permitted


                                      14


     pursuant to CLAUSE (c) of SECTION 7.2.2 to a vendor of any assets
     permitted to be acquired pursuant to SECTION 7.2.7 to finance the
     acquisition of such assets);

     PLUS

               (v)    the amount of the net increase (if any) of Current Assets,
     other than cash and Cash Equivalent Investments, over Current Liabilities
     of Holdco and its Restricted Subsidiaries for such applicable period;

     PLUS

               (vi)   Investments permitted and actually made, in cash, pursuant
     to clauses (d), (m) and (n) of SECTION 7.2.5 during such applicable period
     (excluding Investments financed with the proceeds of the issuance of any
     Capital Stock or Indebtedness other than Revolving Loans);

     PLUS

               (vii)  amounts paid in cash in respect of periodic
     post-retirement benefits (whether or not previously accrued).

     "EXCLUDED EQUITY PROCEEDS" means any proceeds received by Holdco or the
Company from the sale or issuance by such Person of its Capital Stock or any
warrants or options in respect of any such Capital Stock or the exercise of any
such warrants or options, in each case pursuant to any such sale, issuance or
exercise constituting or resulting from (i) capital contributions to, or Capital
Stock issuances by, Holdco or the Company, including without limitation, the
issuance of the Preferred Stock and any such issuance as payment of accrued
dividends on the Preferred Stock (exclusive of any such contribution or issuance
resulting from a Public Offering or a widely distributed private offering
exempted from the registration requirements of Section 5 of the Securities Act
of 1933, as amended, other than any such issuances the proceeds of which are
required to be and are applied to refinance the Senior Subordinated Bridge Notes
then outstanding in accordance with their terms), (ii) any subscription
agreement, employment agreement, incentive plan or similar arrangement with any
officer, employee, director or Independent Contractor of Holdco or any of its
Subsidiaries, (iii) any loan made by Holdco or any of its Subsidiaries pursuant
to CLAUSE (g) of SECTION 7.2.5, (iv) the sale of any Capital Stock of Holdco to
any officer, director, employee or Independent Contractor described in clause
(ii) above, (v) the Common Equity Contribution or the Preferred Equity
Contribution, (vi) the exercise of the Warrants, the Bridge Warrants or any
options or warrants issued to any officer, employee, director or Independent
Contractor described in clause (ii) above, (vii) the issuance of preferred stock
referred to in clause (iii) of the definition of Preferred Stock in exchange for
preferred stock referred to in clause (ii) of the definition of Preferred Stock.

     "EXISTING DEBT" means indebtedness under (i) the Credit Agreement dated as
of November 25, 1996 among U.S. Bank National Association, as Agent and as a
Bank, Norwest Bank Minnesota, National Association, and Holdco, as amended,
other than any Existing Letters of Credit, (ii) the Note Purchase Agreement,
dated as of October 25, 1996 among Holdco, Massachusetts Mutual Life Insurance
Company and CM Life Insurance Company, (iii) the Loan


                                      15


Agreement, dated as of July 1, 1990 between May Printing Company and
Minnesota Agricultural and Economic Development Board, amended as of December
31, 1993, as amended, (iv) the Bond Purchase Agreement dated as of June 26,
1998 between Dougherty Summit Securities LLC and Piper Jaffray Inc., and (v)
the Guaranty of Loan Obligations of May Printing Company by Holdco in favor
of Minnesota Agricultural and Economic Development Board, dated as of
December 31, 1993.

     "EXISTING LETTERS OF CREDIT" means those letters of credit which (i) are
outstanding on the Closing Date, (ii) have been disclosed on ITEM 7.2.2(a)
("Ongoing Indebtedness") of the Disclosure Schedule and (iii) have been issued
by a Lender or one of its affiliates.

     "EXPENSE PAYMENT" is defined in SECTION 7.1.9.

     "FEDERAL FUNDS RATE" means, for any period, a fluctuating interest rate per
annum equal for each day during such period to

          (a)  the weighted average of the rates on overnight federal funds
     transactions with members of the Federal Reserve System arranged by federal
     funds brokers, as published for such day (or, if such day is not a Business
     Day, for the next preceding Business Day) by the Federal Reserve Bank of
     New York; or

          (b)  if such rate is not so published for any day which is a Business
     Day, the average of the quotations for such day on such transactions
     received by the Administrative Agent from three federal funds brokers of
     recognized standing selected by it.

     "FEE LETTER" means, as the context may require, the DLJMB Fee Letter or the
Administrative Agent Fee Letter.

     "FISCAL QUARTER" means any quarter of a Fiscal Year.

     "FISCAL YEAR" means any twelve month period ending on January 31 of any
calendar year.

     "FIXED CHARGE COVERAGE RATIO" means, at the end of any Fiscal Quarter,
subject to CLAUSE (b) of SECTION 1.4, the ratio computed for the period
consisting of such Fiscal Quarter and each of the three immediately prior Fiscal
Quarters of

          (a)  EBITDA for all such Fiscal Quarters

     TO

          (b)  the sum (without duplication) of

               (i)    Capital Expenditures actually made during all such Fiscal
     Quarters pursuant to CLAUSE (a) of SECTION 7.2.7 (excluding Capital
     Expenditures constituting Capitalized Lease Liabilities and by way of the
     incurrence of Indebtedness permitted


                                      16


     pursuant to CLAUSE (c) of SECTION 7.2.2 to a vendor of any assets permitted
     to be acquired pursuant to SECTION 7.2.7 to finance the acquisition of such
     assets);

     PLUS

               (ii)   the cash portion of Interest Expense (net of interest
     income) for all such Fiscal Quarters, provided that for the first three
     Fiscal Quarters ending after the Closing Date, Interest Expense shall be
     determined on an Annualized basis;

     PLUS

               (iii)  all scheduled payments of principal of the Term Loans and
     other funded Debt (including the principal portion of any Capitalized Lease
     Liabilities) of Holdco and its Restricted Subsidiaries during all such
     Fiscal Quarters, provided that for the first three Fiscal Quarters ending
     after the Closing Date, such payments shall be determined on an Annualized
     basis;

     PLUS

               (iv)   cash income taxes actually paid or payable by Holdco and
     its Restricted Subsidiaries for all such Fiscal Quarters.

     "F.R.S. BOARD" means the Board of Governors of the Federal Reserve System
or any successor thereto.

     "GAAP" is defined in SECTION 1.4.

     "HAZARDOUS MATERIAL" means

          (a)  any "hazardous substance", as defined by CERCLA;

          (b)  any "hazardous waste", as defined by the Resource Conservation
     and Recovery Act, as amended;

          (c)  any petroleum product; or

          (d)  any pollutant or contaminant or hazardous, dangerous or toxic
     chemical, material or substance within the meaning of any other applicable
     Environmental Laws.

     "HEDGING OBLIGATIONS" means, with respect to any Person, all liabilities of
such Person under interest rate or currency swap agreements, interest or
exchange rate cap agreements and interest or exchange rate collar agreements,
and all other agreements or arrangements designed to protect such Person against
fluctuations in interest rates, currency exchange rates or commodity prices.

     "HEREIN", "HEREOF", "HERETO", "HEREUNDER" and similar terms contained in
this Agreement or any other Loan Document refer to this Agreement or such other
Loan Document,


                                      17


as the case may be, as a whole and not to any particular Section, paragraph
or provision of this Agreement or such other Loan Document.

     "HOLDCO" is defined in the preamble.

     "HOLDCO PLEDGE AGREEMENT" means the Pledge Agreement executed and delivered
by an Authorized Officer of Holdco pursuant to CLAUSE (a) of SECTION 5.1.7,
substantially in the form of EXHIBIT I hereto, as amended, supplemented, amended
and restated or otherwise modified from time to time.

     "IMMATERIAL SUBSIDIARY" means each Subsidiary of Holdco that (a) accounted
for no more than 3% of the consolidated gross revenues of Holdco and its
Restricted Subsidiaries for the most recently completed Fiscal Quarter with
respect to which, pursuant to SECTION 7.1.1(a) or 7.1.1(b), financial statements
have been, or are required to have been, delivered by the Company on or before
the date as of which any such determination is made, as reflected in such
financial statements; and (b) has assets which represent no more than 3% of the
consolidated gross assets of Holdco and its Restricted Subsidiaries as of the
last day of the most recently completed Fiscal Quarter with respect to which,
pursuant to SECTION 7.1.1(a) or 7.1.1(b), financial statements have been, or are
required to have been, delivered by the Company on or before the date as of
which any such determination is made, as reflected in such financial statements.

     "IMPERMISSIBLE QUALIFICATION" means, relative to the opinion or
certification of any independent public accountant as to any financial statement
of any Obligor, any qualification or exception to such opinion or certification
(i) which is of a "going concern" or similar nature, (ii) which relates to the
limited scope of examination of matters relevant to such financial statement
(except, in the case of matters relating to any acquired business or assets, in
respect of the period prior to the acquisition by such Obligor of such business
or assets), or (iii) which relates to the treatment or classification of any
item in such financial statement and which, as a condition to its removal, would
require an adjustment to such item the effect of which would be to cause the
Company to be in default of any of its obligations under SECTION 7.2.4.

     "INCLUDING" means including without limiting the generality of any
description preceding such term, and, for purposes of this Agreement and each
other Loan Document, the parties hereto agree that the rule of EJUSDEM GENERIS
shall not be applicable to limit a general statement, which is followed by or
referable to an enumeration of specific matters, to matters similar to the
matters specifically mentioned.

     "INDEBTEDNESS" of any Person means, without duplication:

          (a)  all obligations of such Person for borrowed money or for the
     deferred purchase price of property or services (exclusive of (i)
     deferred purchase price arrangements in the nature of open or other
     accounts payable owed to suppliers on normal terms in connection with
     the purchase of goods and services in the ordinary course of business
     and (ii) usual and customary compensation arrangements in the ordinary
     course of business for officers, employees, directors and Independent
     Contractors) and all obligations of such Person evidenced by bonds,
     debentures, notes or other similar instruments;

                                      18


          (b)  all obligations, contingent or otherwise, relative to the face
     amount of all letters of credit, whether or not drawn, and banker's
     acceptances issued for the account of such Person;

          (c)  all Capitalized Lease Liabilities;

          (d)  net liabilities of such Person under all Hedging Obligations;

          (e)  whether or not so included as liabilities in accordance with
     GAAP, all Indebtedness of the types referred to in CLAUSES (a) through
     (d) above (excluding prepaid interest thereon) secured by a Lien on
     property owned or being purchased by such Person (including Indebtedness
     arising under conditional sales or other title retention agreements),
     whether or not such Indebtedness shall have been assumed by such Person
     or is limited in recourse; PROVIDED, HOWEVER, that, to the extent such
     Indebtedness is limited in recourse to the assets securing such
     Indebtedness, the amount of such Indebtedness shall be limited to the
     fair market value of such assets; and

          (f)  all Contingent Liabilities of such Person in respect of any of
     the foregoing.

For all purposes of this Agreement, the Indebtedness of any Person shall
include the Indebtedness of any partnership or joint venture in which such
Person is a general partner or a joint venturer (to the extent such Person
is liable for such Indebtedness).

     "INDEMNIFIED LIABILITIES" is defined in SECTION 11.4.

     "INDEMNIFIED PARTIES" is defined in SECTION 11.4.

     "INDEPENDENT CONTRACTOR" means individuals or personal service corporations
that provide consulting or related services to the Company and its Subsidiaries
on a regular or continuing basis.

     "INTERCOMPANY LOAN" is defined in the EIGHTH RECITAL.

     "INTERCOMPANY NOTE" is defined in the EIGHTH RECITAL.

     "INTEREST COVERAGE RATIO" means, at the end of any Fiscal Quarter, subject
to CLAUSE (b) of SECTION 1.4, the ratio computed for the period consisting of
such Fiscal Quarter and each of the three immediately prior Fiscal Quarters of:

          (a)  EBITDA (for all such Fiscal Quarters)

     TO

          (b)  the cash portion of Interest Expense (net of interest income)
     (for all such Fiscal Quarters; PROVIDED that for the first three Fiscal
     Quarters ending after the Closing Date, Interest Expense shall be
     determined on an Annualized basis).

                                      19


     "INTEREST EXPENSE" means, for any period, the aggregate consolidated
interest expense of Holdco and its Restricted Subsidiaries for such period, as
determined in accordance with GAAP, including the portion of any payments made
in respect of Capitalized Lease Liabilities allocable to interest expense, but
excluding (to the extent included in interest expense) up-front fees and
expenses and the amortization of all deferred financing costs.

     "INTEREST PERIOD" means, as to any LIBOR Loan, the period commencing on the
Borrowing date of such Loan or on the date on which the Loan is converted into
or continued as a LIBOR Loan, and ending on the date one, two, three, six or, if
available in the Administrative Agent's reasonable determination, nine or twelve
months thereafter as selected by the Company in its Borrowing Request or its
Conversion/Continuation Notice; PROVIDED HOWEVER that:

               (i)    if any Interest Period would otherwise end on a day that
     is not a Business Day, that Interest Period shall be extended to the
     following Business Day unless the result of such extension would be to
     carry such Interest Period into another calendar month, in which event such
     Interest Period shall end on the preceding Business Day;

               (ii)   any Interest Period that begins on the last Business Day
     of a calendar month (or on a day for which there is no numerically
     corresponding day in the calendar month at the end of such Interest Period)
     shall end on the last Business Day of the calendar month at the end of such
     Interest Period;

               (iii)  no Interest Period for any Loan shall extend beyond the
     Stated Maturity Date for such Loan;

               (iv)   no Interest Period applicable to a Term Loan or portion
     thereof shall extend beyond any date upon which is due any scheduled
     principal payment in respect of the Term Loans unless the aggregate
     principal amount of Term Loans represented by Base Rate Loans, or by LIBOR
     Loans having Interest Periods that will expire on or before such date,
     equals or exceeds the amount of such principal payment; and

               (v)    there shall be no more than 20 Interest Periods in respect
     of Loans in effect at any one time;

PROVIDED, that (i) with respect to each Borrowing of Term Loans consisting of
LIBOR Loans made on the Closing Date, Interest Period means the period
commencing on (and including) the Business Day on which such Borrowing is made
and ending on (but excluding) January 31, 2000 and (ii) with respect to each
Borrowing of Term-A Loans or Term-B Loans consisting of LIBOR Loans that are
made pursuant to CLAUSE (b) or (d) of SECTION 2.1.1, the initial Interest
Periods shall be the periods commencing on (and including) the Business Day on
which such Borrowing is made and, in proportion to the aggregate principal
amounts of Term-A Loans or Term-B Loans, as the case may be, outstanding
immediately prior to such Borrowing, ending on (but excluding) the last day of
each Interest Period outstanding with respect to Term-A Loans or Term-B Loans
consisting of LIBOR Loans, as the case may be, that are outstanding immediately
prior to such Borrowing.

                                20


     "INVESTMENT" means, relative to any Person, (i) any loan or advance made by
such Person to any other Person (excluding commission, travel, relocation and
similar advances to officers, directors and employees (or individuals acting in
similar capacities) made in the ordinary course of business), or (ii) any
investment, contribution or similar transfer made by such Person for purposes of
acquiring or maintaining any ownership or similar interest in another Person or
a business of another Person (whether through the ownership or acquisition of
Capital Stock, revenues or profits or otherwise, including by way of merger,
consolidation or otherwise).  The amount of any Investment shall be the original
principal or capital amount thereof less all returns of principal or equity
thereon (and without adjustment by reason of the financial condition of such
other Person) and shall, if made by the transfer or exchange of property other
than cash, be deemed to have been made in an original principal or capital
amount equal to the fair market value of such property at the time of such
transfer or exchange.

     "INVESTORS AGREEMENT" means the Investors Agreement dated as of November
23, 1999 among Holdco, the Equity Investors, DLJ Investment Partners II, L.P.,
and the other holders of warrants and common stock of Holdco party thereto.

     "ISSUANCE REQUEST" means a Letter of Credit request and certificate duly
executed by an Authorized Officer of the Company, substantially in the form of
EXHIBIT B-2 hereto.

     "ISSUER" means (i) U.S. Bank National Association, in its capacity as
issuer of Letters of Credit, and (ii) any other Lender as may be designated by
the Company (and consented to by the Agents and such Lender, such consent by the
Agents not to be unreasonably withheld) in its capacity as issuer of Letters of
Credit.

     "LENDER ASSIGNMENT AGREEMENT" means a Lender Assignment Agreement
substantially in the form of EXHIBIT J hereto.

     "LENDERS" is defined in the PREAMBLE.

     "LETTER OF CREDIT" is defined in SECTION 2.1.3.

     "LETTER OF CREDIT COMMITMENT" means, with respect to any Issuer, such
Issuer's obligation to issue Letters of Credit pursuant to SECTION 2.1.3 and,
with respect to each of the other Lenders that has a Revolving Loan Commitment,
the obligation of each such Lender to participate in such Letters of Credit
pursuant to SECTION 2.6.1.

     "LETTER OF CREDIT COMMITMENT AMOUNT" means, on any date, a maximum amount
of $15,000,000, as such amount may be reduced from time to time pursuant to
SECTION 2.2.

     "LETTER OF CREDIT OUTSTANDINGS" means, on any date, an amount equal to the
sum of

          (a)  the then aggregate amount which is undrawn and available under
     all issued and outstanding Letters of Credit,

     PLUS

                                   21


          (b)  the then aggregate amount of all unpaid and outstanding
     Reimbursement Obligations in respect of such Letters of Credit.

     "LEVERAGE RATIO" means, at the end of any Fiscal Quarter, subject to
CLAUSE (b) of SECTION 1.4, the ratio of

          (a)  total Debt (less cash and Cash Equivalent Investments) of Holdco
     and its Restricted Subsidiaries on a consolidated basis outstanding at such
     time;

     TO

          (b)  EBITDA for the period of four consecutive Fiscal Quarters ended
     on such date.

     "LIBOR" means, relative to any Interest Period for LIBOR Loans, the
applicable London interbank offered rate for deposits in U.S. Dollars appearing
on Dow Jones Markets (Telerate Page 3750) as of 11:00 a.m. (London time) two
Business Days prior to the first day of such Interest Period, and having a
maturity equal to such Interest Period; provided that, if Dow Jones Markets
(Telerate Page 3750) is not available for any reason, LIBOR for the relevant
Interest Period shall instead be the applicable London interbank offered rate
for deposits in U.S. Dollars appearing on Reuters Screen FRBD as of 11:00 a.m.
(London time) two Business Days prior to the first day of such Interest Period,
and having a maturity equal to such Interest Period.

     "LIBOR LOAN" means a Loan bearing interest, at all times during an Interest
Period applicable to such Loan, at a fixed rate of interest determined by
reference to LIBOR.

     "LIBOR (RESERVE ADJUSTED)" means, relative to any Loan to be made,
continued or maintained as, or converted into, a LIBOR Loan for any Interest
Period, the rate of interest per annum (rounded upwards to the next 1/100th of
1%) determined by the Administrative Agent as follows:


                  LIBOR          =                LIBOR
            (Reserve Adjusted)       -------------------------------
                                     1.00 - LIBOR Reserve Percentage

     LIBOR (Reserve Adjusted) for any Interest Period for LIBOR Loans will be
adjusted automatically as to all LIBOR Loans that are then outstanding as of the
effective date of any change in the LIBOR Reserve Percentage.

     "LIBOR OFFICE" means, relative to any Lender (i) the office of such Lender
designated as such on SCHEDULE II hereto or designated in the Lender Assignment
Agreement pursuant to which such Lender became a Lender hereunder, or (ii) such
other office of such Lender as shall be so designated from time to time by
notice from such Lender to the Company and the Administrative Agent, which shall
be making or maintaining LIBOR Loans of such Lender hereunder.

     "LIBOR RESERVE PERCENTAGE" means, relative to any Interest Period for LIBOR
Loans, the percentage (expressed as a decimal, rounded upward to the next
1/100th of 1%) in effect on such day (whether or not applicable to any Lender)
under regulations issued from time to time by

                                  22


the F.R.S. Board for determining the maximum reserve requirement (including
any emergency, supplemental or other marginal reserve requirement) with
respect to Eurocurrency funding (currently referred to as "Eurocurrency
Liabilities" in Regulation D of the F.R.S. Board).

     "LIEN" means any security interest, mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or otherwise),
charge against or interest in property, or any filing or recording of any
instrument or document in respect of the foregoing, to secure payment of a debt
or performance of an obligation or any other priority or preferential treatment
of any kind or nature whatsoever that has the practical effect of creating a
security interest in property.

     "LOAN" means, as the context may require, a Revolving Loan, a Term-A Loan,
a Term-B Loan or a Swing Line Loan, in each case of any type.

     "LOAN DOCUMENT" means this Agreement, the Notes, the Letters of Credit,
each Rate Protection Agreement relating to Hedging Obligations of the Company or
any of its Restricted Subsidiaries, each Borrowing Request, each Issuance
Request, each Fee Letter, each Pledge Agreement, the Subsidiary Guaranty, each
Mortgage (upon execution and delivery thereof), the Security Agreement and each
other agreement, document or instrument delivered in connection with this
Agreement or any other Loan Document, whether or not specifically mentioned
herein or therein.

     "MATERIAL ADVERSE EFFECT" means (a) a material adverse effect on the
condition (financial or otherwise), business, assets, results of operations or
prospects of Holdco and its Restricted Subsidiaries, taken as a whole, but
excluding, for purposes of the initial Credit Extension only, (i) any change
resulting from general economic conditions and (ii) with respect to the
agreements set forth on Schedule 3.04 to the Merger Agreement, any changes
arising out of the Transaction and the public announcement thereof, (b) a
material impairment of the ability of the Company or any other Obligor to
perform its respective material obligations under the Loan Documents to which it
is or will be a party, or (c) an impairment of the validity or enforceability
of, or a material impairment of the rights, remedies or benefits available to
each Issuer, the Agents or the Lenders under, this Agreement or any other Loan
Document.

     "MATERIAL DOCUMENTS" means the Merger Agreement, the Organic Documents of
Holdco and of the Company, the Administrative Services Agreement, the Warrants,
the Intercompany Note and any other documents evidencing the Intercompany Loan,
the Investors Agreement, and, if entered into or issued, and for long as they
shall remain outstanding, the Senior Subordinated Bridge Note Agreement, the
Senior Subordinated Bridge Notes, the Senior Subordinated Note Indenture, the
Senior Subordinated Notes and the Bridge Warrants, each as amended,
supplemented, amended and restated or otherwise modified from time to time as
permitted in accordance with the terms hereof or of any other Loan Document.

     "MERGER" is defined in the SECOND RECITAL.

     "MERGER AGREEMENT" means the Agreement and Plan of Merger, dated as of July
14, 1999, as amended on or prior to the Closing Date (and as it may be
further amended,

                                 23


supplemented, amended and restated or otherwise modified from time to
time in accordance with SECTION 7.2.10) between Holdco and Merger Sub.

     "MERGER SUB" is defined in the FIRST RECITAL.

     "MERRILL BUSINESS" is defined in SECTION 7.2.1.

     "MOODY'S" means Moody's Investors Service, Inc.

     "MORTGAGE" means, collectively, each Mortgage or Deed of Trust executed and
delivered pursuant to the terms of this Agreement, including CLAUSE (b) of
SECTION 7.1.8 or 7.1.12, in form and substance reasonably satisfactory to the
Agents.

     "NET DEBT PROCEEDS" means, with respect to the incurrence, sale or issuance
by Holdco or any of its Restricted Subsidiaries of any Debt (other than Debt
incurred as part of the Transaction and other Debt permitted by SECTION 7.2.2 as
in effect on the date hereof (including without limitation the proceeds from the
sale of the Senior Subordinated Notes applied to the refinancing of the Senior
Subordinated Bridge Notes)), the EXCESS of:

          (a)  the gross cash proceeds received, directly or indirectly, by
     Holdco or any of its Restricted Subsidiaries from such incurrence, sale or
     issuance,

     OVER

          (b)  the sum (without duplication) of (i) all reasonable and customary
     underwriting commissions and legal, investment banking, brokerage and
     accounting and other professional fees, sales commissions and disbursements
     and all other reasonable fees, expenses and charges, in each case actually
     incurred in connection with such incurrence, sale or issuance and (ii) in
     the case of any Debt incurred, sold or issued by any Non-U.S. Subsidiary,
     any taxes or other costs or expenses resulting from repatriating any such
     proceeds to the United States.

     "NET DISPOSITION PROCEEDS" means, with respect to any sale, transfer or
other disposition of any assets of Holdco or any of its Restricted Subsidiaries
(other than transfers made as part of the Transaction and other sales permitted
pursuant to CLAUSE (a), (b), (d) or (e) of SECTION 7.2.9, but including any sale
or issuance of Capital Stock of any such Restricted Subsidiary to any Person
other than Holdco or any of its Subsidiaries), the excess of:

          (a)  the gross cash proceeds received, directly or indirectly, by
     Holdco or any of its Restricted Subsidiaries from any such sale, transfer
     or other disposition and any cash payments received in respect of
     promissory notes or other non-cash consideration delivered to Holdco or
     such Restricted Subsidiary in respect thereof,

     LESS

          (b)  the sum (without duplication) of (i)  all reasonable and
     customary fees and expenses with respect to legal, investment banking,
     brokerage, accounting and other professional fees, sales commissions and
     disbursements and all other reasonable fees,
                                      24


     expenses and charges, in each case actually incurred in connection with
     such sale, transfer or other disposition, (ii) all taxes and other
     governmental costs and expenses actually paid or estimated by the
     Company (in good faith) to be payable in cash in connection with such
     sale, transfer or other disposition (including, in the event of a
     transfer, sale or other disposition of non-U.S. assets, any such taxes
     or other costs or expenses resulting from repatriating any such proceeds
     to the U.S.), (iii) payments made by Holdco or any of its Restricted
     Subsidiaries to retire Indebtedness (other than the Loans) of Holdco or
     any of its Restricted Subsidiaries where payment of such Indebtedness is
     required in connection with such sale, transfer or other disposition and
     (iv) reserves for purchase price adjustments and retained fixed
     liabilities reasonably expected to be payable by Holdco and its
     Restricted Subsidiaries in cash in connection therewith;

PROVIDED, HOWEVER, that if, after the payment of all taxes, purchase price
adjustments and retained fixed liabilities with respect to such sale, transfer
or other disposition, the amount of estimated taxes, purchase price adjustments
and retained fixed liabilities, if any, pursuant to CLAUSE (b)(ii) or (b)(iv)
above exceeded the tax, purchase price adjustment and retained fixed liability
amount actually paid in cash in respect of such sale, transfer or other
disposition, the aggregate amount of such excess shall, at such time, constitute
Net Disposition Proceeds.

     "NET EQUITY PROCEEDS" means with respect to any sale or issuance by the
Company or Holdco to any Person of any Capital Stock of the Company or Holdco,
as the case may be, or any warrants or options with respect to any such Capital
Stock or the exercise of any such warrants or options after the Closing Date
(exclusive of any such proceeds constituting Excluded Equity Proceeds) the
EXCESS of:

          (a)  the gross cash proceeds received by Holdco or the Company from
     such sale, exercise or issuance,

     OVER

          (b)  all reasonable and customary underwriting commissions and legal,
     investment banking, brokerage, accounting and other professional fees,
     sales commissions and disbursements and all other reasonable fees, expenses
     and charges, in each case actually incurred in connection with such sale or
     issuance.

     "NET INCOME" means, for any period, the net income of Holdco and its
Restricted Subsidiaries for such period on a consolidated basis, as determined
in accordance with GAAP.

     "NON-CONSENTING LENDER" means any Lender that, in response to any request
by the Company or the Administrative Agent to a departure from, waiver of or
amendment to any provision of any Loan Document that requires the agreement of
all Lenders or all Lenders with respect to a particular Tranche, which
departure, waiver or amendment receives the consent of the Required Lenders or
the holders of a majority of the Commitments or (if the applicable Commitments
in respect of such Tranche shall have expired or been terminated) outstanding
Credit Extensions in respect of such Tranche, as the case may be, shall not have
given its consent to such departure, waiver or amendment.

                                   25


     "NON-FUNDING LENDER" means a Lender that shall have failed to fund any Loan
hereunder that it was required to have funded in accordance with the terms
hereof, which Loan was included in any Borrowing in respect of which a majority
of the aggregate principal amount of all Loans included in such Borrowing were
funded by the Lenders party thereto.

     "NON-RECOURSE DEBT" means Indebtedness (i) no default with respect to which
(including any rights that the holders thereof may have to take enforcement
action against an Unrestricted Subsidiary) would permit (upon notice, lapse of
time or both) any holder of any other Indebtedness of Holdco or any of its
Restricted Subsidiaries to declare a default on such other Indebtedness or cause
the payment thereof to be accelerated or payable prior to its stated maturity,
and (ii) as to which the lenders have been notified in writing that they will
not have any recourse to the Capital Stock or assets of Holdco or any of its
Restricted Subsidiaries (other than Capital Stock of Unrestricted Subsidiaries
pledged by Holdco or a Restricted Subsidiary of Holdco to secure Debt of such
Unrestricted Subsidiary); PROVIDED, HOWEVER, that in no event shall Indebtedness
of any Unrestricted Subsidiary fail to be Non-Recourse Debt solely as a result
of any default provisions contained in a guarantee thereof by Holdco or any of
its Restricted Subsidiaries if Holdco or such Restricted Subsidiary was
otherwise permitted to incur such guarantee under this Agreement.

     "NON-U.S. LENDER" means any Lender (including each Assignee Lender) that is
not (i) a citizen or resident of the United States, (ii) a corporation,
partnership or other entity created or organized in or under the laws of the
United States or any state thereof, (iii) an estate that is subject to U.S.
federal income taxation regardless of the source of its income or (iv) a trust
treated as a U.S. person under SECTION 7701(a)(30)(E) of the Code and the
regulations promulgated thereunder.

     "NON-U.S. SUBSIDIARY" means a Subsidiary of Holdco that is not a U.S.
Subsidiary.

     "NOTE" means, as the context may require, a Revolving Note, a Term-A Note,
a Term-B Note or a Swing Line Note.

     "OBLIGATIONS" means all obligations (monetary or otherwise) of the Company
and the other Obligors arising under or in connection with this Agreement, any
Rate Protection Agreement, any Note, any Letter of Credit and any other Loan
Document.

     "OBLIGOR" means the Company or any other Person (other than any Agent, the
Arranger, any Issuer, the Swing Line Lender or any Lender) obligated under any
Loan Document.

     "ORGANIC DOCUMENT" means, relative to any Obligor, its certificate of
incorporation and by-laws or other constitutive documents and all shareholder
agreements, voting trusts and similar arrangements to which such Obligor is a
party applicable to any of its authorized shares of Capital Stock.

     "PARTICIPANT" is defined in SECTION 11.11.2.

     "PBGC" means the Pension Benefit Guaranty Corporation and any successor
entity.

                                   26


     "PENSION PLAN" means a "pension plan", as such term is defined in SECTION
3(2) of ERISA, which is subject to Title IV of ERISA (other than a multiemployer
plan as defined in SECTION 4001(a)(3) of ERISA), and to which Holdco or any
corporation, trade or business that is, along with Holdco, a member of a
Controlled Group, has or within the prior six years has had any liability,
including any liability by reason of having been a substantial employer within
the meaning of SECTION 4063 of ERISA at any time during the preceding five
years, or by reason of being deemed to be a contributing sponsor under SECTION
4069 of ERISA.

     "PERCENTAGE" means, relative to any Lender, the applicable percentage
relating to Term-A Loans, Term-B Loans, or Revolving Loans, as the case may be,
as set forth opposite its name on SCHEDULE II hereto under the applicable column
heading or set forth in Lender Assignment Agreement(s) under the applicable
column heading, as such percentage may be adjusted from time to time pursuant to
Lender Assignment Agreement(s) executed by such Lender and its Assignee
Lender(s) and delivered pursuant to SECTION 11.11 or pursuant to CLAUSE (b) or
CLAUSE (d) of SECTION 2.1.1 or CLAUSE (c) of SECTION 2.1.2.  A Lender shall not
have any Commitment to make Revolving Loans, Term-A Loans or Term-B Loans (as
the case may be) if its percentage under the applicable column heading or in the
applicable Lender Assignment Agreement is zero.

     "PERMITTED NEGATIVE PLEDGE INDEBTEDNESS" is defined in CLAUSE (b) of
SECTION 7.2.12.

     "PERSON" means any natural person, corporation, partnership, firm,
association, trust, government, governmental agency, limited liability company
or any other entity, whether acting in an individual, fiduciary or other
capacity.

     "PLAN" means any Pension Plan or Welfare Plan.

     "PLEDGE AGREEMENT" means, as the context may require, the Company Pledge
Agreement, the Holdco Pledge Agreement or the Subsidiary Pledge Agreement.

     "PREFERRED STOCK" means (i) Merger Sub's 14.5% Senior Preferred Stock due
2011 issued pursuant to the Preferred Equity Contribution having the terms and
conditions set forth in the Certificate of Designations of 14.5% Senior
Preferred Stock due 2011, a copy of which has been distributed to the Lenders,
(ii) preferred stock of Holdco having the same terms and conditions into which
such Preferred Stock of Merger Sub is converted in the Merger, and (iii)
preferred stock of Holdco issued in exchange for the preferred stock described
in (ii) above prior to the first Dividend Payment Date (as defined in the
Certificate of Designation of such preferred stock), identical in all respects
to such preferred stock except that the liquidation value is reduced from $80.00
to $25.00, such exchange to be on the basis of 3.2 new $25.00 preferred shares
for each existing $80.00 preferred share then held.

     "PREFERRED EQUITY CONTRIBUTION" is defined in the FOURTH RECITAL.

     "PRO FORMA BALANCE SHEET" is defined in clause (b) of SECTION 5.1.9.

     "PROXY STATEMENT" means Holdco's proxy statement/prospectus dated
October 25, 1999 relating to the Merger.

                                   27


     "PUBLIC OFFERING" means, for any Person, any sale after the Closing Date of
the Capital Stock of such Person to the public pursuant to a primary offering
registered under the Securities Act of 1933, as amended.

     "QUARTERLY PAYMENT DATE" means the last day of each of April, July, October
and January, or, if any such day is not a Business Day, the next succeeding
Business Day, commencing with January 31, 2000.

     "RATE PROTECTION AGREEMENT" means any interest rate swap, cap, collar or
similar agreement permitted under this Agreement that is entered into by Holdco
or any of its Restricted Subsidiaries and under which the counterparty to such
agreement is (or at the time such Rate Protection Agreement was entered into,
was) a Lender or an affiliate of a Lender.

     "RECAPITALIZATION" is defined in the SECOND RECITAL.

     "REFINANCING" is defined in SECTION 7.1.9.

     "REFUNDED SWING LINE LOANS" is defined in clause (b) of SECTION 2.3.2.

     "REGISTER" is defined in clause (b) of SECTION 2.7.

     "REIMBURSEMENT OBLIGATION" is defined in SECTION 2.6.3.

     "REINSTATEMENT DATE" is defined in SECTION 4.1.

     "RELEASE" means a "RELEASE", as such term is defined in CERCLA.

     "REPLACEMENT LENDER" is defined in SECTION 4.11.

     "REPLACEMENT NOTICE" is defined in SECTION 4.11.

     "REQUIRED LENDERS" means, at any time, (a) prior to the date of the making
of the initial Credit Extension hereunder, Lenders having at least a majority of
the sum of the Revolving Loan Commitments, Term-A Loan Commitments and Term-B
Loan Commitments, and (b) on and after the date of the initial Credit Extension,
Lenders holding at least a majority of the Total Exposure Amount.

     "RESOURCE CONSERVATION AND RECOVERY ACT" means the Resource Conservation
and Recovery Act, 42 U.S.C. SECTION 6901, ET SEQ., as in effect from time to
time.

     "RESTRICTED PAYMENTS" is defined in SECTION 7.2.6.

     "RESTRICTED SUBSIDIARY" means any Subsidiary of Holdco or the Company which
is not designated as an Unrestricted Subsidiary.

     "RETAINED INTERESTS" is defined in the SECOND RECITAL.

     "REVOLVING LOAN" is defined in clause (a) of SECTION 2.1.2.

                              28


     "REVOLVING LOAN COMMITMENT" is defined in clause (a) of SECTION 2.1.2.

     "REVOLVING LOAN COMMITMENT AMOUNT" means $50,000,000, as such amount may be
increased from time to time pursuant to CLAUSE (C) of SECTION 2.1.2 or reduced
from time to time pursuant to SECTION 2.2.

     "REVOLVING LOAN COMMITMENT TERMINATION DATE" means the earliest of (i) the
sixth anniversary of the Closing Date, (ii) the date on which the Revolving Loan
Commitment Amount is terminated in full or reduced to zero pursuant to SECTION
2.2 and (iii) the date on which any Commitment Termination Event occurs.

     "REVOLVING NOTE" means a promissory note of the Company payable to any
Lender, substantially in the form of EXHIBIT A-1 hereto (as such promissory note
may be amended, endorsed or otherwise modified from time to time), evidencing
Indebtedness of the Company to such Lender resulting from outstanding Revolving
Loans, and also means all other promissory notes accepted from time to time in
substitution therefor or renewal thereof.

     "S&P" means Standard & Poor's Ratings Group, a division of McGraw Hill,
Inc.

     "SECURED PARTIES" means, collectively, the Lenders, the Issuers, the Agents
and all affiliates of the Lenders (or Persons that were, at the time they
entered into such Loan Document, affiliates of the Lenders) which may be party
to any Loan Document (including any Rate Protection Agreement); PROVIDED that no
Obligor shall be a Secured Party.

     "SECURITY AGREEMENT" means the Security Agreement executed and delivered by
an Authorized Officer of Holdco, the Company and each Restricted Subsidiary of
the Company, substantially in the form of EXHIBIT F hereto, as amended,
supplemented, amended and restated or otherwise modified from time to time.

     "SENIOR SUBORDINATED BRIDGE NOTE AGREEMENT" means that certain Securities
Purchase Agreement, if any, pursuant to which the Senior Subordinated Bridge
Notes, if any, are issued, as in effect on the date of execution of this
Agreement and as such agreement may be amended from time to time thereafter to
the extent permitted under SECTION 7.2.10.

     "SENIOR SUBORDINATED BRIDGE NOTES" means the senior subordinated increasing
rate notes, if any, issued by Holdco on the Closing Date, which notes (i) are
unsecured and subordinated to the Obligations, (ii) mature at least one year
after the Closing Date; and (iii) provide that the maturity thereof will be
automatically extended to the date which is eight and one-half years after the
Closing Date, subject to satisfaction of certain conditions, as such notes may
be amended from time to time thereafter to the extent permitted under SECTION
7.2.10.

     "SENIOR SUBORDINATED NOTE INDENTURE" means the senior subordinated note
indenture, if any, executed by the Company and a trustee named thereunder
pursuant to which the Senior Subordinated Notes, if any, are issued, as such
indenture may be amended from time to time to the extent permitted under SECTION
7.2.10.

     "SENIOR SUBORDINATED NOTES" means the senior subordinated notes, if any,
issued by Holdco, which notes shall be unsecured and shall not provide for
any scheduled redemptions or

                                29


prepayments or any sinking fund installment payments or maturities prior to a
date which is eight and one-half years after the Closing Date, which shall
have terms and conditions substantially as set forth in the Preliminary
Offering Memorandum dated November 3, 1999 or otherwise in form and substance
satisfactory to the Agents, as such notes may be amended from time to time to
the extent permitted under SECTION 7.2.10.  If the Senior Subordinated Notes
described above are issued by Holdco other than pursuant to a registered
public offering, "Senior Subordinated Notes" shall also refer to the
registered securities, if any, having the same terms and conditions as the
notes described above which are issued by the Company in exchange for such
notes upon exercise of the customary registration rights accompanying such
notes.

     "SHARES" is defined in SECTION 7.1.9.

     "SOLVENT" means, with respect to any Person on a particular date, that on
such date (a) the fair value of the property of such Person is greater than the
total amount of liabilities, including contingent liabilities, of such Person,
(b) the present fair salable value of the assets of such Person is not less than
the amount that will be required to pay the probable liability of such Person on
its debts as they become absolute and matured, (c) such Person does not intend
to, and does not believe that it will, incur debts or liabilities beyond such
Person's ability to pay as such debts and liabilities mature, and (d) such
Person is not engaged in business or a transaction, and such Person is not about
to engage in business or a transaction, for which such Person's property would
constitute an unreasonably small capital.  The amount of contingent liabilities
at any time shall be computed as the amount that, in light of all the facts and
circumstances existing at such time, can reasonably be expected to become an
actual or matured liability.

     "STATED AMOUNT" of each Letter of Credit means the total amount available
to be drawn under such Letter of Credit upon the issuance thereof.

     "STATED EXPIRY DATE" is defined in SECTION 2.6.

     "STATED MATURITY DATE" means (i) in the case of any Revolving Loan, the
sixth anniversary of the Closing Date, (ii) in the case of any Term-A Loan, the
sixth anniversary of the Closing Date and (iii) in the case of any Term-B Loan,
the eighth anniversary of the Closing Date, or, in each case, if such day is not
a Business Day, the first Business Day following such day.

     "SUBJECT LENDER" is defined in SECTION 4.11.

     "SUBORDINATED INDEBTEDNESS" means the Senior Subordinated Bridge Notes and
the Senior Subordinated Notes.

     "SUBORDINATION PROVISIONS" is defined in SECTION 8.1.11.

     "SUBSIDIARY" means, with respect to any Person, any corporation,
partnership or other business entity of which more than 50% of the outstanding
Capital Stock (or other ownership interest) having ordinary voting power to
elect a majority of the board of directors, managers or other voting members of
the governing body of such entity (irrespective of whether at the time Capital
Stock (or other ownership interests) of any other class or classes of such
entity shall or might have voting power upon the occurrence of any contingency)
is at the time directly or

                                  30


indirectly owned by such Person, by such Person and one or more other
Subsidiaries of such Person, or by one or more other Subsidiaries of such
Person.  For purposes of this Agreement and other Loan Documents, any
Acquired Controlled Person that is not a "Subsidiary" of Holdco pursuant to
the foregoing definition shall nonetheless be deemed to be a "Subsidiary" of
Holdco for purposes of SECTIONS 6.1, 6.7, 6.9, 6.10, 6.11, 6.12, 7.1.2,
7.1.3, 7.1.4, 7.1.5, 7.1.6, 7.1.7(b), 7.2.1, 7.2.2, 7.2.3, 7.2.5, 7.2.6.
7.2.9, 7.2.11, 7.2.12 and 7.2.14 and, to the extent (and only to the extent)
that it relates to any of the foregoing Sections, Article VIII.

     "SUBSIDIARY GUARANTOR" means, on the Closing Date, each U.S. Subsidiary
that is a Restricted Subsidiary of Holdco (other than the Company) and
thereafter, each Subsidiary that is a Restricted Subsidiary of Holdco that is
required, pursuant to CLAUSE (a) of SECTION 7.1.7, to execute and deliver a
supplement to the Subsidiary Guaranty.

      "SUBSIDIARY GUARANTY" means the Subsidiary Guaranty executed and delivered
by an Authorized Officer of each Subsidiary Guarantor pursuant to SECTION 5.1.6,
substantially in the form of EXHIBIT H hereto, as amended, supplemented, amended
and restated or otherwise modified from time to time.

     "SUBSIDIARY PLEDGE AGREEMENT" means the Pledge Agreement executed and
delivered by an Authorized Officer of each Restricted Subsidiary of Holdco
(other than the Company), substantially in the form of EXHIBIT G-2 hereto, as
amended, supplemented, amended and restated or otherwise modified from time to
time.

     "SWING LINE LENDER" means U.S. Bank National Association, in its capacity
as Swing Line Lender hereunder.

     "SWING LINE LOAN" is defined in clause (b) of SECTION 2.1.2.

     "SWING LINE LOAN COMMITMENT" is defined in clause (b) of SECTION 2.1.2.

     "SWING LINE LOAN COMMITMENT AMOUNT" means $10,000,000, as such amount may
be reduced from time to time pursuant to SECTION 2.2.

     "SWING LINE NOTE" means a promissory note of the Company payable to the
Swing Line Lender, in the form of EXHIBIT A-4 hereto (as such promissory note
may be amended, endorsed or otherwise modified from time to time), evidencing
the aggregate Indebtedness of the Company to the Swing Line Lender resulting
from outstanding Swing Line Loans, and also means all other promissory notes
accepted from time to time in substitution therefor or renewal thereof.

     "SYNDICATION AGENT" is defined in the preamble.

     "TAXES" is defined in SECTION 4.6.

     "TERM-A LOAN" is defined in clause (a) of SECTION 2.1.1.

     "TERM-A LOAN COMMITMENT" is defined in clause (a) of SECTION 2.1.1.

                                    31


     "TERM-A LOAN COMMITMENT AMOUNT" means $65,000,000, as such amount may be
increased from time to time pursuant to CLAUSE (b) of SECTION 2.1.1.

     "TERM-A NOTE" means a promissory note of the Company payable to the order
of any Lender, in the form of EXHIBIT A-2 hereto (as such promissory note may be
amended, endorsed or otherwise modified from time to time), evidencing the
aggregate Indebtedness of the Company to such Lender resulting from outstanding
Term-A Loans, and also means all other promissory notes accepted from time to
time in substitution therefor or renewal thereof.

     "TERM-B LOAN" is defined in clause (c) of SECTION 2.1.1.

     "TERM-B LOAN COMMITMENT" is defined in clause (c) of SECTION 2.1.1.

     "TERM-B LOAN COMMITMENT AMOUNT" means $155,000,000, as such amount may be
increased from time to time pursuant to CLAUSE (d) of SECTION 2.1.1.

     "TERM-B NOTE" means a promissory note of the Company payable to the order
of any Lender, in the form of EXHIBIT A-3 hereto (as such promissory note may be
amended, endorsed or otherwise modified from time to time), evidencing the
aggregate Indebtedness of the Company to such Lender resulting from outstanding
Term-B Loans, and also means all other promissory notes accepted from time to
time in substitution therefor or renewal thereof.

     "TERM LOAN COMMITMENT TERMINATION DATE" means the earliest of (i) December
31, 1999, if the Term Loans have not been made on or prior to such date, (ii)
the Closing Date (immediately after the making of the Term Loans on such date)
and (iii) the date on which any Commitment Termination Event occurs.

     "TERM LOANS" means, collectively, the Term-A Loans and the Term-B Loans.

     "TOTAL EXPOSURE AMOUNT" means, at any time,

          (a)  with respect to any provision of this Agreement other than the
     declaration of the acceleration of the maturity of all or any portion of
     the outstanding principal amount of the Loans and other Obligations to be
     due and payable pursuant to SECTION 8.3, the sum of (i) the aggregate
     principal amount of all Term Loans outstanding at such time and (ii) (x)
     the Revolving Loan Commitment Amount, if there are any Revolving Loan
     Commitments then outstanding, or (y) if all Revolving Loan Commitments
     shall have expired or been terminated, the sum of (1) the aggregate
     principal amount of all Revolving Loans and Swing Line Loans outstanding at
     such time and (2) the Letter of Credit Outstandings at such time; and

          (b)  with respect to the declaration of the acceleration of the
     maturity of all or any portion of the outstanding principal amount of the
     Loans and other Obligations to be due and payable pursuant to SECTION 8.3,
     the sum of (i) the aggregate principal amount of all Loans outstanding at
     such time and (ii) the Letter of Credit Outstandings at such time.

     "TRANCHE" means, as the context may require, the Loans constituting Term-A
Loans, Term-B Loans, Revolving Loans or Swing Line Loans.

                              32


     "TRANSACTION" means the Recapitalization, the Merger, the Asset
Contribution, the Refinancing and the related financings and other transactions
contemplated hereby, including without limitation, the Common Equity
Contribution, the Preferred Equity Contribution, the Intercompany Loan and the
issuance of the Preferred Stock, the Senior Subordinated Bridge Notes, if any,
and the Senior Subordinated Notes, if any.

     "TRANSACTION DOCUMENTS" means each of the Material Documents and all other
agreements, documents, instruments, certificates, filings, consents, approvals,
board of directors resolutions and opinions furnished pursuant to or in
connection with the Merger, the Common Equity Contribution, the Preferred Equity
Contribution, the Intercompany Loan, the Asset Contribution, the issuance of the
Senior Subordinated Bridge Notes or the Senior Subordinated Notes, as the case
may be, and the transactions contemplated hereby or thereby, each as amended,
supplemented, amended and restated or otherwise modified from time to time as
permitted in accordance with the terms hereof or of any other Loan Document.

     "TYPE" means relative to any Loan, the portion thereof, if any, being
maintained as a Base Rate Loan or a LIBOR Loan.

     "UCC" means the Uniform Commercial Code as in effect from time to time in
the State of New York; PROVIDED, that if, with respect to any financing
statement or by reason of any mandatory provisions of law, the perfection or the
effect of perfection or non-perfection of the security interests granted to the
Administrative Agent pursuant to the applicable Loan Document is governed by the
Uniform Commercial Code as in effect in a jurisdiction of the United States
other than New York, UCC means the Uniform Commercial Code as in effect from
time to time in such other jurisdiction for purposes of the provisions of this
Agreement, each Loan Document and any financing statement relating to such
perfection or effect of perfection or non-perfection..

     "UNITED STATES" or "U.S." means the United States of America, its fifty
states and the District of Columbia.

     "UNRESTRICTED SUBSIDIARY" means any Subsidiary of Holdco (other than the
Company) which is designated as an Unrestricted Subsidiary on ITEM 6.8 of the
Disclosure Schedule or is designated by a resolution of the Board of Directors
of the Company as an Unrestricted Subsidiary, but only to the extent that such
Subsidiary:  (i) has no Indebtedness other than Non-Recourse Debt; (ii) is not
party to any agreement, contract, arrangement or understanding with Holdco or
any Restricted Subsidiary of Holdco unless the terms of any such agreement,
contract, arrangement or understanding are no less favorable to Holdco or such
Restricted Subsidiary than those that might be obtained at the time from Persons
who are not Affiliates of Holdco; (iii) is a Person with respect to which none
of Holdco nor any of its Restricted Subsidiaries has any direct or indirect
obligation (a) to subscribe for additional Capital Stock or warrants, options or
other rights to acquire Capital Stock or (b) to maintain or preserve such
Person's financial condition or to cause such Person to achieve any specified
levels of operating results; and (iv) has not guaranteed or otherwise directly
or indirectly provided credit support for any Indebtedness of Holdco or any of
its Restricted Subsidiaries.  If, at any time, any Unrestricted Subsidiary would
fail to meet the foregoing requirements as an Unrestricted Subsidiary, it shall
thereafter cease to be an Unrestricted Subsidiary for purposes hereof.  The
Board of Directors of the Company may at any time designate any Unrestricted
Subsidiary to be a Restricted Subsidiary; PROVIDED that

                                33


such designation shall be deemed to be an incurrence of Indebtedness by a
Restricted Subsidiary of Holdco of any outstanding Indebtedness of such
Unrestricted Subsidiary and such designation shall only be permitted if no
Default would be in existence following such designation.

     "U.S. DOLLAR" and "$" means the lawful currency of the United States.

     "U.S. SUBSIDIARY" means any Subsidiary of Holdco that is incorporated or
organized in or under the laws of the United States or any state thereof.

     "VOTING STOCK" of any Person means Capital Stock of such Person which
ordinarily has voting power for the election of directors (or Persons performing
similar functions) of such Person, whether at all times or only so long as no
senior class of securities has such voting power by reason of any contingency.

     "WAIVER" means an agreement in favor of the Agents for the benefit of the
Lenders in form and substance reasonably satisfactory to the Agents.

     "WARRANTS" means (i) the warrants to purchase common stock of Merger Sub
issued pursuant to the Preferred Equity Contribution, (ii) the warrants to
purchase common stock of Holdco having the same terms and conditions as the
warrants referred to in clause (i) above into which such warrants are to be
converted in the Merger and (iii) the warrants to purchase common stock of
Holdco issued in connection with the issuance of the Senior Subordinated Notes.

     "WELFARE PLAN" means a "welfare plan", as such term is defined in SECTION
3(1) of ERISA, and to which the Company has any liability.

     "WHOLLY-OWNED RESTRICTED SUBSIDIARY" means, with respect to Holdco, any
Restricted Subsidiary all of the Capital Stock (and all rights and options to
purchase such Capital Stock) of which, other than directors' qualifying shares,
are owned, beneficially and of record, by Holdco and/or one or more Wholly-Owned
Restricted Subsidiaries of Holdco.

          SECTION 1.2 USE OF DEFINED TERMS.  Unless otherwise defined or the
context otherwise requires, terms for which meanings are provided in this
Agreement shall have such meanings when used in the Disclosure Schedule and in
each other Loan Document, notice and other communication delivered from time to
time in connection with this Agreement or any other Loan Document.

          SECTION 1.3 CROSS-REFERENCES.  Unless otherwise specified, references
in this Agreement and in each other Loan Document to any Article or Section are
references to such Article or Section of this Agreement or such other Loan
Document, as the case may be, and, unless otherwise specified, references in any
Article, Section or definition to any clause are references to such clause of
such Article, Section or definition.

          SECTION 1.4 ACCOUNTING AND FINANCIAL DETERMINATIONS.

          (a)  Unless otherwise specified, all accounting terms used herein
or in any other Loan Document shall be interpreted, all accounting
determinations and computations hereunder or thereunder (including under
SECTION 7.2.4) shall be made, and all financial

                            34


statements required to be delivered hereunder or thereunder shall be
prepared, in accordance with those generally accepted accounting principles
("GAAP"), as in effect from time to time, applied on a basis consistent
(except for changes concurred in by Holdco's independent public accountants
and a description of which is provided by the Company to the Lenders) with
the most recent audited consolidated financial statements of Holdco and its
Restricted Subsidiaries delivered to the Lenders and, unless otherwise
expressly provided herein, shall be computed or determined on a consolidated
basis and without duplication; PROVIDED that (1) if the Company notifies the
Administrative Agent and the Lenders of any change in GAAP from that in
effect on January 31, 1999, not later than five Business Days prior to the
delivery of any financial statements required under this Agreement which have
been prepared on the basis of GAAP as so changed and (2) if the Company
notifies the Administrative Agent that the Company wishes to amend any
provision hereof to eliminate the effect of any such change in GAAP, or if
the Administrative Agent notifies the Company that the Required Lenders wish
to amend any provision hereof for such purpose, then such provision shall be
applied, and all accounting determinations, interpretations and computations
hereunder or under the other Loan Documents shall be made in accordance with
GAAP, and all financial statements required to be delivered hereunder or
thereunder shall include a reconciliation to GAAP, in each case as in effect
immediately before the relevant change in GAAP became effective, until either
such notice is withdrawn or such provision is amended in a manner
satisfactory to the Company and the Required Lenders.

          (b)  For purposes of computing the Fixed Charge Coverage Ratio,
Interest Coverage Ratio and Leverage Ratio (and any financial calculations
required to be made or included within such ratios) as of the end of any Fiscal
Quarter, all components of such ratios, including Capital Expenditures, in the
case of any disposition, but excluding Capital Expenditures, in the case of any
acquisition, for the period of four Fiscal Quarters ending at the end of such
Fiscal Quarter shall include or exclude, as the case may be, without
duplication, such components of such ratios attributable to any business or
assets that have been acquired or disposed of by the Company or any of its
Restricted Subsidiaries (including through mergers or consolidations) after the
first day of such period of four Fiscal Quarters and prior to the end of such
period, as determined in good faith by the Company on a pro forma basis for such
period of four Fiscal Quarters as if such acquisition or disposition had
occurred on such first day of such period (including, whether or not such
inclusion would be permitted under GAAP or Regulation S-X of the Securities and
Exchange Commission, cost savings that would have been realized had such
acquisition occurred on such day).

                                     ARTICLE II
    COMMITMENTS, BORROWING AND ISSUANCE PROCEDURES, NOTES AND LETTERS OF CREDIT

          SECTION 2.1 COMMITMENTS.  On the terms and subject to the conditions
of this Agreement (including SECTIONS 2.1.4, 2.1.5 and ARTICLE V),

          (a)  each Lender severally agrees to make Loans (other than Swing
Line Loans) pursuant to each of its Commitments, and the Swing Line Lender
agrees to make Swing

                                 35


Line Loans pursuant to the Swing Line Loan Commitment, in each case as
described in this SECTION 2.1; and

          (b)  each Issuer that has a Letter of Credit Commitment severally
agrees that it will issue Letters of Credit pursuant to SECTION 2.1.3, and each
other Lender that has a Revolving Loan Commitment severally agrees that it will
purchase participation interests in such Letters of Credit pursuant to SECTION
2.6.1.

          SECTION 2.1.1. TERM LOAN COMMITMENTS.  Subject to compliance by the
Company with the terms of SECTIONS 2.1.4, 5.1, 5.2.1 and 5.2.2, on (but solely
on) the Closing Date (which shall be a Business Day), each Lender that has a
Percentage in excess of zero of the Term-A Loan Commitment or the Term-B Loan
Commitment, as applicable, will make Term Loans to the Company as provided in
this SECTION 2.1.1.

          (a)  Each Lender having a Percentage of the Term-A Loan Commitment in
excess of zero will make loans denominated in U.S. Dollars (relative to such
Lender, and together with Loans made pursuant to CLAUSE (b) of this SECTION
2.1.1, its "TERM-A LOANS") to the Company equal to such Lender's Percentage of
the aggregate amount of the Borrowing or Borrowings of Term-A Loans requested by
the Company to be made on the Closing Date (with the commitment of each such
Lender described in this CLAUSE (a) herein referred to as its "TERM-A LOAN
COMMITMENT").

          (b)  At any time prior to the sixth anniversary of the Closing Date
that no Default has occurred and is continuing, the Company may, by notice to
the Agents, request that, on the terms and subject to the conditions contained
in this Agreement, the Lenders and/or other financial institutions not then a
party to this Agreement that are satisfactory to the Agents provide additional
Term-A Loans; PROVIDED that such additional Term-A Loans and all additional
Term-B Loans and Revolving Loan Commitments made pursuant to CLAUSE (d) of this
SECTION 2.1.1 and CLAUSE (c) of SECTION 2.1.2 shall not exceed an aggregate
amount of $30,000,000.  Upon receipt of such notice, the Syndication Agent shall
use all commercially reasonable efforts to arrange for the Lenders or other
financial institutions to provide such additional Term-A Loans; PROVIDED that
the Syndication Agent will first offer each of the Lenders that then has a
Percentage of any Term-A Loans a pro rata portion (based upon the outstanding
Term-A Loans at such time) of any such additional Term-A Loans.  Alternatively,
any Lender may commit to provide the full amount of the requested additional
Term-A Loans and then offer portions of such additional Term-A Loans to the
other Lenders or other financial institutions, subject to the proviso in the
immediately preceding sentence.  Nothing contained in this CLAUSE (b) or
otherwise in this Agreement is intended to commit any Lender or any Agent to
provide any portion of any such additional Term-A Loans.  If and to the extent
that any Lenders and/or other financial institutions agree, in their sole
discretion, to provide any such additional Term-A Loans, (i) the total amount of
Term-A Loans shall be increased by the amount of the additional Term-A Loans
agreed to be so provided, (ii) the Percentages of the respective Lenders in
respect of the Term-A Loans shall be proportionally adjusted and (iii) the
Company shall execute and deliver any additional Notes or other amendments or
modifications to this Agreement or any other Loan Document as the Agents may
reasonably request.

                                   36


          (c)  Each Lender having a Percentage of the Term-B Loan Commitment in
excess of zero will make loans denominated in U.S. Dollars (relative to such
Lender, and together with Loans made pursuant to CLAUSE (d) of this SECTION
2.1.1, its "TERM-B LOANS") to the Company equal to such Lender's Percentage of
the aggregate amount of the Borrowing or Borrowings of Term-B Loans requested by
the Company to be made on the Closing Date (with the commitment of each such
Lender described in this CLAUSE (c) herein referred to as its "TERM-B LOAN
COMMITMENT").

          (d)  At any time prior to the sixth anniversary of the Closing Date
that no Default has occurred and is continuing, the Company may, by notice to
the Agents, request that, on the terms and subject to the conditions contained
in this Agreement, the Lenders and/or other financial institutions not then a
party to this Agreement that are satisfactory to the Agents provide additional
Term-B Loans; PROVIDED that such additional Term-B Loans and all additional
Term-A Loans and Revolving Loan Commitments made pursuant to CLAUSE (b) of this
SECTION 2.1.1 and CLAUSE (c) of SECTION 2.1.2 shall not exceed an aggregate
amount of $30,000,000.  Upon receipt of such notice, the Syndication Agent shall
use all commercially reasonable efforts to arrange for the Lenders or other
financial institutions to provide such additional Term-B Loans provided that the
Syndication Agent will first offer each of the Lenders that then has a
Percentage of any Term-B Loans a pro rata portion (based upon the outstanding
Term-B Loans at such time) of any such additional Term-B Loans.  Alternatively,
any Lender may commit to provide the full amount of the requested additional
Term-B Loans and then offer portions of such additional Term-B Loans to the
other Lenders or other financial institutions, subject to the proviso in the
immediately preceding sentence.  Nothing contained in this CLAUSE (d) or
otherwise in this Agreement is intended to commit any Lender or any Agent to
provide any portion of any such additional Term-B Loans.  If and to the extent
that any Lenders and/or other financial institutions agree, in their sole
discretion, to provide any such additional Term-B Loans, (i) the total amount of
Term-B Loans shall be increased by the amount of the additional Term-B Loans
agreed to be so provided, (ii) the Percentages of the respective Lenders in
respect of the Term-B Loans shall be proportionally adjusted and (iii) the
Company shall execute and deliver any additional Notes or other amendments or
modifications to this Agreement or any other Loan Document as the Agents may
reasonably request.

     No amounts paid or prepaid with respect to Term-A Loans or Term-B Loans may
be reborrowed.

          SECTION 2.1.2. REVOLVING LOAN COMMITMENTS AND SWING LINE LOAN
COMMITMENT.  Subject to compliance by the Company with the terms of SECTIONS
2.1.4, 5.2.1 and 5.2.2, from time to time on any Business Day occurring
concurrently with (or after) the making of the Term Loans on the Closing Date
but prior to the Revolving Loan Commitment Termination Date, each Lender that
has a Percentage in excess of zero of the Revolving Loan Commitment or the Swing
Line Loan Commitment will make Revolving Loans or Swing Line Loans, as
applicable, to the Company as provided in this SECTION 2.1.2.

          (a)  Each Lender having a Percentage of the Revolving Loan Commitment
in excess of zero will make loans denominated in U.S. Dollars (relative to such
Lender, its "REVOLVING LOANS") to the Company equal to such Lender's Percentage
of the aggregate amount of the Borrowing or Borrowings of Revolving Loans
requested by the Company to be made on

                                 37


such day.  The Commitment of each Lender described in this CLAUSE (a) is
herein referred to as its "REVOLVING LOAN COMMITMENT."  On the terms and
subject to the conditions hereof, the Company may from time to time borrow,
prepay and reborrow Revolving Loans.

          (b)  The Swing Line Lender will make a loan denominated in U.S.
Dollars (a "SWING LINE LOAN") to the Company equal to the principal amount of
the Swing Line Loan requested by the Company to be made on such day.  The
Commitment of the Swing Line Lender described in this CLAUSE (b) is herein
referred to as its "SWING LINE LOAN COMMITMENT."  On the terms and subject to
the conditions hereof, the Company may from time to time borrow, prepay and
reborrow Swing Line Loans.

          (c)  At any time prior to the sixth anniversary of the Closing Date
that no Default has occurred and is continuing, the Company may, by notice to
the Agents, request that, on the terms and subject to the conditions contained
in this Agreement, the Lenders and/or other financial institutions not then a
party to this Agreement that are satisfactory to the Agents and the Issuers
provide additional Revolving Loan Commitments; PROVIDED that such additional
Revolving Loan Commitments and all additional Term-A Loans and Term-B Loans made
pursuant to CLAUSE (b) and CLAUSE (d) of SECTION 2.1.1 shall not exceed an
aggregate amount of $30,000,000.  Upon receipt of such notice, the Syndication
Agent shall use all commercially reasonable efforts to arrange for the Lenders
or other financial institutions to provide such additional Revolving Loan
Commitments; PROVIDED that the Syndication Agent will first offer each of the
Lenders that then has a Percentage of any Revolving Loan Commitments a pro rata
portion of any such additional Revolving Loan Commitments.  Alternatively, any
Lender may commit to provide the full amount of the requested additional
Revolving Loan Commitments and then offer portions of such additional Revolving
Loan Commitments to the other Lenders or other financial institutions, subject
to the proviso in the immediately preceding sentence.  Nothing contained in this
CLAUSE (c) or otherwise in this Agreement is intended to commit any Lender or
any Agent to provide any portion of any such additional Revolving Loan
Commitments.  If and to the extent that any Lenders and/or other financial
institutions agree, in their sole discretion, to provide any such additional
Revolving Loan Commitments, (i) the Revolving Loan Commitment Amount shall be
increased by the amount of the additional Revolving Loan Commitments agreed to
be so provided, (ii) the Percentages of the respective Lenders in respect of the
Revolving Loan Commitments shall be proportionally adjusted, (iii) at such time
and in such manner as the Company and the Syndication Agent shall agree (it
being understood that the Company and the Agents will use all commercially
reasonable efforts to avoid the prepayment or assignment of any LIBOR Loan on a
day other than the last day of the Interest Period applicable thereto), the
Lenders shall assign and assume outstanding Revolving Loans and participations
in outstanding Letters of Credit so as to cause the amount of such Revolving
Loans and participations in Letters of Credit held by each Lender to conform to
the respective percentages of the applicable Revolving Loan Commitments of the
Lenders and (iv) the Company shall execute and deliver any additional Notes or
other amendments or modifications to this Agreement or any other Loan Document
as the Agents may reasonably request.

                              38


          SECTION 2.1.3. LETTER OF CREDIT COMMITMENT.

          (a)  Subject to compliance by the Company with the terms of SECTIONS
2.1.5, 5.1, 5.2.1 and 5.2.2, from time to time on any Business Day occurring
concurrently with (or after) the Closing Date but prior to the Revolving Loan
Commitment Termination Date, an Issuer will (i) issue one or more standby
letters of credit denominated in U.S. Dollars (a "LETTER OF CREDIT") for the
account of the Company or any of its Restricted Subsidiaries in the Stated
Amount requested by the Company on such day, or (ii) extend the Stated Expiry
Date of an existing standby Letter of Credit previously issued hereunder to a
date not later than the earlier of (x) the Business Day immediately preceding
the sixth anniversary of the Closing Date and (y) the first anniversary of the
date of such extension; PROVIDED that, notwithstanding the terms of this
CLAUSE (y), a Letter of Credit may, if required by the beneficiary thereof,
contain "evergreen" provisions pursuant to which the Stated Expiry Date shall be
automatically extended, unless notice to the contrary shall have been given to
the beneficiary by the applicable Issuer or the account party of such Letter of
Credit more than a specified period prior to the then existing Stated Expiry
Date.  In addition to the conditions precedent and limitations stated elsewhere
in this Agreement, no Issuer shall be required to issue a Letter of Credit
unless (i) the Company shall enter into applications, agreements and other
documents deemed appropriate by the Issuer for the issuance of such Letters of
Credit (PROVIDED, that in the instance of any conflict in the terms of such
applications, agreements and documents and the terms of this Agreement, the
terms of this Agreement shall control) and (ii) there shall not have occurred
any statutory or regulatory change or directive which would make it illegal or
unlawful for such Issuer to issue Letters of Credit.

          (b)  Each Existing Letter of Credit shall for purposes of this
Agreement be deemed to be a "Letter of Credit" issued hereunder on the Closing
Date.

          SECTION 2.1.4. LENDERS NOT PERMITTED OR REQUIRED TO MAKE THE LOANS.
No Lender shall be permitted or required to make, and the Company shall not
request any Lender to make, any of the following Loans to the extent prohibited
by this SECTION 2.1.4:

          (a)  No Term-A Loan or Term-B Loan (as the case may be) shall be made
by any Lender, or requested to be made by the Company if, after giving effect
thereto, the aggregate original principal amount of all Term-A Loans or Term-B
Loans (as the case may be) then being made by such Lender or then being
requested by the Company would exceed such Lender's Percentage of the then
outstanding Term-A Loan Commitment Amount (in the case of Term-A Loans) or the
then outstanding Term-B Loan Commitment Amount (in the case of Term-B Loans).

          (b)  No Revolving Loan shall be made by any Lender, or requested to be
made by the Company if, after giving effect thereto, the aggregate outstanding
principal amount of (i) all Revolving Loans of such Lender, PLUS (ii) such
Lender's Percentage in respect of the Revolving Loan Commitment of the aggregate
amount of all Letter of Credit Outstandings PLUS (iii) such Lender's Percentage
in respect of the Revolving Loan Commitment of the outstanding principal amount
of all Swing Line Loans, would exceed such Lender's Percentage of the Revolving
Loan Commitment Amount.

                                  39


          (c)  No Swing Line Loan shall be made by the Swing Line Lender, or
requested to be made by the Company if, after giving effect thereto, the
aggregate outstanding principal amount of all Swing Line Loans would exceed the
lesser of (i) the then existing Swing Line Loan Commitment Amount and (ii) an
amount equal to the then existing Revolving Loan Commitment Amount less the sum
of (x) the aggregate outstanding principal amount of all Revolving Loans  and
(y) the Letter of Credit Outstandings.

          SECTION 2.1.5. ISSUER NOT PERMITTED OR REQUIRED TO ISSUE LETTERS OF
CREDIT.  No Issuer shall be permitted or required to issue any Letter of Credit
if, after giving effect thereto, (i) the Letter of Credit Outstandings would
exceed the then existing Letter of Credit Commitment Amount or (ii) the Letter
of Credit Outstandings would exceed (x) the then existing Revolving Loan
Commitment Amount LESS (y) the sum of (A) the aggregate amount of all Revolving
Loans and (B) the aggregate amount of all Swing Line Loans.

          SECTION 2.2 OPTIONAL REDUCTION OF THE REVOLVING LOAN COMMITMENT
AMOUNT.  The Company may, from time to time on any Business Day occurring after
the Closing Date, voluntarily reduce any Revolving Loan Commitment Amount;
PROVIDED, HOWEVER, that all such reductions shall require at least three
Business Days' prior notice to the Administrative Agent and any partial
reduction of any Revolving Loan Commitment Amount shall be in an aggregate
amount of $500,000 or any larger integral multiple of $100,000.  Any such
reduction of any Revolving Loan Commitment Amount which reduces such Revolving
Loan Commitment Amount below the Letter of Credit Commitment Amount (or the
Swing Line Loan Commitment Amount) shall result in an automatic and
corresponding reduction of such Letter of Credit Commitment Amount (or the Swing
Line Loan Commitment Amount, as the case may be) to an aggregate amount not in
excess of the applicable Revolving Loan Commitment Amount, as so reduced,
without any further action on the part of the applicable Issuer (or the Swing
Line Lender, if applicable); PROVIDED, that any such reduction in any such
Letter of Credit Commitment Amount or the Swing Line Loan Commitment Amount
shall be reinstated to the extent that, whether pursuant to CLAUSE (c) of
SECTION 2.1.2 or otherwise, the corresponding Revolving Loan Commitment Amount
is thereafter increased.

          SECTION 2.3 BORROWING PROCEDURES AND FUNDING MAINTENANCE.  Loans
(other than Swing Line Loans) shall be made by the Lenders in accordance with
SECTION 2.3.1, and Swing Line Loans shall be made by the Swing Line Lender in
accordance with SECTION 2.3.2.

          SECTION 2.3.1. TERM LOANS AND REVOLVING LOANS.  By delivering a
Borrowing Request to the Administrative Agent on or before 12:00 noon, New York
time, on a Business Day, the Company may from time to time irrevocably request,
on not less than one Business Day's notice (in the case of Base Rate Loans) or
three Business Days' notice (in the case of LIBOR Loans) nor more than five
Business Days' notice, that a Borrowing be made in an aggregate amount of
$1,000,000 or any larger integral multiple of $500,000, or in the unused amount
of the applicable Commitment.  No Borrowing Request shall be required, and the
minimum aggregate amounts specified under this SECTION 2.3.1 shall not apply, in
the case of Revolving Loans made under CLAUSE (b) of SECTION 2.3.2 to refund
Refunded Swing Line Loans or Revolving Loans deemed made under SECTION 2.6.2 in
respect of unreimbursed Disbursements.  On the terms and subject to the
conditions of this Agreement, each Borrowing


                                       40


shall be comprised of the type of Loans, and of the Tranche, and shall be made
on the Business Day, specified in such Borrowing Request. On or before 11:00
a.m., New York time, on such Business Day each Lender shall deposit with the
Administrative Agent same day funds in an amount equal to such Lender's
Percentage of the requested Borrowing. Such deposit will be made to an account
which the Administrative Agent shall specify from time to time by notice to the
Lenders. To the extent funds are received from the Lenders, the Administrative
Agent shall make such funds available to the Company by wire transfer to the
accounts the Company shall have specified in its Borrowing Request. No Lender's
obligation to make any Loan shall be affected by any other Lender's failure to
make any Loan.

          SECTION 2.3.2. SWING LINE LOANS.

          (a)  By telephonic notice, promptly followed (within one Business Day)
by the delivery of a confirming Borrowing Request, to the Swing Line Lender and
the Administrative Agent on or before 3:00 p.m., New York City time, on the
Business Day the proposed Swing Line Loan is to be made, the Company may from
time to time irrevocably request that a Swing Line Loan be made by the Swing
Line Lender in a minimum principal amount of $250,000 or any larger integral
multiple of $100,000.  All Swing Line Loans shall be made in U.S. Dollars as
Base Rate Loans and shall not be entitled to be converted into LIBOR Loans.
Upon receipt of notice from the Administrative Agent confirming the amount of
the requested Borrowing, the proceeds of each Swing Line Loan shall be made
available by the Swing Line Lender, by 3:30 p.m., New York City time, on the
Business Day telephonic notice is received by it as provided in this CLAUSE (a),
to the Company by wire transfer to the account the Company shall have specified
in its notice therefor.

          (b)  If any Default shall occur and be continuing, each Lender with a
Revolving Loan Commitment (other than the Swing Line Lender) irrevocably agrees
that it will, at the request of the Swing Line Lender and upon notice from the
Administrative Agent, unless such Swing Line Loan shall have been earlier repaid
in full, make a Revolving Loan (which shall initially be funded as a Base Rate
Loan) in an amount equal to such Lender's Percentage in respect of the Revolving
Loan Commitments of the aggregate principal amount of all such Swing Line Loans
then outstanding (such outstanding Swing Line Loans hereinafter referred to as
the "REFUNDED SWING LINE LOANS"); PROVIDED, that the Swing Line Lender shall not
request, and no Lender with a Revolving Loan Commitment shall make, any Refunded
Swing Line Loan if, after giving effect to the making of such Refunded Swing
Line Loan, the sum of all Swing Line Loans and Revolving Loans made by such
Lender, plus such Lender's Percentage in respect of the Revolving Loan
Commitments of the aggregate amount of all Letter of Credit Outstandings, would
exceed such Lender's Percentage of the then existing Revolving Loan Commitment
Amount.  On or before 11:00 a.m. (New York City time) on the first Business Day
following receipt by each Lender of a request to make Revolving Loans as
provided in the preceding sentence, each such Lender with a Revolving Loan
Commitment shall deposit in an account specified by the Swing Line Lender the
amount so requested in same day funds and such funds shall be applied by the
Swing Line Lender to repay the Refunded Swing Line Loans.  At the time the
aforementioned Lenders make the above referenced Revolving Loans, the Swing Line
Lender shall be deemed to have made, in consideration of the making of the
Refunded Swing Line Loans, a Revolving Loan in an amount equal to the Swing Line
Lender's Percentage in respect of the Revolving Loan Commitment of the aggregate
principal amount of the Refunded


                                       41


Swing Line Loans. Upon the making (or deemed making, in the case of the Swing
Line Lender) of any Revolving Loans pursuant to this CLAUSE (b), the amount so
funded shall become outstanding as a Revolving Loan of such Lender and shall no
longer be a Swing Line Loan. All interest payable with respect to any Revolving
Loans made (or deemed made, in the case of the Swing Line Lender) pursuant to
this CLAUSE (b) shall be appropriately adjusted to reflect the period of time
during which the Swing Line Lender had outstanding Swing Line Loans in respect
of which such Revolving Loans were made. Each Lender's obligation (in the case
of Lenders with a Revolving Loan Commitment) to make the Revolving Loans
referred to in this CLAUSE (b) shall be absolute and unconditional and shall not
be affected by any circumstance, including, without limitation, (i) any set-off,
counterclaim, recoupment, defense or other right which such Lender may have
against the Swing Line Lender, the Company or any other Person for any reason
whatsoever; (ii) the occurrence or continuance of any Default; (iii) any adverse
change in the condition (financial or otherwise) of the Company or any other
Obligor; (iv) the acceleration or maturity of any Loans or the termination of
any Commitment after the making of any Swing Line Loan; (v) any breach of this
Agreement or any other Loan Document by the Company or any Lender; or (vi) any
other circumstance, happening or event whatsoever, whether or not similar to any
of the foregoing.

          SECTION 2.4 CONTINUATION AND CONVERSION ELECTIONS.  By delivering a
Continuation/Conversion Notice to the Administrative Agent on or before 12:00
noon, New York City time, on a Business Day, the Company may from time to time
irrevocably elect, on not less than one Business Day's notice (in the case of a
conversion of LIBOR Loans to Base Rate Loans) or three Business Days' notice (in
the case of a continuation of LIBOR Loans or a conversion of Base Rate Loans
into LIBOR Loans) nor more than five Business Days' notice (in the case of any
Loans) that all, or any portion in a minimum amount of $1,000,000 or any larger
integral multiple of $500,000, of any Borrowing of Loans be, in the case of Base
Rate Loans, converted into LIBOR Loans or, in the case of LIBOR Loans, continued
as LIBOR Loans or converted into Base Rate Loans (in the absence of delivery of
a Continuation/Conversion Notice with respect to any Loan that is a LIBOR Loan
at least three Business Days before the last day of the then current Interest
Period with respect thereto, such LIBOR Loan shall automatically convert to a
Base Rate Loan); PROVIDED, HOWEVER, that (x) each such conversion or
continuation shall be pro rated among the applicable outstanding Loans of the
relevant Lenders, and (y) no portion of the outstanding principal amount of any
Loans may be continued as, or be converted into, LIBOR Loans when any Default
has occurred and is continuing.

          SECTION 2.5 FUNDING.  Each Lender may, if it so elects, fulfill its
obligation to make, continue or convert LIBOR Loans hereunder by causing one of
its foreign branches or affiliates (or an international banking facility created
by such Lender) to make or maintain such LIBOR Loan, so long as such action does
not result in increased costs to the Company; PROVIDED, HOWEVER, that such LIBOR
Loan shall nonetheless be deemed to have been made and to be held by such
Lender, and the obligation of the Company to repay such LIBOR Loan shall
nevertheless be to such Lender for the account of such foreign branch, affiliate
or international banking facility; and PROVIDED, FURTHER, HOWEVER, that, except
for purposes of determining whether any such increased costs are payable by the
Company, such Lender shall cause such foreign branch, affiliate or international
banking facility to comply with the applicable provisions of CLAUSE (b) of
SECTION 4.6 with respect to such LIBOR Loan.  In addition, the Company hereby
consents and agrees that, for purposes of any determination to be made for
purposes of SECTION


                                       42


4.1, 4.2, 4.3 or 4.4, it shall be conclusively assumed that each Lender elected
to fund all LIBOR Loans by purchasing deposits in its LIBOR Office's interbank
Eurodollar market.

          SECTION 2.6 ISSUANCE PROCEDURES.  By delivering to the applicable
Issuer and the Administrative Agent an Issuance Request on or before 12:00 noon,
New York time, on a Business Day, the Company may, from time to time irrevocably
request, on not less than three nor more than ten Business Days' notice (or such
shorter or longer notice as may be acceptable to the applicable Issuer), in the
case of an initial issuance of a Letter of Credit, and not less than three nor
more than ten Business Days' notice (unless a shorter or longer notice period is
acceptable to the applicable Issuer) prior to the then existing Stated Expiry
Date of a Letter of Credit, in the case of a request for the extension of the
Stated Expiry Date of a Letter of Credit, that any Issuer that has a Letter of
Credit Commitment issue, or extend the Stated Expiry Date of, as the case may
be, an irrevocable Letter of Credit (whether issued for the account of or on
behalf of the Company or any of its Restricted Subsidiaries) in such form as may
be requested by the Company and approved by such Issuer, for the purposes
described in SECTION 7.1.9.  Notwithstanding anything to the contrary contained
herein or in any separate application for any Letter of Credit, the Company
hereby acknowledges and agrees that it shall be obligated to reimburse the
applicable Issuer upon each Disbursement paid under a Letter of Credit, and it
shall be deemed to be the obligor for purposes of each such Letter of Credit
issued hereunder by such Issuer at the request of the Company (whether the
account party on such Letter of Credit is the Company or a Restricted Subsidiary
of the Company).  Upon receipt of an Issuance Request, the Administrative Agent
shall promptly notify the applicable Issuer and each Lender that has a
Percentage of more than zero in respect of the Revolving Loan Commitments
thereof.  Each Letter of Credit shall by its terms be stated to expire on a date
(its "STATED EXPIRY DATE") no later than the earlier to occur of (i) the sixth
anniversary of the Closing Date or (ii) one year from the date of its issuance;
PROVIDED, that, notwithstanding the terms of CLAUSE (II) above, a Letter of
Credit may, if required by the beneficiary thereof, contain "evergreen"
provisions pursuant to which the Stated Expiry Date shall be automatically
extended, unless notice to the contrary shall have been given to the beneficiary
by the applicable Issuer or the account party more than a specified period prior
to the then existing Stated Expiry Date.  The applicable Issuer will make
available to the beneficiary thereof the original of each Letter of Credit which
it issues hereunder.  In the event that the Issuer is other than the
Administrative Agent, such Issuer will send by facsimile transmission to the
Administrative Agent, promptly on the first Business Day of each week, its daily
maximum amount available to be drawn under the Letters of Credit issued by such
Issuer for the previous week.  The Administrative Agent shall deliver to each
Lender upon each calendar month end, and upon each Letter of Credit fee payment,
a report setting forth the daily maximum amount available to be drawn for all
Issuers during such period.

          SECTION 2.6.1. OTHER LENDERS' PARTICIPATION.  Upon the issuance of
each Letter of Credit issued by an Issuer pursuant hereto, and without further
action, each Lender (other than such Issuer) that has a Revolving Loan
Commitment shall be deemed to have irrevocably purchased from such Issuer, to
the extent of its Percentage in respect of the Revolving Loan Commitments, and
such Issuer shall be deemed to have irrevocably granted and sold to such Lender
a participation interest in such Letter of Credit (including the Contingent
Liability and any Reimbursement Obligation and all rights with respect thereto),
and such Lender shall, to the extent of its Percentage in respect of the
Revolving Loan Commitments, be responsible for reimbursing promptly (and in any
event within one Business Day) the applicable


                                       43


Issuer for Reimbursement Obligations which have not been reimbursed by the
Company in accordance with SECTION 2.6.3. In addition, such Lender shall, to the
extent of its Percentage in respect of the Revolving Loan Commitments, be
entitled to receive from the Administrative Agent a ratable portion of the
Letter of Credit fees payable pursuant to SECTION 3.3.3 with respect to each
Letter of Credit and of interest payable pursuant to SECTION 3.2 with respect to
any Reimbursement Obligation. To the extent that any Lender has reimbursed an
Issuer for a Disbursement as required by this Section, such Lender shall be
entitled to receive from the Administrative Agent its ratable portion of any
amounts subsequently received (from the Company or otherwise) in respect of such
Disbursement.

          SECTION 2.6.2. DISBURSEMENTS; CONVERSION TO REVOLVING LOANS.  Each
Issuer will notify the Company and the Administrative Agent promptly of the
presentment for payment of any drawing under any Letter of Credit issued by such
Issuer, together with notice of the date (the "DISBURSEMENT DATE") such payment
shall be made (each such payment, a "DISBURSEMENT").  Subject to the terms and
provisions of such Letter of Credit and this Agreement, such Issuer shall make
such payment to the beneficiary (or its designee) of such Letter of Credit.
Prior to 12:30 p.m., New York time, on the first Business Day following the
Disbursement Date (the "DISBURSEMENT DUE DATE"), the Company will reimburse the
Administrative Agent, for the account of such Issuer, for all amounts which such
Issuer has disbursed under such Letter of Credit, together with interest thereon
at the rate per annum otherwise applicable to Revolving Loans made as Base Rate
Loans from and including the Disbursement Date to but excluding the Disbursement
Due Date and, thereafter (unless such Disbursement is converted into a Revolving
Loan on the Disbursement Due Date), at a rate per annum equal to the rate per
annum then in effect with respect to overdue Revolving Loans made as Base Rate
Loans pursuant to SECTION 3.2.2 for the period from the Disbursement Due Date
through the date of such reimbursement; PROVIDED, HOWEVER, that, if no Default
shall have then occurred and be continuing, unless the Company has notified the
Administrative Agent no later than one Business Day prior to the Disbursement
Due Date that it will reimburse such Issuer for the applicable Disbursement,
then the amount of the Disbursement shall be deemed to be a Borrowing of
Revolving Loans which shall constitute Base Rate Loans, and following the giving
of notice thereof by the Administrative Agent to the applicable Lenders, each
Lender with a Revolving Loan Commitment (other than such Issuer) will deliver to
such Issuer on the Disbursement Due Date immediately available funds in an
amount equal to such Lender's Percentage of such Borrowing.  Each conversion of
Disbursement amounts into Revolving Loans shall constitute a representation and
warranty by the Company that on the date of the making of such Revolving Loans
all of the statements set forth in SECTION 5.2.1 are true and correct.

          SECTION 2.6.3. REIMBURSEMENT.  The obligation (a "REIMBURSEMENT
OBLIGATION") of the Company under SECTION 2.6.2 to reimburse an Issuer with
respect to each Disbursement (including interest thereon) not converted into a
Revolving Loan pursuant to SECTION 2.6.2, and, upon the failure of the Company
to reimburse an Issuer and the giving of notice thereof by the Administrative
Agent to the applicable Lenders, each Lender's (to the extent it has a Revolving
Loan Commitment) obligation under SECTION 2.6.1 to reimburse such Issuer or fund
its Percentage of any Disbursement converted into a Revolving Loan, shall be
absolute and unconditional under any and all circumstances and irrespective of
any setoff, counterclaim or defense to payment which the Company or such Lender,
as the case may be, may have or have had against such Issuer or any such Lender,
including any defense based upon


                                       44


the failure of any Disbursement to conform to the terms of the applicable Letter
of Credit (if, in the applicable Issuer's good faith opinion, such Disbursement
is determined to be appropriate) or any non-application or misapplication by the
beneficiary of the proceeds of such Letter of Credit; PROVIDED, HOWEVER, that
after paying in full its Reimbursement Obligation hereunder, nothing herein
shall adversely affect the right of the Company or such Lender, as the case may
be, to commence any proceeding against the applicable Issuer for any wrongful
Disbursement made by such Issuer under a Letter of Credit as a result of acts or
omissions constituting gross negligence or willful misconduct on the part of
such Issuer.

          SECTION 2.6.4. DEEMED DISBURSEMENTS.  Upon the occurrence and during
the continuation of any Event of Default of the type described in CLAUSES (b)
through (d) of SECTION 8.1.9 with respect to any Obligor (other than Immaterial
Subsidiaries) or, with notice from the Administrative Agent acting at the
direction of the Required Lenders, upon the occurrence and during the
continuation of any other Event of Default,

          (a)  an amount equal to that portion of all Letter of Credit
     Outstandings attributable to the then aggregate amount which is undrawn and
     available under all Letters of Credit issued and outstanding shall, without
     demand upon or notice to the Company or any other Person, be deemed to have
     been paid or disbursed by the applicable Issuer under such Letters of
     Credit (notwithstanding that such amount may not in fact have been so paid
     or disbursed); and

          (b)  upon notification by the Administrative Agent to the Company of
     its obligations under this Section, the Company shall be immediately
     obligated to reimburse the applicable Issuer for the amount deemed to have
     been so paid or disbursed by the applicable Issuer.

Any amounts so payable by the Company pursuant to this Section shall be
deposited in cash with the Administrative Agent and held as collateral security
for the Obligations in connection with the Letters of Credit issued by the
applicable Issuer.  At such time as the Events of Default giving rise to the
deemed disbursements hereunder shall have been cured or waived, the
Administrative Agent shall return to the Company all amounts then on deposit
with the Administrative Agent pursuant to this Section, together with accrued
interest at the Federal Funds Rate, which have not been applied to the
satisfaction of such Obligations.

          SECTION 2.6.5. NATURE OF REIMBURSEMENT OBLIGATIONS.  The Company and,
to the extent set forth in SECTION 2.6.1, each Lender with a Revolving Loan
Commitment, shall assume all risks of the acts, omissions or misuse of any
Letter of Credit by the beneficiary thereof.  No Issuer (except to the extent of
its own gross negligence or willful misconduct) shall be responsible for:

          (a)  the form, validity, sufficiency, accuracy, genuineness or legal
     effect of any Letter of Credit or any document submitted by any party in
     connection with the application for and issuance of a Letter of Credit,
     even if it should in fact prove to be in any or all respects invalid,
     insufficient, inaccurate, fraudulent or forged;


                                       45


          (b)  the form, validity, sufficiency, accuracy, genuineness or legal
     effect of any instrument transferring or assigning or purporting to
     transfer or assign a Letter of Credit or the rights or benefits thereunder
     or the proceeds thereof in whole or in part, which may prove to be invalid
     or ineffective for any reason;

          (c)  failure of the beneficiary to comply fully with conditions
     required in order to demand payment under a Letter of Credit;

          (d)  errors, omissions, interruptions or delays in transmission or
     delivery of any messages, by mail, cable, telegraph, telex or otherwise; or

          (e)  any loss or delay in the transmission or otherwise of any
     document or draft required in order to make a Disbursement under a Letter
     of Credit.

None of the foregoing shall affect, impair or prevent the vesting of any of the
rights or powers granted to any Issuer or any Lender with an applicable
Revolving Loan Commitment hereunder.  In furtherance and extension and not in
limitation or derogation of any of the foregoing, any action taken or omitted to
be taken by any Issuer in good faith (and not constituting gross negligence or
willful misconduct) shall be binding upon the Company, each Obligor and each
such Lender, and shall not put such Issuer under any resulting liability to the
Company, any Obligor or any such Lender, as the case may be.

          SECTION 2.7 REGISTER; NOTES.

          (a)  Each Lender may maintain in accordance with its usual practice an
account or accounts evidencing the Indebtedness of the Company to such Lender
resulting from each Loan made by such Lender to the Company, including the
amounts of principal and interest payable and paid to such Lender from time to
time hereunder.  In the case of a Lender that does not request, pursuant to
CLAUSE (b)(ii) below, execution and delivery of a Note or Notes evidencing the
Loans made by such Lender to the Company, such account or accounts shall, to the
extent not inconsistent with the notations made by the Administrative Agent in
the Register, be conclusive and binding on the Company absent manifest error;
PROVIDED, HOWEVER, that the failure of any Lender to maintain such account or
accounts shall not limit or otherwise affect any Obligations of the Company or
any other Obligor.

          (b)  (i)  The Company hereby designates the Administrative Agent to
serve as its agent, solely for the purpose of this CLAUSE (b), to maintain a
register (the "REGISTER") on which the Administrative Agent will record each
Lender's Commitments, the Loans made by each Lender and each repayment in
respect of the principal amount of the Loans of each Lender and annexed to which
the Administrative Agent shall retain a copy of each Lender Assignment Agreement
delivered to the Administrative Agent pursuant to SECTION 11.11.1.  Failure to
make any recordation, or any error in such recordation, shall not affect the
Company's obligations in respect of such Loans.  The entries in the Register
shall be conclusive, in the absence of manifest error, and the Company, the
Administrative Agent and the Lenders shall treat each Person in whose name a
Loan (and, as provided in CLAUSE (ii), the Note evidencing such Loan, if any) is
registered as the owner thereof for all purposes of this Agreement,
notwithstanding notice or any provision herein to the contrary.  Any Commitment
of any Lender and the Loans made pursuant


                                       46


thereto may be assigned or otherwise transferred in whole or in part only by
registration of such assignment or transfer in the Register. Any assignment or
transfer of any Commitment of any Lender or the Loans made pursuant thereto
shall be registered in the Register only upon delivery to the Administrative
Agent of a Lender Assignment Agreement duly executed by the assignor thereof. No
assignment or transfer of any Commitment of any Lender or the Loans made
pursuant thereto shall be effective unless such assignment or transfer shall
have been recorded in the Register by the Administrative Agent as provided in
this Section.

          (ii)  The Company agrees that, upon the request by any Lender to the
Administrative Agent, the Company will execute and deliver to such Lender, as
applicable, a Revolving Note, a Term-A Note, a Term-B Note and a Swing Line Note
evidencing the Loans made by such Lender to the Company.  The Company hereby
irrevocably authorizes each Lender to make (or cause to be made) appropriate
notations on the grid attached to such Lender's Notes (or on any continuation of
such grid), which notations, if made, shall evidence, INTER ALIA, the date of,
the outstanding principal amount of, and the interest rate and Interest Period
applicable to the Loans evidenced thereby.  Such notations shall, to the extent
not inconsistent with the notations made by the Administrative Agent in the
Register, be conclusive and binding on the Company absent manifest error;
PROVIDED, HOWEVER, that the failure of any Lender to make any such notations or
any error in any such notations shall not limit or otherwise affect any
Obligations of the Company or any other Obligor. The Loans evidenced by any such
Note and interest thereon shall at all times (including after assignment
pursuant to SECTION 11.11.1) be represented by one or more Notes payable to the
order of the payee named therein and its registered assigns.  A Note and the
obligation evidenced thereby may be assigned or otherwise transferred in whole
or in part only by registration of such assignment or transfer of such Note and
the obligation evidenced thereby in the Register (and each Note shall expressly
so provide).  Any assignment or transfer of all or part of an obligation
evidenced by a Note shall be registered in the Register only upon surrender for
registration of assignment or transfer of the Note evidencing such obligation,
accompanied by a Lender Assignment Agreement duly executed by the assignor
thereof, and thereupon, if requested by the assignee, one or more new Notes
shall be issued by the Company to the designated assignee and the old Note shall
be returned by the Administrative Agent to the Company marked "exchanged".  No
assignment of a Note and the obligation evidenced thereby shall be effective
unless it shall have been recorded in the Register by the Administrative Agent
as provided in this Section.

                                   ARTICLE III
                   REPAYMENTS, PREPAYMENTS, INTEREST AND FEES

          SECTION 3.1    REPAYMENTS AND PREPAYMENTS; APPLICATION.

          SECTION 3.1.1. REPAYMENTS AND PREPAYMENTS.  The Company shall repay in
full the unpaid principal amount of each Loan upon the Stated Maturity Date
therefor. Prior thereto, payments and repayments of Loans shall or may be made
as set forth below.

          (a)  From time to time on any Business Day, the Company may make a
voluntary prepayment, in whole or in part, of the outstanding principal amount
of any


                                       47


         (i)  Loans (other than Swing Line Loans); PROVIDED, HOWEVER, that

               (1)    any such prepayment of the Loans of any Tranche shall be
          made PRO RATA among Loans of such Tranche of the same type and, if
          applicable, having the same Interest Period of all Lenders that have
          made such Loans;

               (2)    the Company shall comply with SECTION 4.4 in the event
          that any LIBOR Loan is prepaid on any day other than the last day of
          the Interest Period for such Loan;

               (3)    all such voluntary prepayments shall require at least one
          Business Day's notice in the case of Base Rate Loans, three Business
          Days' notice in the case of LIBOR Loans, but no more than five
          Business Days' notice in the case of any Loans, in each case in
          writing to the Administrative Agent; and

               (4)    all such voluntary partial prepayments shall be in an
          aggregate amount of $1,000,000 or any larger integral multiple of
          $500,000 or in the aggregate principal amount of all Loans of the
          applicable Tranche and type then outstanding; or

          (ii) Swing Line Loans, PROVIDED that

               (1)    all such voluntary prepayments shall require prior
          telephonic notice to the Swing Line Lender on or before 3:00 p.m.,
          New York City time, on the day of such prepayment (such notice to be
          confirmed in writing by the Company within 24 hours thereafter); and

               (2)    all such voluntary partial prepayments shall be in an
          aggregate amount of $250,000 or any larger integral multiple of
          $100,000 or in the aggregate principal amount of all Swing Line Loans
          then outstanding.

          (b)  No later than five Business Days following the delivery by the
Company of the annual audited financial reports required pursuant to CLAUSE (b)
of SECTION 7.1.1 (beginning with the financial reports delivered in respect of
the Fiscal Year ending on January 31, 2001), the Company shall deliver to the
Administrative Agent a calculation of the Excess Cash Flow for the Fiscal Year
last ended and, no later than five Business Days following the delivery of such
calculation, make or cause to be made a mandatory prepayment of the Term Loans
in an amount equal to (i) 50% of the Excess Cash Flow (if any) for such Fiscal
Year LESS (ii) the aggregate amount of all voluntary prepayments of the
principal of the Term Loans actually made in such Fiscal Year pursuant to
CLAUSE (a) of SECTION 3.1.1, to be applied as set forth in SECTION 3.1.2;
PROVIDED, HOWEVER, that such prepayment shall only be required to be made to the
extent that the amount of Debt, as reduced by giving effect to such prepayment,
would result in a Leverage Ratio greater than or equal to 3.50:1 on a pro forma
basis as of the date of such prepayment.  For purposes of calculating the pro
forma Leverage Ratio on the date of such prepayment under this CLAUSE (b) of
SECTION 3.1.1, EBITDA shall be determined for the Fiscal Year for which Excess
Cash Flow has been calculated.


                                       48


          (c)  No later than (i) one Business Day (in the case of Net Debt
Proceeds) or (ii) 30 calendar days (in the case of Net Disposition Proceeds)
following the receipt of any Net Disposition Proceeds or Net Debt Proceeds by
Holdco, the Company or any of its Restricted Subsidiaries, the Company shall
deliver to the Administrative Agent a calculation of the amount of such Net
Disposition Proceeds or Net Debt Proceeds, as the case may be, and, to the
extent the amount of such Net Disposition Proceeds or Net Debt Proceeds, as the
case may be, with respect to any single transaction or series of related
transactions, exceeds $2,000,000, make or cause to be made a mandatory
prepayment of the Term Loans in an amount equal to 100% of such Net Disposition
Proceeds or Net Debt Proceeds, as the case may be, to be applied as set forth in
SECTION 3.1.2; PROVIDED, that no mandatory prepayment on account of such Net
Disposition Proceeds shall be required under this clause if the Company informs
the Agents no later than 30 days following the receipt of any Net Disposition
Proceeds of its or its Restricted Subsidiary's good faith intention to apply
such Net Disposition Proceeds to the acquisition of other assets or property
consistent with the Merrill Business (including by way of merger or investment)
within 365 days following the receipt of such Net Disposition Proceeds, with the
amount of such Net Disposition Proceeds unused after such 365 day period being
applied to the Loans as set forth in SECTION 3.1.2.

     If, following the receipt by Holdco, the Company or any of its Restricted
Subsidiaries of any Net Disposition Proceeds, the Company is required to apply
or cause to be applied any portion of such Net Disposition Proceeds to prepay
any Indebtedness evidenced either (i) by the Senior Subordinated Bridge Notes
pursuant to the Senior Subordinated Bridge Note Agreement or (ii) by the Senior
Subordinated Notes pursuant to the Senior Subordinated Note Indenture, then,
notwithstanding anything contained in this CLAUSE (c), the Company shall prepay
the Loans and/or reduce the Revolving Loan Commitments as set forth in this
CLAUSE (c) so as to eliminate any obligation to prepay such Indebtedness.

          (d)  Concurrently with the consummation of any transaction giving rise
to any Net Equity Proceeds, the Company shall deliver to the Administrative
Agent a calculation of the amount of such Net Equity Proceeds, and no later than
five Business Days following the delivery of such calculation, and, to the
extent that the amount of such Net Equity Proceeds with respect to any single
transaction or series of related transactions exceeds $2,000,000, the Company
shall make or cause to be made a mandatory prepayment of the Term Loans in an
amount equal to 50% of such Net Equity Proceeds, to be applied as set forth in
SECTION 3.1.2; PROVIDED, HOWEVER, that such prepayment shall only be required to
be made to the extent that the amount of Debt, as reduced by giving effect to
such prepayment, would result in a Leverage Ratio of greater than or equal to
3.50:1 on a pro forma basis as of the date of such prepayment.  For purposes of
calculating the pro forma Leverage Ratio on the date of such prepayment under
this CLAUSE (d) of SECTION 3.1.1, EBITDA shall be determined for the period of
four Fiscal Quarters ending on the last day of the most recent Fiscal Quarter
for which financial statements have been delivered, or are required to have been
delivered, pursuant to Section 7.1.1(a) or (b).

          (e)  Not later than the 60th calendar day following the receipt by
Holdco, the Company or any other Restricted Subsidiary of any Casualty Proceeds
in excess of $2,000,000 (individually or in the aggregate over the course of a
Fiscal Year), the Company shall make or cause to be made a mandatory prepayment
of the Term Loans in an amount equal to 100% of such Casualty Proceeds, to be
applied as set forth in SECTION 3.1.2; PROVIDED, that no mandatory


                                       49


prepayment on account of Casualty Proceeds shall be required under this clause
if the Company informs the Agents no later than 60 days following the occurrence
of the Casualty Event resulting in such Casualty Proceeds of its or its
Restricted Subsidiary's good faith intention to apply such Casualty Proceeds to
the rebuilding or replacement of the assets or property subject to such Casualty
Event or the acquisition of other assets or property consistent with the Merrill
Business (including by way of merger or Investment) and in fact uses such
Casualty Proceeds to rebuild or replace the assets or property subject to such
Casualty Event or to acquire such other property or assets within 365 days
following the receipt of such Casualty Proceeds, with the amount of such
Casualty Proceeds unused after such 365 day period being applied to the Loans
pursuant to SECTION 3.1.2; PROVIDED, FURTHER, HOWEVER, that at any time when any
Event of Default shall have occurred and be continuing or Casualty Proceeds not
applied as provided above shall exceed $2,000,000, such Casualty Proceeds will
be deposited in an account maintained with the Administrative Agent for
disbursement at the request of the Company to pay for such rebuilding,
replacement or acquisition.

          (f)  On each date when any reduction in the Revolving Loan Commitment
Amount shall become effective in respect of any Revolving Loan Commitment,
including pursuant to SECTION 2.2, the Company shall make a mandatory prepayment
of Revolving Loans and (if necessary) Swing Line Loans and (if necessary)
deposit with the Administrative Agent cash collateral for Letter of Credit
Outstandings in an aggregate amount equal to the excess, if any, of (A) the sum
of the aggregate outstanding principal amount of all Revolving Loans and Swing
Line Loans outstanding and Letter of Credit Outstandings over (B) the Revolving
Loan Commitment Amount as so reduced.

          (g)  On the Stated Maturity Date and on each Quarterly Payment Date
occurring during any period set forth below, the Company shall make a scheduled
repayment of the outstanding principal amount, if any, of its Term-A Loans (such
repayments to be applied as set forth in SECTION 3.1.2), in an aggregate amount
equal to the amount set forth below for such Stated Maturity Date or for each
Quarterly Payment Date occurring during such period, as applicable (as such
amounts may have otherwise been reduced pursuant to this Agreement); PROVIDED
that in the event that the aggregate principal amount of Term-A Loans
outstanding has been increased pursuant to CLAUSE (b) of SECTION 2.1.1, the
aggregate amount of repayments for the Stated Maturity Date and each remaining
Quarterly Payment Date occurring during any period set forth below shall be
increased by an amount which bears the same proportion to the aggregate amount
of all such additional Term-A Loans as the amount of such repayments for such
Quarterly Payment Date or Stated Maturity Date (determined prior to the
application of this provision in respect of such increase) bears to the
aggregate amount of all such remaining repayments (as so determined):




                                                             Scheduled
                                                             Principal
                                Period                       Repayment
                        ----------------------            ---------------
                                               
                         Closing Date - 2/15/01               $        0
                         2/16/01 - 2/15/02                    $  812,500
                         2/16/02 - 2/15/03                    $1,625,000
                         2/16/03 - 2/15/04                    $3,250,000


                                       50






                                                             Scheduled
                                                             Principal
                                Period                       Repayment
                        ----------------------            ---------------
                                               
                         2/16/04 - 2/15/05                   $4,062,500
                         2/16/05 - 11/15/05                  $6,500,000
                           Sixth Anniversary
                           of the Closing Date               $6,500,000


          (h)  On the Stated Maturity Date and on each Quarterly Payment Date
occurring during any period set forth below, the Company shall make a scheduled
repayment of the outstanding principal amount, if any, of Term-B Loans, in an
aggregate amount equal to the amount set forth below for such Stated Maturity
Date or for each Quarterly Payment Date occurring during such period, as
applicable (as such amounts may have otherwise been reduced pursuant to this
Agreement); PROVIDED that, in the event that the aggregate principal amount of
Term-B Loans outstanding has been increased pursuant to CLAUSE (d) of SECTION
2.1.1, the aggregate amount of repayments for the Stated Maturity Date and each
remaining Quarterly Payment Date occurring during any period set forth below
shall be increased by an amount which bears the same proportion to the aggregate
amount of all such additional Term-B Loans as the amount of such repayments for
such Quarterly Payment Date or Stated Maturity Date (determined prior to the
application of this provision in respect of such increase) bears to the
aggregate amount of all such remaining repayments (as so determined):





                                                             Scheduled
                                                             Principal
                                Period                       Repayment
                        ----------------------            ---------------
                                               

                         Closing Date - 2/15/07               $   387,500
                         2/16/07 - 11/15/07                   $35,940,625
                          Eighth Anniversary of               $35,940,625
                            the Closing Date



          (i)  Following the prepayment in full of the Term Loans, on the date
the Term Loans would otherwise have been required to be prepaid on account of
any Net Disposition Proceeds, Net Debt Proceeds, Excess Cash Flow, Net Equity
Proceeds or Casualty Proceeds, the Company shall FIRST, prepay such Tranche or
Tranches of Revolving Loans and Swing Line Loans, to the extent then
outstanding, as the Company shall elect, and, SECOND, deposit with the
Administrative Agent cash collateral for Letter of Credit Outstandings, in an
aggregate amount equal to the amount by which the Term Loans would otherwise
have been required to be prepaid if Term Loans had been outstanding.

          (j)  Immediately upon any acceleration of the Stated Maturity Date of
any Loans or Obligations pursuant to SECTION 8.2 or SECTION 8.3, the Company
shall repay all outstanding Loans and other Obligations, unless, pursuant to
SECTION 8.3, only a portion of all Loans and other Obligations are so
accelerated (in which case the portion so accelerated shall be so prepaid).


                                       51


     Each prepayment of any Loans made pursuant to this Section shall be without
premium or penalty, except as may be required by SECTION 4.4.  No prepayment of
principal of any Revolving Loans or Swing Line Loans pursuant to CLAUSE (a) or
(i) of this SECTION 3.1.1 shall cause a reduction in the Revolving Loan
Commitment Amount or the Swing Line Loan Commitment Amount, as the case may be.
Any Letter of Credit outstanding that is cash collateralized pursuant to CLAUSE
(f) or (i) of this SECTION 3.1.1 shall not thereafter, so long as, and to the
extent that, such Letter of Credit remains so cash collateralized, be considered
to be outstanding for purposes of (but only for purposes of) such CLAUSE (f) or
(i) of this SECTION 3.1.1.

          SECTION 3.1.2. APPLICATION.

          (a)  Subject to CLAUSE (b) below, each prepayment or repayment of
principal of the Loans of any Tranche shall be applied, to the extent of such
prepayment or repayment, FIRST, to the principal amount thereof being maintained
as Base Rate Loans, and SECOND, to the principal amount thereof being maintained
as LIBOR Loans; PROVIDED, that prepayments or repayments of LIBOR Loans not made
on the last day of the Interest Period with respect thereto, shall be prepaid or
repaid subject to the provisions of SECTION 4.4 (together with a payment of all
accrued interest).  Any mandatory prepayments of LIBOR Loans made pursuant to
CLAUSES (c) and (d) of SECTION 3.1.1, if not made on the last day of the
Interest Period with respect thereto, shall, at the Company's option, so long as
no Default has occurred and is continuing, be prepaid subject to the provisions
of SECTION 4.4, or the amount required to be applied to the prepayment of LIBOR
Loans (after application to any Base Rate Loans) shall be deposited with the
Administrative Agent as cash collateral for such Loans on terms reasonably
satisfactory to the Administrative Agent and thereafter shall be applied in the
order of the Interest Periods next ending most closely to the date of receipt of
the proceeds in respect of which such prepayment is required to be made and on
the last day of each such Interest Period (together with a payment of all
interest that is due on the last day of each such Interest Period pursuant to
CLAUSE (d) of SECTION 3.2.3).

          (b)  Each prepayment of Term Loans made pursuant to CLAUSES (a), (b),
(c), (d), (e), (g) and (h) of SECTION 3.1.1 shall be applied, (i) on a PRO RATA
basis, to the outstanding principal amount of (A) in the case of CLAUSES (a),
(b), (c), (d) and (e), all remaining Term-A Loans and Term-B Loans and (B) in
the case of CLAUSES (g) and (h), all remaining Term-A Loans or Term-B Loans, as
the case may be, and (ii) in respect of each Tranche of Term Loans, in direct
order of maturity of the remaining scheduled quarterly amortization payments in
respect thereof, until all such Term-A Loans and Term-B Loans have been paid in
full; PROVIDED that if the Company at any time elects in writing, in its sole
discretion, to permit any Lender that has Term-B Loans outstanding to decline to
have such Loans prepaid pursuant to CLAUSE (a), (b), (c), (d) or (e) of SECTION
3.1.1, then any Lender having Term-B Loans outstanding may, by delivering a
notice to the Agents at least one Business Day prior to the date that such
prepayment is to be made, decline to have such Loans prepaid with the amounts
set forth above, in which case 50% of the amounts that would have been applied
to a prepayment of such Lender's Term-B Loans shall instead be applied to a
prepayment of the Term-A Loans (until paid in full), with the balance being
retained by the Company and its Restricted Subsidiaries.


                                       52


          SECTION 3.2    INTEREST PROVISIONS.  Interest on the outstanding
principal amount of the Loans shall accrue and be payable in accordance with
this SECTION 3.2.

          SECTION 3.2.1. RATES.

          (a)  Each Base Rate Loan shall accrue interest on the unpaid principal
amount thereof for each day from and including the day upon which such Loan was
made or converted to a Base Rate Loan to but excluding the date such Loan is
repaid or converted to a LIBOR Loan at a rate per annum equal to the sum of the
Alternate Base Rate for such day plus the Applicable Margin for such Loan on
such day.

          (b)  Each LIBOR Loan shall accrue interest on the unpaid principal
amount thereof for each day during each Interest Period applicable thereto at a
rate per annum equal to the sum of the LIBOR (Reserve Adjusted) for such
Interest Period plus the Applicable Margin for such Loan on such day.

All LIBOR Loans shall bear interest from and including the first day of the
applicable Interest Period to (but not including) the last day of such Interest
Period at the interest rate determined as applicable to such LIBOR Loan.

          SECTION 3.2.2. POST-MATURITY RATES.  After the date any principal
amount of any Loan shall have become due and payable (whether on the applicable
Stated Maturity Date, upon acceleration or otherwise), or any other monetary
Obligation (other than overdue Reimbursement Obligations which shall bear
interest as provided in SECTION 2.6.2) of the Company shall have become due and
payable, the Company shall pay, but only to the extent permitted by law,
interest (after as well as before judgment) on such amounts at a rate per annum
equal to (i) in the case of any overdue principal of Loans, overdue interest
thereon, overdue commitment fees or other overdue amounts in respect of Loans or
other obligations (or the related Commitments) under a particular Tranche, the
rate that would otherwise be applicable to Base Rate Loans under such Tranche
pursuant to SECTION 3.2.1 plus 2%, and (ii) in the case of other overdue
monetary Obligations, the rate that would otherwise be applicable to Revolving
Loans that were Base Rate Loans plus 2%.

          SECTION 3.2.3. PAYMENT DATES.  Interest accrued on each Loan shall be
payable, without duplication:

          (a)  on the Stated Maturity Date therefor;

          (b)  in the case of a LIBOR Loan, on the date of any payment or
     prepayment, in whole or in part, of principal outstanding on such Loan, to
     the extent of the unpaid interest accrued through such date on the
     principal so paid or prepaid;

          (c)  with respect to Base Rate Loans, on each Quarterly Payment Date
     occurring after the date of the initial Credit Extension hereunder;

          (d)  with respect to LIBOR Loans, on the last day of each applicable
     Interest Period (and, if such Interest Period shall exceed three months, at
     intervals of three months after the first day of such Interest Period); and


                                       53


          (e)  on that portion of any Loans the Stated Maturity Date of which is
     accelerated pursuant to SECTION 8.2 or SECTION 8.3, immediately upon such
     acceleration.

Interest accrued on Loans, Reimbursement Obligations or other monetary
Obligations arising under this Agreement or any other Loan Document after the
date such amount is due and payable (whether on the Stated Maturity Date, upon
acceleration or otherwise) shall be payable upon demand.

          SECTION 3.3    FEES.  The Company agrees to pay the fees set forth in
this SECTION 3.3.  All such fees shall be non-refundable.

          SECTION 3.3.1. COMMITMENT FEE. The Company agrees to pay to the
Administrative Agent for the account of each Lender that has a Revolving Loan
Commitment, for each day during the period (including any portion thereof when
any of the Lenders' Revolving Loan Commitments are suspended by reason of the
Company's inability to satisfy any condition of ARTICLE V) commencing on the
Closing Date and continuing to but excluding the Revolving Loan Commitment
Termination Date, a commitment fee on such Lender's Percentage of the unused
portion, whether or not then available, of the Revolving Loan Commitment Amount
(net of Letter of Credit Outstandings) for such day at a rate per annum equal to
the Applicable Commitment Fee for such day.  Such commitment fee shall be
payable by the Company in arrears on each Quarterly Payment Date, commencing
with the first such day following the Closing Date and on the Revolving Loan
Commitment Termination Date.  The making of Swing Line Loans shall not
constitute usage of the applicable Revolving Loan Commitment with respect to the
calculation of commitment fees to be paid by the Company to the applicable
Lenders.  Payments by the Company to the Swing Line Lender in respect of accrued
interest on Swing Line Loans shall be net of the commitment fee payable in
respect of the Swing Line Lender's Revolving Loan Commitment.

          SECTION 3.3.2. ADMINISTRATIVE AGENT FEE.  The Company agrees to pay an
annual administration fee to the Administrative Agent, for its own account, in
the amount set forth in the Administrative Agent Fee Letter, payable in advance
on the Closing Date and annually thereafter.

          SECTION 3.3.3. LETTER OF CREDIT FEE.  The Company agrees to pay to the
Administrative Agent, for the PRO RATA account of the applicable Issuer and each
other Lender that has a Revolving Loan Commitment, a Letter of Credit fee for
each day on which there shall be any Letters of Credit outstanding, at a rate
per annum equal to the then Applicable Margin for Revolving Loans maintained as
LIBOR Loans MULTIPLIED BY the Stated Amount of each such Letter of Credit, such
fees being payable quarterly in arrears on each Quarterly Payment Date.  The
Company further agrees to pay to the applicable Issuer quarterly in arrears on
each Quarterly Payment Date, an issuance fee at the rates agreed between the
Company and such Issuer.  The Company further agrees to pay to the applicable
Issuer usual and customary administrative fees in connection with the issuance
of, drawings under and amendments to Letters of Credit.


                                       54


                                   ARTICLE IV
                       CERTAIN LIBOR AND OTHER PROVISIONS

          SECTION 4.1    LIBOR LENDING UNLAWFUL.  If any Lender shall determine
(which determination shall, in the absence of manifest error, upon notice
thereof to the Company and the Lenders, be conclusive and binding on the
Company) that the introduction of or any change in or in the interpretation of
any law, in each case after the date upon which such Lender shall have become a
Lender hereunder, makes it unlawful, or any central bank or other governmental
authority asserts, after such date, that it is unlawful, for such Lender to
make, continue or maintain any Loan as, or to convert any Loan into, a LIBOR
Loan, the obligations of such Lender to make, continue, maintain or convert any
Loans as or to LIBOR Loans shall, upon such determination, forthwith be
suspended until such Lender shall notify the Administrative Agent that the
circumstances causing such suspension no longer exist, which such Lender shall
do promptly upon obtaining actual knowledge of such change in circumstances
(PROVIDED that the rights and benefits of such Lender under this clause relating
to any period prior to such failure to give prompt notice shall not be limited
or otherwise adversely affected as a result of such failure) (with the date of
such notice being the "REINSTATEMENT DATE"), and (i) all LIBOR Loans previously
made by such Lender shall automatically convert into Base Rate Loans at the end
of the then current Interest Periods with respect thereto or sooner, if required
by such law or assertion, and (ii) all Loans thereafter to be made by such
Lender and outstanding prior to the Reinstatement Date shall be made as Base
Rate Loans, with interest thereon being payable on the same date that interest
is payable with respect to the corresponding Borrowing of LIBOR Loans made by
Lenders not so affected.

          SECTION 4.2    DEPOSITS UNAVAILABLE.  If the Administrative Agent
shall have determined that

          (a)  Dollar deposits in the relevant amount and for the relevant
     Interest Period are not available to the Administrative Agent in its
     relevant market; or

          (b)  by reason of circumstances affecting the Administrative Agent's
     relevant market, adequate means do not exist for ascertaining the interest
     rate applicable hereunder to LIBOR Loans,

then, upon notice from the Administrative Agent to the Company and the Lenders,
the obligations of all Lenders under SECTION 2.3 and SECTION 2.4 to make or
continue any Loans as, or to convert any Loans into, LIBOR Loans shall forthwith
be suspended until the Administrative Agent shall notify the Company and the
Lenders that the circumstances causing such suspension no longer exist, which
the Administrative Agent shall do promptly upon obtaining actual knowledge of
such change in circumstances (PROVIDED that the rights and benefits of the
Administrative Agent under this clause relating to any period prior to such
failure to give prompt notice shall not be limited or otherwise adversely
affected as a result of such failure).

          SECTION 4.3    INCREASED LIBOR LOAN COSTS, ETC.  The Company agrees
to reimburse each Lender for any increase in the cost to such Lender of, or
any reduction in the amount of any sum receivable by such Lender in respect
of, making, continuing or maintaining (or of its obligation to make, continue
or maintain) any Loans as, or of converting (or of its

                                       55


obligation to convert) any Loans into, LIBOR Loans (excluding any amounts,
whether or not constituting Taxes, referred to in SECTION 4.6) arising as a
result of any change in, or the introduction, adoption, effectiveness,
interpretation, reinterpretation or phase-in of, any law or regulation,
directive, guideline, decision or request (whether or not having the force of
law) of any court, central bank, regulator or other governmental authority that
occurs after the date upon which such Lender became a Lender hereunder. Such
Lender shall promptly notify the Administrative Agent and the Company in writing
of the occurrence of any such event, such notice to state, in reasonable detail,
the reasons therefor and the additional amount required fully to compensate such
Lender for such increased cost or reduced amount. Such additional amounts shall
be payable by the Company directly to such Lender within five days of its
receipt of such notice, and such notice shall, in the absence of manifest error,
be conclusive and binding on the Company.

          SECTION 4.4    FUNDING LOSSES.  In the event any Lender shall incur
any loss or expense (including any loss or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by such Lender
to make, continue or maintain any portion of the principal amount of any Loan
as, or to convert any portion of the principal amount of any Loan into, a LIBOR
Loan, but excluding any loss of margin after the date of any such conversion,
repayment, prepayment or failure to borrow, continue or convert) as a result of

          (a)  any conversion or repayment or prepayment of the principal amount
     of any LIBOR Loans on a date other than the scheduled last day of the
     Interest Period applicable thereto, whether pursuant to SECTION 3.1 or
     otherwise;

          (b)  any Loans not being borrowed as LIBOR Loans in accordance with
     the Borrowing Request therefor; or

          (c)  any Loans not being continued as, or converted into, LIBOR Loans
     in accordance with the Continuation/Conversion Notice therefor,

then, upon the written notice of such Lender to the Company (with a copy to the
Administrative Agent), the Company shall, within five days of its receipt
thereof, pay directly to such Lender such amount as will (in the reasonable
determination of such Lender) reimburse such Lender for such loss or expense.
Such written notice (which shall include calculations in reasonable detail)
shall, in the absence of manifest error, be conclusive and binding on the
Company.

          SECTION 4.5    INCREASED CAPITAL COSTS.  If any change in, or
the introduction, adoption, effectiveness, interpretation, reinterpretation or
phase-in of, any law or regulation, directive, guideline, decision or request
(whether or not having the force of law) of any court, central bank, regulator
or other governmental authority, in each case occurring after the applicable
Lender becomes a Lender hereunder, affects or would affect the amount of capital
required or expected to be maintained by any Lender or any Person controlling
such Lender, and such Lender determines (in its reasonable discretion) that the
rate of return on its or such controlling Person's capital as a consequence of
its Commitments, participation in Letters of Credit or the Loans made by such
Lender is reduced to a level below that which such Lender or such controlling
Person could have achieved but for the occurrence of any such circumstance,
then, in any such case upon notice from time to time by such Lender to the
Company, which


                                       56


such Lender shall give promptly upon its obtaining actual knowledge of such
circumstance (PROVIDED that the rights and benefits of such Lender under this
clause relating to any period prior to such failure to give prompt notice shall
not be limited or otherwise adversely affected as a result of such failure), the
Company shall immediately pay directly to such Lender additional amounts
sufficient to compensate such Lender or such controlling Person for such
reduction in rate of return. A statement of such Lender as to any such
additional amount or amounts (including calculations thereof in reasonable
detail) shall, in the absence of manifest error, be conclusive and binding on
the Company. In determining such amount, such Lender may use any method of
averaging and attribution that it (in its sole and absolute discretion) shall
deem applicable; PROVIDED, that such Lender may not impose materially greater
costs on the Company than on other similarly situated borrowers by virtue of any
such averaging or attribution method.

          SECTION 4.6    TAXES.

          (a)  All payments by the Company of principal of, and interest on, the
Loans and all other amounts payable hereunder or under any other Loan Document
(including Reimbursement Obligations, fees and expenses) shall be made free and
clear of and without deduction for any present or future income, excise, stamp
or franchise taxes and other taxes, fees, duties, withholdings or other charges
of any nature whatsoever imposed by any taxing authority, from or through which
payments originate or are made or deemed made by or to the Company, but
excluding (i) any income, excise, stamp or franchise taxes and other similar
taxes, fees, duties, withholdings or other charges imposed on any Lender or any
of the Agents by a jurisdiction under the laws of which such Lender or Agent is
organized or in which the principal executive office is located, or otherwise as
a result of a present or former connection between the applicable lending office
(or office through which it performs any of its actions as Lender or Agent) of
such Lender or Agent, and the jurisdiction of the governmental authority
imposing such tax or any political subdivision or taxing authority thereof or
therein (other than any such connection arising solely from such Agent or such
Lender having executed, delivered or performed its obligations or received a
payment under, or taken any action to enforce, this Agreement or any Note) or
(ii) any income, excise, stamp or franchise taxes and other similar taxes, fees,
duties, withholdings or other charges to the extent that they are in effect and
would apply (x) as of the date any Person becomes a Lender or Assignee Lender,
or (y) as of the date that any Lender changes its applicable lending office, to
the extent such taxes become applicable as a result of such change (other than a
change in an applicable lending office made pursuant to SECTION 4.10 below)
(such non-excluded items being called "TAXES").  In the event that any
withholding or deduction from any payment to be made by the Company hereunder is
required in respect of any Taxes pursuant to any applicable law, rule or
regulation, then the Company will (i) pay directly to the relevant taxing
authority the full amount required to be so withheld or deducted, (ii) promptly
forward to the Administrative Agent an official receipt or other documentation
available to the Company reasonably satisfactory to the Administrative Agent
evidencing such payment to such authority, and (iii) pay to the Administrative
Agent for the account of the applicable Lenders such additional amount or
amounts as is necessary to ensure that the net amount actually received by each
such Lender will equal the full amount such applicable Lender would have
received had no such withholding or deduction been required, PROVIDED, HOWEVER,
that the Company shall not be required to pay any such additional amounts in
respect of amounts payable to any Non-U.S. Lender or any Agent that is not
organized under the laws of the United States or a state thereof to the extent
that the related tax is imposed (or an


                                       57


exemption therefrom is not available) as a result of such Lender or Agent
failing to comply with the requirements of CLAUSE (b) of SECTION 4.6.

          Moreover, if any Taxes are directly asserted against either of the
Agents or any Lender with respect to any payment received by such Agent or such
Lender hereunder, such Agent or such Lender may pay such Taxes and the Company
will, upon written demand therefor, promptly pay to such Person such additional
amount (including any penalties, interest or expenses) as is necessary in order
that the net amount received by such Person (including any Taxes on such
additional amount) shall equal the amount of such Taxes paid by such Person;
PROVIDED, HOWEVER, that the Company shall not be obligated to make payment to
the Lenders or the Agents (as the case may be) pursuant to this sentence in
respect of penalties or interest attributable to any Taxes, if written demand
therefor has not been made by such Lenders or the Agents within 60 days from the
date on which such Lenders or the Agents knew of the imposition of Taxes by the
relevant taxing authority or for any additional imposition which may arise from
the failure of the Lenders or the Agents to apply payments in accordance with
the applicable tax law after the Company has made the payments required
hereunder; PROVIDED, FURTHER, HOWEVER, that the Company shall not be required to
pay any such additional amounts in respect of any amounts payable to any
Non-U.S. Lender or any Agent that is not organized under the laws of the United
States or a state thereof to the extent the related Tax is imposed as a result
of such Lender or Agent failing to comply with the requirements of CLAUSE (b) of
SECTION 4.6. After a Lender or an Agent (as the case may be) learns of the
imposition of Taxes, such Lender or Agent will act in good faith to notify the
Company of its obligations hereunder as soon as reasonably possible.

          If the Company fails to pay any Taxes when due to the appropriate
taxing authority or fails to remit to the Administrative Agent, for the account
of the respective Lenders, the required receipts or other required documentary
evidence, the Company shall indemnify the Lenders for any incremental Taxes,
interest or penalties that may become payable by any Lender as a result of any
such failure.

          (b)  Each Non-U.S. Lender shall, (i) on or prior to the date of the
execution and delivery of this Agreement, in the case of each Lender listed on
the signature pages hereof, or, in the case of an Assignee Lender, on or prior
to the date it becomes a Lender, execute and deliver to the Company and the
Administrative Agent, two or more (as the Company or the Agents may reasonably
request) United States Internal Revenue Service Forms W-8ECI or Forms W-8BEN (or
successor forms) establishing such Lender's exemption from United States federal
withholding tax or, solely if such Lender is claiming exemption from United
States withholding tax under SECTION 871(h) OR 881(c) of the Code with respect
to payments of "portfolio interest", United States Internal Revenue Service
Forms W-8BEN and a certificate signed by a duly authorized officer of such
Lender representing that such Lender is not a "bank" (within the meaning of
SECTION 881(c)(3)(A) of the Code), is not a 10 percent shareholder (within the
meaning of SECTION 871(h)(3)(B) of the Code) with respect to the Company and is
not a controlled foreign corporation with respect to which the Company is a
related person (within the meaning of SECTION 864(d)(4) of the Code) or such
other forms or documents (or successor forms or documents), appropriately
completed, establishing that payments to such Lender are exempt from withholding
or deduction of Taxes imposed by the United States; and (ii) deliver to the
Company and the Administrative Agent two further copies of any such form or
document on or


                                       58


before the date that any such form or document expires or becomes obsolete and
after the occurrence of any event requiring a change in the most recent such
form or document previously delivered by it to the Company. Each Lender and each
Agent agrees, to the extent reasonable and without material cost to it, to
provide to the Company and the Administrative Agent such other applicable forms
or certificates as would reduce or eliminate any Tax otherwise applicable.

          (c)  If the Company determines in good faith that a reasonable basis
exists for contesting the imposition of a Tax with respect to a Lender or either
of the Agents, the relevant Lender or Agent, as the case may be, shall
reasonably cooperate with the Company in challenging such Tax at the Company's
expense if requested by the Company; PROVIDED, HOWEVER, that nothing in this
SECTION 4.6 shall require any Lender to submit to the Company or any other
Person any tax returns or any part thereof, or to prepare or file any tax
returns other than as such Lender in its sole discretion shall determine.

          (d)  If a Lender or an Agent shall receive a refund (including any
offset or credits) from a taxing authority (as a result of any error in the
imposition of Taxes by such taxing authority) of any Taxes paid by the Company
pursuant to CLAUSE (a) above, such Lender or the Agent (as the case may be)
shall promptly pay the Company the amount so received, with interest from the
taxing authority with respect to such refund, net of any tax liability incurred
by such Lender or Agent that is attributable to the receipt of such refund and
such interest.

          (e)  Each Lender and each Agent agrees, to the extent reasonable and
without material cost to it, to cooperate with the Company to minimize any
amounts payable by the Company under this SECTION 4.6; PROVIDED, HOWEVER, that
nothing in this SECTION 4.6 shall require any Lender to take any action which,
in the sole discretion of such Lender, is inconsistent with its internal policy
and legal and regulatory restrictions.

          (f)  Notwithstanding anything expressed or implied to the contrary in
this Agreement or any other Loan Document (including any schedule or exhibit to
any of the foregoing), this SECTION 4.6 (and SECTION 4.11 insofar as it relates
to SECTION 4.6) shall constitute the complete and exclusive understanding of the
parties in respect of all matters relating to any Taxes (including interest
thereon, additions thereto and penalties in connection therewith).

          SECTION 4.7    PAYMENTS, COMPUTATIONS, ETC. Unless otherwise expressly
provided, all payments by or on behalf of the Company pursuant to this Agreement
or any other Loan Document shall be made by the Company to the Administrative
Agent for the PRO RATA account of the Lenders, Agents or Arranger, as
applicable, entitled to receive such payment.  All such payments required to be
made to the Administrative Agent shall be made, without setoff, deduction or
counterclaim, not later than 1:00 p.m., New York time, on the date due, in same
day or immediately available funds, to such account as the Administrative Agent
shall specify from time to time by notice to the Company.  Funds received after
that time shall be deemed to have been received by the Administrative Agent on
the next succeeding Business Day.  The Administrative Agent shall promptly remit
in same day funds to each Lender, Agent or Arranger, as the case may be, its
share, if any, of such payments received by the Administrative Agent for the
account of such Lender, Agent or Arranger, as the case may be.  All interest and
fees shall be computed on the basis of the actual number of days (including the
first day but excluding the last day) occurring during the period for which such
interest or fee is payable over a year comprised


                                       59


of 360 days (or, in the case of interest on a Base Rate Loan, 365 days or, if
appropriate, 366 days).  Whenever any payment to be made shall otherwise be
due on a day which is not a Business Day, such payment shall (except as
otherwise required by CLAUSE (i) of the definition of the term "INTEREST
PERIOD") be made on the next succeeding Business Day and such extension of
time shall be included in computing interest and fees, if any, in connection
with such payment.

          SECTION 4.8    SHARING OF PAYMENTS.  If any Lender shall obtain any
payment or other recovery (whether voluntary, involuntary, by application of
setoff or otherwise) on account of any Loan or Reimbursement Obligations (other
than pursuant to the terms of SECTIONS 4.3, 4.4 and 4.5) in excess of its PRO
RATA share of payments then or therewith obtained by all Lenders entitled
thereto, such Lender shall purchase from the other Lenders such participation in
the Credit Extensions made by them as shall be necessary to cause such
purchasing Lender to share the excess payment or other recovery ratably with
each of them; PROVIDED, HOWEVER, that if all or any portion of the excess
payment or other recovery is thereafter recovered from such purchasing Lender,
the purchase shall be rescinded and each Lender which has sold a participation
to the purchasing Lender shall repay to the purchasing Lender the purchase price
to the ratable extent of such recovery together with an amount equal to such
selling Lender's ratable share (according to the proportion of (i) the amount of
such selling Lender's required repayment to the purchasing Lender in respect of
such recovery to (ii) the total amount so recovered from the purchasing Lender)
of any interest or other amount paid or payable by the purchasing Lender in
respect of the total amount so recovered.  The Company agrees that any Lender so
purchasing a participation from another Lender pursuant to this Section may, to
the fullest extent permitted by law, exercise all its rights of payment
(including pursuant to SECTION 4.9) with respect to such participation as fully
as if such Lender were the direct creditor of the Company in the amount of such
participation.  If under any applicable bankruptcy, insolvency or other similar
law, any Lender receives a secured claim in lieu of a setoff to which this
Section applies, such Lender shall, to the extent practicable, exercise its
rights in respect of such secured claim in a manner consistent with the rights
of the Lenders entitled under this Section to share in the benefits of any
recovery on such secured claim.

          SECTION 4.9    SETOFF.  Each Lender shall, upon the occurrence of any
Event of Default described in CLAUSES (b) through (d) of SECTION 8.1.9 with
respect to any Obligor (other than Immaterial Subsidiaries) or, with the consent
of the Required Lenders, upon the occurrence of any other Event of Default, to
the fullest extent permitted by law, have the right to appropriate and apply to
the payment of the Obligations then due to it from the Company, and (as security
for such Obligations) the Company hereby grants to each Lender a continuing
security interest in, any and all balances, credits, deposits, accounts or
moneys of the Company (general or special, matured or unmatured and in whatever
currencies denominated) then or thereafter maintained with or otherwise held by
such Lender; PROVIDED, HOWEVER, that any such appropriation and application
shall be subject to the provisions of SECTION 4.8.  Each Lender agrees promptly
to notify the Company and the Administrative Agent after any such setoff and
application made by such Lender; PROVIDED, HOWEVER, that the failure to give
such notice shall not affect the validity of such setoff and application.  The
rights of each Lender under this Section are in addition to other rights and
remedies (including other rights of setoff under applicable law or otherwise)
which such Lender may have.

                                      60


          SECTION 4.10   MITIGATION.  Each Lender agrees that if it makes any
demand for payment under SECTIONS 4.3, 4.4, 4.5 or 4.6, or if any adoption or
change of the type described in SECTION 4.1 shall occur with respect to it, it
will use reasonable efforts (consistent with its internal policy and legal and
regulatory restrictions and so long as such efforts would not be disadvantageous
to it, as determined in its sole discretion) to designate a different lending
office if the making of such a designation would reduce or obviate the need for
the Company to make payments under SECTION 4.3, 4.4, 4.5 or 4.6, or would
eliminate or reduce the effect of any adoption or change described in SECTION
4.1.

          SECTION 4.11   REPLACEMENT OF LENDERS.  Each Lender hereby severally
agrees as set forth in this Section.  If any Lender (a "SUBJECT LENDER")
(i) makes demand upon the Company for (or if the Company is otherwise required
to pay) amounts pursuant to SECTION 4.3, 4.5 or 4.6, (ii) gives notice pursuant
to SECTION 4.1 requiring a conversion of such Subject Lender's LIBOR Loans to
Base Rate Loans or any change in the basis upon which interest is to accrue in
respect of such Subject Lender's LIBOR Loans or suspending such Lender's
obligation to make Loans as, or to convert Loans into, LIBOR Loans,
(iii) becomes a Non-Consenting Lender or (iv) becomes a Non-Funding Lender, the
Company may, within 180 days of receipt by the Company of such demand or notice
(or the occurrence of such other event causing the Company to be required to pay
such compensation) or within 180 days of such Lender becoming a Non-Consenting
Lender or a Non-Funding Lender, as the case may be, give notice (a "REPLACEMENT
NOTICE") in writing to the Agents and such Subject Lender of its intention to
replace such Subject Lender with a financial institution (a "REPLACEMENT
LENDER") designated in such Replacement Notice.  If the Agents shall, in the
exercise of their reasonable discretion and within 30 days of their receipt of
such Replacement Notice, notify the Company and such Subject Lender in writing
that the designated financial institution is satisfactory to the Agents (such
consent not being required where the Replacement Lender is already a Lender),
then such Subject Lender shall, subject to the payment of any amounts due
pursuant to SECTION 4.4, assign, in accordance with SECTION 11.11.1, all of its
Commitments, Loans and other rights and obligations under this Agreement and all
other Loan Documents (including, without limitation, Reimbursement Obligations)
to such designated financial institution; PROVIDED, HOWEVER, that (i) such
assignment shall be without recourse, representation or warranty and shall be on
terms and conditions reasonably satisfactory to such Subject Lender and such
designated financial institution and (ii) the purchase price paid by such
designated financial institution shall be in the amount of such Subject Lender's
Loans and its Percentage in respect of the Revolving Loan Commitment of such
Reimbursement Obligations, together with all accrued and unpaid interest and
fees in respect thereof, plus all other amounts (including the amounts demanded
and unreimbursed under SECTIONS 4.3, 4.5 and 4.6), owing to such Subject Lender
hereunder.  Upon the effective date of an assignment described above, the
designated financial institution or Replacement Lender shall become a "Lender"
for all purposes under this Agreement and the other Loan Documents.

                                      61


                                     ARTICLE V
                          CONDITIONS TO CREDIT EXTENSIONS

          SECTION 5.1    INITIAL CREDIT EXTENSION.  The obligations of the
Lenders and the Issuers to fund the initial Credit Extension shall be subject to
the prior or concurrent satisfaction of each of the conditions precedent set
forth in this SECTION 5.1.

          SECTION 5.1.1. RESOLUTIONS, ETC.  The Agents shall have received from
each Obligor a certificate, dated the date of the initial Credit Extension, of
its Secretary or Assistant Secretary as to (i) resolutions of its Board of
Directors then in full force and effect authorizing the execution, delivery and
performance of each Loan Document to be executed by it, and (ii) the incumbency
and signatures of those of its officers authorized to act with respect to each
Loan Document executed by it, upon which certificate each Agent and each Lender
may conclusively rely until it shall have received a further certificate of the
Secretary or Assistant Secretary of such Obligor canceling or amending such
prior certificate.

          SECTION 5.1.2. TRANSACTION DOCUMENTS.  The Agents shall have received
(with copies for each Lender that shall have expressly requested copies thereof)
copies of fully executed versions of the Transaction Documents, certified to be
true and complete copies thereof by an Authorized Officer of the Company.  The
Merger Agreement shall be in full force and effect and shall not have been
modified or waived in any material respect, nor shall there have been any
forbearance to exercise any material rights with respect to any of the terms or
provisions relating to the conditions to the consummation of the Merger set
forth in the Merger Agreement unless otherwise agreed to by the Required
Lenders;

          SECTION 5.1.3. CONSUMMATION OF MERGER.  The Agents shall have received
evidence satisfactory to each of them that all actions necessary to consummate
the Merger (including the filing of the Certificate of Merger with the Secretary
of State of the State of Minnesota) shall have been taken in accordance with
SECTION 302A.673 of the Business Corporation Act of the State of Minnesota.

          SECTION 5.1.4. CLOSING DATE CERTIFICATE.  Each of the Agents shall
have received, with copies for each Lender, the Closing Date Certificate,
substantially in the form of EXHIBIT D hereto, dated the date of the initial
Credit Extension and duly executed and delivered by an Authorized Officer of the
Company, in which certificate the Company shall agree and acknowledge that the
statements made therein shall be deemed to be true and correct representations
and warranties of the Company made as of such date under this Agreement, and, at
the time such certificate is delivered, such statements shall in fact be true
and correct.

          SECTION 5.1.5. DELIVERY OF NOTES.  The Agents shall have received, for
the account of each Lender that shall have requested a Note not less than two
Business Days prior to the Closing Date, a Note of the Company in respect of
each applicable Tranche duly executed and delivered by the Company.

          SECTION 5.1.6. SUBSIDIARY GUARANTY.  The Agents shall have received
the Subsidiary Guaranty, dated the date hereof, duly executed and delivered by
an Authorized

                                      62



Officer of each Restricted Subsidiary of the Company that is a U.S.
Subsidiary in existence on the date of the initial Credit Extension (after
giving effect to the Merger).

          SECTION 5.1.7. PLEDGE AGREEMENTS.  The Agents shall have received
executed counterparts of

          (a)  (i) the Holdco Pledge Agreement, dated as of the date hereof,
     duly executed by an Authorized Officer of Holdco, together with the
     certificates evidencing all of the issued and outstanding shares of Capital
     Stock of the Company which shall be pledged pursuant to the Holdco Pledge
     Agreement, which certificates shall be accompanied by undated stock powers
     duly executed in blank; and (ii) the Company Pledge Agreement, dated as of
     the date hereof, duly executed by an Authorized Officer of the Company,
     together with (i) the certificates evidencing all of the issued and
     outstanding shares of Capital Stock of each Restricted Subsidiary of the
     Company which shall be pledged pursuant to the Company Pledge Agreement,
     which certificates shall in each case be accompanied by undated stock
     powers duly executed in blank and (ii) the Intercompany Note and any other
     intercompany notes between the Company and its Restricted Subsidiaries (if
     any) which shall be pledged pursuant to the Company Pledge Agreement duly
     indorsed to the order of the Administrative Agent; and

          (b)  the Subsidiary Pledge Agreement, dated as of the date hereof,
     duly executed by an Authorized Officer of each Restricted Subsidiary of the
     Company (after giving effect to the Transaction) which is a U.S.
     Subsidiary, together with the certificates evidencing all of the issued and
     outstanding shares of Capital Stock of each indirect Restricted Subsidiary
     of the Company which shall be pledged pursuant to such Subsidiary Pledge
     Agreement, which certificates shall in each case be accompanied by undated
     stock powers duly executed in blank;

PROVIDED, HOWEVER, that neither the Company nor any of its Restricted
Subsidiaries shall be required to pledge in excess of 65% of the outstanding
voting stock of any Non-U.S. Subsidiary.  If any securities pledged pursuant to
a Pledge Agreement are uncertificated securities or are held through a
securities intermediary, the Administrative Agent shall have obtained "control"
(as defined in the UCC) over such securities and shall have received such
instruments and documents, if any, as the Administrative Agent shall deem
necessary or in the reasonable opinion of the Administrative Agent desirable
under applicable law to perfect the security interest of the Administrative
Agent in such securities.

          SECTION 5.1.8. SECURITY AGREEMENT.  The Agents shall have received
executed counterparts of the Security Agreement, dated as of the date hereof,
duly executed by Holdco, the Company and its Restricted Subsidiaries that are
U.S. Subsidiaries, together with

          (a)  executed Uniform Commercial Code financing statements
     (Form UCC-1) naming Holdco, the Company or the relevant Restricted
     Subsidiary as the debtor and the Administrative Agent as the secured party,
     or other similar instruments or documents, to be filed under the Uniform
     Commercial Code of all jurisdictions as may be necessary or, in the opinion
     of the Administrative Agent, desirable to perfect the security interest of
     the Administrative Agent pursuant to the Security Agreement (PROVIDED that
     perfection of

                                      63


     security interests in (i) motor vehicles shall not be required, (ii)
     certain intellectual property owned as of the Closing Date by Holdco,
     the Company or its Restricted Subsidiaries that are U.S. Subsidiaries
     shall be completed in accordance with SECTION 7.1.11 and (iii) inventory
     and equipment located at document service centers maintained by Holdco or
     any of its Restricted Subsidiaries at sites owned or leased by clients of
     Holdco or such Restricted Subsidiaries, as the case may be, shall not be
     required); and

          (b)  certified copies of Uniform Commercial Code Requests for
     Information or copies (Form UCC-11), or a similar search report certified
     by a party acceptable to the Agents, dated a date reasonably near to the
     date of the initial Credit Extension, listing all effective financing
     statements which name Holdco, the Company or the relevant Restricted
     Subsidiary (under its present name and any previous names) as the debtor
     and which are filed in the jurisdictions in which filings are to be made
     pursuant to CLAUSE (a) above, together with copies of such financing
     statements.

          SECTION 5.1.9. FINANCIAL INFORMATION, ETC. The Agents shall have
received, with counterparts for each Lender,

          (a)  (i) audited consolidated balance sheets of Holdco and its
     Subsidiaries as at January 31, 1999 and January 31, 1998 and audited
     consolidated statements of operations, cash flows and stockholders' equity
     for the periods ended January 31, 1999, January 31, 1998 and January 31,
     1997 and (ii) an unaudited consolidated balance sheet of Holdco and its
     Subsidiaries as at July 31, 1999 and unaudited consolidated statements of
     operations and cash flows for the three months and portion of the fiscal
     year, respectively, then ended, prepared in each case in a manner
     consistent with the historical audited statements (except for normal
     year-end adjustments and the absence of footnotes) (collectively, the
     "BASE FINANCIAL STATEMENTS"); and

          (b)  (i) a pro forma consolidated balance sheet of Holdco and its
     Subsidiaries as of July 31, 1999 after giving effect to the Transaction
     (the "Pro Forma Balance Sheet"); and (ii) projected consolidated financial
     statements (including balance sheets and statements of operations and cash
     flows of Holdco and its Subsidiaries) for the six-year period ending
     January 31, 2006, certified by an Authorized Officer that is the chief
     financial officer or controller of Holdco, giving effect to the
     consummation of the Transaction and reflecting the proposed legal and
     capital structure of Holdco and its Subsidiaries, which legal and capital
     structure shall be, in all material respects, as described in the Holdco
     Proxy Statement or otherwise reasonably satisfactory to the Syndication
     Agent.

          SECTION 5.1.10.     SOLVENCY, ETC.  The Agents shall have received an
opinion letter from Valuation Research Corporation addressed to the Agents and
each Lender and dated as of the date of the initial Credit Extensions,
supporting the conclusions that, after giving effect to the Transaction, the
initial Credit Extensions and the related transactions contemplated hereby,
Holdco and its Subsidiaries on a consolidated basis are Solvent, such opinion
letter to be in form, substance and scope reasonably satisfactory to the Agents.

                                      64


          SECTION 5.1.11.     COMMON EQUITY CONTRIBUTION, PREFERRED EQUITY
CONTRIBUTION, ASSET CONTRIBUTION, INTERCOMPANY LOAN AND/OR CLOSING DATE DIVIDEND
AND SENIOR SUBORDINATED BRIDGE NOTES OR SENIOR SUBORDINATED NOTES.  The Agents
shall have received evidence satisfactory to each of them that (i) the members
of the Company's management shall have retained not less than $21,500,000 of
their existing Capital Stock in Holdco valued at the Merger consideration value
per share and after giving effect to the Common Equity Contribution, the
Preferred Equity Contribution, the Senior Subordinated Notes or the Senior
Subordinated Bridge Notes, the Loans made on the Closing Date and the
Intercompany Loan, Holdco shall have sufficient cash on hand in the amount
required to consummate the Transaction, (ii) Merger Sub shall have received not
less than $70,600,000 in gross cash proceeds or Holdco common stock purchased
for cash by the DLJMB Entities from the DLJMB Entities' portion of the Common
Equity Contribution and not less than $40,000,000 in gross cash proceeds from
the Preferred Equity Contribution, (iii) immediately following the consummation
of the Merger, Holdco shall make the Asset Contribution to the Company and shall
have entered into the Administrative Services Agreement with the Company, (iv)
the Intercompany Loan and/or Closing Date Dividend shall have been made, and (v)
Holdco shall have received not less than $136,000,000 in gross cash proceeds
from the issuance of the Senior Subordinated Bridge Notes or the Senior
Subordinated Notes and warrants to purchase common stock of Holdco, all on terms
and conditions satisfactory to the Agents.

          SECTION 5.1.12.     LITIGATION.  There shall exist no pending or
threatened material action, suit, investigation, litigation or proceeding in any
court or before any arbitrator or governmental instrumentality that could
reasonably be expected to have a Material Adverse Effect or could reasonably be
expected to materially, adversely affect the consummation of the Transaction.

          SECTION 5.1.13.     MATERIAL ADVERSE CHANGE.  Except as may be
disclosed in Schedule 3.10 to the Merger Agreement, no facts, events or
circumstances constituting or having a Material Adverse Effect shall have
occurred since January 31, 1999.

          SECTION 5.1.14.     RELIANCE LETTERS. The Agents shall, unless
otherwise agreed, have received reliance letters, dated the date of the initial
Credit Extension and addressed to each Lender and each Agent, in respect of each
of the legal opinions (other than "disclosure" and other similar opinions)
delivered in connection with the Transaction.

          SECTION 5.1.15.     OPINIONS OF COUNSEL.  The Agents shall have
received opinions, dated the date of the initial Credit Extension and addressed
to the Agents and all Lenders from

          (a)  Davis Polk & Wardwell, special New York counsel to each of the
     Obligors, in substantially the form of EXHIBIT K-1 hereto;

          (b)  Oppenheimer Wolff & Donnelly LLP, special local counsel to the
     Company, in substantially the form of EXHIBIT K-2 hereto; and

          (c)  Steve Machov, General Counsel of the Company, in substantially
     the form of EXHIBIT K-3 hereto.

                                      65



          SECTION 5.1.16.     INSURANCE.  The Agents shall have received
satisfactory evidence of the existence of insurance in compliance with SECTION
7.1.4 (including all endorsements included therein), and the Administrative
Agent shall be named additional insured or loss payee, on behalf of the Lenders,
pursuant to documentation reasonably satisfactory to the Agents and the Company.

          SECTION 5.1.17.     CLOSING FEES, EXPENSES, ETC. The Agents and the
Arranger shall have received, each for its own respective account, or, in the
case of the Administrative Agent, for the account of each Lender, as the case
may be, all fees, costs and expenses due and payable pursuant to SECTIONS 3.3
and 11.3, if then invoiced.

          SECTION 5.1.18.     SATISFACTORY LEGAL FORM.  All documents executed
or submitted pursuant hereto by or on behalf of Holdco or any of its
Subsidiaries or any other Obligors shall be reasonably satisfactory in form and
substance to the Agents and their counsel; the Agents and their counsel shall
have received all information, approvals, opinions, documents or instruments
that the Agents or their counsel shall have reasonably requested.

          SECTION 5.1.19.     REPAYMENT OF EXISTING DEBT.  Contemporaneously
with the application of the proceeds of the Loans to be made on the Closing
Date, (a) Holdco shall use not more than $87,500,000 to repay in full the
aggregate principal amount of Existing Debt (other than Existing Letters of
Credit) plus accrued and unpaid interest thereon, (b) Holdco and its Restricted
Subsidiaries shall have terminated any commitments to lend or make other
extensions of credit under the Existing Debt and (c) Holdco and its Restricted
Subsidiaries shall have taken all action necessary to terminate or release all
Liens securing the Existing Debt in connection therewith, or arrangements
satisfactory to the Agents for the repayment of such Existing Debt, the
termination of such commitments and the release of such Liens shall have been
made.  There shall be no Indebtedness of Holdco or its Restricted Subsidiaries
outstanding after consummation of the Closing Date transactions other than
Indebtedness permitted under SECTION 7.2.2.

          SECTION 5.1.20.     CORPORATE STRUCTURE, OWNERSHIP, ETC.  The
corporate, tax, capital, shareholder and ownership structure of Holdco and its
Subsidiaries before and after the Transaction shall be as described or
identified to the Agents prior to the date hereof or as is otherwise reasonably
satisfactory to the Agents.

          SECTION 5.1.21.     CERTAIN APPROVALS.  All material governmental,
shareholder and third party consents (including Hart-Scott-Rodino clearance) and
approvals necessary in connection with the Transaction, the related financings,
the continuing operation of Holdco and its Restricted Subsidiaries' businesses
and other transactions contemplated hereby shall have been obtained, and all
applicable waiting periods shall have expired without any action being taken by
any competent authority that could reasonably be expected to restrain, prevent
or impose any materially adverse conditions on the Transaction, and no law or
regulation shall be applicable which could reasonably be expected to have any
such effect.

          Each Lender hereby agrees that by its execution and delivery of its
signature page hereto and by the funding of its Loans to be made on the Closing
Date, such Lender approves of and consents to each of the matters set forth in
this Section 5.1 which must be approved by, or

                                      66


satisfactory to, Required Lenders, PROVIDED that, in the case of any
agreement or document which must be approved by, or which must be
satisfactory to, Required Lenders, a copy of such agreement or document shall
have been delivered to such Lender on or prior to the Closing Date.

          SECTION 5.2    ALL CREDIT EXTENSIONS.  The obligation of each Lender
and, if applicable, each Issuer, to make any Credit Extension (including its
initial Credit Extension) shall be subject to the satisfaction of each of the
conditions precedent set forth in this SECTION 5.2.

          SECTION 5.2.1. COMPLIANCE WITH WARRANTIES, NO DEFAULT, ETC. Both
before and after giving effect to any Credit Extension the following statements
shall be true and correct:

          (a)  the representations and warranties set forth in ARTICLE VI and in
     each other Loan Document shall, in each case, be true and correct in all
     material respects with the same effect as if then made (unless stated to
     relate solely to an earlier date, in which case such representations and
     warranties shall be true and correct in all material respects as of such
     earlier date);

          (b)  in the case of Revolving Loans, Swing Line Loans or Letters of
     Credit (x) the sum of (A) the aggregate outstanding principal amount of all
     Revolving Loans and Swing Line Loans and (B) the Letter of Credit
     Outstandings will not exceed the Revolving Loan Commitment Amount, (y) the
     aggregate outstanding principal amount of all Swing Line Loans will not
     exceed the Swing Line Loan Commitment Amount, and (z) the Letter of Credit
     Outstandings will not exceed the Letter of Credit Commitment Amount; and

          (c)  no Default shall have then occurred and be continuing.

          SECTION 5.2.2. CREDIT EXTENSION REQUEST. Except with respect to the
deemed issuance of the Existing Letters of Credit on the Closing Date, the
Administrative Agent shall have received a Borrowing Request if Loans are being
requested, or an Issuance Request if a Letter of Credit is being requested or
extended.  Each of the delivery of a Borrowing Request or Issuance Request and
the acceptance by the Company of the proceeds of any Credit Extension shall
constitute a representation and warranty by the Company that on the date of such
Credit Extension (both immediately before and after giving effect thereto and
the application of the proceeds thereof) the statements made in SECTION 5.2.1
are true and correct.

                                     ARTICLE VI
                           REPRESENTATIONS AND WARRANTIES

     In order to induce the Lenders, the Issuers and the Agents to enter into
this Agreement and to make Credit Extensions hereunder, each of Holdco and the
Company represents and warrants unto the Agents, each Issuer and each Lender as
set forth in this ARTICLE VI.

          SECTION 6.1    ORGANIZATION, ETC.  Except as disclosed in ITEM 6.1
("Organization, etc.") of the Disclosure Schedule, each of Holdco, the Company
and each other Restricted Subsidiary (a) is validly organized and existing and
in good standing to the extent

                                      67


required under the laws of the jurisdiction of its incorporation, except to
the extent that the failure to be in good standing would not reasonably be
expected to have a Material Adverse Effect, (b) is duly qualified to do
business and is in good standing to the extent required under the laws of
each jurisdiction where the nature of its business requires such
qualification, except to the extent that the failure to qualify would not
reasonably be expected to result in a Material Adverse Effect, and (c) has
full power and authority and holds all requisite governmental licenses,
permits and other approvals to (i) enter into and perform its obligations in
connection with the Transaction and its Obligations under this Agreement and
each other Loan Document to which it is a party and (ii) own and hold under
lease its property and to conduct its business substantially as currently
conducted by it except, in the case of this CLAUSE (b)(ii), where the failure
to do so could not reasonably be expected to result in a Material Adverse
Effect.

          SECTION 6.2    DUE AUTHORIZATION, NON-CONTRAVENTION, ETC.  The
execution, delivery and performance by each of Holdco and the Company of this
Agreement and each other Loan Document executed or to be executed by it, and the
execution, delivery and performance by each other Obligor of each Loan Document
executed or to be executed by it and Holdco's, the Company's and, where
applicable, each such other Obligor's participation in the consummation of the
Transaction, are within Holdco's, the Company's and each such Obligor's powers,
have been duly authorized by all necessary action, and do not

          (a)  contravene Holdco's, the Company's or any such Obligor's Organic
Documents;

          (b)  contravene any contractual restriction (other than any
     contractual restriction that shall have been waived on or prior to the
     Closing Date), law or governmental regulation or court decree or order
     binding on or affecting Holdco, the Company or any such Obligor, where such
     contravention, individually or in the aggregate, could reasonably be
     expected to have a Material Adverse Effect; or

          (c)  result in, or require the creation or imposition of, any Lien on
     any of Holdco's, the Company's or any other Obligor's properties, except
     pursuant to the terms of a Loan Document.

          SECTION 6.3    GOVERNMENT APPROVAL, REGULATION, ETC. No authorization
or approval or other action by, and no notice to or filing with, any
governmental authority or regulatory body or other Person, is required for the
due execution, delivery or performance by Holdco, the Company or any other
Obligor of this Agreement or any other Loan Document to which it is a party,
except as have been duly obtained or made and are in full force and effect or
those which the failure to obtain or make could not reasonably be expected to
have a Material Adverse Effect. All authorizations, approvals and other actions
by, and all notices to and filings with, any governmental authority or
regulatory body that are required pursuant to the Merger Agreement in connection
with the Transaction have been duly obtained or made and are in full force and
effect, except those which the failure to obtain or make could not reasonably be
expected to have a Material Adverse Effect.  None of Holdco, the Company or any
other Obligor is an "investment company" within the meaning of the Investment
Company Act of 1940, as amended, or a "holding company", or a "subsidiary
company" of a "holding company", or an

                                     68


"affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company", within the meaning of the Public Utility Holding Company Act of
1935, as amended.

          SECTION 6.4    VALIDITY, ETC.  This Agreement constitutes, and each
other Loan Document executed by Holdco or the Company will, on the due execution
and delivery thereof, constitute, the legal, valid and binding obligation of
each of Holdco and the Company as is a party thereto, in each case, enforceable
against Holdco or the Company, as the case may be, in accordance with its terms;
and each Loan Document executed pursuant hereto by each other Obligor will, on
the due execution and delivery thereof by such Obligor, be the legal, valid and
binding obligation of such Obligor enforceable in accordance with its terms, in
each case with respect to this SECTION 6.4 subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.

          SECTION 6.5    FINANCIAL INFORMATION.  Holdco has delivered to the
Agents and each Lender copies of (i) the Base Financial Statements and (ii) the
Pro Forma Balance Sheet.  Each of the financial statements described above has
been prepared in accordance with GAAP consistently applied (in the case of
CLAUSE (i)) and, in the case of CLAUSE (ii), on a basis substantially consistent
with the basis used to prepare the financial statements referred to in CLAUSE
(i), and (in the case of CLAUSE (i)) present fairly the consolidated financial
condition of the corporations covered thereby as at the date thereof and the
results of their operations for the periods then ended and (in the case of
CLAUSE (ii)) include appropriate pro forma adjustments to give pro forma effect
to the Transaction.

          SECTION 6.6    NO MATERIAL ADVERSE EFFECT.  Since January 31, 1999, no
facts, events or conditions have occurred which constitute a Material Adverse
Effect.

          SECTION 6.7    LITIGATION, LABOR CONTROVERSIES, ETC.  There is no
pending or, to the knowledge of Holdco or the Company, threatened litigation,
action, proceeding or governmental investigation affecting any Obligor, or any
of their respective properties, businesses, assets or revenues, which could
reasonably be expected to result in a Material Adverse Effect except as
disclosed in ITEM 6.7 ("Litigation") of the Disclosure Schedule.  No development
has occurred in any litigation, action, labor controversy, arbitration or
governmental investigation or other proceeding disclosed in ITEM 6.7
("Litigation") of the Disclosure Schedule which could reasonably be expected to
have a Material Adverse Effect.

          SECTION 6.8    SUBSIDIARIES.  Holdco has only those Subsidiaries
(i) which are identified in ITEM 6.8 ("Existing Subsidiaries") of the Disclosure
Schedule as Restricted Subsidiaries or Unrestricted Subsidiaries, or (ii) which
are permitted to have been created or acquired in accordance with SECTION 7.2.5
or 7.2.8.

          SECTION 6.9    OWNERSHIP OF PROPERTIES.  Except to the extent that the
failure to do so could not reasonably be expected to have a Material Adverse
Effect, Holdco, the Company and each other Restricted Subsidiary owns good title
to, or leasehold interests in, all of its properties and assets (other than
insignificant properties and assets), real and personal, tangible and
intangible, of any nature whatsoever (including patents, trademarks, trade
names,

                                      69


service marks and copyrights), free and clear of all Liens or material
claims (including material infringement claims with respect to patents,
trademarks, copyrights and the like), except as permitted pursuant to
SECTION 7.2.3.

          SECTION 6.10   TAXES.  Except as set forth in ITEM 6.10 ("Taxes") of
the Disclosure Schedule, each of Holdco and its Subsidiaries has filed all
federal and other material tax returns required by law to have been filed by it
and has paid all material taxes and governmental charges thereby shown to be
owing, except any such taxes or charges which are being contested in good faith
by appropriate proceedings and for which adequate reserves in accordance with
GAAP shall have been set aside on its books.

          SECTION 6.11   PENSION AND WELFARE PLANS.  During the
twelve-consecutive-month period prior to the date of the execution and
delivery of this Agreement, no steps have been taken to terminate any Pension
Plan, and no contribution failure has occurred with respect to any Pension
Plan sufficient to give rise to a Lien under SECTION 302(f) of ERISA, which,
in either case, is reasonably expected to lead to a liability of Holdco or
any member of the Controlled Group to such Pension Plan in excess of
$7,500,000.  No condition exists or event or transaction has occurred with
respect to any Pension Plan which could reasonably be expected to result in
the incurrence by Holdco or any member of the Controlled Group of any
material liability, fine or penalty other than such condition, event or
transaction which would not reasonably be expected to have a Material Adverse
Effect.  Except as disclosed in ITEM 6.11 ("Employee Benefit Plans") of the
Disclosure Schedule or otherwise approved by the Agents (such approval not to
be unreasonably withheld or delayed), since the date of the last financial
statement neither of Holdco nor the Company has increased any contingent
liability with respect to any post-retirement benefit under a Welfare Plan,
other than liability for continuation coverage described in Part 6 of
Subtitle B of Title I of ERISA, except as would not have a Material Adverse
Effect.

          SECTION 6.12   ENVIRONMENTAL WARRANTIES.  Except as set forth in
ITEM 6.12 ("Environmental Matters") of the Disclosure Schedule or as,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect:

          (a)  all facilities and property owned or leased by Holdco or any of
     its Restricted Subsidiaries are in compliance with all Environmental Laws;

          (b)  there are no pending or threatened

               (i)    written claims, complaints, notices or requests for
          information received by Holdco or any of its Restricted Subsidiaries
          with respect to any alleged violation of any Environmental Law, or

               (ii)   written complaints, notices or inquiries to Holdco or any
          of its Restricted Subsidiaries regarding potential liability under any
          Environmental Law;

          (c)  to the knowledge of Holdco and the Company, there have been no
     releases of Hazardous Materials at, on or under any property now or
     previously owned or leased by Holdco or any of its Restricted Subsidiaries;

                                      70


          (d)  Holdco and its Restricted Subsidiaries have been issued and are
     in compliance with all permits, certificates, approvals, licenses and other
     authorizations relating to environmental matters and necessary or desirable
     for their businesses;

          (e)  no property now or, to the best knowledge of Holdco or the
     Company, previously owned or leased by Holdco or any of its Restricted
     Subsidiaries is listed or, to the knowledge of Holdco or the Company,
     proposed for listing (with respect to owned property only) on the National
     Priorities List pursuant to CERCLA, on the CERCLIS or on any similar state
     list of sites requiring investigation or clean-up;

          (f)  to the best knowledge of Holdco and the Company, there are no
     underground storage tanks, active or abandoned, including petroleum storage
     tanks, on or under any property now or previously owned or leased by Holdco
     or any of its Restricted Subsidiaries;

          (g)  to the knowledge of Holdco and the Company, Holdco, and its
     Restricted Subsidiaries have not directly transported or directly arranged
     for the transportation of any Hazardous Material to any location (i) which
     is listed or to the knowledge of Holdco and the Company, proposed for
     listing on the National Priorities List pursuant to CERCLA, on the CERCLIS
     or on any similar state list, or (ii) which is the subject of federal,
     state or local enforcement actions or other investigations relating to any
     Environmental Laws;

          (h)  to the knowledge of Holdco and the Company, there are no
     polychlorinated biphenyls or friable asbestos present in a manner or
     condition requiring remedial action to comply with any Environmental Law at
     any property now or previously owned or leased by Holdco or any of its
     Restricted Subsidiaries; and

          (i)  to the knowledge of Holdco and the Company, no conditions exist
     at, on or under any property now or previously owned or leased by Holdco or
     any of its Restricted Subsidiaries which, with the passage of time, or the
     giving of notice or both, would give rise to liability to Holdco or any of
     its Restricted Subsidiaries under any Environmental Law.

          SECTION 6.13   REGULATIONS U AND X.  Neither Holdco nor the Company is
engaged in the business of extending credit for the purpose of purchasing or
carrying margin stock, and no proceeds of any Credit Extension will be used in
violation of F.R.S. Board Regulation U or X.  Terms for which meanings are
provided in F.R.S. Board Regulation U or X or any regulations substituted
therefor, as from time to time in effect, are used in this Section with such
meanings.

          SECTION 6.14   ACCURACY OF INFORMATION.  All material factual
information concerning the financial condition, operations or prospects of
Holdco and its Subsidiaries heretofore or contemporaneously furnished by or on
behalf of Holdco or the Company in writing to the Agents, the Arranger, any
Issuer or any Lender for purposes of or in connection with this Agreement or any
transaction contemplated hereby or with respect to the Transaction is, and all
other such factual information hereafter furnished by or on behalf of Holdco or
any of its

                                      71


Subsidiaries to the Agents, the Arranger, any Issuer or any Lender will be,
taken as a whole, true and accurate in every material respect on the date as
of which such information is dated or certified and such information is not,
or shall not be, taken as a whole, as the case may be, incomplete by omitting
to state any fact necessary to make such information not materially
misleading.

     Any term or provision of this Section to the contrary notwithstanding,
insofar as any of the factual information described above includes assumptions,
estimates, projections or opinions, no representation or warranty is made herein
with respect thereto; PROVIDED, HOWEVER, that to the extent any such
assumptions, estimates, projections or opinions are based on factual matters,
Holdco or the Company has reviewed such factual matters and nothing has come to
its attention in the context of such review which would lead it to believe that
such factual matters were not or are not true and correct in all material
respects or that such factual matters omit to state any material fact necessary
to make such assumptions, estimates, projections or opinions not misleading in
any material respect.

          SECTION 6.15   SOLVENCY.  The Transaction (including the incurrence of
the initial Credit Extensions hereunder, the incurrence by Holdco of the
Indebtedness represented by the Senior Subordinated Bridge Notes or the Senior
Subordinated Notes, the execution and delivery by the Subsidiary Guarantors of
the Subsidiary Guaranty and the application of the proceeds of the Credit
Extensions) will not involve or result in any fraudulent transfer or fraudulent
conveyance under the provisions of SECTION 548 of the Bankruptcy Code (11 U.S.C.
Section  101 ET SEQ., as from time to time hereafter amended, and any successor
or similar statute) or any applicable state law respecting fraudulent transfers
or fraudulent conveyances.  On the Closing Date, after giving effect to the
Transaction, the Company is Solvent.

          SECTION 6.16   CREATION, PERFECTION AND PRIORITY OF LIENS.  The
execution and delivery of the Loan Documents by the Obligors, together with
actions taken pursuant to SECTIONS 5.1.7, 5.1.8, 7.1.8 , 7.1.11 and 7.1.12 are
effective or will be effective, once taken, to create in favor of the
Administrative Agent for the benefit of Lenders, as security for the respective
Secured Obligations (as defined in the applicable Loan Document in respect of
any collateral security for the Obligations), a valid and perfected Lien on the
collateral purportedly covered thereby (except that Liens on motor vehicles need
not be perfected and Liens on real property or interests therein shall only be
required to the extent set forth in SECTIONS 7.1.8 and 7.1.12) subject only to
Liens permitted under SECTION 7.2.3.

          SECTION 6.17   YEAR 2000 COMPLIANCE.  The Company will promptly notify
the Administrative Agent in the event the Company discovers or determines that
any computer application (including those of its suppliers and vendors) that is
material to Holdco's or its Restricted Subsidiaries' business and operations
will not be Year 2000 compliant as of January 1, 2000, except to the extent that
such failure could not reasonably be expected to have a Material Adverse Effect.

                                   72


                                    ARTICLE VII
                                     COVENANTS

          SECTION 7.1    AFFIRMATIVE COVENANTS.  Holdco and the Company agree
with the Agents, each Issuer and each Lender that, until all Commitments have
terminated and all Obligations have been paid and performed in full, Holdco and
the Company will perform the obligations set forth in this SECTION 7.1.

          SECTION 7.1.1. FINANCIAL INFORMATION, REPORTS, NOTICES, ETC.  The
Company will furnish, or will cause to be furnished, to each Lender and each
Agent copies of the following financial statements, reports, notices and
information:

          (a)  as soon as available and in any event within 60 days after the
     end of each of the first three Fiscal Quarters of each Fiscal Year of
     Holdco (or, if Holdco is required to file such information on a Form 10-Q
     with the Securities and Exchange Commission, promptly following such
     filing), a consolidated balance sheet of Holdco and its Subsidiaries as of
     the end of such Fiscal Quarter, together with the related consolidated
     statement of operations for such Fiscal Quarter and for the period
     commencing at the end of the previous Fiscal Year and ending with the end
     of such Fiscal Quarter and the related consolidated statement of cash flows
     for the period commencing at the end of the previous Fiscal Year and ending
     with the end of such Fiscal Quarter (it being understood that the foregoing
     requirement may be satisfied by delivery of Holdco's report to the
     Securities and Exchange Commission on Form 10-Q, if any), certified by an
     Authorized Officer;

          (b)  as soon as available and in any event within 105 days after the
     end of each Fiscal Year of Holdco (or, if Holdco is required to file such
     information on a Form 10-K with the Securities and Exchange Commission,
     promptly following such filing), a copy of the annual audit report for such
     Fiscal Year for Holdco and its Subsidiaries, including therein a
     consolidated balance sheet for Holdco and its Subsidiaries as of the end of
     such Fiscal Year, together with the related consolidated statements of
     operations and cash flows for such Fiscal Year (it being understood that
     the foregoing requirement may be satisfied by delivery of Holdco's report
     to the Securities and Exchange Commission on Form 10-K, if any), in each
     case certified (without any Impermissible Qualification) by a "Big Five"
     firm of independent public accountants, together with a certificate from
     such accountants as to whether, in making the examination necessary for the
     signing of such annual report by such accountants, they have become aware
     of any Default in respect of any term, covenant, condition or other
     provision of this Agreement (including any Default in respect of the
     financial covenants contained in SECTION 7.2.4) that relates to accounting
     matters that has occurred and is continuing or, if in the opinion of such
     accounting firm, any such Default has occurred and is continuing, a
     statement as to the nature thereof;

          (c)  together with the delivery of the financial information required
     pursuant to CLAUSES (a) and (b), a Compliance Certificate, in substantially
     the form of EXHIBIT E, executed by an Authorized Officer of Holdco, showing
     (in reasonable detail and with

                                      73


     appropriate calculations and computations in all respects satisfactory to
     the Agents) compliance with the financial covenants set forth in
     SECTION 7.2.4;

          (d)  promptly and in any event within seven Business Days after
     obtaining knowledge of the occurrence of any Default, if such Default is
     then continuing, a statement of an Authorized Officer of the Company
     setting forth details of such Default and the action which Holdco or the
     Company has taken or proposes to take with respect thereto;

          (e)  promptly and in any event within five Business Days after (x) the
     occurrence of any development with respect to any litigation, action or
     proceeding described in SECTION 6.7 which could reasonably be expected to
     have a Material Adverse Effect or (y) the commencement of any litigation,
     action or proceeding of the type described in SECTION 6.7, notice thereof
     and of the action which Holdco or the Company has taken or proposes to take
     with respect thereto;

          (f)  promptly after the sending or filing thereof, copies of all
     reports and registration statements (other than exhibits thereto and any
     registration statement on Form S-8 or its equivalent) which Holdco or any
     of its Restricted Subsidiaries files with the Securities and Exchange
     Commission or any national securities exchange;

          (g)  as soon as practicable after the chief financial officer or the
     chief executive officer of Holdco or a member of Holdco's Controlled Group
     becomes aware of (i) formal steps in writing to terminate any Pension Plan
     or (ii) the occurrence of any event with respect to a Pension Plan which,
     in the case of (i) or (ii), could reasonably be expected to result in a
     contribution to such Pension Plan by (or a liability to) Holdco or a member
     of Holdco's Controlled Group in excess of $7,500,000, (iii) the failure to
     make a required contribution to any Pension Plan if such failure is
     sufficient to give rise to a Lien under SECTION 302(f) of ERISA in an
     amount in excess of $7,500,000, (iv) the taking of any action with respect
     to a Pension Plan which could reasonably be expected to result in the
     requirement that the Company furnish a bond to the PBGC or such Pension
     Plan in an amount in excess of $7,500,000 or (v) any material increase in
     the contingent liability of Holdco or the Company with respect to any
     post-retirement Welfare Plan benefit as a result of a change in the level
     or scope of benefits thereunder, notice thereof and copies of all
     documentation relating thereto;

          (h)  as soon as practicable and in any event no later than 90 days
     after the beginning of each Fiscal Year, a consolidated plan and financial
     forecast of Holdco for such Fiscal Year prepared in a manner consistent
     with the annual forecasts presented to the Board of Directors of Holdco;
     and

          (i)  such other information respecting the condition or operations,
     financial or otherwise, of Holdco or any of its Restricted Subsidiaries as
     any Lender through the Administrative Agent may from time to time
     reasonably request.

          SECTION 7.1.2. COMPLIANCE WITH LAWS, ETC.  Each of Holdco and the
Company will, and will cause each other Restricted Subsidiary to, comply in all
material respects

                                      74


with all applicable laws, rules, regulations and orders, such compliance to
include (without limitation):

          (a)  except as permitted under SECTION 7.2.8, the maintenance and
     preservation of its corporate existence and qualification as a foreign
     corporation, except where the failure to so qualify could not reasonably be
     expected to have a Material Adverse Effect; and

          (b)  the payment, before the same become delinquent, of all material
     taxes, assessments and governmental charges imposed upon it or upon its
     property, except to the extent being contested in good faith by appropriate
     proceedings and for which adequate reserves in accordance with GAAP shall
     have been set aside on its books.

          SECTION 7.1.3. MAINTENANCE OF PROPERTIES.  Except to the extent that
the failure to do so could not reasonably be expected to have a Material Adverse
Effect, each of Holdco and the Company will, and will cause each other
Restricted Subsidiary to, maintain, preserve, protect and keep its properties
(other than insignificant properties) in good repair, working order and
condition (ordinary wear and tear excepted), and make necessary and proper
repairs, renewals and replacements so that its business carried on in connection
therewith may be properly conducted at all times unless Holdco or the Company
determines in good faith that the continued maintenance of any of its properties
is no longer economically desirable.

          SECTION 7.1.4. INSURANCE.  Each of Holdco and the Company will, and
will cause each other Restricted Subsidiary to, maintain or cause to be
maintained with responsible insurance companies insurance with respect to its
properties and business against such casualties and contingencies and of such
types and in such amounts as is customary in the case of similar businesses and
with such provisions and endorsements as the Agents may reasonably request and
will, upon request of the Agents, furnish to the Agents and each Lender a
certificate of an Authorized Officer of the Company setting forth the nature and
extent of all insurance maintained by Holdco and its Restricted Subsidiaries in
accordance with this Section.

          SECTION 7.1.5. BOOKS AND RECORDS.  Each of Holdco and the Company
will, and will cause each other Restricted Subsidiary to, keep books and records
which accurately reflect in all material respects all of its business affairs
and transactions and permit the Agents, each Issuer and each Lender or any of
their respective representatives, at reasonable times and intervals, and upon
reasonable notice, but, unless an Event of Default shall have occurred and be
continuing, not more frequently than once in each Fiscal Year, to visit its
offices, to discuss its financial matters with its officers and, after notice to
the Company and provision of an opportunity for Holdco and the Company to
participate in such discussion, its independent public accountant (and Holdco
and the Company hereby authorize such independent public accountants to discuss
Holdco's and the Company's financial matters with each Issuer and each Lender or
its representatives, whether or not any representative of Holdco or the Company
is present, so long as Holdco and the Company have been afforded a reasonable
opportunity to be present) and to examine, and photocopy extracts from, any of
its books or other corporate records.  Unless an Event of Default shall have
occurred and be continuing, the cost and expense of each such visit shall be
borne by the applicable Agent or Lender.

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          SECTION 7.1.6. ENVIRONMENTAL COVENANT.  Each of Holdco and the Company
will and will cause each other Restricted Subsidiary to,

          (a)  use and operate all of its facilities and properties in
     compliance with all Environmental Laws, keep all necessary permits,
     approvals, certificates, licenses and other authorizations relating to
     environmental matters in effect and remain in compliance therewith, and
     handle all Hazardous Materials in compliance with all applicable
     Environmental Laws, in each case except where the failure to comply with
     the terms of this clause would not reasonably be expected to have a
     Material Adverse Effect;

          (b)  promptly notify the Agents and provide copies of all written
     claims, complaints, notices or inquiries relating to the condition of its
     facilities and properties, which relate to environmental matters, or
     relating to compliance with Environmental Laws which would have, or would
     reasonably be expected to have, a Material Adverse Effect, and promptly
     cure and have dismissed with prejudice any material actions and proceedings
     relating to compliance with Environmental Laws, except to the extent being
     diligently contested in good faith by appropriate proceedings and for which
     adequate reserves in accordance with GAAP have been set aside on its books;
     and

          (c)  provide such information and certifications which the Agents may
     reasonably request from time to time to evidence compliance with this
     SECTION 7.1.6.

          SECTION 7.1.7. FUTURE SUBSIDIARIES.  Upon any Person becoming, after
the Closing Date, a U.S. Subsidiary of Holdco that is a Restricted Subsidiary
or, in the event there is a change in United States federal and any similar
applicable state income tax laws such that a guarantee, grant of a security
interest or pledge by a Non-U.S. Subsidiary of Holdco that is a Restricted
Subsidiary would not result in a deemed dividend or other adverse income tax
consequences to Holdco or the Company, a Non-U.S. Subsidiary of Holdco that is a
Restricted Subsidiary, or (in the case of CLAUSE (b) below only) upon Holdco or
any such Subsidiary acquiring additional Capital Stock of any existing
Subsidiary that is a Restricted Subsidiary, the Company shall notify the Agents
of such acquisition or change, and shall (but in the case of any such Non-U.S.
Subsidiary only to the extent reasonably requested by the Agents)

          (a)  promptly cause any such Subsidiary to execute and deliver to the
     Administrative Agent, with counterparts for each Lender, a supplement to
     the Subsidiary Guaranty and a supplement to the Security Agreement (and, if
     such Subsidiary owns any real property, to the extent required by CLAUSE
     (b) of SECTION 7.1.8, a Mortgage), together with Uniform Commercial Code
     financing statements (Form UCC-1) executed and delivered by such Subsidiary
     naming such Subsidiary as the debtor and the Administrative Agent as the
     secured party, or other similar instruments or documents, in appropriate
     form for filing under the Uniform Commercial Code and any other applicable
     recording statutes, in the case of real property, of all jurisdictions as
     may be necessary or, in the reasonable opinion of the Administrative Agent,
     desirable to perfect the security interest of the Administrative Agent
     pursuant to the Security Agreement or a Mortgage, as the case may be (other
     than the perfection of security interests in motor vehicles or inventory
     and equipment located at document service centers maintained by Holdco or

                                      76


     any of its Restricted Subsidiaries at sites owned or leased by clients of
     Holdco or any such Restricted Subsidiary); and

          (b)  promptly deliver, or cause to be delivered, to the Administrative
     Agent under a Pledge Agreement (or a supplement thereto) certificates (if
     any) representing all of the issued and outstanding shares of Capital Stock
     of such Subsidiary owned by Holdco or any Restricted Subsidiary that is a
     U.S. Subsidiary or, in the event there is a change in United States federal
     and any similar applicable state income tax laws such that a pledge by a
     Non-U.S. Subsidiary that is a Restricted Subsidiary would not result in a
     deemed dividend or other adverse income tax consequences to Holdco or the
     Company, any Restricted Subsidiary that is a Non-U.S. Subsidiary, as the
     case may be, along with undated stock powers for such certificates,
     executed in blank, or, if any securities subject thereto are uncertificated
     securities, the Administrative Agent shall have obtained "control" (as
     defined in the Uniform Commercial Code applicable to such securities) over
     such securities, or other appropriate steps shall have been taken under
     applicable law resulting in the perfection of the security interest granted
     in such securities in favor of the Administrative Agent pursuant to the
     terms of such Pledge Agreement;

together, in each case, with such opinions, in form and substance and from
counsel reasonably satisfactory to the Agents, as the Agents may reasonably
require; PROVIDED, HOWEVER, that notwithstanding the foregoing, no Non-U.S.
Subsidiary shall be required to execute and deliver a Mortgage, a supplement to
the Subsidiary Guaranty, a supplement to the Security Agreement or a supplement
to a Pledge Agreement, nor will Holdco or any Restricted Subsidiary be required
to deliver in pledge pursuant to a Pledge Agreement in excess of 65% of the
total combined voting power of all classes of Capital Stock of a Non-U.S.
Subsidiary entitled to vote unless (i) there is a change in United States
federal and any similar state income tax laws such that no deemed dividend or
other adverse income tax consequences to Holdco or the Company would result
therefrom and (ii) the Agents shall have reasonably requested the same.

          SECTION 7.1.8. FUTURE LEASED PROPERTY AND FUTURE ACQUISITIONS OF REAL
PROPERTY; FUTURE ACQUISITION OF OTHER PROPERTY.

          (a)  Prior to entering into any new lease of real property or renewing
any existing lease of real property following the Closing Date, Holdco and the
Company shall, and shall cause each of their U.S. Subsidiaries that are
Restricted Subsidiaries and, in the event there is a change in United States
federal and any similar applicable state income tax laws such that no deemed
dividend or other adverse income tax consequences to Holdco or the Company would
result therefrom, each of its Non-U.S. Subsidiaries that is a Restricted
Subsidiary (but in the case of any such Non-U.S. Subsidiary only to the extent
reasonably requested by the Agents), to use its (and their) commercially
reasonable efforts (which shall not require the expenditure of cash or the
making of any material concessions under the relevant lease) to deliver to the
Administrative Agent a Waiver executed by the lessor of any real property that
is to be leased by Holdco or such Subsidiary for a term in excess of one year in
any state which by statute grants such lessor a "landlord's" (or similar) Lien
which is superior to the Administrative Agent's, to the extent the value of any
personal property of Holdco or such Subsidiaries to be held at such leased
property exceeds (or it is anticipated that the value of such personal property
will, at any point in time during the term of such leasehold term, exceed)
$3,000,000, excluding inventory and equipment

                                      77


located at document service centers maintained by Holdco or any of its
Restricted Subsidiaries at sites owned or leased by clients of Holdco or any
such Restricted Subsidiary.

          (b)  In the event that Holdco or any of its U.S. Subsidiaries that are
Restricted Subsidiaries or, in the event there is a change in United States
federal and any similar applicable state income tax laws such that no deemed
dividend or other adverse income tax consequences to Holdco or the Company would
result therefrom, any of its Non-U.S. Subsidiaries that are Restricted
Subsidiaries (but in the case of any such Non-U.S. Subsidiary only to the extent
reasonably requested by the Agents), shall acquire any fee interest in real
property having a value as determined in good faith by the Administrative Agent
in excess of $3,000,000 in the aggregate, Holdco or the applicable Subsidiary
shall, promptly after such acquisition, execute a Mortgage and provide the
Administrative Agent with (i) evidence of the completion (or satisfactory
arrangements for the completion) of all recordings and filings of such Mortgage
as may be necessary or, in the reasonable opinion of the Administrative Agent,
desirable effectively to create a valid, perfected, first priority Lien, subject
to the Liens permitted by SECTION 7.2.3, against the properties purported to be
covered thereby, (ii) mortgagee's title insurance policies in favor of the
Agents and the Lenders in amounts and in form and substance and issued by
insurers, reasonably satisfactory to the Agents, with respect to the property
purported to be covered by such Mortgage, insuring that title to such property
is indefeasible and that the interests created by the Mortgage constitute valid
first Liens thereon free and clear of all defects and encumbrances other than as
permitted by SECTION 7.2.3 or as approved by the Agents, and such policies shall
also include, to the extent available on commercially reasonable terms, a
revolving credit endorsement and such other endorsements as the Agents shall
reasonably request and shall be accompanied by evidence of the payment in full
of all premiums thereon, and (iii) such other approvals, opinions, or documents
as the Agents may reasonably request.

          (c)  In accordance with the terms and provisions of the Loan
Documents, Holdco, each U.S. Subsidiary that is a Restricted Subsidiary and, in
the event there is a change in United States federal and any similar applicable
state income tax laws such that no deemed dividend or other adverse income tax
consequences to Holdco or the Company would result therefrom, each Non-U.S.
Subsidiary that is a Restricted Subsidiary (but in the case of any such Non-U.S.
Subsidiary only to the extent reasonably requested by the Agents), shall provide
the Agents with evidence of all recordings and filings as may be necessary or,
in the reasonable opinion of the Administrative Agent, desirable to create a
valid, perfected, first priority Lien, subject to the Liens permitted by
SECTION 7.2.3, against all property acquired after the Closing Date (excluding
(i) motor vehicles, (ii) (except to the extent required under CLAUSE (b) of
SECTION 7.1.8), leases of and fee interests in real property and (iii) inventory
and equipment located at document service centers maintained by Holdco or any of
its Restricted Subsidiaries at sites owned or leased by clients of Holdco or any
such Subsidiary) and not otherwise subject to SECTIONS 7.1.11 and 7.1.12.

          SECTION 7.1.9. USE OF PROCEEDS, ETC.  The Company shall

          (a)  apply the proceeds of the Loans

          (i)  in the case of the Term Loans and the Revolving Loans made on the
          Closing Date, to pay, in part, through the Intercompany Loan and/or
          Closing Date

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          Dividend to Holdco, the cash merger consideration in respect of all
          of the outstanding capital stock (the "SHARES") of Holdco (including
          stock options but excluding any Shares which are rolled over) of not
          in excess of $22.00 per Share and to fund up to $10,000,000 in
          management deferred compensation plans for an aggregate cash amount
          which does not exceed $370,000,000, to refinance the Existing Debt
          (the "REFINANCING") in an aggregate principal amount not to exceed
          $87,500,000, plus accrued and unpaid interest thereon, and
          to pay transaction fees and expenses ("EXPENSE PAYMENTS") of
          approximately $23,900,000 associated with the Transaction; PROVIDED,
          that not more than $6,500,000 of the proceeds from Revolving Loans may
          be used to finance the consummation of the Transaction, including the
          Expense Payments; and

          (ii) in the case of any other Revolving Loans, the Swing Line Loans
          and any Term Loans made pursuant to CLAUSE (b) or CLAUSE (d) of
          SECTION 2.1.1, for working capital and general corporate purposes of
          the Company and its Restricted Subsidiaries, including permitted
          acquisitions hereunder; and

          (b)  use Letters of Credit only for purposes of supporting working
     capital and general corporate purposes of the Company and its Restricted
     Subsidiaries.

          SECTION 7.1.10.     HEDGING OBLIGATIONS.  Within six months following
the Closing Date, the Administrative Agent shall have received evidence
satisfactory to it that Holdco and/or the Company have entered into interest
rate swap, cap, collar or similar arrangements (including without limitation
such Indebtedness accruing interest at a fixed rate by its terms) designed to
protect them against fluctuations in interest rates with respect to at least 50%
of the aggregate principal amount of the Term Loans for a period of at least two
years from the Closing Date with terms reasonably satisfactory to the Company
and the Agents.

          SECTION 7.1.11.     UNDERTAKING.  Holdco and the Company will deliver
to the Agents no later than 60 days after the Closing Date instruments or
documents, in appropriate form for filing with the United States Patent and
Trademark Office, sufficient to create and perfect a security interest in all
intellectual property owned as of the Closing Date by Holdco and its U.S.
Subsidiaries that are Restricted Subsidiaries as identified in ITEM 7.1.11
("Intellectual Property") of the Disclosure Schedule.

          SECTION 7.1.12.     MORTGAGES.  Within 60 days after the Closing Date,
Holdco and the Company shall deliver to the Agents counterparts of each Mortgage
relating to each fee property and (if, and to the extent that the lessor thereof
shall have consented thereto after being requested by the Company or Holdco)
each leasehold property listed on ITEM 7.1.12 ("Mortgaged Properties") of the
Disclosure Schedule, each dated as of the date of such delivery, duly executed
by Holdco, the Company or the applicable U.S. Subsidiary, together with

          (a)  evidence of the completion (or satisfactory arrangements for the
     completion) of all recordings and filings of such Mortgage as may be
     necessary or, in the reasonable opinion of the Administrative Agent,
     desirable effectively to create a valid, perfected, first priority Lien,
     subject to Liens permitted by SECTION 7.2.3, against the properties
     purported to be covered thereby;

                                      79




          (b)  mortgagee's title insurance policies in favor of the
     Administrative Agent for the benefit of the Secured Parties in amounts and
     in form and substance and issued by insurers, reasonably satisfactory to
     the Agents, with respect to the property purported to be covered by such
     Mortgage, insuring that title to such property is indefeasible and that the
     interests created by the Mortgage constitute valid first Liens thereon free
     and clear of all defects and encumbrances other than as permitted by
     SECTION 7.2.3 or as approved by the Agents, and such policies shall also
     include, to the extent available on commercially reasonable terms, a
     revolving credit endorsement and such other endorsements as the
     Administrative Agent shall reasonably request and shall be accompanied by
     evidence of the payment in full of all premiums thereon; and

          (c)  such other approvals, opinions or documents as the Agents may
     reasonably request.

          SECTION 7.2    NEGATIVE COVENANTS.  Holdco and the Company agree with
the Agents, each Issuer and each Lender that, until all Commitments have
terminated, and all Obligations have been paid and performed in full, Holdco and
the Company will perform the obligations set forth in this SECTION 7.2.

          SECTION 7.2.1. BUSINESS ACTIVITIES.  Each of Holdco and the Company
will not, and will not permit any other Restricted Subsidiary to, engage in any
business activity, except the document services and communications business and
any businesses reasonably ancillary, related or incidental thereto (the "MERRILL
BUSINESS").  From and after the Closing Date, Holdco shall not engage in any
business or other operations other than entering into and performing its
obligations under and in accordance with the Loan Documents, the Material
Documents, the other Transaction Documents and the Retained Interests to which
it is a party and Holdco shall not own any assets other than the Capital Stock
of the Company, the Retained Interests, assets acquired pursuant to the Retained
Interests (provided that promptly upon the acquisition of such assets, such
assets (other than any assets that it may not, pursuant to binding contractual
obligations, transfer without the consent of any third party) will be
contributed to the Company) and cash and Cash Equivalents which cash and Cash
Equivalents are being held by Holdco pending application to meeting Holdco's
current liabilities under the Retained Interests, the Material Documents, the
other Transaction Documents or to make other payments permitted to be made by
Holdco under SECTION 7.2.6 in an amount which does not exceed by more than
$1,000,000 the amount required to meet such liabilities or to make such
payments.  Notwithstanding the permissive nature of SECTION 7.2.2, 7.2.3, 7.2.5,
7.2.6 and 7.2.7 or anything else contained herein to the contrary, Holdco shall
not create, incur, assume or suffer to exist or otherwise become or be liable in
respect of any Indebtedness, create, incur, assume or suffer to exist any Lien
upon any of its property, revenues or assets, whether now owned or hereafter
acquired, make, incur, assume or suffer to exist any Investment in any other
Person, declare, pay or make any Restricted Payment, make or commit to make any
Capital Expenditure or otherwise engage in any business or other operations
except as explicitly permitted thereby and as shall be necessary to enable
Holdco to enter into and perform its obligations under and in accordance with
the Loan Documents, the Material Documents, the other Transaction Documents and
the Retained Interests and only for so long as Holdco retains rights and
obligations under the Loan Documents, the Material Documents, the other
Transaction Documents and the Retained Interests.  Holdco will use its best
efforts to transfer the Retained Interests (other than the

                                80


Preferred Stock, the Senior Subordinated Bridge Notes, the Warrants, the
Bridge Warrants, the Senior Subordinated Notes or the other Transaction
Documents), and to transfer any assets acquired in the exercise of any of its
rights under the Retained Interests (other than cash and Cash Equivalents
permitted to be held by it pursuant to the second sentence of this Section
7.2.1 and any assets that it may not, pursuant to binding contractual
obligations, transfer without the consent of any third party), to the Company
promptly after their acquisition, including upon any renewal or extension of
any contracts or agreements included in the Retained Interests; PROVIDED,
HOWEVER, that that nothing herein contained shall be deemed to require Holdco
to obtain, or seek to obtain, any consents to transfer such Retained
Interests to the Company.

          SECTION 7.2.2. INDEBTEDNESS.  Each of Holdco and the Company will not,
and will not permit any other Restricted Subsidiary to, create, incur, assume or
suffer to exist or otherwise become or be liable in respect of any Indebtedness,
other than, without duplication, the following:

          (a)  Indebtedness outstanding on the Closing Date and identified in
     ITEM 7.2.2(a) ("Ongoing Indebtedness") of the Disclosure Schedule, and
     refinancings and replacements thereof in a principal amount not exceeding
     the principal amount of the Indebtedness so refinanced or replaced and with
     an average life to maturity of not less than the then average life to
     maturity of the Indebtedness so refinanced or replaced;

          (b)  Indebtedness in respect of the Credit Extensions and other
     Obligations;

          (c)  to the extent (but only to the extent) otherwise permitted by
     SECTION 7.2.7, Indebtedness incurred by Company or any of its Restricted
     Subsidiaries that is represented by Capitalized Lease Liabilities, mortgage
     financings or purchase money obligations; PROVIDED, that the maximum
     aggregate amount of all Indebtedness permitted under this CLAUSE (c) shall
     not at any time exceed $15,000,000;

          (d)  Hedging Obligations of Holdco, the Company or any other
     Restricted Subsidiary in respect of the Credit Extensions or otherwise
     entered into by Holdco, the Company or any other Restricted Subsidiary to
     hedge against interest rate, currency exchange rate or commodity price
     risk, in each case arising in the ordinary course of business of Holdco,
     the Company and such Restricted Subsidiaries and not for speculative
     purposes;

          (e)  the Intercompany Loan and intercompany Indebtedness (i) (x) of
     any U.S. Subsidiary that is a Restricted Subsidiary owing to Holdco or any
     Restricted Subsidiary or (y) of Holdco owing to any Restricted Subsidiary
     the proceeds of which Indebtedness was applied by Holdco to make payments
     permitted to be made by Holdco pursuant to clauses (c) and (d) of SECTION
     7.2.6, and (ii) of any Non-U.S. Subsidiary that is a Restricted Subsidiary
     owing to Holdco or any U.S. Subsidiary; PROVIDED that in respect of (A) any
     such Indebtedness described in this CLAUSE (ii), such Indebtedness (other
     than any such intercompany Indebtedness incurred to finance any acquisition
     permitted hereunder) shall not exceed, when taken together with the
     aggregate amount at such time of all outstanding Investments made pursuant
     to CLAUSE (m) of SECTION 7.2.5 (other than any such Investments made as
     part of, or to finance, any acquisition permitted hereunder),

                                   81


     $20,000,000 at any time outstanding and (B) any such Indebtedness
     described in this CLAUSE (e) which is owing to Holdco or any Restricted
     Subsidiary, (1) to the extent requested by the Administrative Agent, such
     Indebtedness shall be evidenced by one or more promissory notes in form
     and substance satisfactory to the Agents which shall be duly executed and
     delivered to (and indorsed to the order of) the Administrative Agent in
     pledge pursuant to a Pledge Agreement and (2) in the case of any such
     Indebtedness owed by a Person other than Holdco, the Company or a
     Subsidiary Guarantor, such Indebtedness shall not be forgiven or
     otherwise discharged for any consideration other than payment in cash
     unless the Agents otherwise consent;

          (f)  Indebtedness of Holdco evidenced by the Senior Subordinated
     Bridge Notes and Indebtedness of Holdco evidenced by the Senior
     Subordinated Notes and, in each case, subordinated guarantees thereof, in
     an aggregate outstanding principal amount not to exceed $140,000,000 (as
     such amount may be increased by the amount of any Senior Subordinated
     Bridge Notes issued in lieu of cash interest payments on the Senior
     Subordinated Bridge Notes) at any time; PROVIDED that if Holdco issued the
     Senior Subordinated Bridge Notes on the Closing Date, all of the net
     proceeds of the Senior Subordinated Notes shall be used to refinance in
     whole or in part an equal principal amount of the Senior Subordinated
     Bridge Notes then outstanding;

          (g)  Assumed Indebtedness of the Company and the other Restricted
     Subsidiaries incurred in connection with an Investment permitted under
     SECTION 7.2.5 in an aggregate outstanding principal amount not to exceed
     $15,000,000 at any time;

          (h)  Indebtedness of any Non-U.S. Subsidiary that is a Restricted
     Subsidiary owing to any other Non-U.S. Subsidiary;

          (i)  Indebtedness of Non-U.S. Subsidiaries that are Restricted
     Subsidiaries in an aggregate outstanding principal amount not to exceed
     $15,000,000 at any time; and

          (j)  other unsecured Indebtedness of the Company and the other
     Restricted Subsidiaries in an aggregate amount at any time outstanding not
     to exceed $15,000,000 plus the difference between the maximum amount of
     additional Commitment Amounts that have been or could be provided under
     CLAUSE (c) of SECTION 2.1.2 and the then outstanding amount of additional
     Loans made pursuant to CLAUSE (b) and (d) of SECTION 2.1.1 and CLAUSE (c)
     of SECTION 2.1.2.

PROVIDED, HOWEVER, that no Indebtedness otherwise permitted by CLAUSE (c), (e)
(as such CLAUSE (e) relates to loans made by Holdco, the Company or any
Subsidiary Guarantor to Restricted Subsidiaries which are not the Company or
party to the Subsidiary Guaranty), (g), (h), (i) or (j) may be incurred if,
immediately before or after giving effect to the incurrence thereof, any Default
shall have occurred and be continuing, and PROVIDED, FURTHER, HOWEVER, that all
such Indebtedness of the type described in CLAUSE (e)(i)(y) above that is owed
to Restricted Subsidiaries which are not the Company or party to the Subsidiary
Guaranty, shall be subordinated, in writing, to the Obligations upon terms
satisfactory to the Agents.

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          SECTION 7.2.3. LIENS.  Each of Holdco and the Company will not, and
will not permit any other Restricted Subsidiary to, create, incur, assume or
suffer to exist any Lien upon any of its property, revenues or assets, whether
now owned or hereafter acquired, except:

          (a)  Liens existing on the Closing Date identified in ITEM 7.2.3(a)
     ("Ongoing Liens") of the Disclosure Schedule, including Liens securing
     extensions or renewals of the Indebtedness which such identified Liens
     secure; PROVIDED that no such extension or renewal shall increase the
     obligations secured by such Lien, extend such Lien to additional assets or
     otherwise result in a Default hereunder;

          (b)  Liens securing payment of the Obligations or any Hedging
     Obligations owed to any Person that, at the time such Hedging Obligation
     was contracted for, was a Lender or any affiliate of any Lender, which
     Liens are granted pursuant to any Loan Document;

          (c)  Liens granted to secure payment of Indebtedness of the type
     permitted and described in CLAUSE (c) of SECTION 7.2.2; PROVIDED that such
     Lien is limited in recourse solely to the asset being purchased or leased
     through the incurrence of such Indebtedness;

          (d)  Liens for taxes, assessments or other governmental charges or
     levies, including Liens pursuant to SECTION 107(l) of CERCLA or other
     similar law, not at the time delinquent or thereafter payable without
     penalty or being contested in good faith by appropriate proceedings and for
     which adequate reserves in accordance with GAAP shall have been set aside
     on its books;

          (e)  Liens of carriers, warehousemen, mechanics, repairmen,
     materialmen, contractors, laborers and landlords or other like Liens
     incurred in the ordinary course of business for sums not overdue for a
     period of more than 30 days or being diligently contested in good faith by
     appropriate proceedings and for which adequate reserves in accordance with
     GAAP shall have been set aside on its books;

          (f)  Liens incurred in the ordinary course of business in connection
     with workmen's compensation, unemployment insurance or other forms of
     governmental insurance or benefits, or to secure performance of tenders,
     bids, statutory or regulatory obligations, insurance obligations, leases
     and contracts (other than for borrowed money) entered into in the ordinary
     course of business or to secure obligations on surety or appeal bonds;

          (g)  judgment Liens which do not result in a Default under SECTION
     8.1.6;

          (h)  (i) Liens with respect to minor imperfections of title and
     easements, rights-of-way, restrictions, reservations, permits, servitudes
     and other similar encumbrances on real property and fixtures which do not
     materially detract from the value or materially impair the use by Holdco,
     the Company or any other Restricted Subsidiary in the ordinary course of
     its business of the property subject thereto; (ii) in the case of any
     property covered by a Mortgage, encumbrances disclosed in the title
     insurance policy issued to, and reasonably approved by the Agents
     insuring the Mortgage; and (iii) in the case of any property covered by a
     Mortgage, upon certification by the Company that an

                                 83


     easement, right-of-way, restriction, reservation, permit, servitude or
     other similar encumbrance granted or to be granted by Holdco, the Company
     or any other Restricted Subsidiary does not materially detract from the
     value of or materially impair the use by Holdco, the Company or any such
     other Restricted Subsidiary in the ordinary course of its business of the
     property subject to or to be subject to such encumbrance, the
     Administrative Agent shall execute such documents as are reasonably
     requested to subordinate its Mortgage to such encumbrance;

          (i)  licenses, leases or subleases granted by Holdco, the Company or
     any of its Restricted Subsidiaries to any other Person in the ordinary
     course of business;

          (j)  Liens in the nature of trustees' Liens granted pursuant to any
     indenture governing any Indebtedness permitted by SECTION 7.2.2, in each
     case in favor of the trustee under such indenture and securing only
     obligations to pay compensation to such trustee, to reimburse its expenses
     and to indemnify it under the terms thereof;

          (k)  Liens of sellers of goods to Holdco and any of the Restricted
     Subsidiaries arising under Article 2 of the UCC or similar provisions of
     applicable law in the ordinary course of business, covering only the goods
     sold and securing only the unpaid purchase price for such goods and related
     expenses;

          (l)  Liens securing Assumed Indebtedness of the Company and the other
     Restricted Subsidiaries permitted pursuant to CLAUSE (g) of SECTION 7.2.2;
     PROVIDED, HOWEVER, that (i) any such Liens attach only to the property of
     the Restricted Subsidiary acquired, or the property acquired, in connection
     with such Assumed Indebtedness and shall not attach to any assets of Holdco
     or any Restricted Subsidiary theretofore existing or which arise after the
     date thereof, (ii) the Assumed Indebtedness and other secured Indebtedness
     of the Company and the other Restricted Subsidiaries secured by any such
     Lien shall not exceed 100% of the fair market value of the assets being
     acquired in connection with such Assumed Indebtedness, and (iii) any such
     Liens are not created or incurred in connection with, or in anticipation or
     contemplation of, such property being acquired by, or such Person becoming
     a Restricted Subsidiary of, the Company or any of its Restricted
     Subsidiaries;

          (m)  Liens on the assets and Capital Stock of Unrestricted
     Subsidiaries granted to secure payment of Indebtedness of such Unrestricted
     Subsidiaries;

          (n)  Liens on assets of Non-U.S. Subsidiaries of Holdco that are
     Restricted Subsidiaries securing Indebtedness permitted pursuant to CLAUSE
     (h) or (i) or SECTION 7.2.2; and

          (o)  Liens not otherwise permitted hereunder which secure obligations
     not exceeding $5,000,000 at any time outstanding.

                                  84


          SECTION 7.2.4. FINANCIAL COVENANTS.

          (a)  EBITDA.  Holdco and the Company will not permit EBITDA for the
period of four consecutive Fiscal Quarters ending on the last day of any Fiscal
Quarter occurring during any period set forth below to be less than the amount
set forth opposite such period:




                       PERIOD                          EBITDA
                       ------                          ------
                                                 
               Closing - 1/31/00                     $72,500,000
               2/1/00 - 4/30/00                      $72,500,000
               5/1/00 - 7/31/00                      $72,500,000
               8/1/00 - 10/31/00                     $72,500,000

               11/1/00 - 1/31/01                     $74,000,000
               2/1/01 - 4/30/01                      $74,000,000
               5/1/01 - 7/31/01                      $74,000,000
               8/1/01 - 10/31/01                     $74,000,000

               11/1/01 - 1/31/02                     $80,000,000
               2/1/02 - 4/30/02                      $80,000,000
               5/1/02 - 7/31/02                      $80,000,000
               8/1/02 - 10/31/02                     $80,000,000

               11/1/02 - 1/31/03                     $85,000,000
               2/1/03 - 4/30/03                      $85,000,000
               5/1/03 - 7/31/03                      $85,000,000
               8/1/03 - 10/31/03                     $85,000,000

               11/1/03 - 1/31/04                     $90,000,000
               2/1/04 - 4/30/04                      $90,000,000
               5/1/04 - 7/31/04                      $90,000,000
               8/1/04 - 10/31/04                     $90,000,000

               11/1/04 - 1/31/05                     $95,000,000
               2/1/05 - 4/30/05                      $95,000,000
               5/1/05 - 7/31/05                      $95,000,000
               8/1/05 - 10/31/05                     $95,000,000

               11/1/05 - 1/31/06                    $100,000,000
               Thereafter                           $100,000,000


PROVIDED, THAT, to the extent the amount of EBITDA for any period of four
consecutive Fiscal Quarters exceeds the amount of EBITDA required to be
maintained for such period pursuant to this CLAUSE (a), an amount equal to 50%
of such excess amount may be carried forward to (but only to) the next
succeeding period of four consecutive Fiscal Quarters (any such amount to be
certified to the Administrative Agent in the Compliance Certificate delivered
for the four consecutive Fiscal Quarter period to which such amount is being
carried forward).

                                   85


          (b)  LEVERAGE RATIO.  Holdco and the Company will not permit the
Leverage Ratio as of the end of any Fiscal Quarter ending after the Closing Date
and occurring during any period set forth below to be greater than the ratio set
forth opposite such period:



                     PERIOD                         LEVERAGE RATIO
                     ------                         --------------
                                                   
               Closing Date to 1/31/00                5.25:1.00
               2/1/00 - 4/30/00                       5.25:1.00
               5/1/00 - 7/31/00                       5.25:1.00
               8/1/00 - 10/31/00                      5.00:1.00

               11/1/00 - 1/31/01                      4.75:1.00
               2/1/01 - 4/30/01                       4.75:1.00
               5/1/01 - 7/31/01                       4.75:1.00
               8/1/01 - 10/31/01                      4.75:1.00

               11/1/01 - 1/31/02                      4.50:1.00
               2/1/02 - 4/30/02                       4.50:1.00
               5/1/02 - 7/31/02                       4.50:1.00
               8/1/02 - 10/31/02                      4.50:1.00

               11/1/02 - 1/31/03                      4.00:1.00
               2/1/03 - 4/30/03                       4.00:1.00
               5/1/03 - 7/31/03                       4.00:1.00
               8/1/03 - 10/31/03                      4.00:1.00

               11/1/03 - 1/31/04                      3.50:1.00
               2/1/04 - 4/30/04                       3.50:1.00
               5/1/04 - 7/31/04                       3.50:1.00
               8/1/04 - 10/31/04                      3.50:1.00

               11/1/04 - 1/31/05                      3.00:1.00
               2/1/05 - 4/30/05                       3.00:1.00
               5/1/05 - 7/31/05                       3.00:1.00
               8/1/05 - 10/31/05                      3.00:1.00

               11/1/05 - 1/31/06                      3.00:1.00
               Thereafter                             3.00:1.00


          (c)  INTEREST COVERAGE RATIO.  Holdco and the Company will not permit
the Interest Coverage Ratio as of the end of any Fiscal Quarter ending after the
Closing Date and occurring during any period set forth below to be less than the
ratio set forth opposite such period:

                                  86




                     PERIOD                    INTEREST COVERAGE RATIO
                     ------                    -----------------------
                                                   
               Closing Date to 1/31/00                1.80:1.00
               2/1/00 - 4/30/00                       1.80:1.00
               5/1/00 - 7/31/00                       1.80:1.00
               8/1/00 - 10/31/00                      1.80:1.00

               11/1/00 - 1/31/01                      1.95:1.00
               2/1/01 - 4/30/01                       1.95:1.00
               5/1/01 - 7/31/01                       1.95:1.00
               8/1/01 - 10/31/01                      1.95:1.00

               11/1/01 - 1/31/02                      2.00:1.00
               2/1/02 - 4/30/02                       2.00:1.00
               5/1/02 - 7/31/02                       2.00:1.00
               8/1/02 - 10/31/02                      2.00:1.00

               11/1/02 - 1/31/03                      2.15:1.00
               2/1/03 - 4/30/03                       2.15:1.00
               5/1/03 - 7/31/03                       2.15:1.00
               8/1/03 - 10/31/03                      2.15:1.00

               11/1/03 - 1/31/04                      2.50:1.00
               2/1/04 - 4/30/04                       2.50:1.00
               5/1/04 - 7/31/04                       2.50:1.00
               8/1/04 - 10/31/04                      2.50:1.00

               11/1/04 - 1/31/05                      2.75:1.00
               2/1/05 - 4/30/05                       2.75:1.00
               5/1/05 - 7/31/05                       2.75:1.00
               8/1/05 - 10/31/05                      2.75:1.00

               11/1/05 - 1/31/06                      3.00:1.00
               Thereafter                             3.00:1.00


          (d)  FIXED CHARGE COVERAGE RATIO.  Holdco and the Company will not
permit the Fixed Charge Coverage Ratio as of the end of any Fiscal Quarter
ending after the Closing Date to be less than 1.10:1.00.

          SECTION 7.2.5. INVESTMENTS.  Each of Holdco and the Company will not,
and will not permit any other Restricted Subsidiary to, make, incur, assume or
suffer to exist any Investment in any other Person, except:

          (a)  Investments existing on the Closing Date and identified in
     ITEM 7.2.5(a) ("Ongoing Investments") of the Disclosure Schedule and
     extensions or renewals thereof, PROVIDED that no such extension or renewal
     shall be permitted if it would (x) increase the amount of such Investment
     at the time of such extension or renewal or (y) result in a Default
     hereunder;

                                  87


          (b)  Cash Equivalent Investments;

          (c)  without duplication, Investments permitted as Indebtedness
     (including without limitation the Intercompany Loan) pursuant to
     SECTION 7.2.2;

          (d)  without duplication, Investments permitted as Capital
     Expenditures pursuant to SECTION 7.2.7 (including any such Investments
     which would otherwise constitute Capital Expenditures but for the operation
     of CLAUSE (i) of the proviso to the definition of "CAPITAL EXPENDITURES");

          (e)  Investments made by the Company or any other Restricted
     Subsidiary from capital contributions by Holdco to the Company, sales of
     Capital Stock by Holdco or repayments of the Intercompany Loan by Holdco to
     the Company to the extent the proceeds used for such repayments of the
     Intercompany Loan were generated from the issuance by Holdco of its Capital
     Stock, in each case only to the extent proceeds from such capital
     contribution, sale or repayment (x) are not required to be applied as Net
     Equity Proceeds pursuant to CLAUSE (e) of SECTION 3.1.1, and (y) are
     received after the Closing Date for the purpose of making an Investment
     identified in a notice delivered to the Agents on or prior to the date such
     capital contribution, sale or repayment is made, which Investments shall
     result in the Company or such other Restricted Subsidiary acquiring a
     majority controlling interest in the Person in which such Investment was
     made or increasing any such controlling interest already maintained by it;

          (f)  Investments to the extent the consideration received pursuant to
     CLAUSE (c)(i) of SECTION 7.2.9 is not all cash;

          (g)  Investments in the form of loans by Holdco or the Company to
     officers, directors, employees and Independent Contractors of Holdco and
     its Restricted Subsidiaries for the sole purpose of purchasing Holdco
     common stock (or purchases of such loans made by others) PROVIDED that the
     proceeds, if any, of such stock purchases have been contributed to the
     Company by Holdco;

          (h)  Letters of Credit issued in support of, and guarantees by Holdco
     or any Restricted Subsidiary of, Indebtedness permitted under CLAUSES (b),
     (c), (d) and (j) of SECTION 7.2.2;

          (i)  Investments made or held by any Non-U.S. Subsidiary of Holdco
     that is a Restricted Subsidiary in any other Non-U.S. Subsidiary of Holdco
     that is a Restricted Subsidiary;

          (j)  Investments of Holdco or any U.S. Subsidiary that is a Restricted
     Subsidiary in Holdco or any U.S. Subsidiary that is a Restricted
     Subsidiary; PROVIDED that the proceeds of any such Investments in Holdco
     shall be applied by Holdco to make payments permitted to be made by Holdco
     pursuant to CLAUSES (c) and (d) of SECTION 7.2.6;

          (k)  equity Investments of the Company or any U.S. Subsidiary that is
     a Restricted Subsidiary in Non-U.S. Subsidiaries that are Restricted
     Subsidiaries in an

                                  88


     aggregate amount at any time outstanding not to exceed (exclusive
     of any such Investments made as part of, or to finance, any
     acquisition permitted hereunder) $20,000,000 (other than any such
     intercompany Indebtedness incurred to finance any acquisition permitted
     hereunder);

          (l)  Investments of the Company or any Restricted Subsidiary in
     Unrestricted Subsidiaries of the Company in an aggregate amount at any time
     outstanding not to exceed $10,000,000;

          (m)  Investments made by the Company or any other Restricted
     Subsidiary, and Investments made by Holdco pursuant to the Retained
     Interests as long as such Investments are promptly transferred to the
     Company upon consummation (unless Holdco may not, pursuant to binding
     contractual obligations, transfer such Investments without the consent of a
     third party), in an aggregate amount not to exceed $25,000,000 in any
     single transaction (or a series of related transactions) or $50,000,000 in
     the aggregate over the term of this Agreement; PROVIDED that such
     Investments (x) result in the Company or the relevant Restricted Subsidiary
     acquiring (subject to SECTION 7.2.1) a majority controlling interest in the
     Person (or its assets and businesses) in which such Investment was made, or
     increasing any such controlling interest maintained by it in such Person or
     (y) result in the Person in which such Investment was made becoming an
     Acquired Controlled Person with respect to the Company and its Restricted
     Subsidiaries; PROVIDED FURTHER, that, to the extent any Assumed
     Indebtedness permitted pursuant to CLAUSE (g) of SECTION 7.2.2 would be
     incurred in connection with any such Investment to be made pursuant to this
     CLAUSE (m), the permitted amounts set forth in this clause shall be
     reduced, Dollar for Dollar, by the outstanding principal amount of any such
     Assumed Indebtedness to be assumed; and PROVIDED FURTHER the amount of
     Investments made by the Company or any of its U.S. Subsidiaries that are
     Restricted  Subsidiaries in any of its Non-U.S. Subsidiaries that are
     Restricted Subsidiaries, when taken together with the outstanding aggregate
     principal amount of Indebtedness incurred by such Non-U.S. Subsidiaries
     from Holdco and such U.S. Subsidiaries pursuant to CLAUSE (e)(ii) of
     SECTION 7.2.2, shall not exceed $20,000,000;

          (n)  Investments made by the Company or any other Restricted
     Subsidiary, and Investments made by Holdco pursuant to the Retained
     Interests so long as such Investments are promptly transferred to the
     Company upon consummation (unless Holdco may not, pursuant to binding
     contractual obligations, transfer such Investments without the consent of a
     third party), in Persons engaged in the Merrill Business that are not
     permitted under CLAUSES (a) through (m) above in an aggregate principal
     amount at any one time outstanding not to exceed $10,000,000;

          (o)  extensions of trade credit in the ordinary course of business;

          (p)  Investments in Hedging Obligations permitted hereunder;

          (q)  Investments (including debt obligations and Capital Stock)
     received in connection with the bankruptcy or reorganization of suppliers
     and customers and in

                                    89


     settlement of delinquent obligations of and other
     disputes with customers and suppliers arising in the ordinary course of
     business;

     PROVIDED, HOWEVER, that

          (r)  any Investment which when made complies with the requirements of
     the definition of the term "Cash Equivalent Investment" may continue to be
     held notwithstanding that such Investment if made thereafter would not
     comply with such requirements; and

          (s)  no Investment otherwise permitted by CLAUSE (c) (except to the
     extent permitted under SECTION 7.2.2), (e), (g), (h) (to the extent that
     the applicable Letter of Credit relates to Indebtedness permitted under
     CLAUSE (c) or (j) of SECTION 7.2.2), (k), (l), (m) or (n) shall be
     permitted to be made if, immediately before or after giving effect thereto,
     any Default shall have occurred and be continuing.

          SECTION 7.2.6. RESTRICTED PAYMENTS, ETC.  On and at all times after
the date hereof:

          (a)  Holdco will not, and will not permit any of its Restricted
     Subsidiaries to, declare, pay or make any dividend, distribution or
     exchange (in cash, property or obligations) on or in respect of any shares
     of any class of Capital Stock (now or hereafter outstanding) of Holdco or
     the Company or on any warrants, options or other rights with respect to any
     shares of any class of Capital Stock (now or hereafter outstanding) of
     Holdco or the Company (other than (i) dividends or distributions payable in
     its Capital Stock or warrants to purchase its Capital Stock, (ii) splits or
     reclassifications of its stock into additional or other shares of its
     Capital Stock and (iii) the exchange of preferred stock referred to in
     clause (iii) of the definition of Preferred Stock for preferred stock
     referred to in clause (ii) of the definition of Preferred Stock) or apply,
     or permit any of its Restricted Subsidiaries to apply, any of its funds,
     property or assets to the purchase, redemption, exchange, sinking fund or
     other retirement of, or agree or permit any of its Restricted Subsidiaries
     to purchase, redeem or exchange, any shares of any class of Capital Stock
     (now or hereafter outstanding) of Holdco or the Company or warrants,
     options or other rights with respect to any shares of any class of Capital
     Stock (now or hereafter outstanding) of Holdco or the Company;

          (b)  other than any refinancing of the Senior Subordinated Bridge
     Notes with the proceeds of the Senior Subordinated Notes, Holdco will not,
     and will not permit any of its Restricted Subsidiaries to (i) directly or
     indirectly, make any payment or prepayment of principal of, or premium on,
     if any, or make any payment of interest on, any Subordinated Indebtedness,
     on any day other than the stated, scheduled date for such payment or
     prepayment set forth in the documents and instruments memorializing such
     Subordinated Indebtedness, or which would violate the subordination
     provisions of such Subordinated Indebtedness, or (ii) make any payment to
     redeem, purchase or defease any Subordinated Indebtedness (the foregoing
     prohibited acts referred to in CLAUSES (a) and (b) above are herein
     collectively referred to as "RESTRICTED PAYMENTS");

                              90


     PROVIDED, HOWEVER, that

          (c)  notwithstanding the provisions of CLAUSES (a) AND (b) above, the
     Company shall be permitted to make Restricted Payments to Holdco (x)
     pursuant to the Administrative Services Agreement which payments shall, to
     the extent applicable, be promptly applied by Holdco to meet its
     obligations under the Retained Interests and (y) to the extent necessary to
     enable Holdco to (i) pay its overhead expenses, (ii) make payments in
     respect of taxes, (iii) make payments in respect of the Senior Subordinated
     Bridge Notes or the Senior Subordinated Notes, (iv) make payments in
     respect of expenses, fees and other costs in connection with litigations,
     (v) make payments in respect of compensation expenses in respect of any
     period prior to January 1, 2000, (vi) make payments in respect of employee
     benefit plans or other similar arrangements, (vii) pay fees and expenses in
     connection with the Transaction and (viii) so long as (A) no Default shall
     have occurred and be continuing on the date such Restricted Payment is
     declared or to be made, nor would a Default (including in respect of the
     financial covenants set forth in SECTION 7.2.4) result from the making of
     such Restricted Payment, (b) after giving effect to the making of such
     Restricted Payment, Holdco shall be in PRO FORMA compliance with the
     covenant set forth in CLAUSE (b) of SECTION 7.2.4 for the most recent full
     Fiscal Quarter immediately preceding the date of the making of such
     Restricted Payment for which the relevant financial information has been
     delivered pursuant to CLAUSE (a) or CLAUSE (b) of SECTION 7.1.1, and (c) an
     Authorized Officer of the Company shall have delivered a certificate to the
     Administrative Agent in form and substance satisfactory to the
     Administrative Agent (including a calculation of Holdco's PRO FORMA
     compliance with the covenant set forth in CLAUSE (b) of SECTION 7.2.4 in
     reasonable detail) certifying as to the accuracy of CLAUSE (c)(y)(viii)(a)
     and CLAUSE (c)(y)(viii)(b) above, the Company may make Restricted Payments
     to Holdco to enable Holdco to, and Holdco may, repurchase, redeem or
     otherwise acquire or retire for value any Capital Stock of Holdco
     (including Preferred Stock), or any warrant, option or other right to
     acquire any such Capital Stock of Holdco, held by any member of management
     or an employee or Independent Contractor of Holdco or any of its Restricted
     Subsidiaries pursuant to any employment agreement, management equity
     subscription agreement, restricted stock plan, stock option agreement or
     other similar arrangement so long as the total amount of such repurchases,
     redemptions, acquisitions, retirements and payments shall not exceed (I)
     $5,000,000 in any calendar year (with unused amounts in any calendar year
     being carried forward to succeeding calendar years subject to a maximum
     (without giving effect to the following clause (II)) of $10,000,000 in any
     calendar year) PLUS (II) the aggregate cash proceeds received by Holdco
     during such calendar year from any reissuance of Capital Stock of Holdco,
     and warrants, options and other rights to acquire Capital Stock of Holdco
     by Holdco or the Company to members of management and employees and
     Independent Contractors of Holdco and its Restricted Subsidiaries (to the
     extent such proceeds are not otherwise required to be applied pursuant to
     CLAUSE (d) of SECTION 3.1.1 and to the extent such proceeds do not
     represent the proceeds of loans made by Holdco or the Company to such
     members of management or employees);

          (d)  notwithstanding the provisions of CLAUSES (a) and (b) above,
     (i) Holdco and its Restricted Subsidiaries shall be permitted to make the
     Restricted Payments included in the Transaction, (ii) Holdco shall be
     permitted to make payments in respect of statutory

                                91


     appraisal rights (and any settlement thereof) exercised by holders of
     outstanding Capital Stock of Holdco in connection with the Merger, (iii)
     the Company may pay a non-cash dividend to Holdco consisting solely of a
     transfer of all or a portion of the Intercompany Loan, (iv) after the
     Closing Date, Holdco may purchase common stock of Holdco from the Equity
     Investors as long as such common stock is resold to officers, directors,
     employees and Independent Contractors of Holdco and its Restricted
     Subsidiaries for cash proceeds other than any such proceeds funded with
     advances by Holdco or any of its Restricted Subsidiaries and (v) after
     the fifth anniversary of the Closing Date, the Company may make Restricted
     Payments to Holdco for the purpose of paying, and Holdco may pay, cash
     dividends with respect to the Preferred Stock in an annual amount in any
     Fiscal Year not to exceed 50% of Excess Cash Flow for the previous Fiscal
     Year so long as, at the time of such payment, the Leverage Ratio is less
     than or equal to 3.5 to 1.0.

          SECTION 7.2.7. CAPITAL EXPENDITURES, ETC.  With respect to Capital
Expenditures, the parties covenant and agree as follows:

          (a)  Holdco and the Company will not, and will not permit any other
     Restricted Subsidiaries to, make or commit to make Capital Expenditures in
     any Fiscal Year, except Capital Expenditures (i) which do not aggregate in
     excess of $20,000,000 in such Fiscal Year (the "BASE AMOUNT") PLUS (ii) an
     additional aggregate amount over the term of this Agreement equal to
     $10,000,000; PROVIDED that at such time as the Leverage Ratio is less than
     or equal to 4.0 to 1.0 as of the end of the immediately preceding Fiscal
     Year such additional aggregate amount shall be increased to $20,000,000;
     PROVIDED, HOWEVER, that to the extent the Base Amount for any Fiscal Year
     exceeds the aggregate amount of Capital Expenditures (other than Capital
     Expenditures permitted to be made pursuant to CLAUSE (a)(ii) above or
     CLAUSE (b) below) actually made during such Fiscal Year, such excess amount
     (up to an aggregate of 50% of the Base Amount for such Fiscal Year) may be
     carried forward to (but only to) the next succeeding Fiscal Year (any such
     amount to be certified by the Company to the Agents in the Compliance
     Certificate delivered for the last Fiscal Quarter of such Fiscal Year, and
     any such amount carried forward to a succeeding Fiscal Year shall be deemed
     to be used prior to Holdco and the Restricted Subsidiaries using the Base
     Amount for such succeeding Fiscal Year).

          (b)  The parties acknowledge and agree that the permitted Capital
     Expenditure level set forth in CLAUSE (a) above shall be exclusive of the
     amount of Capital Expenditures actually made with cash capital
     contributions (including the proceeds of issuances of equity securities)
     made, directly or indirectly, by any Person other than Holdco and its
     Restricted Subsidiaries, after the Closing Date to Holdco or any of its
     Restricted Subsidiaries and specifically identified in a certificate
     delivered by an Authorized Officer of the Company to the Agents on or about
     the time such capital contribution is made; PROVIDED, that, to the extent
     any such cash capital contributions constitute Net Equity Proceeds arising
     from the issuance by Holdco of its Capital Stock, only that portion of such
     Net Equity Proceeds which is not required to be applied as a prepayment
     pursuant to CLAUSE (d) of SECTION 3.1.1 may be used for Capital
     Expenditures pursuant to this CLAUSE (b).

                                  92


          SECTION 7.2.8. CONSOLIDATION, MERGER, ETC.  Holdco and the Company
will not, and will not permit any other Restricted Subsidiary to, liquidate or
dissolve, consolidate with, or merge into or with, any other corporation, or
purchase or otherwise acquire all or substantially all of the assets of any
Person (or of any division thereof) except

          (a)  any such Restricted Subsidiary (other than the Company) may
     liquidate or dissolve voluntarily into, and may merge with and into, the
     Company (so long as the Company is the surviving corporation of such
     combination or merger) or any other Restricted Subsidiary (other than the
     Company), and the assets or stock of any Restricted Subsidiary (other than
     the Company) may be purchased or otherwise acquired by the Company or any
     other Restricted Subsidiary; PROVIDED, that notwithstanding the above, a
     Restricted Subsidiary of the Company may only liquidate or dissolve into,
     or merge with and into, another Restricted Subsidiary of the Company if,
     after giving effect to such combination or merger, the Company continues to
     own (directly or indirectly), and the Administrative Agent continues to
     have pledged to it pursuant to a Pledge Agreement, a percentage of the
     issued and outstanding shares of Capital Stock (on a fully diluted basis)
     of the Restricted Subsidiary surviving such combination or merger that is
     equal to or in excess of the percentage of the issued and outstanding
     shares of Capital Stock (on a fully diluted basis) of the Restricted
     Subsidiary that does not survive such combination or merger that was
     (immediately prior to the combination or merger) owned by the Company or
     pledged to the Administrative Agent;

          (b)  so long as no Default has occurred and is continuing or would
     occur after giving effect thereto, the Company or any of its Restricted
     Subsidiaries may purchase all or substantially all of the assets of any
     Person (or any division thereof) not then a Subsidiary, or acquire such
     Person by merger, if permitted (without duplication) pursuant to SECTION
     7.2.7 or CLAUSE (e), (f), (m), (p) or (q) of SECTION 7.2.5;

          (c)  Holdco, the Company and the other Restricted Subsidiaries may
     consummate the Transaction; and

          (d)  Holdco and the Company may each merge into a newly-formed
     corporation incorporated under the laws of the United States or any State
     for the purpose of reincorporating in such State so long as (i) the
     shareholders of the surviving corporation immediately after such merger are
     the same as the shareholders of Holdco or the Company, as the case may be,
     immediately prior to such merger, (ii) immediately before and after such
     merger, no Default shall have occurred and be continuing and (iii) the
     corporation surviving such merger shall assume, pursuant to documentation
     reasonably satisfactory to the Agents, all of the obligations of Holdco or
     the Company, as the case may be, under the Loan Documents.

          SECTION 7.2.9. ASSET DISPOSITIONS, ETC.  Holdco and the Company will
not, and will not permit any other Restricted Subsidiary to, sell, transfer,
license, lease, contribute or otherwise convey, or grant options, warrants or
other rights with respect to, all or any part of its assets, whether now owned
or hereafter acquired (including accounts receivable and Capital Stock of
Restricted Subsidiaries) to any Person, unless

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          (a)  such sale, transfer, license, lease, contribution or conveyance
     of such assets is (i) in the ordinary course of its business (and, other
     than the Asset Contribution, does not constitute a sale, transfer, license,
     lease, contribution or other conveyance of all or a substantial part of
     Holdco's and the Restricted Subsidiaries' assets, taken as a whole) or is
     of obsolete or worn out property, (ii) permitted by SECTION 7.2.8,
     (iii) from Holdco or any of its Restricted Subsidiaries to the Company or
     one of its Wholly-Owned Restricted Subsidiaries that is a U.S. Subsidiary
     or from a Restricted Subsidiary of Holdco that is a Non-U.S. Subsidiary to
     a Wholly-Owned Restricted Subsidiary of Holdco that is a Non-U.S.
     Subsidiary (but only to the extent such sale, transfer, license, lease,
     contribution or conveyance would be permitted by SECTION 7.2.11);

          (b)  such sale, transfer, lease, contribution or conveyance
     (i) constitutes an Investment permitted under SECTION 7.2.5,
     (ii) constitutes a Lien permitted under SECTION 7.2.3, (iii) constitutes a
     Restricted Payment permitted under SECTION 7.2.6, (iv) is from the Company
     or any Wholly-Owned Restricted Subsidiary that is a U.S. Subsidiary to any
     Wholly-Owned Restricted Subsidiary that is a Non-U.S. Subsidiary and is for
     fair market value (but only to the extent such sale, transfer, license,
     lease, contribution or conveyance would be permitted by SECTION 7.2.11), or
     (v) is pursuant to the Administrative Services Agreement;

          (c)   (i) such sale, transfer, lease, contribution or conveyance of
     such assets is for fair market value and the consideration consists of no
     less than 75% in cash or a Lien permitted under CLAUSE (h)(iii) of
     SECTION 7.2.3, (ii) the Net Disposition Proceeds received from such assets,
     together with the Net Disposition Proceeds of all other assets sold,
     transferred, leased, contributed or conveyed pursuant to this CLAUSE (c)
     since the Closing Date, does not exceed (individually or in the aggregate)
     $20,000,000 in any Fiscal Year and (iii) an amount equal to the Net
     Disposition Proceeds generated from such sale, transfer, lease (except
     leases and subleases pursuant to CLAUSE (i) of SECTION 7.2.3), contribution
     or conveyance is reinvested in the Merrill Business, or, to the extent
     required thereunder, is applied to prepay the Loans pursuant to the terms
     of SECTION 3.1.1 and SECTION 3.1.2;

          (d)  such sale, transfer, lease, contribution or conveyance results
from a casualty or condemnation of property or assets; or

          (e)  the sale or discount of overdue accounts receivable in the
ordinary course of business, but only in connection with the compromise or
collection thereof.

          SECTION 7.2.10.  MODIFICATION OF CERTAIN AGREEMENTS.  Without the
prior written consent of the Required Lenders, Holdco and the Company will not,
and will not permit any other Restricted Subsidiary to, consent to any
amendment, supplement, amendment and restatement, waiver or other modification
of any of the terms or provisions contained in, or applicable to, the Preferred
Stock or any Material Document or any schedules, exhibits or agreements related
thereto (the "RESTRICTED AGREEMENTS"), in each case which would materially
adversely affect the rights or remedies of the Lenders or Holdco's, the
Company's or any other Obligor's ability to perform hereunder or under any Loan
Document, or materially increase the obligations of Holdco, the Company or any
other Restricted Subsidiary thereunder to the

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detriment of the Lenders, or which (a) would increase the cash consideration
payable in respect of the Merger or (b) in the case of the Merger Agreement,
which would increase Holdco's, the Company's or any other Restricted
Subsidiary's obligations or liabilities, contingent or otherwise (other than
adjustments to the cash consideration payable in respect of the Merger made
pursuant to the terms of the Merger Agreement).

          SECTION 7.2.11.     TRANSACTIONS WITH AFFILIATES.  Holdco and the
Company will not, and will not permit any other Restricted Subsidiary to, enter
into, or cause, suffer or permit to exist any arrangement or contract with any
of its other Affiliates (other than any Obligor or any other Restricted
Subsidiary) unless such arrangement or contract is fair and equitable to Holdco,
the Company or such Restricted Subsidiary and is an arrangement or contract of
the kind which would be entered into by a prudent Person in the position of
Holdco, the Company or such Restricted Subsidiary with a Person which is not one
of its Affiliates; PROVIDED, HOWEVER that Holdco, the Company and the other
Restricted Subsidiaries shall be permitted to (i) enter into and perform their
obligations, or take any other actions contemplated or permitted under the
Transaction Documents, (ii) make any Restricted Payment permitted under SECTION
7.2.6, (iii) enter into and perform their obligations under arrangements with
DLJ and its affiliates for underwriting, investment banking and advisory
services on usual and customary terms, (iv) make payment of reasonable and
customary fees and reimbursement of expenses payable to directors of Holdco and
(v) enter into employment arrangements with respect to the procurement of
services of directors, officers and employees in the ordinary course of business
and pay reasonable fees in connection therewith.

          SECTION 7.2.12.     NEGATIVE PLEDGES, RESTRICTIVE AGREEMENTS, ETC.
Each of Holdco and the Company will not, and will not permit any other
Restricted Subsidiary to, enter into any agreement (other than the Loan
Documents) prohibiting

          (a)  (i) the creation or assumption of any Lien upon its properties,
     revenues or assets, whether now owned or hereafter acquired securing any
     Obligations or any senior refinancing thereof (other than, (a) in the case
     of any assets acquired with the proceeds of any Indebtedness permitted
     under CLAUSE (c) of SECTION 7.2.2 or subject to Capitalized Lease
     Liabilities permitted under such CLAUSE (c), customary limitations and
     prohibitions contained in such Indebtedness, and (b) in the case of any
     Indebtedness permitted under CLAUSES (g), (h), (i) and (j) of SECTION
     7.2.2, customary limitations in respect of the Restricted Subsidiary of the
     Company that has incurred such Indebtedness) and its assets; PROVIDED, that
     such limitations shall be limited solely to such Restricted Subsidiary (and
     any of its Restricted Subsidiaries) and its (and their) assets, or (ii) the
     ability of Holdco, the Company or any other Obligor to amend or otherwise
     modify this Agreement or any other Loan Document; or

          (b)  any Restricted Subsidiary from making any payments, directly or
     indirectly, to the Company by way of dividends, advances, repayments of
     loans or advances, reimbursements of management and other intercompany
     charges, expenses and accruals or other returns on investments, or any
     other agreement or arrangement which restricts the ability of any such
     Restricted Subsidiary to make any payment, directly or indirectly, to the
     Company (other than customary limitations and prohibitions in any
     Indebtedness ("PERMITTED NEGATIVE PLEDGE INDEBTEDNESS") permitted under
     CLAUSES (b),

                                  95


     (g), (h), (i) and (j) of SECTION 7.2.2; PROVIDED, that such
     limitations shall be limited solely to such Restricted Subsidiary (and any
     of its Restricted Subsidiaries) and its (and their) assets).  The Company
     will provide copies of the documents governing any Permitted Negative
     Pledge Indebtedness to the Agents at the time such Indebtedness is incurred
     or the time at which the Person liable for such Permitted Negative Pledge
     Indebtedness becomes a Restricted Subsidiary.

          SECTION 7.2.13.     STOCK OF SUBSIDIARIES.  Holdco will not directly
own or hold the capital stock of any person other than the Company, any Retained
Interests and any Investments made by Holdco pursuant to the Retained Interests
so long as such Investments are promptly transferred to the Company upon
consummation (unless Holdco may not, pursuant to binding contractual
obligations, transfer such Investments without the consent of a third party).
Holdco and the Company will not permit any Wholly-Owned Restricted Subsidiary to
issue any Capital Stock (whether for value or otherwise) to any Person other
than the Company or another Wholly-Owned Restricted Subsidiary of the Company.

          SECTION 7.2.14.     SALE AND LEASEBACK.  Each of Holdco and the
Company will not, and will not permit any other Restricted Subsidiary to, enter
into any agreement or arrangement with any other Person providing for the
leasing by Holdco, the Company or any other Restricted Subsidiary of real or
personal property which has been or is to be sold or transferred by each of
Holdco, the Company or any other Restricted Subsidiary to such other Person or
to any other Person to whom funds have been or are to be advanced by such Person
on the security of such property or rental obligations of Holdco, the Company or
any other Restricted Subsidiary, to the extent the aggregate amount of cash
proceeds received by the Company in connection with such agreements or
arrangements exceeds $10,000,000.

          SECTION 7.2.15.     DESIGNATION OF SENIOR INDEBTEDNESS.  Neither
Holdco nor the Company will designate any Indebtedness other than the
Obligations as "Designated Senior Indebtedness" under the Senior Subordinated
Bridge Note Agreement, the Senior Subordinated Note Indenture or the
Subordinated Exchange Debenture Indenture without the consent of the Required
Lenders.

                                    ARTICLE VIII
                                 EVENTS OF DEFAULT

          SECTION 8.1    LISTING OF EVENTS OF DEFAULT.  Each of the following
events or occurrences described in this SECTION 8.1 shall constitute an "EVENT
OF DEFAULT".

          SECTION 8.1.1. NON-PAYMENT OF OBLIGATIONS.  (a) The Company shall
default in the payment or prepayment of any principal of any Loan when due or
any Reimbursement Obligations or any deposit of cash for collateral purposes
pursuant to SECTION 2.6.4, as the case may be, or (b) any Obligor (including the
Company) shall default (and such default shall continue unremedied for a period
of three Business Days) in the payment when due of any interest or commitment
fee with respect to the Loans or Commitments or of any other monetary
Obligation.

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          SECTION 8.1.2. BREACH OF WARRANTY.  Any representation or warranty of
the Company or any other Obligor made or deemed to be made hereunder or in any
other Loan Document executed by it or any other writing or certificate
(including the Closing Date Certificate) furnished by or on behalf of the
Company or any other Obligor to the Agents, any Issuer, the Arranger or any
Lender for the purposes of or in connection with this Agreement or any such
other Loan Document (including any certificates delivered pursuant to ARTICLE V)
is or shall be incorrect when made in any material respect.

          SECTION 8.1.3. NON-PERFORMANCE OF CERTAIN COVENANTS AND OBLIGATIONS.
Holdco or the Company shall default in the due performance and observance of any
of its obligations under SECTIONS 7.1.9, 7.1.10, 7.1.11, 7.1.12 or 7.2 (other
than SECTION 7.2.1).

          SECTION 8.1.4. NON-PERFORMANCE OF OTHER COVENANTS AND OBLIGATIONS.
Any Obligor shall default in the due performance and observance of any other
agreement contained herein or in any other Loan Document executed by it, and
such default shall continue unremedied for a period of 30 days after notice
thereof shall have been given to the Company by the Administrative Agent at the
direction of the Required Lenders.

          SECTION 8.1.5. DEFAULT ON OTHER INDEBTEDNESS.  A default shall occur
(i) in the payment when due (subject to any applicable grace period), whether by
acceleration or otherwise, of any Indebtedness, other than Indebtedness
described in SECTION 8.1.1, of Holdco or any Restricted Subsidiary having a
principal amount, individually or in the aggregate, in excess of $5,000,000, or
(ii) a default shall occur in the performance or observance of any obligation or
condition with respect to such Indebtedness having a principal amount,
individually or in the aggregate, in excess of $5,000,000 if the effect of such
default is to accelerate the maturity of any such Indebtedness or such default
shall continue unremedied for any applicable period of time sufficient to permit
the holder or holders of such Indebtedness, or any trustee or agent for such
holders, to cause such Indebtedness to become due and payable prior to its
expressed maturity.

          SECTION 8.1.6. JUDGMENTS.  Judgments or orders for the payment of
money in excess of $5,000,000 (not covered by insurance from a responsible
insurance company that is not denying its liability with respect thereto) in the
aggregate at any time outstanding shall be rendered against Holdco or any
Restricted Subsidiary and remain unvacated and unpaid and either

          (a)  enforcement proceedings shall have been commenced by any creditor
     upon any such judgment or order; or

          (b)  there shall be any period of 30 consecutive days during which a
     stay of enforcement of any such judgment or order, by reason of a pending
     appeal or otherwise, shall not be in effect.

          SECTION 8.1.7. PENSION PLANS.  Any of the following events shall occur
with respect to any Pension Plan

          (a)  the termination of any Pension Plan if, as a result of such
     termination, Holdco or the Company would be required to make a
     contribution to such Pension Plan,

                                   97


     or would reasonably expect to incur a liability or
     obligation to such Pension Plan, in excess of $7,500,000; or

          (b)  a contribution failure occurs with respect to any Pension Plan
     sufficient to give rise to a Lien under SECTION 302(f) of ERISA in an
     amount in excess of $7,500,000.

          SECTION 8.1.8. CHANGE IN CONTROL.  Any Change in Control shall occur.

          SECTION 8.1.9. BANKRUPTCY, INSOLVENCY, ETC.  The Company, any other
Obligor or any other Restricted Subsidiary (other than Immaterial Subsidiaries)
shall

          (a)  become insolvent or generally fail to pay, or admit in writing
     its inability to pay its debts as they become due;

          (b)  apply for, consent to, or acquiesce in, the appointment of a
     trustee, receiver, sequestrator or other custodian for Holdco or any
     Restricted Subsidiary (other than Immaterial Subsidiaries) or any other
     Obligor or any material property of any thereof, or make a general
     assignment for the benefit of creditors;

          (c)  in the absence of such application, consent, acquiescence or
     assignment, permit or suffer to exist the appointment of a trustee,
     receiver, sequestrator or other custodian for Holdco or any Restricted
     Subsidiary (other than Immaterial Subsidiaries) or any other Obligor or for
     a substantial part of the property of any thereof, and such trustee,
     receiver, sequestrator or other custodian shall not be discharged within 60
     days, provided that Holdco, each Restricted Subsidiary and each other
     Obligor hereby expressly authorizes the Agents, each Issuer and each Lender
     to appear in any court conducting any relevant proceeding during such
     60-day period to preserve, protect and defend their rights under the Loan
     Documents;

          (d)  permit or suffer to exist the commencement of any bankruptcy,
     reorganization, debt arrangement or other case or proceeding under any
     bankruptcy or insolvency law, or any dissolution, winding up or liquidation
     proceeding, in respect of Holdco or any Restricted Subsidiary (other than
     Immaterial Subsidiaries) or any other Obligor, and, if any such case or
     proceeding is not commenced by Holdco or such Restricted Subsidiary or such
     other Obligor, such case or proceeding shall be consented to or acquiesced
     in by Holdco or such Restricted Subsidiary or such other Obligor or shall
     result in the entry of an order for relief or shall remain for 60 days
     undismissed, provided that Holdco, each Restricted Subsidiary and each
     other Obligor hereby expressly authorizes the Agents, each Issuer and each
     Lender to appear in any court conducting any such case or proceeding during
     such 60-day period to preserve, protect and defend their rights under the
     Loan Documents; or

          (e)  take any action (corporate or otherwise) authorizing, or in
     furtherance of, any of the foregoing.

          SECTION 8.1.10.     IMPAIRMENT OF SECURITY, ETC.  Any Loan Document,
or any Lien granted thereunder, shall (except in accordance with its terms or
pursuant to an agreement of the parties thereto), in whole or in part,
terminate, cease to be in full force and effect or cease

                                   98


to be the legally valid, binding and enforceable obligation of any Obligor
party thereto; the Company or any other Obligor shall, directly or
indirectly, contest in any manner the effectiveness, validity, binding nature
or enforceability thereof; or any Lien securing any Obligation shall, in
whole or in part, cease to be a perfected first priority Lien, subject only
to those exceptions expressly permitted by the Loan Documents, except to the
extent any event referred to above (a) relates to assets of Holdco or any
Restricted  Subsidiary that are immaterial, (b) results from the failure of
the Administrative Agent to maintain possession of certificates representing
securities pledged under any Pledge Agreement or to file continuation
statements under the Uniform Commercial Code of any applicable jurisdiction
or (c) is covered by a lender's title insurance policy and the relevant
insurer promptly after the occurrence thereof shall have acknowledged in
writing that the same is covered by such title insurance policy.

          SECTION 8.1.11.     SUBORDINATED NOTES.  The subordination provisions
relating to the Senior Subordinated Notes, the Senior Subordinated Bridge Notes
or the Subordinated Exchange Debentures (the "SUBORDINATION PROVISIONS") shall
fail to be enforceable by the Lenders (which have not effectively waived the
benefits thereof) in accordance with the terms thereof, or the principal or
interest on any Loan, Reimbursement Obligation or other Obligations shall fail
to constitute "Senior Indebtedness" or "Designated Senior Indebtedness" (as
defined in the Senior Subordinated Bridge Note Agreement, the Senior
Subordinated Note Indenture or the Subordinated Exchange Debenture Indenture);
or Holdco, or any Restricted Subsidiary shall disavow or contest in any manner
(i) the effectiveness, validity or enforceability of any of the Subordination
Provisions, or (ii) that any of such Subordination Provisions exist for the
benefit of the Agents and the Lenders.

          SECTION 8.2    ACTION IF BANKRUPTCY, ETC.  If any Event of Default
described in CLAUSES (b), (c) and (d) of SECTION 8.1.9 shall occur with respect
to any Obligor (other than Immaterial Subsidiaries) the Commitments (if not
theretofore terminated) shall automatically terminate and the outstanding
principal amount of all outstanding Loans and all other Obligations (including
Reimbursement Obligations) shall automatically be and become immediately due and
payable, without notice or demand and the Company shall automatically and
immediately be obligated to deposit with the Administrative Agent cash
collateral in an amount equal to all Letter of Credit Outstandings.

          SECTION 8.3    ACTION IF OTHER EVENT OF DEFAULT.  If any Event of
Default (other than an Event of Default described in CLAUSES (b), (c) and (d) of
SECTION 8.1.9) shall occur for any reason, whether voluntary or involuntary, and
be continuing, the Administrative Agent, upon the direction of the Required
Lenders, shall by notice to the Company declare all or any portion of the
outstanding principal amount of the Loans and other Obligations (including
Reimbursement Obligations) to be due and payable, require the Company to provide
cash collateral to be deposited with the Administrative Agent in an amount equal
to the undrawn amount of all Letters of Credit outstanding and/or declare the
Commitments (if not theretofore terminated) to be terminated, whereupon the full
unpaid amount of such Loans and other Obligations which shall be so declared due
and payable shall be and become immediately due and payable, without further
notice, demand or presentment, and/or, as the case may be, the Commitments shall
terminate and the Company shall deposit with the Administrative Agent cash
collateral in an amount equal to all Letters of Credit Outstandings.


                              99



                                     ARTICLE IX
                                     THE AGENTS

          SECTION 9.1    ACTIONS.  Each Lender hereby appoints DLJ as its
Syndication Agent and U.S. Bank National Association as its Administrative Agent
under and for purposes of this Agreement and each other Loan Document.  Each
Lender authorizes the Agents to act on behalf of such Lender under this
Agreement and each other Loan Document and, in the absence of other written
instructions from the Required Lenders received from time to time by the Agents
(with respect to which each of the Agents agrees that it will comply, except as
otherwise provided in this Section or as otherwise advised by counsel), to
exercise such powers hereunder and thereunder as are specifically delegated to
or required of the Agents by the terms hereof and thereof, together with such
powers as may be reasonably incidental thereto.  Each Lender hereby indemnifies
(which indemnity shall survive any termination of this Agreement) the Agents,
ratably in accordance with their respective Term Loans outstanding and
Commitments (or, if no Term Loans or Commitments are at the time outstanding and
in effect, then ratably in accordance with the principal amount of Term Loans
held by such Lender, and their respective Commitments as in effect in each case
on the date of the termination of this Agreement), from and against any and all
liabilities, obligations, losses, damages, claims, costs or expenses of any kind
or nature whatsoever which may at any time be imposed on, incurred by, or
asserted against, any of the Agents in any way relating to or arising out of
this Agreement and any other Loan Document, including reasonable attorneys'
fees, and as to which any Agent is not reimbursed by the Company or any other
Obligor (and without limiting the obligation of the Company or any other Obligor
to do so); PROVIDED, HOWEVER, that no Lender shall be liable for the payment of
any portion of such liabilities, obligations, losses, damages, claims, costs or
expenses which are determined by a court of competent jurisdiction in a final
proceeding to have resulted solely from such Agent's gross negligence or willful
misconduct.  The Agents shall not be required to take any action hereunder or
under any other Loan Document, or to prosecute or defend any suit in respect of
this Agreement or any other Loan Document, unless it is indemnified hereunder to
its satisfaction.  If any indemnity in favor of any of the Agents shall be or
become, in such Agent's determination, inadequate, the Agent may call for
additional indemnification from the Lenders and cease to do the acts indemnified
against hereunder until such additional indemnity is given.

          SECTION 9.2    FUNDING RELIANCE, ETC.  Unless the Administrative Agent
shall have been notified by telephone, confirmed in writing, by any Lender by
5:00 p.m., New York time, on the day prior to a Borrowing or Disbursement with
respect to a Letter of Credit pursuant to SECTION 2.6.2 that such Lender will
not make available the amount which would constitute its Percentage of such
Borrowing on the date specified therefor, the Administrative Agent may assume
that such Lender has made such amount available to the Administrative Agent and,
in reliance upon such assumption, make available to the Company a corresponding
amount.  If and to the extent that such Lender shall not have made such amount
available to the Administrative Agent, such Lender severally agrees and the
Company agrees to repay the Administrative Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the date
the Administrative Agent made such amount available to the Company to the date
such amount is repaid to the Administrative Agent, at the interest rate
applicable at the time to Loans comprising such Borrowing.

                                100


          SECTION 9.3    EXCULPATION.  None of the Agents or the Arranger nor
any of their respective directors, officers, employees or agents shall be liable
to any Lender for any action taken or omitted to be taken by it under this
Agreement or any other Loan Document, or in connection herewith or therewith,
except for its own willful misconduct or gross negligence, nor responsible for
any recitals or warranties herein or therein, nor for the effectiveness,
enforceability, validity or due execution of this Agreement or any other Loan
Document, nor for the creation, perfection or priority of any Liens purported to
be created by any of the Loan Documents, or the validity, genuineness,
enforceability, existence, value or sufficiency of any collateral security, nor
to make any inquiry respecting the performance by the Company of its obligations
hereunder or under any other Loan Document.  Any such inquiry which may be made
by any Agent or any Issuer shall not obligate it to make any further inquiry or
to take any action. The Agents and the Issuers shall be entitled to rely upon
advice of counsel concerning legal matters and upon any notice, consent,
certificate, statement or writing which the Agents or the Issuers, as
applicable, believe to be genuine and to have been presented by a proper Person.

          SECTION 9.4    SUCCESSOR.  The Syndication Agent may resign as such
upon one Business Day's notice to the Company and the Administrative Agent.
The Administrative Agent may resign as such at any time upon at least 30
days' prior notice to the Company and all Lenders.  If the Administrative
Agent at any time shall resign, the Required Lenders may, with the prior
consent of the Company (which consent shall not be unreasonably withheld),
appoint another Lender as a successor Administrative Agent which shall
thereupon become the Administrative Agent hereunder.  If no successor
Administrative Agent shall have been so appointed by the Required Lenders,
and shall have accepted such appointment, within 30 days after the retiring
Administrative Agent's giving notice of resignation, then the retiring
Administrative Agent may, on behalf of the Lenders and with the prior consent
of the Company (which consent shall not be unreasonably withheld), appoint a
successor Administrative Agent, which shall be one of the Lenders or a
commercial banking institution organized under the laws of the United States
or a United States branch or agency of a commercial banking institution, and
having a combined capital and surplus of at least $500,000,000. Upon the
acceptance of any appointment as Administrative Agent hereunder by a
successor Administrative Agent, such successor Administrative Agent shall be
entitled to receive from the retiring Administrative Agent such documents of
transfer and assignment as such successor Administrative Agent may reasonably
request, and shall thereupon succeed to and become vested with all rights,
powers, privileges and duties of the retiring Administrative Agent, and the
retiring Administrative Agent shall be discharged from its duties and
obligations under this Agreement.  After any retiring Administrative Agent's
resignation hereunder as the Administrative Agent, the provisions of

          (a)  this ARTICLE IX shall inure to its benefit as to any actions
     taken or omitted to be taken by it while it was the Administrative Agent
     under this Agreement; and

          (b)  SECTION 11.3 and SECTION 11.4 shall continue to inure to its
benefit.

          SECTION 9.5    CREDIT EXTENSIONS BY EACH AGENT AND ISSUER.  Each Agent
and each Issuer shall have the same rights and powers with respect to (i) in the
case of the Agents, the Credit Extensions made by it or any of its affiliates
and (ii) in the case of any Issuer, the Loans made by it or any of its
affiliates as any other Lender and may exercise the same as if it were not an
Agent or an Issuer.  Each Agent, each Issuer and each of their respective
affiliates

                             101


may accept deposits from, lend money to, and generally engage in any
kind of business with the Company or any Subsidiary or Affiliate of the Company
as if such Agent or Issuer were not an Agent or Issuer hereunder.

          SECTION 9.6    CREDIT DECISIONS.  Each Lender acknowledges that it
has, independently of each Agent, the Arranger, each Issuer and each other
Lender, and based on such Lender's review of the financial information of the
Company, this Agreement, the other Loan Documents (the terms and provisions of
which being satisfactory to such Lender) and such other documents, information
and investigations as such Lender has deemed appropriate, made its own credit
decision to extend its Commitments.  Each Lender also acknowledges that it will,
independently of each Agent, the Arranger, each Issuer and each other Lender,
and based on such other documents, information and investigations as it shall
deem appropriate at any time, continue to make its own credit decisions as to
exercising or not exercising from time to time any rights and privileges
available to it under this Agreement or any other Loan Document.

          SECTION 9.7    COPIES, ETC. The Administrative Agent shall give prompt
notice to each Lender of each material notice or request required or permitted
to be given to the Administrative Agent by the Company pursuant to the terms of
this Agreement (unless concurrently delivered to the Lenders by the Company).
The Administrative Agent will distribute to each Lender each document or
instrument received for such Lender's account and copies of all other
communications received by the Administrative Agent from the Company for
distribution to the Lenders by the Administrative Agent in accordance with the
terms of this Agreement.

          SECTION 9.8    THE SYNDICATION AGENT, THE DOCUMENTATION AGENT AND THE
ADMINISTRATIVE AGENT.  Notwithstanding anything else to the contrary contained
in this Agreement or any other Loan Document, the Syndication Agent, the
Documentation Agent and the Administrative Agent, each in such capacity, shall
have no duties or responsibilities under this Agreement or any other Loan
Document nor any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or otherwise exist against the Syndication Agent,
the Documentation Agent or the Administrative Agent, as applicable, in such
capacity except, in the case of the Agents, as are explicitly set forth herein
or in the other Loan Documents.

                                     ARTICLE X
                                  HOLDCO GUARANTY

          SECTION 10.1   GUARANTY.  Holdco hereby absolutely, unconditionally
and irrevocably

          (a)  guarantees the full and punctual payment when due, whether at
stated maturity, by required prepayment, declaration, acceleration, demand or
otherwise, of all Obligations of each Obligor (other than Holdco) now or
hereafter existing under this Agreement and each other Loan Document to which
such Obligor is or may become a party, whether for principal, interest, fees,
expenses or otherwise (including all such amounts which would become due but for
the operation of the automatic stay under SECTION 362(a) of the United States

                            102


Bankruptcy Code, 11 U.S.C. Section  362(a), and the operation of SECTIONS 502(b)
and 506(b) of the United States Bankruptcy Code, 11 U.S.C. Section  502(b) and
Section  506(b)), and

          (b)  agrees to indemnify and hold harmless each Lender for any and all
costs and expenses (including reasonable attorney's fees and expenses) incurred
by such Lender or such holder, as the case may be, in enforcing any rights under
this ARTICLE X;

PROVIDED, HOWEVER, that Holdco shall be liable under this Agreement only for
the maximum amount of such liability that can be hereby incurred without
rendering this Agreement, as it relates to Holdco, voidable under applicable
law relating to fraudulent conveyance or fraudulent transfer, and not for any
greater amount. This ARTICLE X constitutes a guaranty of payment when due and
not of collection, and Holdco specifically agrees that it shall not be
necessary or required that any Lender exercise any right, assert any claim or
demand or enforce any remedy whatsoever against any Obligor (other than
Holdco) (or any other Person) before or as a condition to the obligations of
such Guarantor hereunder.

          SECTION 10.2   ACCELERATION OF OBLIGATIONS HEREUNDER.  Holdco agrees
that, in the event of the dissolution or insolvency of any Obligor (other than
Holdco), or the inability or failure of any Obligor to pay its debts as they
become due, or an assignment by any Obligor (other than Holdco) for the benefit
of creditors, or the commencement of any case or proceeding in respect of any
Obligor (other than Holdco) under any bankruptcy, insolvency or similar laws,
and if such event shall occur at a time when any of the Obligations of any
Obligor (other than Holdco) may not then be due and payable, Holdco agrees that
it will pay to the Lenders forthwith the full amount which would be payable
hereunder by such Obligor if all such Obligations were then due and payable.
The foregoing provisions of this SECTION 10.2 shall not be applicable if the
dissolution, insolvency or other events described above relate to an Immaterial
Subsidiary.

          SECTION 10.3   OBLIGATIONS HEREUNDER ABSOLUTE, ETC. The obligations of
Holdco under this ARTICLE X shall in all respects be a continuing, absolute,
unconditional and irrevocable guaranty of payment, and shall remain in full
force and effect until all Obligations of each Obligor (other than Holdco) have
been paid in full and all Commitments shall have terminated.  Holdco guarantees
that the Obligations of each Obligor (other than Holdco) will be paid strictly
in accordance with the terms of this Agreement and each other Loan Document
under which they arise, regardless of any law, regulation or order now or
hereafter in effect in any jurisdiction affecting any of such terms or the
rights of any Lender or any holder of any Note with respect thereto.  The
liability of Holdco under this ARTICLE X shall be absolute, unconditional and
irrevocable irrespective of:

          (a)  any lack of validity, legality or enforceability of other
provisions of this Agreement or any other Loan Document;

          (b)  the failure of any Lender

          (i)  to assert any claim or demand or to enforce any right or remedy
          against any Obligor (other than Holdco) or any other Person (including
          any other guarantor) under the provisions of this Agreement, any other
          Loan Document or otherwise, or

                                  103


          (ii) to exercise any right or remedy against any other guarantor of,
          or collateral securing, any Obligations of any Obligor
          (other than Holdco);

          (c)  any change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations of any Obligor (other than Holdco),
or any other extension, compromise or renewal of any Obligation of any Obligor
(other than Holdco);

          (d)  any reduction, limitation, impairment or termination of any
Obligation of any Obligor (other than Holdco) for any reason, including any
claim of waiver, release, surrender, alteration or compromise, and shall not be
subject to (and Holdco hereby waives any right to or claim of) any defense or
setoff, counterclaim, recoupment or termination whatsoever by reason of the
invalidity, illegality, nongenuineness, irregularity, compromise,
unenforceability of, or any other event or occurrence affecting, any Obligation
of any Obligor (other than Holdco) or otherwise;

          (e)  any amendment to, rescission, waiver, or other modification of,
or any consent to departure from, any of the other terms of this Agreement or
any other Loan Document;

          (f)  any addition, exchange, release, surrender or non-perfection of
any collateral, or any amendment to or waiver or release or addition of, or
consent to departure from, any other guaranty, held by any Lender securing any
of the Obligations of any Obligor (other than Holdco); or

          (g)  any other circumstance which might otherwise constitute a defense
available to, or a legal or equitable discharge of, any Obligor (other than
Holdco), any surety or any guarantor.

          SECTION 10.4   REINSTATEMENT, ETC.  Holdco agrees that this ARTICLE X
shall continue to be effective or be reinstated, as the case may be, if at any
time any payment (in whole or in part) of any of the Obligations of any Obligor
(other than Holdco) is rescinded or must otherwise be restored by any Lender
upon the insolvency, bankruptcy or reorganization of any Obligor (other than
Holdco) or otherwise, all as though such payment had not been made.

          SECTION 10.5   WAIVER, ETC.  Holdco hereby waives promptness,
diligence, notice of acceptance and any other notice with respect to any of the
Obligations of any Obligor (other than Holdco) and this ARTICLE X and any
requirement that the Administrative Agent and any other Lender protect, secure
or perfect or insure any security interest or Lien, or any property subject
thereto, or exhaust any right or take any action against any Obligor (other than
Holdco) or any other Person (including any other guarantor) or entity or any
collateral securing the Obligations of any Obligor (other than Holdco), as the
case may be.

          SECTION 10.6   POSTPONEMENT OF SUBROGATION.  Holdco agrees that it
will not exercise any rights which it may acquire by way of subrogation under
this ARTICLE X, by any payment made hereunder or otherwise, until the prior
payment, in full and in cash, of all Obligations of each Obligor (other than
Holdco).  Any amount paid to Holdco on account of any such subrogation rights
prior to the payment in full of all Obligations of each Obligor (other than
Holdco) shall be held in trust for the benefit of the Lenders and shall
immediately be paid to the

                                104


Lenders and credited and applied against the Obligations of each Obligor
(other than Holdco) whether matured or unmatured, in accordance with the
terms of this Agreement; PROVIDED, HOWEVER, that if all Obligations of each
Obligor (other than Holdco) have been paid in full in cash and all
Commitments have been permanently terminated, each Lender agrees that, at
Holdco's request, the Lenders will execute and deliver to Holdco appropriate
documents (without recourse and without representation or warranty) necessary
to evidence the transfer by subrogation to Holdco of an interest in the
Obligations of each Obligor (other than Holdco) resulting from such payment
by Holdco.  In furtherance of the foregoing, for so long as any Obligations
of any Obligor (other than Holdco) or any Commitments remain outstanding,
Holdco shall refrain from taking any action or commencing any proceeding
against any Obligor (other than Holdco) (or its successors or assigns),
whether in connection with a bankruptcy proceeding or otherwise to recover
any amounts in respect of payments made under this ARTICLE X to any Lender.

          SECTION 10.7   SUCCESSORS, TRANSFEREES AND ASSIGNS; TRANSFERS OF
NOTES, ETC.  Without limiting the generality of SECTION 11.11, any Lender may
assign or otherwise transfer (in whole or in part) any Obligation of any Obligor
(other than Holdco) held by it to any other Person or entity, and such other
Person or entity shall thereupon become vested with all rights and benefits in
respect thereof granted to such Lender under any Loan Document (including this
ARTICLE X) or otherwise, subject, however, to any contrary provisions in such
assignment or transfer, and to the provisions of SECTION 11.11 and ARTICLE IX of
this Agreement.

                                     ARTICLE XI
                              MISCELLANEOUS PROVISIONS

          SECTION 11.1   WAIVERS, AMENDMENTS, ETC.  The provisions of this
Agreement and of each other Loan Document may from time to time be amended,
modified or waived, if such amendment, modification or waiver is in writing and
consented to by Holdco, the Company and each Obligor party thereto and by the
Required Lenders; PROVIDED, HOWEVER, that no such amendment, modification or
waiver which would:

          (a)  modify any requirement hereunder that any particular action be
     taken by all the Lenders or by the Required Lenders shall be effective
     unless consented to by each Lender;

          (b)  modify this SECTION 11.1, or clause (a) of SECTION 11.10, change
     the definitions of "Required Lenders" or "Total Exposure Amount", increase
     any Commitment Amount or the Percentage of any Lender (other than pursuant
     to CLAUSE (b) or CLAUSE (d) of SECTION 2.1.1 or CLAUSE (c) of
     SECTION 2.1.2), reduce any fees described in SECTION 3.3 (other than the
     administration fee referred to in SECTION 3.3.2), release any material
     Subsidiary Guarantor from its obligations under the Subsidiary Guaranty,
     Holdco from its obligations under Article X or all or substantially all of
     the collateral security (except in each case as otherwise specifically
     provided in this Agreement, the Subsidiary Guaranty, the Security Agreement
     or a Pledge Agreement and it being understood that an increase in the
     amount of the Indebtedness of the Company secured ratably by such
     collateral security shall not be deemed a release of collateral security)
     or
                                 105


     extend any Commitment Termination Date, shall be made without the
     consent of each Lender directly and adversely affected thereby;

          (c)  extend the due date for, or reduce the amount of, any scheduled
     repayment of principal of or interest on or fees payable in respect of any
     Loan or reduce the principal amount of or rate of interest on or fees
     payable in respect of any Loan or any Reimbursement Obligations (which
     shall in each case include the conversion of all or any part of the
     Obligations into equity of any Obligor), shall be made without the consent
     of the Lender which has made such Loan or, in the case of a Reimbursement
     Obligation, the Issuer owed, and those Lenders participating in, such
     Reimbursement Obligation;

          (d)  affect adversely the interests, rights or obligations of any
     Agent, any Issuer or the Arranger (in its capacity as Agent, Issuer or
     Arranger), unless consented to by such Agent, Issuer or Arranger, as the
     case may be; or

          (e)  amend, modify or waive the provisions of CLAUSE (a)(i) of SECTION
     3.1.1 or CLAUSE (b) of SECTION 3.1.2 or effect any amendment, modification
     or waiver that by its terms adversely affects the rights of Lenders
     participating in any Tranche differently from those of Lenders
     participating in other Tranches, without the consent of the holders of at
     least a majority of the aggregate amount of Loans outstanding under the
     Tranche or Tranches affected by such amendment, modification or waiver, or,
     in the case of an amendment, modification or waiver affecting any Tranche
     or Tranches of Revolving Loan Commitments, the Lenders holding at least a
     majority of the Revolving Loan Commitments in respect of such Tranche or
     Tranches.

For purposes of this Section 11.1, the Syndication Agent, in coordination
with the Administrative Agent, shall have primary responsibility, together
with the Company, in the negotiation, preparation and documentation relating
to any amendment, modification or waiver of this Agreement, any other Loan
Document or any other agreement or document related hereto or thereto
contemplated pursuant to this Section.  No failure or delay on the part of
any Agent, any Issuer or any Lender in exercising any power or right under
this Agreement or any other Loan Document shall operate as a waiver thereof,
nor shall any single or partial exercise of any such power or right preclude
any other or further exercise thereof or the exercise of any other power or
right.  No notice to or demand on the Company in any case shall entitle it to
any notice or demand in similar or other circumstances.  No waiver or
approval by any Agent, any Issuer or any Lender under this Agreement or any
other Loan Document shall, except as may be otherwise stated in such waiver
or approval, be applicable to subsequent transactions.  No waiver or approval
hereunder shall require any similar or dissimilar waiver or approval
thereafter to be granted hereunder.

          SECTION 11.2   NOTICES.  All notices and other communications provided
to any party hereto under this Agreement or any other Loan Document shall be in
writing or by facsimile and addressed, delivered or transmitted to such party at
its address or facsimile number set forth on SCHEDULE II hereto or, in the case
of a Lender that becomes a party hereto after the date hereof, as set forth in
the Lender Assignment Agreement pursuant to which such Lender becomes a Lender
hereunder or at such other address or facsimile number as may be designated by
such party in a notice to the other parties.  Any notice, if mailed and properly
addressed with
                                106


postage prepaid or if properly addressed and sent by pre-paid courier
service, shall be deemed given when received; any notice, if transmitted by
facsimile, shall be deemed given when transmitted (and telephonic
confirmation of receipt thereof has been received).

          SECTION 11.3   PAYMENT OF COSTS AND EXPENSES.  The Company agrees
to pay on demand all reasonable expenses of each of the Agents (including the
reasonable fees and out-of-pocket expenses of a single counsel to the Agents
and of local counsel, if any, who may be retained by counsel to the Agents)
in connection with

          (a)  the syndication by the Syndication Agent and the Arranger of the
     Loans, the negotiation, preparation, execution and delivery of this
     Agreement and of each other Loan Document, including schedules and
     exhibits, and any amendments, waivers, consents, supplements or other
     modifications to this Agreement or any other Loan Document as may from time
     to time hereafter be required, whether or not the transactions contemplated
     hereby are consummated;

          (b)  the filing, recording, refiling or rerecording of each Mortgage,
     each Pledge Agreement and the Security Agreement and/or any Uniform
     Commercial Code financing statements relating thereto and all amendments,
     supplements and modifications to any thereof and any and all other
     documents or instruments of further assurance required to be filed or
     recorded or refiled or rerecorded by the terms hereof or of such Mortgage,
     Pledge Agreement or Security Agreement; and

          (c)  the preparation and review of the form of any document or
     instrument relevant to this Agreement or any other Loan Document.

The Company further agrees to pay, and to save the Agents, the Issuers and the
Lenders harmless from all liability for, any stamp or other similar taxes which
may be payable in connection with the execution or delivery of this Agreement,
the Credit Extensions made hereunder or the issuance of any Notes or Letters of
Credit or any other Loan Documents.  The Company also agrees to reimburse each
Agent, each Issuer and each Lender upon demand for all reasonable out-of-pocket
expenses (including reasonable attorneys' fees and legal expenses) incurred by
such Agent, such Issuer or such Lender in connection with (x) the negotiation of
any restructuring or "work-out", whether or not consummated, of any Obligations
and (y) the enforcement of any Obligations.

          SECTION 11.4   INDEMNIFICATION.  In consideration of the execution and
delivery of this Agreement by each Lender and the extension of the Commitments,
the Company hereby, to the fullest extent permitted under applicable law,
indemnifies, exonerates and holds each Agent, each Issuer, the Arranger and each
Lender and each of their respective Affiliates, and each of their respective
partners, officers, directors, employees and agents, and each other Person
controlling any of the foregoing within the meaning of either SECTION 15 of the
Securities Act of 1933, as amended, or SECTION 20 of the Securities Exchange Act
of 1934, as amended (collectively, the "INDEMNIFIED PARTIES"), free and harmless
from and against any and all actions, causes of action, suits, losses, costs,
liabilities and damages, and expenses actually incurred in connection therewith
(irrespective of whether any such Indemnified Party is a party to the action for
which indemnification hereunder is sought), including reasonable attorneys' fees
and
                             107


disbursements (collectively, the "INDEMNIFIED LIABILITIES"), incurred by the
Indemnified Parties or any of them as a result of, or arising out of, or
relating to

          (a)  any transaction financed or to be financed in whole or in part,
     directly or indirectly, with the proceeds of any Credit Extension;

          (b)  the entering into and performance of this Agreement and any other
     Loan Document by any of the Indemnified Parties (excluding any successful
     action brought by or on behalf of the Company as the result of any failure
     by any Lender to make any Credit Extension hereunder);

          (c)  any investigation, litigation or proceeding related to any
     acquisition or proposed acquisition by Holdco, the Company or any of its
     Subsidiaries of all or any portion of the stock or assets of any Person,
     whether or not such Agent, such Issuer, such Arranger or such Lender is
     party thereto;

          (d)  any alleged or actual litigation or proceeding related to any
     environmental cleanup or noncompliance with or liability under any
     Environmental Law relating to the use, ownership or operation by Holdco,
     the Company or any of its Subsidiaries of any real property or to the
     release, generation, transportation or arrangement for transportation by
     Holdco, the Company or any of its Subsidiaries of any Hazardous Material;
     or

          (e)  the presence on or under, or the escape, seepage, leakage,
     spillage, discharge, emission or release from, any real property owned or
     operated by Holdco, the Company or any Subsidiary thereof of any Hazardous
     Material present on or under such property at or prior to the time Holdco,
     the Company or such Subsidiary owned or operated such property which gives
     rise to liability under any Environmental Law (including any losses,
     liabilities, damages, injuries, costs, expenses or claims asserted or
     arising under any Environmental Law), regardless of whether caused by, or
     within the control of, Holdco, the Company or such Subsidiary,

except for any such Indemnified Liabilities arising for the account of a
particular Indemnified Party by reason of the relevant Indemnified Party's gross
negligence or willful misconduct or any Hazardous Materials that are first
manufactured, emitted, generated, treated, released, stored or disposed of on
any real property of Holdco or any of its Subsidiaries or any violation of
Environmental Law that first occurs on or with respect to any real property of
Holdco, the Company or any of its Subsidiaries after such real property is
transferred to any Indemnified Party or its successor by foreclosure sale, deed
in lieu of foreclosure, or similar transfer, except to the extent such
manufacture, emission, release, generation, treatment, storage or disposal or
violation is actually caused by Holdco, the Company or any of the Company's
Subsidiaries.  Holdco and the Company and its permitted successors and assigns
hereby waive, release and agree not to make any claim, or bring any cost
recovery action against, any Agent, any Issuer, the Documentation Agent, the
Arranger or any Lender under CERCLA or any state equivalent, or any similar law
now existing or hereafter enacted, except to the extent arising (x) out of the
gross negligence or willful misconduct of any Indemnified Party or arising (y)
out of any Hazardous Materials that are manufactured, emitted, generated,
treated, released, stored or

                                   108


disposed of on any real property of Holdco or any of its Subsidiaries or any
violation of Environmental Law that occurs on or with respect to any real
property of Holdco or any of its Subsidiaries to the extent occurring after
such real property is transferred to any Indemnified Party or its successor
by foreclosure sale, deed in lieu of foreclosure, or similar transfer, except
to the extent such manufacture, emission, release, generation, treatment,
storage or disposal or violation is actually caused by Holdco or any of its
Subsidiaries.  It is expressly understood and agreed that to the extent that
any Indemnified Party is strictly liable under any Environmental Laws, the
Company's obligation to such Indemnified Party under this indemnity shall
likewise be without regard to fault on the part of the Company, to the extent
permitted under applicable law, with respect to the violation or condition
which results in liability of such Indemnified Party.  Notwithstanding
anything to the contrary herein, each Agent, each Issuer, the Arranger and
each Lender shall be responsible with respect to any Hazardous Materials that
are first manufactured, emitted, generated, treated, released, stored or
disposed of on any real property of Holdco or any of its Subsidiaries or any
violation of Environmental Law that first occurs on or with respect to any
such real property after such real property is transferred to any Agent,
Issuer, Arranger or Lender to its successor by foreclosure sale, deed in lieu
of foreclosure, or similar transfer, except to the extent such manufacture,
emission, release, generation, treatment, storage or disposal or violation is
actually caused by Holdco or any of its Subsidiaries.  If and to the extent
that the foregoing undertaking may be unenforceable for any reason, the
Company hereby agrees to make the maximum contribution to the payment and
satisfaction of each of the Indemnified Liabilities, which is permissible
under applicable law.

          SECTION 11.5   SURVIVAL.  The obligations of the Company under
SECTIONS 4.3, 4.4, 4.5, 4.6, 11.3 and 11.4, and the obligations of the Lenders
under SECTIONS 4.8 and 9.1, shall in each case survive any termination of this
Agreement, the payment in full of all Obligations and the termination of all
Commitments.  The representations and warranties made by Holdco, the Company and
each other Obligor in this Agreement and in each other Loan Document shall
survive the execution and delivery of this Agreement and each such other Loan
Document.

          SECTION 11.6   SEVERABILITY.  Any provision of this Agreement or any
other Loan Document which is prohibited or unenforceable in any jurisdiction
shall, as to such provision and such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions of this Agreement or such Loan Document or affecting the validity or
enforceability of such provision in any other jurisdiction.

          SECTION 11.7   HEADINGS.  The various headings of this Agreement and
of each other Loan Document are inserted for convenience only and shall not
affect the meaning or interpretation of this Agreement or such other Loan
Document or any provisions hereof or thereof.

          SECTION 11.8   EXECUTION IN COUNTERPARTS, EFFECTIVENESS, ETC.  This
Agreement may be executed by the parties hereto in several counterparts, each of
which shall be deemed to be an original and all of which shall constitute
together but one and the same agreement.

          SECTION 11.9   GOVERNING LAW; ENTIRE AGREEMENT.  THIS AGREEMENT AND,
EXCEPT TO THE EXTENT OTHERWISE EXPRESSLY PROVIDED THEREIN,

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EACH OTHER LOAN DOCUMENT SHALL EACH BE DEEMED TO BE A CONTRACT MADE UNDER AND
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT
REGARD TO CONFLICTS OF LAWS PRINCIPLES.  This Agreement and the other Loan
Documents constitute the entire understanding among the parties hereto with
respect to the subject matter hereof and supersede any prior agreements,
written or oral, with respect thereto.  Upon the execution and delivery of
this Agreement by the parties hereto, all obligations and liabilities of the
DLJMB Entities under or relating or with respect to the Commitment Letter
shall be terminated and of no further force or effect.

          SECTION 11.10  SUCCESSORS AND ASSIGNS.  This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and assigns; PROVIDED, HOWEVER, that:

          (a)  Holdco, the Company may not assign or transfer its rights or
     obligations hereunder without the prior written consent of each of the
     Agents and all Lenders; and

          (b)  the rights of sale, assignment and transfer of the Lenders are
     subject to SECTION 11.11.

          SECTION 11.11  SALE AND TRANSFER OF LOANS AND NOTES; PARTICIPATIONS IN
LOANS AND NOTES.  Each Lender may assign, or sell participations in, its Loans
and Commitments to one or more other Persons, on a non PRO RATA basis (except as
provided below), in accordance with this SECTION 11.11.

          SECTION 11.11.1.    ASSIGNMENTS.  Any Lender (the "ASSIGNOR LENDER"),

          (a)  with the written consents of the Company, the Agents and (in the
     case of any assignment of participations in Letters of Credit or Revolving
     Loan Commitments) the applicable Issuer (which consents (i) shall not be
     unreasonably delayed or withheld and (ii) of the Company shall not be
     required upon the occurrence and during the continuance of any Event of
     Default), may at any time assign and delegate to one or more commercial
     banks, funds which are regularly engaged in making, purchasing or investing
     in loans or securities or other financial institutions, and

          (b)  with notice to the Company, the Agents, and (in the case of any
     assignment of participations in Letters of Credit or Revolving Loan
     Commitments) the applicable Issuer, but without the consent of the Company,
     the Agents or such Issuer, may assign and delegate to any of its affiliates
     or to any other Lender, or to an Approved Fund of any Lender

(each Person described in either of the foregoing clauses as being the Person to
whom such assignment and delegation is to be made, being hereinafter referred to
as an "ASSIGNEE LENDER"), all or any fraction of such Lender's Term Loans of any
Tranche, Revolving Loans, participations in Letters of Credit, Letter of Credit
Outstandings with respect thereto and related Commitments of any Tranche (which
assignment and delegation shall be, as among Revolving Loan Commitments,
Revolving Loans and participations in Letters of Credit, of a constant, and
not a

                                   110


varying, percentage) which, in the case of an assignment under CLAUSE (A)
above, shall be in a minimum aggregate amount of (i) $1,000,000 or such
lesser amount as the Company and the Agents may consent to, or (ii) with
respect to the Tranche as to which such assignment is to occur, the then
remaining amount of such Lender's Term Loans or Revolving Loan Commitment and
related Revolving Loans and participations in Letters of Credit, as the case
may be; PROVIDED, HOWEVER, that any such Assignee Lender will comply, if
applicable, with the provisions contained in SECTION 4.6 and the Company,
each other Obligor and the Agents shall be entitled to continue to deal
solely and directly with such Lender in connection with the interests so
assigned and delegated to an Assignee Lender until

               (i)    written notice of such assignment and delegation, together
               with payment instructions, addresses and related information with
               respect to such Assignee Lender, shall have been given to the
               Company and the Agents by such Lender and such Assignee Lender;

               (ii)   such Assignee Lender shall have executed and delivered to
               the Company and the Agents a Lender Assignment Agreement,
               accepted by the Agents;

               (iii)  the processing fees described below shall have been paid;
               and

               (iv)   the Administrative Agent shall have registered such
               assignment and delegation in the Register pursuant to CLAUSE (b)
               of SECTION 2.7.

From and after the date that the Agents accept such Lender Assignment Agreement
and such assignment and delegation is registered in the Register pursuant to
CLAUSE (b) of SECTION 2.7, (x) the Assignee Lender thereunder shall be deemed
automatically to have become a party hereto and to the extent that rights and
obligations hereunder have been assigned and delegated to such Assignee Lender
in connection with such Lender Assignment Agreement, shall have the rights and
obligations of a Lender hereunder and under the other Loan Documents, and
(y) the Assignor Lender, to the extent that rights and obligations hereunder
have been assigned and delegated by it in connection with such Lender Assignment
Agreement, shall be released from its obligations hereunder and under the other
Loan Documents.  Any Assignor Lender that shall have previously requested and
received any Note or Notes in respect of any Tranche to which any such
assignment applies shall, upon the acceptance by the Administrative Agent of the
applicable Lender Assignment Agreement, mark such Note or Notes "exchanged" and
deliver them to the Company (against, if the Assignor Lender has retained Loans
or Commitments with respect to the applicable Tranche and has requested
replacement Notes pursuant to CLAUSE (b)(ii) of SECTION 2.7, its receipt from
the Company of replacement Notes in the principal amount of the Loans and
Commitments of the applicable Tranche retained by it).  Such Assignor Lender or
such Assignee Lender must also pay a processing fee to the Administrative Agent
upon delivery of any Lender Assignment Agreement in the amount of $3,500, unless
such assignment and delegation is by a Lender to its Affiliate or Approved Fund
or if such assignment and delegation is by a Lender to a Federal Reserve Bank,
as provided below or is otherwise consented to by the Administrative Agent.  Any
attempted assignment and delegation not made in accordance with this SECTION
11.11.1 shall be null and void.  Nothing contained in this SECTION 11.11.1 shall
prevent or prohibit any Lender from pledging its rights (but not its obligations
to make Loans or participate in Letters of Credit or Letter of Credit
Outstandings) under this Agreement and/or its

                              111


Loans hereunder to a Federal Reserve Bank in support of borrowings made by
such Lender from such Federal Reserve Bank, and any Lender that is a fund
that invests in bank loans may pledge all or any portion of its rights (but
not its obligations to make Loans or participate in Letters of Credit or
Letter of Credit Outstandings) hereunder to any trustee or any other
representative of holders of obligations owed or securities issued by such
fund as security for such obligations or securities. In the event that S&P,
Moody's or Thompson's BankWatch (or InsuranceWatch Ratings Service, in the
case of Lenders that are insurance companies (or Best's Insurance Reports, if
such insurance company is not rated by Insurance Watch Ratings Service))
shall, after the date that any Lender with a Commitment to make Revolving
Loans or participate in Letters of Credit becomes a Lender, downgrade the
long-term certificate of deposit rating or long-term senior unsecured debt
rating of such Lender, and the resulting rating shall be below BBB-, Baa3 or
C (or BB, in the case of Lender that is an insurance company (or B, in the
case of an insurance company not rated by InsuranceWatch Ratings Service)),
respectively, then the applicable Issuer or the Company shall have the right,
but not the obligation, upon notice to such Lender and the Agents, to replace
such Lender with an Assignee Lender in accordance with and subject to the
restrictions contained in this Section, and such Lender hereby agrees to
transfer and assign without recourse (in accordance with and subject to the
restrictions contained in this Section) all its interests, rights and
obligations in respect of its Revolving Loan Commitment under this Agreement
to such Assignee Lender; PROVIDED, HOWEVER, that (i) no such assignment shall
conflict with any law, rule, regulation or order of any governmental
authority and (ii) such Assignee Lender shall pay to such Lender in
immediately available funds on the date of such assignment the principal of
and interest and fees (if any) accrued to the date of payment on the Loans
made, and Letters of Credit participated in, by such Lender hereunder and all
other amounts accrued for such Lender's account or owed to it hereunder.

          SECTION 11.11.2.    PARTICIPATIONS.  Any Lender may at any time
sell to one or more commercial banks or other Persons (each such commercial
bank and other Person being herein called a "PARTICIPANT") participating
interests in any of the Loans, Commitments, participations in Letters of
Credit and Letter of Credit Outstandings or other interests of such Lender
hereunder; PROVIDED, HOWEVER, that

          (a)  no participation contemplated in this Section shall relieve such
     Lender from its Commitments or its other obligations hereunder or under any
     other Loan Document;

          (b)  such Lender shall remain solely responsible for the performance
     of its Commitments and such other obligations;

          (c)  the Company and each other Obligor and the Agents shall continue
     to deal solely and directly with such Lender in connection with such
     Lender's rights and obligations under this Agreement and each of the other
     Loan Documents;

          (d)  no Participant, unless such Participant is itself a Lender, shall
     be entitled to require such Lender to take or refrain from taking any
     action hereunder or under any other Loan Document, except that such Lender
     may agree with any Participant that such Lender will not, without such
     Participant's consent, agree to (i) any reduction in the interest rate or
     amount of fees that such Participant is otherwise entitled to, (ii) a
     decrease
                                   112


     in the principal amount, or an extension of the final Stated
     Maturity Date, of any Loan in which such Participant has purchased a
     participating interest or (iii) a release of all or substantially all of
     the collateral security under the Loan Documents or any material Subsidiary
     Guarantor under the Subsidiary Guaranty, in each case except as otherwise
     specifically provided in a Loan Document; and

          (e)  the Company shall not be required to pay any amount under
     SECTIONS 4.3, 4.4, 4.5, 4.6, 11.3 and 11.4 that is greater than the amount
     which it would have been required to pay had no participating interest been
     sold.

The Company acknowledges and agrees, subject to CLAUSE (e) above, that, to the
fullest extent permitted under applicable law, each Participant, for purposes of
SECTIONS 4.3, 4.4, 4.5, 4.6, 4.8, 4.9, 11.3 and 11.4, shall be considered a
Lender.

          SECTION 11.12  OTHER TRANSACTIONS.  Nothing contained herein shall
preclude any Agent or any other Lender from engaging in any transaction, in
addition to those contemplated by this Agreement or any other Loan Document,
with Holdco, the Company or any of its Affiliates in which Holdco, the Company
or such Affiliate is not restricted hereby from engaging with any other Person.

          SECTION 11.13  FORUM SELECTION, CONSENT TO JURISDICTION AND WAIVER OF
IMMUNITIES.

          (a)  ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH, THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS
OF THE AGENTS, THE LENDERS, THE ISSUERS, HOLDCO OR THE COMPANY RELATING
THERETO SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY (TO THE EXTENT PERMITTED
UNDER APPLICABLE LAW) IN THE COURTS OF THE STATE OF NEW YORK, NEW YORK
COUNTY, OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
NEW YORK; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY
COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE ADMINISTRATIVE AGENT'S
OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER
PROPERTY MAY BE FOUND. EACH OF HOLDCO AND THE COMPANY HEREBY EXPRESSLY AND
IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW
YORK, NEW YORK COUNTY, AND OF THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET
FORTH ABOVE AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED
THEREBY IN CONNECTION WITH SUCH LITIGATION.  EACH OF HOLDCO AND THE COMPANY
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE
PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK.
EACH OF HOLDCO AND THE COMPANY HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR
HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH

                             113


LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY
SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

          (b)  NOTHING IN THIS SECTION SHALL AFFECT THE RIGHT OF ANY AGENT,
ANY LENDER OR ANY ISSUER TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED
BY LAW OR AFFECT THE RIGHT OF ANY SUCH PERSON TO BRING ANY ACTION OR
PROCEEDING AGAINST HOLDCO, THE COMPANY OR ITS RESPECTIVE PROPERTY IN THE
COURTS OF ANY OTHER JURISDICTIONS.

          (c)  TO THE EXTENT HOLDCO OR THE COMPANY HAS OR HEREAFTER MAY
ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS
(WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT
IN AID OF EXECUTION, EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR TO ITS
PROPERTY, EACH OF HOLDCO AND THE COMPANY HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, SUCH IMMUNITY IN RESPECT OF ITS
OBLIGATIONS UNDER THIS AGREEMENT AND EACH OTHER LOAN DOCUMENT EXECUTED OR TO
BE EXECUTED BY IT.

          SECTION 11.14  WAIVER OF JURY TRIAL.  THE AGENTS, THE ISSUERS, THE
LENDERS AND HOLDCO AND THE COMPANY HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH,
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE
OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE AGENTS,
THE LENDERS, HOLDCO OR THE COMPANY RELATING THERETO.  EACH OF HOLDCO AND THE
COMPANY ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT
CONSIDERATION FOR THIS PROVISION (AND EACH OTHER PROVISION OF EACH OTHER LOAN
DOCUMENT TO WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE AGENTS AND THE LENDERS ENTERING INTO THIS AGREEMENT AND
EACH SUCH OTHER LOAN DOCUMENT.

          SECTION 11.15  CONFIDENTIALITY.  The Agents, the Issuers, the
Arranger and the Lenders shall hold all non-public information obtained
pursuant to or in connection with this Agreement or obtained by them based on
a review of the books and records of the Company or any of its Subsidiaries
in accordance with their customary procedures for handling confidential
information of this nature, but may make disclosure to any of their
examiners, Affiliates, Approved Funds, outside auditors, counsel and other
professional advisors in connection with this Agreement or as reasonably
required by any potential BONA FIDE transferee, participant or assignee, or
to any direct or indirect contractual counterparties in swap agreements or
such contractual counterparties' professional advisors, or in connection with
the exercise of remedies under a Loan Document, or as requested by any
governmental or regulatory agency, or the

                                114


National Association of Insurance Commissioners, or representative of any
thereof or pursuant to legal process; PROVIDED, HOWEVER, that

          (a)  unless specifically prohibited by applicable law or court order,
     each Agent, each Issuer, the Arranger and each Lender shall promptly notify
     the Company of any request by any governmental agency or representative
     thereof (other than any such request in connection with an examination of
     the financial condition of such Agent, such Issuer, the Arranger and such
     Lender by such governmental agency) for disclosure of any such non-public
     information prior to disclosure of such information;

          (b)  prior to any such disclosure pursuant to this SECTION 11.15, each
     Agent, each Issuer, the Arranger and each Lender shall require any such
     BONA FIDE transferee, participant and assignee receiving a disclosure of
     non-public information to agree in writing

               (i)    to be bound by this SECTION 11.15; and

               (ii)   to require such Person to require any other Person to whom
          such Person discloses such non-public information to be similarly
          bound by this SECTION 11.15; and

          (c)  except as may be required by an order of a court of competent
     jurisdiction and to the extent set forth therein, no Lender shall be
     obligated or required to return any materials furnished by Holdco, the
     Company or any of its Subsidiaries.

                    [Remainder of page intentionally left blank]















                                     115


          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized as of the day
and year first above written.

MERRILL CORPORATION

By:    /s/ Steven J. Machov
     ------------------------
     Title:  Vice President,
             General Counsel
             and Secretary

                                   MERRILL COMMUNICATIONS LLC

                                   By:      /s/ Steven J. Machov
                                        ---------------------------
                                        Title:  Vice President,
                                                General Counsel
                                                and Secretary


                                   DLJ CAPITAL FUNDING, INC.
                                   as the Syndication Agent and as a Lender

                                   By:        /s/ Dana Klein
                                        ---------------------------
                                        Title:  Managing Director


                                   U.S. BANK NATIONAL ASSOCIATION
                                   as the Administrative Agent and as a Lender

                                   By:    /s/ Joshua R. Pirozzolo
                                        ---------------------------
                                        Title:  Commercial Banking Officer


                                   WELLS FARGO BANK, N.A.
                                   as the Documentation Agent and as a Lender

                                   By:        /s/ Hugh Diddy
                                        ---------------------------
                                        Title:    Relationship Manager



                                S-1


     LENDERS

                                   COMERICA BANK
                                   as a Lender

                                   By:    /s/ Timothy H. O'Rourke
                                        ---------------------------
                                        Title:  Vice President


                                   WELLS FARGO BANK, N.A.
                                   as the Documentation Agent and as a Lender

                                   By:        /s/ Hugh Diddy
                                        ---------------------------
                                        Title:  Relationship Manager


                                   CREDIT LYONNAIS NEW YORK BRANCH
                                   as a Lender

                                   By:       /s/ John Mararo
                                        ---------------------------
                                        Title:  Supervisor


                                   HARRIS TRUST AND SAVINGS
                                   as a Lender

                                   By:       /s/ Andrew Claar
                                        ---------------------------
                                         Title:  Vice President

                                   TRANSAMERICA BUSINESS CREDIT CORPORATION
                                   as a Lender

                                   By:      /s/ Perry Vavoules
                                        ---------------------------
                                        Title:  Senior Vice President



                             S-2


                         TABLE OF CONTENTS



                                                                                 PAGE
                                                                                 ----
                                                                           
ARTICLE I             DEFINITIONS AND ACCOUNTING TERMS . . . . . . . . . . . . . . .3

SECTION 1.1           Defined Terms. . . . . . . . . . . . . . . . . . . . . . . . .3
SECTION 1.2           Use of Defined Terms . . . . . . . . . . . . . . . . . . . . 36
SECTION 1.3           Cross-References . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 1.4           Accounting and Financial Determinations. . . . . . . . . . . 36

ARTICLE II            COMMITMENTS, BORROWING AND ISSUANCE PROCEDURES, NOTES
                      AND LETTERS OF CREDIT. . . . . . . . . . . . . . . . . . . . 37

SECTION 2.1           Commitments. . . . . . . . . . . . . . . . . . . . . . . . . 37
     SECTION 2.1.1.   Term Loan Commitments. . . . . . . . . . . . . . . . . . . . 37
     SECTION 2.1.2.   Revolving Loan Commitments and Swing Line Loan
                      Commitment . . . . . . . . . . . . . . . . . . . . . . . . . 39
     SECTION 2.1.3.   Letter of Credit Commitment. . . . . . . . . . . . . . . . . 40
     SECTION 2.1.4.   Lenders Not Permitted or Required to Make the Loans. . . . . 41
     SECTION 2.1.5.   Issuer Not Permitted or Required to Issue Letters of
                      Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 2.2           Optional Reduction of the Revolving Loan Commitment Amount . 41
SECTION 2.3           Borrowing Procedures and Funding Maintenance . . . . . . . . 42
     SECTION 2.3.1.   Term Loans and Revolving Loans . . . . . . . . . . . . . . . 42
     SECTION 2.3.2.   Swing Line Loans . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 2.4           Continuation and Conversion Elections. . . . . . . . . . . . 43
SECTION 2.5           Funding. . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 2.6           Issuance Procedures. . . . . . . . . . . . . . . . . . . . . 44
     SECTION 2.6.1.   Other Lenders' Participation . . . . . . . . . . . . . . . . 45
     SECTION 2.6.2.   Disbursements; Conversion to Revolving Loans . . . . . . . . 45
     SECTION 2.6.3.   Reimbursement. . . . . . . . . . . . . . . . . . . . . . . . 46
     SECTION 2.6.4.   Deemed Disbursements . . . . . . . . . . . . . . . . . . . . 46
     SECTION 2.6.5.   Nature of Reimbursement Obligations. . . . . . . . . . . . . 47
SECTION 2.7           Register; Notes. . . . . . . . . . . . . . . . . . . . . . . 48

ARTICLE III           REPAYMENTS, PREPAYMENTS, INTEREST AND FEES . . . . . . . . . 49

SECTION 3.1           Repayments and Prepayments; Application. . . . . . . . . . . 49
     SECTION 3.1.1.   Repayments and Prepayments . . . . . . . . . . . . . . . . . 49
     SECTION 3.1.2.   Application. . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 3.2           Interest Provisions. . . . . . . . . . . . . . . . . . . . . 54
     SECTION 3.2.1.   Rates. . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
     SECTION 3.2.2.   Post-Maturity Rates. . . . . . . . . . . . . . . . . . . . . 55
     SECTION 3.2.3.   Payment Dates. . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 3.3           Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
     SECTION 3.3.1.   Commitment Fee . . . . . . . . . . . . . . . . . . . . . . . 56
     SECTION 3.3.2.   Administrative Agent Fee . . . . . . . . . . . . . . . . . . 56


                               -i-




                                                                                  PAGE
                                                                                  ----
                                                                            
     SECTION 3.3.3.   Letter of Credit Fee . . . . . . . . . . . . . . . . . . . . 56

ARTICLE IV            CERTAIN LIBOR AND OTHER PROVISIONS . . . . . . . . . . . . . 56

SECTION 4.1           LIBOR Lending Unlawful . . . . . . . . . . . . . . . . . . . 56
SECTION 4.2           Deposits Unavailable . . . . . . . . . . . . . . . . . . . . 57
SECTION 4.3           Increased LIBOR Loan Costs, etc. . . . . . . . . . . . . . . 57
SECTION 4.4           Funding Losses . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 4.5           Increased Capital Costs. . . . . . . . . . . . . . . . . . . 58
SECTION 4.6           Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 4.7           Payments, Computations, etc. . . . . . . . . . . . . . . . . 61
SECTION 4.8           Sharing of Payments. . . . . . . . . . . . . . . . . . . . . 62
SECTION 4.9           Setoff . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 4.10          Mitigation . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 4.11          Replacement of Lenders . . . . . . . . . . . . . . . . . . . 63

ARTICLE V             CONDITIONS TO CREDIT EXTENSIONS. . . . . . . . . . . . . . . 64

SECTION 5.1           Initial Credit Extension . . . . . . . . . . . . . . . . . . 64
     SECTION 5.1.1.   Resolutions, etc . . . . . . . . . . . . . . . . . . . . . . 64
     SECTION 5.1.2.   Transaction Documents. . . . . . . . . . . . . . . . . . . . 64
     SECTION 5.1.3.   Consummation of Merger . . . . . . . . . . . . . . . . . . . 64
     SECTION 5.1.4.   Closing Date Certificate . . . . . . . . . . . . . . . . . . 64
     SECTION 5.1.5.   Delivery of Notes. . . . . . . . . . . . . . . . . . . . . . 64
     SECTION 5.1.6.   Subsidiary Guaranty. . . . . . . . . . . . . . . . . . . . . 64
     SECTION 5.1.7.   Pledge Agreements. . . . . . . . . . . . . . . . . . . . . . 65
     SECTION 5.1.8.   Security Agreement . . . . . . . . . . . . . . . . . . . . . 65
     SECTION 5.1.9.   Financial Information, etc . . . . . . . . . . . . . . . . . 66
     SECTION 5.1.10.  Solvency, etc. . . . . . . . . . . . . . . . . . . . . . . . 66
     SECTION 5.1.11.  Common Equity Contribution, Preferred Equity Contribution,
                      Asset Contribution, Intercompany Loan and/or Closing Date
                      Dividend and Senior Subordinated Bridge Notes or Senior
                      Subordinated Notes . . . . . . . . . . . . . . . . . . . . . 66
     SECTION 5.1.12.  Litigation . . . . . . . . . . . . . . . . . . . . . . . . . 67
     SECTION 5.1.13.  Material Adverse Change. . . . . . . . . . . . . . . . . . . 67
     SECTION 5.1.14.  Reliance Letters . . . . . . . . . . . . . . . . . . . . . . 67
     SECTION 5.1.15.  Opinions of Counsel. . . . . . . . . . . . . . . . . . . . . 67
     SECTION 5.1.16.  Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . 68
     SECTION 5.1.17.  Closing Fees, Expenses, etc. . . . . . . . . . . . . . . . . 68
     SECTION 5.1.18.  Satisfactory Legal Form. . . . . . . . . . . . . . . . . . . 68
     SECTION 5.1.19.  Repayment of Existing Debt.. . . . . . . . . . . . . . . . . 68
     SECTION 5.1.20.  Corporate Structure, Ownership, etc. . . . . . . . . . . . . 68
     SECTION 5.1.21.  Certain Approvals. . . . . . . . . . . . . . . . . . . . . . 68
SECTION 5.2           All Credit Extensions. . . . . . . . . . . . . . . . . . . . 69
     SECTION 5.2.1.   Compliance with Warranties, No Default, etc. . . . . . . . . 69


                              -ii-




                                                                                  PAGE
                                                                                  ----
                                                                            
     SECTION 5.2.2.   Credit Extension Request . . . . . . . . . . . . . . . . . . 69

ARTICLE VI            REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . 70

SECTION 6.1           Organization, etc. . . . . . . . . . . . . . . . . . . . . . 70
SECTION 6.2           Due Authorization, Non-Contravention, etc. . . . . . . . . . 70
SECTION 6.3           Government Approval, Regulation, etc . . . . . . . . . . . . 70
SECTION 6.4           Validity, etc. . . . . . . . . . . . . . . . . . . . . . . . 71
SECTION 6.5           Financial Information. . . . . . . . . . . . . . . . . . . . 71
SECTION 6.6           No Material Adverse Effect . . . . . . . . . . . . . . . . . 71
SECTION 6.7           Litigation, Labor Controversies, etc . . . . . . . . . . . . 71
SECTION 6.8           Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . 72
SECTION 6.9           Ownership of Properties. . . . . . . . . . . . . . . . . . . 72
SECTION 6.10          Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
SECTION 6.11          Pension and Welfare Plans. . . . . . . . . . . . . . . . . . 72
SECTION 6.12          Environmental Warranties . . . . . . . . . . . . . . . . . . 72
SECTION 6.13          Regulations U and X. . . . . . . . . . . . . . . . . . . . . 74
SECTION 6.14          Accuracy of Information. . . . . . . . . . . . . . . . . . . 74
SECTION 6.15          Solvency . . . . . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 6.16          Creation, Perfection and Priority of Liens . . . . . . . . . 75
SECTION 6.17          Year 2000 Compliance . . . . . . . . . . . . . . . . . . . . 75

ARTICLE VII           COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . 75

SECTION 7.1           Affirmative Covenants. . . . . . . . . . . . . . . . . . . . 75
     SECTION 7.1.1.   Financial Information, Reports, Notices, etc . . . . . . . . 75
     SECTION 7.1.2.   Compliance with Laws, etc. . . . . . . . . . . . . . . . . . 77
     SECTION 7.1.3.   Maintenance of Properties. . . . . . . . . . . . . . . . . . 77
     SECTION 7.1.4.   Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . 77
     SECTION 7.1.5.   Books and Records. . . . . . . . . . . . . . . . . . . . . . 78
     SECTION 7.1.6.   Environmental Covenant . . . . . . . . . . . . . . . . . . . 78
     SECTION 7.1.7.   Future Subsidiaries. . . . . . . . . . . . . . . . . . . . . 78
     SECTION 7.1.8.   Future Leased Property and Future Acquisitions of Real
                      Property; Future Acquisition of Other Property . . . . . . . 79
     SECTION 7.1.9.   Use of Proceeds, etc . . . . . . . . . . . . . . . . . . . . 81
     SECTION 7.1.10.  Hedging Obligations. . . . . . . . . . . . . . . . . . . . . 82
     SECTION 7.1.11.  Undertaking. . . . . . . . . . . . . . . . . . . . . . . . . 82
     SECTION 7.1.12.  Mortgages. . . . . . . . . . . . . . . . . . . . . . . . . . 82
SECTION 7.2           Negative Covenants . . . . . . . . . . . . . . . . . . . . . 82
     SECTION 7.2.1.   Business Activities. . . . . . . . . . . . . . . . . . . . . 83
     SECTION 7.2.2.   Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . 83
     SECTION 7.2.3.   Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
     SECTION 7.2.4.   Financial Covenants. . . . . . . . . . . . . . . . . . . . . 87
     SECTION 7.2.5.   Investments. . . . . . . . . . . . . . . . . . . . . . . . . 90
     SECTION 7.2.6.   Restricted Payments, etc . . . . . . . . . . . . . . . . . . 93


                                  -iii-



                                                                                  PAGE
                                                                                  ----
                                                                            
     SECTION 7.2.7.   Capital Expenditures, etc. . . . . . . . . . . . . . . . . . 95
     SECTION 7.2.8.   Consolidation, Merger, etc . . . . . . . . . . . . . . . . . 96
     SECTION 7.2.9.   Asset Dispositions, etc. . . . . . . . . . . . . . . . . . . 96
     SECTION 7.2.10.  Modification of Certain Agreements . . . . . . . . . . . . . 97
     SECTION 7.2.11.  Transactions with Affiliates . . . . . . . . . . . . . . . . 98
     SECTION 7.2.12.  Negative Pledges, Restrictive Agreements, etc. . . . . . . . 98
     SECTION 7.2.13.  Stock of Subsidiaries. . . . . . . . . . . . . . . . . . . . 99
     SECTION 7.2.14.  Sale and Leaseback . . . . . . . . . . . . . . . . . . . . . 99
     SECTION 7.2.15.  Designation of Senior Indebtedness . . . . . . . . . . . . . 99

ARTICLE VIII          EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . . . . . . 99

SECTION 8.1           Listing of Events of Default . . . . . . . . . . . . . . . . 99
     SECTION 8.1.1.   Non-Payment of Obligations . . . . . . . . . . . . . . . . .100
     SECTION 8.1.2.   Breach of Warranty . . . . . . . . . . . . . . . . . . . . .100
     SECTION 8.1.3.   Non-Performance of Certain Covenants and Obligations . . . .100
     SECTION 8.1.4.   Non-Performance of Other Covenants and Obligations . . . . .100
     SECTION 8.1.5.   Default on Other Indebtedness. . . . . . . . . . . . . . . .100
     SECTION 8.1.6.   Judgments. . . . . . . . . . . . . . . . . . . . . . . . . .100
     SECTION 8.1.7.   Pension Plans. . . . . . . . . . . . . . . . . . . . . . . .101
     SECTION 8.1.8.   Change in Control. . . . . . . . . . . . . . . . . . . . . .101
     SECTION 8.1.9.   Bankruptcy, Insolvency, etc. . . . . . . . . . . . . . . . .102
     SECTION 8.1.10.  Impairment of Security, etc. . . . . . . . . . . . . . . . .102
     SECTION 8.1.11.  Subordinated Notes . . . . . . . . . . . . . . . . . . . . .102
SECTION 8.2           Action if Bankruptcy, etc. . . . . . . . . . . . . . . . . .102
SECTION 8.3           Action if Other Event of Default . . . . . . . . . . . . . .103

ARTICLE IX            THE AGENTS . . . . . . . . . . . . . . . . . . . . . . . . .103

SECTION 9.1           Actions. . . . . . . . . . . . . . . . . . . . . . . . . . .103
SECTION 9.2           Funding Reliance, etc. . . . . . . . . . . . . . . . . . . .104
SECTION 9.3           Exculpation. . . . . . . . . . . . . . . . . . . . . . . . .104
SECTION 9.4           Successor. . . . . . . . . . . . . . . . . . . . . . . . . .104
SECTION 9.5           Credit Extensions by Each Agent and Issuer . . . . . . . . .105
SECTION 9.6           Credit Decisions . . . . . . . . . . . . . . . . . . . . . .105
SECTION 9.7           Copies, etc. . . . . . . . . . . . . . . . . . . . . . . . .105
SECTION 9.8           The Syndication Agent, the Documentation Agent and the
                      Administrative Agent . . . . . . . . . . . . . . . . . . . .105

ARTICLE X             HOLDCO GUARANTY. . . . . . . . . . . . . . . . . . . . . . .106

SECTION 10.1          Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . .106
SECTION 10.2          Acceleration of Obligations Hereunder. . . . . . . . . . . .106
SECTION 10.3          Obligations Hereunder Absolute, etc. . . . . . . . . . . . .107
SECTION 10.4          Reinstatement, etc . . . . . . . . . . . . . . . . . . . . .108
SECTION 10.5          Waiver, etc. . . . . . . . . . . . . . . . . . . . . . . . .108


                                 -iv-



                                                                                PAGE
                                                                                ----
                   
SECTION 10.6          Postponement of Subrogation. . . . . . . . . . . . . . . . .108
SECTION 10.7          Successors, Transferees and Assigns; Transfers of
                      Notes, etc . . . . . . . . . . . . . . . . . . . . . . . . .108

ARTICLE XI            MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . . . . . .109

SECTION 11.1          Waivers, Amendments, etc . . . . . . . . . . . . . . . . . .109
SECTION 11.2          Notices. . . . . . . . . . . . . . . . . . . . . . . . . . .110
SECTION 11.3          Payment of Costs and Expenses. . . . . . . . . . . . . . . .110
SECTION 11.4          Indemnification. . . . . . . . . . . . . . . . . . . . . . .111
SECTION 11.5          Survival . . . . . . . . . . . . . . . . . . . . . . . . . .113
SECTION 11.6          Severability . . . . . . . . . . . . . . . . . . . . . . . .113
SECTION 11.7          Headings . . . . . . . . . . . . . . . . . . . . . . . . . .113
SECTION 11.8          Execution in Counterparts, Effectiveness, etc. . . . . . . .113
SECTION 11.9          Governing Law; Entire Agreement. . . . . . . . . . . . . . .113
SECTION 11.10         Successors and Assigns . . . . . . . . . . . . . . . . . . .113
SECTION 11.11         Sale and Transfer of Loans and Notes; Participations
                      in Loans and Notes . . . . . . . . . . . . . . . . . . . . .114
     SECTION 11.11.1. Assignments. . . . . . . . . . . . . . . . . . . . . . . . .114
     SECTION 11.11.2. Participations . . . . . . . . . . . . . . . . . . . . . . .116
SECTION 11.12         Other Transactions . . . . . . . . . . . . . . . . . . . . .117
SECTION 11.13         Forum Selection, Consent to Jurisdiction and Waiver
                      of Immunities. . . . . . . . . . . . . . . . . . . . . . . .117
SECTION 11.14         Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . .118
SECTION 11.15         Confidentiality. . . . . . . . . . . . . . . . . . . . . . .118








                         -v-



                                      SCHEDULES
                                      ---------
                      
SCHEDULE I               -    Disclosure Schedule

SCHEDULE II              -  Percentages and Administrative Information



                                      EXHIBITS
                                      --------
                      
EXHIBIT A-1              -    Form of Revolving Note
EXHIBIT A-2              -    Form of Term-A Note
EXHIBIT A-3              -    Form of Term-B Note
EXHIBIT A-4              -    Form of Swing Line Note
EXHIBIT B-1              -    Form of Borrowing Request
EXHIBIT B-2              -    Form of Issuance Request
EXHIBIT C                -    Form of Continuation/Conversion Notice
EXHIBIT D                -    Form of Closing Date Certificate
EXHIBIT E                -    Form of Compliance Certificate
EXHIBIT F                -    Form of Security Agreement
EXHIBIT G-1              -    Form of Company Pledge Agreement
EXHIBIT G-2              -    Form of Subsidiary Pledge Agreement
EXHIBIT H                -    Form of Subsidiary Guaranty
EXHIBIT I                -    Form of Holdco Pledge Agreement
EXHIBIT J                -    Form of Lender Assignment Agreement
EXHIBIT K-1              -    Form of New York Counsel Opinion
EXHIBIT K-2              -    Form of Local Counsel Opinion
EXHIBIT K-3              -    Form of Opinion of the General Counsel of the Company







                             -vi-


                                    EXHIBIT A-1

                               FORM OF REVOLVING NOTE

                             MERRILL COMMUNICATIONS LLC

                                  PROMISSORY NOTE

$[1]                                                   New York, New York
                                                       November 23, 1999

     FOR VALUE RECEIVED, MERRILL COMMUNICATIONS LLC, a Delaware limited
liability company ("COMPANY"), promises to pay to [2] ________ ("PAYEE") or its
registered assigns, on the Stated Maturity Date the lesser of (x)[4]($[1]) and
(y) the unpaid principal amount of all advances made by Payee to Company as
Revolving Loans under the Credit Agreement referred to below.

     Company also promises to pay interest on the unpaid principal amount
hereof, from the date hereof until paid in full, at the rates and at the times
which shall be determined in accordance with the provisions of that certain
Credit Agreement dated as of November 23, 1999 by and among Company, Merrill
Corporation, as guarantor, the financial institutions listed therein as Lenders,
DLJ Capital Funding, Inc., as Syndication Agent for the Lenders, Wells Fargo
Bank, N.A., as Documentation Agent for the Lenders, and U.S. Bank National
Association, as Administrative Agent for the Lenders ("ADMINISTRATIVE AGENT")
(said Credit Agreement, as it may be amended, supplemented or otherwise modified
from time to time, being the "CREDIT AGREEMENT", the terms defined therein and
not otherwise defined herein being used herein as therein defined).

     This Note is one of Company's "REVOLVING NOTES" and is issued pursuant to
and entitled to the benefits of the Credit Agreement, to which reference is
hereby made for a more complete statement of the terms and conditions under
which the Revolving Loans evidenced hereby were made and are to be repaid.

     All payments of principal and interest in respect of this Note shall be
made in accordance with the terms of the Credit Agreement.  Unless and until an
Assignment Agreement effecting the assignment or transfer of this Note shall
have been accepted by Administrative Agent as provided in subsection 11.11.1 of
the Credit Agreement, Company and Administrative Agent shall be entitled to deem
and treat Payee as the owner and holder of this Note and the Loans evidenced
hereby.  Payee hereby agrees, by its acceptance hereof, that before disposing of
this Note or any part hereof it will make a notation hereon of all principal
payments previously made hereunder and of the date to which interest hereon has
been paid; PROVIDED, HOWEVER, that the failure to make a notation of any payment
made on this Note shall not limit or otherwise affect the obligations of Company
hereunder with respect to payments of principal of or interest on this Note.


_____________________________

1    Insert amount of Lender's Revolving Loan Commitment in numbers.
2    Insert Lender's name in capital letters.

                             A1-1


     This Note is subject to mandatory prepayment and to prepayment at the
option of Company as provided in subsection 3.1 of the Credit Agreement.

     THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF COMPANY AND PAYEE HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE
GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES.

     Upon the occurrence of an Event of Default, the unpaid balance of the
principal amount of this Note, together with all accrued and unpaid interest
thereon, may become, or may be declared to be, due and payable in the manner,
upon the conditions and with the effect provided in the Credit Agreement.

     The terms of this Note are subject to amendment only in the manner provided
in the Credit Agreement.

     This Note is subject to restrictions on transfer or assignment as provided
in subsections 11.10 and 11.11 of the Credit Agreement.

     Company and any endorsers of this Note hereby waive diligence, presentment,
protest, demand and notice of every kind.

     IN WITNESS WHEREOF, Company has caused this Note to be duly executed and
delivered by its officer thereunto duly authorized as of the date and at the
place first written above.

                                   MERRILL COMMUNICATIONS LLC

                                   By: __________________________
                                   Name:________________________
                                   Title: ________________________







                                 A1-2

                                    TRANSACTIONS
                                         ON
                                   REVOLVING NOTE



                                                          Outstanding
           Type of      Amount of        Amount of         Principal
          Loan Made     Loan Made     Principal Paid        Balance      Notation
  Date    This Date     This Date        This Date         This Date      Made By
  ----    ---------     ---------     --------------      -----------    --------
                                                          











                                A1-3


                                    EXHIBIT A-2

                                FORM OF TERM-A NOTE

                             MERRILL COMMUNICATIONS LLC

                                  PROMISSORY NOTE

$[1]                                                   New York, New York
                                                       November 23, 1999

     FOR VALUE RECEIVED, MERRILL COMMUNICATIONS LLC, a Delaware limited
liability company ("COMPANY"), promises to pay to  [2] ("PAYEE") or its
registered assigns the principal amount of [3] ($[1]) or, if less, the aggregate
unpaid principal amount of all advances made by Payee to Company as Term-A Loans
under the Credit Agreement referred to below, payable in installments as set
forth in the Credit Agreement with a final installment (in the amount necessary
to pay this Note, in full) due and payable on the Stated Maturity Date.

     Company also promises to pay interest on the unpaid principal amount
hereof, from the date hereof until paid in full, at the rates and at the times
which shall be determined in accordance with the provisions of that certain
Credit Agreement dated as of November 23, 1999 by and among Company, Merrill
Corporation, as guarantor, the financial institutions listed therein as Lenders,
DLJ Capital Funding, Inc., as Syndication Agent for the Lenders, Wells Fargo
Bank, N.A., as Documentation Agent for the Lenders, and U.S. Bank National
Association, as Administrative Agent for the Lenders ("ADMINISTRATIVE AGENT")
(said Credit Agreement, as it may be amended, supplemented or otherwise modified
from time to time, being the "CREDIT AGREEMENT", the terms defined therein and
not otherwise defined herein being used herein as therein defined).

     This Note is one of Company's "TERM-A NOTES" issued pursuant to and
entitled to the benefits of the Credit Agreement, to which reference is hereby
made for a more complete statement of the terms and conditions under which the
Term-A Loans evidenced hereby was made and is to be repaid.

     All payments of principal and interest in respect of this Note shall be
made in accordance with the terms of the Credit Agreement.  Unless and until an
Assignment Agreement effecting the assignment or transfer of this Note shall
have been accepted by Administrative Agent as provided in subsection 11.11.1 of
the Credit Agreement, Company and Administrative Agent shall be entitled to deem
and treat Payee as the owner and holder of this Note and the Loan evidenced
hereby.  Payee hereby agrees, by its acceptance hereof, that before disposing of
this Note or any part hereof it will make a notation hereon of all principal
payments previously made hereunder and of the date to which interest hereon has
been paid; PROVIDED, HOWEVER, that the failure to make a notation of any payment
made on this Note shall not limit or otherwise


____________________________

1    Insert amount of Lender's Term-A Loan in numbers.
2    Insert Lender's name in capital letters.
3    Insert amount of Lender's Term-A Loan in words.

                            A2-1


affect the obligations of Company hereunder with respect to payments of
principal of or interest on this Note.

     This Note is subject to mandatory prepayment and to prepayment at the
option of Company as provided in subsection 3.1.1 of the Credit Agreement.

     THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF COMPANY AND PAYEE HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE
GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES.

     Upon the occurrence of an Event of Default, the unpaid balance of the
principal amount of this Note, together with all accrued and unpaid interest
thereon, may become, or may be declared to be, due and payable in the manner,
upon the conditions and with the effect provided in the Credit Agreement.

     The terms of this Note are subject to amendment only in the manner provided
in the Credit Agreement.

     This Note is subject to restrictions on transfer or assignment as provided
in subsections 11.10 and 11.11 of the Credit Agreement.

     Company and any endorsers of this Note hereby waive diligence, presentment,
protest, demand and notice of every kind.

     IN WITNESS WHEREOF, Company has caused this Note to be duly executed and
delivered by its officer thereunto duly authorized as of the date and at the
place first written above.

                              MERRILL COMMUNICATIONS LLC

                              By: __________________________
                              Name:________________________
                              Title: ________________________



                              A2-2


                                     EXHIBIT A-3

                                FORM OF TERM-B NOTE

                             MERRILL COMMUNICATIONS LLC

                                  PROMISSORY NOTE



$[1]                                              New York, New York
                                                  November 23, 1999

     FOR VALUE RECEIVED, MERRILL COMMUNICATIONS LLC, a Delaware limited
liability company ("COMPANY"), promises to pay to [2] ("PAYEE") or its
registered assigns the principal amount of [3] ($[1]) or, if less, the aggregate
unpaid principal amount of all advances made by Payee to Company as Term-B Loans
under the Credit Agreement referred to below, payable in installments as set
forth in the Credit Agreement with a final installment (in the amount necessary
to pay this Note in full) due and payable on the Stated Maturity Date.

     Company also promises to pay interest on the unpaid principal amount
hereof, from the date hereof until paid in full, at the rates and at the times
which shall be determined in accordance with the provisions of that certain
Credit Agreement dated as of November 23, 1999 by and among Company, Merrill
Corporation, as guarantor, the financial institutions listed therein as Lenders,
DLJ Capital Funding, Inc., as Syndication Agent for the Lenders, Wells Fargo
Bank, N.A., as Documentation Agent for the Lenders, and U.S. Bank National
Association, as Administrative Agent for the Lenders ("ADMINISTRATIVE AGENT")
(said Credit Agreement, as it may be amended, supplemented or otherwise modified
from time to time, being the "CREDIT AGREEMENT", the terms defined therein and
not otherwise defined herein being used herein as therein defined).

     This Note is one of Company's "TERM-B NOTES" issued pursuant to and
entitled to the benefits of the Credit Agreement, to which reference is hereby
made for a more complete statement of the terms and conditions under which the
Term-B Loans evidenced hereby was made and is to be repaid.

     All payments of principal and interest in respect of this Note shall be
made in accordance with the terms of the Credit Agreement.  Unless and until an
Assignment Agreement effecting the assignment or transfer of this Note shall
have been accepted by Administrative Agent as provided in subsection 11.11.1 of
the Credit Agreement, Company and Administrative Agent shall be entitled to deem
and treat Payee as the owner and holder of this Note and the Loan evidenced
hereby.  Payee hereby agrees, by its acceptance hereof, that before disposing of
this Note or any part hereof it will make a notation hereon of all principal
payments previously made hereunder and of the date to which interest hereon has
been paid; PROVIDED, HOWEVER, that the failure to make a notation of any payment
made on this Note shall not limit or otherwise


_________________________

1    Insert amount of Lender's Term-B Loan in numbers.
2    Insert Lender's name in capital letters.
3    Insert amount of Lender's Term-B Loan in words.

                                 A3-1


affect the obligations of Company hereunder with respect to payments of
principal of or interest on this Note.

     This Note is subject to mandatory prepayment and to prepayment at the
option of Company as provided in subsection 3.1.1 of the Credit Agreement.

     THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF COMPANY AND PAYEE HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE
GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES.

     Upon the occurrence of an Event of Default, the unpaid balance of the
principal amount of this Note, together with all accrued and unpaid interest
thereon, may become, or may be declared to be, due and payable in the manner,
upon the conditions and with the effect provided in the Credit Agreement.

     The terms of this Note are subject to amendment only in the manner provided
in the Credit Agreement.

     This Note is subject to restrictions on transfer or assignment as provided
in subsections 11.10 and 11.11 of the Credit Agreement.

     Company and any endorsers of this Note hereby waive diligence, presentment,
protest, demand and notice of every kind.

     IN WITNESS WHEREOF, Company has caused this Note to be duly executed and
delivered by its officer thereunto duly authorized as of the date and at the
place first written above.

                                   MERRILL COMMUNICATIONS LLC

                                   By: __________________________
                                   Name:________________________
                                   Title: ________________________



                          A3-2


                                    EXHIBIT A-4

                              FORM OF SWING LINE NOTE

                             MERRILL COMMUNICATIONS LLC

                                  PROMISSORY NOTE

$10,000,000                                                   New York, New York
                                                               November 23, 1999

     FOR VALUE RECEIVED, MERRILL COMMUNICATIONS LLC, a Delaware limited
liability company ("COMPANY"), promises to pay to U.S. BANK NATIONAL
ASSOCIATION, ("PAYEE"), on the Stated Maturity Date the lesser of (x) TEN
MILLION DOLLARS AND NO CENTS ($10,000,000) and (y) the unpaid principal amount
of all advances made by Payee to Company as Swing Line Loans under the Credit
Agreement referred to below.

     Company also promises to pay interest on the unpaid principal amount
hereof, from the date hereof until paid in full, at the rates and at the times
which shall be determined in accordance with the provisions of that certain
Credit Agreement dated as of November 23, 1999 by and among Company, Merrill
Corporation, as guarantor, the financial institutions listed therein as Lenders,
DLJ Capital Funding, Inc., as Syndication Agent for the Lenders, Wells Fargo
Bank, N.A., as Documentation Agent for the Lenders, and U.S. Bank National
Association, as Administrative Agent for the Lenders ("ADMINISTRATIVE AGENT")
(said Credit Agreement, as it may be amended, supplemented or otherwise modified
from time to time, being the "CREDIT AGREEMENT", the terms defined therein and
not otherwise defined herein being used herein as therein defined).

     This Note is Company's "SWING LINE NOTE" and is issued pursuant to and
entitled to the benefits of the Credit Agreement, to which reference is hereby
made for a more complete statement of the terms and conditions under which the
Swing Line Loans evidenced hereby were made and are to be repaid.

     All payments of principal and interest in respect of this Note shall be
made in accordance with the terms of the Credit Agreement.

     This Note is subject to mandatory prepayment and to prepayment at the
option of Company as provided in subsection 3.1.1 of the Credit Agreement.

     THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF COMPANY AND PAYEE HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE
GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES.

                                 A4-1


     Upon the occurrence of an Event of Default, the unpaid balance of the
principal amount of this Note, together with all accrued and unpaid interest
thereon, may become, or may be declared to be, due and payable in the manner,
upon the conditions and with the effect provided in the Credit Agreement.

     The terms of this Note are subject to amendment only in the manner provided
in the Credit Agreement.

     This Note is subject to restrictions on transfer or assignment as provided
in subsections 11.10 and 11.11 of the Credit Agreement.

     Company and any endorsers of this Note hereby waive diligence, presentment,
protest, demand and notice of every kind.




                                  A4-2


     IN WITNESS WHEREOF, Company has caused this Note to be duly executed and
delivered by its officer thereunto duly authorized as of the date and at the
place first written above.

                                   MERRILL COMMUNICATIONS LLC

                                   By: ___________________________
                                   Name:_________________________
                                   Title: _________________________





                           A4-3


                                    TRANSACTIONS
                                         ON
                                  SWING LINE NOTE





                                                   Outstanding
                   Amount of       Amount of        Principal
                   Loan Made    Principal Paid       Balance        Notation
       Date        This Date       This Date        This Date       Made By
       ----        ---------    --------------      ----------      --------
                                                        





                               A4-4


                                    EXHIBIT B-1

                             FORM OF BORROWING REQUEST

     Pursuant to that certain Credit Agreement dated as of November 23, 1999, as
amended, supplemented or otherwise modified to the date hereof (said Credit
Agreement, as so amended, supplemented or otherwise modified, being the "CREDIT
AGREEMENT", the terms defined therein and not otherwise defined herein being
used herein as therein defined), by and among Merrill Communications LLC, a
Delaware limited liability company (the "COMPANY"), Merrill Corporation, a
Minnesota corporation, as guarantor, the financial institutions listed therein
as Lenders ("LENDERS"), DLJ Capital Funding, Inc., as Syndication Agent for the
Lenders, Wells Fargo Bank, N.A., as Documentation Agent for the Lenders, and
U.S. Bank National Association, as Administrative Agent for the Lenders
("ADMINISTRATIVE AGENT"), this represents a request by Company to borrow as
follows:

     1.   DATE OF BORROWING:  ___________________, _________

     2.   AMOUNT OF BORROWING:     $___________________

     3.   TRANCHE OF LOANS:        / /  a.   Term-A Loans
                                   / /  b.   Term-B Loans
                                   / /  c.   Revolving Loans
                                   / /  d.   Swing Line Loan

     4.   INTEREST RATE OPTION:    / /  a.   Base Rate Loan(s)
                                   / /  b.   LIBOR Loans with an initial
                                             Interest Period of ____________
                                             month(s)

The proceeds of such Loans are to be deposited in the account of Company at
Administrative Agent.

          Company certifies that on the date of the borrowing contemplated
hereby:

          (i)  The representations and warranties contained in Article VI of the
          Credit Agreement and in each other Loan Document are true and correct
          in all material respects with the same effect as if then made (unless
          stated to relate solely to an earlier date, in which case such
          representations and warranties were true and correct in all material
          respects as of such earlier date); and



                              B1-1


          (ii) No Default has occurred and is continuing.


DATED: ____________________             MERRILL COMMUNICATIONS LLC


                                   By: __________________________
                                   Name:________________________
                                   Title: ________________________


                                    B1-2



                                    EXHIBIT B-2

                              FORM OF ISSUANCE REQUEST


     Pursuant to that certain Credit Agreement dated as of November 23, 1999,
as amended, supplemented or otherwise modified to the date hereof (said
Credit Agreement, as so amended, supplemented or otherwise modified, being
the "CREDIT AGREEMENT", the terms defined therein and not otherwise defined
herein being used herein as therein defined), by and among Merrill
Communications LLC, a Delaware limited liability company (the "COMPANY"),
Merrill Corporation, a Minnesota corporation, as guarantor, the financial
institutions listed therein as Lenders, DLJ Capital Funding, Inc., as
Syndication Agent for the Lenders, Wells Fargo Bank, N.A., as Documentation
Agent for the Lenders, and U.S. Bank National Association, as Administrative
Agent for the Lenders ("ADMINISTRATIVE AGENT"), this represents a request by
Company for the issuance of a Letter of Credit as follows:

     1.   ISSUER:             / /  a.   Administrative Agent
                              / /  b.   ______________________

     2.   DATE OF ISSUANCE OF LETTER OF CREDIT:   ________________, ________

     3.   FACE AMOUNT OF LETTER OF CREDIT:   $________________________

     4.   EXPIRATION DATE OF LETTER OF CREDIT:    ________________, ________

     5.   NAME AND ADDRESS OF BENEFICIARY:
                    ___________________________________________
                    ___________________________________________
                    ___________________________________________
                    ___________________________________________

     6.   ATTACHED HERETO IS:
          / /  a.   the verbatim text of such proposed Letter of Credit; or
          / /  b.   a description of the proposed terms and conditions of such
          Letter of Credit, including a precise description of any documents to
          be presented by the beneficiary which, if presented by the beneficiary
          prior to the expiration date of such Letter of Credit, would require
          the Issuer to make payment under such Letter of Credit.

          Company certifies that on the date of the proposed issuance of the
Letter of Credit contemplated hereby:

          (i)  The representations and warranties contained in Article VI of the
          Credit Agreement and in each other Loan Document are true and correct
          in all material respects with the same effect as if then made (unless
          stated to relate only to an earlier date, in which case such
          representations and warranties were true and correct in all material
          respects as of such earlier date); and

                                    B2-1


          (ii) No Default has occurred and is continuing.

DATED: ____________________        MERRILL COMMUNICATIONS LLC

                                   By: __________________________
                                   Name:________________________
                                   Title: ________________________



                                    B2-2


                                  EXHIBIT C

                   FORM OF CONTINUATION/CONVERSION NOTICE

     Pursuant to that certain Credit Agreement dated as of November 23, 1999,
as amended, supplemented or otherwise modified to the date hereof (said
Credit Agreement, as so amended, supplemented or otherwise modified, being
the "CREDIT AGREEMENT", the terms defined therein and not otherwise defined
herein being used herein as therein defined), by and among Merrill
Communications LLC, a Delaware limited liability company (the "COMPANY"),
Merrill Corporation, a Minnesota corporation, as guarantor, the financial
institutions listed therein as Lenders, DLJ Capital Funding, Inc., as
Syndication Agent for the Lenders, Wells Fargo Bank, N.A., as Documentation
Agent for the Lenders, and U.S. Bank National Association, as Administrative
Agent for the Lenders, this represents a request by Company to convert or
continue Loans as follows:

     1.   DATE OF CONVERSION/CONTINUATION:   __________________, _______

     2.   AMOUNT OF LOANS BEING CONVERTED/CONTINUED:  $___________________

     3.   TRANCHE OF LOANS BEING   / /  a.   Term-A Loans
          CONVERTED/CONTINUED:     / /  b.   Term-B Loans
                                   / /  c.   Revolving Loans
                                   / /  d.   Swing Line Loans

     4.   NATURE OF CONVERSION/CONTINUATION:
               / /  a.   Conversion of Base Rate Loans to LIBOR Loans
               / /  b.   Conversion of LIBOR Loans to Base Rate Loans
               / /  c.   Continuation of LIBOR Loans as such

     5.   If Loans are being continued as or converted to LIBOR Loans, the
     duration of the new Interest Period that commences on the conversion/
     continuation date:   _______________ month(s)

     In the case of a conversion to or continuation of LIBOR Loans, Company
certifies that on the date of the conversion or continuation contemplated hereby
no Default has occurred and is continuing under the Credit Agreement.

DATED: _____________________            MERRILL COMMUNICATIONS LLC

                                   By: __________________________
                                   Name:________________________
                                   Title: ________________________



                                    C-1


                                     EXHIBIT D

                          FORM OF CLOSING DATE CERTIFICATE

                              MERRILL COMMUNICATIONS LLC

     This certificate is delivered pursuant to Section 5.1.4 of the Credit
Agreement, dated as of November 23, 1999 (as amended, supplemented, amended
and restated or otherwise modified from time to time, the "CREDIT AGREEMENT";
capitalized terms used but not defined herein shall have the respective
meanings assigned to such terms in the Credit Agreement), among Merrill
Communications LLC, a Delaware limited liability company (the "COMPANY"),
Merrill Corporation, a Minnesota corporation, as guarantor ("HOLDCO"), the
various financial institutions as are or may from time to time become parties
thereto (the "LENDERS"), DLJ Capital Funding, Inc., as Syndication Agent,
Wells Fargo Bank, N.A., as Documentation Agent, and U.S. Bank National
Association, as Administrative Agent.  Unless otherwise defined herein or the
context otherwise requires, terms used herein have the meanings provided in
the Credit Agreement.

     The undersigned hereby certifies, represents and warrants that, as of
the date of the initial Credit Extensions under the Credit Agreement:

     1.  TRANSACTION DOCUMENTS.  The Agents have received (with copies for
each Lender that shall have expressly requested copies thereof) copies of
fully executed versions of the Transaction Documents, certified to be true
and complete copies thereof by an Authorized Officer of the Company, attached
hereto as ANNEX I.  The Merger Agreement is in full force and effect and has
not been modified or waived in any material respect, nor has there been any
forbearance to exercise any material rights with respect to any of the terms
or provisions relating to the conditions to the consummation of the Merger
set forth in the Merger Agreement.

     2.  CONSUMMATION OF MERGER.  All actions necessary to consummate the
Merger (including the filing of the Certificate of Merger with the Secretary
of State of the State of Minnesota) have been taken in accordance with
Section 302A.673 of the Business Corporation Act of the State of Minnesota.

     3.  CONSUMMATION OF CAPITAL TRANSACTIONS, ETC.  (i) The members of
Company's management have retained not less than $21,500,000 of their
existing Capital Stock in Holdco, valued at the Merger consideration value
per share, and after giving effect to the Common Equity Contribution, the
Preferred Equity Contribution, the Senior Subordinated Notes or the Senior
Subordinated Bridge Notes, the loans made on the Closing Date and the
Intercompany Loan, Holdco has sufficient cash on hand in the amount required
to consummate the Transaction on the Closing Date, (ii) Merger Sub has
received (A) not less than $70,600,000 in gross cash proceeds or Holdco
common stock purchased for cash by the DLJMB Entities from the DLJMB
Entities' portion of the Common Equity Contribution, and (B) not less than
$40,000,000 in gross cash proceeds from the Preferred Equity Contribution,
(iii) immediately after the consummation of the Merger, Holdco shall have
made the Asset Contribution and has entered into the Administrative Services
Agreement with the Company, (iv) the Intercompany Loan and/or Closing Date
Dividend has been made and (v) the Company has received not less than
$136,000,000 in gross

                                    D-1


cash proceeds from the issuance of the Senior Subordinated Notes and warrants
to purchase common stock of Holdco or the Senior Subordinated Bridge Notes.

     4.  LITIGATION.  There exists no pending or threatened material
litigation, proceeding or investigation which (x) could reasonably be
expected to have a Material Adverse Effect or (y) could reasonably be
expected to materially, adversely affect the consummation of the Transaction.

     5.  MATERIAL ADVERSE CHANGE.  Except as disclosed in SCHEDULE 3.10 to
the Merger Agreement, no facts, events or circumstances constituting or
having a Material Adverse Effect have occurred since January 31, 1999.

     6.  CERTAIN APPROVALS.  All material governmental, shareholder and third
party consents (including Hart-Scott-Rodino clearance) and approvals
necessary in connection with the Transaction, the related financings, the
continuing operation of Holdco and the Restricted Subsidiaries' businesses
and other transactions contemplated by the Credit Agreement have been
obtained, and all applicable waiting periods have expired without any action
being taken by any competent authority that could reasonably be expected to
restrain, prevent or impose any materially adverse conditions on the
Transaction, and no law or regulation is applicable which could reasonably be
expected to have any such effect.

     7.  WARRANTIES, NO DEFAULT, ETC.  Immediately after giving effect to the
initial Credit Extensions and the consummation of the Transaction:

          (a) the representations and warranties set forth in Article VI of the
     Credit Agreement and in each of the other Loan Documents are, in each case,
     true and correct in all material respects (unless stated to relate solely
     to an earlier date, in which case such representations and warranties were
     true and correct in all material respects as of such earlier date);

          (b) in the case of Revolving Loans, Swing Line Loans or Letters of
     Credit (x) the sum of (A) the aggregate outstanding principal amount of all
     Revolving Loans and Swing Line Loans and (B) the Letter of Credit
     Outstandings does not exceed the Revolving Loan Commitment Amount, (y) the
     aggregate outstanding principal amount of all Swing Line Loans does not
     exceed the Swing Line Loan Commitment Amount, and (z) the Letter of Credit
     Outstandings do not exceed the Letter of Credit Commitment Amount; and

          (c) no Default has occurred and is continuing.

                                    D-2


     IN WITNESS WHEREOF, the undersigned has caused this Certificate to be
executed and delivered, and the certification, representations and warranties
contained herein to be made, by its Authorized Officer this 23rd day of
November, 1999.


                                    MERRILL COMMUNICATIONS LLC

                                    By: ________________________
                                    Name:______________________
                                    Title:_______________________



                                    D-3


                                 ANNEX I

                           TRANSACTION DOCUMENTS





                                    D-4


                                 EXHIBIT E
                       FORM OF COMPLIANCE CERTIFICATE

                         MERRILL COMMUNICATIONS LLC

     This Compliance Certificate is delivered pursuant to clause (c) of
Section 7.1.1 of the Credit Agreement, dated as of November 23, 1999 (as
amended, supplemented, amended and restated or otherwise modified from time
to time, the "CREDIT AGREEMENT"), among Merrill COMMUNICATIONS LLC, a
Delaware limited liability company (the "COMPANY"), Merrill Corporation, a
Minnesota corporation, as guarantor ("HOLDCO"), the various financial
institutions as are, or may from time to time become, parties thereto, as
Lenders, DLJ Capital Funding, Inc., as Syndication Agent for the Lenders,
Wells Fargo Bank, N.A., as Documentation Agent for the Lenders, and U.S. Bank
National Association, as Administrative Agent for the Lenders.  Unless
otherwise defined herein or the context otherwise requires, terms used herein
or in any of the attachments hereto have the meanings provided in the Credit
Agreement.

     The Company hereby certifies, represents and warrants in respect of the
period (the "COMPUTATION PERIOD") commencing on ______________ and ending on
______________ (such latter date being the "COMPUTATION DATE"):

          (a)  As of the Computation Date, [no Default had occurred and was
     continuing] [the following Default had occurred and is continuing and
     Holdco and the Company have taken or propose to take the following action
     with respect thereto:].

          (b)  EBITDA for the Computation Period (including Carryover EBITDA (as
     reflected in Item 10 of Attachment 1 hereto) was $__________, as computed
     on ATTACHMENT 1 hereto.  The minimum EBITDA required pursuant to clause (a)
     of Section 7.2.4 of the Credit Agreement for the Computation Period was
     $_________.

          (c)  The Leverage Ratio as of the Computation Date was ______________,
     as computed on ATTACHMENT 2 hereto.  The maximum Leverage Ratio permitted
     pursuant to clause (b) of Section 7.2.4 of the Credit Agreement on the
     Computation Date was ___________.

          (d)  The Interest Coverage Ratio for the Computation Period was
     ___________, as computed on ATTACHMENT 3 hereto.  The minimum Interest
     Coverage Ratio permitted pursuant to clause (c) of Section 7.2.4 of the
     Credit Agreement for the Computation Period was _________.

          (e)  The Fixed Charge Coverage Ratio for the Computation Period was
     ____________, as computed on ATTACHMENT 4 hereto.  The minimum Fixed Charge
     Coverage Ratio permitted pursuant to clause (d) of Section 7.2.4 of the
     Credit Agreement for the Computation Period was ________________________.

     The Equipment and Inventory (as such terms are defined in the Security
Agreement) of the Obligors, other than Equipment and Inventory located at
document service

                                    E-1


centers maintained by Holdco or any of its Restricted Subsidiaries at sites
owned or leased by clients of Holdco or such Restricted Subsidiaries, as the
case may be, are located as indicated on ITEM A of ATTACHMENT 5 hereto or as
set forth on the relevant Schedule to the Security Agreement or in a previous
Compliance Certificate.

     Neither Holdco nor any Restricted Subsidiary has changed its legal name,
used any trade name (except as listed in the Security Agreement ) or been the
subject of any merger or other corporate reorganization except (i) as
indicated on ITEM B of ATTACHMENT 5 hereto, (ii) as set forth on the relevant
Schedule to the Security Agreement or (iii) as set forth in a previous
Compliance Certificate.

                                    E-2


IN WITNESS WHEREOF, the Company has caused this Compliance Certificate to be
executed and delivered, and the certification and warranties contained herein
to be made, by its [president] [chief executive officer] [treasurer]
[assistant treasurer] [controller] [chief financial officer] on
________________.

                              MERRILL COMMUNICATIONS LLC

                              By:________________________
                              Name:______________________
                              Title:_____________________




                                    E-3


                                     Attachment 1
                                                         (to __/__/__ Compliance
                                                                    Certificate)

                                       EBITDA
                  for the Computation Period ended on ____________
                              (the "Computation Date")

                                                     
          *EBITDA: the sum (without duplication) of:

          1.   Net Income (the net income of Holdco
               and its Restricted Subsidiaries for the
               Computation Period on a consolidated
               basis) . . . . . . . . . . . . . . . . . $________________


          2.   the amount deducted in determining Net
               Income representing (i) net periodic
               post-retirement benefits paid in cash
               and (ii) non-cash charges or expenses,
               including depreciation and amortization
               (excluding any non-cash charges
               representing an accrual of or reserve
               for cash charges to be paid within the
               next twelve months and any non-cash
               charges representing reversals of items
               increasing Net Income in any prior
               period). . . . . . . . . . . . . . . . . $________________


          3.   the amount deducted in determining Net
               Income representing income taxes
               (whether paid or deferred) . . . . . . . $________________


          4.   the amount deducted in determining Net
               Income representing (i) Interest
               Expense (the aggregate consolidated
               interest expense of Holdco and its
               Restricted Subsidiaries for the
               Computation Period, as determined in
               accordance with GAAP, including the
               portion of any payments made in respect
               of Capitalized Lease Liabilities
               allocable to interest expense, but
               excluding (to the extent included in
               interest expense) up-front fees and
               expenses and the amortization of all
               deferred financing costs), (ii) the
               payment of management bonuses and the
               purchase of stock options on or prior
               to April 30, 2000 in connection with
               the Transaction and (iii) other fees,
               expenses and financing costs incurred
               in connection with the Transaction . . . $_________________



_____________________
*    Computed for the period consisting of the Fiscal Quarter ending on the
Computation Date and each of the three immediately preceding Fiscal Quarters;
PROVIDED that if, during any such period, Holdco or any of its Restricted
Subsidiaries shall have made one or more acquisitions or dispositions, EBITDA
for such period shall, in accordance with Section 1.4(b) of the Credit
Agreement, be calculated on a pro forma basis as if each such acquisition or
disposition had been made, and all Indebtedness incurred to finance each such
acquisition or repaid upon the consummation of such disposition had been
incurred or repaid, as the case may be, on the first day of such period.

                                    E-4

                                                     
          5.   the amount deducted in determining Net
               Income representing any net loss
               realized in connection with any sale,
               lease, conveyance or other disposition
               of any asset (other than in the
               ordinary course of business or from
               Holdco or any of its Restricted
               Subsidiaries to Holdco or any of its
               Restricted Subsidiaries) or any
               extraordinary or non-recurring loss. . . $_________________


          6.   MINUS the amount included in
               determining Net Income representing any
               net gain realized in connection with
               any sale, lease, conveyance or other
               disposition of any asset (other than in
               the ordinary course of business or from
               Holdco or any of its Restricted
               Subsidiaries to Holdco or any of its
               Restricted Subsidiaries) or any
               extraordinary gain . . . . . . . . . . . $_________________


          7.   EBITDA for the four consecutive Fiscal
               Quarters ended on the Computation Date:
               The sum of ITEMS 1 through 5,
               subtracting Item 6 . . . . . . . . . . . $_________________



          8.   EBITDA for the four consecutive Fiscal
               Quarters ended on ___________ __, ____
               (the "Prior Compliance Period"). . . . . $_________________


          9.   EBITDA required under Section 7.2.4(a)
               of the Credit Agreement for the Prior
               Compliance Period. . . . . . . . . . . . $_________________


          10.  Carryover EBITDA:  50% of the excess of
               item 8 over Item 9 . . . . . . . . . . . $_________________


          11.  EBITDA (including Carryover EBITDA)
               (The sum of Item 7 and Item 10). . . . $_________________




                                    E-5


                                                                    Attachment 2
                                                         (to __/__/__ Compliance
                                                                    Certificate)

                                   LEVERAGE RATIO
                                  on ____________
                              (the "Computation Date")

                                                     
LEVERAGE RATIO:

          1.   total Debt (less cash and Cash
               Equivalent Investments) of Holdco and
               its Restricted Subsidiaries on a
               consolidated basis outstanding on the
               Computation Date . . . . . . . . . . . . $_________________


          2.   EBITDA for the period of four
               consecutive Fiscal Quarters ended on
               the Computation Date (see ITEM 7 of
               ATTACHMENT 1). . . . . . . . . . . . . . $_________________


          3.   LEVERAGE RATIO:  ratio of ITEM 1 to
               ITEM 2                                             :1
                                                             _____________





_________________________
*     At the close of any Fiscal Quarter, the ratio computed for the period
consisting of such Fiscal Quarter and each of the three immediately prior Fiscal
Quarters; PROVIDED, HOWEVER, that if, during any such period, Holdco or any of
its Restricted Subsidiaries shall have made one or more acquisitions or
dispositions, the Leverage Ratio for such period shall, in accordance with
Section 1.4(b) of the Credit Agreement, be calculated on a pro forma basis as if
each such acquisition or disposition had been made, and all Indebtedness
incurred to finance each such acquisition or repaid upon the consummation of
such disposition had been incurred or repaid, as the case may be, on the first
day of such period.

                                    E-6


                                                                    Attachment 3
                                                         (to __/__/__ Compliance
                                                                    Certificate)


                              INTEREST COVERAGE RATIO
                  for the Computation Period ended on ____________
                              (the "Computation Date")

                                                     
INTEREST COVERAGE RATIO:

          1.   EBITDA for the Computation Period (see
               ITEM 7 of ATTACHMENT 1). . . . . . . . . $_________________


          2.   the cash portion of Interest Expense
               (net of interest income) for the
               Computation Period . . . . . . . . . . . $_________________


          3.   INTEREST COVERAGE RATIO:  ratio of ITEM
               1 to ITEM 2. . . . . . . . . . . . . . .            :1
                                                               __________




- --------------------
*     At the close of any Fiscal Quarter, the ratio computed for the period
consisting of such Fiscal Quarter and each of the three immediately prior Fiscal
Quarters; PROVIDED, HOWEVER, that (i) for the first three Fiscal Quarters ending
after the Closing Date, the Interest Expense included in ITEM 2 shall be
determined on an Annualized basis and (ii) if, during any such period, Holdco or
any of its Restricted Subsidiaries shall have made one or more acquisitions or
dispositions, the Interest Coverage Ratio for such period shall, in accordance
with Section 1.4(b) of the Credit Agreement, be calculated on a pro forma basis,
as if each such acquisition or disposition had been made, and all Indebtedness
incurred to finance each such acquisition or repaid upon the consummation of
such disposition had been incurred or repaid, as the case may be, on the first
day of such period.



                                    E-7


                                                                    Attachment 4
                                                         (to __/__/__ Compliance
                                                                    Certificate)


                            *FIXED CHARGE COVERAGE RATIO
                  for the Computation Period ended on ____________
                              (the "Computation Date")

                                                     
          FIXED CHARGE COVERAGE RATIO:

          1.   EBITDA for the Computation Period (see
               ITEM 7 of ATTACHMENT 1). . . . . . . . . $_________________


          2.   Capital Expenditures actually made
               during the Computation Period pursuant
               to clause (a) of Section 7.2.7 of the
               Credit Agreement (excluding Capital
               Expenditures constituting Capitalized
               Lease Liabilities and by way of the
               incurrence of Indebtedness permitted
               pursuant to Section 7.2.2(c) of the
               Credit Agreement to a vendor of any
               assets permitted to be acquired
               pursuant to Section 7.2.7 of the Credit
               Agreement to finance the acquisition of
               such assets) . . . . . . . . . . . . . . $_________________


          3.   the cash portion of Interest Expense
               (net of interest income) for the
               Computation Period . . . . . . . . . . . $_________________


          4.   all scheduled payments of principal of
               the Term Loans and other funded Debt
               (including the principal portion of any
               Capital Lease Liabilities) of Holdco
               and its Restricted Subsidiaries for the
               Computation Period . . . . . . . . . . . $_________________


          5.   cash income taxes actually paid or
               payable by Holdco and its Restricted
               Subsidiaries for the Computation Period. $_________________


          6.   the sum (without duplication) of ITEMS
               2 through 5. . . . . . . . . . . . . . . $_________________


          7.   Fixed Charge Coverage Ratio:  ratio of             :1
               ITEM 1 to ITEM 6 . . . . . . . . . . . .         _______




- -----------------------
*    At the close of any Fiscal Quarter, the ratio computed for the period
consisting of such Fiscal Quarter and each of the three immediately prior Fiscal
Quarters; PROVIDED, HOWEVER, that (i) for the first three Fiscal Quarters ending
after the Closing Date, the Interest Expense (net of interest income) and
scheduled payments of principal of Term Loans and other funded Debt shall be
determined on an Annualized basis and (ii) if, during any such period, Holdco or
any of its Restricted Subsidiaries shall have made one or more dispositions or,
with the exception of the calculation of Capital Expenditures, acquisitions, the
Fixed Charge Coverage Ratio for such period shall, in accordance with Section
1.4(b) of the Credit Agreement, be calculated on a pro forma basis as if each
such disposition or acquisition had been made, and all Indebtedness incurred to
finance each such acquisition or repaid upon the consummation of such
disposition had been incurred or repaid, as the case may be, on the first day of
such period.

                                    E-8


                                                                    Attachment 5
                                                         (to __/__/__ Compliance
                                                                    Certificate)

Item A.  CHANGE OF LOCATION OF EQUIPMENT AND INVENTORY




                      Description                              New Location
                      -----------                              ------------
                                                        
1.


2.


3.


Item B.  MERGER OR OTHER CORPORATE REORGANIZATION



         Name of Holdco or Restricted Subsidiary                Description
         ---------------------------------------                -----------
                                                        
1.


2.


3.


CHANGE OF TRADE OR LEGAL NAMES



                                                            New Trade Name or
         Name of Holdco or Restricted Subsidiary             New Legal Name
         ---------------------------------------             --------------
                                                       

1.


2.


3.



                                   E-9


                                     EXHIBIT F

                             FORM OF SECURITY AGREEMENT

     This SECURITY AGREEMENT (this "AGREEMENT") is dated as of November 23, 1999
and entered into by and among MERRILL COMMUNICATIONS LLC, a Delaware limited
liability company (the "COMPANY"), Merrill Corporation, a Minnesota corporation
("HOLDCO"), each of THE UNDERSIGNED DIRECT AND INDIRECT RESTRICTED SUBSIDIARIES
of Company (each of such undersigned Restricted Subsidiaries being a "SUBSIDIARY
GRANTOR" and collectively "SUBSIDIARY GRANTORS", and each of Company, Holdco and
each Subsidiary Grantor being a "GRANTOR" and collectively "GRANTORS"; including
any Additional Grantors (as hereinafter defined)) and U. S. BANK NATIONAL
ASSOCIATION, as Administrative Agent for and representative of (in such capacity
herein called "SECURED PARTY") the financial institutions ("LENDERS") party to
the Credit Agreement referred to below and any Interest Rate Exchangers (as
hereinafter defined).

                                PRELIMINARY STATEMENTS

          A.   Pursuant to that certain Credit Agreement dated as of November
23, 1999, as amended, restated, supplemented or otherwise modified to the date
hereof (said Credit Agreement, as amended, restated, supplemented or otherwise
modified from time to time, being the "CREDIT AGREEMENT"; the terms defined
therein and not otherwise defined herein being used herein as therein defined),
by and among Company, Holdco as guarantor, the financial institutions listed
therein as Lenders, DLJ Capital Funding, Inc., as Syndication Agent for the
Lenders, Wells Fargo Bank, N.A., as Documentation Agent for the Lenders, and U.
S. Bank National Association, as Administrative Agent for the Lenders (in such
capacity, "ADMINISTRATIVE AGENT"), Lenders have made certain commitments,
subject to the terms and conditions set forth in the Credit Agreement, to extend
certain credit facilities to Company and Holdco has guaranteed the obligations
of Company under the Credit Agreement.

          B.   Company may from time to time enter, or may from time to time
have entered, into one or more Rate Protection Agreements (collectively, the
"LENDER INTEREST RATE AGREEMENTS") with one or more Lenders or their affiliates
(in such capacity, collectively, "INTEREST RATE EXCHANGERS") as permitted under
the terms of the Credit Agreement, and it is desired that the obligations of
Company under the Lender Interest Rate Agreements, including without limitation
the obligation of Company to make payments thereunder in the event of early
termination thereof (all such obligations being the "INTEREST RATE
OBLIGATIONS"), together with all obligations of Company under the Credit
Agreement and the other Loan Documents, be secured hereunder.

          C.   Subsidiary Grantors have executed and delivered that certain
Subsidiary Guaranty dated as of the date hereof, (said Subsidiary Guaranty, as
it may hereafter be amended, restated, supplemented or otherwise modified from
time to time, being the "SUBSIDIARY GUARANTY") in favor of Secured Party for the
benefit of Lenders and any Interest Rate Exchangers, pursuant to which each
Subsidiary Grantor has guarantied the prompt payment and performance when due of
all obligations of Company under the Credit Agreement and all

                                     F-1


obligations of Company under the Lender Interest Rate Agreements, including
without limitation the obligation of Company to make payments thereunder in
the event of early termination thereof.

          D.   It is a condition precedent to the extensions of credit by
Lenders under the Credit Agreement that the Grantors shall have granted the
security interests and undertaken the obligations contemplated by this
Agreement.

          NOW, THEREFORE, in consideration of the premises and in order to
induce Lenders to make Loans and other extensions of credit under the Credit
Agreement and to induce Interest Rate Exchangers to enter into the Lender
Interest Rate Agreements, and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, each Grantor hereby
agrees with Secured Party as follows:

SECTION 1.  GRANT OF SECURITY.

          Each Grantor hereby assigns to Secured Party, and hereby grants to
Secured Party a security interest in, all of such Grantor's right, title and
interest in and to the following, in each case whether now or hereafter existing
or in which Grantor now has or hereafter acquires an interest and wherever the
same may be located (the "COLLATERAL"):

          (a)  all equipment in all of its forms, all parts thereof and all
          accessions thereto (any and all such equipment, parts and accessions
          being the "EQUIPMENT");

          (b)  all inventory in all of its forms (including, but not limited to,
          (i) all goods held by such Grantor for sale or lease or to be
          furnished under contracts of service or so leased or furnished,
          (ii) all raw materials, work in process, finished goods, and materials
          used or consumed in the manufacture, packing, shipping, advertising,
          selling, leasing, furnishing or production of such inventory or
          otherwise used or consumed in such Grantor's business, (iii) all goods
          in which such Grantor has an interest in mass or a joint or other
          interest or right of any kind, and (iv) all goods which are returned
          to or repossessed by such Grantor) and all accessions thereto and
          products thereof (all such inventory, accessions and products being
          the "INVENTORY") and all negotiable and non-negotiable documents of
          title (including without limitation warehouse receipts, dock receipts
          and bills of lading) issued by any Person covering any Inventory (any
          such negotiable document of title being a "NEGOTIABLE DOCUMENT OF
          TITLE");

          (c)  all accounts, contract rights, chattel paper, documents,
          instruments, general intangibles and other rights and obligations of
          any kind owned by or owing to such Grantor and all rights in, to and
          under all security agreements, leases and other contracts securing or
          otherwise relating to any such accounts, contract rights, chattel
          paper, documents, instruments, general intangibles or other
          obligations (any and all such accounts, contract rights, chattel
          paper, documents, instruments, general intangibles and other
          obligations being the "ACCOUNTS", and any and all such security
          agreements, leases and other contracts being the "RELATED CONTRACTS");

                                     F-2



          (d)  all cash, money, currency and deposit accounts, including without
          limitation demand, time, savings, passbooks or similar accounts
          maintained with Lenders or other banks, savings and loan associations
          or other financial institutions (but excluding deposit accounts
          maintained in trust by such Grantor or otherwise segregated from other
          funds of such Grantor for the benefit of customers of such Grantor and
          containing only funds owing to such customers);

          (e)  the "INTELLECTUAL PROPERTY COLLATERAL", which term means:

               (i)    all rights, title and interest (including rights acquired
               pursuant to a license or otherwise but only to the extent
               permitted by agreements governing such license or other use) in
               and to all trademarks, service marks, designs, logos, indicia,
               tradenames, trade dress, corporate names, company names, business
               names, fictitious business names, trade styles and/or other
               source and/or business identifiers and applications pertaining
               thereto, owned by such Grantor, or hereafter adopted and used, in
               its business (including, without limitation, the trademarks
               specifically identified in SCHEDULE 1(a), as the same may be
               amended pursuant hereto from time to time) (collectively, the
               "TRADEMARKS"), all registrations that have been or may hereafter
               be issued or applied for thereon in the United States and any
               state thereof (including, without limitation, the registrations
               and applications specifically identified in SCHEDULE 1(a), as the
               same may be amended pursuant hereto from time to time) (the
               "TRADEMARK REGISTRATIONS"), all common law and other rights (but
               in no event any of the obligations) in and to the Trademarks in
               the United States and any state thereof (the "TRADEMARK RIGHTS"),
               and all goodwill of such Grantor's business symbolized by the
               Trademarks and associated therewith (the "ASSOCIATED GOODWILL"):

               (ii)   all rights, title and interest (including rights acquired
               pursuant to a license or otherwise but only to the extent
               permitted by agreements governing such license or other use) in
               and to all patents and patent applications and rights and
               interests in patents and patent applications under any domestic
               law that are presently, or in the future may be, owned or held by
               such Grantor and all patents and patent applications and rights,
               title and interests in patents and patent applications under any
               domestic law that are presently, or in the future may be, owned
               by such Grantor in whole or in part (including, without
               limitation, the patents and patent applications listed in
               SCHEDULE 1(b), as the same may be amended pursuant hereto from
               time to time), all rights (but not obligations) corresponding
               thereto (including, without limitation, the right (but not the
               obligation), exercisable only upon the occurrence and during the
               continuation of an Event of Default, to sue for past, present and
               future infringements in the name of such Grantor or in the name
               of Secured Party or Lenders), and all re-issues, divisions,
               continuations, renewals, extensions and continuations-in-part
               thereof (all of the foregoing being collectively referred to as
               the "PATENTS"); it being understood that the rights and interests
               included in the

                                     F-3


               Intellectual Property Collateral hereby shall include, without
               limitation, all rights and interests pursuant to licensing or
               other contracts in favor of such Grantor pertaining to patent
               applications and patents presently or in the future owned or
               used by third parties but, in the case of third parties
               which are not Affiliates of such Grantor, only to the extent
               permitted by such licensing or other contracts and, if not so
               permitted, only with the consent of such third parties; and

               (iii)  all rights, title and interest (including rights acquired
               pursuant to a license or otherwise but only to the extent
               permitted by agreements governing such license or other use)
               under copyright in various published and unpublished works of
               authorship including, without limitation, computer programs,
               computer data bases, other computer software, layouts, trade
               dress, drawings, designs, writings, and formulas owned by Grantor
               (including, without limitation, the works listed on
               SCHEDULE 1(c), as the same may be amended pursuant hereto from
               time to time) (collectively, the "COPYRIGHTS"), all copyright
               registrations issued to such Grantor and applications for
               copyright registration that have been or may hereafter be issued
               or applied for thereon by Grantor in the United States and any
               state thereof (including, without limitation, the registrations
               listed on SCHEDULE 1(c), as the same may be amended pursuant
               hereto from time to time) (collectively, the "COPYRIGHT
               REGISTRATIONS"), all common law and other rights in and to the
               Copyrights in the United States and any state thereof including
               all copyright licenses (but with respect to such copyright
               licenses, only to the extent permitted by such licensing
               arrangements) (the "COPYRIGHT RIGHTS"), including, without
               limitation, each of the Copyrights, rights, titles and interests
               in and to the Copyrights and works protectable by copyright,
               which are presently, or in the future may be, owned, created (as
               a work for hire for the benefit of such Grantor), authored (as a
               work for hire for the benefit of such Grantor), or acquired by
               such Grantor, in whole or in part, and all Copyright Rights with
               respect thereto and all Copyright Registrations therefor,
               heretofore or hereafter granted or applied for, and all renewals
               and extensions thereof, in the United States, including all
               proceeds thereof (such as, by way of example and not by
               limitation, license royalties and proceeds of infringement
               suits), the right (but not the obligation) to renew and extend
               such Copyright Registrations and Copyright Rights and to register
               works protectable by copyright and the right (but not the
               obligation) to sue for past, present and future infringements of
               the Copyrights and Copyright Rights;

          (f)  all information used or useful or arising from the business
          including all goodwill, trade secrets, trade secret rights, know-how,
          customer lists, processes of production, ideas, confidential business
          information, techniques, processes, formulas, and all other
          proprietary information;

          (g)  the agreements listed in Schedule 1(h), as each such agreement
          may be amended, restated, supplemented or otherwise modified from time
          to time (said

                                     F-4






          agreements, as so amended, restated, supplemented or otherwise
          modified, being referred to herein individually as an "ASSIGNED
          AGREEMENT" and collectively as the "ASSIGNED AGREEMENTS"),
          including, without limitation, (i) all rights of such Grantor to
          receive moneys due or to become due under or pursuant to the
          Assigned Agreements, (ii) all rights of such Grantor to receive
          proceeds of any insurance, indemnity, warranty or guaranty with
          respect to the Assigned Agreements, (iii) all claims of such
          Grantor for damages arising out of any breach of or default under
          the Assigned Agreements, and (iv) all rights of such Grantor to
          terminate, amend, supplement, modify or exercise rights or options
          under the Assigned Agreements, to perform thereunder and to compel
          performance and otherwise exercise all remedies thereunder;

          (h)  to the extent not included in any other paragraph of this
          SECTION 1, all other general intangibles (including without limitation
          tax refunds, rights to payment or performance, CHOSES IN ACTION and
          judgments taken on any rights or claims included in the Collateral);

          (i)  all plant fixtures, business fixtures and other fixtures and
          storage and office facilities, and all accessions thereto and products
          thereof;

          (j)  all books, records, ledger cards, files, correspondence, computer
          programs, tapes, disks and related data processing software that at
          any time evidence or contain information relating to any of the
          Collateral or are otherwise necessary or helpful in the collection
          thereof or realization thereupon; and

          (k)  all proceeds, products, rents and profits of or from any and all
          of the foregoing Collateral and, to the extent not otherwise included,
          all payments under insurance (whether or not Secured Party is the loss
          payee thereof), or any indemnity, warranty or guaranty, payable by
          reason of loss or damage to or otherwise with respect to any of the
          foregoing Collateral.  For purposes of this Agreement, the term
          "PROCEEDS" includes whatever is receivable or received when Collateral
          or proceeds are sold, exchanged, collected or otherwise disposed of,
          whether such disposition is voluntary or involuntary.

     Notwithstanding anything herein to the contrary, in no event shall the
Collateral include, and no Grantor shall be deemed to have granted a security
interest in, (i) any of such Grantor's rights or interests in any license,
contract or agreement to which such Grantor is a party or any of its rights or
interests thereunder to the extent, but only to the extent, that such a grant
would, under the terms of such license, contract or agreement or otherwise,
result in a breach of the terms of, or constitute a default under any license,
contract or agreement to which such Grantor is a party (other than to the extent
that any such term would be rendered ineffective pursuant to Section 9-318(4) of
the Uniform Commercial Code of any relevant jurisdiction or any other applicable
law (including Title 11 of the United States Code entitled "Bankruptcy," as now
and hereafter in effect, or any successor statute (the "BANKRUPTCY CODE") or
principles of equity); PROVIDED, that immediately upon the ineffectiveness,
lapse or termination of any such provision, the Collateral shall include, and
such Grantor shall be deemed to have granted a security interest in, all such
rights and interests as if such provision had never been in effect,

                                    F-5



(ii) any of such Grantor's motor vehicles, the ownership of which is
represented by a certificate of title or (iii) real property leaseholds,
unless Grantor has executed a leasehold mortgage pursuant to the Credit
Agreement.

SECTION 2.  SECURITY FOR OBLIGATIONS.

          This Agreement secures, and the Collateral assigned by each Grantor
is collateral security for, the prompt payment or performance in full when
due, whether at stated maturity, by required prepayment, declaration,
acceleration, demand or otherwise (including without limitation the payment
of amounts that would become due but for the operation of the automatic stay
under Section 362(a) of the Bankruptcy Code, 11 U.S.C. Section 362(a)), of
all Secured Obligations with respect to such Grantor.  "SECURED OBLIGATIONS"
means:

          (a)  with respect to Company, all obligations and liabilities of every
          nature of Company now or hereafter existing under or arising out of or
          in connection with the Credit Agreement and the other Loan Documents
          and any Lender Interest Rate Agreement,

          (b)  with respect to Holdco, all obligations and liabilities of every
          nature now or hereafter existing under or arising out of or in
          connection with Article X of the Credit Agreement, and

          (c)  with respect to each Subsidiary Grantor and Additional Grantor,
          all obligations and liabilities of every nature of such Grantor or
          Additional Guarantor now or hereafter existing under or arising out of
          or in connection with the Subsidiary Guaranty;

in each case together with all extensions or renewals thereof, whether for
principal, interest (including without limitation interest that, but for the
filing of a petition in bankruptcy with respect to any Grantor, would accrue
on such obligations, whether or not a claim is allowed against such Grantor
for such interest in the related bankruptcy proceeding), reimbursement of
amounts drawn under Letters of Credit, payments for early termination of
Lender Interest Rate Agreements, fees, expenses, indemnities or otherwise,
whether voluntary or involuntary, direct or indirect, absolute or contingent,
liquidated or unliquidated, whether or not jointly owed with others, and
whether or not from time to time decreased or extinguished and later
increased, created or incurred, and all or any portion of such obligations or
liabilities that are paid, to the extent all or any part of such payment is
avoided or recovered directly or indirectly from Secured Party or any Lender
or Interest Rate Exchanger as a preference, fraudulent transfer or otherwise
(all such obligations and liabilities being the "UNDERLYING DEBT"), and all
obligations of every nature of Grantors now or hereafter existing under this
Agreement.

SECTION 3.  GRANTORS REMAIN LIABLE.

          Anything contained herein to the contrary notwithstanding, (a) each
Grantor shall remain liable under any contracts and agreements included in
the Collateral, to the extent set forth therein, to perform all of its duties
and obligations thereunder to the same extent as if this Agreement had not
been executed, (b) the exercise by Secured Party of any of its rights
hereunder shall not release any Grantor from any of its duties or obligations
under the contracts

                                      F-6



and agreements included in the Collateral, and (c) Secured Party shall not
have any obligation or liability under any contracts and agreements included
in the Collateral by reason of this Agreement, nor shall Secured Party be
obligated to perform any of the obligations or duties of any Grantor
thereunder or to take any action to collect or enforce any claim for payment
assigned hereunder.

SECTION 4.  REPRESENTATIONS AND WARRANTIES.

     Each Grantor represents and warrants as follows:

          (a)  OWNERSHIP OF COLLATERAL.  Except as expressly permitted by the
          Credit Agreement and for the security interest created by this
          Agreement, such Grantor owns the Collateral owned by such Grantor free
          and clear of any Lien.  Except as expressly permitted by the Credit
          Agreement and such as may have been filed in favor of Secured Party
          relating to this Agreement, no effective financing statement or other
          instrument similar in effect covering all or any part of the
          Collateral is on file in any filing or recording office.

          (b)  LOCATIONS OF EQUIPMENT AND INVENTORY.  All of the Equipment and
          Inventory is, as of the date hereof located at the places specified in
          SCHEDULE 4(b) annexed hereto, except for (i) Inventory which, in the
          ordinary course of business, is in transit either (A) from a supplier
          to such Grantor, (B) between the locations specified in Schedule 4(b),
          (C) to customers of a Grantor or (D) to or from a Customer Service
          Center (as defined below) and (ii) Inventory and Equipment located at
          service centers on the premises of customers ("CUSTOMER SERVICE
          CENTERS").

          (c)  NEGOTIABLE DOCUMENTS OF TITLE.  No Negotiable Documents of Title
          (other than Negotiable Documents of Title that have been delivered to
          Secured Party) are outstanding with respect to any of the Inventory
          with an aggregate fair market value in excess of $500,000.

          (d)  OFFICE LOCATIONS.  The chief place of business and the chief
          executive office, except as set forth on SCHEDULE 4(d) annexed hereto,
          have been for the four month period preceding the date hereof, located
          at the locations set forth on SCHEDULE 4(d) annexed hereto.

          (e)  NAMES.  No Grantor has, at any time during the five year period
          ending on the date hereof, done business under any name (including any
          trade-name or fictitious business name) except the names listed in
          SCHEDULE 4(e) annexed hereto.  From and after the date hereof, no
          Grantor has changed its name except in compliance with SECTION 6(b).

          (f)  DELIVERY OF CERTAIN COLLATERAL.  All notes and other instruments
          (excluding checks) comprising any and all items of Collateral, to the
          extent that the aggregate principal amount of such notes and other
          instruments exceed $500,000, have been delivered to Secured Party duly
          endorsed and accompanied by duly executed instruments of transfer or
          assignment in blank.

                                     F-7



          (g)  INTELLECTUAL PROPERTY COLLATERAL.

          (i)  a true and complete list of all Trademark Registrations and
          Trademark applications owned, held (whether pursuant to a license or
          otherwise) or used by such Grantor, in whole or in part, is set forth
          in SCHEDULE 1(a) (as supplemented in any Compliance Certificate in
          accordance with Section 5(b));

          (ii)  a true and complete list of all Patents owned, held (whether
          pursuant to a license or otherwise) or used by such Grantor, in whole
          or in part, is set forth in SCHEDULE 1(b) (as supplemented in any
          Compliance Certificate in accordance with Section 5(b));

          (iii)  a true and complete list of all Copyright Registrations and
          applications for Copyright Registrations held (whether pursuant to a
          license or otherwise) by such Grantor, in whole or in part, is set
          forth in SCHEDULE 1(c) (as supplemented in any Compliance Certificate
          in accordance with Section 5(b));

          (iv) after reasonable inquiry, such Grantor is not aware that any of
          the Intellectual Property Collateral owned, held or used by such
          Grantor is invalid or unenforceable; and

          (v) no effective security interest or other Lien covering all or any
          part of the Intellectual Property Collateral (other than Liens
          permitted under subsection 7.2.3 of the Credit Agreement) is on file
          in the United States Patent and Trademark Office or the United States
          Copyright Office.

          (h)  PERFECTION.  The security interests in the Collateral granted to
          Secured Party for the ratable benefit of the Lenders and Interest Rate
          Exchangers hereunder constitute valid security interests in the
          Collateral (subject to Section 9-306 of the UCC), securing the payment
          of the Secured Obligations.  Upon the filing of UCC financing
          statements naming each Grantor as "DEBTOR", naming Secured Party as
          "SECURED PARTY", providing an address for each Grantor and the Secured
          Party, describing the Collateral and duly executed by each Grantor, in
          the filing offices set forth on SCHEDULE 4(h) annexed hereto, and in
          the case of the Intellectual Property Collateral, in addition to the
          filing of a Grant of Trademark Security Interest, substantially in the
          form of EXHIBIT I, and a Grant of Patent Security Interest,
          substantially in the form of EXHIBIT II, with the United States Patent
          and Trademark Office and the filing of a Grant of Copyright Security
          Interest, substantially in the form of EXHIBIT III, with the United
          States Copyright Office, the security interests in the Collateral
          granted to Secured Party for the ratable benefit of the Lenders and
          Interest Rate Exchangers (other than any security interests in
          Inventory and Equipment located at Customer Service Centers) will, to
          the extent a security interest in the Collateral may be perfected by
          filing UCC financing statements and, in the case of the Intellectual
          Property Collateral, in addition to the filing of such UCC Financing
          Statements, by the filing of a Grant of Trademark Security Interest
          and Grant of Patent Security Interest with the United States Patent
          and Trademark Office and a Grant of

                                        F-8



          Copyright Security Interest with the United States Copyright
          Office, constitute perfected security interests therein prior to
          all other Liens (other than Liens permitted under subsection 7.2.3
          of the Credit Agreement), and all filings and other actions
          necessary or desirable to perfect and protect such security
          interest have been duly made or taken.

SECTION 5.  FURTHER ASSURANCES.

          (a)  Each Grantor agrees that from time to time, at the expense of
such Grantor, such Grantor will promptly execute and deliver all further
instruments and documents, and take all further action, that may be necessary
or desirable, or that Secured Party may reasonably request, in order to
perfect and protect any security interest granted or purported to be granted
hereby (other than its security interest in Inventory and Equipment located
at Customer Service Centers) or to enable Secured Party to exercise and
enforce its rights and remedies hereunder with respect to any Collateral.
Without limiting the generality of the foregoing, each Grantor will:  (i) at
the request of Secured Party, mark conspicuously each item of chattel paper
included in the Accounts, each Related Contract and, at the request of
Secured Party, each of its records pertaining to the Collateral, with a
legend, in form and substance reasonably satisfactory to Secured Party,
indicating that such Collateral is subject to the security interest granted
hereby, (ii) at the request of Secured Party, deliver and pledge to Secured
Party hereunder all promissory notes and other instruments (excluding checks)
and all original counterparts of chattel paper constituting Collateral, to
the extent that the aggregate principal amount of such notes, other
instruments and chattel paper exceeds $500,000, duly endorsed and accompanied
by duly executed instruments of transfer or assignment, all in form and
substance satisfactory to Secured Party, (iii) use commercially reasonable
efforts to obtain any necessary consents of third parties to the assignment
and perfection of a security interest to Secured Party with respect to any
Collateral, (iv) execute and file such financing or continuation statements,
or amendments thereto, and such other instruments or notices, as may be
necessary or desirable, or as Secured Party may request, in order to perfect
and preserve the security interests granted or purported to be granted hereby
and (v) at Secured Party's request, appear in and defend any action or
proceeding that may affect such Grantor's title to or Secured Party's
security interest in all or any part of the Collateral.

          (b)  Without limiting the generality of the foregoing clause (a),
if any Grantor shall hereafter obtain rights to any new Intellectual Property
Collateral or becomes entitled to the benefit of (i) any patent application
or patent or any reissue, division, continuation, renewal, extension or
continuation-in-part of any Patent or any improvement of any Patent; or (ii)
any Copyright Registration, application for Registration or renewals or
extension of any Copyright, then in any such case, the provisions of this
Agreement shall automatically apply thereto; provided that additional filings
with the United States Patent and Trademark Office and the United States
Copyright Office with respect to such Intellectual Property Collateral shall
only be required as set forth in this subsection (b) and the representation
and warranty set forth in Section 4(h) shall apply to such Intellectual
Property Collateral only after such filings are required to be made.  Each
Grantor shall, upon delivery of each Compliance Certificate pursuant to
clause (c) of subsection 7.1.1 of the Credit Agreement, notify Secured Party
in writing of any of the foregoing rights acquired by such Grantor after the
date hereof or since the date of delivery of the then most recent
notification under this SECTION 5(b), whichever is later, and of (i) any

                                   F-9




Trademark Registrations issued or application for a Trademark Registration or
application for a Patent made, and (ii) any Copyright Registrations issued or
applications for Copyright Registration made, in any such case, after the
date hereof.  Promptly after each such notification each Grantor shall
execute and deliver to Secured Party and record in the United States Patent
and Trademark Office or the United States Copyright Office, as appropriate, a
Security Agreement Supplement, substantially in the form of EXHIBIT IV,
pursuant to which such Grantor shall grant to Secured Party a security
interest to the extent of its interest in such Intellectual Property
Collateral; PROVIDED, if, in the reasonable judgment of such Grantor, after
due inquiry, granting such interest would result in the grant of a Trademark
Registration or Copyright Registration in the name of Secured Party, such
Grantor shall give written notice to Secured Party as soon as reasonably
practicable and the filing shall instead be undertaken as soon as practicable
but in no case later than promptly after the grant of the applicable
Trademark Registration or Copyright Registration, as the case may be; and
PROVIDED FURTHER that no Grantor shall be required to grant to Secured Party
a security interest in any of such Intellectual Property Collateral (or any
proceeds, products, rents or profits thereof) to the extent, but only to the
extent, that such a grant would, under the terms of the relevant license,
contract or agreement or otherwise, result in a breach of the terms of, or
constitute a default under any license, contract or agreement to which such
Grantor is a party (other than to the extent that any such term would be
rendered ineffective pursuant to Section 9-318(4) of the Uniform Commercial
Code of any relevant jurisdiction or any other applicable law (including the
Bankruptcy Code) or principles of equity); PROVIDED that immediately upon the
ineffectiveness, lapse or termination of any such provision, Grantor shall be
deemed to have immediately granted to Secured Party a security interest in
the relevant Intellectual Property Collateral.

          (c)  Each Grantor hereby authorizes Secured Party to file one or
more financing or continuation statements, and amendments thereto, relative
to all or any part of the Collateral without the signature of any Grantor.
Each Grantor agrees that a carbon, photographic or other reproduction of this
Agreement or of a financing statement signed by such Grantor shall be
sufficient as a financing statement and may be filed as a financing statement
in any and all jurisdictions.

          (d)  Each Grantor hereby authorizes Secured Party to modify this
Agreement without obtaining such Grantor's approval of or signature to such
modification by amending SCHEDULES 1(a), 1(b), and 1(c), as applicable, or to
delete any reference to any right, title or interest in any Intellectual
Property Collateral in which any Grantor no longer has or claims any right,
title or interest.

SECTION 6.  CERTAIN COVENANTS OF GRANTORS.

     Each Grantor shall:

          (a)  not use any Collateral or cause or permit any Collateral to be
          used unlawfully or in violation of any provision of this Agreement or
          any applicable statute, regulation or ordinance or any policy of
          insurance covering the Collateral, unless such noncompliance could not
          reasonably be expected to cause, individually or in the aggregate, a
          Material Adverse Effect;

                                      F-10



          (b)  notify Secured Party of any change in such Grantor's name,
          identity or corporate structure within 30 days of such change;

          (c)  give Secured Party 30 days' prior written notice of any change in
          such Grantor's chief place of business or chief executive office;

          (d)  if Secured Party gives value to enable such Grantor to acquire
          rights in or the use of any collateral, use such value for such
          purposes; and

          (e)  except as permitted by the Credit Agreement, pay promptly when
          due all material property and other taxes, assessments and
          governmental charges or levies imposed upon, and all material claims
          (including claims for labor, services, materials and supplies) for
          sums that have become due and payable and that by law have or may
          become a Lien upon any of the Collateral against, the Collateral
          before any penalty accrues thereon, except to the extent the validity
          thereof is being contested in good faith by appropriate proceedings
          promptly instituted and diligently conducted, so long as such reserve
          or other appropriate provision, if any, as shall be required in
          conformity with GAAP shall have been made therefor.

SECTION 7.  SPECIAL COVENANTS WITH RESPECT TO EQUIPMENT AND INVENTORY.

     Each Grantor shall:

          (a)  keep the Equipment and Inventory owned by such Grantor (other
          than (i) Equipment and Inventory located at Customer Service Centers
          and (ii) Inventory which, in the ordinary course of business, is in
          transit (A) from a supplier to such Grantor, (B) between locations
          specified on Schedule 4(b), (C) to customers of a Grantor or (D) to or
          from a Customer Service Center) at the places therefor specified on
          SCHEDULE 4(b) annexed hereto or, upon 30 days' prior written notice to
          Secured Party, at such other places in jurisdictions where all action
          that may be necessary or desirable, or that Secured Party may
          reasonably request, in order to perfect and protect any security
          interest granted or purported to be granted hereby, or to enable
          Secured Party to exercise and enforce its rights and remedies
          hereunder, with respect to such Equipment and Inventory shall have
          been taken;

          (b)  cause the Equipment owned by such Grantor to be maintained and
          preserved in the same condition, repair and working order as when new,
          ordinary wear and tear excepted, and in accordance with such Grantor's
          past practices, and shall forthwith make or cause to be made all
          repairs, replacements and other improvements in connection therewith
          that are necessary or desirable to such end, except to the extent that
          the failure to do so would not reasonably be expected to have a
          Material Adverse Effect.  Each Grantor shall promptly furnish to
          Secured Party a statement respecting any material loss or damage to
          any of the Equipment owned by such Grantor;

          (c)  if any Inventory is in possession or control of any of such
          Grantor's agents or processors, upon the occurrence of an Event of
          Default (as defined in the

                                     F-11



          Credit Agreement), instruct such agent or processor to hold all such
          Inventory for the account of Secured Party and subject to the
          instructions of Secured Party; and

          (d)  promptly upon the issuance and delivery to such Grantor of any
          Negotiable Document of Title, to the extent that the fair market value
          of all Inventory in respect of which Documents of Title are held by
          the Grantors exceeds $500,000, deliver such Negotiable Document of
          Title to Secured Party.

SECTION 8.  INSURANCE.

          (a)  Each Grantor shall, at its own expense, maintain insurance with
respect to the Equipment and Inventory in accordance with the terms of the
Credit Agreement.

          (b)  Upon the occurrence and during the continuation of any Event of
Default, all insurance payments in respect of such Equipment or Inventory shall
be paid to and applied by Secured Party as specified in SECTION 19.

SECTION 9.  SPECIAL COVENANTS WITH RESPECT TO ACCOUNTS AND RELATED CONTRACTS.

          (a)  Each Grantor shall keep its chief place of business and chief
executive office at the locations therefor specified in SECTION 4(d) or, upon 30
days' prior written notice to Secured Party, at such other location in a
jurisdiction where all action that may be necessary or desirable, or that
Secured Party may request, in order to perfect and protect any security interest
granted or purported to be granted hereby (other than security interests in
Inventory and Equipment located at Customer Service Centers), or to enable
Secured Party to exercise and enforce its rights and remedies hereunder, with
respect to such Accounts and Related Contracts shall have been taken.  Promptly
upon the request of Secured Party, each Grantor shall deliver to Secured Party
complete and correct copies of each Related Contract.

          (b)  Each Grantor shall maintain (i) complete records of each Account
of such Grantor, including records of all payments received, credits granted and
merchandise returned, and (ii) all documentation relating thereto, in each case
in accordance with its business practices.

          (c)  Except as otherwise provided in this SUBSECTION (c), each Grantor
shall continue to collect, at its own expense, all amounts due or to become due
to such Grantor under the Accounts and Related Contracts.  In connection with
such collections, each Grantor may take such action as such Grantor may deem
necessary or advisable to enforce collection of amounts due or to become due
under the Accounts; PROVIDED, HOWEVER, that Secured Party shall have the right
at any time, upon the occurrence and during the continuation of an Event of
Default and upon written notice to such Grantor of its intention to do so, to
notify the account debtors or obligors under any Accounts of the assignment of
such Accounts to Secured Party and to direct such account debtors or obligors to
make payment of all amounts due or to become due to such Grantor thereunder
directly to Secured Party, to notify each Person maintaining a lockbox or
similar arrangement to which account debtors or obligors under any Accounts have
been directed to make payment to remit all amounts representing collections on
checks and other payment items from time to time sent to or deposited in such
lockbox or other arrangement directly to Secured Party and, upon such
notification and at the expense of Grantors, to enforce collection of any such
Accounts and to adjust, settle or compromise the amount or payment thereof, in
the

                                    F-12



same manner and to the same extent as such Grantor might have done.  After
receipt by such Grantor of the notice from Secured Party referred to in the
PROVISO to the preceding sentence and during the continuation of an Event of
Default, (i) all amounts and proceeds (including checks and other instruments)
received by such Grantor in respect of the Accounts and the Related Contracts
shall be received in trust for the benefit of Secured Party hereunder, shall be
segregated from other funds of such Grantor and shall be forthwith paid over or
delivered to Secured Party in the same form as so received (with any necessary
endorsement) to be held as cash Collateral and applied as provided by SECTION
19, and (ii) such Grantor shall not adjust, settle or compromise the amount or
payment of any Account, or release wholly or partly any account debtor or
obligor thereof, or allow any credit or discount thereon, except in the ordinary
course of business in accordance with past practice or with the consent of
Secured Party.

SECTION 10.  DEPOSIT ACCOUNTS.

          Upon the occurrence and during the continuation of an Event of
Default, Secured Party may exercise dominion and control over, and refuse to
permit further withdrawals (whether of money, securities, instruments or other
property) from any deposit accounts maintained with Secured Party constituting
part of the Collateral.

SECTION 11.  SPECIAL PROVISIONS WITH RESPECT TO THE INTELLECTUAL PROPERTY
             COLLATERAL.

     (a)  Each Grantor shall:

          (i) diligently keep reasonable records respecting the Intellectual
          Property Collateral and at all times keep at least one complete set of
          its records concerning such Collateral at its chief executive office
          or principal place of business;

          (ii) hereafter use commercially reasonable efforts so as not to permit
          the inclusion in any contract to which it hereafter becomes a party of
          any provision that impairs or prevents the creation of a security
          interest in, or the assignment of, such Grantor's rights and interests
          in any property included within the definitions of any Intellectual
          Property Collateral acquired under such contracts;

          (iii) take any and all commercially reasonable steps to protect the
          secrecy of all trade secrets relating to the products and services
          sold or delivered under or in connection with the Intellectual
          Property Collateral, including, without limitation, where appropriate
          entering into confidentiality agreements with employees and labeling
          and restricting access to secret information and documents;

          (iv) use proper statutory notice in connection with its use of any of
          the Intellectual Property Collateral;

          (v)  use a commercially appropriate standard of quality (which may be
          consistent with such Grantor's past practices) in the manufacture,
          sale and delivery of products and services sold or delivered under or
          in connection with the Trademarks; and

                                      F-13



          (vi) furnish to Secured Party from time to time at Secured Party's
          reasonable request statements and schedules further identifying and
          describing any Intellectual Property Collateral and such other reports
          in connection with such Collateral, all in reasonable detail.

     (b)  Except as otherwise provided in this SECTION 11, each Grantor shall
     continue to collect, at its own expense, all amounts due or to become due
     to such Grantor in respect of the Intellectual Property Collateral or any
     portion thereof.  In connection with such collections, each Grantor may
     take such action as such Grantor may deem reasonably necessary or advisable
     to enforce collection of such amounts; PROVIDED, Secured Party shall have
     the right at any time, upon the occurrence and during the continuation of
     an Event of Default and upon written notice to such Grantor of its
     intention to do so, to notify the obligors with respect to any such amounts
     of the existence of the security interest created hereby and to direct such
     obligors to make payment of all such amounts directly to Secured Party,
     and, upon such notification and at the expense of such Grantor, to enforce
     collection of any such amounts and to adjust, settle or compromise the
     amount or payment thereof, in the same manner and to the same extent as
     such Grantor might have done.  After receipt by any Grantor of the notice
     from Secured Party referred to in the PROVISO to the preceding sentence and
     during the continuation of any Event of Default, (i) all amounts and
     proceeds (including checks and other instruments) received by each Grantor
     in respect of amounts due to such Grantor in respect of the Intellectual
     Property Collateral or any portion thereof shall be received in trust for
     the benefit of Secured Party hereunder, shall be segregated from other
     funds of such Grantor and shall be forthwith paid over or delivered to
     Secured Party in the same form as so received (with any necessary
     endorsement) to be held as cash Collateral and applied as provided by
     SECTION 19, and (ii) such Grantor shall not adjust, settle or compromise
     the amount or payment of any such amount or release wholly or partly any
     obligor with respect thereto or allow any credit or discount thereon,
     except in the ordinary course of business in accordance with past practice
     or with the consent of Secured Party.

     (c)  Each Grantor shall have the duty diligently, through counsel
     reasonably acceptable to Secured Party, to prosecute, file and/or make,
     unless such Grantor has a valid business purpose to do otherwise or to do
     otherwise could not reasonably be expected to have a Material Adverse
     Effect, (i) any application relating to any of the Intellectual Property
     Collateral owned, held or used by such Grantor and identified on SCHEDULES
     1(a), 1(b) or 1(c), as applicable, that is pending as of the date of this
     Agreement, (ii) any Copyright Registration on any existing or future
     unregistered but copyrightable works (except for works of nominal
     commercial value or with respect to which such Grantor has determined in
     the exercise of its commercially reasonable judgment that it shall not seek
     registration), (iii) application on any future patentable but unpatented
     innovation or invention comprising Intellectual Property Collateral, and
     (iv) any Trademark opposition and cancellation proceedings, renew Trademark
     Registrations and Copyright Registrations and do any and all acts which are
     necessary or desirable to preserve and maintain all rights in all
     Intellectual Property Collateral.  Any expenses incurred in connection
     therewith shall be borne solely by Grantors.  Subject to the foregoing,
     each Grantor shall give Secured Party prior written notice of any

                                      F-14



     abandonment of any material Intellectual Property Collateral or any
     material pending patent application or any material Patent.

     (d)  Except as provided herein, each Grantor shall have the right to
     commence and prosecute in its own name, as real party in interest, for its
     own benefit and at its own expense, such suits, proceedings or other
     actions for infringement, unfair competition, dilution, misappropriation
     or other damage, or reexamination or reissue proceedings as are necessary
     to protect the Intellectual Property Collateral.  Secured Party shall
     provide, at such Grantor's expense, all reasonable and necessary
     cooperation in connection with any such suit, proceeding or action
     including, without limitation, joining as a necessary party.  Each Grantor
     shall provide to Secured Party any information with respect thereto
     reasonably requested by Secured Party.

     (e)  In addition to, and not by way of limitation of, the granting of a
     security interest in the Collateral pursuant hereto, each Grantor,
     effective upon the occurrence and during the continuation of an Event of
     Default and upon written notice from Secured Party, shall grant, sell,
     convey, transfer, assign and set over to Secured Party, for its benefit and
     the ratable benefit of Lenders and Interest Rate Exchangers, all of such
     Grantor's right, title and interest in and to the Intellectual Property
     Collateral to the extent necessary to enable Secured Party to use, possess
     and realize on the Intellectual Property Collateral and to enable any
     successor or assignee to enjoy the benefits of the Intellectual Property
     Collateral; provided that additional filings with the United States Patent
     and Trademark Office and the United States Copyright Office with respect to
     such Intellectual Property Collateral shall only be required as set forth
     in subsection 5(b) and the representation and warranty set forth in Section
     4(h) shall apply to such Intellectual Property only after such filings are
     required to be made.  This right shall inure to the benefit of all
     successors, assigns and transferees of Secured Party and its successors,
     assigns and transferees, whether by voluntary conveyance, operation of law,
     assignment, transfer, foreclosure, deed in lieu of foreclosure or
     otherwise.  Such right and license shall be granted free of charge, without
     requirement that any monetary payment whatsoever be made to such Grantor.

SECTION 12.  SPECIAL PROVISIONS WITH RESPECT TO THE ASSIGNED AGREEMENTS.  Each
Grantor shall at its expense:

          (i)  if consistent with sound business practices, perform and observe
     in all material respects the terms and provisions of the Assigned
     Agreements to be performed or observed by it, and, subject to Section
     7.2.10 of the Credit Agreement, maintain the Assigned Agreements in full
     force and effect, enforce the Assigned Agreements in accordance with their
     terms, and take all such action to such end as may be from time to time
     reasonably requested by Secured Party; and

          (ii) upon the reasonable request of Secured Party, furnish to Secured
     Party, promptly upon receipt thereof, copies of all notices, requests and
     other documents received by such Grantor under or pursuant to the Assigned
     Agreements, and from time to time (A) furnish to Secured Party such
     information and reports regarding the Assigned Agreements as Secured Party
     may reasonably request and (B) upon request of Secured

                                     F-15



     Party make to the parties to such Assigned Agreements such demands and
     requests for information and reports or for action as such Grantor is
     entitled to make under the Assigned Agreements.

SECTION 13.  TRANSFERS AND OTHER LIENS.

     No Grantor shall:

          (a)  sell, assign (by operation of law or otherwise) or otherwise
          dispose of any of the Collateral, except as permitted by the Credit
          Agreement; or

          (b)  except for the security interest created by this Agreement and
          any Lien permitted under the Credit Agreement, create or suffer to
          exist any Lien upon or with respect to any of the Collateral to secure
          the indebtedness or other obligations of any Person.

SECTION 14.  SECURED PARTY APPOINTED ATTORNEY-IN-FACT.

          Each Grantor hereby irrevocably appoints Secured Party as such
Grantor's attorney-in-fact, with full authority in the place and stead of such
Grantor and in the name of such Grantor, Secured Party or otherwise, from time
to time in Secured Party's discretion to take any action and to execute any
instrument that Secured Party may deem necessary or advisable to accomplish the
purposes of this Agreement, including without limitation:

          (a)  upon the occurrence and during the continuance of an Event of
          Default, to obtain and adjust insurance required to be maintained by
          such Grantor or paid to Secured Party pursuant to SECTION 8;

          (b)  upon the occurrence and during the continuance of an Event of
          Default, to ask for, demand, collect, sue for, recover, compound,
          receive and give acquittance and receipts for moneys due and to become
          due under or in respect of any of the Collateral;

          (c)  upon the occurrence and during the continuance of an Event of
          Default, to receive, endorse and collect any drafts or other
          instruments, documents and chattel paper in connection with clauses
          (a) and (b) above;

          (d)  upon the occurrence and during the continuance of an Event of
          Default, to file any claims or take any action or institute any
          proceedings that Secured Party may deem necessary or desirable for the
          collection of any of the Collateral or otherwise to enforce the rights
          of Secured Party with respect to any of the Collateral;

          (e)  to pay or discharge taxes or Liens (other than (1) taxes being
          contested by Grantor as permitted under the Credit Agreement and (2)
          Liens permitted under the Credit Agreement) levied or placed upon or
          threatened against the Collateral, the legality or validity thereof
          and the amounts necessary to discharge the same to be determined by
          Secured Party in its sole discretion, any such payments made by

                                      F-16



          Secured Party to become obligations of such Grantor to Secured Party,
          due and payable immediately without demand;

          (f)  upon the occurrence and during the continuance of an Event of
          Default, to sign and endorse any invoices, freight or express bills,
          bills of lading, storage or warehouse receipts, drafts against
          debtors, assignments, verifications and notices in connection with
          Accounts and other documents relating to the Collateral; and

          (g)  upon the occurrence and during the continuance of an Event of
          Default, generally to sell, transfer, pledge, make any agreement with
          respect to or otherwise deal with any of the Collateral as fully and
          completely as though Secured Party were the absolute owner thereof for
          all purposes, and to do, at Secured Party's option and Grantors'
          expense, at any time or from time to time, all acts and things that
          Secured Party deems necessary to protect, preserve or realize upon the
          Collateral and Secured Party's security interest therein in order to
          effect the intent of this Agreement, all as fully and effectively as
          such Grantor might do.

SECTION 15.  SECURED PARTY MAY PERFORM.

          If any Grantor fails to perform any agreement contained herein,
Secured Party may itself perform, or cause performance of, such agreement, and
the expenses of Secured Party incurred in connection therewith shall be payable
by such Grantor under SECTION 20(b).

SECTION 16.  STANDARD OF CARE.

          The powers conferred on Secured Party hereunder are solely to protect
its interest in the Collateral and shall not impose any duty upon it to exercise
any such powers.  Except for the exercise of reasonable care in the custody of
any Collateral in its possession and the accounting for moneys actually received
by it hereunder, Secured Party shall have no duty as to any Collateral or as to
the taking of any necessary steps to preserve rights against prior parties or
any other rights pertaining to any Collateral.  Secured Party shall be deemed to
have exercised reasonable care in the custody and preservation of Collateral in
its possession if such Collateral is accorded treatment substantially equal to
that which Secured Party accords its own property.

SECTION 17.  REMEDIES.

          If any Event of Default shall have occurred and be continuing, Secured
Party may exercise in respect of the Collateral, in addition to all other rights
and remedies provided for herein or otherwise available to it, all the rights
and remedies of a secured party on default under the Uniform Commercial Code as
in effect in any relevant jurisdiction (the "CODE") (whether or not the Code
applies to the affected Collateral), and also may (a) require each Grantor to,
and each Grantor hereby agrees that it will at its expense and upon request of
Secured Party forthwith, assemble all or part of the Collateral as directed by
Secured Party and make it available to Secured Party at a place to be designated
by Secured Party that is reasonably convenient to both parties, (b) enter onto
the property where any Collateral is located and take possession thereof with or
without judicial process without breach of the peace, (c) prior to the
disposition of the Collateral, store, process, repair or recondition the
Collateral or otherwise

                                   F-17



prepare the Collateral for disposition in any manner to the extent Secured
Party deems appropriate, (d) take possession of any Grantor's premises or
place custodians in exclusive control thereof, remain on such premises and
use the same and any of such Grantor's equipment for the purpose of
completing any work in process, in each case without breach of the peace,
taking any actions described in the preceding clause (c) and collecting any
Secured Obligation, and (e) without notice except as specified below, sell
the Collateral or any part thereof in one or more parcels at public or
private sale, at any of Secured Party's offices or elsewhere, for cash, on
credit or for future delivery, at such time or times and at such price or
prices and upon such other terms as are commercially reasonable.  Secured
Party or any Lender or Interest Rate Exchanger may be the purchaser of any or
all of the Collateral at any such sale and Secured Party, as agent for and
representative of Lenders and Interest Rate Exchangers (but not any Lender or
Lenders or Interest Rate Exchanger or Interest Rate Exchangers in its or
their respective individual capacities unless Requisite Obligees (as defined
in SECTION 22(a)) shall otherwise agree in writing), shall be entitled, for
the purpose of bidding and making settlement or payment of the purchase price
for all or any portion of the Collateral sold at any such public sale, to use
and apply any of the Secured Obligations as a credit on account of the
purchase price for any Collateral payable by Secured Party at such sale.
Each purchaser at any such sale shall hold the property sold absolutely free
from any claim or right on the part of any Grantor, and each Grantor hereby
waives (to the extent permitted by applicable law) all rights of redemption,
stay and/or appraisal which it now has or may at any time in the future have
under any rule of law or statute now existing or hereafter enacted.  Each
Grantor agrees that, to the extent notice of sale shall be required by law,
at least ten days' prior written notice to such Grantor of the time and place
of any public sale or the time after which any private sale is to be made
shall constitute reasonable notification. Secured Party shall not be
obligated to make any sale of Collateral regardless of notice of sale having
been given.  Secured Party may adjourn any public or private sale from time
to time by announcement at the time and place fixed therefor, and such sale
may, without further notice, be made at the time and place to which it was so
adjourned.  Each Grantor hereby waives, to the fullest extent permitted under
applicable law, any claims against Secured Party arising by reason of the
fact that the price at which any Collateral may have been sold at such a
private sale was less than the price which might have been obtained at a
public sale, even if Secured Party accepts the first offer received and does
not offer such Collateral to more than one offeree.  If the proceeds of any
sale or other disposition of the Collateral of any Grantor are insufficient
to pay all the Secured Obligations, of such Grantor, such Grantor shall be
liable for the deficiency, including the fees of any attorneys employed by
Secured Party to collect such deficiency.

SECTION 18.  ADDITIONAL REMEDIES FOR INTELLECTUAL PROPERTY COLLATERAL.

          (a)  Anything contained herein to the contrary notwithstanding, upon
the occurrence and during the continuation of an Event of Default, (i) Secured
Party shall have the right (but not the obligation) to bring suit, in the name
of any Grantor, Secured Party or otherwise, to enforce any Intellectual Property
Collateral, in which event each Grantor shall, at the request of Secured Party,
do any and all lawful acts and execute any and all documents required by Secured
Party in aid of such enforcement and each Grantor shall promptly, upon demand,
reimburse and indemnify Secured Party as provided in Sections 11.3 and 11.4 of
the Credit Agreement and SECTION 20 hereof, as applicable, in connection with
the exercise of its rights under this SECTION 18, and, to the extent that
Secured Party shall elect not to bring suit to

                                     F-18



enforce any Intellectual Property Collateral as provided in this SECTION 18,
each Grantor agrees to use all reasonable measures, whether by action, suit,
proceeding or otherwise, to prevent the infringement of any of the
Intellectual Property Collateral by others and for that purpose agrees to use
its commercially reasonable judgement in maintaining any action, suit or
proceeding against any Person so infringing reasonably necessary to prevent
such infringement; (ii) upon written demand from Secured Party, each Grantor
shall execute and deliver to Secured Party an assignment or assignments of
the Intellectual Property Collateral and such other documents as are
necessary or appropriate to carry out the intent and purposes of this
Agreement; provided that additional filings with the United States Patent and
Trademark Office and the United States Copyright Office with respect to such
Intellectual Property Collateral shall only be required as set forth in
subsection 5(b) and the representation and warranty set forth in Section 4(h)
apply to such Intellectual Property Collateral only after such filings are
required to be made; (iii) each Grantor agrees that such an assignment and/or
recording shall be applied to reduce the Secured Obligations outstanding only
to the extent that Secured Party (or any Lender) receives cash proceeds in
respect of the sale of, or other realization upon, the Intellectual Property
Collateral; and (iv) within five Business Days after written notice from
Secured Party, each Grantor shall make available to Secured Party, to the
extent within such Grantor's power and authority, such personnel in such
Grantor's employ on the date of such Event of Default as Secured Party may
reasonably designate, by name, title or job responsibility, to permit such
Grantor to continue, directly or indirectly, to produce, advertise and sell
the products and services sold or delivered by such Grantor under or in
connection with the Trademarks, Trademark Registrations and Trademark Rights,
such persons to be available to perform their prior functions on Secured
Party's behalf and to be compensated by Secured Party at such Grantor's
expense on a per diem, pro-rata basis consistent with the salary and benefit
structure applicable to each as of the date of such Event of Default.

          (b)  If (i) an Event of Default shall have occurred and, by reason of
cure, waiver, modification, amendment or otherwise, no longer be continuing,
(ii) no other Event of Default shall have occurred and be continuing, and
(iii) an assignment to Secured Party of any rights, title and interests in and
to the Intellectual Property Collateral shall have been previously made, upon
the written request of any Grantor, Secured Party shall promptly execute and
deliver to such Grantor such assignments as may be necessary to reassign to such
Grantor any such rights, title and interests as may have been assigned to
Secured Party as aforesaid, subject to any disposition thereof that may have
been made by Secured Party; PROVIDED, after giving effect to such reassignment,
Secured Party's security interest granted pursuant hereto, as well as all other
rights and remedies of Secured Party granted hereunder, shall continue to be in
full force and effect; and PROVIDED FURTHER, the rights, title and interests so
reassigned shall be free and clear of all Liens other than Liens (if any)
encumbering such rights, title and interest at the time of their assignment to
Secured Party and Liens permitted under the Credit Agreement.

SECTION 19.  APPLICATION OF PROCEEDS.

          Except as expressly provided elsewhere in this Agreement, all proceeds
received by Secured Party in respect of any sale of, collection from, or other
realization upon all or any part of the Collateral of any Grantor may, in the
discretion of Secured Party, be held by Secured Party as Collateral for, and/or
then, or at any other time thereafter, applied in full or in part by Secured
Party against, the Secured Obligations of such Grantor in the following order of
priority:

                                       F-19



          FIRST:  To the payment of all costs and expenses of such sale,
          collection or other realization, including reasonable compensation to
          Secured Party or any Lender or Interest Rate Exchanger and their
          respective agents and counsel, and all other expenses, liabilities and
          advances made or incurred by Secured Party, any Lender or Interest
          Rate Exchanger in connection therewith, and all amounts for which
          Secured Party or any Lender or Interest Rate Exchanger is entitled to
          indemnification under SECTION 20 or under Section 11.4 of the Credit
          Agreement and all advances made by Secured Party or any Lender or
          Interest Rate Exchanger hereunder for the account of Grantor, and to
          the payment of all costs and expenses paid or incurred by Secured
          Party or any Lender or Interest Rate Exchanger in connection with the
          exercise of any right or remedy hereunder, all in accordance with
          SECTION 20 or Sections 11.3 and 11.4 of the Credit Agreement;

          SECOND:  To the payment of all other Secured Obligations of such
          Grantor for the ratable benefit of the holders thereof; and

          THIRD:  To the payment to or upon the order of such Grantor, or its
          respective successors or assigns, or to whosoever may be lawfully
          entitled to receive the same or as a court of competent jurisdiction
          may direct, of any surplus then remaining from such proceeds.

SECTION 20.  INDEMNITY AND EXPENSES.

          (a)  Each Subsidiary Grantor agrees to pay to Secured Party to the
extent set forth in Section 2.8 of the Subsidiary Guaranty upon demand the
amount of any and all costs and expenses, including the reasonable fees and
expenses of its counsel and of any experts and agents, that Secured Party may
incur in connection with (i) the administration of this Agreement, (ii) the
custody, preservation, use or operation of, or the sale of, collection from, or
other realization upon, any of the Collateral, (iii) the exercise or enforcement
of any of the rights of Secured Party hereunder, or (iv) the failure by any
Grantor to perform or observe any of the provisions hereof.

          (b)  The obligations of Grantors in this SECTION 20 shall survive the
termination of this Agreement and the discharge of Grantors' other obligations
under this Agreement, the Lender Interest Rate Agreements, the Credit Agreement
and the other Loan Documents.

SECTION 21.  CONTINUING SECURITY INTEREST; TRANSFER OF LOANS.

          This Agreement shall create a continuing security interest in the
Collateral and shall (a) remain in full force and effect until the (1)
payment in full of the Secured Obligations (other than Secured Obligations in
respect of indemnification or expense reimbursement not yet claimed), (2) the
cancellation or termination of the Commitments and the cancellation,
expiration or cash collateralization of all outstanding Letters of Credit or
(3) in the case of a Restricted Subsidiary, such Restricted Subsidiary
becomes an Unrestricted Subsidiary, (b) be binding upon Grantors and their
respective successors and assigns, and (c) inure, together with the rights
and remedies of Secured Party hereunder, to the benefit of Secured Party and
its successors, transferees and assigns.  Without limiting the generality of
the foregoing clause (c), but subject

                                      F-20



to the provisions of subsection 11.11 of the Credit Agreement, any Lender may
assign or otherwise transfer any Loans held by it to any other Person, and
such other Person shall thereupon become vested with all the benefits in
respect thereof granted to Lenders herein or otherwise.  Upon the payment in
full of all Secured Obligations (other than any contingent indemnity and
expense reimbursement claims which at the time of such payment have yet to be
claimed), the cancellation or termination of the Commitments and the
cancellation, expiration or cash collateralization of all outstanding Letters
of Credit, the security interest granted hereby shall terminate and all
rights to the Collateral shall revert to the applicable Grantors.  In
addition, upon the proposed sale, transfer or other disposition of any
Collateral by any Grantor in accordance with the Credit Agreement, or any
amendment or waiver hereof, such Grantor shall deliver a certificate of an
Authorized Officer, which shall be true and correct, (x) stating that the
Collateral subject to such disposition is being sold, transferred or
otherwise disposed of in compliance with the terms of the Credit Agreement
and (y) specifying the Collateral being sold, transferred or otherwise
disposed of in the proposed transaction; PROVIDED, HOWEVER such certificate
need not be delivered for Collateral sold in the ordinary course of business
(including but not limited to the sale of inventory and obsolete or worn out
equipment so sold), in which case, notwithstanding anything to the contrary
in this SECTION 21, the release of Secured Party's Liens on such Collateral
shall be automatic upon such sale, transfer or other disposition. Upon the
receipt of such certificate, Secured Party shall, at Grantors' expense, so
long as Secured Party has no reason to believe that such certificate
delivered by Grantor with respect to such sale is not true and correct,
execute and deliver such releases of its Liens on such Collateral which is to
be so sold, transferred or disposed of, as may be reasonably requested by
such Grantor.  Upon any such termination, Secured Party will, except as
otherwise provided in this SECTION 21, at Grantors' expense, execute and
deliver to Grantors such documents as Grantors shall reasonably request to
evidence such termination.

SECTION 22.  SECURED PARTY AS AGENT.

          (a)  Secured Party has been appointed to act as Secured Party
hereunder by Lenders and, by their acceptance of the benefits hereof, Interest
Rate Exchangers.  Secured Party shall be obligated, and shall have the right
hereunder, to make demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking any action (including
without limitation the release or substitution of Collateral), solely in
accordance with this Agreement and the Credit Agreement; PROVIDED that Secured
Party shall exercise, or refrain from exercising, any remedies provided for in
SECTION 17 in accordance with the instructions of (i) Required Lenders or
(ii) after payment in full of all Obligations under the Credit Agreement and the
other Loan Documents, the cancellation or expiration of all Letters of Credit
and the termination of the Commitments, the holders of a majority of the
aggregate notional amount under all Lender Interest Rate Agreements (Required
Lenders or, if applicable, such holders being referred to herein as "REQUISITE
OBLIGEES").  In furtherance of the foregoing provisions of this SECTION 22(a),
each Interest Rate Exchanger, by its acceptance of the benefits hereof, agrees
that it shall have no right individually to realize upon any of the Collateral
hereunder, it being understood and agreed by such Interest Rate Exchanger that
all rights and remedies hereunder may be exercised solely by Secured Party for
the benefit of Lenders and Interest Rate Exchangers in accordance with the terms
of this SECTION 22(a).

                                      F-21



          (b)  Secured Party shall at all times be the same Person that is
Administrative Agent under the Credit Agreement.  Written notice of resignation
by Administrative Agent pursuant to subsection 9.4 of the Credit Agreement shall
also constitute notice of resignation as Secured Party under this Agreement, and
appointment of a successor Administrative Agent pursuant to subsection 9.4 of
the Credit Agreement shall also constitute appointment of a successor Secured
Party under this Agreement.  Upon the acceptance of any appointment as
Administrative Agent under subsection 9.4 of the Credit Agreement by a successor
Administrative Agent, that successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Secured Party under this Agreement, and the retiring Secured
Party under this Agreement shall promptly (i) transfer to such successor Secured
Party all sums, securities and other items of Collateral held hereunder,
together with all records and other documents necessary or appropriate in
connection with the performance of the duties of the successor Secured Party
under this Agreement, and (ii) execute and deliver to such successor Secured
Party such amendments to financing statements, and take such other actions, as
may be necessary or appropriate in connection with the assignment to such
successor Secured Party of the security interests created hereunder, whereupon
such retiring Secured Party shall be discharged from its duties and obligations
under this Agreement.  After any retiring Administrative Agent's resignation
hereunder as Secured Party, the provisions of this Agreement shall inure to its
benefit as to any actions taken or omitted to be taken by it under this
Agreement while it was Secured Party hereunder.

          (c)  Secured Party shall not be deemed to have any duty whatsoever
with respect to any Interest Rate Exchanger until it shall have received written
notice in form and substance satisfactory to Secured Party from a Grantor or the
Interest Rate Exchanger as to the existence and terms of the applicable Lender
Interest Rate Agreement.

SECTION 23.  ADDITIONAL GRANTORS.

          The initial Grantors hereunder shall be the signatories hereto on the
date hereof.  From time to time subsequent to the date hereof, additional
Restricted Subsidiaries of Company may become parties hereto as additional
Grantors (each an "ADDITIONAL GRANTOR"), by executing an acknowledgement to this
Agreement substantially in the form of EXHIBIT V annexed hereto.  Upon delivery
of any such acknowledgement to Administrative Agent and Secured Party, notice of
which is hereby waived by Grantors, each such Additional Grantor shall be a
Grantor and shall be as fully a party hereto as if such Additional Grantor were
an original signatory hereto.  Each Grantor expressly agrees that its
obligations arising hereunder shall not be affected or diminished by the
addition or release of any other Grantor hereunder, nor by any election of
Administrative Agent not to cause any Restricted Subsidiary of Company to become
an Additional Grantor hereunder.  This Agreement shall be fully effective as to
any Grantor that is or becomes a party hereto regardless of whether any other
Person becomes or fails to become or ceases to be a Grantor hereunder.

SECTION 24.  AMENDMENTS; ETC.

          No amendment, modification, termination or waiver of any provision of
this Agreement, and no consent to any departure by any Grantor therefrom, shall
in any event be effective unless the same shall be in writing and signed by
Secured Party and, in the case of any

                                     F-22



such amendment or modification, by Grantors; PROVIDED that any amendment
hereto consisting of the inclusion of an additional Grantor as a party hereto
pursuant to SECTION 23 shall be effective upon execution by such Additional
Grantor of the acknowledgement to this Agreement referred to in SECTION 23,
and Grantors hereby waive any requirement of notice of or consent to any such
amendment.  Any such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which it was given.

SECTION 25.  NOTICES.

          Any notice or other communication herein required or permitted to be
given shall be in writing and may be personally served or sent by facsimile or
United States mail or courier service and shall be deemed to have been given
when delivered in person or by courier service, upon transmission of facsimile
(with telephonic confirmation), or when received if depositing it in the United
States mail with postage prepaid and properly addressed.  For the purposes
hereof, the address of each party hereto shall be as provided in subsection 11.2
of the Credit Agreement or as set forth under such party's name on the signature
pages hereof or such other address as shall be designated by such party in a
written notice delivered to the other parties hereto.

SECTION 26.  FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE.

          No failure or delay on the part of Secured Party in the exercise of
any power, right or privilege hereunder shall impair such power, right or
privilege or be construed to be a waiver of any default or acquiescence therein,
nor shall any single or partial exercise of any such power, right or privilege
preclude any other or further exercise thereof or of any other power, right or
privilege.  All rights and remedies existing under this Agreement are cumulative
to, and not exclusive of, any rights or remedies otherwise available.

SECTION 27.  SEVERABILITY.

          In case any provision in or obligation under this Agreement shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.

SECTION 28.  HEADINGS.

          Section and subsection headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.

SECTION 29.  GOVERNING LAW; TERMS; RULES OF CONSTRUCTION.

          THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT LIMITATION SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES, EXCEPT TO THE EXTENT THAT THE CODE

                                     F-23



PROVIDES THAT THE PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES
HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS
OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.  Unless otherwise defined
herein or in the Credit Agreement, terms used in Articles 8 and 9 of the
Uniform Commercial Code in the State of New York are used herein as therein
defined.

SECTION 30.  CONSENT TO JURISDICTION AND SERVICE OF PROCESS.

          ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN
CONNECTION WITH, THIS AGREEMENT OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE PARTIES HERETO SHALL
BE BROUGHT AND MAINTAINED EXCLUSIVELY (TO THE EXTENT PERMITTED UNDER
APPLICABLE LAW) IN THE COURTS OF THE STATE OF NEW YORK, NEW YORK COUNTY, OR
IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK;
PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL
OR OTHER PROPERTY MAY BE BROUGHT, AT THE ADMINISTRATIVE AGENT'S OPTION, IN
THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE
FOUND.  EACH GRANTOR HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, NEW YORK COUNTY, AND OF
THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK FOR
THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREES
TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH SUCH
LITIGATION.  EACH GRANTOR IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY
REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT
THE STATE OF NEW YORK.  EACH GRANTOR HEREBY EXPRESSLY AND IRREVOCABLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR
HEREAFTER MAY HAVE TO THE LAYING OF VALUE OF ANY SUCH LITIGATION BROUGHT IN
ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM.

          NOTHING IN THIS SECTION SHALL AFFECT THE RIGHT OF ANY AGENT, ANY
LENDER OR ANY ISSUER TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW OR AFFECT THE RIGHT OF ANY SUCH PERSON TO BRING ANY ACTION OR PROCEEDING
AGAINST ANY GRANTOR OR ITS RESPECTIVE PROPERTY IN THE COURTS OF ANY OTHER
JURISDICTIONS.

          TO THE EXTENT ANY GRANTOR HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY
FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH
SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF
EXECUTION, EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR TO ITS PROPERTY,
EACH GRANTOR HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED UNDER
APPLICABLE LAW, SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER

                                      F-24



THIS AGREEMENT AND EACH OTHER LOAN DOCUMENT EXECUTED OR TO BE EXECUTED BY IT.

SECTION 31.  WAIVER OF JURY TRIAL.

          THE GRANTORS AND SECURED PARTY HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH,
THIS AGREEMENT OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER ORAL OR WRITTEN) OR ACTIONS OF GRANTORS AND SECURED PARTY SECURED
PARTY RELATING THERETO.  EACH OF THE GRANTORS ACKNOWLEDGES AND AGREES THAT IT
HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION AND THAT
THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE SECURED PARTIES ENTERING INTO
THIS AGREEMENT.

SECTION 32.  COUNTERPARTS.

          This Agreement may be executed in one or more counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages
may be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document.

                     [Remainder of page intentionally left blank]






                                     F-25



     IN WITNESS WHEREOF, Grantors and Secured Party have caused this Agreement
to be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.


                              MERRILL COMMUNICATIONS LLC


                              By:______________________________
                              Name:___________________________
                              Title:____________________________


                              NOTICE ADDRESS:

                              Merrill Corporation
                              One Merrill Circle
                              St. Paul, MN  55108
                              Attention:  General Counsel



                              U. S. BANK NATIONAL ASSOCIATION
                              as Secured Party

                              By:______________________________
                              Name:___________________________
                              Title:____________________________


                                     S-1


     IN WITNESS WHEREOF, each of the undersigned Guarantors has caused this
Guaranty to be duly executed and delivered by its officer thereunto duly
authorized as of the date first written above.



                              MERRILL REAL ESTATE COMPANY


                              By:______________________________
                              Name:___________________________
                              Title:____________________________



                              NOTICE ADDRESS:

                              Merrill Corporation
                              One Merrill Circle
                              St. Paul, MN  55108
                              Attention:  General Counsel



                              MERRILL/MAGNUS PUBLISHING CORPORATION


                              By:______________________________
                              Name:___________________________
                              Title:____________________________



                              NOTICE ADDRESS:

                              Merrill Corporation
                              One Merrill Circle
                              St. Paul, MN  55108
                              Attention:  General Counsel


                                     S-2


                              MERRILL/NEW YORK COMPANY


                              By:______________________________
                              Name:___________________________
                              Title:____________________________



                              NOTICE ADDRESS:


                              Merrill Corporation
                              One Merrill Circle
                              St. Paul, MN  55108
                              Attention:  General Counsel



                              MERRILL/MAY INC.


                              By:______________________________
                              Name:___________________________
                              Title:____________________________



                              NOTICE ADDRESS:


                              Merrill Corporation
                              One Merrill Circle
                              St. Paul, MN  55108
                              Attention:  General Counsel


                                     S-3


                              MERRILL INTERNATIONAL INC.


                              By:______________________________
                              Name:___________________________
                              Title:____________________________



                              NOTICE ADDRESS:

                              Merrill Corporation
                              One Merrill Circle
                              St. Paul, MN  55108
                              Attention:  General Counsel



                              FMC RESOURCE MANAGEMENT CORPORATION


                              By:______________________________
                              Name:___________________________
                              Title:____________________________



                              NOTICE ADDRESS:

                              Merrill Corporation
                              One Merrill Circle
                              St. Paul, MN  55108
                              Attention:  General Counsel


                                     S-4


                              MERRILL TRAINING AND
                                  TECHNOLOGY, INC.


                              By:______________________________
                              Name:___________________________
                              Title:____________________________



                              NOTICE ADDRESS:

                              Merrill Corporation
                              One Merrill Circle
                              St. Paul, MN  55108
                              Attention:  General Counsel



                              MERRILL/GLOBAL, INC.


                              By:______________________________
                              Name:___________________________
                              Title:____________________________



                              NOTICE ADDRESS:

                              Merrill Corporation
                              One Merrill Circle
                              St. Paul, MN  55108
                              Attention:  General Counsel


                                     S-5


                              MERRILL/EXECUTECH, INC.


                              By:______________________________
                              Name:___________________________
                              Title:____________________________



                              NOTICE ADDRESS:

                              Merrill Corporation
                              One Merrill Circle
                              St. Paul, MN  55108
                              Attention:  General Counsel



                              MERRILL/DANIELS, INC.


                              By:______________________________
                              Name:___________________________
                              Title:____________________________



                              NOTICE ADDRESS:

                              Merrill Corporation
                              One Merrill Circle
                              St. Paul, MN  55108
                              Attention:  General Counsel


                                     S-6


                              MERRILL/ALTERNATIVES, INC.


                              By:______________________________
                              Name:___________________________
                              Title:____________________________



                              NOTICE ADDRESS:

                              Merrill Corporation
                              One Merrill Circle
                              St. Paul, MN  55108
                              Attention:  General Counsel


                                     S-7


                                      SCHEDULE A

Name                               Notice Address for each Grantor
- ----                               -------------------------------


                                 Schedule A-1


                                  SCHEDULE 1(a) TO
                                 SECURITY AGREEMENT

U.S. TRADEMARKS:

                       Trademark        Registration      Registration
  Registered Owner    Description          Number             Date
  ----------------    -----------       ------------      ------------


                                 Schedule 1(a)-1


                                  SCHEDULE 1(b) TO
                                 SECURITY AGREEMENT

U.S. PATENTS ISSUED:

   Patent No.      Issue Date        Invention       Inventor
   ---------       ----------        ---------       --------


U.S. PATENTS PENDING:

 Applicant's      Date     Application
     Name        Filed        Number     Invention     Inventor
     ----        -----        ------     ---------     --------


                                 Schedule 1(b)-1


                                  SCHEDULE 1(c) TO
                                 SECURITY AGREEMENT

U.S. COPYRIGHTS:

Title          Registration No.    Date of Issue  Registered Owner
- -----          ---------------     -------------  ----------------



PENDING U.S. COPYRIGHT REGISTRATIONS & APPLICATIONS:

Title     Reference No.  Date of Application  Copyright Claimant
- -----     -------------  -------------------  --------- --------


                                 Schedule 1(c)-1


                                   SCHEDULE 4(b)
                                         TO
                                 SECURITY AGREEMENT

                        LOCATIONS OF EQUIPMENT AND INVENTORY


 NAME OF GRANTOR              LOCATIONS OF EQUIPMENT AND INVENTORY
 ---------------              ------------------------------------


                                 Schedule 4(b)-1


                                    SCHEDULE 4(d)
                                         TO
                                 SECURITY AGREEMENT

                                  OFFICE LOCATIONS


 NAME OF GRANTOR                  OFFICE LOCATIONS
 ---------------                  ----------------


                                 Schedule 4(d)-1


                                    SCHEDULE 4(e)
                                         TO
                                 SECURITY AGREEMENT

                                    OTHER NAMES


 NAME OF GRANTOR                                 OTHER NAMES
 ---------------                                 -----------


                                 Schedule 4(e)-1


                                    SCHEDULE 4(h)
                                         TO
                                 SECURITY AGREEMENT

                                   FILING OFFICES


                                 Schedule 4(h)-1


                                                                   EXHIBIT I TO
                                                             SECURITY AGREEMENT

                   [FORM OF GRANT OF TRADEMARK SECURITY INTEREST]

                        GRANT OF TRADEMARK SECURITY INTEREST

          WHEREAS, [NAME OF GRANTOR], a ___________ corporation ("GRANTOR"),
owns and uses in its business, and will in the future adopt and so use, various
intangible assets, including the Trademark Collateral (as defined below); and

          WHEREAS, MERRILL COMMUNICATIONS LLC, a Delaware limited liability
company ("COMPANY") and MERRILL CORPORATION, a Minnesota corporation, as
guarantor ("HOLDCO"), have entered into a Credit Agreement dated as of November
23, 1999 (said Credit Agreement, as it may heretofore have been and as it may
hereafter be amended, supplemented or otherwise modified from time to time,
being the "CREDIT AGREEMENT") with the financial institutions named therein
(collectively, together with their respective successors and assigns party to
the Credit Agreement from time to time, the "LENDERS"), DLJ Capital Funding,
Inc., as Syndication Agent for the Lenders, Wells Fargo Bank, N.A., as
Documentation Agent for the Lenders, and U. S. BANK NATIONAL ASSOCIATION, as
Administrative Agent for the Lenders (in such capacity, "SECURED PARTY"),
pursuant to which Lenders have made certain commitments, subject to the terms
and conditions set forth in the Credit Agreement, to extend certain credit
facilities to Company; and

          WHEREAS, Company may from time to time enter, or may from time to time
have entered, into one or more Rate Protection Agreements (collectively, the
"LENDER INTEREST RATE AGREEMENTS") with one or more Lenders or their affiliates
(in such capacity, collectively, "LENDER COUNTERPARTIES"); and

          [Insert if Grantor is a Subsidiary:] [WHEREAS, Grantor has executed
and delivered that certain Subsidiary Guaranty dated as of November 23, 1999
(said Subsidiary Guaranty, as it may hereafter be amended, supplemented or
otherwise modified from time to time, being the "GUARANTY") in favor of Secured
Party for the benefit of Lenders and any Lender Counterparties, pursuant to
which Grantor has guarantied the prompt payment and performance when due of all
obligations of Company under the Credit Agreement and the other Loan Documents
and all obligations of Company under the Lender Interest Rate Agreements,
including without limitation the obligation of Company to make payments
thereunder in the event of early termination thereof; and]

          WHEREAS, pursuant to the terms of a Security Agreement dated as of
November 23, 1999 (as amended, supplemented or otherwise modified from time to
time, the "SECURITY AGREEMENT"), among Grantor, Secured Party and the other
grantors named therein, Grantor has agreed to create in favor of Secured Party a
secured and protected interest in, and Secured Party has agreed to become a
secured creditor with respect to, the Trademark Collateral;

          NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, subject to the terms and conditions
of the Security


                                    FI-1


Agreement, Grantor hereby grants to Secured Party a security interest in all
of Grantor's right, title and interest in and to the following, in each case
whether now or hereafter existing or in which Grantor now has or hereafter
acquires an interest and wherever the same may be located (the "TRADEMARK
COLLATERAL"):

     (i)  all rights, title and interest (including rights acquired pursuant to
     a license or otherwise but only to the extent permitted by agreements
     governing such license or other use) in and to all trademarks, service
     marks, designs, logos, indicia, tradenames, trade dress, corporate names,
     company names, business names, fictitious business names, trade styles
     and/or other source and/or business identifiers and applications pertaining
     thereto, owned by such Grantor, or hereafter adopted and used, in its
     business (including, without limitation, the trademarks specifically
     identified in SCHEDULE A) (collectively, the "TRADEMARKS"), all
     registrations that have been or may hereafter be issued or applied for
     thereon in the United States and any state thereof (including, without
     limitation, the registrations and applications specifically identified in
     SCHEDULE A) (the "TRADEMARK REGISTRATIONS"), all common law and other
     rights (but in no event any of the obligations) in and to the Trademarks in
     the United States and any state thereof (the "TRADEMARK RIGHTS"), and all
     goodwill of such Grantor's business symbolized by the Trademarks and
     associated therewith (the "ASSOCIATED GOODWILL"); and

     (ii) all proceeds, products, rents and profits of or from any and all of
     the foregoing Trademark Collateral and, to the extent not otherwise
     included, all payments under insurance (whether or not Secured Party is the
     loss payee thereof), or any indemnity, warranty or guaranty, payable by
     reason of loss or damage to or otherwise with respect to any of the
     foregoing Trademark Collateral.  For purposes of this Grant of Trademark
     Security Interest, the term "PROCEEDS" includes whatever is receivable or
     received when Trademark Collateral or proceeds are sold, exchanged,
     collected or otherwise disposed of, whether such disposition is voluntary
     or involuntary.

          Notwithstanding anything herein to the contrary, in no event shall the
Trademark Collateral include, and Grantor shall be deemed not to have granted a
security interest in, any of Grantor's rights or interests in any license,
contract or agreement to which Grantor is a party or any of its rights or
interests thereunder to the extent, but only to the extent, that such a grant
would, under the terms of such license, contract or agreement or otherwise,
result in a breach of the terms of, or constitute a default under any license,
contract or agreement to which Grantor is a party; PROVIDED, that immediately
upon the ineffectiveness, lapse or termination of any such provision, the
Trademark Collateral shall include, and Grantor shall be deemed to have granted
a security interest in, all such rights and interests as if such provision had
never been in effect.

          Grantor does hereby further acknowledge and affirm that the rights and
remedies of Secured Party with respect to the security interest in the Trademark
Collateral granted hereby are more fully set forth in the Security Agreement,
the terms and provisions of which are incorporated by reference herein as if
fully set forth herein.

              [The remainder of this page is intentionally left blank.]


                                      FI-2


     IN WITNESS WHEREOF, Grantor has caused this Grant of Trademark Security
Interest to be duly executed and delivered by its officer thereunto duly
authorized as of the ____ day of _______, ____.

                              [NAME OF GRANTOR]

                              By:_______________________________
                              Name:_____________________________
                              Title:____________________________


                                      FI-3


                                     SCHEDULE A
                                         TO
                        GRANT OF TRADEMARK SECURITY INTEREST


                   United States
 Registered          Trademark        Registration      Registration
 Owner              Description          Number             Date
 ----------         -----------       ------------      ------------


                                      FI-4


                                                                  EXHIBIT II TO
                                                             SECURITY AGREEMENT

                    [FORM OF GRANT OF PATENT SECURITY INTEREST]

                         GRANT OF PATENT SECURITY INTEREST

          WHEREAS, [NAME OF GRANTOR], a _______________ corporation
("GRANTOR"), owns and uses in its business, and will in the future adopt and
so use, various intangible assets, including the Patent Collateral (as
defined below); and

          WHEREAS, MERRILL COMMUNICATIONS LLC, a Delaware limited liability
company ("COMPANY") and MERRILL CORPORATION, a Minnesota corporation as
guarantor ("HOLDCO"), have entered into a Credit Agreement dated as of
November 23, 1999 (said Credit Agreement, as it may heretofore have been and
as it may hereafter be amended, supplemented or otherwise modified from time
to time, being the "CREDIT AGREEMENT") with the financial institutions named
therein (collectively, together with their respective successors and assigns
party to the Credit Agreement from time to time, the "LENDERS"), DLJ Capital
Funding, Inc., as Syndication Agent for the Lenders, Wells Fargo Bank, N.A.,
as Documentation Agent for the Lenders, and U. S. BANK NATIONAL ASSOCIATION,
as Administrative Agent for the Lenders (in such capacity, "SECURED PARTY"),
pursuant to which Lenders have made certain commitments, subject to the terms
and conditions set forth in the Credit Agreement, to extend certain credit
facilities to Company; and

          WHEREAS, Company may from time to time enter, or may from time to
time have entered, into one or more Rate Protection Agreements (collectively,
the "LENDER INTEREST RATE AGREEMENTS") with one or more Lenders or their
affiliates (in such capacity, collectively, "LENDER COUNTERPARTIES"); and

          [Insert if Grantor is a Subsidiary:] [WHEREAS, Grantor has executed
and delivered that certain Subsidiary Guaranty dated as of ____________, 1999
(said Subsidiary Guaranty, as it may hereafter be amended, supplemented or
otherwise modified from time to time, being the "GUARANTY") in favor of
Secured Party for the benefit of Lenders and any Lender Counterparties,
pursuant to which Grantor has guarantied the prompt payment and performance
when due of all obligations of Company under the Credit Agreement and the
other Loan Documents and all obligations of Company under the Lender Interest
Rate Agreements, including without limitation the obligation of Company to
make payments thereunder in the event of early termination thereof; and]

          WHEREAS, pursuant to the terms of a Security Agreement dated as of
November 23, 1999 (as amended, supplemented or otherwise modified from time
to time, the "SECURITY AGREEMENT"), among Grantor, Secured Party and the
other grantors named therein, Grantor has agreed to create in favor of
Secured Party a secured and protected interest in, and Secured Party has
agreed to become a secured creditor with respect to, the Patent Collateral;

                                     FII-1


          NOW, THEREFORE, for good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, subject to the terms and
conditions of the Security Agreement, Grantor hereby grants to Secured Party
a security interest in all of Grantor's right, title and interest in and to
the following, in each case whether now or hereafter existing or in which
Grantor now has or hereafter acquires an interest and wherever the same may
be located (the "PATENT COLLATERAL"):

     (i)    all rights, title and interest (including rights acquired pursuant
     to a license or otherwise but only to the extent permitted by agreements
     governing such license or other use) in and to all patents and patent
     applications and rights and interests in patents and patent applications
     under any domestic law that are presently, or in the future may be, owned
     or held by such Grantor and all patents and patent applications and rights,
     title and interests in patents and patent applications under any domestic
     law that are presently, or in the future may be, owned by such Grantor in
     whole or in part (including, without limitation, the patents and patent
     applications listed in SCHEDULE A), all rights (but not obligations)
     corresponding thereto to sue for past, present and future infringements and
     all re-issues, divisions, continuations, renewals, extensions and
     continuations-in-part thereof (all of the foregoing being collectively
     referred to as the "PATENTS"); and

     (ii)   all proceeds, products, rents and profits of or from any and all of
     the foregoing Patent Collateral and, to the extent not otherwise included,
     all payments under insurance (whether or not Secured Party is the loss
     payee thereof), or any indemnity, warranty or guaranty, payable by reason
     of loss or damage to or otherwise with respect to any of the foregoing
     Patent Collateral.  For purposes of this Grant of Patent Security Interest,
     the term "PROCEEDS" includes whatever is receivable or received when Patent
     Collateral or proceeds are sold, exchanged, collected or otherwise disposed
     of, whether such disposition is voluntary or involuntary.

          Notwithstanding anything herein to the contrary, in no event shall
the Patent Collateral include, and Grantor shall be deemed not to have
granted a security interest in, any of Grantor's rights or interests in any
license, contract or agreement to which Grantor is a party or any of its
rights or interests thereunder to the extent, but only to the extent, that
such a grant would, under the terms of such license, contract or agreement or
otherwise, result in a breach of the terms of, or constitute a default under
any license, contract or agreement to which Grantor is a party; PROVIDED,
that immediately upon the ineffectiveness, lapse or termination of any such
provision, the Patent Collateral shall include, and Grantor shall be deemed
to have granted a security interest in, all such rights and interests as if
such provision had never been in effect.

          Grantor does hereby further acknowledge and affirm that the rights
and remedies of Secured Party with respect to the security interest in the
Patent Collateral granted hereby are more fully set forth in the Security
Agreement, the terms and provisions of which are incorporated by reference
herein as if fully set forth herein.

                [The remainder of this page intentionally left blank.]

                                     FII-2


     IN WITNESS WHEREOF, Grantor has caused this Grant of Patent Security
Interest to be duly executed and delivered by its officer thereunto duly
authorized as of the ____ day of ____________, ____.

                              [NAME OF GRANTOR]


                              By:
                                  --------------------------------------------

                              Name:
                                    ------------------------------------------

                              Title:
                                     -----------------------------------------


                                     FII-3


                                     SCHEDULE A
                                         TO
                         GRANT OF PATENT SECURITY INTEREST


PATENTS ISSUED:



   Patent No.              Issue Date                Invention               Inventor
   ----------              ----------                ---------               --------
                                                                 







PATENTS PENDING:



   Applicant's              Date             Application
     Name                  Filed                Number             Invention             Inventor
     ----                  -----                ------             ---------             --------
                                                                          






                                     FII-4


                                                                 EXHIBIT III TO
                                                             SECURITY AGREEMENT

                   [FORM OF GRANT OF COPYRIGHT SECURITY INTEREST]

                        GRANT OF COPYRIGHT SECURITY INTEREST

          WHEREAS, [NAME OF GRANTOR], a ___________ corporation ("GRANTOR"),
owns and uses in its business, and will in the future adopt and so use,
various intangible assets, including the Copyright Collateral (as defined
below); and

          WHEREAS, MERRILL COMMUNICATIONS LLC, a Delaware limited liability
company ("COMPANY") and MERRILL CORPORATION, a Minnesota corporation, as
guarantor ("HOLDCO"), have entered into a Credit Agreement dated as of
November 23, 1999 (said Credit Agreement, as it may heretofore have been and
as it may hereafter be amended, supplemented or otherwise modified from time
to time, being the "CREDIT AGREEMENT") with the financial institutions named
therein (collectively, together with their respective successors and assigns
party to the Credit Agreement from time to time, the "LENDERS"), DLJ Capital
Funding, Inc., as Syndication Agent for the Lenders, Wells Fargo Bank, N.A.,
as Documentation Agent for the Lenders, and U. S. BANK NATIONAL ASSOCIATION,
as Administrative Agent for the Lenders (in such capacity, "SECURED PARTY"),
pursuant to which Lenders have made certain commitments, subject to the terms
and conditions set forth in the Credit Agreement, to extend certain credit
facilities to Company; and

          WHEREAS, Company may from time to time enter, or may from time to
time have entered, into one or more Rate Protection Agreements (collectively,
the "LENDER INTEREST RATE AGREEMENTS") with one or more Lenders or their
affiliates (in such capacity, collectively, "LENDER COUNTERPARTIES"); and

          [Insert if Grantor is a Subsidiary:] [WHEREAS, Grantor has executed
and delivered that certain Subsidiary Guaranty dated as of November 23, 1999
(said Subsidiary Guaranty, as it may hereafter be amended, supplemented or
otherwise modified from time to time, being the "GUARANTY") in favor of
Secured Party for the benefit of Lenders and any Lender Counterparties,
pursuant to which Grantor has guarantied the prompt payment and performance
when due of all obligations of Company under the Credit Agreement and the
other Loan Documents and all obligations of Company under the Lender Interest
Rate Agreements, including without limitation the obligation of Company to
make payments thereunder in the event of early termination thereof; and]

          WHEREAS, pursuant to the terms of a Security Agreement dated as of
November 23, 1999 (as amended, supplemented or otherwise modified from time
to time, the "SECURITY AGREEMENT"), among Grantor, Secured Party and the
other grantors named therein, Grantor has agreed to create in favor of
Secured Party a secured and protected interest in, and Secured Party has
agreed to become a secured creditor with respect to, the Copyright
Collateral;

          NOW, THEREFORE, for good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, subject to the terms and
conditions of the Security

                                     FIII-1


Agreement, Grantor hereby grants to Secured Party a security interest in all
of Grantor's right, title and interest in and to the following, in each case
whether now or hereafter existing or in which Grantor now has or hereafter
acquires an interest and wherever the same may be located (the "COPYRIGHT
COLLATERAL"):

     (i)    all rights, title and interest (including rights acquired pursuant
     to a license or otherwise but only to the extent permitted by agreements
     governing such license or other use) under copyright in various published
     and unpublished works of authorship including, without limitation, computer
     programs, computer data bases, other computer software layouts, trade
     dress, drawings, designs, writings, and formulas (including, without
     limitation, the works listed on SCHEDULE A) (collectively, the
     "COPYRIGHTS"), all copyright registrations issued to Grantor and
     applications for copyright registration that have been or may hereafter be
     issued or applied for thereon in the United States and any state thereof
     (including, without limitation, the registrations listed on SCHEDULE A)
     (collectively, the "COPYRIGHT REGISTRATIONS"), all common law and other
     rights in and to the Copyrights in the United States and any state thereof,
     including all copyright licenses (but with respect to such copyright
     licenses, only to the extent permitted by such licensing arrangements) (the
     "COPYRIGHT RIGHTS"), including, without limitation, each of the Copyrights,
     rights, titles and interests in and to the Copyrights and works protectable
     by copyright, which are presently, or in the future may be, owned, created
     (as a work for hire for the benefit of Grantor), authored (as a work for
     hire for the benefit of Grantor), or acquired by Grantor, in whole or in
     part, and all Copyright Rights with respect thereto and all Copyright
     Registrations therefor, heretofore or hereafter granted or applied for, and
     all renewals and extensions thereof, in the United States, including all
     proceeds thereof (such as, by way of example and not by limitation, license
     royalties and proceeds of infringement suits), the right (but not the
     obligation) to renew and extend such Copyright Registrations and Copyright
     Rights and to register works protectable by copyright and the right (but
     not the obligation) to sue in the name of such Grantor or in the name of
     Secured Party or Lenders for past, present and future infringements of the
     Copyrights and Copyright Rights; and

     (ii)   all proceeds, products, rents and profits of or from any and all
     of the foregoing Copyright Collateral and, to the extent not otherwise
     included, all payments under insurance (whether or not Secured Party is the
     loss payee thereof), or any indemnity, warranty or guaranty, payable by
     reason of loss or damage to or otherwise with respect to any of the
     foregoing Copyright Collateral.  For purposes of this Grant of Copyright
     Security Interest, the term "PROCEEDS" includes whatever is receivable or
     received when Copyright Collateral or proceeds are sold, exchanged,
     collected or otherwise disposed of, whether such disposition is voluntary
     or involuntary.

          Notwithstanding anything herein to the contrary, in no event shall
the Copyright Collateral include, and Grantor shall be not deemed to have
granted a security interest in, any of Grantor's rights or interests in any
license, contract or agreement to which Grantor is a party or any of its
rights or interests thereunder to the extent, but only to the extent, that
such a grant would, under the terms of such license, contract or agreement or
otherwise, result in a breach of the terms of, or constitute a default under
any license, contract or agreement to which Grantor is a party; PROVIDED,
that immediately upon the ineffectiveness, lapse or termination of any such

                                     FIII-2


provision, the Copyright Collateral shall include, and Grantor shall be
deemed to have granted a security interest in, all such rights and interests
as if such provision had never been in effect.

          Grantor does hereby further acknowledge and affirm that the rights
and remedies of Secured Party with respect to the security interest in the
Copyright Collateral granted hereby are more fully set forth in the Security
Agreement, the terms and provisions of which are incorporated by reference
herein as if fully set forth herein.

              [The remainder of this page intentionally left blank.]









                                     FIII-3


     IN WITNESS WHEREOF, Grantor has caused this Grant of Copyright Security
Interest to be duly executed and delivered by its officer thereunto duly
authorized as of the _____ day of ___________, ____.

                              [NAME OF GRANTOR]

                              By:
                                  --------------------------------------------

                                Name:
                                      ----------------------------------------

                                Title:
                                       ---------------------------------------






                                     FIII-4


                                     SCHEDULE A
                                         TO
                        GRANT OF COPYRIGHT SECURITY INTEREST



U.S. COPYRIGHTS:



Title                    Registration No.            Date of Issue           Registered Owner
- -----                    ----------------            -------------           ----------------
                                                                 







PENDING U.S. COPYRIGHT REGISTRATIONS & APPLICATIONS:



Title                     Reference No.            Date of Application      Copyright Claimant
- -----                     -------------            -------------------      ------------------
                                                                 







                                     FIII-5


                                                                  EXHIBIT IV TO
                                                             SECURITY AGREEMENT

                           SECURITY AGREEMENT SUPPLEMENT

          This SECURITY AGREEMENT SUPPLEMENT, dated _______, is delivered
pursuant to the Security Agreement, dated as of November 23, 1999 (as it may
be from time to time amended, modified or supplemented, the "SECURITY
AGREEMENT"), among Merrill Communications LLC, Merrill Corporation, the other
Grantors named therein, and U. S. BANK NATIONAL ASSOCIATION, as Secured
Party.  Capitalized terms used herein not otherwise defined herein shall have
the meanings ascribed thereto in the Security Agreement.

          Subject to the terms and conditions of the Security Agreement,
Grantor hereby grants to Secured Party a security interest in all of
Grantor's right, title and interest in and to the Intellectual Property
Collateral listed on SUPPLEMENTAL SCHEDULE [1(a)] [1(b)] [1(c)] attached
hereto, in each case whether now or hereafter existing or in which Grantor
now has or hereafter acquires an interest and wherever the same may be
located.  All such Intellectual Property Collateral shall be deemed to be
part of the Collateral and hereafter subject to each of the terms and
conditions of the Security Agreement.

          IN WITNESS WHEREOF, Grantor has caused this Supplement to be duly
executed and delivered by its duly authorized officer as of ______________.

                              [GRANTOR]

                              By:
                                  --------------------------------------------
                                   Name:
                                   Title:




                                     FIV-1


                                                                   EXHIBIT V TO
                                                             SECURITY AGREEMENT

                              [FORM OF ACKNOWLEDGEMENT]

          This ACKNOWLEDGEMENT, dated _______, is delivered pursuant to
SECTION 23 of the Security Agreement referred to below.  The undersigned
hereby agrees that this Acknowledgement may be attached to the Security
Agreement, dated as of November 23, 1999 (as it may be from time to time
amended, modified or supplemented, the "SECURITY AGREEMENT"; capitalized
terms used herein not otherwise defined herein shall have the meanings
ascribed therein), among Merrill Communications LLC, Merrill Corporation, the
other Grantors named therein, and U. S. BANK NATIONAL ASSOCIATION, as Secured
Party, that the undersigned by executing and delivering this Acknowledgement
hereby becomes a Grantor under the Security Agreement in accordance with
SECTION 23 thereof and agrees to be bound by all of the terms thereof, and
that the Patents, Trademarks, Trademark Registrations, Copyrights and
Copyright Registrations described on this Acknowledgement shall be deemed to
be part of, and shall become part of, the Collateral and shall secure all
Secured Obligations.

                              [NAME OF ADDITIONAL GRANTOR]


                              By:
                                  --------------------------------------------
                              Name:
                              Title:



U.S. TRADEMARKS:



      Registered            Trademark               Registration             Registration
        Owner              Description                 Number                    Date
        -----              -----------                 ------                    ----
                                                                 






U.S. PATENTS ISSUED:



       Patent No.          Issue Date                 Invention              Inventor
       ----------          ----------                 ---------              ---------
                                                                 







                                      FV-1


U.S. PATENTS PENDING:



      Applicant's           Date                    Application
         Name              Filed                       Number                Invention             Inventor
         ----              -----                       ------                ---------             --------
                                                                                     












                                      FV-2


U.S. COPYRIGHTS:



Copyright                  Registration No.          Date of Issue          Registered Owner
- ---------                  ----------------          -------------          ----------------
                                                                 







PENDING U.S. COPYRIGHTS:



Copyright                  Reference No.            Date of Application       Copyright          Claimant
- ---------                  -------------            -------------------       ---------          --------
                                                                                  








                                      FV-3


                                  EXHIBIT G-1

                        FORM OF COMPANY PLEDGE AGREEMENT

          This COMPANY PLEDGE AGREEMENT (this "AGREEMENT") is dated as of
November 23, 1999 and entered into by and between MERRILL COMMUNICATIONS LLC,
a Delaware limited liability company ("PLEDGOR"), and U.S. BANK NATIONAL
ASSOCIATION, as Administrative Agent for and representative of (in such
capacity herein called "SECURED PARTY") the financial institutions
("LENDERS") party to the Credit Agreement referred to below and any Interest
Rate Exchangers (as hereinafter defined).

                              PRELIMINARY STATEMENTS

          A.   Pledgor is the legal and beneficial owner of (i) the shares of
stock (the "PLEDGED SHARES") described in Part A of SCHEDULE I annexed hereto
and issued by the corporations named therein and (ii) the indebtedness (the
"PLEDGED DEBT") described in Part B of said SCHEDULE I and issued by the
obligors named therein.

          B.   Secured Party, Lenders and certain other parties have entered
into a Credit Agreement dated as of November 23, 1999 (said Credit Agreement,
as it may hereafter be amended, supplemented or otherwise modified from time
to time, being the "CREDIT AGREEMENT", the terms defined therein and not
otherwise defined herein being used herein as therein defined) with Pledgor
pursuant to which Lenders have made certain commitments, subject to the terms
and conditions set forth in the Credit Agreement, to extend certain credit
facilities to Pledgor.

          C.   Pledgor may from time to time enter into one or more Rate
Protection Agreements (collectively, the "LENDER INTEREST RATE AGREEMENTS")
with one or more Lenders or their affiliates (in such capacity, collectively,
"INTEREST RATE EXCHANGERS") permitted under the terms of the Credit
Agreement, and it is desired that the obligations of Pledgor under the Lender
Interest Rate Agreements, including the obligation of Pledgor to make
payments thereunder in the event of early termination thereof, together with
all obligations of Pledgor under the Credit Agreement and the other Loan
Documents, be secured hereunder.

          D.   It is a condition precedent to the extensions of credit by
Lenders under the Credit Agreement that Pledgor shall have granted the
security interests and undertaken the obligations contemplated by this
Agreement.

          NOW, THEREFORE, in consideration of the premises and in order to
induce Lenders to make Loans and other extensions of credit under the Credit
Agreement and to induce Interest Rate Exchangers to enter into the Lender
Interest Rate Agreements, and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, Pledgor hereby agrees
with Secured Party as follows:

                                     G1-1


          SECTION 1.  PLEDGE OF SECURITY.  Pledgor hereby pledges and assigns
to Secured Party, and hereby grants to Secured Party a security interest in,
all of Pledgor's right, title and interest in and to the following (the
"PLEDGED COLLATERAL"):

          (a)  the Pledged Shares and the certificates representing the
Pledged Shares and any interest of Pledgor in the entries on the books of any
securities intermediary pertaining to the Pledged Shares, and all dividends,
cash, warrants, rights, instruments and other property or proceeds from time
to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of the Pledged Shares;

          (b)  the Pledged Debt and the instruments evidencing the Pledged
Debt, and all interest, cash, instruments and other property or proceeds from
time to time received, receivable or otherwise distributed in respect of or
in exchange for any or all of the Pledged Debt;

          (c)  all additional shares of, and all securities convertible into
and warrants, options and other rights to purchase or otherwise acquire,
stock of any issuer of the Pledged Shares from time to time acquired by
Pledgor in any manner (which shares shall be deemed to be part of the Pledged
Shares), the certificates or other instruments representing such additional
shares, securities, warrants, options or other rights and any interest of
Pledgor in the entries on the books of any securities intermediary pertaining
to such additional shares, and all dividends, cash, warrants, rights,
instruments and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or
all of such additional shares, securities, warrants, options or other rights;
PROVIDED HOWEVER that the Pledged Collateral shall not include any such
additional shares of stock of any Restricted Subsidiary that is a Non-U.S.
Subsidiary if such additional shares would cause the number of shares of such
Non-U.S. Subsidiary pledged hereunder to exceed 65% of the issued and
outstanding shares of such Non-U.S. Subsidiary, unless there is a change in
United States federal and any similar state income tax laws such that a
pledge in excess of 65% would not result in a deemed dividend or other
adverse income tax consequences to Pledgor;

          (d)  all additional indebtedness from time to time owed to Pledgor
by any obligor on the Pledged Debt and the instruments evidencing such
indebtedness, and all interest, cash, instruments and other property or
proceeds from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such indebtedness;

          (e)  all shares of, and all securities convertible into and
warrants, options and other rights to purchase or otherwise acquire, stock of
any Person that, after the date of this Agreement, becomes, as a result of
any occurrence, a direct Restricted Subsidiary of Pledgor (which shares shall
be deemed to be part of the Pledged Shares), the certificates or other
instruments representing such shares, securities, warrants, options or other
rights and any interest of Pledgor in the entries on the books of any
securities intermediary pertaining to such shares, and all dividends, cash,
warrants, rights, instruments and other property or proceeds from time to
time received, receivable or otherwise distributed in respect of or in
exchange for any or all of such shares, securities, warrants, options or
other rights;

          (f)  all indebtedness that is evidenced by an instrument or
certificate and is from time to time owed to Pledgor by any Person that,
after the date of this Agreement, becomes,

                                     G1-2


as a result of any occurrence, a direct or indirect Restricted Subsidiary of
Pledgor, and all interest, cash, instruments and other property or proceeds
from time to time received, receivable or otherwise distributed in respect of
or in exchange for any or all of such indebtedness; and

          (g)  to the extent not covered by clauses (a) through (f) above,
all proceeds of any or all of the foregoing Pledged Collateral.  For purposes
of this Agreement, the term "PROCEEDS" includes whatever is receivable or
received when Pledged Collateral or proceeds are sold, exchanged, collected
or otherwise disposed of, whether such disposition is voluntary or
involuntary, and includes proceeds of any indemnity or guaranty payable to
Pledgor or Secured Party from time to time with respect to any of the Pledged
Collateral.

          SECTION 2.  SECURITY FOR OBLIGATIONS.  This Agreement secures, and
the Pledged Collateral is collateral security for, the prompt payment or
performance in full when due, whether at stated maturity, by required
prepayment, declaration, acceleration, demand or otherwise (including the
payment of amounts that would become due but for the operation of the
automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. Section
362(a)), of all obligations and liabilities of every nature of Pledgor now or
hereafter existing under or arising out of or in connection with the Credit
Agreement and the other Loan Documents and the Lender Interest Rate
Agreements and all extensions or renewals thereof, whether for principal,
interest (including interest that, but for the filing of a petition in
bankruptcy with respect to Pledgor, would accrue on such obligations),
reimbursement of amounts drawn under Letters of Credit, payments for early
termination of Lender Interest Rate Agreements, fees, expenses, indemnities
or otherwise, whether voluntary or involuntary, direct or indirect, absolute
or contingent, liquidated or unliquidated, whether or not jointly owed with
others, and whether or not from time to time decreased or extinguished and
later increased, created or incurred, and all or any portion of such
obligations or liabilities that are paid, to the extent all or any part of
such payment is avoided or recovered directly or indirectly from Secured
Party or any Lender or Interest Rate Exchanger as a preference, fraudulent
transfer or otherwise, and all obligations of every nature of Pledgor now or
hereafter existing under this Agreement (all such obligations of Pledgor
being the "SECURED OBLIGATIONS").

          SECTION 3.  DELIVERY OF PLEDGED COLLATERAL.  All certificates or
instruments representing or evidencing the Pledged Collateral shall be
delivered to and held by or on behalf of Secured Party pursuant hereto and
shall be in suitable form for transfer by delivery or, as applicable, shall
be accompanied by Pledgor's endorsement, where necessary, or duly executed
instruments of transfer or assignment in blank, all in form and substance
reasonably satisfactory to Secured Party.  Upon the occurrence and during the
continuance of an Event of Default  Secured Party shall have the right,
without notice to Pledgor, to transfer to or to register in the name of
Secured Party or any of its nominees any or all of the Pledged Collateral,
subject only to the revocable rights specified in SECTION 7(a).

          SECTION 4.  REPRESENTATIONS AND WARRANTIES.  Pledgor represents and
warrants as follows:

          (a)  DUE AUTHORIZATION, ETC. OF PLEDGED COLLATERAL.  All of the
Pledged Shares have been duly authorized and validly issued and are fully
paid and non-assessable.  All of the

                                     G1-3


Pledged Debt has been duly authorized, authenticated or issued, and delivered
and is the legal, valid and binding obligation of the issuers thereof and is
not in default.

          (b)  DESCRIPTION OF PLEDGED COLLATERAL.  The Pledged Shares
constitute the percentage of the issued and outstanding shares of stock of
the respective issuers thereof as is set forth in Part A of SCHEDULE I
annexed hereto, as supplemented from time to time pursuant to Section 6(b) or
as amended to reflect designation of a Restricted Subsidiary as an
Unrestricted Subsidiary pursuant to Section 5(a), and all of such stock owned
by Pledgor except any issuer that is a Non-U.S. Subsidiary, in which case the
Pledged Shares do not constitute more than 65% of the issued and outstanding
shares of such issuer, unless there is a change in United States federal and
any similar state income tax laws such that a pledge in excess of 65% would
not result in a deemed dividend or other adverse income tax consequences to
Pledgor, in which case the Pledged Shares shall constitute all of such shares
owned by Pledgor, and there are no outstanding warrants, options or other
rights to purchase, or other agreements outstanding with respect to, or
property that is now or hereafter convertible into, or that requires the
issuance or sale of, any Pledged Shares.  The Pledged Debt constitutes all of
the issued and outstanding intercompany indebtedness evidenced by a
promissory note of the respective issuers thereof owing to Pledgor.

          (c)  OWNERSHIP OF PLEDGED COLLATERAL.  Pledgor is the legal, record
and beneficial owner of the Pledged Collateral free and clear of any Lien
except for Liens permitted under Section 7.2.3 of the Credit Agreement
("PERMITTED LIENS").

          SECTION 5.  TRANSFERS AND OTHER LIENS; ADDITIONAL PLEDGED
COLLATERAL; ETC.  Pledgor shall:

          (a)  not, except as expressly permitted by the Credit Agreement,
(i) sell, assign (by operation of law or otherwise) or otherwise dispose of,
or grant any option with respect to, any of the Pledged Collateral, (ii)
create or suffer to exist any Lien upon or with respect to any of the Pledged
Collateral, except for Permitted Liens, or (iii) permit any issuer of Pledged
Shares to merge or consolidate unless all the outstanding capital stock of
the surviving or resulting corporation is, upon such merger or consolidation,
pledged hereunder and no cash, securities or other property is distributed in
respect of the outstanding shares of any other constituent corporation;
PROVIDED that in the event a Restricted Subsidiary becomes an Unrestricted
Subsidiary, Secured Party shall release the Pledged Shares of such
Unrestricted Subsidiary to Pledgor free and clear of the lien and security
interest under this Agreement; and provided that in the event Pledgor makes a
disposition of assets permitted by the Credit Agreement (an "ASSET SALE") and
the assets subject to such Asset Sale are Pledged Shares, Secured Party shall
release the Pledged Shares that are the subject of such Asset Sale to Pledgor
free and clear of the lien and security interest under this Agreement
concurrently with the consummation of such Asset Sale;

          (b)  (i) pledge hereunder, within the period set forth in Section
6(b) after its acquisition (directly or indirectly) thereof, any and all
additional shares of stock or other securities of each issuer of Pledged
Shares; PROVIDED that Pledgor shall not be required to pledge hereunder more
than 65% of the issued and outstanding shares of stock of any such issuer
that is a Non-U.S. Subsidiary, unless there is a change in United States
federal and any similar state

                                     G1-4


income tax laws such that a pledge in excess of 65% would not result in a
deemed dividend or other adverse income tax consequences to Pledgor, and (ii)
pledge hereunder, within the period set forth in Section 6(b) hereof after
its acquisition (directly or indirectly) thereof, any and all shares of stock
of any Person that, after the date of this Agreement, becomes, as a result of
any occurrence, a direct Restricted Subsidiary of Pledgor; and

          (c)  (i) pledge hereunder, within the period set forth in Section
6(b) hereof after their issuance, any and all instruments or other evidences
of additional indebtedness from time to time owed to Pledgor by any obligor
on the Pledged Debt, and (ii) pledge hereunder, within the period set forth
in Section 6(b) hereof after their issuance, any and all instruments or other
evidences of indebtedness from time to time owed to Pledgor by any Person
that after the date of this Agreement becomes, as a result of any occurrence,
a direct or indirect Restricted Subsidiary of Pledgor.

          SECTION 6.  FURTHER ASSURANCES; PLEDGE AMENDMENTS.

          (a)  Pledgor agrees that from time to time, at the expense of
Pledgor, Pledgor will promptly execute and deliver all further instruments
and documents, and take all further action, that may be necessary or
desirable, or that Secured Party may reasonably request, in order to perfect
and protect any security interest granted or purported to be granted hereby
or to enable Secured Party to exercise and enforce its rights and remedies
hereunder with respect to any Pledged Collateral.  Without limiting the
generality of the foregoing, Pledgor will:  (i) execute and file such
financing or continuation statements, or amendments thereto, and such other
instruments or notices, as may be necessary or desirable, or as Secured Party
may reasonably request, in order to perfect and preserve the security
interests granted or purported to be granted hereby and (ii) at Secured
Party's request, appear in and defend any action or proceeding that may
affect Pledgor's title to or Secured Party's security interest in all or any
part of the Pledged Collateral.

          (b)  Pledgor further agrees that it will, upon obtaining any
additional shares of stock or other securities required to be pledged
hereunder as provided in SECTION 5(b) or (c), promptly (and in any event
within ten Business Days) deliver to Secured Party a Pledge Amendment, duly
executed by Pledgor, in substantially the form of SCHEDULE II annexed hereto
(a "PLEDGE AMENDMENT"), in respect of the additional Pledged Shares or
Pledged Debt to be pledged pursuant to this Agreement.  Pledgor hereby
authorizes Secured Party to attach each Pledge Amendment to this Agreement
and agrees that all Pledged Shares or Pledged Debt listed on any Pledge
Amendment delivered to Secured Party shall for all purposes hereunder be
considered Pledged Collateral; PROVIDED that the failure of Pledgor to
execute a Pledge Amendment with respect to any additional Pledged Shares or
Pledged Debt pledged pursuant to this Agreement shall not impair the security
interest of Secured Party therein or otherwise adversely affect the rights
and remedies of Secured Party hereunder with respect thereto.

                                     G1-5


          SECTION 7.  VOTING RIGHTS; DIVIDENDS; ETC.

          (a)  So long as no Event of Default shall have occurred and be
continuing:

          (i)  Pledgor shall be entitled to exercise any and all voting and
          other consensual rights pertaining to the Pledged Collateral or any
          part thereof for any purpose not inconsistent with the terms of this
          Agreement or the Credit Agreement;

          (ii) Pledgor shall be entitled to receive and retain, and to utilize
          free and clear of the lien of this Agreement, any and all dividends
          and interest paid in respect of the Pledged Collateral; and

          (iii) Secured Party shall promptly execute and deliver (or cause
          to be executed and delivered) to Pledgor all such proxies, dividend
          payment orders and other instruments as Pledgor may from time to time
          reasonably request for the purpose of enabling Pledgor to exercise the
          voting and other consensual rights which it is entitled to exercise
          pursuant to paragraph (i) above and to receive the dividends,
          principal or interest payments which it is authorized to receive and
          retain pursuant to paragraph (ii) above.

          (b)  Upon the occurrence and during the continuation of an Event of
Default:

          (i)   upon written notice from Secured Party to Pledgor, all rights of
          Pledgor to exercise the voting and other consensual rights which it
          would otherwise be entitled to exercise pursuant to SECTION 7(a)(i)
          shall cease, and all such rights shall thereupon become vested in
          Secured Party who shall thereupon have the sole right to exercise such
          voting and other consensual rights;

          (ii)  all rights of Pledgor to receive the dividends and interest
          payments which it would otherwise be authorized to receive and retain
          pursuant to SECTION 7(a)(ii) shall cease, and all such rights shall
          thereupon become vested in Secured Party who shall thereupon have the
          sole right to receive and hold as Pledged Collateral such dividends
          and interest payments; and

          (iii) all dividends, principal and interest payments which are
          received by Pledgor contrary to the provisions of paragraph (ii) of
          this SECTION 7(b) shall be received in trust for the benefit of
          Secured Party, shall be segregated from other funds of Pledgor and
          shall forthwith be paid over to Secured Party as Pledged Collateral in
          the same form as so received (with any necessary indorsements).

     (c)  In order to permit Secured Party to exercise the voting and other
consensual rights which it may be entitled to exercise pursuant to SECTION
7(b)(i) and to receive all dividends and other distributions which it may be
entitled to receive under SECTION 7(b)(ii), (i)  Pledgor shall promptly
execute and deliver (or cause to be executed and delivered) to Secured Party
all such proxies, dividend payment orders and other instruments as Secured
Party may from time to time reasonably request and (ii) without limiting the
effect of the immediately preceding clause (i), Pledgor hereby grants to
Secured Party an irrevocable proxy to vote the

                                     G1-6


Pledged Shares and to exercise all other rights, powers, privileges and
remedies to which a holder of the Pledged Shares would be entitled (including
giving or withholding written consents of shareholders, calling special
meetings of shareholders and voting at such meetings), which proxy shall be
effective, automatically and without the necessity of any action (including
any transfer of any Pledged Shares on the record books of the issuer thereof)
by any other Person (including the issuer of the Pledged Shares or any
officer or agent thereof), upon the occurrence and during the continuance of
an Event of Default and which proxy shall only terminate upon the payment in
full of the Secured Obligations.

     SECTION 8.  SECURED PARTY APPOINTED ATTORNEY-IN-FACT.  Pledgor hereby
irrevocably appoints Secured Party as Pledgor's attorney-in-fact, with full
authority in the place and stead of Pledgor and in the name of Pledgor,
Secured Party or otherwise, from time to time in Secured Party's discretion
to take any action and to execute any instrument that Secured Party may deem
necessary or advisable to accomplish the purposes of this Agreement,
including:

     (a)  to file one or more financing or continuation statements, or
amendments thereto, relative to all or any part of the Pledged Collateral
without the signature of Pledgor;

     (b)  upon the occurrence and during the continuance of an Event of
Default, to ask, demand, collect, sue for, recover, compound, receive and
give acquittance and receipts for moneys due and to become due under or in
respect of any of the Pledged Collateral;

     (c)  upon the occurrence and during the continuance of an Event of
Default, to receive, endorse and collect any instruments made payable to
Pledgor representing any dividend, principal or interest payment or other
distribution in respect of the Pledged Collateral or any part thereof and to
give full discharge for the same; and

     (d)  upon the occurrence and during the continuance of an Event of
Default, to file any claims or take any action or institute any proceedings
that Secured Party may deem necessary or desirable for the collection of any
of the Pledged Collateral or otherwise to enforce the rights of Secured Party
with respect to any of the Pledged Collateral.

     SECTION 9.  SECURED PARTY MAY PERFORM.  If Pledgor fails to perform any
agreement contained herein, Secured Party may itself perform, or cause
performance of, such agreement, and the expenses of Secured Party incurred in
connection therewith shall be payable by Pledgor under SECTION 14(b).

     SECTION 10.  STANDARD OF CARE.  The powers conferred on Secured Party
hereunder are solely to protect its interest in the Pledged Collateral and
shall not impose any duty upon it to exercise any such powers.  Except for
the exercise of reasonable care in the custody of any Pledged Collateral in
its possession and the accounting for moneys actually received by it
hereunder, Secured Party shall have no duty as to any Pledged Collateral, it
being understood that Secured Party shall have no responsibility for (a)
ascertaining or taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relating to any Pledged Collateral,
whether or not Secured Party has or is deemed to have knowledge of such
matters, (b) taking any necessary steps (other than steps taken in accordance
with the standard of care set forth above to maintain possession of the
Pledged Collateral) to preserve rights against any

                                     G1-7


parties with respect to any Pledged Collateral, (c) taking any necessary
steps to collect or realize upon the Secured Obligations or any guarantee
therefor, or any part thereof, or any of the Pledged Collateral, or (d)
initiating any action to protect the Pledged Collateral against the
possibility of a decline in market value.  Secured Party shall be deemed to
have exercised reasonable care in the custody and preservation of Pledged
Collateral in its possession if such Pledged Collateral is accorded treatment
substantially equal to that which Secured Party accords its own property
consisting of negotiable securities.

          SECTION 11.  REMEDIES.

          (a)   If any Event of Default shall have occurred and be
continuing, Secured Party may exercise in respect of the Pledged Collateral,
in addition to all other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies of a secured party on default
under the Uniform Commercial Code as in effect in any relevant jurisdiction
(the "CODE") (whether or not the Code applies to the affected Pledged
Collateral), and Secured Party may also in its sole discretion, without
notice except as specified below, sell the Pledged Collateral or any part
thereof in one or more parcels at public or private sale, at any exchange or
broker's board or at any of Secured Party's offices or elsewhere, for cash,
on credit or for future delivery, at such time or times and at such price or
prices and upon such other terms as are commercially reasonable.  Secured
Party or any Lender or Interest Rate Exchanger may be the purchaser of any or
all of the Pledged Collateral of any Pledgor at any such sale and Secured
Party, as agent for and representative of Lenders and Interest Rate
Exchangers (but not any Lender or Lenders or Interest Rate Exchanger or
Interest Rate Exchangers in its or their respective individual capacities
unless Required Lenders shall otherwise agree in writing), shall be entitled,
for the purpose of bidding and making settlement or payment of the purchase
price for all or any portion of the Pledged Collateral sold at any such
public sale, to use and apply any of the Secured Obligations as a credit on
account of the purchase price for any Pledged Collateral payable by Secured
Party at such sale.  Each purchaser at any such sale shall hold the property
sold absolutely free from any claim or right on the part of Pledgor, and
Pledgor hereby waives (to the extent permitted by applicable law) all rights
of redemption, stay and/or appraisal which it now has or may at any time in
the future have under any rule of law or statute now existing or hereafter
enacted. Pledgor agrees that, to the extent notice of sale shall be required
by law, at least ten days' prior written notice to Pledgor of the time and
place of any public sale or the time after which any private sale is to be
made shall constitute reasonable notification.  Secured Party shall not be
obligated to make any sale of Pledged Collateral regardless of notice of sale
having been given.  Secured Party may adjourn any public or private sale from
time to time by announcement at the time and place fixed therefor, and such
sale may, without further notice, be made at the time and place to which it
was so adjourned. Pledgor hereby waives, to the fullest extent permitted
under applicable law, any claims against Secured Party arising by reason of
the fact that the price at which any Pledged Collateral may have been sold at
such a private sale was less than the price which might have been obtained at
a public sale, even if Secured Party accepts the first offer received and
does not offer such Pledged Collateral to more than one offeree.  If the
proceeds of any sale or other disposition of the Pledged Collateral of any
Pledgor are insufficient to pay all the Secured Obligations, Pledgor shall be
liable for the deficiency, including the fees of any attorneys employed by
Secured Party to collect such deficiency.

                                     G1-8


          (b)   Pledgor recognizes that, by reason of certain prohibitions
contained in the Securities Act of 1933, as amended from time to time (the
"SECURITIES ACT"), and applicable state securities laws, Secured Party may be
compelled, with respect to any sale of all or any part of the Pledged
Collateral conducted without prior registration or qualification of such
Pledged Collateral under the Securities Act and/or such state securities
laws, to limit purchasers to those who will agree, among other things, to
acquire the Pledged Collateral for their own account, for investment and not
with a view to the distribution or resale thereof.  Pledgor acknowledges that
any such private sales may be at prices and on terms less favorable than
those obtainable through a public sale without such restrictions (including a
public offering made pursuant to a registration statement under the
Securities Act) and, notwithstanding such circumstances and the registration
rights granted to Secured Party by Pledgor pursuant to SECTION 12, Pledgor
agrees that any such private sale shall not be considered not to have been
made in a commercially reasonable manner solely by reason that Secured Party
shall not have effected a public sale and that Secured Party shall have no
obligation to engage in public sales and no obligation to delay the sale of
any Pledged Collateral for the period of time necessary to permit the issuer
thereof to register it for a form of public sale requiring registration under
the Securities Act or under applicable state securities laws, even if such
issuer would, or should, agree to so register it.

          (c)   If Secured Party determines to exercise its right to sell any
or all of the Pledged Collateral, upon written request, Pledgor shall and
shall cause each issuer of any Pledged Shares to be sold hereunder from time
to time to furnish to Secured Party all such information as Secured Party may
request in order to determine the number of shares and other instruments
included in the Pledged Collateral which may be sold by Secured Party in
exempt transactions under the Securities Act and the rules and regulations of
the Securities and Exchange Commission thereunder, as the same are from time
to time in effect.

          SECTION 12.  REGISTRATION RIGHTS.  If Secured Party shall determine
to exercise its right to sell all or any of the Pledged Collateral pursuant
to SECTION 11, Pledgor agrees that, upon request of Secured Party (which
request may be made by Secured Party in its sole discretion), Pledgor will,
at its own expense:

          (a)   execute and deliver, and cause each issuer of the Pledged
Collateral contemplated to be sold and the directors and officers thereof to
execute and deliver, all such instruments and documents, and do or cause to
be done all such other acts and things, as may be necessary or, in the
opinion of Secured Party, advisable to register such Pledged Collateral under
the provisions of the Securities Act and to cause the registration statement
relating thereto to become effective and to remain effective for such period
as prospectuses are required by law to be furnished, and to make all
amendments and supplements thereto and to the related prospectus which, in
the opinion of Secured Party, are necessary or advisable, all in conformity
with the requirements of the Securities Act and the rules and regulations of
the Securities and Exchange Commission applicable thereto;

          (b)   use its best efforts to qualify the Pledged Collateral under
all applicable state securities or "BLUE SKY" laws and to obtain all
necessary governmental approvals for the sale of the Pledged Collateral, as
requested by Secured Party;

                                     G1-9


          (c)   cause each such issuer to make available to its security
holders, as soon as practicable, an earnings statement which will satisfy the
provisions of Section 11(a) of the Securities Act;

          (d)   do or cause to be done all such other acts and things as may
be necessary to make such sale of the Pledged Collateral or any part thereof
valid and binding and in compliance with applicable law; and

          (e)   bear all costs and expenses, including reasonable attorneys'
fees, of carrying out its obligations under this SECTION 12.

          Pledgor further agrees that a breach of any of the covenants
contained in this SECTION 12 will cause irreparable injury to Secured Party,
that Secured Party has no adequate remedy at law in respect of such breach
and, as a consequence, that, to the fullest extent permitted under applicable
law, each and every covenant contained in this SECTION 12 shall be
specifically enforceable against Pledgor, and Pledgor hereby, to the fullest
extent permitted under applicable law, waives and agrees not to assert any
defenses against an action for specific performance of such covenants except
for a defense that no default has occurred giving rise to the Secured
Obligations becoming due and payable prior to their stated maturities.
Nothing in this SECTION 12 shall in any way alter the rights of Secured Party
under SECTION 11.

          SECTION 13.  APPLICATION OF PROCEEDS. Except as expressly provided
elsewhere in this Agreement, all proceeds received by Secured Party in
respect of any sale of, collection from, or other realization upon all or any
part of the Pledged Collateral may, in the discretion of Secured Party, be
held by Secured Party as Pledged Collateral for, and/or then, or at any time
thereafter, applied in full or in part by Secured Party against, the Secured
Obligations in the following order of priority:

          FIRST:  To the payment of all costs and expenses of such sale,
          collection or other realization, including reasonable compensation to
          Secured Party or any Lender or Interest Rate Exchanger and its agents
          and counsel, and all other expenses, liabilities and advances made or
          incurred by Secured Party or any Lender or Interest Rate Exchanger in
          connection therewith, and all amounts for which Secured Party or any
          Lender or Interest Rate Exchanger is entitled to indemnification
          hereunder and all advances made by Secured Party or any Lender or
          Interest Rate Exchanger hereunder for the account of Pledgor, and to
          the payment of all costs and expenses paid or incurred by Secured
          Party or any Lender or Interest Rate Exchanger in connection with the
          exercise of any right or remedy hereunder, all in accordance with
          Section 14;

          SECOND:  To the payment of all other Secured Obligations for the
          ratable benefit of the holders thereof; and

          THIRD:  To the payment to or upon the order of Pledgor, or to
          whosoever may be lawfully entitled to receive the same or as a court
          of competent jurisdiction may direct, of any surplus then remaining
          from such proceeds.

                                     G1-10


          SECTION 14.  INDEMNITY AND EXPENSES.  Without limiting the
generality of subsections 11.3 and 11.4 of the Credit Agreement, in the event
of any public sale described in SECTION 12, Pledgor agrees to indemnify and
hold harmless Secured Party, and each Lender and each of their respective
directors, officers, employees and agents from and against any loss, fee,
cost, expense, damage, liability or claim, joint or several, to which any
such Persons may become subject or for which any of them may be liable (other
than any losses, fees, costs, expenses, damages, liabilities or claims
resulting from the gross negligence or willful misconduct of Secured Party or
any Lender) or the inclusion in any preliminary prospectus, registration
statement, prospectus or other document published or filed in connection with
such public sale, or any amendments or supplements thereto, of any
information that relates to Secured Party or such Lender and was supplied by
Secured Party or such Lender for use therein, under the Securities Act or
otherwise, insofar as such losses, fees, costs, expenses, damages,
liabilities or claims (or any litigation commenced or threatened in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus,
registration statement, prospectus or other such document published or filed
in connection with such public sale, or any amendment or supplement thereto,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and will reimburse Secured Party and
such other Persons for any legal or other expenses reasonably incurred by
Secured Party and such other Persons in connection with any litigation, of
any nature whatsoever, commenced or threatened in respect thereof (including
any and all fees, costs and expenses whatsoever reasonably incurred by
Secured Party and such other Persons and counsel for Secured Party and such
other Persons in investigating, preparing for, defending against or providing
evidence, producing documents or taking any other action in respect of, ay
such commenced or threatened litigation or any claims asserted).  This
indemnity shall be in addition to any liability which Pledgor may otherwise
have and shall extend upon the same terms and conditions to each Person, if
any, that controls Secured Party or such Persons within the meaning of the
Securities Act.

          SECTION 15.  CONTINUING SECURITY INTEREST; TRANSFER OF LOANS.  This
Agreement shall create a continuing security interest in the Pledged
Collateral and shall, except as otherwise expressly set forth herein, (a)
remain in full force and effect until the payment in full of all Secured
Obligations (other than any contingent indemnity or expense reimbursement
claims that have yet to be claimed), the cancellation or termination of the
Commitments and the cancellation, expiration or cash collateralization of all
outstanding Letters of Credit, (b) be binding upon Pledgor, its successors
and assigns, and (c) inure, together with the rights and remedies of Secured
Party hereunder, to the benefit of Secured Party and its successors,
transferees and assigns.  Without limiting the generality of the foregoing
clause (c), but subject to the provisions of subsections 11.10 and 11.11 of
the Credit Agreement, any Lender may assign or otherwise transfer any Loans
held by it to any other Person, and such other Person shall thereupon become
vested with all the benefits in respect thereof granted to Lenders herein or
otherwise.  Upon the payment in full of all Secured Obligations (other than
any contingent indemnity or expense reimbursement claims which at the time of
such payment have yet to be claimed), the cancellation or termination of the
Commitments and the cancellation, expiration or cash collateralization of all
outstanding Letters of Credit, the security interest granted hereby shall
terminate and all rights to the Pledged Collateral shall revert to Pledgor.
Upon any such termination Secured Party will, at Pledgor's expense, execute
and deliver to such Pledgor such

                                     G1-11


documents as Pledgor shall reasonably request to evidence such termination
and Pledgor shall be entitled to the return, upon its request and at its
expense, against receipt and without recourse to Secured Party, of Pledged
Collateral as shall not have been sold in accordance with this Agreement or
otherwise applied pursuant to the terms hereof.

          SECTION 16.  SECURED PARTY AS ADMINISTRATIVE AGENT.

          (a)   Secured Party has been appointed to act as Secured Party
hereunder by Lenders and, by their acceptance of the benefits hereof,
Interest Rate Exchangers.  Secured Party shall be obligated, and shall have
the right hereunder, to make demands, to give notices, to exercise or refrain
from exercising any rights, and to take or refrain from taking any action
(including the release or substitution of Pledged Collateral), solely in
accordance with this Agreement and the Credit Agreement; PROVIDED that
Secured Party shall exercise, or refrain from exercising, any remedies
provided for in SECTION 11 in accordance with the instructions of (i)
Required Lenders or (ii) after payment in full of all Obligations under the
Credit Agreement and the other Loan Documents, the holders of a majority of
the aggregate notional amount under all Lender Interest Rate Agreements
(Required Lenders or, if applicable, such holders being referred to herein as
"REQUISITE OBLIGEES").  In furtherance of the foregoing provisions of this
SECTION 16(a), each Interest Rate Exchanger, by its acceptance of the
benefits hereof, agrees that it shall have no right individually to realize
upon any of the Pledged Collateral hereunder, it being understood and agreed
by such Interest Rate Exchanger that all rights and remedies hereunder may be
exercised solely by Secured Party for the benefit of Lenders and Interest
Rate Exchangers in accordance with the terms of this SECTION 16(a).

          (b)   Secured Party shall at all times be the same Person that is
Administrative Agent under the Credit Agreement.  Written notice of
resignation by Administrative Agent pursuant to subsection 9.4 of the Credit
Agreement shall also constitute notice of resignation as Secured Party under
this Agreement, and appointment of a successor Administrative Agent pursuant
to subsection 9.4 of the Credit Agreement shall also constitute appointment
of a successor Secured Party under this Agreement.  Upon the acceptance of
any appointment as Administrative Agent under subsection 9.4 of the Credit
Agreement by a successor Administrative Agent, that successor Administrative
Agent shall thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Secured Party under this
Agreement, and the retiring Secured Party under this Agreement shall promptly
(i) transfer to such successor Secured Party all sums, securities and other
items of Collateral held hereunder, together with all records and other
documents necessary or appropriate in connection with the performance of the
duties of the successor Secured Party under this Agreement, and (ii) execute
and deliver to such successor Secured Party such amendments to financing
statements, and take such other actions, as may be necessary or appropriate
in connection with the assignment to such successor Secured Party of the
security interests created hereunder, whereupon such retiring Secured Party
shall be discharged from its duties and obligations under this Agreement.
After any retiring Administrative Agent's resignation hereunder as Secured
Party, the provisions of this Agreement shall inure to its benefit as to any
actions taken or omitted to be taken by it under this Agreement while it was
Secured Party hereunder.

          SECTION 17.  AMENDMENTS; ETC.  No amendment, modification,
termination or waiver of any provision of this Agreement, and no consent to
any departure by Pledgor

                                     G1-12


therefrom, shall in any event be effective unless the same shall be in
writing and signed by Secured Party and, in the case of any such amendment or
modification, by Pledgor.  Any such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which it was given.

          SECTION 18.  NOTICES.  Any notice or other communication herein
required or permitted to be given shall be in writing or by facsimile and
addressed, delivered or transmitted to such party at its address as set forth
under such party's name on the signature block hereof or at such other
address or facsimile number as may be designated by such party in a written
notice delivered to the other parties.  Any notice, if mailed and properly
addressed with postage prepaid or if properly addressed and sent by pre-paid
courier service, shall be deemed given when received; any notice, if
transmitted by facsimile, shall be deemed given when transmitted (and
telephonic confirmation of receipt thereof has been received).

          SECTION 19.  FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE.
No failure or delay on the part of Secured Party in the exercise of any
power, right or privilege hereunder shall impair such power, right or
privilege or be construed to be a waiver of any default or acquiescence
therein, nor shall any single or partial exercise of any such power, right or
privilege preclude any other or further exercise thereof or of any other
power, right or privilege. All rights and remedies existing under this
Agreement are cumulative to, and not exclusive of, any rights or remedies
otherwise available.

          SECTION 20.  SEVERABILITY.  In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

          SECTION 21.  HEADINGS.  Section and subsection headings in this
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose or be given any
substantive effect.

          SECTION 22.  GOVERNING LAW; TERMS.  THIS AGREEMENT AND THE RIGHTS
AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
NEW YORK (INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE
STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES, EXCEPT TO
THE EXTENT THAT THE UNIFORM COMMERCIAL CODE PROVIDES THAT THE PERFECTION OF
THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY
PARTICULAR PLEDGED COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION
OTHER THAN THE STATE OF NEW YORK.  Unless otherwise defined herein or in the
Credit Agreement, terms used in Articles 8 and 9 of the Uniform Commercial
Code in the State of New York are used herein as therein defined.

          SECTION 23.  COUNTERPARTS.  This Agreement may be executed in one
or more counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall

                                     G1-13


constitute but one and the same instrument; signature pages may be detached
from multiple separate counterparts and attached to a single counterpart so
that all signature pages are physically attached to the same document.

                     [Remainder of page intentionally left blank]











                                     G1-14


     IN WITNESS WHEREOF, the Pledgor and Secured Party have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.

                              MERRILL COMMUNICATIONS LLC



                              By:
                                  --------------------------------------------

                              Name:
                                    ------------------------------------------

                              Title:
                                     -----------------------------------------


                              Notice Address:

                              Merrill Corporation
                              One Merrill Circle
                              St. Paul, MN  55108


                              U.S. BANK NATIONAL ASSOCIATION,
                              as Secured Party


                              By:
                                  --------------------------------------------

                              Name:
                                    ------------------------------------------

                              Title:
                                     -----------------------------------------



                              Notice Address:

                              U.S. Bank National Association
                              601 Second Avenue South
                              Minneapolis, MN  55402



                                      S-1


                                   SCHEDULE I

          Attached to and forming a part of the Pledge Agreement dated as of
November 23, 1999 between Merrill Communications LLC and U.S. Bank National
Association, as Secured Party.

                                    Part A



                                                                                     Percentage of
                                                                                     Issued and
                                                                                     Outstanding
                           Class of      Stock Certi-         Par       Number of    Shares of
Stock Issuer                Stock        ficate Nos.         Value       Shares      Relevant Class
- ------------               --------      ------------        -----      ---------    --------------
                                                                      










Debt Issuer                        Amount of Indebtedness
- -----------                        ----------------------
                               









                                  Schedule I-1


                                    SCHEDULE II

                                  PLEDGE AMENDMENT

     This Pledge Amendment, dated ____________, ____, is delivered pursuant to
SECTION 6(b) of the Pledge Agreement referred to below.  The undersigned hereby
agrees that this Pledge Amendment may be attached to the Pledge Agreement dated
November 23, 1999, between Merrill Communications LLC and  U.S. Bank National
Association, as Secured Party (the "PLEDGE AGREEMENT," capitalized terms defined
therein being used herein as therein defined), and that the [Pledged Shares]
[Pledged Debt] listed on this Pledge Amendment shall be deemed to be part of the
[Pledged Shares] [Pledged Debt] and shall become part of the Pledged Collateral
and shall secure all Secured Obligations.

                              MERRILL COMMUNICATIONS LLC



                              By:
                                  --------------------------------------------

                              Name:
                                    ------------------------------------------

                              Title:
                                     -----------------------------------------






                                                                                        Percentage of
                                                                                        Issued and
                                                                                        Outstanding
                          Class of       Stock Certi-        Par        Number of       Shares of
Stock Issuer               Stock         ficate Nos.         Value       Shares         Relevant Class
- ------------              --------       ------------        -----      ---------       --------------
                                                                         








Debt Issuer                        Amount of Indebtedness
- -----------                        ----------------------
                               











                                  Schedule II-1


                                     EXHIBIT I

                              HOLDCO PLEDGE AGREEMENT

          This HOLDCO PLEDGE AGREEMENT (this "AGREEMENT") is dated as of
November 23, 1999 and entered into by and between MERRILL CORPORATION, a
Minnesota corporation ("PLEDGOR"), and U.S. Bank National Association, as
Administrative Agent for and representative of (in such capacity herein
called "SECURED PARTY") the financial institutions ("LENDERS") party to the
Credit Agreement referred to below and any Interest Rate Exchangers (as
hereinafter defined).

                              PRELIMINARY STATEMENTS

          A.    Pledgor is the legal and beneficial owner of (i) the limited
liability company interests or the shares of stock  (the "PLEDGED SHARES")
described in Part A of SCHEDULE I annexed hereto and issued by the limited
liability companies or corporations named therein and (ii) the indebtedness
(the "PLEDGED DEBT") described in Part B of said SCHEDULE I and issued by the
obligors named therein.

          B.    Secured Party, Lenders and certain other parties have entered
into a Credit Agreement dated as of November 23, 1999 (said Credit Agreement,
as it may hereafter be amended, supplemented or otherwise modified from time
to time, being the "CREDIT AGREEMENT", the terms defined therein and not
otherwise defined herein being used herein as therein defined) with Pledgor
as Guarantor and Merrill Communications LLC, a Delaware limited liability
company ("COMPANY"), as Borrower pursuant to which Lenders have made certain
commitments, subject to the terms and conditions set forth in the Credit
Agreement, to extend certain credit facilities to Company.

          C.    Company may from time to time enter into one or more Rate
Protection Agreements (collectively, the "LENDER INTEREST RATE AGREEMENTS")
with one or more Lenders or their affiliates (in such capacity, collectively,
"INTEREST RATE EXCHANGERS") permitted under the terms of the Credit Agreement,

          D.    Pledgor has guarantied, under Article X of the Credit
Agreement (the "GUARANTY"), the prompt payment and performance when due of
all obligations of Company under the Credit Agreement and all obligations of
Company under the Lender Interest Rate Agreements, including the obligations
of Company to make payments thereunder in the event of early termination
thereof.

          E.    It is in the best interests of Pledgor to execute this
Agreement inasmuch as Pledgor will derive substantial direct and indirect
benefits from the Loans made from time to time to the Company by the Lenders
pursuant to the Credit Agreement and the Letters of Credit issued from time
to time for the account of the Company and the other Restricted Subsidiaries
pursuant to the Credit Agreement.

                                      I-1


          F.    It is a condition precedent to the extensions of credit by
Lenders under the Credit Agreement that Pledgor shall have granted the
security interests and undertaken the obligations contemplated by this
Agreement.

          NOW, THEREFORE, in consideration of the premises and in order to
induce Lenders to make Loans and other extensions of credit under the Credit
Agreement and to induce Interest Rate Exchangers to enter into the Lender
Interest Rate Agreements, and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, Pledgor hereby agrees
with Secured Party as follows:

          SECTION 1.  PLEDGE OF SECURITY.  Pledgor hereby pledges and assigns
to Secured Party, and hereby grants to Secured Party a security interest in,
all of Pledgor's right, title and interest in and to the following (the
"PLEDGED COLLATERAL"):

          (a)   the Pledged Shares and the certificates representing the
Pledged Shares and any interest of Pledgor in the entries on the books of any
securities intermediary pertaining to the Pledged Shares, and all dividends,
cash, warrants, rights, instruments and other property or proceeds from time
to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of the Pledged Shares;

          (b)   the Pledged Debt and the instruments evidencing the Pledged
Debt, and all interest, cash, instruments and other property or proceeds from
time to time received, receivable or otherwise distributed in respect of or
in exchange for any or all of the Pledged Debt;

          (c)   all additional shares of, and all securities convertible into
and warrants, options and other rights to purchase or otherwise acquire,
stock or limited liability company interests of any issuer of the Pledged
Shares from time to time acquired by Pledgor in any manner (which shares
shall be deemed to be part of the Pledged Shares), the certificates or other
instruments representing such additional shares, securities, warrants,
options or other rights and any interest of Pledgor in the entries on the
books of any securities intermediary pertaining to such additional shares,
securities, warrants, options or other rights, and all dividends, cash,
warrants, rights, instruments and other property or proceeds from time to
time received, receivable or otherwise distributed in respect of or in
exchange for any or all of such additional shares, securities, warrants,
options or other rights; PROVIDED HOWEVER that the Pledged Collateral shall
not include any such additional shares of stock or equity interests of any
Restricted Subsidiary that is a Non-U.S. Subsidiary if such additional shares
or equity interests would cause the number of shares or equity interests of
such Non-U.S. Subsidiary pledged hereunder to exceed 65% of the issued and
outstanding shares or equity interests of such Non-U.S. Subsidiary, unless
there is a change in United States federal and any similar state income tax
laws such that a pledge in excess of 65% would not result in a deemed
dividend or other adverse income tax consequences to Pledgor;

          (d)   all additional indebtedness from time to time owed to Pledgor
by any obligor on the Pledged Debt and the instruments evidencing such
indebtedness, and all interest, cash, instruments and other property or
proceeds from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such indebtedness;

                                      I-2


          (e)   all shares of, and all securities convertible into and
warrants, options and other rights to purchase or otherwise acquire, stock or
limited liability company interests of any Person that, after the date of
this Agreement, becomes, as a result of any occurrence, a direct Restricted
Subsidiary of Pledgor (which shares shall be deemed to be part of the Pledged
Shares), the certificates or other instruments representing such shares,
securities, warrants, options or other rights and any interest of Pledgor in
the entries on the books of any securities intermediary pertaining to such
shares, and all dividends, cash, warrants, rights, instruments and other
property or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such shares,
securities, warrants, options or other rights;

          (f)   all indebtedness that is evidenced by an instrument or
certificate and is from time to time owed to Pledgor by any Person that,
after the date of this Agreement, becomes, as a result of any occurrence, a
direct or indirect Restricted Subsidiary of Pledgor, and all interest, cash,
instruments and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or
all of such indebtedness; and

          (g)   to the extent not covered by clauses (a) through (f) above,
all proceeds of any or all of the foregoing Pledged Collateral.  For purposes
of this Agreement, the term "PROCEEDS" includes whatever is receivable or
received when Pledged Collateral or proceeds are sold, exchanged, collected
or otherwise disposed of, whether such disposition is voluntary or
involuntary, and includes proceeds of any indemnity or guaranty payable to
Pledgor or Secured Party from time to time with respect to any of the Pledged
Collateral.

          SECTION 2.  SECURITY FOR OBLIGATIONS.  This Agreement secures, and
the Pledged Collateral is collateral security for, the prompt payment or
performance in full when due, whether at stated maturity, by required
prepayment, declaration, acceleration, demand or otherwise (including the
payment of amounts that would become due but for the operation of the
automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. Section
362(a)), of all obligations and liabilities of every nature of Pledgor now or
hereafter existing under or arising out of or in connection with the Guaranty
and all extensions or renewals thereof, whether for principal, interest
(including interest that, but for the filing of a petition in bankruptcy with
respect to Company, would accrue on such obligations whether or not a claim
is allowed against Company for such interest in the related bankruptcy
proceeding), reimbursement of amounts drawn under Letters of Credit, payments
for early termination of Lender Interest Rate Agreements, fees, expenses,
indemnities or otherwise, whether voluntary or involuntary, direct or
indirect, absolute or contingent, liquidated or unliquidated, whether or not
jointly owed with others, and whether or not from time to time decreased or
extinguished and later increased, created or incurred, and all or any portion
of such obligations or liabilities that are paid, to the extent all or any
part of such payment is avoided or recovered directly or indirectly from
Secured Party or any Lender or Interest Rate Exchanger as a preference,
fraudulent transfer or otherwise, and all obligations of every nature of
Pledgor now or hereafter existing under this Agreement (all such obligations
of Pledgor being the "SECURED OBLIGATIONS").

          SECTION 3.  DELIVERY OF PLEDGED COLLATERAL.  All certificates or
instruments representing or evidencing the Pledged Collateral shall be
delivered to and held by or on behalf of Secured Party pursuant hereto and
shall be in suitable form for transfer by delivery or, as

                                      I-3


applicable, shall be accompanied by Pledgor's endorsement, where necessary,
or duly executed instruments of transfer or assignment in blank, all in form
and substance reasonably satisfactory to Secured Party.  Upon the occurrence
and during the continuation of an Event of Default, Secured Party shall have
the right, without notice to Pledgor, to transfer to or to register in the
name of Secured Party or any of its nominees any or all of the Pledged
Collateral, subject only to the revocable rights specified in SECTION 7(a).

          SECTION 4.  REPRESENTATIONS AND WARRANTIES.  Pledgor represents and
warrants as follows:

          (a)   DUE AUTHORIZATION, ETC. OF PLEDGED COLLATERAL.  All of the
Pledged Shares owned by Pledgor have been duly authorized and validly issued
and are fully paid and non-assessable.  All of the Pledged Debt owned by
Pledgor has been duly authorized, authenticated or issued, and delivered and
is the legal, valid and binding obligation of the issuers thereof and is not
in default.

          (b)   DESCRIPTION OF PLEDGED COLLATERAL.  The Pledged Shares
constitute the percentage of the issued and outstanding shares of stock or
limited liability company interests of the respective issuer thereof as is
set forth in Part A of Schedule I attached hereto, as supplemented from time
to time pursuant to Section 6(b) or as amended to reflect designation of a
Restricted Subsidiary as an Unrestricted Subsidiary, and all of such stock or
limited liability company interests are owned by Pledgor except in the case
of any issuer that is a Non-U.S. Subsidiary, in which case the Pledged Shares
do not constitute more than 65% of the issued and outstanding shares or
limited liability company interests of such issuer, unless there is a change
in United States federal and any similar state income tax laws such that a
pledge in excess of 65% would not result in a deemed dividend or other
adverse income tax consequences to Pledgor, in which case the Pledged Shares
shall constitute all of such shares owned by Pledgor, and there are no
outstanding warrants, options or other rights to purchase, or other
agreements outstanding with respect to, or property that is now or hereafter
convertible into, or that requires the issuance or sale of, any Pledged
Shares.  The Pledged Debt constitutes all of the issued and outstanding
intercompany indebtedness evidenced by a promissory note of the respective
issuers thereof owing to Pledgor.

          (c)   OWNERSHIP OF PLEDGED COLLATERAL.  Pledgor is the legal,
record and beneficial owner of the Pledged Collateral free and clear of any
Lien except for the Liens permitted under Section 7.2.3 of the Credit
Agreement ("Permitted Liens").

          SECTION 5.  TRANSFERS AND OTHER LIENS; ADDITIONAL PLEDGED
COLLATERAL; ETC.  Pledgor shall:

          (a)   not, except as expressly permitted by the Credit Agreement,
(i) sell, assign (by operation of law or otherwise) or otherwise dispose of,
or grant any option with respect to, any of the Pledged Collateral, (ii)
create or suffer to exist any Lien upon or with respect to any of the Pledged
Collateral, except for the Permitted Liens, or (iii) permit any issuer of
Pledged Shares to merge or consolidate unless all the outstanding capital
stock of the surviving or resulting corporation is, upon such merger or
consolidation, pledged hereunder and no cash, securities or other property is
distributed in respect of the outstanding shares of any other

                                      I-4


constituent corporation; PROVIDED that in the event Pledgor makes a
disposition of assets permitted by the Credit Agreement (an "ASSET SALE") and
the assets subject to such Asset Sale are Pledged Shares, Secured Party shall
release the Pledged Shares that are the subject of such Asset Sale to Pledgor
free and clear of the lien and security interest under this Agreement
concurrently with the consummation of such Asset Sale;

          (b)   (i) pledge hereunder, within the period set forth in Section
6(b) after its acquisition (directly or indirectly) thereof, any and all
additional shares of stock or other securities of each issuer of its Pledged
Shares; PROVIDED that Pledgor shall not be required to pledge hereunder
issued and outstanding shares of stock or limited liability company interests
of any such issuer that is a Non-U.S. Subsidiary if the Pledged Shares of
Pledgor issued by such issuer would exceed 65% of the issued and outstanding
shares of stock or limited liability company interests of such issuer, unless
there is a change in United States federal and any similar state income tax
laws such that a pledge in excess of 65% would not result in a deemed
dividend or other adverse income tax consequences to Pledgor, and (ii) pledge
hereunder, within the period set forth in Section 6(b) after its acquisition
(directly or indirectly) thereof, any and all shares of stock or limited
liability company interests of any Person that, after the date of this
Agreement, becomes, as a result of any occurrence, a direct Restricted
Subsidiary of Pledgor; and

          (c)   (i) pledge hereunder, within the period set forth in Section
6(b) after their issuance, any and all instruments or other evidences of
additional indebtedness from time to time owed to Pledgor by any obligor on
the Pledged Debt, and (ii) pledge hereunder, within the period set forth in
Section 6(b) after their issuance, any and all instruments or other evidences
of indebtedness from time to time owed to Pledgor by any Person that after
the date of this Agreement becomes, as a result of any occurrence, a direct
or indirect Restricted Subsidiary of Pledgor.

          SECTION 6.  FURTHER ASSURANCES; PLEDGE AMENDMENTS.

          (a)   Pledgor agrees that from time to time, at the expense of
Pledgor, Pledgor will promptly execute and deliver all further instruments
and documents, and take all further action, that may be necessary or
desirable, or that Secured Party may reasonably request, in order to perfect
and protect any security interest granted or purported to be granted hereby
or to enable Secured Party to exercise and enforce its rights and remedies
hereunder with respect to any Pledged Collateral.  Without limiting the
generality of the foregoing, Pledgor will:  (i) execute and file such
financing or continuation statements, or amendments thereto, and such other
instruments or notices, as may be necessary or desirable, or as Secured Party
may reasonably request, in order to perfect and preserve the security
interests granted or purported to be granted hereby and (ii) at Secured
Party's request, appear in and defend any action or proceeding that may
affect Pledgor's title to or Secured Party's security interest in all or any
part of the Pledged Collateral.

          (b)   Pledgor further agrees that it will, upon obtaining any
additional shares of stock or other securities required to be pledged
hereunder as provided in SECTION 5(b) or (c), promptly (and in any event
within ten Business Days) deliver to Secured Party a Pledge Amendment, duly
executed by Pledgor, in substantially the form of SCHEDULE II annexed hereto

                                      I-5


(a "PLEDGE AMENDMENT"), in respect of the additional Pledged Shares or
Pledged Debt to be pledged pursuant to this Agreement.  Pledgor hereby
authorizes Secured Party to attach each Pledge Amendment to this Agreement
and agrees that all Pledged Shares or Pledged Debt listed on any Pledge
Amendment delivered to Secured Party shall for all purposes hereunder be
considered Pledged Collateral; PROVIDED that the failure of Pledgor to
execute a Pledge Amendment with respect to any additional Pledged Shares or
Pledged Debt pledged pursuant to this Agreement shall not impair the security
interest of Secured Party therein or otherwise adversely affect the rights
and remedies of Secured Party hereunder with respect thereto.

          SECTION 7.  VOTING RIGHTS; DIVIDENDS; ETC.

          (a)   So long as no Event of Default shall have occurred and be
continuing:

          (i)   Pledgor shall be entitled to exercise any and all voting and
          other consensual rights pertaining to the Pledged Collateral or any
          part thereof for any purpose not inconsistent with the terms of this
          Agreement or the Credit Agreement;

          (ii)  Pledgor shall be entitled to receive and retain, and to utilize
          free and clear of the lien of this Agreement, any and all dividends,
          interest and other distributions paid in respect of the Pledged
          Collateral; and

          (iii) Secured Party shall promptly execute and deliver (or cause to be
          executed and delivered) to Pledgor all such proxies, dividend payment
          orders and other instruments as Pledgor may from time to time
          reasonably request for the purpose of enabling Pledgor to exercise the
          voting and other consensual rights which it is entitled to exercise
          pursuant to paragraph (i) above and to receive the dividends,
          principal, interest or other distribution payments which it is
          authorized to receive and retain pursuant to paragraph (ii) above.

          (b)   Upon the occurrence and during the continuation of an Event of
Default:

          (i)   upon written notice from Secured Party to Pledgor, all rights of
          Pledgor to exercise the voting and other consensual rights which it
          would otherwise be entitled to exercise pursuant to SECTION 7(a)(i)
          shall cease, and all such rights shall thereupon become vested in
          Secured Party who shall thereupon have the sole right to exercise such
          voting and other consensual rights;

          (ii)  all rights of Pledgor to receive the dividends, interest or
          other distribution payments which it would otherwise be authorized to
          receive and retain pursuant to SECTION 7(a)(ii) shall cease, and all
          such rights shall thereupon become vested in Secured Party who shall
          thereupon have the sole right to receive and hold as Pledged
          Collateral such dividends, interest or other distribution payments;
          and

          (iii) all dividends, principal, interest and other distribution
          payments which are received by Pledgor contrary to the provisions of
          paragraph (ii) of this SECTION 7(b) shall be received in trust for the
          benefit of Secured Party, shall be segregated from other funds of
          Pledgor and shall forthwith be paid over to Secured Party as

                                      I-6


          Pledged Collateral in the same form as so received (with any
          necessary indorsements).

     (c)  In order to permit Secured Party to exercise the voting and other
consensual rights which it may be entitled to exercise pursuant to SECTION
7(b)(i) and to receive all dividends and other distributions which it may be
entitled to receive under SECTION 7(b)(ii), (i) Pledgor shall promptly
execute and deliver (or cause to be executed and delivered) to Secured Party
all such proxies, dividend payment orders and other instruments as Secured
Party may from time to time reasonably request and (ii) without limiting the
effect of the immediately preceding clause (i), Pledgor hereby grants to
Secured Party an irrevocable proxy to vote the Pledged Shares and to exercise
all other rights, powers, privileges and remedies to which a holder of the
Pledged Shares would be entitled (including giving or withholding written
consents of shareholders, calling special meetings of shareholders and voting
at such meetings), which proxy shall be effective, automatically and without
the necessity of any action (including any transfer of any Pledged Shares on
the record books of the issuer thereof) by any other Person (including the
issuer of the Pledged Shares or any officer or agent thereof), upon the
occurrence of an Event of Default and which proxy shall only terminate upon
the payment in full of the Secured Obligations.

     SECTION 8.  SECURED PARTY APPOINTED ATTORNEY-IN-FACT.  Pledgor hereby
irrevocably appoints Secured Party as Pledgor's attorney-in-fact, with full
authority in the place and stead of Pledgor and in the name of Pledgor,
Secured Party or otherwise, from time to time in Secured Party's discretion
to take any action and to execute any instrument that Secured Party may deem
necessary or advisable to accomplish the purposes of this Agreement,
including:

          (a)   to file one or more financing or continuation statements, or
amendments thereto, relative to all or any part of the Pledged Collateral
without the signature of Pledgor;

          (b)   upon the occurrence and during the continuance of an Event of
Default, to ask, demand, collect, sue for, recover, compound, receive and
give acquittance and receipts for moneys due and to become due under or in
respect of any of the Pledged Collateral;

          (c)   upon the occurrence and during the continuance of an Event of
Default, to receive, endorse and collect any instruments made payable to
Pledgor representing any dividend, principal or interest payment or other
distribution in respect of the Pledged Collateral or any part thereof and to
give full discharge for the same; and

          (d)   upon the occurrence and during the continuance of an Event of
Default, to file any claims or take any action or institute any proceedings
that Secured Party may deem necessary or desirable for the collection of any
of the Pledged Collateral or otherwise to enforce the rights of Secured Party
with respect to any of the Pledged Collateral.

          SECTION 9.  SECURED PARTY MAY PERFORM.  If Pledgor fails to perform
any agreement contained herein, Secured Party may itself perform, or cause
performance of, such agreement, and the expenses of Secured Party incurred in
connection therewith shall be payable by Pledgor under SECTION 14(b).

                                      I-7


          SECTION 10.  STANDARD OF CARE.  The powers conferred on Secured
Party hereunder are solely to protect its interest in the Pledged Collateral
and shall not impose any duty upon it to exercise any such powers.  Except
for the exercise of reasonable care in the custody of any Pledged Collateral
in its possession and the accounting for moneys actually received by it
hereunder, Secured Party shall have no duty as to any Pledged Collateral, it
being understood that Secured Party shall have no responsibility for (a)
ascertaining or taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relating to any Pledged Collateral,
whether or not Secured Party has or is deemed to have knowledge of such
matters, (b) taking any necessary steps (other than steps taken in accordance
with the standard of care set forth above to maintain possession of the
Pledged Collateral) to preserve rights against any parties with respect to
any Pledged Collateral, (c) taking any necessary steps to collect or realize
upon the Secured Obligations or any guarantee therefor, or any part thereof,
or any of the Pledged Collateral, or (d) initiating any action to protect the
Pledged Collateral against the possibility of a decline in market value.
Secured Party shall be deemed to have exercised reasonable care in the
custody and preservation of Pledged Collateral in its possession if such
Pledged Collateral is accorded treatment substantially equal to that which
Secured Party accords its own property consisting of negotiable securities.

          SECTION 11.  REMEDIES.

          (a)   If any Event of Default shall have occurred and be
continuing, Secured Party may exercise in respect of the Pledged Collateral,
in addition to all other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies of a secured party on default
under the Uniform Commercial Code as in effect in any relevant jurisdiction
(the "CODE") (whether or not the Code applies to the affected Pledged
Collateral), and Secured Party may also in its sole discretion, without
notice except as specified below, sell the Pledged Collateral or any part
thereof in one or more parcels at public or private sale, at any exchange or
broker's board or at any of Secured Party's offices or elsewhere, for cash,
on credit or for future delivery, at such time or times and at such price or
prices and upon such other terms as are commercially reasonable.  Secured
Party or any Lender or Interest Rate Exchanger may be the purchaser of any or
all of the Pledged Collateral at any such sale and Secured Party, as agent
for and representative of Lenders and Interest Rate Exchangers (but not any
Lender or Lenders or Interest Rate Exchanger or Interest Rate Exchangers in
its or their respective individual capacities unless Required Lenders shall
otherwise agree in writing), shall be entitled, for the purpose of bidding
and making settlement or payment of the purchase price for all or any portion
of the Pledged Collateral sold at any such public sale, to use and apply any
of the Secured Obligations as a credit on account of the purchase price for
any Pledged Collateral payable by Secured Party at such sale.  Each purchaser
at any such sale shall hold the property sold absolutely free from any claim
or right on the part of Pledgor, and Pledgor hereby waives (to the extent
permitted by applicable law) all rights of redemption, stay and/or appraisal
which it now has or may at any time in the future have under any rule of law
or statute now existing or hereafter enacted.  Pledgor agrees that, to the
extent notice of sale shall be required by law, at least ten days' prior
written notice to Pledgor of the time and place of any public sale or the
time after which any private sale is to be made shall constitute reasonable
notification.  Secured Party shall not be obligated to make any sale of
Pledged Collateral regardless of notice of sale having been given.  Secured
Party may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may, without
further notice, be

                                      I-8


made at the time and place to which it was so adjourned.  Pledgor hereby
waives to the fullest extent permitted under applicable law any claims
against Secured Party arising by reason of the fact that the price at which
any Pledged Collateral may have been sold at such a private sale was less
than the price which might have been obtained at a public sale, even if
Secured Party accepts the first offer received and does not offer such
Pledged Collateral to more than one offeree. If the proceeds of any sale or
other disposition of the Pledged Collateral are insufficient to pay all the
Secured Obligations, Pledgor shall be liable for the deficiency, including
the fees of any attorneys employed by Secured Party to collect such
deficiency.

          (b)   Pledgor recognizes that, by reason of certain prohibitions
contained in the Securities Act of 1933, as amended from time to time, (the
"SECURITIES ACT"), and applicable state securities laws, Secured Party may be
compelled, with respect to any sale of all or any part of the Pledged
Collateral conducted without prior registration or qualification of such
Pledged Collateral under the Securities Act and/or such state securities
laws, to limit purchasers to those who will agree, among other things, to
acquire the Pledged Collateral for their own account, for investment and not
with a view to the distribution or resale thereof.  Pledgor acknowledges that
any such private sales may be at prices and on terms less favorable than
those obtainable through a public sale without such restrictions (including a
public offering made pursuant to a registration statement under the
Securities Act) and, notwithstanding such circumstances and the registration
rights granted to Secured Party by Pledgor pursuant to SECTION 12, Pledgor
agrees that any such private sale shall not be considered not to have been
made in a commercially reasonable manner solely by reason that Secured Party
shall not have effected a public sale and that Secured Party shall have no
obligation to engage in public sales and no obligation to delay the sale of
any Pledged Collateral for the period of time necessary to permit the issuer
thereof to register it for a form of public sale requiring registration under
the Securities Act or under applicable state securities laws, even if such
issuer would, or should, agree to so register it.

          (c)   If Secured Party determines to exercise its right to sell any
or all of the Pledged Collateral, upon written request, Pledgor shall and
shall cause each issuer of any Pledged Shares to be sold hereunder from time
to time to furnish to Secured Party all such information as Secured Party may
request in order to determine the number of shares and other instruments
included in the Pledged Collateral which may be sold by Secured Party in
exempt transactions under the Securities Act and the rules and regulations of
the Securities and Exchange Commission thereunder, as the same are from time
to time in effect.

          SECTION 12.  REGISTRATION RIGHTS.  If Secured Party shall determine
to exercise its right to sell all or any of the Pledged Collateral pursuant
to SECTION 11, Pledgor agrees that, upon request of Secured Party (which
request may be made by Secured Party in its sole discretion), Pledgor will,
at its own expense:

          (a)   execute and deliver, and cause each issuer of the Pledged
Collateral contemplated to be sold and the directors and officers thereof to
execute and deliver, all such instruments and documents, and do or cause to
be done all such other acts and things, as may be necessary or, in the
opinion of Secured Party, advisable to register such Pledged Collateral under
the provisions of the Securities Act and to cause the registration statement
relating thereto to become effective and to remain effective for such period
as prospectuses are required by law to be furnished, and to make all
amendments and supplements thereto and to the related prospectus

                                      I-9


which, in the opinion of Secured Party, are necessary or advisable, all in
conformity with the requirements of the Securities Act and the rules and
regulations of the Securities and Exchange Commission applicable thereto;

          (b)   use its best efforts to qualify the Pledged Collateral under
all applicable state securities or "BLUE SKY" laws and to obtain all
necessary governmental approvals for the sale of the Pledged Collateral, as
requested by Secured Party;

          (c)   cause each such issuer to make available to its security
holders, as soon as practicable, an earnings statement which will satisfy the
provisions of Section 11(a) of the Securities Act;

          (d)   do or cause to be done all such other acts and things as may
be necessary to make such sale of the Pledged Collateral or any part thereof
valid and binding and in compliance with applicable law; and

          (e)   bear all costs and expenses, including reasonable attorneys'
fees, of carrying out its obligations under this SECTION 12.

          Pledgor further agrees that a breach of any of the covenants
contained in this SECTION 12 will cause irreparable injury to Secured Party,
that Secured Party has no adequate remedy at law in respect of such breach
and, as a consequence, that, to the fullest extent permitted under applicable
law, each and every covenant contained in this SECTION 12 shall be
specifically enforceable against Pledgor, and Pledgor hereby, to the fullest
extent permitted under applicable law waives and agrees not to assert any
defenses against an action for specific performance of such covenants except
for a defense that no default has occurred giving rise to the Secured
Obligations becoming due and payable prior to their stated maturities.
Nothing in this SECTION 12 shall in any way alter the rights of Secured Party
under SECTION 11.

          SECTION 13.  APPLICATION OF PROCEEDS. Except as expressly provided
elsewhere in this Agreement, all proceeds received by Secured Party in
respect of any sale of, collection from, or other realization upon all or any
part of the Pledged Collateral may, in the discretion of Secured Party, be
held by Secured Party as Pledged Collateral for, and/or then, or at any time
thereafter, applied in full or in part by Secured Party against, the Secured
Obligations in the following order of priority:

          FIRST:  To the payment of all costs and expenses of such sale,
          collection or other realization, including reasonable compensation to
          Secured Party and any Lender or Interest Rate Exchanger and its agents
          and counsel, and all other expenses, liabilities and advances made or
          incurred by Secured Party and any Lender or Interest Rate Exchanger in
          connection therewith, and all amounts for which Secured Party and any
          Lender or Interest Rate Exchanger is entitled to indemnification
          hereunder and all advances made by Secured Party or any Lender or
          Interest Rate Exchanger hereunder for the account of Pledgor, and to
          the payment of all costs and expenses paid or incurred by Secured
          Party or any Lender or Interest Rate Exchanger in connection with the
          exercise of any right or remedy hereunder, all in accordance with
          Section 14;

                                      I-10


          SECOND:  To the payment of all other Secured Obligations for the
          ratable benefit of the holders thereof; and

          THIRD:  To the payment to or upon the order of Pledgor, or to
          whosoever may be lawfully entitled to receive the same or as a court
          of competent jurisdiction may direct, of any surplus then remaining
          from such proceeds.

          SECTION 14.  INDEMNITY AND EXPENSES.  Without limiting the
generality of subsections 11.3 and 11.4 of the Credit Agreement, in the event
of any public sale described in SECTION 12, Pledgor agrees to indemnify and
hold harmless Secured Party, and each Lender and each of their respective
directors, officers, employees and agents from and against any loss, fee,
cost, expense, damage, liability or claim, joint or several, to which any
such Persons may become subject or for which any of them may be liable,
(other than any losses, fees, costs, expenses, damages, liabilities or claims
resulting from the gross negligence or willful misconduct of Secured Party or
any Lender) or the inclusion in any preliminary prospectus, registration
statement, prospectus or other document published or filed in connection with
such public sale, or any amendment or supplement thereto, of any information
that relates to Secured Party or such Lender and was supplied by Secured
Party or such Lender for use therein, under the Securities Act or otherwise,
insofar as such losses, fees, costs, expenses, damages, liabilities or claims
(or any litigation commenced or threatened in respect thereof) arise out of
or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus, registration
statement, prospectus or other such document published or filed in connection
with such public sale, or any amendment or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse Secured Party and such
other Persons for any legal or other expenses reasonably incurred by Secured
Party and such other Persons in connection with any litigation, of any nature
whatsoever, commenced or threatened in respect thereof (including any and all
fees, costs and expenses whatsoever reasonably incurred by Secured Party and
such other Persons and counsel for Secured Party and such other Persons in
investigating, preparing for, defending against or providing evidence,
producing documents or taking any other action in respect of, an such
commenced or threatened litigation or any claims asserted).  This indemnity
shall be in addition to any liability which Pledgor may otherwise have and
shall extend upon the same terms and conditions to each Person, if any, that
controls Secured Party or such Persons within the meaning of the Securities
Act.

          SECTION 15.  CONTINUING SECURITY INTEREST; TRANSFER OF LOANS.  This
Agreement shall create a continuing security interest in the Pledged Collateral
and shall, except as otherwise expressly set forth herein, (a) remain in full
force and effect until the payment in full of all Secured Obligations (other
than any contingent indemnity or expense reimbursement claims that have yet to
be claimed), the cancellation or termination of the Commitments and the
cancellation, expiration or cash collateralization of all outstanding Letters of
Credit, (b) be binding upon Pledgor, its successors and assigns, and (c) inure,
together with the rights and remedies of Secured Party hereunder, to the benefit
of Secured Party and its successors, transferees and assigns.  Without limiting
the generality of the foregoing clause (c), but subject to the provisions of
subsections 11.10 and 11.11 of the Credit Agreement, any Lender may assign or
otherwise transfer any Loans held by it to any other Person, and such other
Person shall

                                    I-11



thereupon become vested with all the benefits in respect thereof granted to
Lenders herein or otherwise.  Upon the payment in full of all Secured
Obligations (other than any contingent indemnity or expense reimbursement
claims which at the time of such payment have yet to be claimed), the
cancellation or termination of the Commitments and the cancellation,
expiration or cash collateralization of all outstanding Letters of Credit,
the security interest granted hereby shall terminate and all rights to the
Pledged Collateral shall revert to Pledgor.  Upon any such termination
Secured Party will, at Pledgor's expense, execute and deliver to Pledgor such
documents as Pledgor shall reasonably request to evidence such termination
and Pledgor shall be entitled to the return, upon its request and at its
expense, against receipt and without recourse to Secured Party, of such of
the Pledged Collateral as shall not have been sold in accordance with this
Agreement or otherwise applied pursuant to the terms hereof.

          SECTION 16.  SECURED PARTY AS ADMINISTRATIVE AGENT.

          (a)   Secured Party has been appointed to act as Secured Party
hereunder by Lenders and, by their acceptance of the benefits hereof,
Interest Rate Exchangers.  Secured Party shall be obligated, and shall have
the right hereunder, to make demands, to give notices, to exercise or refrain
from exercising any rights, and to take or refrain from taking any action
(including the release or substitution of Pledged Collateral), solely in
accordance with this Agreement and the Credit Agreement; PROVIDED that
Secured Party shall exercise, or refrain from exercising, any remedies
provided for in SECTION 11 in accordance with the instructions of (i)
Required Lenders or (ii) after payment in full of all Obligations under the
Credit Agreement and the other Loan Documents, the holders of a majority of
the aggregate notional amount under all Lender Interest Rate Agreements
(Required Lenders or, if applicable, such holders being referred to herein as
"REQUISITE OBLIGEES").  In furtherance of the foregoing provisions of this
SECTION 16(a), each Interest Rate Exchanger, by its acceptance of the
benefits hereof, agrees that it shall have no right individually to realize
upon any of the Pledged Collateral hereunder, it being understood and agreed
by such Interest Rate Exchanger that all rights and remedies hereunder may be
exercised solely by Secured Party for the benefit of Lenders and Interest
Rate Exchangers in accordance with the terms of this SECTION 16(a).

          (b)   Secured Party shall at all times be the same Person that is
Administrative Agent under the Credit Agreement.  Written notice of
resignation by Administrative Agent pursuant to subsection 9.4 of the Credit
Agreement shall also constitute notice of resignation as Secured Party under
this Agreement, and appointment of a successor Administrative Agent pursuant
to subsection 9.4 of the Credit Agreement shall also constitute appointment
of a successor Secured Party under this Agreement.  Upon the acceptance of
any appointment as Administrative Agent under subsection 9.4 of the Credit
Agreement by a successor Administrative Agent, that successor Administrative
Agent shall thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Secured Party under this
Agreement, and the retiring Secured Party under this Agreement shall promptly
(i) transfer to such successor Secured Party all sums, securities and other
items of Collateral held hereunder, together with all records and other
documents necessary or appropriate in connection with the performance of the
duties of the successor Secured Party under this Agreement, and (ii) execute
and deliver to such successor Secured Party such amendments to financing
statements, and take such other actions, as may be necessary or appropriate
in connection with the assignment to such successor Secured Party of the
security interests created hereunder,

                                     I-12



whereupon such retiring Secured Party shall be discharged from its duties and
obligations under this Agreement.  After any retiring Administrative Agent's
resignation hereunder as Secured Party, the provisions of this Agreement
shall inure to its benefit as to any actions taken or omitted to be taken by
it under this Agreement while it was Secured Party hereunder.

          SECTION 17.  AMENDMENTS; ETC.  No amendment, modification,
termination or waiver of any provision of this Agreement, and no consent to
any departure by Pledgor therefrom, shall in any event be effective unless
the same shall be in writing and signed by Secured Party and, in the case of
any such amendment or modification, by Pledgor.  Any such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which it was given.

          SECTION 18.  NOTICES.  Any notice or other communication herein
required or permitted to be given shall be in writing or by facsimile and
addressed, delivered or transmitted to such party at its address as set forth
under such party's name on the signature block hereof or at such other
address or facsimile number as may be designated by such party in a written
notice delivered to the other parties.  Any notice, if mailed and properly
addressed with postage prepaid or if properly addressed and sent by pre-paid
courier service, shall be deemed given when received; any notice, if
transmitted by facsimile, shall be deemed given when transmitted (and
telephonic confirmation of receipt thereof has been received).

          SECTION 19.  FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE.
No failure or delay on the part of Secured Party in the exercise of any
power, right or privilege hereunder shall impair such power, right or
privilege or be construed to be a waiver of any default or acquiescence
therein, nor shall any single or partial exercise of any such power, right or
privilege preclude any other or further exercise thereof or of any other
power, right or privilege. All rights and remedies existing under this
Agreement are cumulative to, and not exclusive of, any rights or remedies
otherwise available.

          SECTION 20.  SEVERABILITY.  In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

          SECTION 21.  HEADINGS.  Section and subsection headings in this
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose or be given any
substantive effect.

          SECTION 22.  GOVERNING LAW; TERMS.  THIS AGREEMENT AND THE RIGHTS
AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
NEW YORK (INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE
STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES, EXCEPT TO
THE EXTENT THAT THE UNIFORM COMMERCIAL CODE PROVIDES THAT THE PERFECTION OF
THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY
PARTICULAR PLEDGED COLLATERAL ARE GOVERNED BY THE LAWS OF A

                                       I-13



JURISDICTION OTHER THAN THE STATE OF NEW YORK.  Unless otherwise defined
herein or in the Credit Agreement, terms used in Articles 8 and 9 of the
Uniform Commercial Code in the State of New York are used herein as therein
defined.

          SECTION 23.  COUNTERPARTS.  This Agreement may be executed in one
or more counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document.

                     [Remainder of page intentionally left blank]















                                        I-14



     IN WITNESS WHEREOF, Pledgor and Secured Party have caused this Agreement
to be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.

                              MERRILL CORPORATION

                              By:
                                 -----------------------------

                              Name:
                                   ---------------------------

                              Title:
                                    --------------------------






                                     S-1



                              U.S. BANK NATIONAL ASSOCIATION,
                              as Secured Party


                              By:
                                 -----------------------------

                              Name:
                                   ---------------------------

                              Title:
                                    --------------------------






                                       S-2




                                   SCHEDULE I

     Attached to and forming a part of the Pledge Agreement dated as of
November 23, 1999 between Merrill Corporation, as Pledgor, and U.S. Bank
National Association, as Secured Party.

                                     Part A



- ----------------------------------------------------------------------------
              Issuer of Limited Liability      Certificate
Pledgor       Company Interests                Nos.           Description
- -------       ---------------------------      -----------    -----------
                                                     
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------




                                       Part B



- ----------------------------------------------------------------------------
Debt Issuer                      Amount of Indebtedness
- -----------                      ----------------------
                              
- ----------------------------------------------------------------------------

- ----------------------------------------------------------------------------






                                    Schedule I-1




                                    SCHEDULE II

                                  PLEDGE AMENDMENT

     This Pledge Amendment, dated ____________, ____, is delivered pursuant to
SECTION 6(b) of the Pledge Agreement referred to below.  The undersigned hereby
agrees that this Pledge Amendment may be attached to the Pledge Agreement dated
November 23, 1999, between the undersigned and U.S. Bank National Association,
as Secured Party (the "PLEDGE AGREEMENT," capitalized terms defined therein
being used herein as therein defined), and that the [Pledged Shares] [Pledged
Debt] listed on this Pledge Amendment shall be deemed to be part of the [Pledged
Shares] [Pledged Debt] and shall become part of the Pledged Collateral and shall
secure all Secured Obligations.

                              MERRILL CORPORATION




                              By:
                                 --------------------------------

                              Name:
                                   ------------------------------

                              Title:
                                    -----------------------------







                                 Schedule II-1






                  Class of
                  Stock or                                      Percentage of
                  Limited                                       Issued and
                  Liability                                     Outstanding
                  Company    Certificate             Number of  Shares of
Pledgor  Issuer   Interest   Nos.         Par Value  Shares     Relevant Class
- -------- -------  ---------  -----------  ---------  ---------  ---------------
                                              











                                 Schedule II-2





Debt Issuer                        Amount of Indebtedness
- -----------                        ----------------------
                                












                                 Schedule II-3



                                    EXHIBIT G-2

                        FORM OF SUBSIDIARY PLEDGE AGREEMENT

          This SUBSIDIARY PLEDGE AGREEMENT (this "AGREEMENT") is dated as of
November 23, 1999 and entered into by and among each of the pledgors set forth
on the signature pages hereof (each, a "PLEDGOR" and, collectively, the
"PLEDGORS") and U.S. Bank National Association, as Administrative Agent for and
representative of (in such capacity herein called "SECURED PARTY") the financial
institutions ("LENDERS") party to the Credit Agreement referred to below and any
Interest Rate Exchangers (as hereinafter defined).

                                PRELIMINARY STATEMENTS

          A.    The Pledgors are the legal and beneficial owner of (i) the
shares of stock (the "PLEDGED SHARES") described as being owned by them in
Part A of SCHEDULE I annexed hereto and issued by the corporations named
therein and (ii) the indebtedness (the "PLEDGED DEBT") described as being
owned by them in Part B of said SCHEDULE I and issued by the obligors named
therein.

          B.    Secured Party, Lenders and certain other parties have entered
into a Credit Agreement dated as of November 23, 1999 (said Credit Agreement,
as it may hereafter be amended, supplemented or otherwise modified from time
to time, being the "CREDIT AGREEMENT", the terms defined therein and not
otherwise defined herein being used herein as therein defined) with Merrill
Communications LLC, a Delaware limited liability company (the "COMPANY"),
Merrill Corporation, a Minnesota corporation, as guarantor ("HOLDCO"),
pursuant to which Lenders have made certain commitments, subject to the terms
and conditions set forth in the Credit Agreement, to extend certain credit
facilities to Company.

          C.    Company may from time to time enter, or may from time to time
have entered, into one or more Rate Protection Agreements (collectively, the
"LENDER INTEREST RATE AGREEMENTS") with one or more Lenders or their
affiliates (in such capacity, collectively, "INTEREST RATE EXCHANGERS").

          D.    Pledgors have executed and delivered that certain Subsidiary
Guaranty dated as of November 23, 1999 (said Subsidiary Guaranty, as it may
hereafter be amended, supplemented or otherwise modified from time to time,
being the "GUARANTY") in favor of Secured Party for the benefit of Lenders
and any Interest Rate Exchangers, pursuant to which Pledgors have guarantied
the prompt payment and performance when due of all obligations of Company
under the Credit Agreement and all obligations of Company under the Lender
Interest Rate Agreements, including the obligation of Company to make
payments thereunder in the event of early termination thereof.

          E.    It is a condition precedent to the extensions of credit by
Lenders under the Credit Agreement that Pledgors shall have granted the
security interests and undertaken the obligations contemplated by this
Agreement.

          NOW, THEREFORE, in consideration of the premises and in order to
induce Lenders to make Loans and other extensions of credit under the Credit
Agreement and to induce

                                     G2-1



Interest Rate Exchangers to enter into Lender Interest Rate Agreements, and
for other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, each Pledgor hereby agrees with Secured Party as
follows:

          SECTION 1.  PLEDGE OF SECURITY.  Each Pledgor hereby pledges and
assigns to Secured Party, and hereby grants to Secured Party a security
interest in, all of such Pledgor's right, title and interest in and to the
following (the "PLEDGED COLLATERAL"):

          (a)   the Pledged Shares and the certificates representing the
Pledged Shares and any interest of such Pledgor in the entries on the books
of any securities intermediary pertaining to the Pledged Shares, and all
dividends, cash, warrants, rights, instruments and other property or proceeds
from time to time received, receivable or otherwise distributed in respect of
or in exchange for any or all of the Pledged Shares;

          (b)   the Pledged Debt and the instruments evidencing the Pledged
Debt, and all interest, cash, instruments and other property or proceeds from
time to time received, receivable or otherwise distributed in respect of or
in exchange for any or all of the Pledged Debt;

          (c)   all additional shares of, and all securities convertible into
and warrants, options and other rights to purchase or otherwise acquire,
stock of any issuer of the Pledged Shares from time to time acquired by
Pledgor in any manner (which shares shall be deemed to be part of the Pledged
Shares), the certificates or other instruments representing such additional
shares, securities, warrants, options or other rights and any interest of
such Pledgor in the entries on the books of any securities intermediary
pertaining to such additional shares, and all dividends, cash, warrants,
rights, instruments and other property or proceeds from time to time
received, receivable or otherwise distributed in respect of or in exchange
for any or all of such additional shares, securities, warrants, options or
other rights; PROVIDED HOWEVER that the Pledged Collateral shall not include
any such additional shares of stock of any Restricted Subsidiary that is a
Non-U.S. Subsidiary if such additional shares would cause the number of
shares of such Non-U.S. Subsidiary pledged hereunder to exceed 65% of the
issued and outstanding shares of such Non-U.S. Subsidiary, unless there is a
change in United States federal and any similar state income tax laws such
that a pledge in excess of 65% would not result in a deemed dividend or other
adverse income tax consequences to Pledgor;

          (d)   all additional indebtedness from time to time owed to such
Pledgor by any obligor on the Pledged Debt and the instruments evidencing
such indebtedness, and all interest, cash, instruments and other property or
proceeds from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such indebtedness;

          (e)   all shares of, and all securities convertible into and
warrants, options and other rights to purchase or otherwise acquire, stock of
any Person that, after the date of this Agreement, becomes, as a result of
any occurrence, a direct Restricted Subsidiary of such Pledgor (which shares
shall be deemed to be part of the Pledged Shares), the certificates or other
instruments representing such shares, securities, warrants, options or other
rights and any interest of such Pledgor in the entries on the books of any
securities intermediary pertaining to such shares, and all dividends, cash,
warrants, rights, instruments and other property or proceeds from

                                    G2-2



time to time received, receivable or otherwise distributed in respect of or
in exchange for any or all of such shares, securities, warrants, options or
other rights;

          (f)   all indebtedness that is evidenced by an instrument or
certificate and is from time to time owed to such Pledgor by any Person that,
after the date of this Agreement, becomes, as a result of any occurrence, a
direct or indirect Restricted Subsidiary of such Pledgor, and all interest,
cash, instruments and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or
all of such indebtedness; and

          (g)   to the extent not covered by clauses (a) through (f) above,
all proceeds of any or all of the foregoing Pledged Collateral.  For purposes
of this Agreement, the term "PROCEEDS" includes whatever is receivable or
received when Pledged Collateral or proceeds are sold, exchanged, collected
or otherwise disposed of, whether such disposition is voluntary or
involuntary, and includes proceeds of any indemnity or guaranty payable to
the applicable Pledgor or Secured Party from time to time with respect to any
of the Pledged Collateral.

          SECTION 2.  SECURITY FOR OBLIGATIONS.  The agreements of each
Pledgor under this Agreement secure, and the Pledged Collateral of such
Pledgor is collateral security for, the prompt payment or performance in full
when due, whether at stated maturity, by required prepayment, declaration,
acceleration, demand or otherwise (including the payment of amounts that
would become due but for the operation of the automatic stay under Section
362(a) of the Bankruptcy Code, 11 U.S.C. Section  362(a)), of all obligations
and liabilities of every nature of such Pledgor now or hereafter existing
under or arising out of or in connection with the Guaranty and all extensions
or renewals thereof, whether for principal, interest (including interest
that, but for the filing of a petition in bankruptcy with respect to Company,
would accrue on such obligations, whether or not a claim is allowed against
Company for such interest in the related bankruptcy proceeding),
reimbursement of amounts drawn under Letters of Credit, payments for early
termination of Lender Interest Rate Agreements, fees, expenses, indemnities
or otherwise, whether voluntary or involuntary, direct or indirect, absolute
or contingent, liquidated or unliquidated, whether or not jointly owed with
others, and whether or not from time to time decreased or extinguished and
later increased, created or incurred, and all or any portion of such
obligations or liabilities that are paid, to the extent all or any part of
such payment is avoided or recovered directly or indirectly from Secured
Party or any Lender or Interest Rate Exchanger as a preference, fraudulent
transfer or otherwise, and all obligations of every nature of Pledgor now or
hereafter existing under this Agreement (all such obligations of such Pledgor
being such Pledgor's "SECURED OBLIGATIONS").

          SECTION 3.  DELIVERY OF PLEDGED COLLATERAL.  All certificates or
instruments representing or evidencing the Pledged Collateral shall be
delivered to and held by or on behalf of Secured Party pursuant hereto and
shall be in suitable form for transfer by delivery or, as applicable, shall
be accompanied by the applicable Pledgor's endorsement, where necessary, or
duly executed instruments of transfer or assignment in blank, all in form and
substance reasonably satisfactory to Secured Party.  Upon the occurrence and
during the continuation of an Event of Default  Secured Party shall have the
right, without notice to the applicable Pledgor, to transfer to or to
register in the name of Secured Party or any of its nominees any or all of
such Pledgor's Pledged Collateral, subject only to the revocable rights
specified in SECTION 7(a).

                                     G2-3



          SECTION 4.  REPRESENTATIONS AND WARRANTIES.  Each Pledgor represents
and warrants as follows:

          (a)   DUE AUTHORIZATION, ETC. OF PLEDGED COLLATERAL.  All of the
Pledged Shares owned by such Pledgor have been duly authorized and validly
issued and are fully paid and non-assessable.  All of the Pledged Debt owned
by such Pledgor has been duly authorized, authenticated or issued, and
delivered and is the legal, valid and binding obligation of the issuers
thereof and is not in default.

          (b)   DESCRIPTION OF PLEDGED COLLATERAL. The Pledged Shares
constitute the percentage of the issued and outstanding shares of stock of
the respective issuers thereof as is set forth for such Pledgor in Part A of
Schedule I annexed hereto, as supplemented from time to time pursuant to
Section 6(b) or as amended to reflect the designation of a Restricted
Subsidiary as an Unrestricted Subsidiary pursuant to Section 5(a), and all of
such stock as is owned by such Pledgor except in the case of any issuer that
is a Non-U.S. Subsidiary, in which case the Pledged Shares of such Pledgor
(together with all other Pledged Shares of any other Pledgor) do not
constitute more than 65% of the issued and outstanding shares of such issuer,
unless there is a change in United States federal and any similar state
income tax laws such that a pledge in excess of 65% would not result in a
deemed dividend or other adverse income tax consequences to any Pledgor, in
which case the Pledged Shares of such Pledgor shall constitute all of such
shares owned by such Pledgor, and there are no outstanding warrants, options
or other rights to purchase, or other agreements outstanding with respect to,
or property that is now or hereafter convertible into, or that requires the
issuance or sale of, any Pledged Shares owned by such Pledgor.  The Pledged
Debt of such Pledgor constitutes all of the issued and outstanding
intercompany indebtedness evidenced by a promissory note of the respective
issuers thereof owing to such Pledgor.

          (c)   OWNERSHIP OF PLEDGED COLLATERAL.  Pledgor is the legal,
record and beneficial owner of such Pledgor's Pledged Collateral free and
clear of any Lien except for Liens permitted under Section 7.2.3 of the
Credit Agreement ("PERMITTED LIENS").

          SECTION 5.  TRANSFERS AND OTHER LIENS; ADDITIONAL PLEDGED
COLLATERAL; ETC.  Each Pledgor shall:

          (a)   not, except as expressly permitted by the Credit Agreement,
(i) sell, assign (by operation of law or otherwise) or otherwise dispose of,
or grant any option with respect to, any of its Pledged Collateral, (ii)
create or suffer to exist any Lien upon or with respect to any of its Pledged
Collateral, except for Permitted Liens, or (iii) permit any issuer of its
Pledged Shares to merge or consolidate unless all the outstanding capital
stock of the surviving or resulting corporation is, upon such merger or
consolidation, pledged hereunder and no cash, securities or other property is
distributed in respect of the outstanding shares of any other constituent
corporation; PROVIDED that in the event a Restricted Subsidiary becomes an
Unrestricted Subsidiary, Secured Party shall release the Pledged Shares of
such Unrestricted Subsidiary to Pledgor free and clear of the lien and
security interest under this Agreement; and PROVIDED that in the event such
Pledgor makes a disposition of assets permitted by the Credit Agreement (an
"ASSET SALE") and the assets subject to such Asset Sale are Pledged Shares,
Secured Party shall release the Pledged Shares that are the subject of such
Asset Sale to the applicable Pledgor free

                                    G2-4



and clear of the lien and security interest under this Agreement concurrently
with the consummation of such Asset Sale;

          (b)   (i) pledge hereunder, within the period set forth in Section
6(b) after its acquisition (directly or indirectly) thereof, any and all
additional shares of stock or other securities of each issuer of its Pledged
Shares; PROVIDED that such Pledgor shall not be required to pledge hereunder
issued and outstanding shares of stock of any such issuer that is a Non-U.S.
Subsidiary if the Pledged Shares of such Pledgor issued by such issuer,
together with the Pledged Shares of all other Pledgors issued by such issuer,
would exceed 65% of the issued and outstanding shares of stock of such
issuer, unless there is a change in United States federal and any similar
state income tax laws such that a pledge in excess of 65% would not result in
a deemed dividend or other adverse income tax consequences to any Pledgor,
and (ii) pledge hereunder, within the period set forth in Section 6(b) after
its acquisition (directly or indirectly) thereof, any and all shares of stock
of any Person that, after the date of this Agreement, becomes, as a result of
any occurrence, a direct Restricted Subsidiary of such Pledgor; and

          (c)   (i) pledge hereunder, within the period set forth in Section
6(b) after their issuance, any and all instruments or other evidences of
additional indebtedness from time to time owed to such Pledgor by any obligor
on the Pledged Debt, and (ii) pledge hereunder, within the period set forth
in Section 6(b) after their issuance, any and all instruments or other
evidences of indebtedness from time to time owed to such Pledgor by any
Person that after the date of this Agreement becomes, as a result of any
occurrence, a direct or indirect Restricted Subsidiary of Pledgor.

          SECTION 6.  FURTHER ASSURANCES; PLEDGE AMENDMENTS.

          (a)   Each Pledgor agrees that from time to time, at the expense of
such Pledgor, such Pledgor will promptly execute and deliver all further
instruments and documents, and take all further action, that may be necessary
or desirable, or that Secured Party may reasonably request, in order to
perfect and protect any security interest granted or purported to be granted
hereby by such Pledgor or to enable Secured Party to exercise and enforce its
rights and remedies hereunder with respect to any Pledged Collateral of such
Pledgor. Without limiting the generality of the foregoing, each Pledgor will:
(i) execute and file such financing or continuation statements, or amendments
thereto, and such other instruments or notices, as may be necessary or
desirable, or as Secured Party may reasonably request, in order to perfect
and preserve the security interests granted or purported to be granted hereby
by such Pledgor and (ii) at Secured Party's request, appear in and defend any
action or proceeding that may affect such Pledgor's title to or Secured
Party's security interest in all or any part of its Pledged Collateral.

          (b)   Each Pledgor further agrees that it will, upon obtaining any
additional shares of stock or other securities required to be pledged
hereunder as provided in SECTION 5(b) or (c), promptly (and in any event
within ten Business Days) deliver to Secured Party a Pledge Amendment, duly
executed by such Pledgor, in substantially the form of SCHEDULE II annexed
hereto (a "PLEDGE AMENDMENT"), in respect of the additional Pledged Shares or
Pledged Debt to be pledged by such Pledgor pursuant to this Agreement.  Each
Pledgor hereby authorizes Secured Party to attach each of its Pledge
Amendments to this Agreement and agrees that all Pledged Shares or Pledged
Debt listed on any of its Pledge Amendments delivered to Secured

                                       G2-5



Party shall for all purposes hereunder be considered Pledged Collateral;
PROVIDED that the failure of any Pledgor to execute a Pledge Amendment with
respect to any additional Pledged Shares or Pledged Debt pledged by it
pursuant to this Agreement shall not impair the security interest of Secured
Party therein or otherwise adversely affect the rights and remedies of
Secured Party hereunder with respect thereto.

          SECTION 7.  VOTING RIGHTS; DIVIDENDS; ETC.

          (a)   So long as no Event of Default shall have occurred and be
continuing:

          (i)   each Pledgor shall be entitled to exercise any and all voting
          and other consensual rights pertaining to its Pledged Collateral or
          any part thereof for any purpose not inconsistent with the terms of
          this Agreement or the Credit Agreement;

          (ii)  each Pledgor shall be entitled to receive and retain, and to
          utilize free and clear of the lien of this Agreement, any and all
          dividends and interest paid in respect of its Pledged Collateral; and

          (iii) Secured Party shall promptly execute and deliver (or cause to be
          executed and delivered) to each Pledgor all such proxies, dividend
          payment orders and other instruments as such Pledgor may from time to
          time reasonably request for the purpose of enabling such Pledgor to
          exercise the voting and other consensual rights which it is entitled
          to exercise pursuant to paragraph (i) above and to receive the
          dividends, principal or interest payments which it is authorized to
          receive and retain pursuant to paragraph (ii) above.

          (b)   Upon the occurrence and during the continuation of an Event of
Default:

          (i)   upon written notice from Secured Party to any Pledgor, all
          rights of such Pledgor to exercise the voting and other consensual
          rights which it would otherwise be entitled to exercise pursuant to
          SECTION 7(a)(i) shall cease, and all such rights shall thereupon
          become vested in Secured Party who shall thereupon have the sole right
          to exercise such voting and other consensual rights;

          (ii)  all rights of such Pledgor to receive the dividends and interest
          payments which it would otherwise be authorized to receive and retain
          pursuant to SECTION 7(a)(ii) shall cease, and all such rights shall
          thereupon become vested in Secured Party who shall thereupon have the
          sole right to receive and hold as Pledged Collateral such dividends
          and interest payments; and

          (iii) all dividends, principal and interest payments which are
          received by such Pledgor contrary to the provisions of paragraph (ii)
          of this SECTION 7(b) shall be received in trust for the benefit of
          Secured Party, shall be segregated from other funds of such Pledgor
          and shall forthwith be paid over to Secured Party as Pledged
          Collateral in the same form as so received (with any necessary
          indorsements).

                                        G2-6



          (c)   In order to permit Secured Party to exercise the voting and
other consensual rights which it may be entitled to exercise pursuant to
SECTION 7(b)(i) and to receive all dividends and other distributions which it
may be entitled to receive under SECTION 7(b)(ii), (i) each Pledgor shall
promptly execute and deliver (or cause to be executed and delivered) to
Secured Party all such proxies, dividend payment orders and other instruments
as Secured Party may from time to time reasonably request and (ii) without
limiting the effect of the immediately preceding clause (i), each Pledgor
hereby grants to Secured Party an irrevocable proxy to vote its Pledged
Shares and to exercise all other rights, powers, privileges and remedies to
which a holder of such Pledged Shares would be entitled (including giving or
withholding written consents of shareholders, calling special meetings of
shareholders and voting at such meetings), which proxy shall be effective,
automatically and without the necessity of any action (including any transfer
of any such Pledged Shares on the record books of the issuer thereof) by any
other Person (including the issuer of such Pledged Shares or any officer or
agent thereof), upon the occurrence of an Event of Default and which proxy
shall only terminate upon the payment in full of the Secured Obligations of
such Pledgor.

          SECTION 8.  SECURED PARTY APPOINTED ATTORNEY-IN-FACT.  Each Pledgor
hereby irrevocably appoints Secured Party as such Pledgor's attorney-in-fact,
with full authority in the place and stead of such Pledgor and in the name of
such Pledgor, Secured Party or otherwise, from time to time in Secured
Party's discretion to take any action and to execute any instrument that
Secured Party may deem necessary or advisable to accomplish the purposes of
this Agreement, including:

          (a)   to file one or more financing or continuation statements, or
amendments thereto, relative to all or any part of the Pledged Collateral of
such Pledgor without the signature of such Pledgor;

          (b)   upon the occurrence and during the continuance of an Event of
Default, to ask, demand, collect, sue for, recover, compound, receive and
give acquittance and receipts for moneys due and to become due under or in
respect of any of its Pledged Collateral;

          (c)   upon the occurrence and during the continuance of an Event of
Default, to receive, endorse and collect any instruments made payable to such
Pledgor representing any dividend, principal or interest payment or other
distribution in respect of its Pledged Collateral or any part thereof and to
give full discharge for the same; and

          (d)   upon the occurrence and during the continuance of an Event of
Default, to file any claims or take any action or institute any proceedings
that Secured Party may deem necessary or desirable for the collection of any
of its Pledged Collateral or otherwise to enforce the rights of Secured Party
with respect to any of its Pledged Collateral.

          SECTION 9.  SECURED PARTY MAY PERFORM.  If any Pledgor fails to
perform any agreement contained herein, Secured Party may itself perform, or
cause performance of, such agreement, and the expenses of Secured Party
incurred in connection therewith shall be payable by such Pledgor under
SECTION 14(b).

                                     G2-7



          SECTION 10.  STANDARD OF CARE.  The powers conferred on Secured
Party hereunder are solely to protect its interest in the Pledged Collateral
and shall not impose any duty upon it to exercise any such powers.  Except
for the exercise of reasonable care in the custody of any Pledged Collateral
in its possession and the accounting for moneys actually received by it
hereunder, Secured Party shall have no duty as to any Pledged Collateral, it
being understood that Secured Party shall have no responsibility for (a)
ascertaining or taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relating to any Pledged Collateral,
whether or not Secured Party has or is deemed to have knowledge of such
matters, (b) taking any necessary steps (other than steps taken in accordance
with the standard of care set forth above to maintain possession of the
Pledged Collateral) to preserve rights against any parties with respect to
any Pledged Collateral, (c) taking any necessary steps to collect or realize
upon the Secured Obligations or any guarantee therefor, or any part thereof,
or any of the Pledged Collateral, or (d) initiating any action to protect the
Pledged Collateral against the possibility of a decline in market value.
Secured Party shall be deemed to have exercised reasonable care in the
custody and preservation of Pledged Collateral in its possession if such
Pledged Collateral is accorded treatment substantially equal to that which
Secured Party accords its own property consisting of negotiable securities.

          SECTION 11.  REMEDIES.

          (a)   If any Event of Default shall have occurred and be
continuing, Secured Party may exercise in respect of the Pledged Collateral
of any Pledgor, in addition to all other rights and remedies provided for
herein or otherwise available to it, all the rights and remedies of a secured
party on default under the Uniform Commercial Code as in effect in any
relevant jurisdiction (the "CODE") (whether or not the Code applies to the
affected Pledged Collateral of such Pledgor), and Secured Party may also in
its sole discretion, without notice except as specified below, sell the
Pledged Collateral of any Pledgor or any part thereof in one or more parcels
at public or private sale, at any exchange or broker's board or at any of
Secured Party's offices or elsewhere, for cash, on credit or for future
delivery, at such time or times and at such price or prices and upon such
other terms as are commercially reasonable.  Secured Party or any Lender or
Interest Rate Exchanger may be the purchaser of any or all of the Pledged
Collateral of any Pledgor at any such sale and Secured Party, as agent for
and representative of Lenders and Interest Rate Exchangers (but not any
Lender or Lenders or Interest Rate Exchanger or Interest Rate Exchangers in
its or their respective individual capacities unless Required Lenders shall
otherwise agree in writing), shall be entitled, for the purpose of bidding
and making settlement or payment of the purchase price for all or any portion
of the Pledged Collateral of any Pledgor sold at any such public sale, to use
and apply any of the Secured Obligations of such Pledgor as a credit on
account of the purchase price for any Pledged Collateral of such Pledgor
payable by Secured Party at such sale.  Each purchaser at any such sale shall
hold the property sold absolutely free from any claim or right on the part of
the applicable Pledgor, and each Pledgor hereby waives (to the extent
permitted by applicable law) all rights of redemption, stay and/or appraisal
which it now has or may at any time in the future have under any rule of law
or statute now existing or hereafter enacted.  Each Pledgor agrees that, to
the extent notice of sale shall be required by law, at least ten days' prior
written notice to such Pledgor of the time and place of any public sale or
the time after which any private sale is to be made shall constitute
reasonable notification.  Secured Party shall not be obligated to make any
sale of Pledged Collateral regardless of notice of sale having been given.
Secured Party may adjourn any public or private

                                     G2-8



sale from time to time by announcement at the time and place fixed therefor,
and such sale may, without further notice, be made at the time and place to
which it was so adjourned.  Each Pledgor hereby waives, to the fullest extent
permitted under applicable law, any claims against Secured Party arising by
reason of the fact that the price at which any Pledged Collateral of such
Pledgor may have been sold at such a private sale was less than the price
which might have been obtained at a public sale, even if Secured Party
accepts the first offer received and does not offer such Pledged Collateral
to more than one offeree. If the proceeds of any sale or other disposition of
the Pledged Collateral of any Pledgor are insufficient to pay all the Secured
Obligations of such Pledgor, such Pledgor shall be liable for the deficiency,
including the fees of any attorneys employed by Secured Party to collect such
deficiency.

          (b)   Each Pledgor recognizes that, by reason of certain
prohibitions contained in the Securities Act of 1933, as amended from time to
time (the "SECURITIES ACT"), and applicable state securities laws, Secured
Party may be compelled, with respect to any sale of all or any part of the
Pledged Collateral of such Pledgor conducted without prior registration or
qualification of such Pledged Collateral under the Securities Act and/or such
state securities laws, to limit purchasers to those who will agree, among
other things, to acquire such Pledged Collateral for their own account, for
investment and not with a view to the distribution or resale thereof.  Each
Pledgor acknowledges that any such private sales may be at prices and on
terms less favorable than those obtainable through a public sale without such
restrictions (including a public offering made pursuant to a registration
statement under the Securities Act) and, notwithstanding such circumstances
and the registration rights granted to Secured Party by such Pledgor pursuant
to SECTION 12, such Pledgor agrees that any such private sale shall not be
considered not to have been made in a commercially reasonable manner solely
by reason that Secured Party shall not have effected a public sale and that
Secured Party shall have no obligation to engage in public sales and no
obligation to delay the sale of any of its Pledged Collateral for the period
of time necessary to permit the issuer thereof to register it for a form of
public sale requiring registration under the Securities Act or under
applicable state securities laws, even if such issuer would, or should, agree
to so register it.

          (c)   If Secured Party determines to exercise its right to sell any
or all of the Pledged Collateral of any Pledgor, upon written request, such
Pledgor shall and shall cause each issuer of any of its Pledged Shares to be
sold hereunder from time to time to furnish to Secured Party all such
information as Secured Party may request in order to determine the number of
shares and other instruments included in such Pledged Collateral which may be
sold by Secured Party in exempt transactions under the Securities Act and the
rules and regulations of the Securities and Exchange Commission thereunder,
as the same are from time to time in effect.

          SECTION 12.  REGISTRATION RIGHTS.  If Secured Party shall determine
to exercise its right to sell all or any of the Pledged Collateral of any
Pledgor pursuant to SECTION 11, such Pledgor agrees that, upon request of
Secured Party (which request may be made by Secured Party in its sole
discretion), such Pledgor will, at its own expense:

          (a)   execute and deliver, and cause each issuer of such Pledgor's
Pledged Collateral contemplated to be sold and the directors and officers
thereof to execute and deliver, all such instruments and documents, and do or
cause to be done all such other acts and things, as may be necessary or, in
the opinion of Secured Party, advisable to register such Pledged

                                      G2-9



Collateral under the provisions of the Securities Act and to cause the
registration statement relating thereto to become effective and to remain
effective for such period as prospectuses are required by law to be
furnished, and to make all amendments and supplements thereto and to the
related prospectus which, in the opinion of Secured Party, are necessary or
advisable, all in conformity with the requirements of the Securities Act and
the rules and regulations of the Securities and Exchange Commission
applicable thereto;

          (b)   use its best efforts to qualify such Pledged Collateral under
all applicable state securities or "BLUE SKY" laws and to obtain all
necessary governmental approvals for the sale of such Pledged Collateral, as
requested by Secured Party;

          (c)   cause each such issuer to make available to its security
holders, as soon as practicable, an earnings statement which will satisfy the
provisions of Section 11(a) of the Securities Act;

          (d)   do or cause to be done all such other acts and things as may
be necessary to make such sale of such Pledged Collateral or any part thereof
valid and binding and in compliance with applicable law; and

          (e)   bear all costs and expenses, including reasonable attorneys'
fees, of carrying out its obligations under this SECTION 12.

          Each Pledgor further agrees that a breach of any of the covenants
contained in this SECTION 12 will cause irreparable injury to Secured Party,
that Secured Party has no adequate remedy at law in respect of such breach
and, as a consequence, that, to the fullest extent permitted under applicable
law, each and every covenant contained in this SECTION 12 shall be
specifically enforceable against such Pledgor, and such Pledgor hereby, to
the fullest extent permitted under applicable law, waives and agrees not to
assert any defenses against an action for specific performance of such
covenants except for a defense that no default has occurred giving rise to
the Secured Obligations becoming due and payable prior to their stated
maturities.  Nothing in this SECTION 12 shall in any way alter the rights of
Secured Party under SECTION 11.

          SECTION 13.  APPLICATION OF PROCEEDS. Except as expressly provided
elsewhere in this Agreement, all proceeds received by Secured Party in
respect of any sale of, collection from, or other realization upon all or any
part of the Pledged Collateral of any Pledgor may, in the discretion of
Secured Party, be held by Secured Party as Pledged Collateral of such Pledgor
for, and/or then, or at any time thereafter, applied in full or in part by
Secured Party against, the Secured Obligations of such Pledgor in the
following order of priority:

          FIRST:  To the payment of all costs and expenses of such sale,
          collection or other realization, including reasonable compensation to
          Secured Party and any Lender or Interest Rate Exchanger and its agents
          and counsel, and all other expenses, liabilities and advances made or
          incurred by Secured Party and any Lender or Interest Rate Exchanger in
          connection therewith, and all amounts for which Secured Party and any
          Lender or Interest Rate Exchanger is entitled to indemnification
          hereunder and all advances made by Secured Party and any Lender or
          Interest Rate Exchanger hereunder for the account of Pledgor, and to

                                          G2-10



          the payment of all costs and expenses paid or incurred by Secured
          Party and any Lender or Interest Rate Exchanger in connection with the
          exercise of any right or remedy hereunder, all in accordance with
          Section 14;

          SECOND:  To the payment of all other Secured Obligations of such
          Pledgor for the ratable benefit of the holders thereof; and

          THIRD:  To the payment to or upon the order of such Pledgor, or to
          whosoever may be lawfully entitled to receive the same or as a court
          of competent jurisdiction may direct, of any surplus then remaining
          from such proceeds.

          SECTION 14.  INDEMNITY AND EXPENSES.

          (a)   Pledgor shall pay to Secured Party to the extent set forth in
Section 2.8 of the Subsidiary Guaranty upon demand the amount of any and all
costs and expenses, including the reasonable fees and expenses of its counsel
and of any experts and agents, that Secured Party may incur in connection
with (i) the administration of this Agreement, (ii) the custody or
preservation of, or the sale of, collection from, or other realization upon,
any of the Pledged Collateral, (iii) the exercise or enforcement of any of
the rights of Secured Party hereunder, or (iv) the failure by Pledgor to
perform or observe any of the provisions hereof.

          (b)   In the event of any public sale described in SECTION 12 of
any Pledgor's Pledged Collateral, such Pledgor agrees to indemnify and hold
harmless Secured Party, and each Lender and each of their respective
directors, officers, employees and agents from and against any loss, fee,
cost, expense, damage, liability or claim, joint or several, to which any
such Persons may become subject or for which any of them may be liable (other
than any losses, fees, costs, expenses, damages, liabilities or claims
resulting from the gross negligence or willful misconduct of Secured Party or
any Lender) or the inclusion in any preliminary prospectus, registration
statement, prospectus or other document published or filed in connection with
such public sale, or any amendment or supplement thereto, of any information
that relates to Secured Party or such Lender and was supplied by Secured
Party or such Lender for use therein, under the Securities Act or otherwise,
insofar as such losses, fees, costs, expenses, damages, liabilities or claims
(or any litigation commenced or threatened in respect thereof) arise out of
or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus, registration
statement, prospectus or other such document published or filed in connection
with such public sale, or any amendment or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse Secured Party and such
other Persons for any legal or other expenses reasonably incurred by Secured
Party and such other Persons in connection with any litigation, of any nature
whatsoever, commenced or threatened in respect thereof (including any and all
fees, costs and expenses whatsoever reasonably incurred by Secured Party and
such other Persons and counsel for Secured Party and such other Persons in
investigating, preparing for, defending against or providing evidence,
producing documents or taking any other action in respect of, any such
commenced or threatened litigation or any claims asserted).  This indemnity
shall be in addition to any liability which any such Pledgor may otherwise
have and shall extend upon the same

                                    G2-11



terms and conditions to each Person, if any, that controls Secured Party or
such Persons within the meaning of the Securities Act.

          SECTION 15.  CONTINUING SECURITY INTEREST; TRANSFER OF LOANS.  This
Agreement shall create a continuing security interest in the Pledged
Collateral and shall, except as otherwise expressly set forth herein, (a)
remain in full force and effect until the payment in full of all Secured
Obligations (other than any contingent indemnity or expense reimbursement
claims that have yet to be claimed) of such Pledgor, the cancellation or
termination of the Commitments and the cancellation, expiration or cash
collateralization of all outstanding Letters of Credit, (b) be binding upon
each Pledgor, its successors and assigns, and (c) inure, together with the
rights and remedies of Secured Party hereunder, to the benefit of Secured
Party and its successors, transferees and assigns. Without limiting the
generality of the foregoing clause (c), but subject to the provisions of
subsections 11.10 and 11.11 of the Credit Agreement, any Lender may assign or
otherwise transfer any Loans held by it to any other Person, and such other
Person shall thereupon become vested with all the benefits in respect thereof
granted to Lenders herein or otherwise.  Upon the payment in full of all
Secured Obligations (other than any contingent indemnity or expense
reimbursement claims which at the time of such payment have yet to be
claimed), the cancellation or termination of the Commitments and the
cancellation, expiration or cash collateralization of all outstanding Letters
of Credit, the security interest granted hereby shall terminate and all
rights to the Pledged Collateral shall revert to the applicable Pledgor.
Upon any such termination Secured Party will, at the applicable Pledgor's
expense, execute and deliver to such Pledgor such documents as such Pledgor
shall reasonably request to evidence such termination and such Pledgor shall
be entitled to the return, upon its request and at its expense, against
receipt and without recourse to Secured Party, of such of such Pledgor's
Pledged Collateral as shall not have been sold in accordance with this
Agreement or otherwise applied pursuant to the terms hereof.

          SECTION 16.  SECURED PARTY AS ADMINISTRATIVE AGENT.

          (a)   Secured Party has been appointed to act as Secured Party
hereunder by Lenders and, by their acceptance of the benefits hereof,
Interest Rate Exchangers.  Secured Party shall be obligated, and shall have
the right hereunder, to make demands, to give notices, to exercise or refrain
from exercising any rights, and to take or refrain from taking any action
(including the release or substitution of Pledged Collateral), solely in
accordance with this Agreement and the Credit Agreement; PROVIDED that
Secured Party shall exercise, or refrain from exercising, any remedies
provided for in SECTION 11 in accordance with the instructions of (i)
Required Lenders or (ii) after payment in full of all Obligations under the
Credit Agreement and the other Loan Documents, the holders of a majority of
the aggregate notional amount under all Lender Interest Rate Agreements
(Required Lenders or, if applicable, such holders being referred to herein as
"REQUISITE OBLIGEES").  In furtherance of the foregoing provisions of this
SECTION 16(a), each Interest Rate Exchanger, by its acceptance of the
benefits hereof, agrees that it shall have no right individually to realize
upon any of the Pledged Collateral hereunder, it being understood and agreed
by such Interest Rate Exchanger that all rights and remedies hereunder may be
exercised solely by Secured Party for the benefit of Lenders and Interest
Rate Exchangers in accordance with the terms of this SECTION 16(a).

                                       G2-12



          (b)   Secured Party shall at all times be the same Person that is
Administrative Agent under the Credit Agreement.  Written notice of
resignation by Administrative Agent pursuant to subsection 9.4 of the Credit
Agreement shall also constitute notice of resignation as Secured Party under
this Agreement, and appointment of a successor Administrative Agent pursuant
to subsection 9.4 of the Credit Agreement shall also constitute appointment
of a successor Secured Party under this Agreement.  Upon the acceptance of
any appointment as Administrative Agent under subsection 9.4 of the Credit
Agreement by a successor Administrative Agent, that successor Administrative
Agent shall thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Secured Party under this
Agreement, and the retiring Secured Party under this Agreement shall promptly
(i) transfer to such successor Secured Party all sums, securities and other
items of Collateral held hereunder, together with all records and other
documents necessary or appropriate in connection with the performance of the
duties of the successor Secured Party under this Agreement, and (ii) execute
and deliver to such successor Secured Party such amendments to financing
statements, and take such other actions, as may be necessary or appropriate
in connection with the assignment to such successor Secured Party of the
security interests created hereunder, whereupon such retiring Secured Party
shall be discharged from its duties and obligations under this Agreement.
After any retiring Administrative Agent's resignation hereunder as Secured
Party, the provisions of this Agreement shall inure to its benefit as to any
actions taken or omitted to be taken by it under this Agreement while it was
Secured Party hereunder.

          SECTION 17.  AMENDMENTS; ETC.  No amendment, modification,
termination or waiver of any provision of this Agreement, and no consent to
any departure by any Pledgor therefrom, shall in any event be effective
unless the same shall be in writing and signed by Secured Party and, in the
case of any such amendment or modification, by the Pledgors.  Any such waiver
or consent shall be effective only in the specific instance and for the
specific purpose for which it was given.

          SECTION 18.  NOTICES.  Any notice or other communication herein
required or permitted to be given shall be in writing or by facsimile and
addressed, delivered or transmitted to such party at its address as set forth
under such party's name on the signature block hereof or at such other
address or facsimile number as may be designated by such party in a written
notice delivered to the other parties.  Any notice, if mailed and properly
addressed with postage prepaid or if properly addressed and sent by pre-paid
courier service, shall be deemed given when received; any notice, if
transmitted by facsimile, shall be deemed given when transmitted (and
telephonic confirmation of receipt thereof has been received).

          SECTION 19.  FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE.
No failure or delay on the part of Secured Party in the exercise of any
power, right or privilege hereunder shall impair such power, right or
privilege or be construed to be a waiver of any default or acquiescence
therein, nor shall any single or partial exercise of any such power, right or
privilege preclude any other or further exercise thereof or of any other
power, right or privilege. All rights and remedies existing under this
Agreement are cumulative to, and not exclusive of, any rights or remedies
otherwise available.

          SECTION 20.  SEVERABILITY.  In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and

                                     G2-13



enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.

          SECTION 21.  HEADINGS.  Section and subsection headings in this
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose or be given any
substantive effect.

          SECTION 22.  GOVERNING LAW; TERMS; RULES OF CONSTRUCTION.  THIS
AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE
GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO
CONFLICTS OF LAWS PRINCIPLES, EXCEPT TO THE EXTENT THAT THE UNIFORM
COMMERCIAL CODE PROVIDES THAT THE PERFECTION OF THE SECURITY INTEREST
HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR PLEDGED
COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF
NEW YORK.  Unless otherwise defined herein or in the Credit Agreement, terms
used in Articles 8 and 9 of the Uniform Commercial Code in the State of New
York are used herein as therein defined.

          SECTION 23.  CONSENT TO JURISDICTION AND SERVICE OF PROCESS.  ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH, THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE PARTIES
HERETO SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY (TO THE EXTENT PERMITTED
UNDER APPLICABLE LAW) IN THE COURTS OF THE STATE OF NEW YORK, NEW YORK
COUNTY, OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
NEW YORK; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY
COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE ADMINISTRATIVE AGENT'S
OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER
PROPERTY MAY BE FOUND. EACH PLEDGOR HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS
TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, NEW YORK COUNTY,
AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK
FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY
AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH SUCH
LITIGATION.  EACH PLEDGOR IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY
REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT
THE STATE OF NEW YORK.  EACH PLEDGOR HEREBY EXPRESSLY AND IRREVOCABLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR
HEREAFTER MAY HAVE TO THE LAYING OF VALUE OF ANY SUCH LITIGATION BROUGHT IN
ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM.

                                    G2-14



          NOTHING IN THIS SECTION SHALL AFFECT THE RIGHT OF ANY AGENT, ANY
LENDER OR ANY ISSUER TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW OR AFFECT THE RIGHT OF ANY SUCH PERSON TO BRING ANY ACTION OR PROCEEDING
AGAINST ANY PLEDGOR OR ITS PROPERTY IN THE COURTS OF ANY OTHER JURISDICTIONS.

          TO THE EXTENT ANY PLEDGOR HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY
FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH
SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF
EXECUTION, EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR TO ITS PROPERTY,
EACH PLEDGOR HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS
OBLIGATIONS UNDER THIS AGREEMENT AND EACH OTHER LOAN DOCUMENT EXECUTED OR TO
BE EXECUTED BY IT.

          SECTION 24.  WAIVER OF JURY TRIAL.   THE AGENTS, THE ISSUERS, THE
LENDERS AND THE PLEDGOR HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE
ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH, THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE AGENTS, THE LENDERS OR
THE PLEDGOR RELATING THERETO.  EACH OF THE PLEDGORS ACKNOWLEDGES AND AGREES
THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION
(AND EACH OTHER PROVISION OF EACH OTHER LOAN DOCUMENT TO WHICH IT IS A PARTY)
AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE AGENTS AND THE
LENDERS ENTERING INTO THIS AGREEMENT AND EACH SUCH OTHER LOAN DOCUMENT.

          SECTION 25.  COUNTERPARTS.  This Agreement may be executed in one
or more counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document.

                     [Remainder of page intentionally left blank]






                                         G2-15



     IN WITNESS WHEREOF, the Pledgors and Secured Party have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.

                              MERRILL/MAY, INC.



                              By:
                                 -----------------------------
                              Name:
                                   ---------------------------
                              Title:
                                    --------------------------


                              Notice Address:
                              ---------------

                              Merrill Corporation
                              One Merrill Circle
                              St. Paul, MN  55108






                                     S-1



                              MERRILL/GLOBAL, INC.



                              By:
                                 -----------------------------
                              Name:
                                   ---------------------------
                              Title:
                                    --------------------------


                              Notice Address:
                              ---------------

                              Merrill Corporation
                              One Merrill Circle
                              St. Paul, MN  55108


                              MERRILL REAL ESTATE COMPANY


                              By:
                                 -----------------------------
                              Name:
                                   ---------------------------
                              Title:
                                    --------------------------


                              Notice Address:
                              ---------------

                              Merrill Corporation
                              One Merrill Circle
                              St. Paul, MN  55108
                              Attention:  General Counsel



                                    S-2a




                              MERRILL/MAGNUS PUBLISHING CORPORATION



                              By:
                                 -----------------------------
                              Name:
                                   ---------------------------
                              Title:
                                    --------------------------



                              Notice Address:
                              ---------------

                              Merrill Corporation
                              One Merrill Circle
                              St. Paul, MN  55108
                              Attention:  General Counsel


                              MERRILL/NEW YORK COMPANY



                              By:
                                 -----------------------------
                              Name:
                                   ---------------------------
                              Title:
                                    --------------------------


                              Notice Address:
                              ---------------

                              Merrill Corporation
                              One Merrill Circle
                              St. Paul, MN  55108




                                        S-2b



                              MERRILL INTERNATIONAL INC.


                              By:
                                 -----------------------------
                              Name:
                                   ---------------------------
                              Title:
                                    --------------------------


                              Notice Address:
                              ---------------

                              Merrill Corporation
                              One Merrill Circle
                              St. Paul, MN  55108
                              Attention:  General Counsel






                                    S-2c




                              FMC RESOURCE MANAGEMENT CORPORATION


                              By:
                                 -----------------------------
                              Name:
                                   ---------------------------
                              Title:
                                    --------------------------


                              Notice Address:
                              ---------------

                              Merrill Corporation
                              One Merrill Circle
                              St. Paul, MN  55108
                              Attention:  General Counsel



                              MERRILL TRAINING AND
                               TECHNOLOGY, INC.



                              By:
                                 -----------------------------
                              Name:
                                   ---------------------------
                              Title:
                                    --------------------------



                              Notice Address:
                              ---------------

                              Merrill Corporation
                              One Merrill Circle
                              St. Paul, MN  55108
                              Attention:  General Counsel




                                     S-2d



                              MERRILL/EXECUTECH, INC.


                              By:
                                 -----------------------------
                              Name:
                                   ---------------------------
                              Title:
                                    --------------------------


                              Notice Address:
                              ---------------

                              Merrill Corporation
                              One Merrill Circle
                              St. Paul, MN  55108
                              Attention:  General Counsel



                              MERRILL/DANIELS, INC.


                              By:
                                 -----------------------------
                              Name:
                                   ---------------------------
                              Title:
                                    --------------------------


                              Notice Address:
                              ---------------

                              Merrill Corporation
                              One Merrill Circle
                              St. Paul, MN  55108
                              Attention:  General Counsel




                                     S-2e



                              MERRILL/ALTERNATIVES, INC.


                              By:
                                 -----------------------------
                              Name:
                                   ---------------------------
                              Title:
                                    --------------------------


                              Notice Address:
                              ---------------

                              Merrill Corporation
                              One Merrill Circle
                              St. Paul, MN  55108
                              Attention:  General Counsel





                                    S-2f



                              U.S. BANK NATIONAL ASSOCIATION,
                              as Secured Party


                              By:
                                 -----------------------------
                              Name:
                                   ---------------------------
                              Title:
                                    --------------------------


                              Notice Address:
                              ---------------

                              U.S. Bank National Association
                              601 Second Avenue South
                              Minneapolis, MN  55402






                                      S-3



                                   SCHEDULE I

     Attached to and forming a part of the Pledge Agreement dated as of
November 23, 1999 among the Pledgors listed on the signature pages thereof,
and U.S. Bank National Association, as Secured Party.




                                    Part A




                                                                         Percentage of
                                                                         Issued and
                                                                         Outstanding
                         Class of  Stock Certi-   Par       Number of    Shares of
Pledgor   Stock Issuer   Stock     ficate Nos.    Value     Shares       Relevant Class
- -------   ------------   --------  ------------   -----     ---------    --------------
                                                       






                                    Part B




Pledgor         Debt Issuer                  Amount of Indebtedness
- -------         -----------                  ----------------------
                                       







                                 Schedule I-1



                                    SCHEDULE II

                                  PLEDGE AMENDMENT

     This Pledge Amendment, dated ____________, _____, is delivered pursuant to
SECTION 6(b) of the Pledge Agreement referred to below.  The undersigned hereby
agrees that this Pledge Amendment may be attached to the Pledge Agreement dated
November 23, 1999, among the Pledgors listed on the signature pages thereof and
U.S. Bank National Association, as Secured Party (the "PLEDGE AGREEMENT,"
capitalized terms defined therein being used herein as therein defined), and
that the [Pledged Shares] [Pledged Debt] listed on this Pledge Amendment shall
be deemed to be part of the [Pledged Shares] [Pledged Debt] and shall become
part of the Pledged Collateral and shall secure all Secured Obligations.

                              [NAME OF PLEDGOR]



                              By:
                                 --------------------------------
                              Name:
                                   ------------------------------
                              Title:
                                    -----------------------------






                                 Schedule II-1






                                                                        Percentage of
                                                                        Issued and
                                                                        Outstanding
                         Class of  Stock Certi-   Par       Number of   Shares of
Pledgor   Stock Issuer   Stock     ficate Nos.    Value     Shares      Relevant Class
- -------   ------------   --------  ------------   -----     ---------   --------------
                                                      









                                    Schedule II-2






Pledgor   Debt Issuer    Amount of Indebtedness
- -------   -----------    ----------------------
                   






                                    Schedule II-3



                                     EXHIBIT H

                            FORM OF SUBSIDIARY GUARANTY

          This SUBSIDIARY GUARANTY is entered into as of November 23, 1999 by
EACH OF THE UNDERSIGNED (each, a "GUARANTOR"; and collectively, the
"GUARANTORS") in favor of and for the benefit of U.S. Bank National
Association, as Administrative Agent for and representative of (in such
capacity herein called "GUARANTIED PARTY") the financial institutions
("LENDERS") party to the Credit Agreement referred to below and any Interest
Rate Exchangers (as hereinafter defined), and, subject to SUBSECTION 3.12,
for the benefit of the other Beneficiaries (as hereinafter defined).

                                      RECITALS

          A.    Merrill Communications LLC, a Delaware limited liability
company (the "COMPANY"), and Merrill Corporation, a Minnesota corporation, as
guarantor, have entered into that certain Credit Agreement dated as of
November 23, 1999 with the Lenders, DLJ Capital Funding, Inc., as Syndication
Agent for the Lenders, Wells Fargo Bank, N.A., as Documentation Agent for the
Lenders, and Guarantied Party, as Administrative Agent for the Lenders (said
Credit Agreement, as it may hereafter be amended, supplemented or otherwise
modified from time to time, being the "CREDIT AGREEMENT"; capitalized terms
defined therein and not otherwise defined herein being used herein as therein
defined).

          B.    Company may from time to time enter, or may from time to time
have entered, into one or more Rate Protection Agreements (collectively, the
"LENDER INTEREST RATE AGREEMENTS") with or one or more Lenders or their
Affiliates (such Lenders or Affiliates, in such capacity, collectively,
"INTEREST RATE EXCHANGERS") permitted under the terms of the Credit
Agreement, and it is desired that the obligations of Company under the Lender
Interest Rate Agreements, including the obligation of Company to make
payments thereunder in the event of early termination thereof (all such
obligations being the "INTEREST RATE OBLIGATIONS"), together with all
obligations of Company under the Credit Agreement and the other Loan
Documents, be guarantied hereunder.

          C.    A portion of the proceeds of the Loans may be advanced to
Guarantors and thus the Guarantied Obligations (as hereinafter defined) are
being incurred for and will inure to the benefit of Guarantors (which
benefits are hereby acknowledged).

          D.    It is a condition precedent to the making of the initial
Loans under the Credit Agreement that Company's obligations thereunder be
guarantied by Guarantors.

          E.    Guarantors are willing irrevocably and unconditionally to
guaranty such obligations of Company.

          NOW, THEREFORE, based upon the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and in order to induce Lenders and Guarantied Party to enter
into the Credit Agreement and to make Loans and

                                     H-1



other extensions of credit thereunder and to induce Interest Rate Exchangers
to enter into the Lender Interest Rate Agreements, Guarantors hereby agree as
follows:

SECTION 1.  DEFINITIONS

     1.1  CERTAIN DEFINED TERMS.  As used in this Guaranty, the following
terms shall have the following meanings unless the context otherwise requires:

"BENEFICIARIES" means Guarantied Party, Lenders and any Interest Rate
Exchangers.

"COMPANY" has the meaning assigned to that term in the Credit Agreement.

"GUARANTIED OBLIGATIONS" has the meaning assigned to that term in SUBSECTION
2.1.

"GUARANTY" means this Subsidiary Guaranty dated as of November 23 1999, as it
may be amended, supplemented or otherwise modified from time to time.

"PAYMENT IN FULL", "PAID IN FULL" or any similar term means payment in full
of the Guarantied Obligations, including all principal, interest, costs, fees
and expenses (including reasonable legal fees and expenses) of Beneficiaries
as required under the Loan Documents and the Lender Interest Rate Agreements.

     1.2  DEFINED TERMS IN CREDIT AGREEMENT.  All capitalized terms used and
not otherwise defined herein shall have the meanings given such terms in the
Credit Agreement.

     1.3  INTERPRETATION.

(a) References to "Sections" and "subsections" shall be to Sections and
subsections, respectively, of this Guaranty unless otherwise specifically
provided.

(b) In the event of any conflict or inconsistency between the terms,
conditions and provisions of this Guaranty and the terms, conditions and
provisions of the Credit Agreement, the terms, conditions and provisions of
this Guaranty shall prevail.

SECTION 2.  THE GUARANTY

     2.1  GUARANTY OF THE GUARANTIED OBLIGATIONS.  Subject to the provisions
of SUBSECTION 2.2(a), Guarantors jointly and severally hereby irrevocably and
unconditionally guaranty the due and punctual payment in full of all
Guarantied Obligations when the same shall become due, whether at stated
maturity, by required prepayment, declaration, acceleration, demand or
otherwise (including amounts that would become due but for the operation of
the automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C.
Section 362(a)).  The term "GUARANTIED OBLIGATIONS" means:

          (a)   any and all Obligations of Company and any and all Interest Rate
Obligations, in each case now or hereafter made, incurred or created, whether
absolute or contingent, liquidated or unliquidated, whether due or not due, and
however arising under or in connection with the Credit Agreement and the other
Loan Documents and the Lender Interest

                                      H-2



Rate Agreements, including those arising under successive borrowing
transactions under the Credit Agreement which shall either continue the
Obligations of Company or from time to time renew them after they have been
satisfied and including interest which, but for the filing of a petition in
bankruptcy with respect to Company, would have accrued on any Guarantied
Obligations, whether or not a claim is allowed against Company for such
interest in the related bankruptcy proceeding; and

          (b)   those expenses set forth in SUBSECTION 2.8 hereof.

     2.2  LIMITATION ON AMOUNT GUARANTIED; CONTRIBUTION BY GUARANTORS.

          (a)   Anything contained in this Guaranty to the contrary
notwithstanding, if any Fraudulent Transfer Law (as hereinafter defined) is
determined by a court of competent jurisdiction to be applicable to the
obligations of any Guarantor under this Guaranty, such obligations of such
Guarantor hereunder shall be limited to a maximum aggregate amount equal to
the largest amount that would not render its obligations hereunder subject to
avoidance as a fraudulent transfer or conveyance under Section 548 of Title
11 of the United States Code or any applicable provisions of comparable state
law (collectively, the "FRAUDULENT TRANSFER LAWS"), in each case after giving
effect to all other liabilities of such Guarantor, contingent or otherwise,
that are relevant under the Fraudulent Transfer Laws (specifically excluding,
however, any liabilities of such Guarantor (x) in respect of intercompany
indebtedness to Company or other affiliates of Company to the extent that
such indebtedness would be discharged in an amount equal to the amount paid
by such Guarantor hereunder and (y) under any guaranty of Subordinated
Indebtedness, which guaranty contains a limitation as to maximum amount
similar to that set forth in this SUBSECTION 2.2(a), pursuant to which the
liability of such Guarantor hereunder is included in the liabilities taken
into account in determining such maximum amount) and after giving effect as
assets to the value (as determined under the applicable provisions of the
Fraudulent Transfer Laws) of any rights to subrogation, reimbursement,
indemnification or contribution of such Guarantor pursuant to applicable law
or pursuant to the terms of any agreement (including any such right of
contribution under SUBSECTION 2.2(b)).

          (b)   Guarantors under this Guaranty together desire to allocate
among themselves (collectively, the "CONTRIBUTING GUARANTORS"), in a fair and
equitable manner, their obligations arising under this Guaranty.
Accordingly, in the event any payment or distribution is made on any date by
any Guarantor under this Guaranty (a "FUNDING GUARANTOR") that exceeds its
Fair Share (as defined below) as of such date, that Funding Guarantor shall
be entitled to a contribution from each of the other Contributing Guarantors
in the amount of such other Contributing Guarantor's Fair Share Shortfall (as
defined below) as of such date, with the result that all such contributions
will cause each Contributing Guarantor's Aggregate Payments (as defined
below) to equal its Fair Share as of such date.  "FAIR SHARE" means, with
respect to a Contributing Guarantor as of any date of determination, an
amount equal to (i) the ratio of (x) the Adjusted Maximum Amount (as defined
below) with respect to such Contributing Guarantor to (y) the aggregate of
the Adjusted Maximum Amounts with respect to all Contributing Guarantors
MULTIPLIED BY (ii) the aggregate amount paid or distributed on or before such
date by all Funding Guarantors under this Guaranty in respect of the
obligations guarantied.  "FAIR SHARE SHORTFALL" means, with respect to a
Contributing Guarantor as of any

                                 H-3



date of determination, the excess, if any, of the Fair Share of such
Contributing Guarantor over the Aggregate Payments of such Contributing
Guarantor.  "ADJUSTED MAXIMUM AMOUNT" means, with respect to a Contributing
Guarantor as of any date of determination, the maximum aggregate amount of
the obligations of such Contributing Guarantor under this Guaranty determined
as of such date, in the case of any Guarantor, in accordance with SUBSECTION
2.2(a); PROVIDED that, solely for purposes of calculating the Adjusted
Maximum Amount with respect to any Contributing Guarantor for purposes of
this SUBSECTION 2.2(b), any assets or liabilities of such Contributing
Guarantor arising by virtue of any rights to subrogation, reimbursement or
indemnification or any rights to or obligations of contribution hereunder
shall not be considered as assets or liabilities of such Contributing
Guarantor.  "AGGREGATE PAYMENTS" means, with respect to a Contributing
Guarantor as of any date of determination, an amount equal to (i) the
aggregate amount of all payments and distributions made on or before such
date by such Contributing Guarantor in respect of this Guaranty (including in
respect of this SUBSECTION 2.2(b)) MINUS (ii) the aggregate amount of all
payments received on or before such date by such Contributing Guarantor from
the other Contributing Guarantors as contributions under this SUBSECTION
2.2(b).  The amounts payable as contributions hereunder shall be determined
as of the date on which the related payment or distribution is made by the
applicable Funding Guarantor.  The allocation among Contributing Guarantors
of their obligations as set forth in this SUBSECTION 2.2(b) shall not be
construed in any way to limit the liability of any Contributing Guarantor
hereunder.

     2.3  PAYMENT BY GUARANTORS; APPLICATION OF PAYMENTS.

          (a)   Subject to the provisions of SUBSECTION 2.2(a), Guarantors
hereby jointly and severally agree, in furtherance of the foregoing and not in
limitation of any other right which any Beneficiary may have at law or in equity
against any Guarantor by virtue hereof, that upon the failure of Company to pay
any of the Guarantied Obligations when and as the same shall become due, whether
at stated maturity, by required prepayment, declaration, acceleration, demand or
otherwise (including amounts that would become due but for the operation of the
automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C.  Section
 362(a)), Guarantors will upon demand pay, or cause to be paid, in cash, to
Guarantied Party for the ratable benefit of Beneficiaries, an amount equal to
the sum of the unpaid principal amount of all Guarantied Obligations then due as
aforesaid, accrued and unpaid interest then due or which would become due but
for the operation of the automatic stay under Section 362(a) of the United
States Bankruptcy Code, 11 U.S.C. 362(a), and the operation of Sections 502(b)
and 506(b) of the Untied States Bankruptcy Code, 11 U.S.C. 502(b) and 506(b), on
such Guarantied Obligations (including interest which, but for the filing of a
petition in bankruptcy with respect to Company, would have accrued on such
Guarantied Obligations, whether or not a claim is allowed against Company for
such interest in the related bankruptcy proceeding) and all other Guarantied
Obligations then due and owing to Beneficiaries as aforesaid.  All such payments
from any Guarantor shall be applied promptly from time to time by Guarantied
Party:

          FIRST, to the payment of the costs and expenses of any collection or
          other realization from such Guarantor under this Guaranty, including
          reasonable compensation to Guarantied Party or any Lender or Interest
          Rate Exchanger and its respective agents and counsel, and all
          expenses, liabilities and advances made

                               H-4


          or incurred by Guarantied Party or any Lender or Interest Rate
          Exchanger in connection therewith;

          SECOND, to the payment of all other obligations of such Guarantor in
          respect of Guarantied Obligations for the ratable benefit of the
          holders thereof; and

          THIRD, after payment in full of all obligations of such Guarantor in
          respect of Guarantied Obligations, to the payment to such Guarantor,
          or its successors or assigns, or to whomsoever may be lawfully
          entitled to receive the same or as a court of competent jurisdiction
          may direct, of any surplus then remaining from such payments.

     2.4  LIABILITY OF GUARANTORS ABSOLUTE.  Each Guarantor agrees that, subject
to Section 2.2(a), its obligations hereunder are, to the fullest extent
permitted under applicable law, irrevocable, absolute, independent and
unconditional and shall not be affected by any circumstance which constitutes a
legal or equitable discharge of a guarantor or surety other than payment in full
of the Guarantied Obligations.  In furtherance of the foregoing and without
limiting the generality thereof, each Guarantor agrees as follows:

          (a)   This Guaranty is a guaranty of payment when due and not of
collectibility.

          (b)   Guarantied Party may enforce this Guaranty upon the occurrence
of an Event of Default under the Credit Agreement notwithstanding the existence
of any dispute between Company and any Beneficiary with respect to the existence
of such Event of Default.

          (c)   The obligations of each Guarantor hereunder are independent of
the obligations of Company under the Loan Documents or the Lender Interest Rate
Agreements and the obligations of any other guarantor (including any other
Guarantor) of the obligations of Company under the Loan Documents or the Lender
Interest Rate Agreements, and a separate action or actions may be brought and
prosecuted against such Guarantor whether or not any action is brought against
Company or any of such other guarantors and whether or not Company is joined in
any such action or actions.

          (d)   Payment by any Guarantor of a portion, but not all, of the
Guarantied Obligations shall in no way limit, affect, modify or abridge any
Guarantor's liability for any portion of the Guarantied Obligations which has
not been paid.  Without limiting the generality of the foregoing, if Guarantied
Party is awarded a judgment in any suit brought to enforce any Guarantor's
covenant to pay a portion of the Guarantied Obligations, such judgment shall not
be deemed to release such Guarantor from its covenant to pay the portion of the
Guarantied Obligations that is not the subject of such suit, and such judgment
shall not, except to the extent satisfied by such Guarantor, limit, affect,
modify or abridge any other Guarantor's liability hereunder in respect of the
Guarantied Obligations.

          (e)   Any Beneficiary, upon such terms as it deems appropriate,
without notice or demand and without affecting the validity or enforceability of
this Guaranty or giving rise to any reduction, limitation, impairment, discharge
or termination of any Guarantor's liability hereunder, from time to time may,
subject to such consent of the Company as may be required

                                   H-5


under the agreements to and documents governing such Guarantied Obligations,
(i) renew, extend, accelerate, increase the rate of interest on, or otherwise
change the time, place, manner or terms of payment of the Guarantied
Obligations, (ii) settle, compromise, release or discharge, or accept or
refuse any offer of performance with respect to, or substitutions for, the
Guarantied Obligations or any agreement relating thereto and/or subordinate
the payment of the same to the payment of any other obligations; (iii)
request and accept other guaranties of the Guarantied Obligations and take
and hold security for the payment of this Guaranty or the Guarantied
Obligations; (iv) release, surrender, exchange, substitute, compromise,
settle, rescind, waive, alter, subordinate or modify, with or without
consideration, any security for payment of the Guarantied Obligations, any
other guaranties of the Guarantied Obligations, or any other obligation of
any Person (including any other Guarantor) with respect to the Guarantied
Obligations; (v) enforce and apply any security now or hereafter held by or
for the benefit of such Beneficiary in respect of this Guaranty or the
Guarantied Obligations and direct the order or manner of sale thereof, or
exercise any other right or remedy that such Beneficiary may have against any
such security, in each case as such Beneficiary in its discretion may
determine consistent with the Credit Agreement or the applicable Lender
Interest Rate Agreement and any applicable security agreement, including
foreclosure on any such security pursuant to one or more judicial or
nonjudicial sales, whether or not, to the fullest extent permitted under
applicable law, every aspect of any such sale is commercially reasonable, and
even though such action operates to impair or extinguish any right of
reimbursement or subrogation or other right or remedy of any Guarantor
against Company or any security for the Guarantied Obligations; and (vi)
exercise any other rights available to it under the Loan Documents or the
Lender Interest Rate Agreements.

          (f)   This Guaranty and the obligations of Guarantors hereunder shall
be valid and enforceable and shall not be subject to any reduction, limitation,
impairment, discharge or termination for any reason (other than pursuant to
Section 2.2(a) hereof or payment in full of the Guarantied Obligations),
including the occurrence of any of the following, whether or not any Guarantor
shall have had notice or knowledge of any of them: (i) any failure or omission
to assert or enforce or agreement or election not to assert or enforce, or the
stay or enjoining, by order of court, by operation of law or otherwise, of the
exercise or enforcement of, any claim or demand or any right, power or remedy
(whether arising under the Loan Documents or the Lender Interest Rate
Agreements, at law, in equity or otherwise) with respect to the Guarantied
Obligations or any agreement relating thereto, or with respect to any other
guaranty of or security for the payment of the Guarantied Obligations; (ii) any
rescission, waiver, amendment or modification of, or any consent to departure
from, any of the terms or provisions (including provisions relating to events of
default) of the Credit Agreement, any of the other Loan Documents, any of the
Lender Interest Rate Agreements or any agreement or instrument executed pursuant
thereto, or of any other guaranty or security for the Guarantied Obligations, in
each case whether or not in accordance with the terms of the Credit Agreement or
such Loan Document, such Lender Interest Rate Agreement or any agreement
relating to such other guaranty or security; (iii) the Guarantied Obligations,
or any agreement relating thereto, at any time being found to be illegal,
invalid or unenforceable in any respect; (iv) the application of payments
received from any source (other than payments received pursuant to the other
Loan Documents or any of the Lender Interest Rate Agreements or from the
proceeds of any security for the Guarantied Obligations, except to the extent
such security also serves as collateral for indebtedness other than the
Guarantied Obligations) to the payment of indebtedness other than

                                 H-6


the Guarantied Obligations, even though any Beneficiary might have elected to
apply such payment to any part or all of the Guarantied Obligations; (v) any
Beneficiary's consent to the change, reorganization or termination of the
corporate structure or existence of Company or any of its Subsidiaries and to
any corresponding restructuring of the Guarantied Obligations; (vi) any
failure to perfect or continue perfection of a security interest in any
collateral which secures any of the Guarantied Obligations; (vii) any
defenses, set-offs or counterclaims which Company may allege or assert
against any Beneficiary in respect of the Guarantied Obligations, including
failure of consideration, breach of warranty, payment, statute of frauds,
statute of limitations, accord and satisfaction and usury, PROVIDED that this
clause (vii) shall not prevent assertion of any such counterclaim by separate
suit or compulsory counterclaim; and (viii) any other act or thing or
omission, or delay to do any other act or thing, which may or might in any
manner or to any extent vary the risk of any Guarantor as an obligor in
respect of the Guarantied Obligations.

     2.5  WAIVERS BY GUARANTORS.  Each Guarantor hereby waives, for the benefit
of Beneficiaries:

          (a)    any right to require any Beneficiary, as a condition of payment
or performance by such Guarantor, to (i) proceed against Company, any other
guarantor (including any other Guarantor) of the Guarantied Obligations or any
other Person, (ii) proceed against or exhaust any security held from Company,
any such other guarantor or any other Person, (iii) proceed against or have
resort to any balance of any deposit account or credit on the books of any
Beneficiary in favor of Company or any other Person, or (iv) pursue any other
remedy in the power of any Beneficiary whatsoever;

          (b)   any defense arising by reason of the incapacity, lack of
authority or any disability or other defense of Company including any defense
based on or arising out of the lack of validity or the unenforceability of the
Guarantied Obligations or any agreement or instrument relating thereto or by
reason of the cessation of the liability of Company from any cause other than
payment in full of the Guarantied Obligations;

          (c)   any defense based upon any statute or rule of law which provides
that the obligation of a surety must be neither larger in amount nor in other
respects more burdensome than that of the principal;

          (d)   any defense based upon any Beneficiary's errors or omissions in
the administration of the Guarantied Obligations, except behavior which amounts
to bad faith, gross negligence or willful misconduct;

          (e)   to the fullest extent permitted under applicable law, (i) any
principles or provisions of law, statutory or otherwise, which are or might be
in conflict with the terms of this Guaranty and any legal or equitable discharge
of such Guarantor's obligations hereunder, (ii) the benefit of any statute of
limitations affecting such Guarantor's liability hereunder or the enforcement
hereof, (iii) any rights to set-offs, recoupments and counterclaims, and
(iv) promptness, diligence and any requirement that any Beneficiary protect,
secure, perfect or insure any security interest or lien or any property subject
thereto;

                                  H-7


          (f)   notices, demands, presentments, protests, notices of protest,
notices of dishonor and notices of any action or inaction, including acceptance
of this Guaranty, notices of default under the Credit Agreement, the Lender
Interest Rate Agreements or any agreement or instrument related thereto, notices
of any renewal, extension or modification of the Guarantied Obligations or any
agreement related thereto, notices of any extension of credit to Company and
notices of any of the matters referred to in SUBSECTION 2.4 and any right to
consent to any thereof; and

          (g)   any defenses or benefits that may be derived from or afforded by
law which limit the liability of or exonerate guarantors or sureties, or which
may conflict with the terms of this Guaranty.

     2.6  CERTAIN CALIFORNIA LAW WAIVERS.  As used in this SUBSECTION 2.6, any
reference to "THE PRINCIPAL" includes Company, and any reference to "THE
CREDITOR" includes each Beneficiary.  In accordance with Section 2856 of the
California Civil Code:

          (a)   each Guarantor agrees (i) to waive any and all rights of
subrogation and reimbursement against Company or against any collateral or
security granted by Company for any of the Guarantied Obligations and (ii) to
withhold the exercise of any and all rights of contribution against any other
guarantor of any of the Guarantied Obligations and against any collateral or
security granted by any such other guarantor for any of the Guarantied
Obligations until the Guarantied Obligations shall have been paid in full (other
than Guarantied Obligations for indemnity or expense reimbursement that have not
yet been claimed), the Commitments shall have terminated and all Letters of
Credit shall have expired, been cancelled or been cash collateralized, all as
more fully set forth in SUBSECTION 2.7;

          (b)   each Guarantor waives any and all other rights and defenses
available to such Guarantor by reason of Sections 2787 to 2855, inclusive, 2899
and 3433 of the California Civil Code, including any and all rights or defenses
such Guarantor may have by reason of protection afforded to the principal with
respect to any of the Guarantied Obligations, or to any other guarantor
(including any other Guarantor) of any of the Guarantied Obligations with
respect to any of such guarantor's obligations under its guaranty, in either
case pursuant to the antideficiency or other laws of the State of California
limiting or discharging the principal's indebtedness or such guarantor's
obligations, including Section 580a, 580b, 580d, or 726 of the California Code
of Civil Procedure; and

          (c)   each Guarantor waives all rights and defenses arising out of an
election of remedies by the creditor, even though that election of remedies,
such as a nonjudicial foreclosure with respect to security for any Guarantied
Obligation, has destroyed such Guarantor's rights of subrogation and
reimbursement against the principal by the operation of Section 580d of the Code
of Civil Procedure or otherwise; and even though that election of remedies by
the creditor, such as nonjudicial foreclosure with respect to security for an
obligation of any other guarantor (including any other Guarantor) of any of the
Guarantied Obligations, has destroyed such Guarantor's rights of contribution
against such other guarantor.

          No other provision of this Guaranty shall be construed as limiting
the generality of any of the covenants and waivers set forth in this
SUBSECTION 2.6. In accordance with

                                   H-8


SUBSECTION 3.6 below, this Guaranty shall be governed by, and
shall be construed and enforced in accordance with, the internal laws of the
State of New York, without regard to conflicts of laws principles.  This
SUBSECTION 2.6 is included solely out of an abundance of caution, and shall not
be construed to mean that any of the above-referenced provisions of California
law are in any way applicable to this Guaranty or to any of the Guarantied
Obligations.

     2.7  GUARANTORS' RIGHTS OF SUBROGATION, CONTRIBUTION, ETC.  Each Guarantor
hereby agrees that it will not assert any claim, right or remedy, in each case
direct or indirect, that such Guarantor now has or may hereafter have against
Company or any of its assets in connection with this Guaranty or the performance
by such Guarantor of its obligations hereunder, in each case whether such claim,
right or remedy arises in equity, under contract, by statute (including under
California Civil Code Section 2847, 2848 or 2849), under common law or otherwise
and including (a) any right of subrogation, reimbursement or indemnification
that such Guarantor now has or may hereafter have against Company, (b) any right
to enforce, or to participate in, any claim, right or remedy that any
Beneficiary now has or may hereafter have against Company, and (c) any benefit
of, and any right to participate in, any collateral or security now or hereafter
held by any Beneficiary unless and until the Guarantied Obligations (other than
Guarantied Obligations in respect of indemnification and expense reimbursement
not yet claimed) shall have been indefeasibly paid in full, the Commitments
shall have terminated and all Letters of Credit shall have expired, been
cancelled or been cash collateralized.  In addition, until the Guarantied
Obligations (other than Guarantied Obligations in respect of indemnity and
expense reimbursement not yet claimed) shall have been indefeasibly paid in full
and the Commitments shall have terminated and all Letters of Credit shall have
expired, been cancelled, or been cash collateralized each Guarantor shall
withhold exercise of any right of contribution such Guarantor may have against
any other guarantor (including any other Guarantor) of the Guarantied
Obligations (including any such right of contribution under California Civil
Code Section 2848 or under subSECTION 2.2(b)).

     2.8  EXPENSES.  Subject to Section 2.2(a), Guarantors jointly and severally
agree to pay, or cause to be paid, on demand, and to save Beneficiaries harmless
against liability for, any and all costs and expenses (including reasonable
fees, costs of settlement and disbursements of counsel) incurred or expended by
any Beneficiary in connection with the enforcement of or preservation of any
rights under this Guaranty.

     2.9  CONTINUING GUARANTY.  This Guaranty is a continuing guaranty and shall
remain in effect until all of the Guarantied Obligations shall have been paid in
full and the Commitments shall have terminated and all Letters of Credit shall
have expired,  been cancelled or cash collateralized.  Each Guarantor hereby
irrevocably waives any right (including any such right arising under California
Civil Code Section 2815) to revoke this Guaranty as to future transactions
giving rise to any Guarantied Obligations.

     2.10 FINANCIAL CONDITION OF COMPANY.  Any Loans may be granted to Company
or continued from time to time, and any Lender Interest Rate Agreements may be
entered into from time to time, in each case without notice to or authorization
from any Guarantor regardless of the financial or other condition of Company at
the time of any such grant or continuation or at the time such Lender Interest
Rate Agreement is entered into, as the case may be.  No Beneficiary shall have
any obligation to disclose or discuss with any Guarantor its assessment,

                                   H-9


or any Guarantor's assessment, of the financial condition of Company.  Each
Guarantor has adequate means to obtain information from Company on a
continuing basis concerning the financial condition of Company and its
ability to perform its obligations under the Loan Documents and the Lender
Interest Rate Agreements, and each Guarantor assumes the responsibility for
being and keeping informed of the financial condition of Company and of all
circumstances bearing upon the risk of nonpayment of the Guarantied
Obligations.  Each Guarantor hereby waives and relinquishes any duty on the
part of any Beneficiary to disclose any matter, fact or thing relating to the
business, operations or conditions of Company now known or hereafter known by
any Beneficiary.

     2.11 RIGHTS CUMULATIVE.  The rights, powers and remedies given to
Beneficiaries by this Guaranty are cumulative and shall be in addition to and
independent of all rights, powers and remedies given to Beneficiaries by virtue
of any statute or rule of law or in any of the other Loan Documents, any of the
Lender Interest Rate Agreements or any agreement between any Guarantor and any
Beneficiary or Beneficiaries or between Company and any Beneficiary or
Beneficiaries.  Any forbearance or failure to exercise, and any delay by any
Beneficiary in exercising, any right, power or remedy hereunder shall not impair
any such right, power or remedy or be construed to be a waiver thereof, nor
shall it preclude the further exercise of any such right, power or remedy.

     2.12 BANKRUPTCY; POST-PETITION INTEREST; REINSTATEMENT OF GUARANTY.

          (a)  So long as any Guarantied Obligations remain outstanding (other
than Guarantied Obligations in respect of indemnity and expense reimbursement
not yet claimed), Guarantor shall not, without the prior written consent of
Guarantied Party acting pursuant to the instructions of Required Lenders,
commence or join with any other Person in commencing any bankruptcy,
reorganization or insolvency proceedings of or against Company.

          (b)   In the event that all or any portion of the Guarantied
Obligations is paid by Company, the obligations of Guarantors hereunder shall
continue and remain in full force and effect or be reinstated, as the case may
be, in the event that all or any part of such payment(s) are rescinded or
recovered directly or indirectly from any Beneficiary as a preference,
fraudulent transfer or otherwise, and any such payments which are so rescinded
or recovered shall constitute Guarantied Obligations for all purposes under this
Guaranty.

     2.13 SET OFF.  Each Beneficiary shall, upon the occurrence of any Event of
Default described in clauses (b) through (d) of Section 8.1.9 of the Credit
Agreement with respect to any Obligor (other than Immaterial Subsidiaries) or,
with the consent of the Required Lenders, upon the occurrence of any other Event
of Default, to the fullest extent permitted by law, have the right to
appropriate and apply to the payment of the Obligations of any Guarantor then
due to it from such Guarantor, and (as security of such Obligations) each
Guarantor hereby grants to each Beneficiary a continuing security interest in,
any and all balances, credits, deposits, accounts or moneys of such Guarantor
(general or special, matured or unmatured and in whatever currencies
denominated) then or thereafter maintained with or otherwise held by such
Beneficiary, provided, however, that any such appropriation and application
shall be subject to the provisions of Section 4.8 of the Credit Agreement.  Each
Beneficiary agrees promptly to notify the Company, the applicable Guarantors and
the Administrative Agent after any such

                                H-10


setoff and application made by such Beneficiary; provided, however, that the
failure to give such notice shall not affect the validity of such setoff and
application.  The rights of each Beneficiary under this Section are in
addition to other rights and remedies (including other rights of setoff under
applicable law or otherwise) which such Beneficiary may have.

     2.14 DISCHARGE OF GUARANTY UPON SALE OF GUARANTOR.  If all of the stock of
any Guarantor or any of its successors in interest under this Guaranty shall be
sold or otherwise disposed of (including by merger or consolidation) in a
transaction permitted under the Credit Agreement or otherwise consented to by
Required Lenders, or if a Guarantor shall be designated as an Unrestricted
Subsidiary in accordance with the Credit Agreement, the Guaranty of such
Guarantor or such successor in interest, as the case may be, hereunder shall
automatically be discharged and released without any further action by any
Beneficiary or any other Person effective as of the time of such asset
disposition or designation.

SECTION 3.  MISCELLANEOUS

     3.1  SURVIVAL OF WARRANTIES.  All agreements, representations and
warranties made herein shall survive the execution and delivery of this Guaranty
and the other Loan Documents and the Lender Interest Rate Agreements and any
increase in the Commitments under the Credit Agreement.

     3.2  NOTICES.  Any communications between Guarantied Party and any
Guarantor shall be in writing or by facsimile and addressed, delivered or
transmitted to such party at its address as set forth on the signature pages
hereof or to such other addresses or facsimile number as each such party may
designate in a written notice delivered to the other parties.  Any notice,
request or demand to or upon Guarantied Party or any Guarantor shall be
effective if mailed and properly addressed with postage prepaid or properly
addressed and sent by prepaid courier service, or, if transmitted by facsimile,
shall be deemed given when transmitted (and telephonic confirmation of receipt
thereof has been received).

     3.3  SEVERABILITY.  In case any provision in or obligation under this
Guaranty shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.

     3.4  AMENDMENTS AND WAIVERS.  No amendment, modification, termination or
waiver of any provision of this Guaranty, and no consent to any departure by any
Guarantor therefrom, shall in any event be effective without the written
concurrence of Guarantied Party and, in the case of any such amendment or
modification, each Guarantor against whom enforcement of such amendment or
modification is sought.  Any such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which it was given.

     3.5  HEADINGS.  Section and subsection headings in this Guaranty are
included herein for convenience of reference only and shall not constitute a
part of this Guaranty for any other purpose or be given any substantive effect.

     3.6  APPLICABLE LAW; RULES OF CONSTRUCTION.  THIS GUARANTY AND THE RIGHTS
AND OBLIGATIONS OF GUARANTORS AND BENEFICIARIES

                                H-11


HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING
SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK),
WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES

     3.7  SUCCESSORS AND ASSIGNS.  This Guaranty is a continuing guaranty and
shall be binding upon each Guarantor and its respective successors and assigns.
This Guaranty shall inure to the benefit of Beneficiaries and their respective
successors and assigns.  No Guarantor shall assign this Guaranty or any of the
rights or obligations of such Guarantor hereunder without the prior written
consent of all Lenders.  The terms and provisions of this Guaranty shall inure
to the benefit of any assignee of any Loan pursuant to any assignment made in
accordance with subsections 11.10 and 11.11 of the Credit Agreement, and in the
event of such assignment the rights and privileges herein conferred upon such
Beneficiary shall automatically extend to and be vested in such assignee with
respect to the assigned amounts, all subject to the terms and conditions hereof.

          3.8   CONSENT TO JURISDICTION AND SERVICE OF PROCESS.  ANY LITIGATION
BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH, THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE PARTIES HERETO SHALL BE BROUGHT
AND MAINTAINED EXCLUSIVELY (TO THE EXTENT PERMITTED UNDER APPLICABLE LAW) IN THE
COURTS OF THE STATE OF NEW YORK, NEW YORK COUNTY, OR IN THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK; PROVIDED, HOWEVER, THAT
ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE
BROUGHT, AT THE ADMINISTRATIVE AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION
WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND.  EACH GUARANTOR HEREBY
EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE
OF NEW YORK, NEW YORK COUNTY, AND OF THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET
FORTH ABOVE AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY
IN CONNECTION WITH SUCH LITIGATION.  EACH GUARANTOR IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE
WITHIN OR WITHOUT THE STATE OF NEW YORK.  EACH GUARANTOR HEREBY EXPRESSLY AND
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH
IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION
BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH
LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

          NOTHING IN THIS SECTION SHALL AFFECT THE RIGHT OF ANY AGENT, ANY
LENDER OR ANY ISSUER TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW
OR AFFECT THE RIGHT OF ANY SUCH PERSON TO

                             H-12


BRING ANY ACTION OR PROCEEDING AGAINST ANY GUARANTOR OR ITS PROPERTY IN THE
COURTS OF ANY OTHER JURISDICTIONS.

          TO THE EXTENT ANY GUARANTOR HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY
FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH
SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION,
EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR TO ITS PROPERTY, EACH
GUARANTOR HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED UNDER
APPLICABLE LAW, SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT
AND EACH OTHER LOAN DOCUMENT EXECUTED OR TO BE EXECUTED BY IT.

     3.9  WAIVER OF TRIAL BY JURY.  THE AGENTS, THE ISSUERS, THE LENDERS AND THE
GUARANTORS HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY
MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR
ARISING OUT OF, UNDER OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL
OR WRITTEN) OR ACTIONS OF THE AGENTS, THE LENDERS OR THE GUARANTORS RELATING
THERETO.  EACH OF THE GUARANTORS ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED
FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH OTHER PROVISION
OF EACH OTHER LOAN DOCUMENT TO WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A
MATERIAL INDUCEMENT FOR THE AGENTS AND THE LENDERS ENTERING INTO THE LOAN
DOCUMENTS.

     3.10 NO OTHER WRITING.  This writing is intended by Guarantors and
Beneficiaries as the final expression of this Guaranty and, along with any Loan
Documents to which any Guarantor is a party, is also intended as a complete and
exclusive statement of the terms of their agreement with respect to the matters
covered hereby.  No course of dealing, course of performance or trade usage, and
no parol evidence of any nature, shall be used to supplement or modify any terms
of this Guaranty.  There are no conditions to the full effectiveness of this
Guaranty.

     3.11 ADDITIONAL GUARANTORS.  The initial Guarantors hereunder shall be such
of the Restricted Subsidiaries of Company as are signatories hereto on the date
hereof.  From time to time subsequent to the date hereof, additional Restricted
Subsidiaries of Company may become parties hereto, as additional Guarantors
(each an "ADDITIONAL GUARANTOR"), by executing a counterpart of this Guaranty.
Upon delivery of any such counterpart to Administrative Agent, notice of which
is hereby waived by Guarantors, each such Additional Guarantor shall be a
Guarantor and shall be as fully a party hereto as if such Additional Guarantor
were an original signatory hereof.  Each Guarantor expressly agrees that its
obligations arising hereunder shall not be affected or diminished by the
addition or release of any other Guarantor hereunder, nor by any election of
Administrative Agent not to cause any Restricted Subsidiary of Company to become
an Additional Guarantor hereunder.  This Guaranty shall be fully effective as to
any

                                  H-13


Guarantor that is or becomes a party hereto regardless of whether any other
Person becomes or fails to become or ceases to be a Guarantor hereunder.

     3.12 COUNTERPARTS; EFFECTIVENESS.  This Guaranty may be executed in any
number of counterparts and by the different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original for all purposes; but all such counterparts together shall
constitute but one and the same instrument.  This Guaranty shall become
effective as to each Guarantor upon the execution of a counterpart hereof by
such Guarantor (whether or not a counterpart hereof shall have been executed by
any other Guarantor) and receipt by Guarantied Party of written or telephonic
notification of such execution and authorization of delivery thereof.

     3.13 GUARANTIED PARTY AS ADMINISTRATIVE AGENT.

          (a)   Guarantied Party has been appointed to act as Guarantied Party
hereunder by Lenders and, by their acceptance of the benefits hereof, Interest
Rate Exchangers.  Guarantied Party shall be obligated, and shall have the right
hereunder, to make demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking any action, solely in
accordance with this Guaranty and the Credit Agreement; PROVIDED that Guarantied
Party shall exercise, or refrain from exercising, any remedies hereunder in
accordance with the instructions of (i) Required Lenders or (ii) after payment
in full of all Obligations under the Credit Agreement and the other Loan
Documents, the holders of a majority of the aggregate notional amount under all
Lender Interest Rate Agreements (Required Lenders or, if applicable, such
holders being referred to herein as "REQUISITE OBLIGEES").  In furtherance of
the foregoing provisions of this SUBSECTION 3.14, each Interest Rate Exchanger,
by its acceptance of the benefits hereof, agrees that it shall have no right
individually to enforce this Guaranty, it being understood and agreed by such
Interest Rate Exchanger that all rights and remedies hereunder may be exercised
solely by Guarantied Party for the benefit of Beneficiaries in accordance with
the terms of this SUBSECTION 3.14.

          (b)   Guarantied Party shall at all times be the same Person that is
Administrative Agent under the Credit Agreement.  Written notice of resignation
by Administrative Agent pursuant to subsection 9.4 of the Credit Agreement shall
also constitute notice of resignation as Guarantied Party under this Guaranty,
and appointment of a successor Administrative Agent pursuant to subsection 9.4
of the Credit Agreement shall also constitute appointment of a successor
Guarantied Party under this Guaranty.  Upon the acceptance of any appointment as
Administrative Agent under subsection 9.4 of the Credit Agreement by a successor
Administrative Agent, that successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Guarantied Party under this Guaranty, and the retiring
Guarantied Party under this Guaranty shall promptly (i) transfer to such
successor Guarantied Party all sums held hereunder, together with all records
and other documents necessary or appropriate in connection with the performance
of the duties of the successor Guarantied Party under this Guaranty, and
(ii) take such other actions as may be necessary or appropriate in connection
with the assignment to such successor Guarantied Party of the rights created
hereunder, whereupon such retiring Guarantied Party shall be discharged from its
duties and obligations under this Guaranty.  After any retiring Guarantied
Party's resignation hereunder as Guarantied Party, the provisions of this
Guaranty shall inure to

                                H-14


its benefit as to any actions taken or omitted to be taken by it under this
Guaranty while it was Guarantied Party hereunder.


                    [Remainder of page intentionally left blank]












                                   H-15


     IN WITNESS WHEREOF, each of the undersigned Guarantors has caused this
Guaranty to be duly executed and delivered by its officer thereunto duly
authorized as of the date first written above.



                              MERRILL REAL ESTATE COMPANY


                              By:
                                 ------------------------------
                              Name:
                                   ---------------------------
                              Title:
                                    --------------------------


                              NOTICE ADDRESS:

                              Merrill Corporation
                              One Merrill Circle
                              St. Paul, MN  55108
                              Attention:  General Counsel


                              MERRILL/MAGNUS PUBLISHING CORPORATION


                              By:
                                 ------------------------------
                              Name:
                                   ---------------------------
                              Title:
                                    --------------------------


                              NOTICE ADDRESS:

                              Merrill Corporation
                              One Merrill Circle
                              St. Paul, MN  55108
                              Attention:  General Counsel



                            S-1



                              MERRILL/NEW YORK COMPANY

                              By:
                                 ------------------------------
                              Name:
                                   ---------------------------
                              Title:
                                    --------------------------


                              NOTICE ADDRESS:

                              Merrill Corporation
                              One Merrill Circle
                              St. Paul, MN  55108
                              Attention:  General Counsel


                              MERRILL/MAY INC.

                              By:
                                 ------------------------------
                              Name:
                                   ---------------------------
                              Title:
                                    --------------------------


                              NOTICE ADDRESS:

                              Merrill Corporation
                              One Merrill Circle
                              St. Paul, MN  55108
                              Attention:  General Counsel





                             S-2


                              MERRILL INTERNATIONAL INC.

                              By:
                                 ------------------------------
                              Name:
                                   ---------------------------
                              Title:
                                    --------------------------


                              NOTICE ADDRESS:

                              Merrill Corporation
                              One Merrill Circle
                              St. Paul, MN  55108
                              Attention:  General Counsel


                              FMC RESOURCE MANAGEMENT CORPORATION

                              By:
                                 ------------------------------
                              Name:
                                   ---------------------------
                              Title:
                                    --------------------------


                              NOTICE ADDRESS:

                              Merrill Corporation
                              One Merrill Circle
                              St. Paul, MN  55108
                              Attention:  General Counsel





                             S-3


                              MERRILL TRAINING AND
                                  TECHNOLOGY, INC.

                              By:
                                 ------------------------------
                              Name:
                                   ---------------------------
                              Title:
                                    --------------------------


                              NOTICE ADDRESS:

                              Merrill Corporation
                              One Merrill Circle
                              St. Paul, MN  55108
                              Attention: General Counsel


                              MERRILL/GLOBAL, INC.

                              By:
                                 ------------------------------
                              Name:
                                   ---------------------------
                              Title:
                                    --------------------------


                              NOTICE ADDRESS:

                              Merrill Corporation
                              One Merrill Circle
                              St. Paul, MN  55108
                              Attention:  General Counsel





                            S-4


                              MERRILL/EXECUTECH, INC.

                              By:
                                 ------------------------------
                              Name:
                                   ---------------------------
                              Title:
                                    --------------------------


                              NOTICE ADDRESS:

                              Merrill Corporation
                              One Merrill Circle
                              St. Paul, MN  55108
                              Attention:  General Counsel


                              MERRILL/DANIELS, INC.

                              By:
                                 ------------------------------
                              Name:
                                   ---------------------------
                              Title:
                                    --------------------------


                              NOTICE ADDRESS:

                              Merrill Corporation
                              One Merrill Circle
                              St. Paul, MN  55108
                              Attention:  General Counsel




                              S-5


                              MERRILL/ALTERNATIVES, INC.

                              By:
                                 ------------------------------
                              Name:
                                   ---------------------------
                              Title:
                                    --------------------------


                              NOTICE ADDRESS:

                              Merrill Corporation
                              One Merrill Circle
                              St. Paul, MN  55108
                              Attention:  General Counsel






                             S-6



                              U.S. BANK NATIONAL ASSOCIATION,
                              as Secured Party


                              By:
                                 ------------------------------
                              Name:
                                   ---------------------------
                              Title:
                                    --------------------------


                              NOTICE ADDRESS:

                              U.S. Bank National Association
                              601 Second Avenue South
                              Minneapolis, MN  55402




                             S-7


     IN WITNESS WHEREOF, the undersigned Additional Guarantor has caused this
Guaranty to be duly executed and delivered by its officer thereunto duly
authorized as of _________, ____.



                      --------------------------------------------------
                              (Name of Additional Guarantor)


                         By:
                            --------------------------------------------
                         Name:
                              ------------------------------------------
                         Title:
                               -----------------------------------------

                         Address:
                                 ---------------------------------------
                                 ---------------------------------------
                                 ---------------------------------------




                                S-8


                                    EXHIBIT J

                       FORM OF LENDER ASSIGNMENT AGREEMENT

          This LENDER ASSIGNMENT AGREEMENT (this "AGREEMENT") is entered into
by and between the parties designated as Assignor ("ASSIGNOR") and Assignee
("ASSIGNEE") above the signatures of such parties on the Schedule of Terms
attached hereto and hereby made an integral part hereof (the "SCHEDULE OF
TERMS") and relates to that certain Credit Agreement described in the
Schedule of Terms (said Credit Agreement, as amended, supplemented or
otherwise modified to the date hereof and as it may hereafter be amended,
supplemented or otherwise modified from time to time, being the "CREDIT
AGREEMENT", the terms defined therein and not otherwise defined herein being
used herein as therein defined).

          IN CONSIDERATION of the agreements, provisions and covenants herein
contained, the parties hereto hereby agree as follows:

          SECTION 1.  ASSIGNMENT AND ASSUMPTION.

          (a)   Effective upon the Settlement Date specified in Item 4 of the
Schedule of Terms (the "SETTLEMENT DATE"), Assignor hereby sells and assigns
to Assignee, without recourse, representation or warranty (except as
expressly set forth herein), and Assignee hereby purchases and assumes from
Assignor, that percentage interest in all of Assignor's rights and
obligations as a Lender arising under the Credit Agreement and the other Loan
Documents with respect to Assignor's Commitments, if any, and outstanding
Loans, if any, which represents, as of the Settlement Date, the percentage
interest specified in Item 3 of the Schedule of Terms of all rights and
obligations of Lenders arising under the Credit Agreement and the other Loan
Documents with respect to the Commitments and any outstanding Loans (the
"ASSIGNED SHARE").  Without limiting the generality of the foregoing, the
parties hereto hereby expressly acknowledge and agree that any assignment of
all or any portion of Assignor's rights and obligations relating to
Assignor's Revolving Loan Commitment shall include the sale to Assignee of a
ratable portion of any participations previously purchased by Assignor
pursuant to Section 2.6.1 of the Credit Agreement or, if Assignor is an
Issuer with respect to any outstanding Letters of Credit, an interest in a
ratable portion of Assignor's retained interest with respect thereto.

          (b)   In consideration of the assignment described above, Assignee
hereby agrees to pay to Assignor, on the Settlement Date, the principal
amount of any outstanding Loans included within the Assigned Share, together
with accrued and unpaid interest thereon and accrued and unpaid commitment
and letter of credit fees, such payment to be made by wire transfer of
immediately available funds in accordance with the applicable payment
instructions set forth in Item 5 of the Schedule of Terms.

                                      J-1



          (c)   Assignor hereby represents and warrants that Item 3 of the
Schedule of Terms correctly sets forth the amount of the Commitments, the
outstanding Loans and the Percentage corresponding to the Assigned Share.

          (d)   Assignor and Assignee hereby agree that, upon giving effect
to the assignment and assumption described above, (i) Assignee shall be a
party to the Credit Agreement and shall have all of the rights and
obligations under the Loan Documents, and shall be deemed to have made all of
the covenants and agreements contained in the Loan Documents, arising out of
or otherwise related to the Assigned Share, and (ii) Assignor shall be
absolutely released from any of such obligations, covenants and agreements
assumed or made by Assignee in respect of the Assigned Share.  Assignee
hereby acknowledges and agrees that the agreement set forth in this SECTION
1(d) is expressly made for the benefit of Company, Holdco, Administrative
Agent, Assignor and the other Lenders and their respective successors and
permitted assigns.

          (e)   Assignor and Assignee hereby acknowledge and confirm their
understanding and intent that (i) this Agreement shall effect the assignment
by Assignor and the assumption by Assignee of Assignor's rights and
obligations with respect to the Assigned Share, (ii) any other assignments by
Assignor of a portion of its rights and obligations with respect to the
Commitments and any outstanding Loans shall have no effect on the
Commitments, the outstanding Loans and the Percentage corresponding to the
Assigned Share as set forth in Item 3 of the Schedule of Terms or on the
interest of Assignee in any outstanding Loans corresponding thereto, and
(iii) from and after the Settlement Date, Administrative Agent shall make all
payments under the Credit Agreement in respect of the Assigned Share
(including all payments of principal and accrued but unpaid interest,
commitment fees and letter of credit fees with respect thereto) to Assignee;
PROVIDED that Assignor and Assignee shall make payments directly to each
other to the extent necessary to effect any appropriate adjustments in any
amounts distributed to Assignor and/or Assignee by Administrative Agent under
the Loan Documents in respect of the Assigned Share in the event that, for
any reason whatsoever, the payment of consideration contemplated by SECTION
1(b) occurs on a date other than the Settlement Date.

          SECTION 2.  CERTAIN REPRESENTATIONS, WARRANTIES AND AGREEMENTS.

          (a)   Assignor represents and warrants that it is the legal and
beneficial owner of the Assigned Share, free and clear of any adverse claim.

          (b)   Assignor shall not be responsible to Assignee for the
execution, effectiveness, genuineness, validity, enforceability,
collectibility or sufficiency of any of the Loan Documents or for any
representations, warranties, recitals or statements made therein or made in
any written or oral statements or in any financial or other statements,
instruments, reports or certificates or any other documents furnished or made
by Assignor to Assignee or by or on behalf of Holdco or any of its
Subsidiaries to Assignor or Assignee in connection with the Loan Documents
and the transactions contemplated thereby or for the financial condition or
business affairs of Holdco or any other Person liable for the payment of any

                                      J-2



Obligations, nor shall Assignor be required to ascertain or inquire as to the
performance or observance of any of the terms, conditions, provisions,
covenants or agreements contained in any of the Loan Documents or as to the
use of the proceeds of the Loans or the use of the Letters of Credit or as to
the existence or possible existence of any Default.

          (c)   Assignee represents and warrants that it meets the
requirements of an eligible assignee under the terms of subsection 11.11 of
the Credit Agreement; that it has experience and expertise in the making of
loans such as the Loans; that it has acquired the Assigned Share for its own
account in the ordinary course of its business and without a view to
distribution of the Loans within the meaning of the Securities Act of 1933,
as amended, or the Securities Exchange Act of 1934, as amended, or other
federal securities laws (it being understood that, subject to the provisions
of subsection 11.11 of the Credit Agreement, the disposition of the Assigned
Share or any interests therein shall at all times remain within its exclusive
control); and that it has received, reviewed and approved a copy of the
Credit Agreement (including all Exhibits and Schedules thereto) as in effect
on the date hereof.

          (d)   Assignee represents and warrants that it has received from
Assignor such financial information regarding Holdco and its Subsidiaries as
is available to Assignor and as Assignee has requested, that it has made its
own independent investigation of the financial condition and affairs of
Holdco and its Subsidiaries in connection with the assignment evidenced by
this Agreement, and that it has made and shall continue to make its own
appraisal of the creditworthiness of Holdco and its Subsidiaries.  Assignor
shall have no duty or responsibility, either initially or on a continuing
basis, to make any such investigation or any such appraisal on behalf of
Assignee or to provide Assignee with any other credit or other information
with respect thereto, whether coming into its possession before the making of
the initial Loans or at any time or times thereafter, and Assignor shall not
have any responsibility with respect to the accuracy of or the completeness
of any information provided to Assignee.

          (e)   Each party to this Agreement represents and warrants to the
other party hereto that it has full power and authority to enter into this
Agreement and to perform its obligations hereunder in accordance with the
provisions hereof, that this Agreement has been duly authorized, executed and
delivered by such party and that this Agreement constitutes a legal, valid
and binding obligation of such party, enforceable against such party in
accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors' rights generally and by general principles
of equity.

          (f)   Assignee hereby represents and warrants that none of the
funds, monies, assets or other consideration being used to make the purchase
pursuant to this Agreement are "plan assets" as defined under ERISA and that
its rights, benefits, and interests in and under the Loan Documents will not
be "plan assets" under ERISA.

                                      J-3



          SECTION 3.  MISCELLANEOUS.

          (a)   Each of Assignor and Assignee hereby agrees from time to
time, upon request of the other such party hereto, to take such additional
actions and to execute and deliver such additional documents and instruments
as such other party may reasonably request to effect the transactions
contemplated by, and to carry out the intent of, this Agreement.

          (b)   Neither this Agreement nor any term hereof may be changed,
waived, discharged or terminated, except by an instrument in writing signed
by the party (including, if applicable, any party required to evidence its
consent to or acceptance of this Agreement) against whom enforcement of such
change, waiver, discharge or termination is sought.

          (c)   Unless otherwise specifically provided herein, any notice or
other communication herein required or permitted to be given shall be given
and shall be effective as set forth in subsection 11.2 of the Credit
Agreement.

          (d)   In case any provision in or obligation under this Agreement
shall be invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions or obligations, or of
such provision or obligation in any other jurisdiction, shall not in any way
be affected or impaired thereby.

          (e)   THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING
SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK),
WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.

          (f)   This Agreement shall be binding upon, and shall inure to the
benefit of, the parties hereto and their respective successors and assigns.

          (g)   This Agreement may be executed in one or more counterparts
and by different parties hereto in separate counterparts, each of which when
so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and
attached to a single counterpart so that all signature pages are physically
attached to the same document.

          (h)   This Agreement shall become effective upon the date (the
"EFFECTIVE DATE") upon which all of the following conditions are satisfied:
(i) the execution of a counterpart hereof by each of Assignor and Assignee,
(ii) the execution of a counterpart hereof by Company and Administrative
Agent as evidence of their consent hereto to the extent required under
subsection 11.11.1 of the Credit Agreement, (iii) the receipt by
Administrative Agent of the processing fee referred to in subsection 11.11.1
of the Credit

                                      J-4



Agreement, (iv) in the event Assignee is a Non-U.S. Lender, the delivery by
Assignee to Administrative Agent of such forms, certificates or other
evidence with respect to United States federal income tax withholding matters
as Assignee may be required to deliver to Administrative Agent pursuant to
SUBSECTION 4.6(b), (v) the receipt by Administrative Agent of originals or
telefacsimiles of the counterparts described above and authorization of
delivery thereof, and (vi) the recordation by Administrative Agent in the
Register of the pertinent information regarding the assignment effected
hereby in accordance with sections 2.7 and 11.11 of the Credit Agreement.



                    [Remainder of page intentionally left blank]






                                      J-5



          IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and delivered by their respective officers thereunto duly
authorized, such execution being made as of the Effective Date in the
applicable spaces provided on the Schedule of Terms.
















                                      J-6



                                  SCHEDULE OF TERMS

1.   BORROWER:  Company (as defined in the Credit Agreement)

2.   NAME AND DATE OF CREDIT AGREEMENT:  Credit Agreement dated as of
     November 23, 1999 by and among Merrill Communications LLC, a Delaware
     limited liability company, Merrill Corporation, a Minnesota corporation, as
     guarantor, the financial institutions listed therein as Lenders, DLJ
     Capital Funding, Inc., as Syndication Agent for the Lenders, Wells Fargo
     Bank, N.A., as Documentation Agent for the Lenders and U.S. Bank National
     Association, as Administrative Agent for the Lenders.

3.   Amounts:



                                                                   Re: Revolving
                                                 Re:           Re:      Loans
                                                                         and
                                               Term-A       Term-B     Letters
                                                Loans        Loans    of Credit
(a)  Aggregate Commitments of all Lenders:   $_________     $_______  $_______
(b)  Assigned Share/Percentage:               _______%      _______%  _______%
(c)  Amount of Assigned Share of Commitments: $________     $_______  $_______
(d)  Amount of Assigned Share of Loans:       $________     $_______  $_______

  4. SETTLEMENT DATE:   ____________, ____


  5. PAYMENT INSTRUCTIONS:
       ASSIGNOR:                        ASSIGNEE:
       ____________________________     ____________________________
       ____________________________     ____________________________
       ____________________________     ____________________________
       Attention: __________________    Attention: __________________
       Reference: _________________     Reference: _________________

                    [Remainder of page intentionally left blank]



                                    J-7



6.  NOTICE ADDRESSES:
       ASSIGNOR:                        ASSIGNEE:
       ____________________________     ____________________________
       ____________________________     ____________________________
       ____________________________     ____________________________
       ____________________________     ____________________________

7.  SIGNATURES:

[NAME OF ASSIGNOR],                     [NAME OF ASSIGNEE],
as Assignor                             as Assignee

By:_______________________              By:_______________________
Name:_____________________              Name:_____________________
Title:____________________              Title:____________________
Consented to in accordance with         Accepted in accordance with
subsection 11.11.1 of the Credit        subsection 11.11.1 of the Credit
Agreement                               Agreement


MERRILL COMMUNICATIONS LLC              U.S. BANK NATIONAL ASSOCIATION
                                        as the Administrative Agent

By:_______________________              By:_______________________
Name:_____________________              Name:_____________________
Title:____________________              Title:____________________



                                   J-8

EX-10.3

                              INVESTORS' AGREEMENT

                                   DATED AS OF

                                NOVEMBER 23, 1999

                                  BY AND AMONG

                            VIKING MERGER SUB, INC.,

                     DLJ MERCHANT BANKING PARTNERS II, L.P.,

                    DLJ MERCHANT BANKING PARTNERS II-A, L.P.,
                         DLJ OFFSHORE PARTNERS II, C.V.,
                         DLJ DIVERSIFIED PARTNERS, L.P.
                       DLJ DIVERSIFIED PARTNERS -A, L.P.,
                          DLJ MILLENNIUM PARTNERS, L.P.
                         DLJ MILLENNIUM PARTNERS-A, L.P.
                             DLJMB FUNDING II, INC.,
                             DLJ EAB PARTNERS, L.P.,
                              DLJ FIRST ESC, L.P.,
                                DLJ ESC II L.P.,
                        DLJ INVESTMENT FUNDING II, INC.,
                         DLJ INVESTMENT PARTNERS, L.P.,
                        DLJ INVESTMENT PARTNERS II, L.P.,
              DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION,
                            BNY CAPITAL CORPORATION,
                       CARLYLE HIGH YIELD PARTNERS, L.P.,
                   CONNECTICUT GENERAL LIFE INSURANCE COMPANY,
                    LIFE INSURANCE COMPANY OF NORTH AMERICA,

                                 JOHN W. CASTRO

                                       AND

                                RICK R. ATTERBURY




                                TABLE OF CONTENTS

                                -----------------



                                                                            PAGE
                                                                            ----

                                     ARTICLE
                                   DEFINITIONS

   Section 1.01.      DEFINITIONS..............................................2

                                    ARTICLE 2
                              CORPORATE GOVERNANCE

   Section 2.01.      COMPOSITION OF THE BOARD.................................8
   Section 2.02.      REMOVAL..................................................8
   Section 2.03.      VACANCIES................................................8
   Section 2.04.      MEETINGS.................................................8
   Section 2.05.      ACTION BY THE BOARD......................................9
   Section 2.06.      CONFLICTING CHARTER OR BYLAW PROVISIONS..................9

                                    ARTICLE 3
                            RESTRICTIONS ON TRANSFER

   Section 3.01.      GENERAL..................................................9
   Section 3.02.      LEGENDS.................................................10
   Section 3.03.      PERMITTED TRANSFEREES...................................10
   Section 3.04.      RESTRICTIONS ON TRANSFERS BY MANAGEMENT STOCKHOLDERS....10

                                    ARTICLE 4
             TAG-ALONG RIGHTS; DRAG-ALONG RIGHTS; PRE-EMPTIVE RIGHTS

   Section 4.01.      RIGHTS TO PARTICIPATE IN TRANSFER.......................11
   Section 4.02.      RIGHT TO COMPEL PARTICIPATION IN CERTAIN TRANSFERS......13
   Section 4.03.      CERTAIN RIGHTS..........................................15
   Section 4.04.      PRE-EMPTIVE RIGHTS......................................15
   Section 4.05.      TREATMENT OF DLJIP ENTITIES.............................16

                                    ARTICLE 5
                               REGISTRATION RIGHTS

   Section 5.01.      DEMAND REGISTRATION.....................................16
   Section 5.02.      PIGGYBACK REGISTRATION..................................19
   Section 5.03.      HOLDBACK AGREEMENTS.....................................20
   Section 5.04.      REGISTRATION PROCEDURE..................................20
   Section 5.05.      INDEMNIFICATION BY THE COMPANY..........................23








   Section 5.06.      INDEMNIFICATION BY PARTICIPATING STOCKHOLDERS...........24
   Section 5.07.      CONDUCT OF INDEMNIFICATION PROCEEDINGS..................24
   Section 5.08.      CONTRIBUTION............................................25
   Section 5.09.      PARTICIPATION IN PUBLIC OFFERING........................26
   Section 5.10.      OTHER INDEMNIFICATION...................................26
   Section 5.11.      COOPERATION BY THE COMPANY..............................26

                                    ARTICLE 6
                                  MISCELLANEOUS

   Section 6.01.      ENTIRE AGREEMENT........................................27
   Section 6.02.      BINDING EFFECT; BENEFIT.................................27
   Section 6.03.      EXCLUSIVE FINANCIAL AND INVESTMENT BANKING ADVISOR......27
   Section 6.04.      ASSIGNABILITY...........................................27
   Section 6.05.      PRINTING BUSINESS.......................................27
   Section 6.06.      AMENDMENT; WAIVER; TERMINATION..........................27
   Section 6.07.      NOTICES.................................................28
   Section 6.08.      HEADINGS................................................29
   Section 6.09.      COUNTERPARTS............................................29
   Section 6.10.      APPLICABLE LAW..........................................29
   Section 6.11.      SPECIFIC ENFORCEMENT....................................29
   Section 6.12.      CONSENT TO JURISDICTION.................................30





                              INVESTORS' AGREEMENT

         AGREEMENT dated as of November 23, 1999 among (i) Viking Merger Sub,
Inc. ("VIKING") which, immediately upon consummation of the Merger will become
Merrill Corporation, a Minnesota corporation (the surviving corporation being
the "COMPANY"), (ii) DLJ Merchant Banking Partners II, L.P., a Delaware limited
partnership, DLJ Offshore Partners II, C.V., a Netherlands Antilles limited
partnership, DLJ Merchant Banking Partners II-A, L.P., a Delaware limited
partnership, DLJ Diversified Partners, L.P., a Delaware limited partnership, DLJ
Diversified Partners-A, L.P., a Delaware limited partnership, DLJ EAB Partners,
L.P., a Delaware limited partnership, DLJ Millennium Partners, L.P., a Delaware
limited partnership, DLJ Millennium Partners-A, L.P., a Delaware limited
partnership, DLJMB Funding II, Inc., a Delaware corporation, DLJ First ESC,
L.P., a Delaware limited partnership DLJ ESC II, L.P., a Delaware limited
partnership, DLJ Investment Partners II, L.P., a Delaware limited partnership,
DLJ Investment Partners, L.P., a Delaware limited partnership, DLJ Investment
Funding II, Inc., a Delaware corporation (each of the foregoing, a "DLJ ENTITY",
and collectively, the "DLJ ENTITIES"), (iii) Donaldson, Lufkin & Jenrette
Securities Corporation, BNY Capital Corporation, Carlyle High Yield Partners,
L.P., Connecticut General Life Insurance Company, Life Insurance Company of
North America and (iv) John W. Castro and Rick R. Atterbury (each a "MANAGEMENT
STOCKHOLDER" and collectively, the "MANAGEMENT STOCKHOLDERS") (each of the
persons in (ii), (iii) and (iv) a "STOCKHOLDER" and collectively, the
"STOCKHOLDERS").

                         W I T N E S S E T H:

         WHEREAS, pursuant to the Agreement and Plan of Merger dated July 14,
1999 between Viking and the Company, as amended, (the "MERGER AGREEMENT"),
Viking has agreed to merge with and into the Company, with the Company as the
surviving corporation (the "MERGER");

         WHEREAS, prior to the Merger, the DLJ Entities and the entities
described in (iii) above will acquire securities in Viking and will, at the time
the Merger becomes effective pursuant to the terms of the Merger Agreement (the
"EFFECTIVE TIME") hold securities in the Company;

         WHEREAS, immediately prior to the Merger, the Management Stockholders
will own class B common shares in the Company which will remain outstanding at
the Effective Time;

         WHEREAS, the parties hereto desire to enter into this Agreement to
govern certain of their rights, duties and obligations as holders of securities
in the Company after consummation of the transactions contemplated by the Merger
Agreement;

         NOW, THEREFORE, in consideration of the covenants and agreements
contained herein and in the Merger Agreement, and with effect from the Effective
Time, the parties hereto agree as follows:






                                    ARTICLE 1
                                   DEFINITIONS

         Section 1.01 DEFINITIONS. (a) The following terms, as used herein, have
the following meanings:

         "AFFILIATE" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control with
such Person; PROVIDED that no stockholder of the Company shall be deemed an
Affiliate of any other stockholder of the Company solely by reason of any
investment in the Company. For the purpose of this definition, the term
"CONTROL" (including with correlative meanings, the terms "controlling",
"CONTROLLED BY" and "UNDER COMMON CONTROL WITH"), when used with respect to any
Person, means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of such Person, whether
through the ownership of voting securities, by contract or otherwise.

         "AFFILIATED EMPLOYEE BENEFIT TRUST" means any trust that is a successor
to the assets held by a trust established under an employee benefit plan subject
to ERISA or any other trust established directly or indirectly under such plan
or any other such plan having the same sponsor.

         "AGGREGATE OWNERSHIP" means, with respect to any Stockholder or group
of Stockholders, and with respect to any class of Company Securities, the total
amount of such securities "beneficially owned" (as such term is defined in Rule
13d-3 under the Exchange Act without regard to the timing limitation in Rule
13d-3(d)(1)(i)) (without duplication) by such Stockholder or group of
Stockholders as of the date of such calculation (but adjusted in accordance with
the proviso below), calculated on a Fully Diluted basis and taking into account
any stock dividend, stock split or reverse stock split; PROVIDED that such
amount of securities shall be increased (without duplication) with respect to
any Stockholder, by any stock appreciation rights, options, warrants or other
rights to purchase or subscribe for Company Securities of such Stockholder only
as and when such stock appreciation rights, options, warrants or other rights
have vested.

         "BOARD" means the board of directors of the Company.

         "BUSINESS DAY" means any day except a Saturday, Sunday or other day on
which commercial banks in New York City are authorized by law to close.

         "BYLAWS" means the Bylaws of the Company, as amended from time to time.

         "CHARTER" means the Articles of Incorporation of the Company, as
amended from time to time.

         "CLOSING DATE" means November 23, 1999.

         "CO-INVEST MANAGEMENT STOCKHOLDER" means any individual who (a) may, in
accordance with Section 6.04, become a Management Stockholder after the Closing
Date and (b)


                                        2




participates in any leveraged co-investment plan, stock option plan or other
stock based incentive plan of the Company after the Closing Date.

         "COMMON SHARES" means the voting common shares, par value $0.01 per
share, of Viking and immediately upon consummation of the Merger will mean,
without duplication, the voting class B common shares, par value $0.01 per
share, of the Company and any shares into which such Common Shares may
thereafter be converted or exchanged.

         "COMPANY SECURITIES" means the Common Shares (and securities
convertible into or exchangeable for Common Shares), the Preferred Shares and
any options, warrants (including the Warrants) or other rights to acquire Common
Shares, Preferred Shares or any other equity security issued by the Company.

         "DLJIP ENTITIES" means collectively, DLJ ESC II L.P., DLJ Investment
Funding II, Inc., DLJ Investment Partners, L.P. and DLJ Investment Partners II,
L.P.

         "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.

         "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.

         "FULLY DILUTED" means, with respect to Common Shares and without
duplication, all outstanding Common Shares and all Common Shares issuable in
respect of securities convertible into or exchangeable for Common Shares, stock
appreciation rights, options, warrants (including the Warrants) and other rights
to purchase or subscribe for Common Shares or securities convertible into or
exchangeable for Common Shares; PROVIDED that, to the extent any of the
foregoing stock appreciation rights, options, warrants or other rights to
purchase or subscribe for Common Shares are subject to vesting, the Common
Shares subject to vesting shall be included in the definition of "Fully Diluted"
only upon and to the extent of such vesting.

         "FIRST PUBLIC OFFERING" means the first sale after the date hereof of
Common Shares pursuant to an effective registration statement under the
Securities Act (other than a registration statement on Form S-8 or any successor
form and other than the registration statement filed in connection with Senior
Notes Warrants and in connection with any Common Shares for which warrants may
be exercised).

         "INITIAL OWNERSHIP" means, with respect to any Stockholder and any
class of Company Securities, the number of shares of such class of Company
Securities beneficially owned and (without duplication) which such Persons have
the right to acquire as of the date hereof, or in the case of any Person that
shall become a party to this Agreement on a later date, as of such date, taking
into account any stock split, stock dividend, reverse stock split or similar
event.

         "OTHER STOCKHOLDERS" means all Stockholders other than the DLJ
Entities, and their respective Permitted Transferees.


                                        3





         "PERMITTED TRANSFEREE" means:

                           (i) in the case of any DLJ Entity (A) any other DLJ
                  Entity, (B) any general or limited partner of any DLJ Entity
                  (a "DLJ PARTNER"), and any corporation, partnership,
                  Affiliated Employee Benefit Trust or other entity that is an
                  Affiliate of any DLJ Partner (collectively, the "DLJ
                  AFFILIATES"), (C) any managing director, general partner,
                  director, limited partner, officer or employee of any DLJ
                  Entity or of any DLJ Affiliate, or the heirs, executors,
                  administrators, testamentary trustees, legatees or
                  beneficiaries of any of the foregoing persons referred to in
                  this clause (C) (collectively, "DLJ ASSOCIATES"), (D) a trust,
                  the beneficiaries of which, or a corporation, limited
                  liability company or partnership, the stockholders, members or
                  general or limited partners of which, include only DLJ
                  Entities, DLJ Affiliates, DLJ Associates, their spouses or
                  their lineal descendants or (E) a voting trustee for one or
                  more DLJ Entities, DLJ Affiliates or DLJ Associates under the
                  terms of a voting trust;

                           (ii) in the case of any Other Stockholder that is an
                  individual, (A) a spouse, child, parent, or sibling (or child
                  thereof) of the Other Stockholder or the heirs, executors,
                  administrators, testamentary trustees, legatees or
                  beneficiaries of any of the foregoing persons referred to in
                  this clause (A), (B) a trust for the benefit of any of the
                  foregoing or the Other Stockholder, (C) a charitable remainder
                  trust, or (D) a private foundation or similar not-for-profit
                  entity controlled solely by such Other Stockholder or the
                  spouse or a child of such Other Stockholder, PROVIDED that if
                  any such Other Stockholder shall transfer, individually or in
                  the aggregate, more than 10% of his or her Initial Ownership
                  of Common Shares, the Permitted Transferee to whom such Common
                  Shares have been transferred shall grant such Other
                  Stockholder an irrevocable proxy with respect to the voting of
                  any matter relating to such shares; and

                           (iii) in the case of any Other Stockholder that is
                  not an individual, any Affiliate of such Other Stockholder.

         "PERSON" means an individual, corporation, partnership, association,
trust or other entity or organization, including a government or political
subdivision or an agency or instrumentality thereof.

         "PREFERRED SHARES" means the 14.5% Senior Preferred Shares due 2011,
$0.01 par value, of the Company.

         "PRO RATA PORTION" means the number of Common Shares a Stockholder
holds on a Fully Diluted basis multiplied by a fraction, the numerator of which
is the number of Common Shares to be sold by the DLJ Entities and their
Permitted Transferees in a given transaction (including, if Warrants are to be
sold, the number of Common Shares into which such Warrants may be converted upon
exercise) and the denominator of which is the total number of Common

                                        4






Shares, on a Fully Diluted basis, held in the aggregate by the DLJ Entities and
their Permitted Transferees prior to such transaction.

         "PUBLIC OFFERING" means an underwritten public offering of Registrable
Securities of the Company pursuant to an effective registration statement under
the Securities Act.

         "REGISTRABLE SECURITIES" means any Shares until (i) a registration
statement covering such Shares has been declared effective by the SEC and such
shares have been disposed of pursuant to such effective registration statement,
(ii) such Shares are sold under circumstances in which all of the applicable
conditions of Rule 144 are met or under which they may be sold pursuant to Rule
144(k) or (iii) such Shares are otherwise transferred, the Company has delivered
a new certificate or other evidence of ownership for such Shares not bearing the
legend required pursuant to this Agreement and such Shares may be resold without
subsequent registration under the Securities Act.

         "REGISTRATION EXPENSES" means (i) all registration and filing fees,
(ii) fees and expenses of compliance with securities or blue sky laws (including
reasonable fees and disbursements of counsel in connection with blue sky
qualifications of the Shares), (iii) printing expenses, (iv) internal expenses
of the Company (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), (v) reasonable
fees and disbursements of counsel for the Company and customary fees and
expenses for independent certified public accountants retained by the Company
(including the expenses of any comfort letters or costs associated with the
delivery by independent certified public accountants of a comfort letter or
comfort letters requested pursuant to Section 5.04(h)), (vi) reasonable fees and
expenses of any special experts retained by the Company in connection with such
registration, (vii) reasonable fees and expenses of one counsel for the
Stockholders participating in the offering selected (A) by the DLJ Entities, in
the case of any offering in which such entities participate, or (B) in any other
case, by the Other Stockholders holding the majority of Shares to be sold for
the account of all Other Stockholders in the offering, (viii) fees and expenses
in connection with any review of underwriting arrangements by the National
Association of Securities Dealers, Inc. (the "NASD") including fees and expenses
of any "QUALIFIED INDEPENDENT UNDERWRITER" and (ix) fees and disbursements of
underwriters customarily paid by issuers or sellers of securities, which shall
not include any underwriting fees, discounts or commissions attributable to the
sale of Registrable Securities, or any out-of-pocket expenses of the
Stockholders (or the agents who manage their accounts), except as set forth in
(vii) above, but which shall include any fees and expenses of underwriter's
counsel.

         "RESTRICTION TERMINATION DATE" means the earlier to occur of (a) the
fourth anniversary of the Closing Date and (b) the date upon which the Aggregate
Ownership of Common Shares of the DLJ Entities and any of their Permitted
Transferees falls below 10 percent of the Initial Ownership of Common Shares of
the DLJ Entities.

         "RULE 144" means Rule 144 and Rule 144A (or any successor provisions)
under the Securities Act.

         "SEC" means the Securities and Exchange Commission.

                                        5






         "SECTION 4.04 PORTION" means the pro rata portion of any Company equity
securities proposed to be issued by the Company with respect to which
Stockholders shall be entitled to exercise their rights under Section 4.04 based
upon such Stockholder's Aggregate Ownership of Common Shares as a percentage of
the Aggregate Ownership of Common Shares of all Stockholders.

         "SECURITIES ACT" means the Securities Act of 1933, as amended.

         "SENIOR NOTES WARRANTS" means the warrants attached to the Senior
Discount Notes due 2009 of Merrill Corporation issued on or about November 23,
1999.

         "SHARES" means Common Shares, Preferred Shares and Warrant Shares.

         "STOCKHOLDER" means each Person (other than the Company) who shall be a
party to or bound by this Agreement, whether in connection with the execution
and delivery hereof as of the date hereof, pursuant to Section 6.04, or
otherwise, so long as such Person shall (i) beneficially own any Company
Securities, or (ii) have any stock appreciation rights, options, warrants or
other rights to purchase or subscribe for Company Securities.

         "TAG-ALONG PORTION" means the number of Common Shares held (or, without
duplication, Common Shares acquirable upon exercise of the Warrants) by the
Tagging Person or the Selling Person, as the case may be, multiplied by a
fraction, the numerator of which is the number of Common Shares (or, without
duplication, Common Shares acquirable upon the exercise of Warrants) proposed to
be sold in the Tag-Along Sale pursuant to Section 4.01, and the denominator of
which is the aggregate number of Common Shares (assuming the exercise of all
Warrants) outstanding and owned by all Stockholders;

         "THIRD PARTY" means a prospective purchaser of Shares in an
arm's-length transaction from a Stockholder where such purchaser is not a
Permitted Transferee of such Stockholder.

         "WARRANTS" means the warrants issued by the Company to Stockholders
pursuant to the Subscription Agreement for the purchase of an aggregate of
344,263 Common Shares (subject to adjustment as provided for therein).

         "WARRANT SHARES" means shares of Common Stock issuable by the Company
upon exercise of the Warrants.

         (b) The term "DLJ ENTITIES", to the extent such entities shall have
transferred any of their Shares to Permitted Transferees, shall mean the DLJ
Entities and the Permitted Transferees of the DLJ Entities, taken together, and
any right or action that may be taken at the election of the DLJ Entities may be
taken at the election of the DLJ Entities and such Permitted Transferees.

         (c) The term "MANAGEMENT STOCKHOLDERS", to the extent such stockholders
shall have transferred any of their Shares to Permitted Transferees, shall mean
the Management Stockholders and the Permitted Transferees of the Management
Stockholders, taken together,

                                        6






and any right or action that may be taken at the election of the Management
Stockholders may be taken at the election of the Management Stockholders and
such Permitted Transferees.

         (d) The term "OTHER STOCKHOLDERS", to the extent such stockholders
shall have transferred any of their Shares to Permitted Transferees, shall mean
the Other Stockholders and the Permitted Transferees of the Other Stockholders,
taken together, and any right or action that may be taken at the election of the
Other Stockholders may be taken at the election of the Other Stockholders and
such Permitted Transferees.

         (e) Each of the following terms is defined in the Section set forth
opposite such term:

                           TERM                      SECTION

                  Demand Registration                5.01(e)
                  DLJSC                              6.03
                  Drag-Along Rights                  4.02(a)
                  Holdback Period                    5.03
                  Holders                            5.01(e)
                  Incidental Registration            5.01(e)
                  Indemnified Party                  5.07
                  Indemnifying Party                 5.07
                  Inspectors                         5.04(g)
                  Maximum Offering Size              5.01(e)
                  Nominee                            2.03(a)
                  Participating Stockholder          4.04(b)
                  Public float                       4.01(f)
                  Public Offering Limitations        3.04(a)
                  Records                            5.04(g)
                  Registration Request               5.01
                  Relevant Portion                   4.04(b)
                  Relevant Stockholder               4.04(b)
                  Section 4.01 Response Notice       4.01(a)
                  Section 4.02 Notice                4.02(a)
                  Section 4.02 Notice Period         4.02(a)
                  Section 4.02 Sale                  4.02(a)
                  Section 4.02 Sale Price            4.02(a)
                  Selling Person                     4.01(a)
                  Selling Stockholder                5.01(e)
                  Subscription Agreement             6.01
                  Tag-Along Notice                   4.01(a)
                  Tag-Along Notice Period            4.01(a)
                  Tag-Along Offer                    4.01(a)
                  Tag-Along Right                    4.01(a)
                  Tag-Along Sale                     4.01(a)
                  Tagging Person                     4.01(a)

                                        7




                  TCW Entity                         3.01
                  Transfer                           3.01

                                    ARTICLE 2
                              CORPORATE GOVERNANCE

         Section 2.01. COMPOSITION OF THE BOARD. (a) The Board shall consist
initially of seven directors, three of which (including the Chairman) will be
nominated by DLJ Merchant Banking Partners II, L.P., three of which will be
nominated by the Management Stockholders and one of which shall be nominated by
DLJ Investment Partners II, L.P. so long as its Aggregate Ownership of Common
Shares exceeds 10% of its Initial Ownership of Common Shares, failing which,
such director will be nominated by DLJ Merchant Banking Partners II, L.P. Any
directors appointed pursuant to paragraph 7(b) of the Certificate of Designation
of the Preferred Shares shall be in addition to these seven directors and shall
not affect the rights of appointment hereunder.

         (b) Each Stockholder entitled to vote for the election of directors to
the Board agrees that it will vote its Shares or execute written consents, as
the case may be, and take all other necessary action (including causing the
Company to call a special meeting of stockholders) in order to ensure that the
composition of the Board is as set forth in this Section 2.01; PROVIDED that the
DLJ Entities will be required to vote their shares in favor of the nominees of
the Management Stockholders only until the time that the Aggregate Ownership of
Common Shares of the Management Stockholders falls below 10 percent of the
Initial Ownership of Common Shares of the Management Stockholders.

         Section 2.02. REMOVAL. Each Stockholder agrees that if, at any time, it
is then entitled to vote for the removal of directors of the Company, it will
not vote any of its Shares in favor of the removal of any director who shall
have been designated or nominated pursuant to Section 2.01 unless such removal
shall be for cause or the Persons entitled to designate or nominate such
director shall have consented to such removal in writing.

         Section 2.03. VACANCIES. If, as a result of death, disability,
retirement, resignation, removal (with or without cause) or otherwise, there
shall exist or occur any vacancy of the Board:

         (a) the Person or Persons entitled under Section 2.01 to designate or
nominate such director whose death, disability, retirement, resignation or
removal resulted in such vacancy may designate another individual (the
"NOMINEE") to fill such capacity and serve as a director of the Company; and

         (b) each Stockholder then entitled to vote for the election of the
Nominee as a director of the Company agrees that it will vote its Shares, or
execute a written consent, as the case may be, in order to ensure that the
Nominee is elected to the Board.

         Section 2.04. MEETINGS. The Board shall hold a regularly scheduled
meeting at least once every calendar quarter.

                                        8






         Section 2.05. ACTION BY THE BOARD. (a) A quorum of the Board shall
consist of four directors; PROVIDED that the DLJ Entities shall have the right
at any time to increase the number of directors necessary to constitute a quorum
of the Board. All actions of the Board shall require the affirmative vote of at
least a majority of the directors present at a duly convened meeting of the
Board at which a quorum is present or the unanimous written consent of the
Board; PROVIDED that, in the event there is a vacancy on the Board and an
individual has been nominated to fill such vacancy, the first order of business
shall be to fill such vacancy.

         (b) The Board may create executive, compensation and audit committees,
as well as such other committees as it may determine, to the extent authorized
by applicable law. To the extent not prohibited by applicable law, the DLJ
Entities shall be entitled to majority representation on any committee created
by the Board and the Management Stockholders shall be entitled to at least one
representative on any such committee.

         Section 2.06. CONFLICTING CHARTER OR BYLAW PROVISIONS. Each Stockholder
shall vote its Shares or execute written consents, as the case may be, and take
all other actions necessary, to ensure that the Company's Charter and Bylaws
facilitate and do not at any time conflict with any provision of this Agreement.

                                    ARTICLE 3
                            RESTRICTIONS ON TRANSFER

         Section 3.01. GENERAL. Each Stockholder understands and agrees that the
Company Securities purchased pursuant to the applicable subscription agreement
have not been registered under the Securities Act and are restricted securities.
Each Stockholder agrees that it will not, directly or indirectly, sell, assign,
transfer, grant a participation in, pledge or otherwise dispose of ("TRANSFER")
any Company Securities (or solicit any offers to buy or otherwise acquire, or
take a pledge of any Company Securities) except in compliance with the
Securities Act and the terms and conditions of this Agreement.

         Except as set forth below, no transferee other than a Permitted
Transferee or a party hereto shall be required to become a party to this
Agreement. Except as set forth (i) in the second sentence of this Section 3.01
and (ii) with respect to the DLJ Entities, Section 4.01, transfers by the
Stockholders (other than Management Stockholders) are not subject to any
restrictions on transfer of Company Securities. It is acknowledged that DLJSC
shall be permitted to sell any or all of its Company Securities to TCW/Crescent
Mezzanine Partners II, L.P. and/or one or more of its Affiliates (each a "TCW
ENTITY"), and in such event, each such TCW Entity shall execute and deliver an
agreement to be bound by the terms of and become a party to this Agreement upon
the same terms (other than any rights or obligations of DLJSC under Section 6.03
hereof) as DLJSC is so bound at the time of such transfer.

         Any attempt to transfer any Company Securities not in compliance
with this Agreement shall be null and void and the Company shall not, and
shall cause any transfer agent not to, give any effect in the Company's stock
records to such attempted transfer.

                                        9






         Section 3.02. LEGENDS. In addition to any other legend that may be
required, each certificate for Common Shares or Preferred Shares and each
Warrant that is issued to any Stockholder shall bear a legend in substantially
the following form:

         "THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND MAY NOT BE OFFERED OR SOLD
EXCEPT IN COMPLIANCE THEREWITH. THIS SECURITY IS ALSO SUBJECT TO ADDITIONAL
RESTRICTIONS ON TRANSFER, VOTING AND OTHER MATTERS AS SET FORTH IN THE
INVESTORS' AGREEMENT DATED AS OF NOVEMBER 23, 1999, COPIES OF WHICH ARE ON FILE
AT THE PRINCIPAL EXECUTIVE OFFICES OF THE COMPANY".

                  If any Company Securities shall cease to be Registrable
Securities under clause (i) or clause (ii) of the definition thereof, the
Company shall, upon the written request of the holder thereof, issue to such
holder a new certificate evidencing such securities without the first sentence
of the legend required by this Section endorsed thereon. If any Company
Securities cease to be subject to any and all restrictions on transfer set forth
in this Agreement, the Company shall, upon the written request of the holder
thereof, issue to such holder a new certificate evidencing such Company
Securities without the second sentence of the legend required by this Section
endorsed thereon.

         Section 3.03. PERMITTED TRANSFEREES. Notwithstanding anything in this
Agreement to the contrary, any Stockholder may at any time transfer any or all
of its Company Securities to one or more of its Permitted Transferees without
the consent of the Board or any other Stockholder or group of Stockholders and
without compliance with Sections 3.04 and 4.01 so long as (a) such Permitted
Transferee shall have agreed in writing to be bound by the terms of and become a
party to this Agreement and (b) the transfer to such Permitted Transferee is not
in violation of applicable federal or state securities laws.

         Section 3.04.     RESTRICTIONS ON TRANSFERS BY MANAGEMENT STOCKHOLDERS.

         (a) Each Management Stockholder and each Permitted Transferee of such
Management Stockholder may transfer its Company Securities only as permitted by
Section 3.03, or as follows:

                  (i) in a transfer made in compliance with Section 4.01 or 4.02
         or as required by any employment contract between the Company or any
         Subsidiary and such management Stockholder;

                  (ii) subject to the Public Offering Limitations, in a Public
         Offering in connection with the exercise of its rights under Article 5
         hereof; or

                  (iii) after the first anniversary of the First Public
         Offering, subject to Section 5.03, in a transfer made in compliance
         with Rule 144 promulgated under the Securities Act; PROVIDED, however,
         that such sales cannot reduce a Management Stockholder's ownership to
         (or occur at a time when such Management Stockholder's ownership is


                                        10





         otherwise) below the greater of (a) 50% of such Management
         Stockholder's Initial Ownership of Common Shares and (b) the percentage
         of such Management Stockholder's Initial Ownership of Common Shares
         that is equal to the Aggregate Ownership of Common Shares of the DLJ
         Entities as a percentage of the DLJ Entities' Initial Ownership of
         Common Shares.

         For purposes of this Agreement, "PUBLIC OFFERING LIMITATIONS" means (A)
no Management Stockholder shall be permitted to sell any Common Shares in the
First Public Offering provided that any Management Stockholder that is not a
Co-invest Management Stockholder may sell in the First Public Offering the
lesser of (i) such Management Stockholder's Pro Rata Portion in respect of the
First Public Offering, and (ii) 20 percent of the Initial Ownership of Common
Shares of such Management Stockholder; (B) other than pursuant to the proviso in
(A) above, no Management Stockholder may sell any Common Shares until such time
as the Aggregate Ownership of Common Shares of the DLJ Entities is less than 75
percent of the Initial Ownership of Common Shares of the DLJ Entities and (C) in
each Public Offering following the First Public Offering, each Management
Stockholder may sell no more than such Management Stockholder's Pro Rata Portion
in respect of such Public Offering.

         (b) The provisions of Section 3.04(a) shall terminate on the
Restriction Termination Date. Notwithstanding the foregoing sentence, the
provisions of Section 3.04(a) shall not terminate with respect to any Management
Stockholder's Common Shares which shall have been pledged to the Company as
security in connection with any indebtedness for borrowed money owed by such
Management Stockholder to the Company unless the proceeds from the sale of such
Shares are applied to repay such indebtedness.

         (c) In addition to any other restriction contained in this Agreement
and notwithstanding any other provision of this Section 3.04, neither a
Management Stockholder nor any Permitted Transferee thereof may transfer any
Common Shares prior to the date such Common Shares have vested in accordance
with the terms of any relevant investment plan or other related agreement to
which such Common Shares are subject.

                                    ARTICLE 4
             TAG-ALONG RIGHTS; DRAG-ALONG RIGHTS; PRE-EMPTIVE RIGHTS

         Section 4.01. RIGHTS TO PARTICIPATE IN TRANSFER. (a) If any DLJ Entity
(the "SELLING PERSON") proposes a transfer (other than a transfer (i) in a
Public Offering or pursuant to Rule 144, (ii) to any Permitted Transferee or
(iii) to the Company or any of its employees or independent contractors in
connection with any plan or proposal for the incentivisation of any such
employees or independent contractors under which such employee or independent
contractor becomes bound by the terms hereof), of a number of Common Shares
equal to or exceeding 20% of the then outstanding Common Shares in a single
transaction or in a series of related transactions (a "TAG-ALONG SALE"), the
Other Stockholders may, at their option, elect to exercise their rights under
this Section 4.01 (each such Stockholder, a "TAGGING PERSON"). In the event of
such a proposed transfer, the Selling Person shall provide each Other
Stockholder written notice of such proposed transfer ("TAG-ALONG NOTICE") and
offer each Tagging Person the opportunity to participate in such sale. The
Tag-Along Notice shall identify the number of

                                        11




Common Shares subject to the offer ("TAG-ALONG OFFER"), the cash price at which
the transfer is proposed to be made, and all other material terms and conditions
of the Tag-Along Offer, including the form of the proposed agreement, if any.
Any Other Stockholder that owns Warrants shall be permitted to participate in
such a Tag-Along Offer, subject to the other provisions of this Section 4.01, by
transferring in lieu of Common Shares representing such Person's Tag Along
Portion a number of Warrants which, if exercised, would confer the right to
acquire such number of Common Shares ("UNDERLYING SHARES") and the calculation
below in this Section 4.01 shall be made as though the Warrants in question had
been exercised for Common Shares. The price per Warrant to be received by such a
Tagging Person shall be the price per Common Share multiplied by the number of
Underlying Shares minus the applicable Warrant exercise price in respect
thereof.

         From the receipt of the Tag-Along Notice, each Tagging Person shall,
subject to Section 4.01(f), have the right (a "TAG-ALONG RIGHT"), exercisable by
written notice ("SECTION 4.01 RESPONSE NOTICE") given to the Selling Person
within 15 Business Days (the "TAG-ALONG NOTICE PERIOD"), to request that the
Selling Person include in the proposed transfer the number of Common Shares (or
Warrants in lieu thereof) held by such Tagging Person as is specified in such
notice; PROVIDED that if the aggregate number of Common Shares (or Warrants in
lieu thereof) proposed to be sold by the Selling Person and all Tagging Persons
in such transaction exceeds the number of Common Shares which can be sold on the
terms and conditions set forth in the Tag-Along Notice, then the Tag-Along
Portion of each Tagging Person shall be sold pursuant to the Tag-Along Offer and
the Selling Person shall sell its Tag-Along Portion and such additional Common
Shares (or Warrants in lieu thereof) as permitted by Section 4.01(d). If the
Tagging Persons exercise their Tag-Along Rights hereunder, each Tagging Person
shall deliver, together with its Section 4.01 Response Notice, to the Selling
Person the certificate or certificates representing the Common Shares (or
Warrants in lieu thereof) of such Tagging Person to be included in the transfer,
together with a limited power-of-attorney authorizing the Selling Person to
transfer such Common Shares (or Warrants in lieu thereof) on the terms set forth
in the Tag-Along Notice. Delivery of such certificate or certificates
representing the Common Shares (or Warrants in lieu thereof) to be transferred
and the limited power-of-attorney authorizing the Selling Person to transfer
such Common Shares (or Warrants in lieu thereof) shall constitute an irrevocable
acceptance of the Tag-Along Offer by such Tagging Persons. If, at the end of a
120 day period after such delivery, the Selling Person has not completed the
transfer of all such Common Shares (or Warrants in lieu thereof) on
substantially the same terms and conditions set forth in the Tag-Along Notice,
the Selling Person shall return to each Tagging Person the limited
power-of-attorney (and all copies thereof) together with all certificates
representing the Common Shares (or Warrants in lieu thereof) which such Tagging
Person delivered for transfer pursuant to this Section 4.01.

         (b) Concurrently with the consummation of the Tag-Along Sale, the
Selling Person shall notify the Tagging Persons thereof, shall remit to the
Tagging Persons the total consideration (by bank or certified check) for the
Common Shares (or Warrants in lieu thereof) of the Tagging Persons transferred
pursuant thereto, and shall, promptly after the consummation of such Tag-Along
Sale, furnish such other evidence of the completion and time of completion of

                                        12




such transfer and the terms thereof (plus such copies of related documents) as
may be reasonably requested by the Tagging Persons.

         (c) If at the termination of the Tag-Along Notice Period any Tagging
Person shall not have elected to participate in the Tag-Along Sale, such Tagging
Person will be deemed to have waived its rights under Section 4.01(a) with
respect to the transfer of its securities pursuant to such Tag-Along Sale.

         (d) If any Tagging Person declines to exercise its Tag-Along Rights or
elects to exercise its Tag-Along Rights with respect to less than such Tagging
Person's Tag-Along Portion, the DLJ Entities shall be entitled to transfer,
pursuant to the Tag-Along Offer, a number of Common Shares (or Warrants in lieu
thereof) held by the DLJ Entities equal to the number of Common Shares (or
Warrants in lieu thereof) constituting the portion of such Tagging Person's
Tag-Along Portion with respect to which Tag-Along Rights were not exercised.

         (e) The DLJ Entities and any Tagging Person who exercises the Tag-Along
Rights pursuant to this Section 4.01 may sell the Common Shares (or Warrants in
lieu thereof) subject to the Tag-Along Offer on the terms and conditions set
forth in the Tag-Along Notice (PROVIDED, however, that the cash price payable in
any such sale may exceed the cash price specified in the Tag-Along Notice by up
to 10%) within 120 days of the date on which Tag-Along Rights shall have been
waived, exercised or expire.

         (f) The Tag-Along Rights will terminate upon consummation of any Public
Offering creating a Public float (as defined) of at least $50,000,000. "PUBLIC
FLOAT" means the fair market value of all outstanding Common Shares (other than
those held by any Affiliate of the Company) which have been subject to a Public
Offering.

         Section 4.02. RIGHT TO COMPEL PARTICIPATION IN CERTAIN TRANSFERS. (a)
If (i) (A) the DLJ Entities and their Permitted Transferees propose to transfer
not less than 75% of their Aggregate Ownership of Common Shares to a Third Party
in a bona fide sale at a price per share in excess of $22 per share (taking into
account the effect of any stock split, stock dividend or reverse stock split) or
(B) the DLJ Entities propose a transfer at a price per share in excess of $22
per share (taking into account the effect of any stock split, stock dividend or
reverse stock split) in which the Common Shares to be transferred by the DLJ
Entities and their Permitted Transferees together with the Subject Shares
(defined below) constitute more than 75% of the outstanding Common Shares and
(ii) the shares to be sold by the DLJ Entities and their Permitted Transferees
constitute at least 50 percent of the total number of Common Shares to be so
sold pursuant to (A) or (B) above (such Common Shares proposed to be transferred
being referred to collectively, as the "SOLD SHARES"; and any such proposed
sale, a "SECTION 4.02 SALE"), the DLJ Entities may at their option require all
Other Stockholders to sell their Subject Shares ("DRAG-ALONG RIGHTS"), (which
for the avoidance of doubt shall require any Other Stockholder (subject to and
effective at the closing of the Section 4.02 Sale) to exercise options and/or
warrants (excluding the Warrants) and to sell to such Third Party the Common
Shares received as a result of such exercise to the extent necessary (or in the
case of the Warrants, to sell such Warrants to such Third Party without
exercise)) for the same consideration per Common Share (or in the case of the
Warrants

                                        13






such consideration per Common Share less the applicable exercise price in
respect thereof) and otherwise on the same terms and conditions as the sale by
the DLJ Entities; provided that any Other Stockholder that holds options or
warrants the exercise price per share of which is greater than the per share
price at which the Common Shares are to be sold to the Third Party may, if
required by the DLJ Entities to exercise such options, in place of such
exercise, submit to irrevocable cancellation thereof without any liability for
payment of any exercise price with respect thereto; and provided further that no
Other Stockholder shall be required (x) to make any representation or warranty
other than in respect of its title to its Subject Shares and its authority to
sell its Subject Shares or (y) to agree to indemnify other parties in an
aggregate amount exceeding the amount of net proceeds it receives in respect of
the exercise of its options or Warrants and/or the sale of its Subject Shares.
In the event the Section 4.02 Sale is not consummated with respect to any shares
acquired upon exercise of such options or warrants, or the Section 4.02 Sale is
not consummated, such options or warrants shall be deemed not to have been
exercised or canceled, as applicable. DLJMB shall provide written notice of such
Section 4.02 Sale to the Other Stockholders (a "SECTION 4.02 NOTICE") not later
than the 15th Business Day prior to the proposed Section 4.02 Sale. The Section
4.02 Notice shall identify the transferee, the number of Common Shares and
Warrants of such Other Stockholder proposed to be sold (the "SUBJECT SHARES"),
the consideration for which a transfer is proposed to be made (the "SECTION 4.02
SALE PRICE") and all other material terms and conditions of the Section 4.02
Sale. The Subject Shares shall, for each Other Stockholder, be its Pro Rata
Portion in respect of such Section 4.02 Sale. Subject to Sections 4.02 and 4.03,
each Other Stockholder shall be required to participate in the Section 4.02 Sale
on the terms and conditions set forth in the Section 4.02 Notice and to tender
all its Subject Shares as set forth below. The price payable in such transfer
shall be the Section 4.02 Sale Price. Not later than the 15th Business Day
following receipt of the Section 4.02 Notice (the "SECTION 4.02 NOTICE PERIOD"),
each of the Other Stockholders shall deliver to a representative of the DLJ
Entities designated in the Section 4.02 Notice certificates representing all
Subject Shares held by such Other Stockholder, duly endorsed, together with all
other documents required to be executed in connection with such Section 4.02
Sale. If an Other Stockholder should fail to deliver such certificates to such
representative, the Company shall cause the books and records of the Company to
show that such Subject Shares are bound by the provisions of this Section 4.02
and Section 4.03 and that such Subject Shares shall be transferred to the
purchaser of the Subject Shares immediately upon surrender for transfer by the
holder thereof.

         (b) The DLJ Entities shall have a period of 45 Business Days from the
date of receipt of the Section 4.02 Notice to consummate the Section 4.02 Sale
on the terms and conditions set forth in such Section 4.02 Notice. If the
Section 4.02 Sale shall not have been consummated during such period, the DLJ
Entities shall return to each of the Other Stockholders all certificates
representing Subject Shares that such Other Stockholder delivered for transfer
pursuant hereto, together with any documents in the possession of the DLJ
Entities executed by the Other Stockholder in connection with such proposed
transfer, and all the restrictions on transfer contained in this Agreement or
otherwise applicable at such time with respect to Common Shares owned by the
Other Stockholders shall again be in effect.


                                        14





         (c) Concurrently with the consummation of the transfer of Common Shares
pursuant to this Section 4.02 and Section 4.03, the DLJ Entities shall give
notice thereof to all Stockholders, shall remit to each of the Stockholders who
have surrendered their certificates the total consideration (by bank or
certified check) for the Subject Shares transferred pursuant hereto and shall
furnish such other evidence of the completion and time of completion of such
transfer and the terms thereof (plus such copies of related documents) as may
reasonably requested by such Stockholders.

         Section 4.03. CERTAIN RIGHTS. It is understood and agreed that the
employment agreements or associated restricted stock purchase agreements between
one or more Management Stockholders and the Company or any Subsidiary may
contain provisions permitting or requiring, under certain circumstances, such
Management Stockholders to sell to the Company or a Subsidiary, and permitting
or requiring, under certain circumstances, the Company or such Subsidiary to
purchase from such Management Stockholder, Company Securities. Such provisions
may, by the terms of such agreements, remain effective notwithstanding that the
employment relationship created by such employment agreements has been
terminated, in which event such provisions are deemed to be incorporated herein
and made a part hereof, to the extent appropriate.

         Section 4.04. PRE-EMPTIVE RIGHTS. (a) The Company shall provide each
Stockholder with a written notice (a "SECTION 4.04 NOTICE") of any proposed
issuance by the Company of equity securities (other than as provided in Section
4.04 (d)) at least 10 Business Days prior to the proposed issuance date. Such
notice shall specify the price at which the equity securities are to be issued
and the other material terms of the issuance. Each Stockholder shall be entitled
to purchase such Stockholder's Section 4.04 Portion of the equity securities
proposed to be issued. A Stockholder may exercise its rights under this Section
4.04 by delivering written notice of its election to purchase equity securities
to the Company and each other Stockholder within 5 Business Days of receipt of
the Section 4.04 Notice. A delivery of such a written notice (which notice shall
specify the number of shares (or amount) of equity securities to be purchased by
the Stockholder submitting such notice) by such Stockholder shall constitute a
binding agreement of such Stockholder to purchase at the price and on the terms
specified in the Section 4.04 Notice, the number of shares (or amount) of equity
securities specified in such Stockholder's written notice. In the event the
equity securities proposed to be issued by the Company are not Common Shares, it
shall be a condition to the consummation of the purchase of such equity
securities pursuant to this Section 4.04 by any Stockholder that such
Stockholder shall execute an amendment of this Agreement on the terms consistent
with this Agreement reasonably satisfactory to the Company and the other
Stockholders.

         (b) In the event any Stockholder (a "RELEVANT STOCKHOLDER") declines to
exercise its preemptive rights under this Section 4.04 or elects to exercise
such rights with respect to less than such Relevant Stockholder's Section 4.04
Portion, each other Stockholder who is not a Relevant Stockholder (a
"PARTICIPATING STOCKHOLDER") shall be entitled to purchase from the Company its
Relevant Portion of the amount of such Relevant Stockholder's Section 4.04
Portion with respect to which such Relevant Stockholder shall not have exercised
its preemptive rights. For these purposes "RELEVANT PORTION" means the pro rata
portion of a Participating

                                        15






Stockholder based upon such Participating Stockholder's Aggregate Ownership of
Common Shares as a percentage of the Aggregate Ownership of Common Shares of all
Participating Stockholders.

         (c) In the case of any issuance of equity securities, the Company shall
have 90 days from the date of the Section 4.04 Notice to consummate the proposed
issuance of any or all of such securities which the Stockholders have not
elected to purchase at the price and upon terms that are not materially less
favorable to the Company than those specified in the Section 4.04 Notice. At the
consummation of such issuance, the Company shall issue certificates representing
the securities to be purchased by each Stockholder exercising preemptive rights
pursuant to this Section 4.04 registered in the name of such Stockholder,
against payment by such Stockholder of the purchase price for such securities.
If the Company proposes to issue securities after such 90-day period, it shall
again comply with the procedures set forth in this Section.

         (d) Notwithstanding the foregoing, no Stockholder shall be entitled to
purchase equity securities as contemplated by this Section 4.04 in connection
with issuances of equity securities (i) to employees, former employees or
independent contractors of the Company or any Subsidiary pursuant to employee
benefit plans or arrangements approved by the Board (including upon the exercise
of stock options), (ii) in connection with any bona fide, arm's length
restructuring of outstanding debt of the Company or any Subsidiary, (iii) in
exchange for securities pursuant to any bona fide, arm's-length merger,
acquisition or similar transaction, (iv) pursuant to a Public Offering, (v) to
holders of Warrants upon exercise thereof in accordance with their terms and
(vi) to holders of Senior Notes Warrants upon exercise thereof in accordance
with their terms. The Company shall not be under any obligation to consummate
any proposed issuance of any equity securities, regardless of whether it shall
have delivered a Section 4.04 Notice in respect of such proposed issuance.

         Section 4.05. TREATMENT OF DLJIP ENTITIES. For purposes of Section 4.01
and 4.02 hereof, the DLJIP Entities shall be treated as, and have the rights of,
Other Stockholders and not DLJ Entities. For the avoidance of doubt, for the
purposes of this Agreement, DLJSC shall (without prejudice to any of its rights
or obligations under Section 6.03 hereof) be treated as, and have the rights of,
an Other Stockholder and not a DLJ Entity.

                                    ARTICLE 5
                               REGISTRATION RIGHTS

         Section 5.01. DEMAND REGISTRATION. (a) If the Company shall receive
a Registration Request (as defined below) from a Person entitled to make such
request pursuant to this Section 5.01 (any such requesting Person, a "SELLING
STOCKHOLDER") that the Company effect the registration under the Securities
Act of all or a portion of such Selling Stockholder's Registrable Securities,
and specifying the intended method of disposition thereof, then the Company
shall promptly give written notice of such requested registration (a "DEMAND
Registration") at least 15 days prior to the anticipated filing date of the
registration statement relating to such Demand Registration to all the other
Stockholders holding Registrable Securities of the same type, or, in the
event such Registrable Securities are Common Shares to all other Stockholders
holding

                                        16



Warrants exercisable for such Common Shares, and thereupon will use its best
efforts to effect, as expeditiously as possible, the registration under the
Securities Act of:

                  (i) the Registrable Securities which the Company has been so
         requested to register by the Person or Persons making such Registration
         Request, then held by such Person or Persons, PROVIDED that if the
         Registration Request is received from the holders of 35% or greater of
         the Warrants, the obligation of the Company under this Section 5.01(a)
         (i) shall be to effect the registration of the Common Shares to which
         the relevant selling Stockholders are entitled upon the exercise of
         such Warrants and not the Warrants themselves; and

                  (ii) subject to the restrictions set forth in Section 3.04 and
         Section 5.01(e), all other Registrable Securities of the same type as
         that to which the request by the Selling Stockholders relates which any
         other Stockholder that is entitled in respect of such Registrable
         Securities to request the Company to effect a Piggyback Registration
         (as such term is defined in Section 5.02) pursuant to Section 5.02 (all
         such Stockholders, together with the Selling Stockholders, the
         "HOLDERS") has requested the Company to register by written request
         received by the Company within 10 days after the receipt by such
         Holders of such written notice given by the Company,

all to the extent necessary to permit the disposition (in accordance with the
intended methods thereof as aforesaid) of the Registrable Securities so to be
registered; PROVIDED that, subject to Section 5.01(d) hereof, the Company shall
not be obligated to effect more than (A) four Demand Registrations where the
Registration Request is made by the DLJ Entities or their Permitted Transferees
in respect of Common Shares, (B) two Demand Registrations in respect of
Preferred Shares, where any such Registration Request may be made by the holders
of 35% or greater of Preferred Shares or (C) one Demand Registration in respect
of a registration of Warrant Shares or Common Shares issued upon the exercise of
Warrants, without duplication, where the Registration Request may be made by the
holders of 35% or greater of the Warrant Shares or Common Shares issued upon the
exercise of Warrants, without duplication, PROVIDED that no such Registration
Request in respect of Warrant Shares or Common Shares issued upon the exercise
of Warrants, without duplication, may be made before the date which is six
months after the First Public Offering; and PROVIDED FURTHER that the Company
shall not be obligated to effect a Demand Registration unless the aggregate
proceeds expected to be received from the sale of the Common Shares to be
included in such Demand Registration, in the reasonable opinion of the DLJ
Entities exercised in good faith, equals or exceeds (x) $25,000,000 if such
Demand Registration would constitute the First Public Offering, (y) no minimum
restriction in the case of a Registration Request by the holders of 35% or
greater of the Warrant Shares or Common Shares issued upon the exercise of
Warrants, without duplication, or (z) $20,000,000 in all other cases. In no
event will the Company be required to effect more than one Demand Registration
within any six-month period.

         For purposes hereof, "REGISTRATION REQUEST" means a written request (a)
in the case of a request in respect of a registration of Common Shares, by (i)
the DLJ Entities or their Permitted Transferees or (ii) by the holders of 35% or
greater of the Warrant Shares or Common Shares

                                        17






issued upon the exercise of Warrants, without duplication, which constitute
Registrable Securities, or (b) in the case of a request in respect of a
registration of Preferred Shares, by the holders of 35% or greater of the
Preferred Shares, which constitute Registrable Securities.

         (b) Promptly after the expiration of the 10-day period referred to in
Section 5.01(a)(ii) hereof, the Company will notify all the Holders to be
included in the Demand Registration of the other Holders and the number of
Registrable Securities requested to be included therein. The Selling
Stockholders requesting a registration under this Section may, at any time prior
to the effective date of the registration statement relating to such
registration, revoke such request, without liability to any of the other
Holders, by providing a written notice to the Company revoking such request, in
which case such request, so revoked, shall be considered a Demand Registration
unless the participating Stockholders reimburse the Company for all costs
incurred by the Company in connection with such registration, or unless such
revocation arose out of the fault of the Company, in which case such request
shall not be considered a Demand Registration.

         (c) The Company will pay all Registration Expenses in connection with
any Demand Registration.

         (d) A registration requested pursuant to this Section shall not be
deemed to have been effected (i) unless the registration statement relating
thereto (A) has become effective under the Securities Act and (B) has remained
effective for a period of at least 180 days (or such shorter period in which all
Registrable Securities of the Holders included in such registration have
actually been sold thereunder); PROVIDED that if after any registration
statement requested pursuant to this Section becomes effective (x) such
registration statement is interfered with by any stop order, injunction or other
order or requirement of the SEC or other governmental agency or court and (y)
less than 75% of the Registrable Securities included in such registration
statement has been sold thereunder, such registration statement shall not be
considered a Demand Registration or (ii) if the Maximum Offering Size (as
defined below) is reduced in accordance with Section 5.01(e) such that less than
66 2/3% of the Registrable Securities of the Selling Stockholders sought to be
included in such registration are included.

         (e) If a Demand Registration involves an underwritten Public Offering
and the managing underwriter shall advise the Company and the Selling
Stockholders that, in its view, (i) the number of Registrable Securities
requested to be included in such registration (taken together with any
securities which the Company proposes to be included which are not Registrable
Securities) or (ii) the inclusion of some or all of the Registrable Securities
owned by the Holders, in any such case, exceeds or would cause the Shares
offered to exceed the largest number of securities which can be sold without
having an adverse effect on such offering, including the price at which such
securities can be sold (the "MAXIMUM OFFERING SIZE"), the Company will include
in such registration, in the priority listed below, up to the Maximum Offering
Size:

                           (A) First, all Registrable Securities requested to be
                  included in such registration by the Person or Persons making
                  such Registration Request;

                           (B) second, all Registrable Securities requested to
                  be included in such registration by any Stockholders pursuant
                  to Section 5.02 below; and


                                        18





                           (C) third, any securities proposed to be registered
                  by the Company.

         Section 5.02. PIGGYBACK REGISTRATION. (a) If the Company proposes to
register any Company Securities under the Securities Act (other than a
registration (A) on Form S-8 or S-4 or any successor or similar forms, (B)
relating to Common Shares issuable upon exercise of employee stock options or in
connection with any employee benefit or similar plan of the Company or (C) in
connection with the issuance of securities in exchange for existing securities
in connection with an acquisition by the Company of another company), whether or
not for sale for its own account, it will each such time, subject to the
provisions of Section 5.02(c), give prompt written notice at least 20 days prior
to the anticipated filing date of the registration statement relating to such
registration to each DLJ Entity and each Other Stockholder, which notice shall
set forth such Stockholder's rights under this Section 5.02 and shall offer such
Stockholders the opportunity to include in such registration statement such
number of Registrable Securities of the same type as are proposed to be
registered as each such Stockholder may request (a "PIGGYBACK REGISTRATION").
Subject to Section 3.04, upon the written request of any such Stockholder made
within 15 days after the receipt of notice from the Company (which request shall
specify the number of Registrable Securities intended to be disposed of by such
Stockholder), the Company will use its best efforts to effect the registration
under the Securities Act of all Registrable Securities which the Company has
been so requested to register by such Stockholders, to the extent requisite to
permit the disposition of the Registrable Securities so to be registered;
PROVIDED that (I) if such registration involves a Public Offering, all such
Stockholders requesting to be included in the Company's registration must sell
their Registrable Securities to the underwriters selected as provided in Section
5.04(f) on the same terms and conditions as apply to the Company and (II) if, at
any time after giving written notice of its intention to register any stock
pursuant to this Section 5.02(a) and prior to the effective date of the
registration statement filed in connection with such registration, the Company
shall determine for any reason not to register such securities, the Company
shall give written notice to all such Stockholders and, thereupon, shall be
relieved of its obligation to register any Registrable Securities in connection
with such registration (without prejudice, however, to rights of any Stockholder
under Section 5.01). No registration effected under this Section 5.02 shall
relieve the Company of its obligations to effect a Demand Registration to the
extent required by Section 5.01. The Company will pay all Registration Expenses
in connection with each registration of Registrable Securities requested
pursuant to this Section 5.02.

         (b) For the avoidance of doubt, holders of Warrants shall be deemed for
purposes of this Section 5.02 to own the Common Shares for which their Warrants
are exercisable and any holders of Warrants wishing to participate in a
Piggyback Registration may make any exercise of its Warrants conditional upon
consummation of the sale of the Common Shares to which such exercise relates in
the Public Offering in question.

         (c) If a registration pursuant to this Section 5.02 involves a Public
Offering (other than in the case of a Public Offering requested by any DLJ
Entity or any of their Permitted Transferees or the Other Stockholders, in each
case, in a Demand Registration pursuant to Section 5.01, in which case the
provisions with respect to priority of inclusion in such offering set forth in
Section 5.01(e) shall apply) and the managing underwriter advises the Company
that,

                                        19






in its view, the number of Shares that the Company and such Stockholders intend
to include in such registration exceeds the Maximum Offering Size, the Company
will include in such registration, in the following priority, up to the Maximum
Offering Size:

                  (i) first, so much of the securities proposed to be registered
         by the Company as would not cause the offering to exceed the Maximum
         Offering Size; and

                  (ii) second, all Registrable Securities requested to be
         included in such registration by any DLJ Entity and its Permitted
         Transferees or any Other Stockholder (allocated, if necessary for the
         offering not to exceed the Maximum Offering Size, pro rata among such
         Stockholders on the basis of the relative number of Registrable
         Securities so requested to be included in such registration).

         (d) Notwithstanding the foregoing, nothing herein will prevent the
Company from, at any time, abandoning or delaying any such registration
initiated by it. If any registration pursuant to this Section 5.02 will be
underwritten in whole or in part, the Company may require that the Registrable
Securities requested for inclusion pursuant to this Section 5.02 be included in
the underwriting on the same terms and conditions as the securities otherwise
being sold through the underwriters.

         Section 5.03. HOLDBACK AGREEMENTS. If any registration of Common Shares
shall be in connection with a Public Offering, each DLJ Entity and its Permitted
Transferees and each Other Stockholder agrees not to effect any public sale or
distribution, including any sale pursuant to Rule 144, or any successor
provision, under the Securities Act, of any Common Shares or any Warrants, other
than as part of such Public Offering during the 14 days prior to the effective
date of such registration statement (except as part of such registration) or
during the period after such effective date equal to the lesser of (i) such
period of time as agreed between such managing underwriter and the Company and
(ii) 180 days (such lesser period, the "APPLICABLE HOLDBACK PERIOD").

         Section 5.04. REGISTRATION PROCEDURES. Whenever Stockholders request
that any Registrable Securities be registered pursuant to Section 5.01 or 5.02,
the Company will, subject to the provisions of such Sections, use its best
efforts to effect the registration and the sale of such Registrable Securities
in accordance with the intended method of disposition thereof as quickly as
practicable, and in connection with any such request:

         (a) The Company will as expeditiously as possible prepare and file with
the SEC a registration statement on any form for which the Company then
qualifies or which counsel for the Company shall deem appropriate and which form
shall be available for the sale of the Registrable Securities to be registered
thereunder in accordance with the intended method of distribution thereof, and
use its best efforts to cause such filed registration statement to become and
remain effective for a period of not less than 180 days.

         (b) The Company will, if requested, prior to filing a registration
statement or prospectus or any amendment or supplement thereto, furnish to each
participating Stockholder and each underwriter, if any, of the Registrable
Securities covered by such registration statement


                                        20





copies of such registration statement as proposed to be filed, and thereafter
the Company will furnish to such Stockholder and underwriter, if any, such
number of copies of such registration statement, each amendment and supplement
thereto (in each case including all exhibits thereto and documents incorporated
by reference therein), the prospectus included in such registration statement
(including each preliminary prospectus) and such other documents as such
Stockholder or underwriter may reasonably request in order to facilitate the
disposition of the Registrable Securities owned by such Stockholder.

         (c) After the filing of the registration statement, the Company will
promptly notify each Stockholder holding Registrable Securities covered by such
registration statement of any stop order issued or threatened by the SEC and
take all reasonable actions required to prevent the entry of such stop order or
to remove it if entered.

         (d) The Company will use its best efforts to (i) register or qualify
the Registrable Securities covered by such registration statement under such
other securities or blue sky laws of such jurisdictions in the United States as
any Stockholder holding such Registrable Securities reasonably (in light of such
Stockholder's intended plan of distribution) requests and (ii) cause such
Registrable Securities to be registered with or approved by such other
governmental agencies or authorities as may be necessary by virtue of the
business and operations of the Company and do any and all other acts and things
that may be reasonably necessary or advisable to enable such Stockholder to
consummate the disposition of the Registrable Securities owned by such
Stockholder; PROVIDED that the Company will not be required to (A) qualify
generally to do business in any jurisdiction where it would not otherwise be
required to qualify but for this paragraph (d), (B) subject itself to taxation
in any such jurisdiction or (C) consent to general service of process in any
such jurisdiction.

         (e) The Company will immediately notify each Stockholder holding such
Registrable Securities, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, of the occurrence of an event
requiring the preparation of a supplement or amendment to such prospectus so
that, as thereafter delivered to the purchasers of such Registrable Securities,
such prospectus will not contain an untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make
the statements therein not misleading and the Company shall promptly prepare and
make available to each such Stockholder any such supplement or amendment.

         (f) (i) The DLJ Entities will have the right, in their sole discretion,
to select an underwriter or underwriters in connection with any Public Offering
in connection with a Demand Registration in which any DLJ Entity or any
Permitted Transferee of any DLJ Entity is selling Shares, which underwriter or
underwriters may include any Affiliate of any DLJ Entity and (ii) the Company
will select an underwriter or underwriters in connection with any other Public
Offering. In connection with any Public Offering, the Company will enter into
customary agreements (including an underwriting agreement in customary form
which provides for, among other things, customary "lock-up" provisions
restricting the issuance of securities by the Company) and take such other
actions as are reasonably required in order to expedite or facilitate the
disposition of Registrable Securities in any such Public Offering, including the
engagement

                                        21






of a "qualified independent underwriter" in connection with the qualification of
the underwriting arrangements with the NASD.

         (g) Upon the execution of confidentiality agreements in form and
substance satisfactory to the Company, the Company will make available for
inspection by any Stockholder and any underwriter participating in any
disposition pursuant to a registration statement being filed by the Company
pursuant to this Section 5.04 and any attorney, accountant or other professional
retained by any such Stockholder or underwriter (collectively, the
"INSPECTORS"), all financial and other records, pertinent corporate documents
and properties of the Company (collectively, the "RECORDS") as shall be
reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the Company's officers, directors and employees to
supply all information reasonably requested by any Inspectors in connection with
such registration statement. Records that the Company determines, in good faith,
to be confidential and that it notifies the Inspectors are confidential shall
not be disclosed by the Inspectors unless (i) the disclosure of such Records is
necessary to avoid or correct a misstatement or omission in such registration
statement or (ii) the release of such Records is ordered pursuant to a subpoena
or other order from a court of competent jurisdiction. Each Stockholder agrees
that information obtained by it as a result of such inspections shall be deemed
confidential and shall not be used by it as the basis for any market
transactions in the Company Securities or its Affiliates unless and until such
is made generally available to the public. Each Stockholder further agrees that
it will, upon learning that disclosure of such Records is sought in a court of
competent jurisdiction, give notice to the Company and allow the Company, at its
expense, to undertake appropriate action to prevent disclosure of the Records
deemed confidential.

         (h) The Company will furnish to each such Stockholder and to each such
underwriter, if any, a signed counterpart, addressed to such underwriter, of (i)
an opinion or opinions of counsel to the Company and (ii) a comfort letter or
comfort letters from the Company's independent public accountants, each in
customary form and covering such matters of the type customarily covered by
opinions or comfort letters, as the case may be, as a majority of such
Stockholders or the managing underwriter therefor reasonably requests.

         (i) The Company will otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC, and make available to its
stockholders, as soon as reasonably practicable, an earnings statement covering
a period of 12 months, beginning within three months after the effective date of
the registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act.

         (j) In a registration involving an underwritten offering, the Company
shall cause senior management of the Company to participate in "road shows"
relating to any offering of Registrable Securities, as reasonably requested by
the managing underwriter or underwriters of such offering; provided, no such
road show shall last more than 10 consecutive Business Days.

         The Company may require each such Stockholder to promptly furnish in
writing to the Company such information regarding the distribution of the
Registrable Securities as the

                                        22






Company may from time to time reasonably request and such other information as
may be legally required in connection with such registration.

         Each such Stockholder agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section 5.04(e),
such Stockholder will forthwith discontinue disposition of Registrable
Securities pursuant to the registration statement covering such Registrable
Securities until such Stockholder's receipt of the copies of the supplemented or
amended prospectus contemplated by Section 5.04(e), and, if so directed by the
Company, such Stockholder will deliver to the Company all copies, other than any
permanent file copies then in such Stockholder's possession, of the most recent
prospectus covering such Registrable Securities at the time of receipt of such
notice. In the event that the Company shall give such notice, the Company shall
extend the period during which such registration statement shall be maintained
effective (including the period referred to in Section 5.04(a)) by the number of
days during the period from and including the date of the giving of notice
pursuant to Section 5.04(e) to the date when the Company shall make available to
such Stockholder a prospectus supplemented or amended to conform with the
requirements of Section 5.04(e).

         Section 5.05. INDEMNIFICATION BY THE COMPANY. The Company agrees to
indemnify and hold harmless each Stockholder holding Registrable Securities
covered by a registration statement, its officers, directors and agents, and
each person, if any, who controls such Stockholder within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act from and against any
and all losses, claims, damages and liabilities caused by any untrue statement
or alleged untrue statement of a material fact contained in any registration
statement or prospectus relating to the Registrable Securities (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) or any preliminary prospectus, or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as such
losses, claims, damages or liabilities are caused by any such untrue statement
or omission or alleged untrue statement or omission based upon information
furnished in writing to the Company by such Stockholder or on such Stockholder's
behalf expressly for use therein; PROVIDED that with respect to any untrue
statement or omission or alleged untrue statement or omission made in any
preliminary prospectus, or in any prospectus, as the case may be, the indemnity
agreement contained in this paragraph shall not apply to the extent that any
such loss, claim, damage, liability or expense results from the fact that a
current copy of the prospectus (or, in the case of a prospectus, the prospectus
as amended or supplemented) was not sent or given to the person asserting any
such loss, claim, damage, liability or expense at or prior to the written
confirmation of the sale of the Registrable Securities concerned to such person
if it is determined that the Company has provided such prospectus and it was the
responsibility of such Stockholder to provide such person with a current copy of
the prospectus (or such amended or supplemented prospectus, as the case may be)
and such current copy of the prospectus (or such amended or supplemented
prospectus, as the case may be) would have cured the defect giving rise to such
loss, claim, damage, liability or expense. The Company also agrees to indemnify
any underwriters of the Registrable Securities, their officers and directors and
each person who controls such underwriters on substantially the same basis as
that of the indemnification of the Stockholders provided in this Section 5.05.

                                        23






         Section 5.06. INDEMNIFICATION BY PARTICIPATING STOCKHOLDERS. Each
Stockholder holding Registrable Securities included in any registration
statement agrees, severally but not jointly, to indemnify and hold harmless the
Company, its officers, directors and agents and each person, if any, who
controls the Company within the meaning of either Section 15 of the Securities
Act or Section 20 of the Exchange Act to the same extent as the foregoing
indemnity from the Company to such Stockholder, but only (i) with respect to
information furnished in writing by such Stockholder or on such Stockholder's
behalf expressly for use in any registration statement or prospectus relating to
the Registrable Securities, or any amendment or supplement thereto, or any
preliminary prospectus or (ii) to the extent that any loss, claim, damage,
liability or expense described in Section 5.05 results from the fact that a
current copy of the prospectus (or, in the case of a prospectus, the prospectus
as amended or supplemented) was not sent or given to the person asserting any
such loss, claim, damage, liability or expense at or prior to the written
confirmation of the sale of the Registrable Securities concerned to such person
if it is determined that it was the responsibility of such Stockholder to
provide such person with a current copy of the prospectus (or such amended or
supplemented prospectus, as the case may be) and such current copy of the
prospectus (or such amended or supplemented prospectus, as the case may be)
would have cured the defect giving rise to such loss, claim, damage, liability
or expense. Each such Stockholder also agrees to indemnify and hold harmless
underwriters of the Registrable Securities, their officers and directors and
each person who controls such underwriters on substantially the same basis as
that of the indemnification of the Company provided in this Section 5.06. As a
condition to including Registrable Securities in any registration statement
filed in accordance with Article 5 hereof, the Company may require that it shall
have received an undertaking reasonably satisfactory to it from any underwriter
to indemnify and hold it harmless to the extent customarily provided by
underwriters with respect to similar securities.

         Section 5.07. CONDUCT OF INDEMNIFICATION PROCEEDINGS. In case any
proceeding (including any governmental investigation) shall be instituted
involving any person in respect of which indemnity may be sought pursuant to
this Article 5, such person (an "INDEMNIFIED PARTY") shall promptly notify the
person against whom such indemnity may be sought (the "INDEMNIFYING PARTY") in
writing and the Indemnifying Party shall assume the defense thereof, including
the employment of counsel reasonably satisfactory to such Indemnified Party, and
shall assume the payment of all fees and expenses; PROVIDED that the failure of
any Indemnified Party so to notify the Indemnifying Party shall not relieve the
Indemnifying Party of its obligations hereunder except to the extent that the
Indemnifying Party is materially prejudiced by such failure to notify. In any
such proceeding, any Indemnified Party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Party unless (i) the Indemnifying Party and the Indemnified
Party shall have mutually agreed to the retention of such counsel or (ii) in the
reasonable judgment of such Indemnified Party representation of both parties by
the same counsel would be inappropriate due to actual or potential differing
interests between them. It is understood that the Indemnifying Party shall not,
in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the reasonable fees and expenses of more than one
separate firm of attorneys (in addition to any local counsel) at any time for
all such Indemnified Parties, and that all such fees and expenses shall be
reimbursed as they are incurred. In the case of any such


                                        24





separate firm for the Indemnified Parties, such firm shall be designated in
writing by the Indemnified Parties. The Indemnifying Party shall not be liable
for any settlement of any proceeding effected without its written consent, but
if settled with such consent, or if there be a final judgment for the plaintiff,
the Indemnifying Party shall indemnify and hold harmless such Indemnified
Parties from and against any loss or liability (to the extent stated above) by
reason of such settlement or judgment. No Indemnifying Party shall, without the
prior written consent of the Indemnified Party, effect any settlement of any
pending or threatened proceeding in respect of which any Indemnified Party is or
could have been a party and indemnity could have been sought hereunder by such
Indemnified Party, unless such settlement includes an unconditional release of
such Indemnified Party from all liability arising out of such proceeding.

         Section 5.08. CONTRIBUTION. If the indemnification provided for in this
Article 5 is unavailable to the Indemnified Parties in respect of any losses,
claims, damages or liabilities referred to herein, then each such Indemnifying
Party, in lieu of indemnifying such Indemnified Party, shall contribute to the
amount paid or payable by such Indemnified Party as a result of such losses,
claims, damages or liabilities (i) as between the Company and the Stockholders
holding Registrable Securities covered by a registration statement on the one
hand and the underwriters on the other, in such proportion as is appropriate to
reflect the relative benefits received by the Company and such Stockholders on
the one hand and the underwriters on the other, from the offering of the
Registrable Securities, or if such allocation is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits but also the relative fault of the Company and such Stockholders on the
one hand and of such underwriters on the other in connection with the statements
or omissions which resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations and (ii) as between the
Company on the one hand and each such Stockholder on the other, in such
proportion as is appropriate to reflect the relative fault of the Company and of
each such Stockholder in connection with such statements or omissions, as well
as any other relevant equitable considerations. The relative benefits received
by the Company and such Stockholders on the one hand and such underwriters on
the other shall be deemed to be in the same proportion as the total proceeds
from the offering (net of underwriting discounts and commissions but before
deducting expenses) received by the Company and such Stockholders bear to the
total underwriting discounts and commissions received by such underwriters, in
each case as set forth in the table on the cover page of the prospectus. The
relative fault of the Company and such Stockholders on the one hand and of such
underwriters on the other shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company and such Stockholders or by such underwriters. The
relative fault of the Company on the one hand and of each such Stockholder on
the other shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by such party,
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.

         The Company and the Stockholders agree that it would not be just and
equitable if contribution pursuant to this Section 5.08 were determined by pro
rata allocation (even if the

                                        25






underwriters were treated as one entity for such purpose) or by any other method
of allocation which does not take account of the equitable considerations
referred to in the immediately preceding paragraph. The amount paid or payable
by an Indemnified Party as a result of the losses, claims, damages or
liabilities referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such Indemnified Party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 5.08, no underwriter shall be required to contribute
any amount in excess of the amount by which the total price at which the
Registrable Securities underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such underwriter
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission, and no Stockholder shall be required
to contribute any amount in excess of the amount by which the total price at
which the Registrable Securities of such Stockholder were offered to the public
exceeds the amount of any damages which such Stockholder has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. Each such Stockholder's obligation to contribute pursuant to
this Section 5.08 is several in the proportion that the proceeds of the offering
received by such Stockholder bears to the total proceeds of the offering
received by all such Stockholders and not joint.

         Section 5.09. PARTICIPATION IN PUBLIC OFFERING. No Person may
participate in any Public Offering hereunder (as a seller) unless such Person
(a) agrees to sell such Person's securities on the basis provided in any
underwriting arrangements approved by the Persons entitled hereunder to approve
such arrangements and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements and the provisions of
this Agreement in respect of registration rights.

         Section 5.10. OTHER INDEMNIFICATION. Indemnification similar to that
specified herein (with appropriate modifications) shall be given by the Company
and each Stockholder participating therein (in their capacity as such) with
respect to any required registration or other qualification of securities under
any federal or state law or regulation or governmental authority other than the
Securities Act.

         Section 5.11. COOPERATION BY THE COMPANY. In the event any Stockholder
shall transfer any Warrants or Registrable Securities pursuant to Rule 144A
under the Securities Act, the Company shall cooperate with such Stockholder
(which shall include, without limitation, in the case of Registrable Securities,
making registration rights (substantially equivalent to those of such
Stockholder set out in this Section 5) with respect to the Registrable
Securities to be sold (or securities issuable or to be issued in exchange
therefor) promptly available to the ultimate purchasers thereof) and shall
provide to such Stockholder such information as such Stockholder shall
reasonably request (provided that any registration rights made available
pursuant to this Section 5.11 shall not be on terms substantially more favorable
to the possessors thereof than the registration rights granted pursuant to this
Agreement to the DLJ Entities).


                                        26





                                    ARTICLE 6
                                  MISCELLANEOUS

         Section 6.01. ENTIRE AGREEMENT. This Agreement, the Subscription
Agreement dated the date hereof between Viking and certain of the parties hereto
(the "SUBSCRIPTION AGREEMENT") (and the Transaction Documents defined therein)
constitute the entire agreement among the parties hereto and supersede all prior
agreements and understandings, oral and written, among the parties hereto with
respect to the subject matter hereof.

         Section 6.02. BINDING EFFECT; BENEFIT. This Agreement shall inure to
the benefit of and be binding upon the parties hereto and their respective
heirs, successors, legal representatives and permitted assigns. Nothing in this
Agreement, expressed or implied, shall confer on any Person other than the
parties hereto, and their respective heirs, successors, legal representatives
and permitted assigns, any rights, remedies, obligations or liabilities under or
by reason of this Agreement.

         Section 6.03. EXCLUSIVE FINANCIAL AND INVESTMENT BANKING ADVISOR .
During the period from and including the date hereof through and including the
fifth anniversary of the date hereof, Donaldson, Lufkin & Jenrette Securities
Corporation ("DLJSC") or any Affiliate of DLJSC that the DLJ Entities may choose
in their sole discretion shall be engaged as the exclusive financial and
investment banking advisor of the Company on terms customary in the investment
banking industry. DLJSC or such Affiliate shall be entitled to reimbursement
from the Company for all customary and reasonable out-of-pocket expenses
incurred by DLJSC or such Affiliate (including, without limitation, reasonable
fees and expenses of counsel) as financial and investment banking advisor of the
Company.

         Section 6.04. ASSIGNABILITY. Except as contemplated by the final
sentence of the second paragraph of Section 3.01, this Agreement shall not be
assignable by any party hereto, except that any Person acquiring Shares who is
required by the terms of this Agreement or any employment agreement or stock
purchase, option, stock option or other compensation plan of the Company or any
Subsidiary to become a party hereto shall (unless already bound hereby) execute
and deliver to the Company an agreement to be bound by this Agreement and shall
thenceforth be a "STOCKHOLDER" and, if such agreement shall so specify, an
"OTHER STOCKHOLDER", a "MANAGEMENT STOCKHOLDER" or a "CO-INVEST MANAGEMENT
STOCKHOLDER". Any Stockholder who ceases to own beneficially any Shares shall
cease to be bound by the terms hereof (other than the provisions of Sections
5.05, 5.06, 5.07, 5.08, and 5.10 applicable to such Stockholder with respect to
any offering of Registrable Securities completed before the date such
Stockholder ceased to own any Shares).

         Section 6.05. PRINTING BUSINESS. The DLJ Entities will use commercially
reasonable efforts to introduce the Company to its portfolio companies and
encourage such companies to utilize the services of the Company.

         Section 6.06. AMENDMENT; WAIVER; TERMINATION. No provision of this
Agreement may be waived except by an instrument in writing executed by the party
against whom the waiver is to be effective. No provision of this Agreement may
be amended or otherwise modified except


                                        27





by an instrument in writing executed by the Company with the approval of the
Board and Stockholders holding at least 75% of the outstanding Shares; PROVIDED
that if any such amendment or modification has an adverse effect on any
Stockholder that is materially disproportionate to the effect of such amendment
or modification on Stockholders generally, the approval of such Stockholder
shall also be required.

         Section 6.07. NOTICES. All notices, requests and other communications
to any party hereunder shall be in writing (including facsimile transmissions
and shall be given,

                           if to the Company or the Management Stockholders, to:

                                    Merrill Corporation
                                    One Merrill Circle
                                    St. Paul, Minnesota  55108
                                    (651) 632-1272
                                    Attention: Steve Machov
                                    General Counsel
                                    Fax: (651) 632-4141

                           with copies to:

                                    Oppenheimer Wolff & Donnelly LLP
                                    45 South Seventh Street, Plaza VII
                                    Minneapolis, Minnesota  55402
                                    Attention: Bruce A. Machmeier, Esq.
                                    (612) 607-7267
                                    Fax:  (612) 607-7100

                                    and

                                    Faegre & Benson LLP
                                    2200 Norwest Center
                                    90 South Seventh Street
                                    Minneapolis, Minnesota  55402
                                    Attention: William R. Busch
                                    (612) 336-3000
                                    Fax: (612) 336-3026

                           and a copy to the DLJ Entities at their addresses
                           listed below.

                                        28






                           if to the DLJ Entities, to:

                                    DLJ Merchant Banking Partners II, L.P.
                                    277 Park Avenue
                                    New York, New York 10172
                                    Attention: William F. Dawson, Jr.
                                    Fax:  (212) 892-7272

                           with a copy to:

                                    Davis Polk & Wardwell
                                    450 Lexington Avenue
                                    New York, New York  10017
                                    Attention:  George R. Bason, Jr.
                                    Fax:  (212) 450-4800

         if to any other party hereto to the address(es) listed for such a party
on the applicable signature page of the Subscription Agreement:

         All notices, requests and other communications shall be deemed received
on the date of receipt by the recipient thereof if received prior to 5 p.m. in
the place of receipt and such day is a business day in the place of receipt.
Otherwise, any such notice, request or communication shall be deemed not to have
been received until the next succeeding business day in the place of receipt.
Any notice, request or other written communication sent by facsimile
transmission shall be confirmed by certified mail, return receipt requested,
posted within one Business Day, or by personal delivery, whether courier or
otherwise, made within two Business Days after the date of such facsimile
transmission.

         Any Person who becomes a Stockholder shall provide its address and fax
number to the Company, which shall promptly provide such information to each
other Stockholder.

         Section 6.08. HEADINGS. The headings contained in this Agreement are
for convenience only and shall not affect the meaning or interpretation of this
Agreement.

         Section 6.09. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original and all
of which together shall be deemed to be one and the same instrument.

         Section 6.10. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO THE CONFLICTS OF LAW RULES OF SUCH STATE.

         Section 6.11. SPECIFIC ENFORCEMENT. Each party hereto acknowledges that
the remedies at law of the other parties for a breach or threatened breach of
this Agreement would be inadequate and, in recognition of this fact, any party
to this Agreement, without posting any


                                        29





bond, and in addition to all other remedies which may be available, shall be
entitled to obtain equitable relief in the form of specific performance, a
temporary restraining order, a temporary or permanent injunction or any other
equitable remedy which may then be available.

         Section 6.12. CONSENT TO JURISDICTION. The parties agree that any suit,
action or proceeding seeking to enforce any provision of, or based on any matter
arising out of or in connection with, this Agreement or the transactions
contemplated hereby may be brought in the United States District Court for the
Southern District of New York or any other New York State court sitting in New
York City, and each of the parties hereby consents to the non-exclusive
jurisdiction of such courts (and of the appropriate appellate courts therefrom)
in any such suit, action or proceeding and irrevocably waives, to the fullest
extent permitted by law, any objection which it may now or hereafter have to the
laying of the venue of any such suit, action or proceeding in any such court or
that any such suit, action or proceeding which is brought in any such court has
been brought in an inconvenient forum. Process in any such suit, action or
proceeding may be served on any party anywhere in the world, whether within or
without the jurisdiction of any such court. Without limiting the foregoing, each
party agrees that service of process on such party as provided in Section 6.07
shall be deemed effective service of process on such party.

                                        30




         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.

                                   VIKING MERGER SUB, INC.

                                   By:  /s/ Keith Palumbo
                                        -----------------------------------
                                         Name:  Keith Palumbo
                                         Title:    Vice President

                                   DLJ MERCHANT BANKING PARTNERS II, L.P.

                                   BY DLJ MERCHANT BANKING II, INC.
                                   Managing General Partner

                                   By:  /s/ William F. Dawson
                                        -----------------------------------
                                         Name:  William F. Dawson
                                         Title:    Attorney-in-fact

                                   DLJ MERCHANT BANKING
                                     PARTNERS II-A, L.P.

                                   BY DLJ MERCHANT BANKING II,
                                         INC., Managing General Partner

                                   By:  /s/ William F. Dawson
                                        -----------------------------------
                                         Name:  William F. Dawson
                                         Title:    Attorney-in-fact




                                    DLJ OFFSHORE PARTNERS II, C.V.

                                    BY DLJ MERCHANT BANKING II,
                                          INC., Advisory General Partner

                                    By:  /s/ William F. Dawson
                                        -----------------------------------
                                          Name:  William F. Dawson
                                          Title:    Attorney-in-fact

                                    DLJ DIVERSIFIED PARTNERS, L.P.

                                    BY DLJ DIVERSIFIED PARTNERS,
                                          INC., Managing General Partner

                                    By:  /s/ William F. Dawson
                                        -----------------------------------
                                          Name:  William F. Dawson
                                          Title:    Attorney-in-fact

                                    DLJ DIVERSIFIED PARTNERS-A, L.P.

                                    BY DLJ DIVERSIFIED PARTNERS, INC.,
                                          Managing General Partner

                                    By:  /s/ William F. Dawson
                                        -----------------------------------
                                          Name:  William F. Dawson
                                          Title:    Attorney-in-fact

                                    DLJMB FUNDING II, INC.

                                    By:  /s/ William F. Dawson
                                        -----------------------------------
                                          Name:  William F. Dawson
                                          Title:    Attorney-in-fact




                                    DLJ EAB PARTNERS, L.P.

                                    BY DLJ LBO PLANS MANAGEMENT
                                          CORPORATION, General Partner

                                    By:  /s/ William F. Dawson
                                        -----------------------------------
                                          Name:  William F. Dawson
                                          Title:    Attorney-in-fact

                                    DLJ MILLENNIUM PARTNERS, L.P.

                                    BY DLJ MERCHANT BANKING II,
                                          INC., Managing General Partner

                                    By:  /s/ William F. Dawson
                                        -----------------------------------
                                          Name:  William F. Dawson
                                          Title:    Attorney-in-fact

                                    DLJ FIRST ESC, L.P.

                                    BY DLJ LBO PLANS MANAGEMENT
                                          CORPORATION, as General Partner

                                    By:  /s/ William F. Dawson
                                        -----------------------------------
                                          Name:  William F. Dawson
                                          Title:    Attorney-in-fact

                                    DLJ ESC II L.P.

                                    BY DLJ LBO PLANS MANAGEMENT
                                          CORPORATION, as General Partner

                                    By:  /s/ William F. Dawson
                                        -----------------------------------
                                          Name:  William F. Dawson
                                          Title:    Attorney-in-fact







                                    DLJ MILLENNIUM PARTNERS-A, L.P.

                                    BY DLJ MERCHANT BANKING II, INC.,
                                          Managing General Partner

                                    By:  /s/ William F. Dawson
                                        -----------------------------------
                                          Name:  William F. Dawson
                                          Title:    Attorney-in-fact

                                    DLJ INVESTMENT FUNDING II, INC.

                                    By:  /s/ John M. Moriarty, Jr.
                                        -----------------------------------
                                          Name:  John M. Moriarty, Jr.
                                          Title:    Managing Director

                                    DLJ INVESTMENT PARTNERS, L.P.

                                    By:   DLJ INVESTMENT PARTNERS, INC.,
                                             Managing General Partner

                                    By:  /s/ John M. Moriarty, Jr.
                                        -----------------------------------
                                          Name:  John M. Moriarty, Jr.
                                          Title:    Managing Director

                                    DLJ INVESTMENT PARTNERS II, L.P.

                                    By:   DLJ INVESTMENT PARTNERS II, INC.,
                                             Managing General Partner

                                    By:  /s/ John M. Moriarty, Jr.
                                        -----------------------------------
                                          Name:  John M. Moriarty, Jr.
                                          Title:    Managing Director







                                    DONALDSON, LUFKIN & JENRETTE
                                    SECURITIES CORPORATION

                                    By:  /s/ Omar Karame
                                        -----------------------------------
                                          Name:  Omar Karame
                                          Title:    Vice President

                                    BNY CAPITAL CORPORATION

                                    By:  /s/ Branko Krmpotic
                                        -----------------------------------
                                          Name:  Branko Krmpotic
                                          Title:    Vice President

                                    CARLYLE HIGH YIELD PARTNERS, L.P.

                                    By:  /s/ Jack Mann
                                        -----------------------------------
                                          Name:  Jack Mann
                                          Title:    Managing Director

                                    CONNECTICUT GENERAL LIFE
                                          INSURANCE COMPANY

                                    By:   CIGNA Investments, Inc.
                                             (authorized agent)

                                    By:  /s/ Maurice A. Gordon
                                        -----------------------------------
                                          Name:  Maurice A. Gordon
                                          Title:    Managing Director







                                    LIFE INSURANCE COMPANY OF
                                          NORTH AMERICA

                                    By:   CIGNA Investments, Inc.
                                          (authorized agent)

                                    By:  /s/ Maurice A. Gordon
                                        -----------------------------------
                                          Name:  Maurice A. Gordon
                                          Title:    Managing Director

                                    /s/ John W. Castro
                                    -----------------------------------
                                    JOHN W. CASTRO

                                    /s/ Rick R. Atterbury
                                    -----------------------------------
                                    RICK R. ATTERBURY





                                    TCW CRESCENT MEZZANINE PARTNERS
                                    II, L.P., TCW CRESCENT MEZZANINE
                                    TRUST II

                                    By:   TCW/CRESCENT MEZZANINE II, L.P.,
                                    Its General Partner or Managing Owner

                                    By:   TCW/CRESCENT MEZZANINE, L.L.C
                                    Its General Partner

                                    By:  /s/ Jean Marc Chapus
                                    -----------------------------------
                                          Name:  Jean Marc Chapus
                                          Title:    President

                                    TCW LEVERAGED INCOME TRUST, L.P.

                                    By:   TCW ADVISORS (BERMUDA), LIMITED,
                                    As General Partner

                                    By:  /s/ Melissa V. Weiler
                                    -----------------------------------
                                          Name:  Melissa V. Weiler
                                          Title:    Managing Director

                                    By:   TCW INVESTMENT MANAGEMENT COMPANY,
                                    As Investment Advisor

                                    By:  /s/ Jean Marc Chapus
                                    -----------------------------------
                                          Name:  Jean Marc Chapus
                                          Title:    Managing Director







                                    TCW LEVERAGED INCOME TRUST II, L.P.

                                   By:   TCW (LINC II), L.P., as General Partner
                                   By:   TCW ADVISORS (BERMUDA), LIMITED,
                                   As General Partner

                                   By:  /s/ Melissa V. Weiler
                                   -----------------------------------
                                          Name:  Melissa V. Weiler
                                          Title:    Managing Director

                                    By:   TCW INVESTMENT MANAGEMENT COMPANY,
                                    As Investment Advisor

                                    By:  /s/ Jean Marc Chapus
                                    -----------------------------------
                                          Name:  Jean Marc Chapus
                                          Title:    Managing Director

EX-10.4

                            EXECUTIVE EMPLOYMENT AGREEMENT


       This Executive Employment Agreement (this "Agreement") is made and
entered into as of July 14, 1999, by and among Viking Merger Sub, Inc., a
Minnesota corporation (which, together with its Subsidiaries (as herein defined)
is called the "Company"), and John Castro ("Employee").

                                     WITNESSETH:

       WHEREAS, Employee is currently employed by the Company;

       WHEREAS, the Company desires to continue to employ Employee upon the
terms set forth herein;

       WHEREAS, Employee desires to continue to be employed by the Company and
to memorialize the terms and conditions of such employment;

       WHEREAS, the Company is entering into this Agreement by and on behalf of
itself and each trade or business in which the Company's direct or indirect
ownership of value or voting power is at least 50% (the "Subsidiaries");

       NOW THEREFORE, Employee and the Company, in consideration of the
agreements, covenants and conditions herein, hereby agree as follows:

       SECTION 1.    Basic Employment Provisions.

       (a)    EMPLOYMENT.  Effective upon the consummation of the merger of the
Company with Merrill Corporation pursuant to the Merger Agreement (the "Merger
Agreement") dated as of July 14, 1999 between the Company and Merrill
Corporation (the "Effective Time"), the Company shall continue to employ
Employee in the position in which Employee is currently employed (hereinafter
referred to as the "Employment") and Employee agrees to be so employed by the
Company, all on the terms and conditions set forth herein.  The Employment shall
continue from the date hereof until the Termination Date (as hereinafter
defined).

       (b)    DUTIES.  Employee shall be subject to the direction of the Board
of Directors of the Company (the "Board") and shall have those duties and
responsibilities which are assigned to Employee by the Board consistent with
Employee's position.  The parties expressly acknowledge that Employee shall
devote Employee's business time and attention to the Company's businesses as is
reasonably necessary to discharge Employee's supervisory management
responsibilities hereunder.  Employee agrees to perform faithfully the duties
assigned to Employee to the best of Employee's ability.

       (c)    CERTAIN DEFINITIONS.

              (i)    FISCAL YEAR.  Each reference in this Agreement to "Fiscal
       Year" means a fiscal year of the Company, and each reference to "Fiscal"
       followed by a calendar year



       means the Fiscal Year ending in that calendar year (e.g., "Fiscal 2000"
       means the Company's Fiscal Year ending January 31, 2000).

              (ii)   TERMINATION DATE.  With regard to any termination of the
       Employment, "Termination Date" means the last day on which Employee was
       employed by the Company.

              (iii)  PERSON.  "Person" shall have the meaning provided in
       Sections 3(a)(9) and 13(d)(3) of the Securities Exchange Act of 1934, as
       amended, or any successor thereto (the "Exchange Act").

              (iv)   CODE.  "Code" means the Internal Revenue Code of 1986, as
       amended, or any successor thereto.

       SECTION 2.    COMPENSATION.

       (a)    SALARY.  At all times while Employee is employed by the Company,
the Company shall pay to Employee a salary as base compensation for the services
to be rendered by Employee hereunder.  The initial amount of such salary shall
be equal to the annual base salary paid by the Company to Employee as of the
date hereof.  Such salary shall be reviewed no less frequently than annually by
the Board and may be increased upon the approval of the Board in its sole
discretion.  Such salary shall accrue and be payable in accordance with the
payroll practices of the Company in effect from time to time.  All such payments
shall be subject to deduction and withholding as required by applicable law.

       (b)    BONUS.  At all times while Employee is employed by the Company,
Employee shall participate in an annual bonus program (the "Annual Bonus Plan")
substantially similar to the bonus program in which Employee is participating
with respect to Fiscal 2000 and shall be entitled to a target bonus under such
Annual Bonus Plan not less than the bonus that would be paid for Fiscal 2000
under the annual bonus plan of the Company currently in effect for Employee,
assuming the transactions contemplated in the Merger Agreement did not occur and
Company earnings for Fiscal 2000 were $1.82 per share.  Performance objectives
under such Annual Bonus Plan shall be established by the Board, based on
achievement of projected financial results heretofore provided by management to
the DLJ Entities (as defined in the Shareholders Agreement).

       (c)    BENEFITS.  At all times while Employee is employed by the Company,
Employee shall be entitled to participate in all such employee benefit plans,
programs and arrangements as are customarily accorded the executives of the
Company, including without limitation tax qualified profit sharing and
retirement plans, group life, hospitalization and other insurance and vacations,
in each case on a basis no less favorable to Employee than as of the date hereof
(but excluding stock-option and other equity-based compensation plans which the
parties acknowledge are being provided to Employee under separate agreements).

                                          2


       SECTION 3.    TERMINATION.

       (a)    DEATH OR DISABILITY.  The Employment shall terminate automatically
upon the death or total disability of Employee.  For purposes of this Agreement,
"total disability" shall be deemed to have occurred if Employee shall have been
unable to perform Employee's duties due to mental or physical incapacity for a
period of six (6) consecutive months.

       (b)    CAUSE.  By action of the Board, the Company may terminate the
Employment for Cause.  For purposes of this Agreement, "Cause" shall be deemed
to be (i) the Employee's willful refusal substantially to perform his duties
(other than as a result of total or partial incapacity due to physical or mental
illness); (ii) the Employee's conviction of a felony arising from any act of
fraud, embezzlement, or willful dishonesty by the Employee in relation to the
business or affairs of the Company; (iii) any other felonious conduct on the
part of the Employee that is materially detrimental to the best interests of the
Company; (iv) the Employee's being repeatedly under the influence of illegal
drugs or alcohol while performing his duties; or (v) any other willful act which
is materially injurious to the financial condition or business reputation of the
Company; PROVIDED that no conduct described in clauses (i), (iii) or (v) hereof
shall constitute Cause unless such conduct was undertaken in bad faith.

       (c)    WITHOUT CAUSE.  By action of the Board, the Company may terminate
the Employment without Cause.

       (d)    INVOLUNTARY TERMINATION.  "Involuntary Termination" shall mean
(i) any termination by the Company that is not for Cause and (ii) any
resignation by Employee if such resignation occurs within 60 days following the
occurrence of any Change in Employment Terms (as hereinafter defined).

       (e)    CHANGE IN EMPLOYMENT TERMS.  "Change in Employment Terms" shall
mean (i) the assignment to Employee of duties that are materially inconsistent
with the Employees's position or with his authority, duties or responsibilities
as of the date hereof, or any other action by the Company which results in a
material diminution or material adverse change in such position, authority,
duties or responsibilities; (ii) any reduction of Employee's base salary;
(iii) any reduction of Employee's target bonus under the Annual Bonus Plan;
(iv) any relocation of employee's principal workplace to a location more than 30
miles from the current site of such workplace (it being recognized that Employee
currently divides his time between his workplace in Florida and his workplace in
Minnesota, and it is the intent of the parties to continue that arrangement);
(v) any substantial reduction in the benefits and perquisites provided, in the
aggregate, to Employee; and (vi) failure by the Company to carry out its
obligation under Section 18;  PROVIDED, HOWEVER, that none of the foregoing
shall constitute a Change in Employment Terms unless Employee objects thereto by
giving notice to the Company within 30 days after Employee becomes aware of such
change and the Company fails to correct the same within 30 days following
receipt of such notice, in which case a Change in Employment Terms shall be
deemed to have occurred on the 31st day following the Company's receipt of such
notice.

                                          3


       SECTION 4.    COMPENSATION FOLLOWING TERMINATION.

       (a)    DEATH OR DISABILITY.  If the Employment is terminated pursuant to
Section 3(a) above (relating to death or disability), this Agreement shall
terminate, and no further compensation shall be payable to Employee, except that
the Company shall pay to Employee or Employee's estate, as applicable, (in
addition to any other benefits to which Employee is or may become entitled under
the terms of any benefit plan) an amount equal to the sum of

              (i)    any unpaid salary accrued through the Termination Date,
       plus

              (ii)   an amount equal to the Average Previous Bonus (as
       hereinafter defined) multiplied by a fraction, the numerator of which is
       the number of days of the then-current Fiscal Year that have elapsed
       prior to the Termination Date and the denominator of which is 365.

       (b)    TERMINATION FOR CAUSE OR VOLUNTARY TERMINATION.  If the Employment
is terminated by the Company for Cause or voluntarily by Employee (without any
Involuntary Termination), then no further compensation or benefits shall be paid
to Employee after the Termination Date, but Employee shall be entitled to
receive benefits to which Employee is or may become entitled pursuant to any
benefit plan plus any unpaid salary accrued through the Termination Date.

       (c)    INVOLUNTARY TERMINATION.  If the Employment is terminated by any
Involuntary Termination, then the Company shall

              (i)    pay to Employee, within five business days after the
       Termination Date, a lump sum equal to 2.99 multiplied by Employee's
       annual base salary in effect on the Termination Date (or, if higher,
       multiplied by the highest annual base salary in effect during the one-
       year period ending on the Termination Date);

              (ii)   pay to Employee, within five business days after the
       Termination Date, a lump sum equal to 2.99 multiplied by the Average
       Previous Bonus;

              (iii)  continue to provide to Employee all insurance and other
       benefits that Employee would have received had Employee remained employed
       during three-year period ending on the third anniversary of the
       Termination Date; and

              (iv)   cause Employee's entire account balance and all accrued
       benefits under the Company's Supplemental Executive Retirement Plan and
       those under each other plan or arrangement providing similar benefits
       (collectively, the "SERP") to become fully vested and nonforfeitable
       effective as of the Termination Date (and at all times thereafter), and
       the Company will cause each distribution under the SERP to be made
       without regard to any provision of the SERP that permits a distribution
       to be deferred to ensure that no part thereof is nondeductible under Code
       Section 162(m).

                                          4


       (d)    AVERAGE PREVIOUS BONUS.  With respect to any Termination Date, the
"Average Previous Bonus" shall be the average of the bonuses received by
Employee for the three consecutive Fiscal Years of the Company ended immediately
prior to the Termination Date (e.g., if the Termination Date were June 30, 2000,
and Employee had received a bonus of $60,000 for Fiscal 1997, $70,000 for Fiscal
1998 and $80,000 for Fiscal 1999, then the Average Previous Bonus would be
$70,000).

       (e)    Gross-Up Amount.

              (i)    Following any payment required under this Section 4 in
       connection with an event that could be treated as described in Code
       Section 280G(b)(2)(A)(i), the Company will cause its independent auditor
       promptly to review, at the Company's sole expense, the applicability of
       Code Section 4999 to all payments and distributions to (or for the
       benefit of) Employee, whether paid or payable or distributed or
       distributable pursuant to the terms of this Agreement, any benefit plan
       or otherwise (the "Total Payments").  If such auditor determines that the
       Total Payments result in an excise tax imposed by Code Section 4999 or
       any comparable federal, state or local law or any interest or penalties
       with respect to such excise tax (such excise tax, together with any such
       interest and penalties, being the "Excise Tax"), then the Company will
       pay to Employee, in cash, the Gross-Up Amount within 10 days after such
       determination.

              (ii)   The Gross-Up Amount shall be that dollar amount such that,
       after payment by Employee of all Excise Tax plus all other taxes,
       interest and penalties imposed on the Gross-Up Amount, Employee would
       retain an amount of the Gross-Up Amount equal to the Excise Tax imposed
       upon the Total Payments.  For purposes of the foregoing determination,
       Employee's tax rate will be deemed to be the highest statutory marginal
       state and federal tax rate (on a combined basis) then in effect.  If no
       determination by the Company's auditors is made prior to the time when
       Employee is required to file a tax return reflecting the Total Payments
       (without any extension), then the Company shall pay to Employee a Gross-
       Up Amount calculated on the basis of the Excise Tax reported in such tax
       return, within 10 days after the later of the date on which such tax
       return is filed or the date on which a copy thereof is provided to the
       Company.  In all events, if any tax authority determines that a greater
       Excise Tax should be imposed upon the Total Payments than so paid to
       Employee by the Company, then the Company shall pay to Employee the full
       Gross-Up Amount calculated on the basis of the amount of Excise Tax
       determined to be payable by such tax authority, within 10 days after
       Employee notifies the Company of such determination.  If any tax
       authority finally determines that a lesser Excise Tax should be imposed
       upon the Total Payments than that which previously served as the basis
       for Gross-Up Amounts paid to Employee, then Employee shall repay to the
       Company such difference, together with any other amounts previously
       included in the Gross-Up amounts with respect to such difference.  If any
       other benefit plan or other plan, policy or practice of the Company or
       any other agreement (an "Other Arrangement") specifically provides that
       benefits thereunder will be reduced or limited so that such benefits or
       the Total Payments will not result in the imposition of an Excise Tax
       pursuant to Code Section 4999, the reduction or limitation will apply, to
       the extent

                                          5


       provided in the Other Arrangement, solely to the benefits provided
       pursuant to the Other Arrangement as if the benefits under the Other
       Arrangement constituted the entire Total Payments, and such reduction or
       limitation will not otherwise reduce or limit the actual Total Payments.

       SECTION 5.    EXPENSE REIMBURSEMENT AND INDEMNIFICATION.  Upon the
submission of properly documented expense account reports, the Company shall
reimburse Employee for all reasonable business-related travel and entertainment
expenses incurred by Employee in the course of Employment.  At all times while
Employee is employed by the Company, and at all times following the Termination
Date, the Company shall continue to provide to Employee indemnification,
elimination of liability, director's and officer's liability insurance and other
protection from personal liability, each of which shall not be, at any time,
less than (a) that in effect for Employee as of May 31, 1999 or (b) if greater,
that in effect at such time for the member of the Board then having the most
protection.

       SECTION 6.    ASSIGNABILITY; BINDING NATURE.  This Agreement shall be
binding and inure to the benefit of the parties, and their respective
successors, heirs (in the case of Employee) and assigns.  No obligations of the
Company under this Agreement may be assigned or transferred by the Company,
except that such obligations shall be assigned or transferred (as described
below) pursuant to a merger or consolidation of the Company in which the Company
is not the continuing entity, or the sale or liquidation of all or substantially
all of the assets of the Company, if the assignee or transferee is the surviving
entity or successor to all or substantially all of the assets of the Company and
such assignee or transferee assumes by written contract, and agrees to perform,
all liabilities, obligations and duties of the Company under this Agreement (an
"Assuming Entity").  As used in this Section 6, "Company" shall mean the Company
as hereinbefore defined and any Assuming Entity which assumes and agrees to
perform this Agreement.

       SECTION 7.    CONFIDENTIAL INFORMATION.

       (a)    NON-DISCLOSURE.  While employed hereunder or at any time
thereafter, irrespective of the time, manner or cause of termination of
Employment, Employee will not directly or indirectly reveal, divulge, disclose
or communicate to any person or entity, other than authorized officers,
directors and employees of the Company, in any manner whatsoever, any
Confidential Information (as hereinafter defined) of the Company without the
prior written consent of the Board; PROVIDED, HOWEVER, that this provision shall
not prohibit a disclosure of Confidential Information made in good faith in the
ordinary course of the Company's business.

       (b)    DEFINITION.  As used herein, "Confidential Information" means
information disclosed to or known by Employee as a direct or indirect
consequence of the Employment about the Company or its businesses, products and
practices which information is not generally known in the business in which the
Company is or may be engaged.  However, Confidential Information shall not
include under any circumstances any information which is (i) available to the
public from an originating source other than Employee, (ii) released in writing
by the Company to the public, (iii) required to be disclosed by Employee or the
Company pursuant to any court process

                                          6


or any government or agency or department of any government, or (iv) the subject
of a written waiver executed by the Company for the benefit of Employee.

       (c)    RETURN OF PROPERTY.  Upon termination of the Employment, Employee
will surrender to the Company all materials in Employee's possession containing
Confidential Information, including without limitation, all lists, charts,
schedules, reports, financial statements, books and records of the Company, and
all copies thereof, and all other property belonging to the Company, provided
Employee shall be accorded reasonable access to such Confidential Information
subsequent to the Termination Date for any proper purpose as determined in the
reasonable judgment of the Company.

       SECTION 8.    AGREEMENT NOT TO COMPETE.  Employee hereby agrees that,
while Employee is employed by the Company and following the Termination Date,
throughout the Non-Compete Period, Employee shall not, either in Employee's own
behalf or as a partner, member, officer, director, employee, consultant,
advisor, agent or shareholder (other than as the holder of less than 5% of the
outstanding capital stock of any corporation with a class of equity security
registered under Section 12(b) or Section 12(g) of the Exchange Act) engage in,
invest in or render services to any person or entity engaged in any business in
which the Company is then engaged within any country.  For any Termination Date,
the "Non-Compete Period" shall commence on such Termination Date and shall end
on the first anniversary of such Termination Date (unless the Company has made
the payments referred to in Section 4(c), in which case the Non-Compete Period
shall end on the third anniversary of the Termination Date).

       SECTION 9.    AGREEMENT NOT TO SOLICIT EMPLOYEES.  Employee agrees that,
while Employee is employed hereunder and following the Termination Date,
throughout the Non-Compete Period, neither Employee nor any affiliate shall, on
behalf of any business engaged in a business competitive with the Company,
solicit or induce, or in any manner attempt to solicit or induce, any person
employed by the Company to terminate his or her employment with the Company (but
the foregoing shall not be construed to prohibit Employee, any affiliate or any
other person from hiring any person who applies for or otherwise seeks
employment in response to a general "help wanted" advertisement or other similar
non-individual solicitation).

       SECTION 10.   ENFORCEMENT OF RESTRICTIONS.

       (a)    Employee acknowledges that the restrictions imposed under Sections
8 and 9, in view of the nature of the businesses in which the Company is engaged
and Employee's position with the Company, are reasonable and necessary to
protect the legitimate interests of the Company.  However, Employee agrees that
if any of these restrictions is construed to be invalid or unenforceable, the
remainder of the restrictions shall not be affected, and if any restriction is
held to be unenforceable because of the area covered, the duration or the scope,
Employee agrees that the court making such determination shall have the power to
reduce the area and/or the duration, and/or limit the scope, and the restriction
shall then be enforceable in its reduced form.

       (b)    The Company and Employee intend that the restrictions set forth in
Sections 8 and 9 be observed and enforced for the full duration of the
applicable period described in those Sections, and the Company and Employee
agree that, if Employee violates these restrictions

                                          7


during such period, then the Company shall be entitled to an injunction
restraining such violation (in addition to all other remedies the Company may
have at law or in equity).

       (c)    Employee acknowledges and accepts that the restrictions and
remedies in Sections 8 and 9 will apply without regard to the reason for
termination of the Employment and without regard to whether the Employment is
terminated by Employee or by the Company.

       SECTION 11.   NO MITIGATION OR OFFSET; INTERES.  Employee shall have no
obligation to mitigate the amount of any payment or benefit t hat the Company
becomes obligated to provide under this Agreement by seeking other employment or
otherwise, and no such payment or benefit may be reduced, offset or subject to
recovery by the Company (whether by reference to any payment or benefit that
Employee may receive from other employment or otherwise).  The Company has no
right to offset any payment or benefit under this Agreement against any amount
owed or claimed to be owed to the Company (whether under this Agreement or
otherwise).  Any amount owed hereunder that is not paid when due shall bear
interest until paid at a rate equal to 2.0 percentage points in excess of the
prime rate in effect from time to time in Minneapolis at Norwest Bank Minnesota
(or any successor thereto).

       SECTION 12.   NO VIOLATION.  Each party hereby represents and warrants to
the other that such party's execution, delivery and performance of this
Agreement does not, with or without the giving of notice or the passage of time,
or both, conflict with, or result in a default, right to accelerate or loss of
rights under, any provision of any agreement or understanding to which such
party (or, to the best knowledge of such party or any of such party's
affiliates) is or may be bound.

       SECTION 13.   CAPTIONS.  The captions, headings and arrangements used in
this Agreement are for convenience only and do not in any way affect, limit or
amplify the provisions hereof.

       SECTION 14.   NOTICES.  All notices required or permitted to be given
hereunder shall be in writing and shall be deemed delivered by hand, by
facsimile (with confirming paper copy), by nationally recognized overnight
courier service or by United States mail, postage prepaid, registered or
certified, return receipt requested, in any case addressed to the party to whom
notice is being given at the specified address below (or at such other address
as such party may designate by notice):

       If to the Company:   Viking Merger Sub, Inc.
                            c/o DLJ Merchant Bank Partners II, L.P.
                            277 Park Avenue
                            New York, New York  10172
                            Attention: William F. Dawson, Jr.
                            Fax: (612) 892-7272

                                          8


                            and, after the Effective Time

                            Merrill Corporation
                            One Merrill Circle
                            St. Paul, MN 55708
                            Attention: General Counsel
                            Fax: (651) 649-1348

                            with a copy to:

                            Davis Polk & Wardwell
                            450 Lexington Avenue
                            New York, New York 10017
                            Attention: George R. Bason, Jr.
                            Fax: (212) 450-4800

       If to Employee:      Merrill Corporation
                            One Merrill Circle
                            St. Paul, MN 55708

                            with a copy to:
                            Faegre & Benson LLP
                            2200 Norwest Center
                            90 South Seventh Street
                            Minneapolis, Minnesota 55402-3901
                            Attention: William R. Busch, Jr.
                            Fax: (612) 336-3026

       SECTION 15.   INVALID PROVISIONS.  If any provision of this Agreement is
held to be illegal, invalid or unenforceable under present or future laws, such
provisions shall be fully severable, and this Agreement shall be construed and
enforced as if such illegal, invalid or unenforceable provision had never
comprised a part of this Agreement; the remaining provisions of this Agreement
shall remain in full force and effect and shall not be affected by the illegal,
invalid or unenforceable provision or by its severance for this Agreement.  In
lieu of each such illegal, invalid or unenforceable provision, there shall be
added automatically as part of this Agreement a provision as similar in terms to
such illegal, invalid or unenforceable provision as may be possible and be
legal, valid and enforceable.

       SECTION 16.   AMENDMENTS.  This Agreement may be amended in whole or in
part only by an instrument in writing setting forth the particulars of such
amendment and duly executed by an officer of the Company and by Employee.

       SECTION 17.   WAIVER; THIRD PARTY BENEFICIARIES.  No delay or omission by
any party hereto to exercise any right or power hereunder shall impair such
right or power to be construed as a waiver thereof.  A waiver by any of the
parties hereto of any of the covenants to be

                                          9


performed by any other party or any breach thereof shall not be construed to be
a waiver of any succeeding breach thereof or of any other covenant herein
contained.  Except as otherwise expressly set forth herein, all remedies
provided for in this Agreement shall be cumulative and in addition to and not in
lieu of any other remedies available to any party at law, in equity or
otherwise.  No provision of this Agreement is intended to confer  any rights or
remedies on any person other than the Employee.

       SECTION 18.   CERTAIN ARRANGEMENTS FOR EMPLOYEES AND OFFICERS FOLLOWING
AFTER THE EFFECTIVE TIME.  The Company agrees with the Employee, that as soon as
reasonably practicable after the Effective Time, it will put in place the Direct
Investment Plan and the Management Incentive Plan described in Annexes I and II
for certain employees and officers of the Company and its subsidiaries.

       SECTION 19.   COUNTERPARTS.  This Agreement may be executed in multiple
counterparts, each of which shall constitute an original, and all of which
together shall constitute one and the same Agreement.

       SECTION 20.   GOVERNING LAW.  This Agreement shall be construed and
enforced according to the laws of the State of Minnesota.

       SECTION 21.   PRIOR EMPLOYMENT AGREEMENT.  Upon the occurrence of the
Effective Time, this Agreement supersedes any and all other employment,
change-in-control, severance or similar agreements between Employee and the
Company or the Employee and Merrill Corporation.


                                          10


IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.

                                         THE COMPANY:

                                         VIKING MERGER SUB, INC.

                                         By     /s/ William F. Dawson, Jr.
                                           -------------------------------------
                                         Title  President
                                              ----------------------------------


                                         EMPLOYEE:

                                         /s/ John Castro
                                         ---------------------------------------
                                                Name:  John Castro




                                                                         ANNEX I

                                      TERM SHEET
                                DIRECT INVESTMENT PLAN

 Share Price:                Same price as that paid by the DLJMB entities
                             under the Merger Agreement.

 Reinvestment and            The employee will purchase Shares with his or her
   Coinvestment Shares:      available funds (each a "Reinvestment Share") and
                             the Company will make a non-recourse loan (the
                             "Loan") to the employee to purchase additional
                             Shares (each a "Coinvestment Share").  (See
                             Schedule A attached for the number of Reinvestment
                             and Coinvestment Shares for each employee.)  All
                             Reinvestment Shares and Coinvestment Shares
                             purchased by an employee will be posted as
                             collateral for the Loan to the employee.  The
                             value of the collateral must be adequate to assure
                             that the Loan will not be treated as income for
                             tax purposes.  The employee may make a Section
                             83(b) election so that any future gain on the
                             Reinvestment and Coinvestment Shares will be
                             treated as capital gain.  All Reinvestment and
                             Coinvestment Shares will be subject to the
                             transfer restrictions and other provisions of the
                             Shareholders Agreement, which will apply to the
                             DLJMB entities and all management investors.

 Loan Terms:                 The Loan will bear interest at the greater of the
                             Company's credit facility rate or the federal
                             applicable rate.  All principal and interest will
                             be repayable in a single payment as of the earlier
                             of (i) the employee's termination of employment or
                             (ii) eight years after the purchase of the
                             Reinvestment and Coinvestment Shares.  In the case
                             of the sale of all or part of the Shares, Loan
                             repayment will be immediately due to the extent of
                             the lesser of (i) the pro rata portion of unpaid
                             principal and interest on the Loan attributable to
                             such Shares and (ii) the net after tax proceeds
                             realized upon such sale;  PROVIDED that the total
                             amount due will not exceed the total amount of the
                             principal and interest outstanding on the Loan.

 Termination of Employment/  In the event an employee's termination of
   Company Repurchase        employment prior to a DLJMB liquidation event the
 Right:                      Reinvestment Shares and Coinvestment Shares will
                             be subject to a Company repurchase right.  The
                             repurchase price will depend on the



                             circumstances of the termination and, in the case
                             of the Coinvestment Shares, the extent to which the
                             Coinvestment Shares have become vested, as
                             follows:

                             (a) VESTING SCHEDULE FOR COINVESTMENT SHARES



                                                     % of Coinvestment
                                   Year  Shares Vested as of the End of the Year
                                   ----  ---------------------------------------
                                      
                                    1                         0%
                                    2                         0%
                                    3                        33%
                                    4                        66%
                                    5                        100%

                             (a) COMPANY REPURCHASE PRICE



                                                Reinvestment
                                             Shares and Vested      Unvested
                                                Coinvestment      Conivestment
                                                  Shares            Shares
                                             -----------------  ----------------
                                                          
                             Voluntary              FMV         Lesser of (i)
                             Resignation,                       FMV or (ii)
                             Disability,                        purchase price
                             Death or                           plus Loan
                             Termination by                     interest
                             Company without
                             Cause





                                                                  All Shares
                                                               -----------------
                                                            
                                                               Lesser of (i)
                             Termination for                   FMV or (ii)
                             Cause                             purchase price


                                          2


 Termination of Employment   Upon termination of employment without Cause,
 without Cause/Employee Put  employee will have the right to put all
 Right                       Reinvestment Shares and all vested Coinvestment
                             Shares to the Company at fair market value;
                             PROVIDED that payment for such Shares shall be
                             required to be made only as rapidly as permissible
                             without violating Loan covenants or other
                             contractual restrictions applicable to the Company
                             (and any amounts not paid upon exercise of the put
                             will bear interest at the rate applicable to the
                             Company's bank debt.)

 Change in Control:          Upon a sale by the DLJMB entities of 60% of their
                             Shares in the Company or substantially all of the
                             assets of the Company, all Coinvestment Shares
                             that have not yet vested shall immediately become
                             vested (unless the Company is publicly traded
                             immediately following such sale).


                                          3


                                     SCHEDULE A

                       REINVESTMENT AND COINVESTMENT SUMMARY



                           Reinvestment Program                 Coinvestment Program                  Totals
                    --------------------------------           ---------------------   -----------------------------------
                      $ Amt.               Shares          $ Amt.           Shares      $ Amt.          Shares        Loans
                    -------------      -------------    ----------------- ----------   ----------     ----------   -------------
                                                                                              
 [TOTAL               $10 million                       $18.6 million (*)                                          $18.6 million



- ---------------------
(*)  This commitment is required by DLJMB only to the extent the $10 million
     reinvestment target is met.

                                          4


                                                                        ANNEX II

                                      TERM SHEET
                              MANAGEMENT INCENTIVE PLAN

 Recipients/ Number of    See Schedule A attached.
   Shares Covered by
   Options:

 Grant Date:              Closing Date

 Option Exercise Price:   Same as DLJMB entities' buying price under the Merger
                          Agreement.

 Time Vesting Option:     Each Time Vesting Option will become vested and
                          exercisable as follows:


                          End of Year:    1     2     3      4      5     6
                                         --    --    ---    ---    ---   ----
                                                       
                                         0%    0%    25%    50%    75%   100%

 Performance Vesting      Performance Vesting Options will become vested and
   Option:                exercisable according to the schedule set forth in
                          Exhibit 1, based on whether the Target Implied Common
                          Equity Values set forth in such Exhibit are attained
                          as of the end of the relevant years.  Such vesting
                          shall be cumulative; I.E., the percentage of
                          Performance Vesting Options set forth for each year
                          shall be vested as of the end of such year if the
                          Target Implied Common Equity Value for such year is
                          achieved as of such date, regardless of whether the
                          Target Implied Common Equity Values have been
                          achieved in previous years.

                          In the event that the DLJMB entities sell 90% or more
                          of their Shares in the Company or substantially all
                          of the assets of the Company and realize an internal
                          rate of return ("DLJMB IRR") of at least 25%, the
                          portion of the Performance Vesting Option which has
                          not previously become vested and exercisable will
                          become vested and exercisable based upon the level of
                          the DLJMB IRR, as set forth in Exhibit 2 attached.

 Super Performance        Each Super Performance Vesting Option will become
   Vesting Options:       exercisable if the DLJMB entities sell 90% or more of
                          their Shares in the Company or substantially all the
                          assets of the Company and realize a DLJMB IRR in
                          excess of 50%.  To the extent that the vesting of all
                          the Super Performance Vesting Options granted under
                          the Plan would cause the DLJMB IRR to be 50% or less,
                          only that portion of the Super Performance



                          Vesting Options that would result in a DLJMB IRR of
                          50% will become vested.

 Transferability/         All Options will be non-transferable.  All Shares
   Shareholders           acquired upon the exercise of the Options will be
   Agreement:             subject to the transfer restrictions and other
                          provisions set forth in the Shareholders' Agreement
                          which will apply to the DLJMB entities and all
                          management investors.

 Termination of           RESIGNATION, TERMINATION WITHOUT CAUSE, DEATH OR
   Employment:            DISABILITY - Unvested Options terminate immediately,
                          but vested Options will be retained by the employee.

                          TERMINATION FOR CAUSE - All vested and unvested
                          Options terminate immediately and all Shares
                          previously acquired upon exercise of Options will be
                          subject to a right of repurchase by the Company at a
                          price equal to the Exercise Price.


                                          2


                                      SCHEDULE A

                                       OPTIONS



                                            Super
                 Time      Performance   Performance
                Vesting      Vesting       Vesting       Total       Exercise
     Name       Options      Options       Options      Options       Price
     ----       -------      -------       -------      -------       -----
                                                      
    [TOTAL        5%*          5%*           5%*          15%*       $22.00]



- -------------
       * The percentages are expressed as percentages of outstanding Shares,
without taking into account the Shares issuable pursuant to the Options.

                                          3


                                     EXHIBIT 1

                    (FOR CALCULATING VESTING UNDER SECTION 4(b))




       FISCAL YEAR:          2000     2001     2002     2003     2004
                             ----     ----     ----     ----     ----
                                                  
TARGET IMPLIED COMMON
EQUITY VALUE OF THE
COMPANY (IN MILLIONS):      [TO BE BASED ON 85% OF MANAGEMENT PROJECTIONS]


TARGET VESTED
PERCENTAGE:                  20%      40%      60%      80%      100%


For this purpose, the "IMPLIED COMMON EQUITY VALUE OF THE COMPANY" is defined as

                                  EV - TD + CASH,

where

       EV (Enterprise Value) is pro forma EBITDA times 6.0
       TD is Total Debt
       CASH is cash on balance sheet (1)


- ---------------------------
(1) As of fiscal year end.

                                          4


                                      EXHIBIT 2

              (FOR PURPOSES OF CALCULATING VESTING UNDER SECTION 4(c))



                                            PERCENTAGE OF UNVESTED
                                       CLIFF VESTING SHARES AS TO WHICH
                                             OPTION BECOMES VESTED
         DLJMB IRR                           ON LIQUIDATION EVENT
      --------------                   --------------------------------
                                    
      40% OR GREATER                                 100%
       35.0 - 39.9%                                   75%
       30.0 - 34.9%                                   50%
       25.0 - 29.9%                                   25%
      LESS THAN 20%                                   0%



For this purpose, "DLJMB IRR" is defined as that annual discount rate which,
when applied to (i) all investments by the DLJMB entities in Shares of Common
Stock of the Company and (ii) all amounts realized by the DLJMB entities with
respect to such Shares causes the net present value of such investments and
amounts realized to equal zero, as determined on a pro forma basis reflecting
the Shares issuable pursuant to Options that have become vested prior to the
Liquidation Event and the Shares issuable pursuant to Options becoming vested as
of the Liquidation Event.


                                          5

EX-10.5

                            EXECUTIVE EMPLOYMENT AGREEMENT


       This Executive Employment Agreement (this "Agreement") is made and
entered into as of July 14, 1999, by and among Viking Merger Sub, Inc., a
Minnesota corporation (which, together with its Subsidiaries (as herein defined)
is called the "Company"), and Rick Atterbury ("Employee").

                                     WITNESSETH:

       WHEREAS, Employee is currently employed by the Company;

       WHEREAS, the Company desires to continue to employ Employee upon the
terms set forth herein;

       WHEREAS, Employee desires to continue to be employed by the Company and
to memorialize the terms and conditions of such employment;

       WHEREAS, the Company is entering into this Agreement by and on behalf of
itself and each trade or business in which the Company's direct or indirect
ownership of value or voting power is at least 50% (the "Subsidiaries");

       NOW THEREFORE, Employee and the Company, in consideration of the
agreements, covenants and conditions herein, hereby agree as follows:

       SECTION 1.    BASIC EMPLOYMENT PROVISIONS.

       (a)    EMPLOYMENT.  Effective upon the consummation of the merger of the
Company with Merrill Corporation pursuant to the Merger Agreement (the "Merger
Agreement") dated as of July 14, 1999 between the Company and Merrill
Corporation (the "Effective Time"), the Company shall continue to employ
Employee in the position in which Employee is currently employed (hereinafter
referred to as the "Employment") and Employee agrees to be so employed by the
Company, all on the terms and conditions set forth herein.  The Employment shall
continue from the date hereof until the Termination Date (as hereinafter
defined).

       (b)    DUTIES.  Employee shall be subject to the direction of the Board
of Directors of the Company (the "Board") and shall have those duties and
responsibilities which are assigned to Employee by the Board consistent with
Employee's position.  The parties expressly acknowledge that Employee shall
devote Employee's business time and attention to the Company's businesses as is
reasonably necessary to discharge Employee's supervisory management
responsibilities hereunder.  Employee agrees to perform faithfully the duties
assigned to Employee to the best of Employee's ability.

       (c)    CERTAIN DEFINITIONS.

              (i)    FISCAL YEAR.  Each reference in this Agreement to "Fiscal
       Year" means a fiscal year of the Company, and each reference to "Fiscal"
       followed by a calendar year



       means the Fiscal Year ending in that calendar year (e.g., "Fiscal 2000"
       means the Company's Fiscal Year ending January 31, 2000).

              (ii)   TERMINATION DATE.  With regard to any termination of the
       Employment, "Termination Date" means the last day on which Employee was
       employed by the Company.

              (iii)  PERSON.  "Person" shall have the meaning provided in
       Sections 3(a)(9) and 13(d)(3) of the Securities Exchange Act of 1934, as
       amended, or any successor thereto (the "Exchange Act").

              (iv)   CODE.  "Code" means the Internal Revenue Code of 1986, as
       amended, or any successor thereto.

       SECTION 2.    COMPENSATION.

       (a)    SALARY.  At all times while Employee is employed by the Company,
the Company shall pay to Employee a salary as base compensation for the services
to be rendered by Employee hereunder.  The initial amount of such salary shall
be equal to the annual base salary paid by the Company to Employee as of the
date hereof.  Such salary shall be reviewed no less frequently than annually by
the Board and may be increased upon the approval of the Board in its sole
discretion.  Such salary shall accrue and be payable in accordance with the
payroll practices of the Company in effect from time to time.  All such payments
shall be subject to deduction and withholding as required by applicable law.

       (b)    BONUS.  At all times while Employee is employed by the Company,
Employee shall participate in an annual bonus program (the "Annual Bonus Plan")
substantially similar to the bonus program in which Employee is participating
with respect to Fiscal 2000 and shall be entitled to a target bonus under such
Annual Bonus Plan not less than the bonus that would be paid for Fiscal 2000
under the annual bonus plan of the Company currently in effect for Employee,
assuming the transactions contemplated in the Merger Agreement did not occur and
Company earnings for Fiscal 2000 were $1.82 per share.  Performance objectives
under such Annual Bonus Plan shall be established by the Board, based on
achievement of projected financial results heretofore provided by management to
the DLJ Entities (as defined in the Shareholders Agreement).

       (c)    BENEFITS.  At all times while Employee is employed by the Company,
Employee shall be entitled to participate in all such employee benefit plans,
programs and arrangements as are customarily accorded the executives of the
Company, including without limitation tax qualified profit sharing and
retirement plans, group life, hospitalization and other insurance and vacations,
in each case on a basis no less favorable to Employee than as of the date hereof
(but excluding stock-option and other equity-based compensation plans which the
parties acknowledge are being provided to Employee under separate agreements).

                                          2


       SECTION 3.    TERMINATION.

       (a)    DEATH OR DISABILITY.  The Employment shall terminate automatically
upon the death or total disability of Employee.  For purposes of this Agreement,
"total disability" shall be deemed to have occurred if Employee shall have been
unable to perform Employee's duties due to mental or physical incapacity for a
period of six (6) consecutive months.

       (b)    CAUSE.  By action of the Board, the Company may terminate the
Employment for Cause.  For purposes of this Agreement, "Cause" shall be deemed
to be (i) the Employee's willful refusal substantially to perform his duties
(other than as a result of total or partial incapacity due to physical or mental
illness); (ii) the Employee's conviction of a felony arising from any act of
fraud, embezzlement, or willful dishonesty by the Employee in relation to the
business or affairs of the Company; (iii) any other felonious conduct on the
part of the Employee that is materially detrimental to the best interests of the
Company; (iv) the Employee's being repeatedly under the influence of illegal
drugs or alcohol while performing his duties; or (v) any other willful act which
is materially injurious to the financial condition or business reputation of the
Company; PROVIDED that no conduct described in clauses (i), (iii) or (v) hereof
shall constitute Cause unless such conduct was undertaken in bad faith.

       (c)    WITHOUT CAUSE.  By action of the Board, the Company may terminate
the Employment without Cause.

       (d)    INVOLUNTARY TERMINATION.  "Involuntary Termination" shall mean
(i) any termination by the Company that is not for Cause and (ii) any
resignation by Employee if such resignation occurs within 60 days following the
occurrence of any Change in Employment Terms (as hereinafter defined).

       (e)    CHANGE IN EMPLOYMENT TERMS.  "Change in Employment Terms" shall
mean (i) the assignment to Employee of duties that are materially inconsistent
with the Employees's position or with his authority, duties or responsibilities
as of the date hereof, or any other action by the Company which results in a
material diminution or material adverse change in such position, authority,
duties or responsibilities; (ii) any reduction of Employee's base salary;
(iii) any reduction of Employee's target bonus under the Annual Bonus Plan;
(iv) any relocation of employee's principal workplace to a location more than 30
miles from the current site of such workplace; (v) any substantial reduction in
the benefits and perquisites provided, in the aggregate, to Employee; and (vi)
failure by the Company to carry out its obligation under Section 18;  PROVIDED,
HOWEVER, that none of the foregoing shall constitute a Change in Employment
Terms unless Employee objects thereto by giving notice to the Company within 30
days after Employee becomes aware of such change and the Company fails to
correct the same within 30 days following receipt of such notice, in which case
a Change in Employment Terms shall be deemed to have occurred on the 31st day
following the Company's receipt of such notice.

       SECTION 4.    COMPENSATION FOLLOWING TERMINATION.

       (a)    DEATH OR DISABILITY.  If the Employment is terminated pursuant to
Section 3(a) above (relating to death or disability), this Agreement shall
terminate, and no further

                                          3


compensation shall be payable to Employee, except that the Company shall pay to
Employee or Employee's estate, as applicable, (in addition to any other benefits
to which Employee is or may become entitled under the terms of any benefit plan)
an amount equal to the sum of

              (i)    any unpaid salary accrued through the Termination Date,
       plus

              (ii)   an amount equal to the Average Previous Bonus (as
       hereinafter defined) multiplied by a fraction, the numerator of which is
       the number of days of the then-current Fiscal Year that have elapsed
       prior to the Termination Date and the denominator of which is 365.

       (b)    TERMINATION FOR CAUSE OR VOLUNTARY TERMINATION.  If the Employment
is terminated by the Company for Cause or voluntarily by Employee (without any
Involuntary Termination), then no further compensation or benefits shall be paid
to Employee after the Termination Date, but Employee shall be entitled to
receive benefits to which Employee is or may become entitled pursuant to any
benefit plan plus any unpaid salary accrued through the Termination Date.

       (c)    INVOLUNTARY TERMINATION.  If the Employment is terminated by any
Involuntary Termination, then the Company shall

              (i)    pay to Employee, within five business days after the
       Termination Date, a lump sum equal to 2.99 multiplied by Employee's
       annual base salary in effect on the Termination Date (or, if higher,
       multiplied by the highest annual base salary in effect during the
       one-year period ending on the Termination Date);

              (ii)   pay to Employee, within five business days after the
       Termination Date, a lump sum equal to 2.99 multiplied by the Average
       Previous Bonus;

              (iii)  continue to provide to Employee all insurance and other
       benefits that Employee would have received had Employee remained employed
       during three-year period ending on the third anniversary of the
       Termination Date; and

              (iv)   cause Employee's entire account balance and all accrued
       benefits under the Company's Supplemental Executive Retirement Plan and
       those under each other plan or arrangement providing similar benefits
       (collectively, the "SERP") to become fully vested and nonforfeitable
       effective as of the Termination Date (and at all times thereafter), and
       the Company will cause each distribution under the SERP to be made
       without regard to any provision of the SERP that permits a distribution
       to be deferred to ensure that no part thereof is nondeductible under Code
       Section 162(m).

       (d)    AVERAGE PREVIOUS BONUS.  With respect to any Termination Date, the
"Average Previous Bonus" shall be the average of the bonuses received by
Employee for the three consecutive Fiscal Years of the Company ended immediately
prior to the Termination Date (e.g., if the Termination Date were June 30, 2000,
and Employee had received a bonus of

                                          4


$60,000 for Fiscal 1997, $70,000 for Fiscal 1998 and $80,000 for Fiscal 1999,
then the Average Previous Bonus would be $70,000).

       (e)    Gross-Up Amount.

              (i)    Following any payment required under this Section 4 in
       connection with an event that could be treated as described in Code
       Section 280G(b)(2)(A)(i), the Company will cause its independent auditor
       promptly to review, at the Company's sole expense, the applicability of
       Code Section 4999 to all payments and distributions to (or for the
       benefit of) Employee, whether paid or payable or distributed or
       distributable pursuant to the terms of this Agreement, any benefit plan
       or otherwise (the "Total Payments").  If such auditor determines that the
       Total Payments result in an excise tax imposed by Code Section 4999 or
       any comparable federal, state or local law or any interest or penalties
       with respect to such excise tax (such excise tax, together with any such
       interest and penalties, being the "Excise Tax"), then the Company will
       pay to Employee, in cash, the Gross-Up Amount within 10 days after such
       determination.

              (ii)   The Gross-Up Amount shall be that dollar amount such that,
       after payment by Employee of all Excise Tax plus all other taxes,
       interest and penalties imposed on the Gross-Up Amount, Employee would
       retain an amount of the Gross-Up Amount equal to the Excise Tax imposed
       upon the Total Payments.  For purposes of the foregoing determination,
       Employee's tax rate will be deemed to be the highest statutory marginal
       state and federal tax rate (on a combined basis) then in effect.  If no
       determination by the Company's auditors is made prior to the time when
       Employee is required to file a tax return reflecting the Total Payments
       (without any extension), then the Company shall pay to Employee a
       Gross-Up Amount calculated on the basis of the Excise Tax reported in
       such tax return, within 10 days after the later of the date on which such
       tax return is filed or the date on which a copy thereof is provided to
       the Company.  In all events, if any tax authority determines that a
       greater Excise Tax should be imposed upon the Total Payments than so paid
       to Employee by the Company, then the Company shall pay to Employee the
       full Gross-Up Amount calculated on the basis of the amount of Excise Tax
       determined to be payable by such tax authority, within 10 days after
       Employee notifies the Company of such determination.  If any tax
       authority finally determines that a lesser Excise Tax should be imposed
       upon the Total Payments than that which previously served as the basis
       for Gross-Up Amounts paid to Employee, then Employee shall repay to the
       Company such difference, together with any other amounts previously
       included in the Gross-Up amounts with respect to such difference.  If any
       other benefit plan or other plan, policy or practice of the Company or
       any other agreement (an "Other Arrangement") specifically provides that
       benefits thereunder will be reduced or limited so that such benefits or
       the Total Payments will not result in the imposition of an Excise Tax
       pursuant to Code Section 4999, the reduction or limitation will apply, to
       the extent provided in the Other Arrangement, solely to the benefits
       provided pursuant to the Other Arrangement as if the benefits under the
       Other Arrangement constituted the entire Total Payments, and such
       reduction or limitation will not otherwise reduce or limit the actual
       Total Payments.

                                          5


       SECTION 5.    EXPENSE REIMBURSEMENT AND INDEMNIFICATION.  Upon the
submission of properly documented expense account reports, the Company shall
reimburse Employee for all reasonable business-related travel and entertainment
expenses incurred by Employee in the course of Employment.  At all times while
Employee is employed by the Company, and at all times following the Termination
Date, the Company shall continue to PROVIDE to Employee indemnification,
elimination of liability, director's and officer's liability insurance and other
protection from personal liability, each of which shall not be, at any time,
less than (a) that in effect for Employee as of May 31, 1999 or (b) if greater,
that in effect at such time for the member of the Board then having the most
protection.

       SECTION 6.    Assignability; Binding Nature.  This Agreement shall be
binding and inure to the benefit of the parties, and their respective
successors, heirs (in the case of Employee) and assigns.  No obligations of the
Company under this Agreement may be assigned or transferred by the Company,
except that such obligations shall be assigned or transferred (as described
below) pursuant to a merger or consolidation of the Company in which the Company
is not the continuing entity, or the sale or liquidation of all or substantially
all of the assets of the Company, if the assignee or transferee is the surviving
entity or successor to all or substantially all of the assets of the Company and
such assignee or transferee assumes by written contract, and agrees to perform,
all liabilities, obligations and duties of the Company under this Agreement (an
"Assuming Entity").  As used in this Section 6, "Company" shall mean the Company
as hereinbefore defined and any Assuming Entity which assumes and agrees to
perform this Agreement.

       SECTION 7.    CONFIDENTIAL INFORMATION.

       (a)    NON-DISCLOSURE.  While employed hereunder or at any time
thereafter, irrespective of the time, manner or cause of termination of
Employment, Employee will not directly or indirectly reveal, divulge, disclose
or communicate to any person or entity, other than authorized officers,
directors and employees of the Company, in any manner whatsoever, any
Confidential Information (as hereinafter defined) of the Company without the
prior written consent of the Board; PROVIDED, HOWEVER, that this provision shall
not prohibit a disclosure of Confidential Information made in good faith in the
ordinary course of the Company's business.

       (b)    DEFINITION.  As used herein, "Confidential Information" means
information disclosed to or known by Employee as a direct or indirect
consequence of the Employment about the Company or its businesses, products and
practices which information is not generally known in the business in which the
Company is or may be engaged.  However, Confidential Information shall not
include under any circumstances any information which is (i) available to the
public from an originating source other than Employee, (ii) released in writing
by the Company to the public, (iii) required to be disclosed by Employee or the
Company pursuant to any court process or any government or agency or department
of any government, or (iv) the subject of a written waiver executed by the
Company for the benefit of Employee.

       (c)    RETURN OF PROPERTY.  Upon termination of the Employment, Employee
will surrender to the Company all materials in Employee's possession containing
Confidential

                                          6


Information, including without limitation, all lists, charts, schedules,
reports, financial statements, books and records of the Company, and all copies
thereof, and all other property belonging to the Company, provided Employee
shall be accorded reasonable access to such Confidential Information subsequent
to the Termination Date for any proper purpose as determined in the reasonable
judgment of the Company.

       SECTION 8.    AGREEMENT NOT TO COMPETE.   Employee hereby agrees that,
while Employee is employed by the Company and following the Termination Date,
throughout the Non-Compete Period, Employee shall not, either in Employee's own
behalf or as a partner, member, officer, director, employee, consultant,
advisor, agent or shareholder (other than as the holder of less than 5% of the
outstanding capital stock of any corporation with a class of equity security
registered under Section 12(b) or Section 12(g) of the Exchange Act) engage in,
invest in or render services to any person or entity engaged in any business in
which the Company is then engaged within any country.  For any Termination Date,
the "Non-Compete Period" shall commence on such Termination Date and shall end
on the first anniversary of such Termination Date (unless the Company has made
the payments referred to in Section 4(c), in which case the Non-Compete Period
shall end on the third anniversary of the Termination Date).

       SECTION 9.    AGREEMENT NOT TO SOLICIT EMPLOYEES.  Employee agrees that,
while Employee is employed hereunder and following the Termination Date,
throughout the Non-Compete Period, neither Employee nor any affiliate shall, on
behalf of any business engaged in a business competitive with the Company,
solicit or induce, or in any manner attempt to solicit or induce, any person
employed by the Company to terminate his or her employment with the Company (but
the foregoing shall not be construed to prohibit Employee, any affiliate or any
other person from hiring any person who applies for or otherwise seeks
employment in response to a general "help wanted" advertisement or other similar
non-individual solicitation).

       SECTION 10.   ENFORCEMENT OF RESTRICTIONS.

       (a)    Employee acknowledges that the restrictions imposed under Sections
8 and 9, in view of the nature of the businesses in which the Company is engaged
and Employee's position with the Company, are reasonable and necessary to
protect the legitimate interests of the Company.  However, Employee agrees that
if any of these restrictions is construed to be invalid or unenforceable, the
remainder of the restrictions shall not be affected, and if any restriction is
held to be unenforceable because of the area covered, the duration or the scope,
Employee agrees that the court making such determination shall have the power to
reduce the area and/or the duration, and/or limit the scope, and the restriction
shall then be enforceable in its reduced form.

       (b)    The Company and Employee intend that the restrictions set forth in
Sections 8 and 9 be observed and enforced for the full duration of the
applicable period described in those Sections, and the Company and Employee
agree that, if Employee violates these restrictions during such period, then the
Company shall be entitled to an injunction restraining such violation (in
addition to all other remedies the Company may have at law or in equity).

                                          7


       (c)    Employee acknowledges and accepts that the restrictions and
remedies in Sections 8 and 9 will apply without regard to the reason for
termination of the Employment and without regard to whether the Employment is
terminated by Employee or by the Company.

       SECTION 11.   NO MITIGATION OR OFFSET; INTEREST.   Employee shall have no
obligation to mitigate the amount of any payment or benefit that the Company
becomes obligated to provide under this Agreement by seeking other employment or
otherwise, and no such payment or benefit may be reduced, offset or subject to
recovery by the Company (whether by reference to any payment or benefit that
Employee may receive from other employment or otherwise).  The Company has no
right to offset any payment or benefit under this Agreement against any amount
owed or claimed to be owed to the Company (whether under this Agreement or
otherwise).  Any amount owed hereunder that is not paid when due shall bear
interest until paid at a rate equal to 2.0 percentage points in excess of the
prime rate in effect from time to time in Minneapolis at Norwest Bank Minnesota
(or any successor thereto).

       SECTION 12.   NO VIOLATION.   Each party hereby represents and warrants
to the other that such party's execution, delivery and performance of this
Agreement does not, with or without the giving of notice or the passage of time,
or both, conflict with, or result in a default, right to accelerate or loss of
rights under, any provision of any agreement or understanding to which such
party (or, to the best knowledge of such party or any of such party's
affiliates) is or may be bound.

       SECTION 13.   CAPTIONS.   The captions, headings and arrangements used in
this Agreement are for convenience only and do not in any way affect, limit or
amplify the provisions hereof.

       SECTION 14.   NOTICES.   All notices required or permitted to be given
hereunder shall be in writing and shall be deemed delivered by hand, by
facsimile (with confirming paper copy), by nationally recognized overnight
courier service or by United States mail, postage prepaid, registered or
certified, return receipt requested, in any case addressed to the party to whom
notice is being given at the specified address below (or at such other address
as such party may designate by notice):

       If to the Company:   Viking Merger Sub, Inc.
                            277 Park Avenue
                            New York, New York  10172
                            Attention: William F. Dawson, Jr.
                            Fax: (612) 892-7272

                                          8


                            and, after the Effective Time

                            Merrill Corporation
                            One Merrill Circle
                            St. Paul, MN 55108
                            Attention: General Counsel
                            Fax: (651) 649-1348

                            with a copy to:

                            Davis Polk & Wardwell
                            450 Lexington Avenue
                            New York, New York 10017
                            Attention: George R. Bason, Jr.
                            Fax: (212) 450-4800

       If to Employee:      Merrill Corporation
                            One Merrill Circle
                            St. Paul, MN 55108

                            with a copy to:
                            Faegre & Benson LLP
                            2200 Norwest Center
                            90 South Seventh Street
                            Minneapolis, Minnesota 55402-3901
                            Attention: William R. Busch, Jr.
                            Fax: (612) 336-3026

       SECTION 15.   INVALID PROVISIONS.   If any provision of this Agreement is
held to be illegal, invalid or unenforceable under present or future laws, such
provisions shall be fully severable, and this Agreement shall be construed and
enforced as if such illegal, invalid or unenforceable provision had never
comprised a part of this Agreement; the remaining provisions of this Agreement
shall remain in full force and effect and shall not be affected by the illegal,
invalid or unenforceable provision or by its severance for this Agreement.  In
lieu of each such illegal, invalid or unenforceable provision, there shall be
added automatically as part of this Agreement a provision as similar in terms to
such illegal, invalid or unenforceable provision as may be possible and be
legal, valid and enforceable.

       SECTION 16.   AMENDMENTS.   This Agreement may be amended in whole or in
part only by an instrument in writing setting forth the particulars of such
amendment and duly executed by an officer of the Company and by Employee.

       SECTION 17.   WAIVER; THIRD PARTY BENEFICIARIES.  No delay or omission by
any party hereto to exercise any right or power hereunder shall impair such
right or power to be construed as a waiver thereof.  A waiver by any of the
parties hereto of any of the covenants to be

                                          9


performed by any other party or any breach thereof shall not be construed to be
a waiver of any succeeding breach thereof or of any other covenant herein
contained.  Except as otherwise expressly set forth herein, all remedies
provided for in this Agreement shall be cumulative and in addition to and not in
lieu of any other remedies available to any party at law, in equity or
otherwise.  No provision of this Agreement is intended to confer  any rights or
remedies on any person other than the Employee.

       SECTION 18.   CERTAIN ARRANGEMENTS FOR EMPLOYEES AND OFFICERS FOLLOWING
AFTER THE EFFECTIVE TIME.  The Company agrees with the Employee, that as soon as
reasonably practicable after the Effective Time, it will put in place the Direct
Investment Plan and the Management Incentive Plan described in Annexes I and II
for certain employees and officers of the Company and its subsidiaries.

       SECTION 19.   COUNTERPARTS.   This Agreement may be executed in multiple
counterparts, each of which shall constitute an original, and all of which
together shall constitute one and the same Agreement.

       SECTION 20.   GOVERNING LAW.  This Agreement shall be construed and
enforced according to the laws of the State of Minnesota.

       SECTION 21.   PRIOR EMPLOYMENT AGREEMENT.   Upon the occurrence of the
Effective Time, this Agreement supersedes any and all other employment,
change-in-control, severance or similar agreements between Employee and the
Company or the Employee and Merrill Corporation.


                                          10


IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.


                                         THE COMPANY:

                                         VIKING MERGER SUB, INC.

                                         By     /s/ William F. Dawson, Jr.
                                           -------------------------------------
                                         Title  President
                                              ----------------------------------


                                         EMPLOYEE:

                                         /s/ Rick Atterbury
                                         ---------------------------------------
                                                Name:  Rick Atterbury



                                                                         ANNEX I

                                      TERM SHEET
                                DIRECT INVESTMENT PLAN


 Share Price:                Same price as that paid by the DLJMB entities
                             under the Merger Agreement.

 Reinvestment and            The employee will purchase Shares with his or her
   Coinvestment Shares:      available funds (each a "Reinvestment Share") and
                             the Company will make a non-recourse loan (the
                             "Loan") to the employee to purchase additional
                             Shares (each a "Coinvestment Share").  (See
                             Schedule A attached for the number of Reinvestment
                             and Coinvestment Shares for each employee.)  All
                             Reinvestment Shares and Coinvestment Shares
                             purchased by an employee will be posted as
                             collateral for the Loan to the employee.  The
                             value of the collateral must be adequate to assure
                             that the Loan will not be treated as income for
                             tax purposes.  The employee may make a Section
                             83(b) election so that any future gain on the
                             Reinvestment and Coinvestment Shares will be
                             treated as capital gain.  All Reinvestment and
                             Coinvestment Shares will be subject to the
                             transfer restrictions and other provisions of the
                             Shareholders Agreement, which will apply to the
                             DLJMB entities and all management investors.

 Loan Terms:                 The Loan will bear interest at the greater of the
                             Company's credit facility rate or the federal
                             applicable rate.  All principal and interest will
                             be repayable in a single payment as of the earlier
                             of (i) the employee's termination of employment or
                             (ii) eight years after the purchase of the
                             Reinvestment and Coinvestment Shares.  In the case
                             of the sale of all or part of the Shares, Loan
                             repayment will be immediately due to the extent of
                             the lesser of (i) the pro rata portion of unpaid
                             principal and interest on the Loan attributable to
                             such Shares and (ii) the net after tax proceeds
                             realized upon such sale;  PROVIDED that the total
                             amount due will not exceed the total amount of the
                             principal and interest outstanding on the Loan.

 Termination of Employment/  In the event an employee's termination of
   Company Repurchase        employment prior to a DLJMB liquidation event the
 Right:                      Reinvestment Shares and Coinvestment Shares will
                             be subject to a Company repurchase right.  The
                             repurchase price will depend on the



                             circumstances of the termination and, in the case
                             of the Coinvestment Shares, the extent to which the
                             Coinvestment Shares have become vested, as
                             follows:

                             (a) VESTING SCHEDULE FOR COINVESTMENT SHARES



                                                      % of Coinvestment
                                   Year  Shares Vested as of the End of the Year
                                   ----  ---------------------------------------
                                      
                                    1                         0%
                                    2                         0%
                                    3                        33%
                                    4                        66%
                                    5                        100%


                             (a) COMPANY REPURCHASE PRICE



                                                Reinvestment
                                                 Shares and
                                                   Vested          Unvested
                                                Coinvestment     Conivestment
                                                   Shares           Shares
                                                -------------  ----------------
                                                         
                             Voluntary              FMV        Lesser of (i)
                             Resignation,                      FMV or (ii)
                             Disability,                       purchase price
                             Death or                          plus Loan
                             Termination by                    interest
                             Company without
                             Cause





                                                                 All Shares
                                                               -----------------
                                                            
                                                               Lesser of (i)
                             Termination for                   FMV or (ii)
                             Cause                             purchase price


                                          2


 Termination of Employment   Upon termination of employment without Cause,
 without Cause/Employee Put  employee will have the right to put all
 Right                       Reinvestment Shares and all vested Coinvestment
                             Shares to the Company at fair market value;
                             PROVIDED that payment for such Shares shall be
                             required to be made only as rapidly as permissible
                             without violating Loan covenants or other
                             contractual restrictions applicable to the Company
                             (and any amounts not paid upon exercise of the put
                             will bear interest at the rate applicable to the
                             Company's bank debt.)


 Change in Control:          Upon a sale by the DLJMB entities of 60% of their
                             Shares in the Company or substantially all of the
                             assets of the Company, all Coinvestment Shares
                             that have not yet vested shall immediately become
                             vested (unless the Company is publicly traded
                             immediately following such sale).


                                          3


                                     SCHEDULE A

                       REINVESTMENT AND COINVESTMENT SUMMARY



                           Reinvestment Program                 Coinvestment Program                        Totals
                    --------------------------------           ---------------------   -----------------------------------
                      $ Amt.               Shares          $ Amt.           Shares      $ Amt.          Shares         Loans
                    -------------      -------------    ----------------- ----------   ----------     ----------     ---------
                                                                                             
 TOTAL               $10 million                        $18.6 million (*)                                         $18.6 million


- --------------------
         [ILLEGIBLE]

                                       4



                                                                      ANNEX II

                                      TERM SHEET
                              MANAGEMENT INCENTIVE PLAN

 Recipients/ Number of    See Schedule A attached.
   Shares Covered by
   Options:

 Grant Date:              Closing Date

 Option Exercise Price:   Same as DLJMB entities' buying price under the Merger
                          Agreement.

 Time Vesting Option:     Each Time Vesting Option will become vested and
                          exercisable as follows:




                          End of Year:    1     2     3      4      5     6
                                         --    --    ---    ---    ---   ----
                                                       
                                         0%    0%    25%    50%    75%   100%



 Performance Vesting      Performance Vesting Options will become vested and
   Option:                exercisable according to the schedule set forth in
                          Exhibit 1, based on whether the Target Implied Common
                          Equity Values set forth in such Exhibit are attained
                          as of the end of the relevant years.  Such vesting
                          shall be cumulative; I.E., the percentage of
                          Performance Vesting Options set forth for each year
                          shall be vested as of the end of such year if the
                          Target Implied Common Equity Value for such year is
                          achieved as of such date, regardless of whether the
                          Target Implied Common Equity Values have been
                          achieved in previous years.

                          In the event that the DLJMB entities sell 90% or more
                          of their Shares in the Company or substantially all
                          of the assets of the Company and realize an internal
                          rate of return ("DLJMB IRR") of at least 25%, the
                          portion of the Performance Vesting Option which has
                          not previously become vested and exercisable will
                          become vested and exercisable based upon the level of
                          the DLJMB IRR, as set forth in Exhibit 2 attached.

 Super Performance        Each Super Performance Vesting Option will become
   Vesting Options:       exercisable if the DLJMB entities sell 90% or more of
                          their Shares in the Company or substantially all the
                          assets of the Company and realize a DLJMB IRR in
                          excess of 50%.  To the extent that the vesting of all
                          the Super Performance Vesting Options granted under
                          the Plan would cause the DLJMB IRR to be 50% or less,
                          only that portion of the Super Performance



                          Vesting Options that would result in a DLJMB IRR of
                          50% will become vested.

 Transferability/         All Options will be non-transferable.  All Shares
   Shareholders           acquired upon the exercise of the Options will be
   Agreement:             subject to the transfer restrictions and other
                          provisions set forth in the Shareholders' Agreement
                          which will apply to the DLJMB entities and all
                          management investors.

 Termination of           RESIGNATION, TERMINATION WITHOUT CAUSE, DEATH OR
   Employment:            DISABILITY - Unvested Options terminate immediately,
                          but vested Options will be retained by the employee.

                          TERMINATION FOR CAUSE - All vested and unvested
                          Options terminate immediately and all Shares
                          previously acquired upon exercise of Options will be
                          subject to a right of repurchase by the Company at a
                          price equal to the Exercise Price.


                                          2


                                      SCHEDULE A

                                       OPTIONS


                                            Super
                 Time      Performance   Performance
                Vesting      Vesting       Vesting       Total       Exercise
     Name       Options      Options       Options      Options       Price
     ----       -------      -------       -------      -------       -----
                                                      
    [TOTAL        5%*          5%*           5%*          15%*       $22.00]




- -------------
       * The percentages are expressed as percentages of outstanding Shares,
without taking into account the Shares issuable pursuant to the Options.



                                     EXHIBIT 1

                    (FOR CALCULATING VESTING UNDER SECTION 4(b))





       FISCAL YEAR:          2000   2001   2002   2003   2004
                             ----   ----   ----   ----   ----
                                          
TARGET IMPLIED COMMON
EQUITY VALUE OF THE
COMPANY (IN MILLIONS):      [TO BE BASED ON 85% OF MANAGEMENT PROJECTIONS]


TARGET VESTED
PERCENTAGE:                  20%    40%    60%    80%    100%



For this purpose, the "IMPLIED COMMON EQUITY VALUE OF THE COMPANY" is defined as

                                  EV - TD + CASH,

where

       EV (Enterprise Value) is pro forma EBITDA times 6.0
       TD is Total Debt
       CASH is cash on balance sheet (2)
- -------------------------------
(1)  As of fiscal year end.


                                       4



                                     EXHIBIT 2

              (FOR PURPOSES OF CALCULATING VESTING UNDER SECTION 4(c))


                                            PERCENTAGE OF UNVESTED
                                       CLIFF VESTING SHARES AS TO WHICH
                                             OPTION BECOMES VESTED
         DLJMB IRR                           ON LIQUIDATION EVENT
      --------------                   --------------------------------
                                    
      40% OR GREATER                                 100%
       35.0 - 39.9%                                   75%
       30.0 - 34.9%                                   50%
       25.0 - 29.9%                                   25%
      LESS THAN 20%                                   0%



For this purpose, "DLJMB IRR" is defined as that annual discount rate which,
when applied to (i) all investments by the DLJMB entities in Shares of Common
Stock of the Company and (ii) all amounts realized by the DLJMB entities with
respect to such Shares causes the net present value of such investments and
amounts realized to equal zero, as determined on a pro forma basis reflecting
the Shares issuable pursuant to Options that have become vested prior to the
Liquidation Event and the Shares issuable pursuant to Options becoming vested as
of the Liquidation Event.



                                          5

EX-10.6

                                                                  EXHIBIT 10.6


                               MERRILL CORPORATION
                             1999 STOCK OPTION PLAN

1.     PURPOSE OF PLAN.

       The purpose of the Merrill Corporation 1999 Stock Option Plan (the
"PLAN") is to advance the interests of Merrill Corporation (the "COMPANY") and
its shareholders by enabling the Company and its Subsidiaries to attract and
retain persons of ability to perform services for the Company and its
Subsidiaries by providing an incentive to such individuals through equity
participation in the Company and rewarding such individuals who contribute to
the achievement by the Company of its economic objectives.

2.     DEFINITIONS.

       In addition to the capitalized terms otherwise defined herein, the
following additional capitalized terms will have the meanings set forth below,
unless the context clearly otherwise requires:

       2.1    "ADVERSE ACTION" means the actions described in Section 10.5(b) of
the Plan.

       2.2    "BOARD" means the Board of Directors of the Company.

       2.3    "BROKER EXERCISE NOTICE" means a written notice pursuant to which
a Participant, upon exercise of an Option, irrevocably instructs a broker or
dealer to sell a sufficient number of shares or loan a sufficient amount of
money to pay all or a portion of the exercise price of the Option and/or any
related withholding tax obligations and remit such sums to the Company and
directs the Company to deliver stock certificates to be issued upon such
exercise directly to such broker or dealer.

       2.4    "CAUSE" means (i) dishonesty, fraud, misrepresentation,
embezzlement or other act of dishonesty with respect to the Company or any
Subsidiary, (ii) any unlawful or criminal activity of a serious nature, (iii)
any intentional and deliberate breach of a duty or duties that, individually or
in the aggregate, are material in relation to the Participant's overall duties,
(iv) any material breach of any employment, service, confidentiality or
non-compete agreement entered into with the Company or any Subsidiary, or (v) an
Adverse Action.

       2.5    "CODE" means the Internal Revenue Code of 1986, as amended.

       2.6    "COMMITTEE" means the group of individuals administering the Plan,
as provided in Section 3 of the Plan.

       2.7    "COMMON STOCK" means the voting class B common stock of the
Company, $0.01 par value per share, or the number and kind of shares of stock or
other securities into which such common stock may be changed in accordance with
Section 4.3 of the Plan.

       2.8    "DISABILITY" means the disability of the Participant such as would
entitle the Participant to receive disability income benefits pursuant to the
long-term disability plan of the Company or Subsidiary then covering the
Participant or, if no such plan exists or is applicable to the Participant, the
permanent and total disability of the Participant within the meaning of
Section 22(e)(3) of the Code.

       2.9    "DLJMB" means DLJ Merchant Banking Partners II, L.P. and all its
affiliated entities as described in the Investors' Agreement.


       2.10   "DLJMB LIQUIDATION EVENT" means, except for transfers to Permitted
Transferees (as defined in the Investors' Agreement), (i) a sale or other
transfer by DLJMB of 90% or more of its shares of common equity in the Company
(including all common equity originally purchased by DLJMB and any additional
common equity purchased by DLJMB thereafter, whether voting, Class B or any
other class of common equity created by the Company) to one or more persons or
entities (in one transaction or in a series of related transactions) other than
in connection with a public offering of the Company's common equity, (ii) the
sale, lease, exchange or other transfer, directly or indirectly, of
substantially all of the assets of the Company (in one transaction or in a
series of related transactions) to a person or entity that is not controlled by
the Company, or (iii) a merger or consolidation to which the Company is a party
if the shareholders of the Company immediately prior to the effective date of
such merger or consolidation do not have "beneficial ownership" (as defined in
Rule 13d-3 under the Exchange Act) immediately following the effective date of
such merger or consolidation of more than 50% of the combined voting power of
the surviving corporation's outstanding securities ordinarily having the right
to vote at elections of directors.

       2.11   "ENTERPRISE VALUE" means a value equal to six times the Pro-Forma
EBITDA as shown on the Company's consolidated statement of operations for its
most recent fiscal year end.

       2.12   "ELIGIBLE RECIPIENTS" means all employees of the Company or any
Subsidiary and any non-employee directors, consultants and independent
contractors of the Company or any Subsidiary.

       2.13   "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.

       2.14   "FAIR MARKET VALUE" means, with respect to the Common Stock, as of
the Valuation Date (or, if no shares were traded or quoted on such date, as of
the next preceding date on which there was such a trade or quote) (a) the mean
between the reported high and low sale prices of the Common Stock if the Common
Stock is listed, admitted to unlisted trading privileges or reported on any
foreign or national securities exchange or on the NASDAQ National Market or an
equivalent foreign market on which sale prices are reported; (b) if the Common
Stock is not so listed, admitted to unlisted trading privileges or reported, the
closing bid price as reported by the NASDAQ SmallCap Market, OTC Bulletin Board
or the National Quotation Bureau, Inc. or other comparable service; or (c) if
the Common Stock is not so listed or reported, such price shall be the Formula
Value, or such other price as the Committee shall determine is appropriate in
its sole discretion.  The Committee's determination as to the Fair Market Value
of the Common Stock shall be final, conclusive and binding for all purposes and
on all persons, including, without limitation, the Company, shareholders of the
Company, the Participants and their respective successors-in-interest.  No
member of the Board or the Committee shall be liable for any determination
regarding current values of the Common Stock that is made in good faith.

       2.15   "FORMULA VALUE" means the price determined on a Valuation Date by
subtracting (i) Total Debt and (ii) Total Preferred Stock from the Enterprise
Value, adding Total Cash to this difference and dividing such sum by the
aggregate of the number of shares of capital stock of the Company outstanding on
such Valuation Date (including all vested and unvested Shares) and all shares of
common equity of the Company which may be issuable upon the exercise of options
and warrants of the Company outstanding on such Valuation Date (whether or not
then exercisable); provided, however, that any option which is not subject to a
specific vesting schedule and only becomes fully exercisable upon a DLJMB
Liquidation Event which realizes an internal rate of return in excess of fifty
percent shall not be included in the outstanding option number on such Valuation
Date.

       2.16   "INCENTIVE STOCK OPTION" means a right to purchase Common Stock
granted to an Eligible Recipient pursuant to Section 6 of the Plan that
qualifies as an "incentive stock option" within the meaning of Section 422 of
the Code.


                                       2


       2.17   "INVESTORS' AGREEMENT" means the Investors' Agreement, dated
November 23, 1999, by and among the Company and its shareholders, as amended
from time to time.

       2.18   "NON-STATUTORY STOCK OPTION" means a right to purchase Common
Stock granted to an Eligible Recipient pursuant to Section 6 of the Plan that
does not qualify as an Incentive Stock Option.

       2.19   "OPTION" means an Incentive Stock Option or a Non-Statutory Stock
Option.

       2.20   "PARTIAL TERMINATION" means a change in the Participant's
employment or other service with the Company and all its Subsidiaries such that
the number of hours worked by such Participant is substantially reduced for any
reason as the Committee in its sole discretion may determine from the number of
hours such Participant is required to work for the Company or Subsidiary and
such reduction is expected to extend for an indefinite period of time.

       2.21   "PARTICIPANT" means an Eligible Recipient who receives one or more
Options under the Plan, and to the extent such Participant transfers any Option
granted under this Plan to a Permitted Transferee (as defined in the Investors'
Agreement) in accordance with the terms of the Investors' Agreement such term
shall mean the Participant and such Permitted Transferee of such Participant.

       2.22   "PREVIOUSLY ACQUIRED SHARES" means shares of Common Stock that are
already owned by the Participant or, with respect to any Option, that are to be
issued upon the exercise of such Option.

       2.23   "PRO-FORMA EBITDA" means earnings before interest, taxes,
depreciation and amortization as computed using generally accepted accounting
principles on a pro-forma basis as allowed by Regulation S-X of the Securities
Act.

       2.24   "REPURCHASE DATE" means the date set forth in Section 7.7 of the
Plan.

       2.25   "REPURCHASE RIGHT" means the Company's irrevocable and exclusive
right to repurchase from the Participant all shares of Common Stock previously
acquired upon exercise of an Option, at a price equal to the exercise price paid
by the Participant to acquire such shares of Common Stock, in the event a
Participant's employment or other service with the Company and all its
Subsidiaries is terminated by the Company or any Subsidiary for Cause.

       2.26   "RETIREMENT" means termination of employment or service pursuant
to and in accordance with the regular (or, if approved by the Committee for
purposes of the Plan, early) retirement/pension plan or practice of the Company
or Subsidiary then covering the Participant, provided that if the Participant is
not covered by any such plan or practice, the Participant will be deemed to be
covered by the Company's plan or practice for purposes of this determination.

       2.27   "SECURITIES ACT" means the Securities Act of 1933, as amended.

       2.28   "SUBSIDIARY" means any entity that is directly or indirectly
controlled by the Company or any entity in which the Company has a significant
equity interest, as determined by the Committee.

       2.29   "TAX DATE" means the date any withholding tax obligation arises
under the Code or other applicable tax statute for a Participant with respect to
an Option.

       2.30   "TOTAL CASH" means the total amount of cash and cash equivalents
shown on the Company's consolidated balance sheet as of its most recent fiscal
year end.

       2.31   "TOTAL DEBT" means any indebtedness of the Company in respect of
borrowed money or evidenced by bonds, notes, debentures or similar instruments
or letters of credit (or reimbursement


                                       3


agreements in respect thereof) or banker's acceptances, except any such balance
that constitutes an accrued expense, trade payable or customer contract advance,
if and to the extent that any of the foregoing (other than letters of credit)
would appear as a liability on the Company's consolidated balance sheet as of
its most recent fiscal year end.

       2.32   "TOTAL PREFERRED STOCK" means the total amount of the liquidation
preference on all of the Company's issued and outstanding preferred stock as of
its most recent fiscal year end.

       2.33   "VALUATION DATE" means a date on which the Committee shall
determine the Fair Market Value of the Common Stock, which date shall be no more
than ninety (90) days following the Company's fiscal year end.

3.     PLAN ADMINISTRATION.

       3.1    THE COMMITTEE.  The Plan will be administered by the Board or by a
committee of the Board.  So long as the Company has a class of its equity
securities registered under Section 12 of the Exchange Act, any committee
administering the Plan will consist solely of two or more members of the Board
who are "non-employee directors" within the meaning of Rule 16b-3 under the
Exchange Act and, if the Board determines in its sole discretion, who are
"outside directors" within the meaning of Section 162(m) of the Code.  As used
in the Plan, "Committee" will refer to the Board or to such a committee, if
established.  The committee, if established, will act by majority approval of
the members (but may also take action with the written consent of a majority of
the members of such committee), and a majority of the members of such a
committee will constitute a quorum.  To the extent consistent with corporate
law, the Committee may delegate to any officers of the Company the duties, power
and authority of the Committee under the Plan pursuant to such conditions or
limitations as the Committee may establish; provided, however, that only the
Committee may exercise such duties, power and authority with respect to Eligible
Recipients who are subject to Section 16 of the Exchange Act.  The Committee may
exercise its duties, power and authority under the Plan in its sole and absolute
discretion without the consent of any Participant or other party, unless the
Plan specifically provides otherwise.  Each determination, interpretation or
other action made or taken by the Committee pursuant to the provisions of the
Plan will be final, conclusive and binding for all purposes and on all persons,
including, without limitation, the Company, the shareholders of the Company, the
Participants and their respective successors-in-interest.  No member of the
Committee will be liable for any action or determination made in good faith with
respect to the Plan or any Option granted under the Plan.

       3.2    AUTHORITY OF THE COMMITTEE.

              (a)    In accordance with and subject to the provisions of the
       Plan, the Committee will have the authority to determine all provisions
       of Options as the Committee may deem necessary or desirable and as
       consistent with the terms of the Plan, including, without limitation, the
       following: (i) the Eligible Recipients to be selected as Participants;
       (ii) the nature and extent of the Options to be granted to each
       Participant (including the number of shares of Common Stock to be subject
       to each Option, the exercise price and the manner in which Options will
       become exercisable) and the form of written agreement, if any, evidencing
       such Option; (iii) the time or times when Options will be granted; (iv)
       the duration of each Option; and (v) the restrictions and other
       conditions to which the Options, or vesting of Options, may be subject.
       In addition, the Committee will have the authority under the Plan in its
       sole discretion to pay the economic value of any Option in the form of
       cash, Common Stock or any combination of both.

              (b)    The Committee will have the authority under the Plan to
       amend or modify the terms of any outstanding Option in any manner,
       including, without limitation, the authority to modify the number of
       shares or other terms and conditions of an Option, extend the term of an
       Option, accelerate the exercisability or otherwise terminate any
       restrictions or vesting relating to


                                       4


       an Option, accept the surrender of any outstanding Option or, to the
       extent not previously exercised or vested, authorize the grant of new
       Options in substitution for surrendered Options; provided, however that
       the amended or modified terms are permitted by the Plan as then in effect
       and that any Participant adversely affected by such amended or modified
       terms has consented to such amendment or modification. No amendment or
       modification to an Option, however, whether pursuant to this Section 3.2
       or any other provisions of the Plan, will be deemed to be a re-grant of
       such Option for purposes of this Plan.

              (c)    In the event of (i) any reorganization, merger,
       consolidation, recapitalization, liquidation, reclassification, stock
       dividend, stock split, combination of shares, rights offering,
       extraordinary dividend or divestiture (including a spin-off) or any other
       change in corporate structure or shares, (ii) any purchase, acquisition,
       sale or disposition of a significant amount of assets or a significant
       business, (iii) any change in accounting principles or practices, or
       (iv) any other similar change, in each case with respect to the Company
       or any other entity whose performance is relevant to the grant or vesting
       of an Option, the Committee (or, if the Company is not the surviving
       corporation in any such transaction, the board of directors of the
       surviving corporation) may, without the consent of any affected
       Participant, amend or modify the conditions to the exercisability of any
       outstanding Option that is based in whole or in part on the financial
       performance of the Company (or any Subsidiary or division thereof) or
       such other entity so as equitably to reflect such event, with the desired
       result that the criteria for evaluating such financial performance of the
       Company or such other entity will be substantially the same (in the sole
       discretion of the Committee or the board of directors of the surviving
       corporation) following such event as prior to such event; provided,
       however, that the amended or modified terms are permitted by the Plan as
       then in effect.

4.     SHARES AVAILABLE FOR ISSUANCE.

       4.1    MAXIMUM NUMBER OF SHARES AVAILABLE.  Subject to adjustment as
provided in Section 4.3 of the Plan, the maximum number of shares of Common
Stock that will be available for issuance under the Plan will be 825,000 shares
of Common Stock.

       4.2    ACCOUNTING FOR OPTIONS.  Shares of Common Stock that are issued
under the Plan or that are subject to outstanding Options will be applied to
reduce the maximum number of shares of Common Stock remaining available for
issuance under the Plan.  Any shares of Common Stock that are subject to an
Option that lapses, expires, is forfeited or for any reason is terminated
unexercised and any shares of Common Stock that are subject to an Option that is
settled or paid in cash or any form other than shares of Common Stock will
automatically again become available for issuance under the Plan.   In addition,
in the event that any shares of Common Stock that are issued under the Plan are
reacquired by the Company pursuant to any forfeiture provision, right of
repurchase or right of first refusal, such shares will automatically again
become available for issuance under the Plan, except that any such shares so
reacquired will not be available for issuance in connection with the exercise of
Incentive Stock Options unless permitted by Section 422 of Code and the rules
and regulations thereunder.

       4.3    ADJUSTMENTS TO SHARES AND OPTIONS.

              (a)    GENERAL. In the event that the Committee determines that
       any reorganization, merger, consolidation, recapitalization, liquidation,
       reclassification, stock dividend, stock split, combination of shares,
       rights offering, divestiture or extraordinary dividend (including a
       spin-off) or any other similar change in the corporate structure or
       shares of the Company, affects the Options such that an adjustment is
       determined by the Committee, in its sole discretion, to be appropriate in
       order to prevent dilution or enlargement of the benefits or potential
       benefits intended to be made available under the Plan, the Committee (or,
       if the Company is not the surviving corporation in any such transaction,
       the board of directors of the surviving corporation)


                                       5


       shall, in such manner as it deems equitable, adjust any or all of (i) the
       number of shares of Common Stock of the Company (or number and kind of
       other securities or property) available for issuance or payment under the
       Plan, (ii) the number of shares of Common Stock or other securities of
       the Company (or number and kind of other securities or property) subject
       to outstanding Options, and (iii) the grant or exercise price with
       respect to any Options, or, if deemed appropriate, make provisions for a
       cash payment to the holder of an outstanding Option.

              (b)    MERGERS AND CONSOLIDATIONS.  Without limiting the authority
       of the Committee to take any actions deemed appropriate under Section
       4.3(a) of the Plan, in the event that the Company is a party to a merger
       or consolidation, outstanding Options under the Plan will be subject to
       the agreement of merger or consolidation, and such agreement, without the
       Participants' consent, may provide for the following:

              (i)    If the Company is the surviving corporation in connection
       with such merger or consolidation, the continuation of outstanding
       Options by the Company.


              (ii) If the Company is not the surviving corporation in connection
       with such merger or consolidation, the assumption of the Plan and the
       outstanding Options by the surviving corporation or its parent or the
       substitution by the surviving corporation or its parent of options with
       substantially similar terms for such outstanding Options.

5.     PARTICIPATION.

       Participants in the Plan will be those Eligible Recipients who, in the
judgment of the Committee, have contributed, are contributing or are expected to
contribute to the achievement of economic objectives of the Company or its
Subsidiaries.  Eligible Recipients may be granted from time to time one or more
Options as may be determined by the Committee in its sole discretion.  Options
will be deemed to be granted as of the date specified in the grant resolution of
the Committee, which date will be the date of any related agreement with the
Participant.

6.     OPTIONS.

       6.1    GRANT.  An Eligible Recipient may be granted one or more Options
under the Plan, and such Options will be subject to such terms and conditions,
consistent with the other provisions of the Plan, as may be determined by the
Committee in its sole discretion.  The Committee may designate whether an Option
is to be considered an Incentive Stock Option or a Non-Statutory Stock Option.
To the extent that any Incentive Stock Option granted under the Plan ceases for
any reason to qualify as an "incentive stock option" for purposes of Section 422
of the Code, such Incentive Stock Option will continue to be outstanding for
purposes of the Plan but will thereafter be deemed to be a Non-Statutory Stock
Option.

       6.2    EXERCISE PRICE.  The per share price to be paid by a Participant
upon exercise of an Option will be determined by the Committee in its discretion
at the time of the Option grant; provided, however, that (a) such price will not
be less than 100% of the Fair Market Value of one share of Common Stock on the
date of grant with respect to an Incentive Stock Option (110% of the Fair Market
Value if, at the time the Incentive Stock Option is granted, the Participant
owns, directly or indirectly, more than 10% of the total combined voting power
of all classes of stock of the Company or any parent or subsidiary corporation
of the Company), and (b) such price will not be less than 85% of the Fair Market
Value of one share of Common Stock on the date of grant with respect to a
Non-Statutory Stock Option (110% of the Fair Market Value if, at the time the
Non-Statutory Stock Option is granted, the Participant owns, directly or
indirectly, more than 10% of the total combined voting power of all classes of
stock of the Company or any parent or subsidiary corporation of the Company).


                                       6


       6.3    EXERCISABILITY AND DURATION.  Subject to Section 7 hereof, an
Option will become exercisable at such times and in such installments as may be
determined by the Committee in its sole discretion at the time of grant;
provided, however, that no Incentive Stock Option may be exercisable after ten
(10) years from its date of grant (five (5) years from its date of grant if, at
the time the Incentive Stock Option is granted, the Participant owns, directly
or indirectly, more than 10% of the total combined voting power of all classes
of stock of the Company or any parent or subsidiary corporation of the Company).

       6.4    PAYMENT OF EXERCISE PRICE.  The total purchase price of the shares
to be purchased upon exercise of an Option must be paid entirely in cash
(including check, bank draft or money order); provided, however, that the
Committee, in its sole discretion and upon terms and conditions established by
the Committee, may allow such payments to be made, in whole or in part, by
tender of a Broker Exercise Notice, Previously Acquired Shares, a promissory
note (on terms acceptable to the Committee in its sole discretion) or by a
combination of such methods.

       6.5    MANNER OF EXERCISE.  An Option may be exercised by a Participant
in whole or in part from time to time, subject to the conditions contained in
the Plan and in the agreement evidencing such Option, by delivery in person, by
facsimile or electronic transmission (with written confirmation via the mail to
follow such electronic transmission) or through the mail of written notice of
exercise to the Company (Attention: Secretary) at its principal executive office
in St. Paul, Minnesota and by paying in full the total exercise price for the
shares of Common Stock to be purchased in accordance with Section 6.4 of the
Plan.

       6.6    AGGREGATE LIMITATION OF STOCK SUBJECT TO INCENTIVE STOCK OPTIONS.
To the extent that the aggregate Fair Market Value (determined as of the date an
Incentive Stock Option is granted) of the shares of Common Stock with respect to
which Incentive Stock Options are exercisable for the first time by a
Participant during any calendar year (under the Plan and any other incentive
stock option plans of the Company or any subsidiary or parent corporation of the
Company (within the meaning of the Code)) exceeds $100,000 (or such other amount
as may be prescribed by the Code from time to time), such excess Options will be
treated as Non-Statutory Stock Options.  The determination will be made by
taking Incentive Stock Options into account in the order in which they were
granted.  If such excess only applies to a portion of an Incentive Stock Option,
the Committee, in its discretion, will designate which shares will be treated as
shares to be acquired upon exercise of an Incentive Stock Option.

       6.7    INVESTORS' AGREEMENT.  Upon exercise of an Option under the Plan
each Participant shall become a party to the Investors' Agreement.  Each
Participant who (i) is an employee of the Company or any Subsidiary reporting
directly to the Chief Executive Officer ("CEO") or Chief Operating Officer
("COO") of the Company or (ii) acquires more than a certain percentage of the
Common Stock available for issuance under the Plan as determined by the
Committee in its sole discretion from time to time, shall be deemed a "Co-invest
Management Stockholder" for all purposes of the Investors' Agreement and all
other Participants who acquire shares of Common Stock under the Plan shall be
deemed "Other Stockholders" for purposes of the Investors' Agreement, including,
without limitation, all transfer restrictions and provisions thereof; provided,
however, if a Participant after the exercise of the Option is no longer required
to report directly to the CEO or COO such Participant shall thereafter be deemed
an "Other Stockholder," and any "Other Stockholder" who acquires more than the
percentage of the Common Stock available for issuance under the Plan as
determined by the Committee or reports directly to the CEO or COO after the
exercise of the Option shall thereafter be deemed a "Co-invest Management
Stockholder," for all purposes of the Investors' Agreement.  Notwithstanding
anything to the contrary in the Plan, if the Investors' Agreement has terminated
by its terms, the provisions of this Section 6.7 shall no longer apply.


                                       7


7.     EFFECT OF TERMINATION OF EMPLOYMENT OR OTHER SERVICE.

       7.1    TERMINATION FOR CAUSE.  Unless otherwise provided by the Committee
in its sole discretion in the agreement evidencing an Option, in the event a
Participant's employment or other service with the Company and all its
Subsidiaries is terminated by the Company or any Subsidiary for Cause, all
rights of the Participant under the Plan and any agreements evidencing an Option
will immediately terminate without notice of any kind, and all Options then held
by the Participant, whether exercisable or not at the time of termination, will
immediately terminate without notice of any kind, and the Company shall also
have the right to exercise its Repurchase Right in the manner set forth in
Section 7.7.

       7.2    TERMINATION FOR REASONS OTHER THAN CAUSE.  Unless otherwise
provided by the Committee in its sole discretion in the agreement evidencing an
Option, in the event a Participant's employment or other service with the
Company and all Subsidiaries is terminated other than for Cause by reason of
voluntary resignation, death, Disability or Retirement, all outstanding Options
then held by the Participant will remain exercisable, to the extent exercisable
as of the date of such termination, for a period of one year following the date
the Participant's employment or other service is terminated, and any outstanding
Options not exercisable as of the date of such termination will immediately
terminate without notice of any kind.

       7.3    PARTIAL TERMINATIONS.  In the event of a Partial Termination, the
Committee shall have the right in its sole discretion to modify the terms of any
unvested Options then held by the Participant at the time of the Partial
Termination, including, without limitation, the right to immediately terminate
without notice of any kind all rights the Participant has in any unvested
Options then held by the Participant at the time of the Partial Termination.

       7.4    MODIFICATION OF RIGHTS UPON TERMINATION.  Notwithstanding the
other provisions of this Section 7, upon a Participant's termination of
employment or other service with the Company and all Subsidiaries, the Committee
may, in its sole discretion (which may be exercised at any time on or after the
date of grant, including following such termination), cause Options (or any part
thereof) then held by such Participant to become or continue to become
exercisable and/or remain exercisable following such termination of employment
or service; provided, however, that no Option may remain exercisable beyond its
expiration date.

       7.5    EXERCISE OF INCENTIVE STOCK OPTIONS FOLLOWING TERMINATION.  Any
Incentive Stock Option that remains unexercised more than one year following
termination of employment by reason of Disability or more than three months
following termination for any reason other than death or Disability will
thereafter be deemed to be a Non-Statutory Stock Option.

       7.6    DATE OF TERMINATION OF EMPLOYMENT OR OTHER SERVICE.  Unless the
Committee otherwise determines in its sole discretion, a Participant's
employment or other service will, for purposes of the Plan, be deemed to have
terminated on the date recorded on the personnel or other records of the Company
or the Subsidiary for which the Participant provides employment or other
service, as determined by the Committee in its sole discretion based upon such
records.

       7.7    EXERCISABILITY OF REPURCHASE RIGHT.  If the Company elects to
exercise its Repurchase Right, the Company shall give the Participant written
notice of its intent to exercise its Repurchase Right (the "NOTICE OF
REPURCHASE") within sixty (60) days of such Participants termination of
employment or other service.  The Notice of Repurchase shall specify (i) the
number of shares of Common Stock the Company intends to repurchase, (ii) the
applicable purchase price for such shares of Common Stock, and (iii) the date
the Company expects to purchase such shares of Common Stock from the Participant
which date shall be no later than thirty (30) days following the Valuation Date
in the fiscal year immediately following the fiscal year in which the
Participant's employment or other service is terminated (the


                                       8


"REPURCHASE DATE"). On or before the Repurchase Date, the Participant shall
deliver to the Company the stock certificates representing the shares of Common
Stock being purchased by the Company, properly endorsed for transfer. By such
delivery of such certificates, the Participant warrants that (i) the Participant
has good title to, the right to possession of, and the right to sell, the shares
of Common Stock, (ii) such shares of Common Stock are free and clear of all
pledges, liens, encumbrances, charges, proxies, restrictions, options, transfers
and other adverse claims, except such as have been imposed by the Plan or the
Investors' Agreement, and except such restrictions on transfer as may be imposed
by federal or state securities laws, and (iii) the Participant shall hold
harmless the Company from all costs, expenses and fees incurred in defending
title and right to possession. On the Repurchase Date, the Company shall pay to
the Participant the total purchase price for the shares of Common Stock to be
purchased by the Company. Notwithstanding anything to the contrary in the Plan,
however, the Company shall only be required to pay for such shares of Common
Stock as rapidly as permissible without violating any loan covenants or other
contractual restrictions applicable to, and binding upon, the Company, and any
amounts not paid to the Participant on the Repurchase Date will bear interest at
a fixed rate of interest equal to eight percent (8%) per annum; provided,
however, that such interest rate shall not exceed the rate permitted by
applicable law. The Company shall only be required to repurchase shares of
Common Stock pursuant to this Section 7.7 to the extent that such repurchase
does not violate any applicable laws.

8.     PAYMENT OF WITHHOLDING TAXES.

       8.1    GENERAL RULES.  The Company is entitled to (a) withhold and deduct
from future wages of the Participant (or from other amounts that may be due and
owing to the Participant from the Company or a Subsidiary), or make other
arrangements for the collection of, all legally required amounts necessary to
satisfy any and all foreign, federal, state and local withholding and
employment-related tax requirements attributable to an Option, including,
without limitation, the grant or exercise of an Option or a disqualifying
disposition of stock received upon exercise of an Incentive Stock Option, or (b)
require the Participant promptly to remit the amount of such withholding to the
Company before taking any action, including issuing any shares of Common Stock,
with respect to an Option.

       8.2    SPECIAL RULES.  The Committee may, in its sole discretion and upon
terms and conditions established by the Committee, permit or require a
Participant to satisfy, in whole or in part, any withholding or
employment-related tax obligation described in Section 8.1 of the Plan by
electing to tender Previously Acquired Shares, a Broker Exercise Notice or a
promissory note (on terms acceptable to the Committee in its sole discretion),
or by a combination of such methods.

9.     DLJMB LIQUIDATION EVENT.

       9.1    ACCELERATION OF VESTING.  Without limiting the authority of the
Committee under the Plan, if a DLJMB Liquidation Event occurs, then, unless
otherwise provided by the Committee in its sole discretion, all unvested Options
will vest in accordance with the terms and conditions of the written agreement
entered into with the Participant to evidence the Option.

       9.2    LIMITATION ON PAYMENTS IN CONNECTION WITH A DLJMB LIQUIDATION
EVENT. Notwithstanding anything in Section 9.1 of the Plan to the contrary, if,
with respect to a Participant, the acceleration of the vesting of Options as
provided in Section 9.1 (which acceleration or payment could be deemed a
"payment" within the meaning of Section 280G(b)(2) of the Code), together with
any other "payments" that such Participant has the right to receive from the
Company or any corporation that is a member of an "affiliated group" (as defined
in Section 1504(a) of the Code without regard to Section 1504(b) of the Code) of
which the Company is a member, would constitute a "parachute payment" (as
defined in Section 280G(b)(2) of the Code), then the "payments" to such
Participant pursuant to Section 9.1 of the Plan will be reduced to the largest
amount as will result in no portion of such "payments" being subject to the
excise tax imposed by Section 4999 of the Code; provided, however, that if a
Participant is subject to a separate agreement with the Company or a Subsidiary
that


                                       9


expressly addresses the potential application of Sections 280G or 4999 of the
Code (including, without limitation, that "payments" under such agreement or
otherwise will be reduced, that the Participant will have the discretion to
determine which "payments" will be reduced, that such "payments" will not be
reduced or that such "payments" will be "grossed up" for tax purposes), then
this Section 9.2 will not apply, and any "payments" to a Participant pursuant to
Section 9.1 of the Plan will be treated as "payments" arising under such
separate agreement.

10.    RIGHTS OF ELIGIBLE RECIPIENTS AND PARTICIPANTS; TRANSFERABILITY.

       10.1   EMPLOYMENT OR SERVICE.  Nothing in the Plan will interfere with or
limit in any way the right of the Company or any Subsidiary to terminate the
employment or service of any Eligible Recipient or Participant at any time, nor
confer upon any Eligible Recipient or Participant any right to continue in the
employ or service of the Company or any Subsidiary.

       10.2   RIGHTS AS A SHAREHOLDER.  As a holder of Options, a Participant
will have no rights as a shareholder unless and until such Options are exercised
for, or paid in the form of, shares of Common Stock and the Participant becomes
the holder of record of such shares.  Except as otherwise provided in the Plan,
no adjustment will be made for dividends or distributions with respect to such
Options as to which there is a record date preceding the date the Participant
becomes the holder of record of such shares, except as the Committee may
determine in its discretion.

       10.3   RESTRICTIONS ON TRANSFER.  Unless approved by the Committee in its
sole discretion, no right or interest of any Participant in an Option prior to
the exercise of such Option will be assignable or transferable, or subjected to
any lien, during the lifetime of the Participant, either voluntarily or
involuntarily, directly or indirectly, by operation of law or otherwise;
provided, however, once a Participant exercises an Option all shares of Common
Stock issued upon exercise of the Option will be subject to the transfer
restrictions and other provisions set forth in the Investors' Agreement.

       10.4   NON-EXCLUSIVITY OF THE PLAN.  Nothing contained in the Plan is
intended to modify or rescind any previously approved compensation plans or
programs of the Company or create any limitations on the power or authority of
the Board to adopt such additional or other compensation arrangements as the
Board may deem necessary or desirable.

       10.5   RESTRICTIONS REGARDING EMPLOYMENT OR SERVICE.

              (i)    Notwithstanding anything in the Plan to the contrary, in
       the event that a Participant takes an Adverse Action with respect to the
       Company or any Subsidiary (1) prior to such Participant's termination of
       employment or other service with the Company and all its Subsidiaries or
       (2) during the period ending twelve (12) months following the date of the
       Participant's termination of employment or other service with the Company
       and all Subsidiaries without Cause, the Committee in its sole discretion
       will have the authority to terminate immediately all rights of the
       Participant under the Plan and any agreement evidencing Options then held
       by the Participant without notice of any kind.  In addition, to the
       extent that the Participant takes such Adverse Action during the period
       beginning twelve (12) months prior to, and ending twelve months
       following, such date of termination of employment or other service, the
       Committee in its sole discretion will have the authority to rescind the
       exercise of any Options of the Participant that were exercised during
       such period and to require the Participant to pay to the Company, within
       ten (10) days of receipt from the Company of notice of such rescission,
       the amount of any gain realized as a result of such rescinded exercise.
       Such payment will be made in cash (including check, bank draft or money
       order) or, with the Committee's consent, shares of Common Stock with a
       Fair Market Value on the date of payment equal to the amount of such
       payment.  The Company will be entitled to withhold and deduct from future
       wages of the Participant (or from other amounts that may be due and owing
       to the Participant from the


                                       10


       Company or a Subsidiary) or make other arrangements for the collection of
       all amounts necessary to satisfy such payment obligations.

              (ii) For purposes of the Plan, an "ADVERSE ACTION" will mean any
       action by a Participant that the Committee, in its sole discretion,
       determines to be adverse to the interests of the Company or any
       Subsidiary, including, without limitation, (i) disclosing confidential
       information of the Company or any Subsidiary to any person not authorized
       by the Company or Subsidiary to receive it, (ii) engaging, directly or
       indirectly, in any commercial activity that in the judgment of the
       Committee competes with the business of the Company or any Subsidiary or
       (iii) interfering with the relationships of the Company or any Subsidiary
       and their respective employees and customers.

11.    SECURITIES LAW AND OTHER RESTRICTIONS.

       11.1   SECURITIES LAW RESTRICTIONS.  Notwithstanding any other provision
of the Plan or any agreements entered into pursuant to the Plan, the Company
will not be required to issue any shares of Common Stock under this Plan, and a
Participant may not sell, assign, transfer or otherwise dispose of shares of
Common Stock issued pursuant to Options granted under the Plan, unless (i) there
is in effect with respect to such shares a registration statement under the
Securities Act and any applicable state or foreign securities laws or an
exemption from such registration under the Securities Act and applicable state
or foreign securities laws, and (ii) there has been obtained any other consent,
approval or permit from any other regulatory body which the Committee, in its
sole discretion, deems necessary or advisable.  The Company may condition such
issuance, sale or transfer upon the receipt of any representations or agreements
from the parties involved, and the placement of any legends on certificates
representing shares of Common Stock, as may be deemed necessary or advisable by
the Company in order to comply with such securities law or other restrictions.

       11.2   OTHER RESTRICTIONS.  The Committee may impose such other
restrictions, including, without limitation, market stand-off provisions and
rights of first refusal, as it deems appropriate in its sole discretion and will
set forth any such restrictions that are not otherwise provided for by the Plan
in the agreement evidencing such Option.

12.    PLAN AMENDMENT, MODIFICATION AND TERMINATION.

       The Board may suspend or terminate the Plan or any portion thereof at any
time, and may amend the Plan from time to time in such respects as the Board may
deem advisable in order that Options under the Plan will conform to any change
in applicable laws or regulations or in any other respect the Board may deem to
be in the best interests of the Company; provided, however, that no amendments
to the Plan will be effective without approval of the shareholders of the
Company if shareholder approval of the amendment is then required pursuant to
Section 422 of the Code or the rules of any stock exchange or NASDAQ or similar
regulatory body.  No termination, suspension or amendment of the Plan may
adversely affect any outstanding Option without the consent of the affected
Participant; provided, however, that this sentence will not impair the right of
the Committee to take whatever action it deems appropriate under Sections 3.2,
4.3, 5, 7.3, 9 and 10.5 of the Plan.

13.    EFFECTIVE DATE AND DURATION OF THE PLAN.

       The Plan is effective as of December 20, 1999, the date it was adopted by
the Board.  The Plan will terminate at midnight on December 19, 2009, and may be
terminated prior to such time to by Board action, and no Option will be granted
after such termination.  Options outstanding upon termination of the Plan may
continue to be exercised in accordance with their terms.


                                       11


14.    MISCELLANEOUS.

       14.1   GOVERNING LAW.  The validity, construction, interpretation,
administration and effect of the Plan and any rules, regulations and actions
relating to the Plan will be governed by and construed exclusively in accordance
with the laws of the State of Minnesota, notwithstanding the conflicts of laws
principles of any jurisdictions.

       14.2   SUCCESSORS AND ASSIGNS.  The Plan will be binding upon and inure
to the benefit of the successors and permitted assigns of the Company and the
Participants.


                                       12

EX-10.7

                                MERRILL CORPORATION
                               DIRECT INVESTMENT PLAN

1.     PURPOSE.

       The purpose of the Merrill Corporation Direct Investment Plan (the
"PLAN") is to advance the interests of Merrill Corporation (the "COMPANY") and
its shareholders by facilitating the purchase of shares of the Company's voting
class B common stock, $0.01 par value per share ("COMMON STOCK") by Eligible
Employees (as defined below) of the Company.  These purchases are intended to
(i) increase Common Stock ownership among Eligible Employees of the Company and
its Subsidiaries; (ii) more closely align such Eligible Employees' financial
rewards with the financial rewards realized by all other holders of capital
stock of the Company; and (iii) increase such Eligible Employees' motivation to
manage the Company as owners.

2.     DEFINITIONS.

       In addition to the capitalized terms otherwise defined herein, the
following additional capitalized terms will have the meanings set forth below,
unless the context clearly otherwise requires:

       2.1    "ADVERSE ACTION" means any of the actions described in Section
              8.7(b) of the Plan.

       2.2    "BOARD" means the Board of Directors of the Company.

       2.3    "CAUSE" means (i) dishonesty, fraud, misrepresentation,
              embezzlement or deliberate injury or attempted injury, in each
              case related to the Company or any Subsidiary, (ii) any unlawful
              or criminal activity of a serious nature, (iii) any intentional
              and deliberate breach of a duty or duties that, individually or in
              the aggregate, are material in relation to the Participant's
              overall duties, (iv) any material breach of any employment,
              service, confidentiality or non-compete agreement entered into
              with the Company or any Subsidiary, or (v) an Adverse Action.

       2.4    "CLOSING DATE" means the date the Company closes on the sale of
              Shares to Eligible Employees who are initially offered the right
              to purchase Shares under the Plan, which the Company expects to be
              on or before January 31, 2000.

       2.5    "CODE" means the Internal Revenue Code of 1986, as amended.

       2.6    "COINVESTMENT SHARES" mean the shares of Common Stock offered to
              the Participant  pursuant to Section 5.2 of the Plan.

       2.7    "COMMITTEE" means the group of individuals administering the Plan,
              as provided in Section 3.1 of the Plan.

       2.8    "COMMON STOCK" shall have the meaning given such term in Section
              1, or the number and kind of shares of stock or other securities
              into which such Common Stock may be changed in accordance with
              Section 7.3 of the Plan.

       2.9    "DISABILITY" means the disability of the Participant such as would
              entitle the Participant to receive disability income benefits
              pursuant to the long-term disability plan of the



              Company or Subsidiary then covering the Participant or, if no such
              plan exists or is applicable to the Participant, the permanent and
              total disability of the Participant within the meaning of
              Section 22(e)(3) of the Code.

       2.10   "DLJMB" means DLJ Merchant Banking Partners II, L.P. and all its
              affiliated entities as described in the Investors' Agreement.

       2.11   "DLJMB LIQUIDATION EVENT" means, except for transfers to Permitted
              Transferees (as defined in the Investors' Agreement), (i) a sale
              or other transfer by DLJMB of 60% or more of its shares of common
              equity in the Company (including all common equity originally
              purchased by DLJMB and any additional common equity purchased by
              DLJMB thereafter, whether voting, Class B or any other class of
              common equity created by the Company)  to one or more persons or
              entities (in one transaction or in a series of related
              transactions) other than in connection with a public offering of
              the Company's common equity, (ii) the sale, lease, exchange or
              other transfer, directly or indirectly, of substantially all of
              the assets of the Company (in one transaction or in a series of
              related transactions) to a person or entity that is not controlled
              by the Company, or (iii) a merger or consolidation to which the
              Company is a party if the shareholders of the Company immediately
              prior to the effective date of such merger or consolidation do not
              have "beneficial ownership" (as defined in Rule 13d-3 under the
              Exchange Act) immediately following the effective date of such
              merger or consolidation of more than 50% of the combined voting
              power of the surviving corporation's outstanding securities
              ordinarily having the right to vote at elections of directors.

       2.12   "EFFECTIVE DATE" means the date set forth in Section 12.1 of the
              Plan.

       2.13   "ELIGIBLE EMPLOYEES" means any employee of the Company or any
              Subsidiary, and any non-employee director, consultant and
              independent contractor of the Company or any Subsidiary.

       2.14   "ELIGIBILITY NOTICE" means the notice described in Section 4.1 of
              the Plan.

       2.15   "ENTERPRISE VALUE" means a value equal to six times the Pro-Forma
              EBITDA as shown on the Company's consolidated statement of
              operations for its most recent fiscal year end.

       2.16   "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
              amended.

       2.17   "FAIR MARKET VALUE" means, with respect to the Common Stock, as of
              a Valuation Date (or, if no shares were traded or quoted on such
              date, as of the next preceding date on which there was such a
              trade or quote) (i) the mean between the reported high and low
              sale prices of the Common Stock if the Common Stock is listed,
              admitted to unlisted trading privileges or reported on any foreign
              or national securities exchange or on the NASDAQ National Market
              or an equivalent foreign market on which sale prices are reported;
              (ii) if the Common Stock is not so listed, admitted to unlisted
              trading privileges or reported, the closing bid price as reported
              by the NASDAQ SmallCap Market, OTC Bulletin Board or the National
              Quotation Bureau, Inc. or other comparable service; or (iii) if
              the Common Stock is not so listed or reported, such price shall be
              the Formula Value, or such other price as the Committee shall
              determine is appropriate in its sole discretion.  The Committee's
              determination as to the Fair Market Value of the Common Stock
              shall be final, conclusive and binding for all purposes and on all
              persons, including, without limitation, the Company, shareholders
              of the Company, the Participants and their

                                          2


              respective successors-in-interest.  No member of the Board or the
              Committee shall be liable for any determination regarding current
              values of the Common Stock that is made in good faith.

       2.18   "FORMULA VALUE" means the price determined on a Valuation Date by
              subtracting (i) Total Debt and (ii) Total Preferred Stock from the
              Enterprise Value, adding Total Cash to this difference and
              dividing such sum by the aggregate of the number of shares of
              capital stock of the Company outstanding on such Valuation Date
              (including all vested and unvested Shares) and all shares of
              common equity of the Company which may be issuable upon the
              exercise of options and warrants of the Company outstanding on
              such Valuation Date (whether or not then exercisable); provided,
              however, that any option which is not subject to a specific
              vesting schedule and only becomes fully exercisable upon a DLJMB
              Liquidation Event which realizes an internal rate of return in
              excess of fifty percent shall not be included in the outstanding
              option number on such Valuation Date.

       2.19   "INTEREST RATE" means the rate of interest on the Purchase Loan as
              set forth in Section 6.2 of the Plan.

       2.20   "INVESTORS' AGREEMENT" means the Investors' Agreement, dated
              November 23, 1999, by and among the Company and its shareholders,
              as amended from time to time.

       2.21   "NOTE"  means the Nonrecourse Promissory Note in the form attached
              hereto as EXHIBIT A to be entered into by each Participant in
              connection with the purchase of Coinvestment Shares.

       2.22   "PARTIAL TERMINATION" means a change in the Participant's
              employment or other service with the Company and all its
              Subsidiaries such that the number of hours worked by such
              Participant is substantially reduced for any reason as the
              Committee in its sole discretion may determine from the number of
              hours such Participant is required to work for the Company or
              Subsidiary and such reduction is expected to extend for an
              indefinite period of time.

       2.23   "PARTICIPANT" means an Eligible Employee of the Company or any
              Subsidiary who is selected by the Committee to participate in the
              Plan, and to the extent such Participant transfers any Shares
              purchased under this Plan to a Permitted Transferee (as defined in
              the Investors' Agreement) in accordance with the terms of the
              Investors' Agreement such term shall mean the Participant and such
              Permitted Transferee of such Participant.

       2.24   "PLEDGE AGREEMENT" means the Pledge and Custody Agreement in the
              form attached hereto as EXHIBIT B to be entered into by each
              Participant and the Company in connection with the purchase of
              Coinvestment Shares.

       2.25   "PRO-FORMA EBITDA" means earnings before interest, taxes,
              depreciation, amortization and non-cash compensation expense as
              computed using generally accepted accounting principles on a
              pro-forma basis as allowed by Regulation S-X of the Securities
              Act.

       2.26   "PRO RATA ADJUSTMENT" means a price per Share (which price
              could be negative)  determined by subtracting the Fair Market
              Value of such Share as determined on the Valuation Date in the
              fiscal year in which the Participant's employment or other
              service is terminated from the Fair Market Value of such Share
              as determined on the Valuation

                                          3


              Date in the fiscal year immediately following the fiscal year
              in which the Participant's employment or other service is
              terminated, and then multiplying such difference by a fraction,
              the numerator of which shall be the number of calendar days the
              Participant was employed by the Company or any Subsidiary in
              the fiscal year in which the Participant's employment or other
              services is terminated, and the denominator of which shall be
              the total number of calendar days in the fiscal year in which
              the Participant's employment or other services is terminated.

       2.27   "PURCHASE DATE" means the date, time and place the Company plans
              to close the sale of Shares and collect the payment of the
              purchase price for the Shares from the Participant as set forth in
              Section 4.1 of the Plan.

       2.28   "PURCHASE LOAN" means a nonrecourse interest bearing loan that may
              be made by the Company to the Participant to enable the
              Participant to purchase Coinvestment Shares pursuant to Section
              5.2  of the Plan which shall be evidenced by a Note.

       2.29   "REINVESTMENT SHARES" means the shares of Common Stock offered to
              the Participant pursuant to Section 5.1 of the Plan.

       2.30   "REPURCHASE DATE" means the date the Company will repurchase
              Shares from the Participant as set forth in Section 8.2 of the
              Plan.

       2.31   "REPURCHASE RIGHT" means the irrevocable and exclusive right the
              Company has to  repurchase Shares as set forth in Section 8 of the
              Plan.

       2.32   "RETIREMENT" means termination of employment or service pursuant
              to and in accordance with the regular (or, if approved by the
              Committee for purposes of the Plan, early) retirement/pension plan
              or practice of the Company or Subsidiary then covering the
              Participant, provided that if the Participant is not covered by
              any such plan or practice, the Participant will be deemed to be
              covered by the Company's plan or practice for purposes of this
              determination.

       2.33   "SECURITIES ACT" means the Securities Act of 1933, as amended.

       2.34   "SHARES" means the Reinvestment Shares and the Coinvestment Shares
              offered to a Participant pursuant to Sections 5.1 and 5.2 of the
              Plan.

       2.35   "SUBSIDIARY" means any entity that is directly or indirectly
              controlled by the Company or any entity in which the Company has a
              significant equity interest, as determined by the Committee.

       2.36   "TOTAL CASH" means the total amount of cash and cash equivalents
              shown on the Company's consolidated balance sheet as of its most
              recent fiscal year end.

       2.37   "TOTAL DEBT" means any indebtedness of the Company in respect of
              borrowed money or evidenced by bonds, notes, debentures or similar
              instruments or letters of credit (or reimbursement agreements in
              respect thereof) or banker's acceptances, except any such balance
              that constitutes an accrued expense, trade payable or customer
              contract advance, if and to the extent that any of the foregoing
              (other than letters of credit) would appear as a liability on the
              Company's consolidated balance sheet as of its most recent fiscal
              year end.

                                          4


       2.38   "TOTAL PREFERRED STOCK" means the total amount of the liquidation
              preference on all of the Company's issued and outstanding
              preferred stock as of its most recent fiscal year end.

       2.39   "VALUATION DATE" means a date on which the Committee shall
              determine the Fair Market Value of the Common Stock, which date
              shall be no more than ninety (90) days following the Company's
              fiscal year end.

3.     ADMINISTRATION.

       3.1    THE COMMITTEE.  The Plan will be administered by the Board or by a
              committee of the Board.  So long as the Company has a class of its
              equity securities registered under Section 12 of the Exchange Act,
              any committee administering the Plan will consist solely of two or
              more members of the Board who are "non-employee directors" within
              the meaning of Rule 16b-3 under the Exchange Act and, if the Board
              determines in its sole discretion, who are "outside directors"
              within the meaning of Section 162(m) of the Code.  As used in the
              Plan, "Committee" will refer to the Board or to such a committee,
              if established.  The Committee will act by majority approval of
              the members (but may also take action with the written consent of
              a majority of the members of the Committee), and a majority of the
              members of the Committee will constitute a quorum.  To the extent
              consistent with corporate law, the Committee may delegate to any
              officers of the Company the duties, power and authority of the
              Committee under the Plan pursuant to such conditions or
              limitations as the Committee may establish; provided, however,
              that only the Committee may exercise such duties, power and
              authority with respect to Eligible Employees who are subject to
              Section 16 of the Exchange Act.  The Committee may exercise its
              duties, power and authority under the Plan in its sole and
              absolute discretion without the consent of any Participant or
              other party, unless the Plan specifically provides otherwise.
              Each determination, interpretation or other action made or taken
              by the Committee pursuant to the provisions of the Plan will be
              final, conclusive and binding for all purposes and on all persons,
              including, without limitation, the Company, the shareholders of
              the Company, the Participants and their respective
              successors-in-interest.  No member of the Committee will be liable
              for any action or determination made in good faith with respect to
              the Plan.

       3.2    AUTHORITY OF THE COMMITTEE.

              (a)    Notwithstanding any other provision to the contrary in the
                     Plan, the Committee will have the authority in its sole
                     discretion to (i) determine the Eligible Employees to be
                     selected as Participants in the Plan, (ii) determine the
                     number of Shares such Participant is allowed to purchase,
                     or the Company is allowed to repurchase, under the Plan,
                     (iii) determine the periods or dates when Shares may be
                     purchased by the Participant, or repurchased by the
                     Company, under the Plan, (iv) determine the amount of
                     Purchase Loans to be made to Participants in connection
                     with the purchase of Coinvestment Shares  (which amount
                     shall not exceed sixty-five percent (65%) of the total
                     purchase price of the Coinvestment Shares), (v) determine
                     the terms and conditions of the Note and Pledge Agreement
                     as described in Section 6 hereof, (vi) adopt, alter, amend,
                     waive or repeal any administrative rules, guidelines,
                     practices and provisions governing the Plan or the
                     administration of the Plan as the Committee shall, from
                     time to time, deem advisable, (vii) interpret the terms and
                     provisions of the Plan (and any agreement or document
                     related hereto) and to supervise the administration of the
                     Plan, and (viii) determine the terms and conditions to
                     which the Shares may be

                                          5


                     subject upon a Participant's death, Disability, Retirement
                     or termination of employment or other service with the
                     Company or any Subsidiary, including, without limitation,
                     the right of the Company to accelerate the vesting of
                     unvested Coinvestment Shares and the right of the Company
                     to repurchase the Shares.

              (b)    The Committee will also have the authority under the Plan
                     to amend or modify the terms of any outstanding Shares in
                     any manner, including, without limitation, the terms and
                     conditions of any Shares or otherwise terminate any
                     restrictions relating to any Shares; provided, however,
                     that the amended or modified terms are permitted by the
                     Plan as then in effect and that any Participant adversely
                     affected by such amended or modified terms has consented to
                     such amendment or modification.  The Committee shall also
                     have the authority to correct any defect, supply any
                     omission or reconcile any inconsistency in the Plan, any
                     Purchase Loan or any related document or agreement in the
                     manner and to the extent it shall deem desirable to carry
                     it into effect.

4.     PARTICIPATION.

       4.1    SELECTION OF PARTICIPANTS.  The Committee will have the authority
              to select from the Eligible Employees the Participants in the Plan
              in accordance with Section 3 hereof. Eligible Employees will be
              given written notice of their eligibility to participate in the
              Plan (the "ELIGIBILITY NOTICE").  The Eligibility Notice shall
              specify (i) the specific number of Reinvestment Shares and
              Coinvestment Shares the Participant shall have the right to
              purchase from the Company, (ii) the per share price the
              Participant must pay for Reinvestment Shares and Coinvestment
              Shares, (iii) the maximum amount the Participant may borrow from
              the Company to assist with the purchase price of the Coinvestment
              Shares (which in no event shall exceed sixty-five percent (65%) of
              the total purchase price for the Coinvestment Shares), and (iv)
              the date, time and place the Company plans to close the sale of
              Shares and collect the payment of the purchase price for the
              Shares from the Participant (the "PURCHASE DATE"). Eligible
              Employees will have fifteen (15) days from the date of the
              Eligibility Notice to elect to participate in the Plan, and if the
              Eligible Employee elects to participate in the Plan, he or she
              must satisfy all of the conditions set forth in Section 4.2 hereof
              on or prior to the Purchase Date determined by the Committee;
              provided, however, that the Eligible Employees initially selected
              to participate in the Plan shall have until the Closing Date to
              elect to participate in the Plan and to satisfy the conditions set
              forth in Section 4.2 hereof.  No Eligible Employee shall have at
              any time the right (i) to be selected as a Participant, (ii) to be
              entitled to purchase any Shares, or (iii) having been selected to
              purchase Shares, to purchase any additional Shares.

       4.2    ELECTION TO PARTICIPATE IN PLAN.  Eligible Employees are not
              required to participate in the Plan.  Each Eligible Employee who
              elects to participate in the Plan, however, shall satisfy the
              following requirements on or prior to the Purchase Date or the
              Closing Date, as applicable:

              (a)    Submit a completed, signed and irrevocable agreement to
                     purchase the Shares under the Plan, which agreement shall
                     specify the number of Coinvestment Shares and Reinvestment
                     Shares to be purchased by the Participant and the total
                     purchase price for such Shares;

                                          6


              (b)    Deliver to the Company in cash (including check, bank draft
                     or money order) the total purchase price for the
                     Reinvestment Shares purchased by the Participant pursuant
                     to Section 5.1 hereof, and that portion of the Coinvestment
                     Shares not covered by the Note pursuant to Section 5.2
                     hereof;

              (c)    Complete and sign all necessary agreements and other
                     documents relating to the Purchase Loan described in
                     Section 6 hereof in connection with the purchase of the
                     Coinvestment Shares;

              (d)    Execute and deliver to the Company an agreement to become a
                     party to the Investors' Agreement pursuant to Section 12.2
                     hereof;

              (e)    If required by the Committee, execute and deliver to the
                     Company an agreement acknowledging to be bound by a
                     confidentiality and non-compete agreement;

              (f)    If required by the Committee, execute an agreement to waive
                     or modify certain compensation provisions in any existing
                     employment agreement or arrangement between the Company and
                     the Participant; and

              (g)    Satisfy all other terms and conditions of participation
                     specified in the Plan, or as may be required from time to
                     time by the Committee after the Effective Date.

              The agreements and other documents specified in this Section 4.2
              shall be in such forms and shall be submitted at such times to
              such Participants as specified by the Committee or its
              designee(s).

5.     PURCHASE OF SHARES.

       5.1    REINVESTMENT SHARES.  Each Participant selected by the Committee
              to participate in the Plan shall be granted the right to purchase,
              out of such Participant's own funds, that number of Reinvestment
              Shares, at a price per share, as determined by the Committee. If a
              Participant elects to participate in the Plan, such Participant
              shall have the right to purchase any number of the Reinvestment
              Shares up to the total amount awarded the Participant in the
              Eligibility Notice.  Each Participant electing to purchase such
              Reinvestment Shares shall deliver to the Company on the Purchase
              Date or the Closing Date, as applicable, the total purchase price
              for the number of Reinvestment Shares such Participant is electing
              to purchase.  Each Participant electing to purchase Reinvestment
              Shares shall be solely responsible for paying the entire amount of
              the total purchase price of the Reinvestment Shares, and the
              Company will not lend any funds to the Participant to assist with
              the purchase of any Reinvestment Shares.  On the Purchase Date or
              the Closing Date, as applicable, the Participant will be recorded
              on the books of the Company as the owner of the Reinvestment
              Shares, and the Company will issue one or more duly issued and
              executed stock certificates to the Participant evidencing such
              Reinvestment Shares.

       5.2    COINVESTMENT SHARES.  Each Participant selected by the Committee
              to participate in the Plan may also be granted the right to
              purchase Coinvestment Shares as determined by the Committee.  Such
              Participant shall have the right to purchase any number of
              Coinvestment Shares up to the total amount awarded the Participant
              in the Eligibility Notice.  On the Purchase Date or the Closing
              Date, as applicable, the Company shall make a Purchase Loan to the
              Participant in an amount determined by the Committee in its

                                          7


              sole discretion (which amount shall not exceed sixty-five percent
              (65%) of the total purchase price of the Coinvestment Shares) to
              pay for a portion of the total purchase price for the number of
              Coinvestment Shares the Participant is electing to purchase, and
              the Participant shall be solely responsible for paying the
              remaining balance of such purchase price.  The proceeds of the
              Purchase Loan shall be used solely to assist the Participant with
              the purchase of the Coinvestment Shares. As a condition to the
              Company making the Purchase Loan, all of the Coinvestment Shares
              purchased by the Participant pursuant this Section 5.2 (whether
              purchased with the Participant's own funds or with the Purchase
              Loan) must be pledged as collateral for the Purchase Loan pursuant
              to Section 6.4 hereof.  The Coinvestment Shares purchased by the
              Participant shall vest in accordance with the vesting schedule set
              forth on an exhibit to the written agreement evidencing such
              purchase.  On the Purchase Date or the Closing Date, as
              applicable, the Participant will be recorded on the books of the
              Company as the owner of the Coinvestment Shares, and, subject to
              Section 6.4 hereof, the Company will issue one or more duly issued
              and executed stock certificates evidencing such Coinvestment
              Shares.

       5.3    RESTRICTIONS ON TRANSFERABILITY OF SHARES.  In no event will a
              Participant be entitled to sell or transfer any Shares purchased
              by the Participant pursuant to the Plan during the six (6) months
              following the Purchase Date or the Closing Date, as applicable.
              In addition, all Shares purchased by Participants under the Plan
              shall be subject to the transfer restrictions and other provisions
              of the Plan and the Investors' Agreement, and until such time as
              such restrictions on transfer expire, no right or interest of any
              Participant under the Plan shall be subject in any manner to
              alienation, sale, transfer, assignment, bankruptcy, pledge,
              attachment, charge or encumbrance of any kind nor in any manner be
              subject to the debts or liabilities of any person, and any attempt
              to so alienate or subject any such amount, whether presently or
              thereafter payable, or any such right shall be void, except as may
              otherwise be provided for in the Plan or the Investors' Agreement.
              Subject to Section 6.1 hereof, and in addition to the other
              restrictions contained in the Plan and the Investors' Agreement, a
              Participant may not sell, transfer, assign, pledge, attach, charge
              or encumber in any way or in any manner any unvested Coinvestment
              Shares.  To enforce the transfer restrictions set forth in the
              Plan and the Investors' Agreement, the Committee, in its sole
              discretion, may place a legend on the stock certificates
              evidencing that the Shares are subject to certain transfer
              restrictions and may require the Company to hold any stock
              certificates issued to the Participant for the Coinvestment
              Shares, together with stock powers executed in blank, in the
              custody of the Company or its transfer agent until the
              restrictions on the Coinvestment Shares have terminated.

6.     PURCHASE LOANS.

       6.1    NOTE.  All Purchase Loans shall be evidenced by the Participant's
              execution of a Note.  In the event that a Participant transfers
              all or a portion of his or her Coinvestment Shares to a Permitted
              Transferee (as defined in the Investors' Agreement), such
              Permitted Transferee, as a condition to the transfer of the
              Coinvestment Shares, shall agree to be bound by the terms and
              conditions of the Plan, any agreement evidencing the sale of the
              Shares to the Participant, and shall also agree to take such
              Shares subject to the terms and conditions of the Note and Pledge
              Agreement.  The Participant, however, shall remain  the primary
              obligor of all obligations outstanding under the Note and the
              Pledge Agreement regardless of such a transfer to a Permitted
              Transferee.

       6.2    INTEREST.  Purchase Loans will accrue at a fixed rate of interest
              equal to eight percent (8%) per annum beginning on the date the
              Note is executed to evidence the Purchase Loan;

                                          8


              provided, however, that such interest rate shall not exceed the
              rate permitted by applicable law (the "INTEREST RATE").  While
              interest on the Purchase Loan will accrue at the Interest Rate,
              interest will not be paid by the Participant during the term of
              the Note, but will be paid upon maturity of the Purchase Loan
              pursuant to Section 6.3 hereof and the terms of the Note.  Accrued
              but unpaid interest on the Purchase Loan will be in addition to
              the principal balance of the Purchase Loan.

       6.3    REPAYMENT.  The principal of the Purchase Loan and all accrued but
              unpaid interest will be due and payable by the Participant in a
              single payment, pursuant to the terms and conditions of the Plan
              and the Note, as of the earlier of (i) the Participant's
              termination of employment or other service with the Company and
              all its Subsidiaries in accordance with Section 8 hereof, (ii) a
              DLJMB Liquidation Event, (iii) a sale or transfer of the
              Coinvestment Shares in accordance with the terms and conditions of
              the Investors' Agreement (other than transfers to Permitted
              Transferees under the Investors' Agreement or hardship repurchases
              under Section 8.5 hereof), (iv) eight years from the Purchase Date
              or Closing Date, as applicable, for the Coinvestment Shares or (v)
              within 120 days following an initial public offering of the
              Company's equity securities in which case the principal of the
              Purchase Loan and all accrued interest thereon must be paid with
              cash, or the Committee in its sole discretion may allow the
              Company to repurchase the Participant's Reinvestment Shares and
              vested Coinvestment Shares at Fair Market Value, and the
              Participant's unvested Coinvestment Shares at a purchase price
              determined by the Committee in its sole discretion, and apply the
              proceeds the Company owes the Participant against the outstanding
              balance of the Note and all accrued interest; provided, however,
              that if the Participant elects to repay the Purchase Loan and all
              accrued interest with the Participant's Shares, the Participant
              will not be required to repay the Note and all accrued interest if
              the total purchase price paid for such Shares does not exceed the
              outstanding balance of the Note, all accrued interest and any tax
              liability of the Participant associated with the sale of the
              Shares.  Notwithstanding anything to the contrary in this Section
              6.3, however, the Committee may decide, in its sole discretion, to
              extend the maturity of the Note.  In the event that the
              Participant sells or transfers (other than transfers to Permitted
              Transferees under the Investors' Agreement or hardship repurchases
              under Section 8.5 hereof) all or a portion of the Coinvestment
              Shares in accordance with the Plan and the Investors' Agreement,
              the Purchase Loan will become immediately due and payable by the
              Participant to the extent of the lesser of (i) the total
              outstanding balance of unpaid principal and all accrued interest
              on the Purchase Loan or (ii) the net after tax proceeds realized
              upon such sale.  The Company shall have the right to apply any
              amounts it owes the Participant for the purchase of  Coinvestment
              Shares pursuant to Section 8 hereof towards the outstanding
              principal and accrued interest on the Note in accordance with
              Section 8.7(c) hereof, and, in the event the Participant sells or
              transfers the Coinvestment Shares in connection with a DLJMB
              Liquidation Event or pursuant to the provisions of the Investors'
              Agreement (other than to a Permitted Transferee, the Participant
              shall be required to use all proceeds received from such sale or
              transfer to repay the outstanding balance of the Note and all
              accrued interest.

       6.4    PLEDGE OF SHARES. As collateral for the Note, the Participant
              shall grant to the Company a security interest in the Coinvestment
              Shares by executing the Pledge Agreement.  Any stock certificates
              issued for Coinvestment Shares purchased pursuant to Section 5.2
              hereof shall be held by the Company as collateral for the Purchase
              Loan until such time as the Purchase Loan and all accrued interest
              on the Purchase Loan are paid in full; provided, however, that the
              Committee may in its sole discretion release, upon request of the
              Participant, Shares if the collateral for the Note exceeds the
              outstanding balance of

                                          9


              the Purchase Loan and all accrued interest and the Committee
              determines in its sole discretion that the remaining collateral is
              sufficient to secure the outstanding balance of the Note and
              accrued interest.  If the Company repurchases the Coinvestment
              Shares so pledged in accordance with Section 8 hereof, the Company
              shall have the right to apply all proceeds it owes the Participant
              against the outstanding balance of the Purchase Loan and all
              accrued interest. Notwithstanding anything to the contrary in the
              Plan or in the Investors' Agreement, so long as Coinvestment
              Shares are pledged to the Company pursuant to this Section 6.4 in
              no event can such Coinvestment Shares (whether vested or unvested)
              be subject in any manner to alienation, sale, transfer,
              assignment, bankruptcy, pledge, attachment, charge or encumbrance
              of any kind nor in any manner be subject to the debts or
              liabilities of any person, except that such Coinvestment Shares
              may be transferred to Permitted Transferees (as defined in the
              Investors' Agreement).

7.     SHARES AVAILABLE FOR ISSUANCE.

       7.1    MAXIMUM NUMBER OF SHARES AVAILABLE.  Subject to adjustment as
              provided in Section 7.3 of the Plan, the maximum number of shares
              of Common Stock that will be available for issuance under the Plan
              will be 1,459,091 shares of Common Stock  of which 227,272 shares
              will be designated for Reinvestment Shares and 1,231,819 shares
              will be designated for Coinvestment Shares.

       7.2    ACCOUNTING FOR SHARES.  Shares of Common Stock that are sold under
              the Plan as Reinvestment Shares will be applied to reduce the
              number of shares of Common Stock designated for Reinvestment
              Shares remaining available for issuance under the Plan and shares
              of Common Stock that are sold under the Plan as Coinvestment
              Shares will be applied to reduce the number of shares of Common
              Stock designated for Coinvestment Shares remaining available for
              issuance under the Plan.  In addition, in the event that any
              Shares purchased under the Plan are reacquired by the Company
              pursuant to any right of repurchase, right of first refusal or
              forfeiture provisions, such Shares will automatically again become
              available for issuance under the Plan and such shares of Common
              Stock shall be divided by the Committee between Reinvestment
              Shares and Coinvestment Shares in such amounts as the Committee
              deems appropriate.

       7.3    ADJUSTMENTS TO SHARES.  In the event that the Committee determines
              that any reorganization, merger, consolidation, recapitalization,
              liquidation, reclassification, stock dividend, stock split,
              combination of shares, rights offering, divestiture or
              extraordinary dividend (including a spin-off) or any other similar
              change in the corporate structure or shares of the Company,
              affects the Shares such that an adjustment is determined by the
              Committee, in its sole discretion, to be appropriate in order to
              prevent dilution or enlargement of the benefits or potential
              benefits of a Participant's investment in the Shares under the
              Plan, the Committee (or, if the Company is not the surviving
              corporation in any such transaction, the board of directors of the
              surviving corporation) shall, in such manner as it deems
              equitable, make such adjustments, if any, to the number and kind
              of Shares (or number and kind of other securities or property)
              with respect to the Shares purchased under the Plan, as it deems
              appropriate and necessary.

8.     REPURCHASE RIGHTS UPON PARTICIPANT'S TERMINATION OF SERVICES.

       8.1    REPURCHASE RIGHT.  Subject to the other provisions of this Section
              8, in the event a Participant's employment or other service with
              the Company and all its Subsidiaries is terminated for any reason
              whatsoever, whether due to death, Disability, Retirement or

                                          10


              termination with or without Cause, prior to a DLJMB Liquidation
              Event, the Company shall have the irrevocable and exclusive right
              to repurchase (the "REPURCHASE RIGHT") at the price determined in
              accordance with this Section 8.1 and in the manner set forth in
              Section 8.2 hereof all or any portion of the Participant's Shares;
              provided, however, that the Committee in its sole discretion may
              determine to pay a price other than the price determined in
              accordance with this Section 8.1 but in no event shall such price
              be less than the price determined in accordance with this Section
              8.1:

              (a)    If the Participant's employment or other service with the
                     Company and all its Subsidiaries is terminated during a
                     fiscal year by reason of voluntary resignation, death,
                     Disability, Retirement or termination by the Company
                     without Cause, the Company shall pay: (i)  for each
                     Coinvestment Share that is vested at the time of
                     termination and each Reinvestment Share, an amount equal to
                     the Fair Market Value of each Share as determined on the
                     Valuation Date in the fiscal year in which the
                     Participant's employment or other service is terminated
                     plus any Pro Rata Adjustment; and (ii) for each
                     Coinvestment Share that is not vested at the time of
                     termination, an amount equal to the lesser of (x) the Fair
                     Market Value of each Coinvestment Share as determined on
                     the Valuation Date in the fiscal year in which the
                     Participant's employment or other service is terminated
                     plus any Pro Rata Adjustment, or (y) the purchase price
                     paid by the Participant for each unvested Coinvestment
                     Share, plus all accrued and unpaid interest on the Purchase
                     Loan relating to such unvested Coinvestment Shares.

              (b)    If the Participant's employment or other service with the
                     Company and all its Subsidiaries is terminated during a
                     fiscal year by the Company for Cause, the Company shall pay
                     for each Share owned by the Participant (whether vested or
                     unvested) the lesser of (i) the Fair Market Value for each
                     Share as determined on the Valuation Date in the fiscal
                     year in which the Participant's employment or other service
                     is terminated plus any Pro Rata Adjustment, or (ii) the
                     purchase price paid by the Participant for each Share,
                     without any accrued and unpaid interest on the Purchase
                     Loan relating to the Coinvestment Shares being paid.

              (c)    Unless the Committee otherwise determines in its sole
                     discretion, a Participant's employment or other service
                     will, for purposes of the Plan, be deemed to have
                     terminated on the date recorded on the personnel or other
                     records of the Company or the Subsidiary for which the
                     Participant provides employment or other service, as
                     determined by the Committee in its sole discretion based
                     upon such records.

       8.2    EXERCISABILITY OF REPURCHASE RIGHT.  Subject to Section 8.7
              hereof, if the Company elects to exercise its Repurchase Right or
              any other right or obligation the Company may have to repurchase
              Shares pursuant to the Plan, the Company shall give the
              Participant written notice of its intent to exercise its
              Repurchase Right (the "NOTICE OF REPURCHASE") within sixty (60)
              days of such Participants termination of employment or other
              service.  The Notice of Repurchase shall specify (i) the number of
              Reinvestment Shares and Coinvestment Shares (including the number
              of vested and unvested Coinvestment Shares) the Company intends to
              repurchase and (ii) the date the Company expects to purchase the
              Reinvestment Shares and Coinvestment Shares from the Participant
              which date shall be no later than thirty (30) days following the
              Valuation Date in the fiscal year immediately following the fiscal
              year in which the Participant's employment or other service is
              terminated (the "REPURCHASE DATE").  On or before the Repurchase
              Date, the

                                          11


              Participant shall deliver to the Company the stock certificates
              representing the Reinvestment Shares and Coinvestment Shares being
              purchased by the Company, properly endorsed for transfer, unless
              the Company is holding such Coinvestment Shares pursuant to
              Section 6.4 hereof in which case such Coinvestment Shares shall be
              deemed to have been delivered to the Company.  By such delivery,
              or deemed delivery, of such certificates, the Participant warrants
              that (i) the Participant has good title to, the right to
              possession of, and the right to sell, the Reinvestment Shares and
              the Coinvestment Shares, (ii) such Reinvestment Shares and
              Coinvestment Shares are free and clear of all pledges, liens,
              encumbrances, charges, proxies, restrictions, options, transfers
              and other adverse claims, except such as have been imposed by the
              Plan or the Investors' Agreement, and except such restrictions on
              transfer as may be imposed by federal or state securities laws,
              and (iii) the Participant shall hold harmless the Company from all
              costs, expenses and fees incurred in defending title and right to
              possession. On the Repurchase Date, the Company shall pay to the
              Participant the total purchase price for the Reinvestment Shares
              and Coinvestment Shares purchased by the Company.

       8.3    ASSIGNABILITY OF REPURCHASE RIGHT. The Company, in its sole
              discretion, may assign its Repurchase Right to one or more
              employees, officers, directors, shareholders or other persons or
              organizations.  In the event the Company does assign its
              Repurchase Right to one or more employees, officers, directors,
              shareholders or other persons or organizations, such persons or
              organizations shall exercise such Repurchase Right in accordance
              with Section 8.2 hereof.

       8.4    PUT RIGHT. Subject to Section 8.7 hereof, in the event that
              neither the Company nor any assignee of the Company exercises the
              Repurchase Right and a Participant's employment or other service
              with the Company and all Subsidiaries is terminated by reason of
              voluntary resignation, death, Disability, Retirement or
              termination by the Company without Cause, the Participant shall
              have the right to require the Company to purchase, in the manner
              set forth in Section 8.2 hereof, (i) all or any portion of the
              Reinvestment Shares and vested Coinvestment Shares owned by the
              Participant at the time of termination at a purchase price per
              share equal to the Fair Market Value for each such Share as
              determined on the Valuation Date in the fiscal year in which the
              Participant's employment or other service is terminated plus any
              Pro Rata Adjustment; and (ii) all or any portion of the unvested
              Coinvestment Shares owned by the Participant at the time of
              termination at a purchase price per share equal to the lesser of
              (x) the Fair Market Value for each such unvested Coinvestment
              Share as determined on the Valuation Date in the fiscal year in
              which the Participant's employment or other service is terminated
              plus any Pro Rata Adjustment, or (y) the purchase price paid by
              the Participant for each such unvested Coinvestment Share, plus
              all accrued and unpaid interest on the Purchase Loan relating to
              such unvested Coinvestment Shares.

       8.5    HARDSHIP REPURCHASES.

              (a)    Subject to the provisions of Section 8.5(e) and Section 8.7
                     hereof, a Participant may request that the Committee
                     repurchase his or her Reinvestment Shares and vested
                     Coinvestment Shares if the Participant is deemed to be in
                     immediate and heavy financial need as determined in
                     accordance with Section 8.5(b) and (c) hereof.  A hardship
                     repurchase will be permitted only if the Committee
                     determines in its sole discretion that the repurchase is
                     being requested on account of an immediate and heavy
                     financial need of the Participant and is necessary to
                     satisfy such financial need.  The fact that the Committee
                     grants a hardship

                                          12


                     repurchase to a Participant, however, will not impact the
                     discretion of the Committee in the future to determine
                     whether to grant additional hardship repurchases to such
                     Participant or any other Participant, and each application
                     for a hardship repurchase will be considered by the
                     Committee on an individual basis independent of any facts
                     or circumstances surrounding any previous hardship
                     repurchase grants.

              (b)    A repurchase will be deemed to be made on account of an
                     immediate and heavy financial need only if it is determined
                     by the Committee in its sole discretion to be on account
                     of: (i) expenses for medical care (as described in Code
                     section 213(d)), incurred or to be incurred by the
                     Participant, the Participant's spouse or the Participant's
                     dependent (as described in Code section 152), (ii) payments
                     necessary to prevent the eviction of the Participant from
                     his or her principal residence or foreclosure on the
                     mortgage on the Participant's principal residence, or (iii)
                     any other situation in which the Committee in its sole
                     discretion determines such Participant is in immediate and
                     heavy financial need.

              (c)    A hardship repurchase will be deemed to be necessary to
                     satisfy the immediate and heavy financial need of the
                     Participant only if the Committee determines in its sole
                     discretion that the aggregate purchase price the Company
                     must pay is not  more than the sum of the amount of the
                     immediate and heavy financial need of the Participant plus
                     the amount necessary to pay any federal, state or local
                     taxes or penalties that the Participant will incur in
                     connection with the repurchase, as estimated by the
                     Committee.

              (d)    The Committee's determination of the existence of a
                     Participant's financial hardship and the amount that may be
                     repurchased to satisfy the need created by such hardship
                     will be made in accordance with all applicable laws, and is
                     final and binding on the Participant. The Committee may
                     require the Participant to make representations and
                     certifications concerning his or her entitlement to a
                     repurchase pursuant to this Section 8.5 and is entitled to
                     rely on such representations and certifications unless the
                     Committee has actual knowledge to the contrary.  The
                     Committee is not obligated to supervise or otherwise verify
                     that amounts repurchased are applied in the manner
                     specified in the Participant's repurchase application.

              (e)    In addition to the provisions of Section 8.7 hereof, all
                     repurchases of Shares under this Section 8.5 shall be
                     subject to the following rules:

                     (i)    Applications for repurchases may be made at anytime
                            during the Company's fiscal year.  The Company,
                            however, will not be required to make any payments
                            for such Shares repurchased within any specific time
                            period designated by the Participant in his or her
                            repurchase application.  The Company will pay the
                            purchase price for such Shares being repurchased
                            pursuant to this Section 8.5 as soon as
                            administratively practicable after the Committee's
                            determination that the Participant is entitled to
                            have his or her Shares repurchased by the Company.

                     (ii)   The price to be paid by the Company to the
                            Participant for each Share shall be the Fair Market
                            Value for such Share as determined on the most
                            recent Valuation Date prior to the hardship
                            repurchase.

                                          13


                     (iii)  No payment for Shares purchased by the Company under
                            this Section 8.5 will be made if the total purchase
                            price for such Shares is less than $1,000.

                     (iv)   All payments for Shares purchased will be made by
                            the Company in the form of a lump sum payment by
                            check.

                     (v)    The Company shall be permitted to repurchase Shares
                            pursuant to this Section 8.5 only to the extent that
                            the Fair Market Value of the Coinvestment Shares
                            held as collateral for the Note exceeds the
                            outstanding balance of the Purchase Loan and all
                            accrued interest, and at no time shall the Company
                            be permitted to repurchase Shares under this Section
                            8.5 if such repurchase would cause the collateral
                            securing the Note to be insufficient to repay the
                            Purchase Loan and all accrued interest in full.

       8.6    PARTIAL TERMINATIONS.  Subject to Section 8.7 hereof, in the event
              that there is a Partial Termination of the Participant, the
              Company shall have the irrevocable and exclusive right to
              repurchase, in the manner set forth in Section 8.2 hereof, all or
              any portion of the Participant's Coinvestment Shares (whether
              vested or unvested) at the time of the Partial Termination  as is
              determined by the Committee in its sole discretion, and the
              Company shall pay the Participant: (i)  for each Coinvestment
              Share that is vested at the time of the Partial Termination, an
              amount equal to the Fair Market Value of each share as determined
              on the Valuation Date in the fiscal year in which the Participant
              has a Partial Termination plus any Pro Rata Adjustment; and (ii)
              for each Coinvestment Share that is not vested at the time of the
              Partial Termination, an amount equal to the lesser of (x) the Fair
              Market Value of each Coinvestment Share as determined on the
              Valuation Date in the fiscal year in which the Participant has a
              Partial Termination plus any Pro Rata Adjustment, or (y) the
              purchase price paid by the Participant for such unvested
              Coinvestment Share, plus all accrued and unpaid interest on the
              Purchase Loan relating to such unvested Coinvestment Shares.

       8.7    OBLIGATIONS, LIMITATIONS AND RESTRICTIONS ON REPURCHASE SHARES.

              (a)    VIOLATION OF LAW AND CONTRACTUAL OBLIGATIONS.
                     Notwithstanding anything to the contrary in the Plan, the
                     Company shall only be required to repurchase any Shares
                     pursuant to this Section 8 as rapidly as permissible
                     without violating any loan covenants or other contractual
                     restrictions applicable to, and binding upon, the Company,
                     and any amounts not paid to the Participant on the
                     Repurchase Date in such case will bear interest at the
                     Interest Rate.  The Company shall only be required to
                     repurchase any Shares pursuant to this Section 8 to the
                     extent that such repurchase does not violate any applicable
                     laws.

              (b)    ADVERSE ACTIONS.

                     (i)    Notwithstanding anything in the Plan to the
                            contrary, in the event that a Participant takes
                            Adverse Actions with respect to the Company or any
                            Subsidiary (1) prior to such Participant's
                            termination of employment or other service with the
                            Company and all its Subsidiaries or (2) during the
                            period ending twelve (12) months following the date
                            of the Participant's termination of employment or
                            other service with the Company and all

                                          14


                            Subsidiaries by reason of voluntary resignation,
                            death, Disability, Retirement or termination by the
                            Company without Cause, the Committee in its sole
                            discretion will have the authority to treat such
                            Participant's termination of employment or other
                            service as a termination for Cause and to repurchase
                            all Shares held by such Participant in the manner
                            set forth in Section 8.2 hereof for the lesser of
                            (x) the Fair Market Value for each Share as
                            determined on the Valuation Date in the fiscal year
                            in which the Participant's employment or other
                            service is terminated plus any Pro Rata Adjustment
                            or (y) the purchase price paid by the Participant
                            for each Share.  In addition, to the extent a
                            Participant has received an amount in excess of such
                            purchase price in connection with a prior exercise
                            of the Company's Repurchase Right or the sale or
                            other transfer of such Shares either in the twelve
                            (12) months prior to, or the twelve (12) months
                            following, such Participant's termination of
                            employment or service, then the Participant shall be
                            required to pay to the Company any such excess.  The
                            Company shall be entitled to require the Participant
                            to pay to the Company, within ten (10) days of
                            receipt of notice from the Company, the amount of
                            any excess.  Such payment will be made in cash
                            (including check, bank draft or money order). The
                            Company will be entitled to off-set any amounts that
                            may be due and owing to the Participant from the
                            Company or any Subsidiary pursuant to Section 8.7(c)
                            or make other arrangements for the collection of all
                            amounts necessary to satisfy such payment
                            obligations.

                     (ii)   For purposes of the Plan, an "ADVERSE ACTION" will
                            mean any action by a Participant that the Committee,
                            in its sole discretion, determines to be adverse to
                            the interests of the Company or any Subsidiary,
                            including, without limitation, (x) disclosing
                            confidential information of the Company or any
                            Subsidiary to any person not authorized by the
                            Company to receive it, (y) engaging, directly or
                            indirectly, in any commercial activity that in the
                            judgement of the Committee competes with the
                            business of the Company or any Subsidiary or (z)
                            interfering with the relationships of the Company or
                            any Subsidiary and their respective employees and
                            customers.

              (c)    RIGHT OF OFF-SET.  The Company shall have the right to
                     set-off against any amounts owing by the Company to the
                     Participants, including, without limitation, any dividends
                     paid on the Shares, which amounts shall be applied first to
                     accrued interest on the Note and then to the outstanding
                     principal balance of the Note.  Neither the exercise of,
                     nor the failure to exercise, such right of set-off will
                     constitute an election of remedies nor limit the Company in
                     any manner in the enforcement of any other remedies that
                     may be available to it.

              (d)    REPAYMENT OF INTEREST.  In the event that the Company
                     repurchases Coinvestment Shares pursuant to Sections 8.1,
                     8.4, 8.6 or 8.7(b) hereof, the Committee, in its sole
                     discretion, shall on the Repurchase Date make an
                     appropriate adjustment to the purchase price paid on such
                     date to repay any interest that has accrued on the Purchase
                     Loan from the date of the Participant's termination of
                     employment or other services with the Company and all its
                     Subsidiaries until the date the Company repurchases the
                     Coinvestment Shares pursuant to this Section 8.

                                          15


9.     SHAREHOLDER RIGHTS. Subject to the provisions of Section 5 and Section
       12.2 hereof, upon the Participant's purchase of the Shares (whether
       vested or unvested) such Participant shall have all the rights of a
       shareholder of the Company with respect to the Shares, including, without
       limitation, all voting rights, liquidation rights and rights to receive
       all dividends paid on the Shares at the same times and in the same
       amounts as all other shares of Common Stock; provided, however, that all
       dividends paid on the Coinvestment Shares shall be pledged as collateral
       for the Note until such time as the Note and all accrued interest is paid
       in full, and the Company shall be entitled to set-off against such
       dividends in accordance with Section 8.7(c) hereof.  Nothing in the Plan,
       however, will interfere with or limit in any way the right of the Company
       or any Subsidiary to terminate the employment or service of any Eligible
       Employee or Participant at any time, nor confer upon any Eligible
       Employee or Participant any right to continue in the employ or service of
       the Company.

10.    TAXES.

       10.1   GENERAL RULES FOR WITHHOLDING.  The Company is entitled to (i)
              withhold and deduct from future wages of the Participant (or from
              other amounts that may be due and owing to the Participant from
              the Company or a Subsidiary), or make other arrangements for the
              collection of, all legally required amounts necessary to satisfy
              any and all foreign, federal, state and local withholding and
              employment-related tax requirements attributable to the
              acquisition of the Shares, the receipt of dividends or
              distributions on the Shares or the termination of the security
              interest or restrictions applicable to the Shares, or (ii) require
              the Participant promptly to remit the amount of such withholding
              to the Company before taking any action, including issuing any
              Shares.  In the event the Company is unable to withhold such
              amounts, for whatever reasons, the Participant hereby agrees to
              pay to the Company an amount equal to the amount the Company would
              otherwise be required to withhold under foreign, federal, state or
              local law.

       10.2   SPECIAL RULES FOR WITHHOLDING.  The Committee may, in its sole
              discretion and upon terms and conditions established by the
              Committee, permit or require a Participant to satisfy, in whole or
              in part, any withholding or employment-related tax obligation
              described in Section 10.1 hereof by electing to tender shares of
              the Company previously acquired by the Participant or a promissory
              note (on terms acceptable to the Committee in its sole
              discretion), or by a combination of such methods.

       10.3   SECTION 83(b) ELECTION.  The Participant has reviewed with the
              Participant's own tax advisors the federal, state, local and
              foreign tax consequences of the purchase of the Shares and the
              other transactions contemplated by the Plan.  The Participant is
              relying solely on such advisors and not on any statements or
              representations of the Company or any of its agents.  The
              Participant understands that the Participant (and not the Company)
              shall be responsible for the Participant's own tax liability that
              may arise as a result of the purchase of the Shares or the other
              transactions contemplated by this Agreement.  The Company
              recommends that each Participant consult with such Participant's
              own tax advisor with respect to the making of an election pursuant
              to Section 83(b) of the Code.  Any such election, if made, must be
              filed with the Internal Revenue Service within thirty (30) days of
              the purchase of such Shares.  THE PARTICIPANT ACKNOWLEDGES THAT IT
              IS THE PARTICIPANT'S SOLE RESPONSIBILITY AND NOT THE COMPANY'S
              RESPONSIBILITY TO FILE SUCH ELECTION ON A TIMELY BASIS, EVEN IF
              THE PARTICIPANT REQUESTS THAT THE COMPANY OR ITS REPRESENTATIVES
              MAKE SUCH FILING ON BEHALF OF THE PARTICIPANT.

                                          16


11.    DLJMB LIQUIDATION EVENT.

       11.1   ACCELERATION OF VESTING.  Without limiting the authority of the
              Committee under the Plan, if a DLJMB Liquidation Event occurs,
              then, unless otherwise provided by the Committee in its sole
              discretion in an agreement with the Participant, all unvested
              Coinvestment Shares will become immediately vested in full.

       11.2   LIMITATION ON PAYMENTS IN CONNECTION WITH A DLJMB LIQUIDATION
              EVENT. Notwithstanding anything in Section 11.1 hereof to the
              contrary, if, with respect to a Participant, the acceleration of
              the vesting of Coinvestment Shares as provided in Section 11.1
              (which acceleration or payment could be deemed a "payment" within
              the meaning of Section 280G(b)(2) of the Code), together with any
              other "payments" that such Participant has the right to receive
              from the Company or any corporation that is a member of an
              "affiliated group" (as defined in Section 1504(a) of the Code
              without regard to Section 1504(b) of the Code) of which the
              Company is a member, would constitute a "parachute payment" (as
              defined in Section 280G(b)(2) of the Code), then the "payments" to
              such Participant pursuant to Section 11.1 hereof will be reduced
              to the largest amount as will result in no portion of such
              "payments" being subject to the excise tax imposed by Section 4999
              of the Code; provided, however, that if a Participant is subject
              to a separate agreement with the Company or a Subsidiary that
              expressly addresses the potential application of Sections 280G or
              4999 of the Code (including, without limitation, that "payments"
              under such agreement or otherwise will be reduced, that the
              Participant will have the discretion to determine which "payments"
              will be reduced, that such "payments" will not be reduced or that
              such "payments" will be "grossed up" for tax purposes), then this
              Section 11.2 will not apply, and any "payments" to a Participant
              pursuant to Section 11.1 hereof will be treated as "payments"
              arising under such separate agreement.

12.    MISCELLANEOUS.

       12.1   EFFECTIVE DATE AND DURATION OF THE PLAN.   The Plan is effective
              as of December 20, 1999, the date it was adopted by the Board.
              The Plan will terminate at midnight on December 19, 2009, and may
              be terminated prior to such time to by Board action, and no Shares
              will be granted after such termination.

       12.2   INVESTORS' AGREEMENT.  Each Participant who purchases Shares under
              the Plan shall become a party to the Investors' Agreement.  Each
              Participant who (i) is an employee of the Company or any
              Subsidiary reporting directly to the Chief Executive Officer
              ("CEO") or Chief Operating Officer ("COO") of the Company or (ii)
              acquires more than a certain percentage of Common Stock available
              for sale under the Plan as determined by the Committee in its sole
              discretion from time to time, shall be deemed a "Co-invest
              Management Stockholder" for all purposes of the Investors'
              Agreement, and all other Participants who acquire shares of Common
              Stock under the Plan shall be deemed "Other Stockholders" for
              purposes of the Investors' Agreement, including, without
              limitation, all transfer restrictions and provisions thereof;
              provided, however, if a Participant after the Purchase Date or
              Closing Date, as applicable, is no longer required to report
              directly to the CEO or COO such Participant shall thereafter be
              deemed an "Other Stockholder," and any "Other Stockholder" who
              acquires more than the percentage of Common Stock available for
              sale under the Plan as determined by the Committee or reports
              directly to the CEO or COO after the Purchase Date or Closing
              Date, as applicable, shall thereafter be deemed a "Co-invest
              Management Stockholder," for all purposes of the Investors'

                                          17


              Agreement.  Notwithstanding anything to the contrary in the Plan,
              if the Investors' Agreement has terminated by its terms, the
              provisions of this Section 12.2 shall no longer apply.

       12.3   NON-EXCLUSIVITY OF THE PLAN.  Nothing contained in the Plan is
              intended to modify or rescind any previously approved compensation
              plans or programs of the Company or create any limitations on the
              power or authority of the Board to adopt such additional or other
              compensation arrangements as the Board may deem necessary or
              desirable.

       12.4   SECURITIES LAW AND OTHER RESTRICTIONS.  Notwithstanding any other
              provision of the Plan or any agreements entered into pursuant to
              the Plan, the Company will not be required to issue any Shares
              under the Plan, and a Participant may not sell, assign, transfer
              or otherwise dispose of Shares issued under the Plan, unless
              (i) there is in effect with respect to such shares a registration
              statement under the Securities Act and any applicable state or
              foreign securities laws or an exemption from such registration
              under the Securities Act and applicable state or foreign
              securities laws, and (ii) there has been obtained any other
              consent, approval or permit from any other regulatory body which
              the Committee, in its sole discretion, deems necessary or
              advisable.  The Company may condition such issuance, sale or
              transfer upon the receipt of any representations or agreements
              from the parties involved, and the placement of any legends on
              certificates representing Shares, as may be deemed necessary or
              advisable by the Company in order to comply with such securities
              law or other restrictions.

       12.5   PLAN AMENDMENT, MODIFICATION AND TERMINATION.  The Board may
              suspend or terminate the Plan or any portion thereof at any time,
              and may amend the Plan from time to time in such respects as the
              Board may deem advisable in order that Shares issued or to be
              issued under the Plan will conform to any change in applicable
              laws or regulations or in any other respect the Board may deem to
              be in the best interests of the Company; provided, however, that
              no amendments to the Plan will be effective without approval of
              the shareholders of the Company if shareholder approval of the
              amendment is then required pursuant to Section 422 of the Code or
              the rules of any stock exchange or NASDAQ or similar regulatory
              body.  No termination, suspension or amendment of the Plan may
              adversely affect any outstanding Shares without the consent of the
              affected Participant; provided, however, that this sentence will
              not impair the right of the Committee to take whatever action it
              deems appropriate in accordance with the terms and conditions of
              the Plan.

       12.6   GOVERNING LAW.  The validity, construction, interpretation,
              administration and effect of the Plan and any rules, regulations
              and actions relating to the Plan will be governed by and construed
              exclusively in accordance with the laws of the State of Minnesota,
              notwithstanding the conflicts of laws principles of any
              jurisdictions.

       12.7   SUCCESSORS AND ASSIGNS.  The Plan will be binding upon and inure
              to the benefit of the successors and permitted assigns of the
              Company and the Participants.

                                          18



                                      EXHIBIT A
                             FORM OF SECURED DEMAND NOTE




                                      EXHIBIT B
                        FORM OF PLEDGE AND CUSTODY AGREEMENT



                                     EXHIBIT C
                      VESTING SCHEDULE FOR COINVESTMENT SHARES

                     (ONLY ATTACHED TO SUBSCRIPTION AGREEMENT)

On the Purchase Date or Closing Date, as applicable, thirty-five percent (35%)
of the Coinvestment Shares purchased by the Participant shall immediately vest,
and the vesting schedule for the Coinvestment shall be as follows:



- --------------------------------------------------------------------------------
                                          PERCENTAGE OF COINVESTMENT SHARES
              VESTING DATE                  VESTED AS OF THE VESTING DATE*
              ------------                ---------------------------------
- --------------------------------------------------------------------------------
                                      
 One Year from Purchase Date or          35% of the Coinvestment Shares
 Closing Date, as applicable             purchased by the Participant

- --------------------------------------------------------------------------------
 Two Years from Purchase Date or         35% of the Coinvestment Shares
 Closing Date, as applicable             purchased by the Participant

- --------------------------------------------------------------------------------
 Three Years from Purchase Date or       57% of the Coinvestment Shares
 Closing Date, as applicable             purchased by the Participant

- --------------------------------------------------------------------------------
 Four Years from Purchase Date or        79% of the Coinvestment Shares
 Closing Date, as applicable             purchased by the Participant

- --------------------------------------------------------------------------------
 Five Years from Purchase Date or        100% of Coinvestment Shares
 Closing Date, as applicable             purchased by the Participant

- --------------------------------------------------------------------------------


* In the event that the vesting of any Coinvestment Shares results in a
fractional Coinvestment Share, such fractional Coinvestment Share shall be
rounded up to the nearest whole Coinvestment Share.

EX-10.8

                                     FORM OF
                            PARTICIPATION AGREEMENT

                                  (ALL AWARDS)

       This Participation Agreement (the "AGREEMENT") is made and entered into
as of January 28, 2000 by and between Merrill Corporation, a Minnesota
corporation ("MERRILL") and _____________, an individual residing at
______________ (the "EMPLOYEE").

                                W I T N E S S E T H

       WHEREAS, on December 20, 1999, the Board of Directors and shareholders of
Merrill adopted the 1999 Merrill Corporation Stock Option Plan (the "OPTION
PLAN") authorizing the Compensation Committee of the Board of Directors of
Merrill to grant stock options to employees and independent contractors of
Merrill or any subsidiary of Merrill pursuant to the terms and conditions of the
Option Plan.

       WHEREAS, on December 20, 1999, the Board of Directors and shareholders of
Merrill adopted the 1999 Merrill Corporation Direct Investment Plan (the "DI
PLAN") authorizing the Compensation Committee of the Board of Directors of
Merrill to sell shares of Merrill's voting class B common stock, $0.01 par value
(the "COMMON STOCK") to employees and independent contractors of Merrill or any
subsidiary of Merrill pursuant to the terms and conditions of the DI Plan.

       WHEREAS, on or about December 21, 1999, the Employee received an award
letter (the "ELIGIBILITY NOTICE") from Merrill informing the Employee that
Merrill was offering the Employee (1) the opportunity to purchase Coinvestment
Shares (as defined in the DI Plan) pursuant to the terms and conditions of the
DI Plan, (2) the opportunity to purchase Reinvestment Shares (as defined in the
DI Plan) pursuant to the terms and conditions of the DI Plan and (3) an option
to purchase shares of  Common Stock.

       WHEREAS, the Employee must execute and deliver this Agreement as a
condition to participating in the DI Plan and Option Plan and receive the awards
the Employee was granted in the Eligibility Notice.

       WHEREAS, all capitalized terms not otherwise defined in this Agreement or
the attachments to this Agreement shall have such meanings given such terms in
the Option Plan and DI Plan, respectively.

       NOW, THEREFORE, in consideration of the covenants and agreements herein
contained, the parties hereto hereby agree as follows:

1.     STOCK OPTION GRANT.

       1.1.   As of the date of this Agreement ("DATE OF GRANT") Merrill hereby
       grants to the Employee the right, privilege, and option (the "OPTION") to
       purchase ____________ shares (the "OPTION SHARES") of Common Stock,
       according to the terms and subject to the conditions set forth in this
       Agreement, the "Terms and Conditions of Non-Statutory Stock Option
       Awards" attached to this Agreement and the Option Plan.  The Option is
       NOT intended to be an "incentive stock option," as that term is used in
       Section 422 of the Internal Revenue Code of 1986, as amended (the
       "CODE").

       1.2.   The per share price to be paid by Employee in the event of an
       exercise of the Option will be $22.00 per share.



       1.3.   The Option will become exercisable with respect to fifty percent
       (50%) of the Option Shares in accordance with the "Time Vesting Option
       Schedule" attached to this Agreement, and the remaining fifty percent
       (50%) of the Option Shares will become exercisable in accordance with the
       "Performance Vesting Option Schedule" attached to this Agreement.

       1.4.   The Employee hereby acknowledges and agrees that by executing this
       Agreement, the Employee will be bound by the terms and conditions set
       forth in the "Terms and Conditions of Non-Statutory Stock Options"
       attached to this Agreement.

2.     STOCK PURCHASE GRANT.

       2.1.   The Employee hereby subscribes to purchase _____________
       Coinvestment Shares (the "COINVESTMENT SHARES") for a purchase price of
       $22.00 per share and upon the terms and conditions set forth in the
       "Terms and Conditions of Purchase of Common Stock" attached to this
       Agreement.  As payment for the Coinvestment Shares, the Employee:

              (a)    Has delivered to Merrill along with the executed copy of
              this Agreement a check or other cash payment payable to "Merrill
              Corporation" in an amount equal to thirty-five percent (35%) of
              the total purchase price for the Coinvestment Shares (or
              $__________).

              (b)    Promises to pay to the order of Merrill, its successors and
              assigns, at its office at One Merrill Circle, St. Paul, Minnesota
              55108, or such other place as the holder hereof may designate in
              writing from time to time, an amount equal to sixty-five percent
              (65%) of the total purchase price for the Coinvestment Shares, or
              the principal sum of $______________ in lawful money of the United
              States (the "PURCHASE LOAN"), together with interest from the date
              hereof on the unpaid balance of the Purchase Loan at a fixed rate
              of eight percent (8%) per annum (the "INTEREST RATE"). Interest on
              the Purchase Loan shall be computed on the actual number of days
              elapsed and a 365-day year. Interest will not be payable during
              the term of the Purchase Loan pursuant to the "Terms and
              Conditions of the Nonrecourse Purchase Loan" attached to this
              Agreement, but will be paid on the Maturity Date (as defined in
              the "Terms and Conditions of the Nonrecourse Purchase Loan"
              attached to this Agreement).  All accrued but unpaid interest on
              the Purchase Loan will be in addition to the principal balance of
              the Purchase Loan.  The Employee hereby acknowledges and agrees
              that by executing this Agreement, the Employee will be bound by
              the terms and conditions set forth in the "Terms and Conditions of
              the Nonrecourse Purchase Loan" attached to this Agreement.

              (c)    Grants to Merrill, as collateral for the Purchase Loan, a
              security interest in the Coinvestment Shares pursuant to the terms
              and conditions set forth in the "Terms and Conditions of the
              Pledge and Custody Agreement" attached to this Agreement.  The
              Employee hereby acknowledges and agrees that by executing this
              Agreement, the Employee will be bound by the terms and conditions
              set forth in the "Terms and Conditions of the Pledge and Custody
              Agreement" attached to this Agreement.

       2.2.   The Employee hereby subscribes to purchase _____________
       Reinvestment Shares (the "REINVESTMENT SHARES") for a purchase price of
       $22.00 per share and upon the terms and conditions set forth in the
       "Terms and Conditions of Purchase of Common Stock" attached to this
       Agreement.  A check or other cash payment payable to "Merrill
       Corporation" in the amount of $___________ for the Reinvestment Shares is
       also delivered to Merrill with an executed copy of this Agreement.

                                       2


       2.3.   All Coinvestment Shares purchased by the Employee shall vest in
       accordance with the "Coinvestment Shares Vesting Schedule" attached to
       this Agreement.

       2.4.   The Employee acknowledges that Merrill is relying upon the
       accuracy and completeness of the representations contained in this
       Agreement and in the "Terms and Conditions of Purchase of Common Stock"
       attached to this Agreement in complying with its obligations under
       applicable securities laws and that the purchase of the Reinvestment
       Shares and Coinvestment Shares may be rejected for any reason.

       2.5.   The Employee represents and warrants to Merrill that the Employee
       is a bona fide resident of the State listed as Employee's residence in
       the introductory paragraph herein.

       2.6.   The Reinvestment Shares and Coinvestment Shares purchased by the
       Employee will be held in such Employee's individual name.

3.     INVESTORS' AGREEMENT.

       3.1.   In connection with the Employee's purchase of Common Stock upon
       the exercise of the Option pursuant to the Option Plan or upon the
       purchase of Coinvestment Shares and/or Reinvestment Shares pursuant to
       the DI Plan, the Employee hereby acknowledges and agrees that Employee
       has received and reviewed a copy of the Investors' Agreement, dated
       November 23, 1999, by and among Merrill and its shareholders (the
       "INVESTORS' AGREEMENT").  By execution of this Agreement, the Employee
       hereby acknowledges and agrees to be bound by the terms and conditions of
       the Investors' Agreement, as amended from time to time, in the same
       manner and to the same effect as if the Employee were an original party
       thereto, including, without limitation, acknowledgment that the Employee
       shall be considered a "Co-invest Management Stockholder" or "Other
       Stockholder" as such terms are defined in the Investors' Agreement.  The
       other shareholders of Merrill, and the Board of Directors of Merrill,
       shall be entitled to rely on this Agreement in the same manner as if a
       counterpart of the Investors' Agreement were executed by the Employee,
       and Merrill's Board of Directors may utilize this Agreement as evidence
       of the signature of the Employee and attach the same to a copy of the
       Investors' Agreement, with this Agreement having the same validity, force
       and effect as if the Investor's Agreement and any amendments thereto had
       been executed by the Employee.

       3.2.   Upon the exercise of the Option and pursuant to the Option Plan,
       unless otherwise notified by the Company, the Employee shall be deemed an
       "other" Stockholder within the meaning of the Investors' Agreement as of
       12:01 a.m., January 28, 2000 (the "EFFECTIVE DATE"), the Date of Grant of
       the Option to the Employee for all purposes of the Investors' Agreement.

       3.3.   Upon the issuance of the Reinvestment Shares and/or Coinvestment
       Shares and pursuant to the DI Plan, unless otherwise notified by the
       Company, the Employee shall be deemed an "other" Stockholder within the
       meaning of the Investors' Agreement as of the Effective Date for the
       issuance of Reinvestment Shares and/or Coinvestment Shares to the
       Employee for all purposes of the Investors' Agreement.

       3.4.   Merrill shall notify the Employee promptly if the Employee's
       status for purposes of the Investors' Agreement changes for any reason
       pursuant to the terms and conditions of the Option Plan and DI Plan,
       respectively.

                                       3


4.     CONFIDENTIALITY AND NONCOMPETE AGREEMENT.

       4.1.   Upon the execution of this Agreement, the Employee hereby
       acknowledges and agrees to be bound by the terms and conditions of the
       "Confidentiality and Noncompete Provisions" attached to this Agreement.

5.     SECTION 83(b) ELECTION.

       5.1.   The Employee acknowledges and agrees that the Employee (i) has
       reviewed with the Employee's own tax advisors the federal, state, local
       and foreign tax consequences of the purchase of the Shares and the other
       transactions contemplated by the DI Plan, and (ii) is relying solely on
       such advisors and not on any statements or representations of Merrill or
       any of its agents.  Merrill strongly encourages the Employee to consult
       with such Employee's own tax advisor with respect to the making of an
       election pursuant to Section 83(b) of the Code.   THE EMPLOYEE
       ACKNOWLEDGES THAT IT IS THE EMPLOYEE'S SOLE RESPONSIBILITY AND NOT
       MERRILL'S RESPONSIBILITY TO FILE SUCH ELECTION ON A TIMELY BASIS, EVEN IF
       THE EMPLOYEE REQUESTS THAT MERRILL OR ITS REPRESENTATIVES MAKE SUCH
       FILING ON BEHALF OF THE EMPLOYEE.

       5.2.   Merrill has attached to this Agreement an 83(b) Election Form that
       may be used by the Employee in the event the Employee decides to make
       such an election.  Any such election, if made, must be filed with the
       Internal Revenue Service within thirty (30) days of the purchase of such
       Shares.

6.     TRUTH-IN-LENDING DISCLOSURE.

       6.1.   If Employee's Purchase Loan is less than or equal to $25,000, the
       Employee acknowledges and agrees that by executing this Agreement, the
       Employee has received and reviewed the "Truth-in-Lending Disclosure" and
       the related "Itemization of Amount Financed" attached to this Agreement
       prior to the Employee's execution of this Agreement.

7.     MISCELLANEOUS.

       7.1.   EMPLOYMENT OR SERVICE.  Nothing in this Agreement or any
       attachments hereto will interfere with or limit in any way the right of
       Merrill or any Subsidiary to terminate the employment or other service of
       the Employee at any time, nor confer upon the Employee any right to
       continue in the employ or other service of Merrill or any Subsidiary at
       any particular position or rate of pay or for any particular period of
       time.  Furthermore, if the Employee was an at-will employee prior to
       executing this Agreement, the Employee shall be an at-will employee after
       executing this Agreement, and if the Employee was bound by a written
       employment agreement prior to executing this Agreement, the Employee will
       continue to be bound by such agreement after executing this Agreement;
       provided, however, that such written agreement shall be subject to the
       terms and conditions in this Agreement and shall be deemed to be amended
       and superseded with respect to the subject matter contained in this
       Agreement.

       7.2.   BINDING EFFECT.  This Agreement, including all the attachments
       hereto, will be binding upon the heirs, executors, administrators and
       successors of the parties to this Agreement.

       7.3.   GOVERNING LAW.  This Agreement, including all the attachments
       hereto, and all rights and obligations under it will be construed in
       accordance with the Option Plan and the DI Plan,

                                       4


       respectively, and governed by the laws of the State of Minnesota,
       without regard to conflicts of laws provisions.  Any legal proceeding
       related to this Agreement, including all the attachments hereto, will
       be brought in an appropriate Minnesota court, and the parties to this
       Agreement  consent to the exclusive jurisdiction of the court for this
       purpose.

       7.4.   ENTIRE AGREEMENT.  This Agreement, including all attachments
       hereto, the Option Plan and the DI Plan set forth the entire agreement
       and understanding of the parties to this Agreement with respect to the
       grant and exercise of the Option, the administration of the Option Plan,
       the purchase of Reinvestment Shares and/or Coinvestment Shares, the
       administration of the DI Plan, and supersede all prior agreements,
       arrangements, plans and understandings relating to the foregoing.

       7.5.   AMENDMENT AND WAIVER.  Other than as provided in this Agreement,
       including all attachments hereto, the Option Plan or the DI Plan, none of
       the terms or provisions of this Agreement, including all attachment to
       this Agreement may be amended, waived, supplemented,  canceled or
       otherwise modified only by a written instrument executed by the parties
       to this Agreement or, in the case of a waiver, by the party waiving
       compliance.

       7.6.     COUNTERPARTS.  This Agreement may be executed in several
       counterparts, each of which shall constitute an original, but all of
       which, when taken together, shall constitute but one agreement.

                                       5


       IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first set forth above.

                                         MERRILL CORPORATION:

                                         By
                                           --------------------------------

                                         Its
                                           --------------------------------


                                         EMPLOYEE:

                                         ----------------------------------
                                         Signature

                                         ----------------------------------
                                         Name Typed or Printed

                                         ----------------------------------
                                         Address

                                         ----------------------------------
                                         City, State and Zip Code

                                         ----------------------------------
                                         Social Security Number


                        *  *  *  *  *  *  *  *


Upon execution of this Agreement the Employee acknowledges having been delivered
and reviewed a copy of the Option Plan, DI Plan, a Summary Plan Description for
each of the Option Plan and the DI Plan, the Investors' Agreement, the
Information Statement and all attachments to this Agreement.

                                      6


                          TIME VESTING OPTION SCHEDULE

The following table sets forth the initial dates of exercisability of each
installment and the percentage of Option Shares as to which this Time Vesting
Option will become exercisable on such dates:




- ------------------------------------------------------- -----------------------------------------------------

                                                                    PERCENTAGE OF OPTION SHARES
                DATE OF EXERCISABILITY                                 AVAILABLE FOR EXERCISE

- ------------------------------------------------------- -----------------------------------------------------
                                                     

             One year from Date of Grant                                0% of Option Shares

- ------------------------------------------------------- -----------------------------------------------------

             Two years from Date of Grant                               0% of Option Shares

- ------------------------------------------------------- -----------------------------------------------------

            Three years from Date of Grant                              25% of Option Shares

- ------------------------------------------------------- -----------------------------------------------------

            Four years from Date of Grant                               50% of Option Shares
- ------------------------------------------------------- -----------------------------------------------------

            Five years from Date of Grant                               75% of Option Shares

- ------------------------------------------------------- -----------------------------------------------------

             Six years from Date of Grant                              100% of Option Shares

- ------------------------------------------------------- -----------------------------------------------------



In no event will this Time Vesting Option be exercisable after, and this Time
Vesting Option will become void and expire as to all unexercised Option Shares
at, 5:00 p.m. (St. Paul, Minnesota time) on December 20, 2009 (the "TIME OF
TERMINATION").

If a DLJMB Liquidation Event (as defined below) occurs, then, unless otherwise
provided by the Committee in its sole discretion, all unvested Time Vesting
Options will become immediately vested in full.

For purposes of this Time Vesting Option Schedule, the following terms shall
have the meanings set forth below:

1.   "DLJMB ENTITIES" shall mean DLJ Merchant Banking Partners II, L.P. and
     all its affiliated entities as described in the Investors' Agreement.

2.   "DLJMB LIQUIDATION EVENT" means, except for transfers to Permitted
     Transferees (as defined in the Investors' Agreement), (i) a sale or other
     transfer by the DLJMB Entities of 90% or more of its shares of common
     equity in Merrill (including all common equity originally purchased by
     the DLJMB Entities and any additional common equity purchased by the
     DLJMB Entities thereafter, whether voting, Class B or any other class of
     common equity created by Merrill)  to one or more persons or entities (in
     one transaction or in a series of related transactions) other than in
     connection with a public offering of Merrill's common equity, (ii) the
     sale, lease, exchange or

                                       7


     other transfer, directly or indirectly, of substantially all of the
     assets of Merrill (in one transaction or in a series of related
     transactions) to a person or entity that is not controlled by Merrill,
     or (iii) a merger or consolidation to which Merrill is a party if the
     shareholders of Merrill immediately prior to the effective date of such
     merger or consolidation do not have "beneficial ownership" (as defined
     in Rule 13d-3 under the Exchange Act) immediately following the
     effective date of such merger or consolidation of more than 50% of the
     combined voting power of the surviving corporation's outstanding
     securities ordinarily having the right to vote at elections of directors.

                                       8



                      PERFORMANCE VESTING OPTION SCHEDULE

This Performance Vesting Option will become vested and exercisable on the dates
and in the proportions indicated in Table 1 below if Merrill attains the Target
Implied Common Equity Value (as defined below) for the relevant fiscal years as
indicated in Table 1 below, but in any event will vest in full eight (8) years
from the Date of Grant. If a DLJMB Liquidation Event (as defined below) of the
DLJMB Entities (as defined below) occurs prior to eight (8) years from the Date
of Grant, however, and such Liquidation Event causes the DLJMB Entities to
realize a DLJMB IRR (as defined below) of at least 25%, the portion of the
Performance Vesting Option which has not previously become vested and
exercisable at the time of the DLJMB Liquidation Event will become vested and
exercisable based upon the level of the DLJMB IRR as indicated in Table 2.

For purposes of this Performance Vesting Option Schedule, the following terms
shall have the meanings set forth below:

1.   "DLJMB ENTITIES" shall mean DLJ Merchant Banking Partners II, L.P. and
     all its affiliated entities as described in the Investors' Agreement.

2.   "DLJMB IRR" means, as to the DLJMB Entities, the annual discount rate at
     which the net present value of (i) all investments and capital
     contributions by the DLJMB Entities in shares of Merrill's common equity
     and (ii) all distributions from Merrill to the DLJMB Entities and other
     amounts realized (whether from Merrill or third parties, including
     amounts realized upon a DLJMB Liquidation Event) by the DLJMB Entities
     with respect to the DLJMB Entities' shares of Merrill's common equity,
     equals zero.  The DLJMB IRR calculation shall be determined from and
     including the date upon which each investment and capital contribution is
     made by the DLJMB Entities to and including the date any distribution is
     made or other amount is realized on account thereof, calculated on the
     actual number of days elapsed over a 365 or 366-day year, as the case may
     be.  All calculations of the DLJMB IRR shall be determined on a pro-forma
     basis reflecting the Option Shares that have become vested prior to a
     DLJMB Liquidation Event and the Option Shares becoming vested as of the
     DLJMB Liquidation Event.

3.   "DLJMB LIQUIDATION EVENT" means, except for transfers to Permitted
     Transferees (as defined in the Investors' Agreement), (i) a sale or other
     transfer by the DLJMB Entities of 90% or more of its shares of common
     equity in Merrill (including all common equity originally purchased by
     the DLJMB Entities and any additional common equity purchased by the
     DLJMB Entities thereafter, whether voting, Class B or any other class of
     common equity created by Merrill)  to one or more persons or entities (in
     one transaction or in a series of related transactions) other than in
     connection with a public offering of Merrill's common equity, (ii) the
     sale, lease, exchange or other transfer, directly or indirectly, of
     substantially all of the assets of Merrill (in one transaction or in a
     series of related transactions) to a person or entity that is not
     controlled by Merrill, or (iii) a merger or consolidation to which
     Merrill is a party if the shareholders of Merrill immediately prior to
     the effective date of such merger or consolidation do not have
     "beneficial ownership" (as defined in Rule 13d-3 under the Exchange Act)
     immediately following the effective date of such merger or consolidation
     of more than 50% of the combined voting power of the surviving
     corporation's outstanding securities ordinarily having the right to vote
     at elections of directors.

4.   "ENTERPRISE VALUE"  means a value equal to six times the Pro-Forma EBITDA
     as shown on Merrill's consolidated statement of operations for its most
     recent fiscal year end.

                                       9


5.   "PRO-FORMA EBITDA" means earnings before interest, taxes, depreciation,
     amortization and non-cash expense as computed using generally accepted
     accounting principles on a pro-forma basis as allowed by Regulation S-X
     of the Securities Act.

6.   "TARGET IMPLIED COMMON EQUITY VALUE" shall mean a value calculated using
     the following formula: Enterprise Value - Total Debt -  Total Preferred
     Stock + Total Cash.

7.   "TOTAL CASH" means the total amount of cash and cash equivalents shown on
     Merrill's consolidated balance sheet as of its most recent fiscal year
     end.

8.   "TOTAL DEBT" means any indebtedness of Merrill in respect of borrowed
     money or evidenced by bonds, notes, debentures or similar instruments or
     letters of credit (or reimbursement agreements in respect thereof) or
     banker's acceptances, except any such balance that constitutes an accrued
     expense, trade payable or customer contract advance, if and to the extent
     that any of the foregoing (other than letters of credit) would appear as
     a liability on Merrill's consolidated balance sheet as of its most recent
     fiscal year end.

9.   "TOTAL PREFERRED STOCK" means the total amount of the liquidation
     preference on all of Merrill's issued and outstanding preferred stock as
     of its most recent fiscal year end.



                                                      TABLE 1


- ------------------------------------- ----------------------------------- -----------------------------------

         FISCAL YEAR ENDED                 TARGET IMPLIED COMMON              PERCENTAGE OF OPTION
            JANUARY 31,*                      EQUITY VALUE                    SHARES AVAILABLE FOR
                                                                                    EXERCISE**
- ------------------------------------- ----------------------------------- -----------------------------------
                                                                    
                2001                             $150,000,000                    20% of Option Shares

- ------------------------------------- ----------------------------------- -----------------------------------

                2002                             $220,000,000                    40% of Option Shares

- ------------------------------------- ----------------------------------- -----------------------------------

                2003                             $330,000,000                    60% of Option Shares

- ------------------------------------- ----------------------------------- -----------------------------------

                2004                             $450,000,000                    80% of Option Shares

- ------------------------------------- ----------------------------------- -----------------------------------

                2005                             $520,000,000                   100% of Option Shares

- ------------------------------------- ----------------------------------- -----------------------------------


* The percentage of Option Shares available for exercise shall vest on the last
day of the Fiscal Year indicated above.

** All such vesting shall be cumulative, i.e., the percentage set forth for each
Fiscal Year shall be vested as of the end of such Fiscal Year if the Target
Implied Common Equity Value for such Fiscal Year is achieved as of such date,
regardless of whether the Target Implied Common Equity Values have been achieved
in any previous year.

- --------------------------------------------------------------------------------

                                       10


                                      TABLE 2



- ------------------------------------------------------- -----------------------------------------------------
                      DLJMB IRR                                 PERCENTAGE OF UNVESTED CLIFF VESTING
                                                                 SHARES AS TO WHICH THE PERFORMANCE
                                                                   VESTING OPTION BECOMES VESTED
                                                                     ON DLJMB LIQUIDATION EVENT

- ------------------------------------------------------- -----------------------------------------------------
                                                     
                    40% or greater                                              100%

- ------------------------------------------------------- -----------------------------------------------------

                     35.0 - 39.9%                                               75%

- ------------------------------------------------------- -----------------------------------------------------

                     30.0 - 34.9%                                               50%

- ------------------------------------------------------- -----------------------------------------------------

                     25.0 - 29.9%                                               25%

- ------------------------------------------------------- -----------------------------------------------------

                    Less than 25%                                                0
- ------------------------------------------------------- -----------------------------------------------------


This Performance Vesting Option will not be exercisable after, and will become
void and expire as to all unexercised Option Shares at, 5:00 p.m. (St. Paul,
Minnesota time), on the earlier of (i) December 20, 2009 or (ii) the day
immediately following the completion of a DLJMB Liquidation Event (the "TIME OF
TERMINATION").

                                       11


                                TERMS AND CONDITIONS
                                         OF
                         NON-STATUTORY STOCK OPTION AWARDS


Upon execution of the Participation Agreement, the Employee hereby
acknowledges and agrees to be bound by the following terms and conditions
relating to the Option:

1.   DURATION OF OPTION AND TIME OF EXERCISE.

     1.1. TERMINATION OF EMPLOYMENT OR OTHER SERVICE.

          (a)  TERMINATION FOR CAUSE.  In the event the Employee's employment
          or other service with Merrill and all Subsidiaries is terminated by
          Merrill or any Subsidiary for Cause, all rights of the Employee
          under the Option Plan with respect to the Option and the
          Participation Agreement will immediately terminate without notice
          of any kind, and the Option, whether exercisable or not on the date
          of termination, will immediately terminate without notice of any
          kind, and Merrill will also have the right to repurchase (the
          "REPURCHASE RIGHT") from the Employee all shares of Common Stock
          previously acquired upon exercise of the Option at a price equal to
          the exercise price paid by the Employee to acquire such shares of
          Common Stock in the manner set forth in Section 2 below.

          (b)  TERMINATION FOR REASONS OTHER THAN CAUSE.  In the event the
          Employee's employment or other service with Merrill and all
          Subsidiaries is terminated other than for Cause by reason of
          voluntary resignation, death, Disability or Retirement, the Option
          will remain exercisable, to the extent exercisable as of the date
          of such termination, for a period of one year following the date
          the Employee's employment or other service is terminated, and any
          portion of the Option which is not exercisable as of the date of
          such termination will immediately terminate without notice of any
          kind.

          (c)  PARTIAL TERMINATIONS.  In the event of a Partial Termination,
          the Committee shall have the right in its sole discretion to modify
          the terms of any unvested Options then held by the Employee at the
          time of the Partial Termination, including, without limitation, the
          right to immediately terminate without notice of any kind all
          rights the Employee has in any unvested Options then held by the
          Employee at the time of the Partial Termination.

2.   EXERCISABILITY OF REPURCHASE RIGHT.

     If Merrill elects to exercise its Repurchase Right, Merrill shall give the
Employee written notice of its intent to exercise its Repurchase Right (the
"NOTICE OF REPURCHASE") within sixty (60) days of such Employee's termination of
employment or other service. The Notice of Repurchase shall specify (i) the
number of shares of Common Stock Merrill intends to repurchase, (ii) the
applicable purchase price for such shares of Common Stock, and (iii) the date
Merrill expects to purchase such shares of Common Stock from the Employee which
date shall be no later than thirty (30) days following the Valuation Date in the
fiscal year immediately following the fiscal year in which the Employee's
employment or other service is terminated (the "REPURCHASE DATE"). On or before
the Repurchase Date, the Employee shall deliver to Merrill the stock
certificates representing the shares of Common Stock being purchased by Merrill,
properly endorsed for transfer. By such delivery of such certificates, the
Employee warrants that (i) the Employee has good title to, the right to
possession of, and the right to sell, the shares of Common Stock, (ii) such
shares of Common Stock are free and clear of all pledges, liens, encumbrances,
charges,

                                       12


proxies, restrictions, options, transfers and other adverse claims, except
such as have been imposed by the Option Plan or the Investors' Agreement, and
except such restrictions on transfer as may be imposed by federal or state
securities laws, and (iii) the Employee shall hold harmless Merrill from all
costs, expenses and fees incurred in defending title and right to possession.
On the Repurchase Date, Merrill shall pay to the Employee the total purchase
price for the shares of Common Stock to be purchased by Merrill.
Notwithstanding anything to the contrary in the Option Plan, however, Merrill
shall only be required to pay for such shares of Common Stock as rapidly as
permissible without violating any loan covenants or other contractual
restrictions applicable to, and binding upon, Merrill, and any amounts not
paid to the Employee on the Repurchase Date will bear interest at a fixed
rate of interest equal to eight percent (8%) per annum; provided, however,
that such interest rate shall not exceed the rate permitted by applicable
law. Merrill shall only be required to repurchase shares of Common Stock
pursuant to this Section 2 to the extent that such repurchase does not
violate any applicable laws.

3.   MANNER OF OPTION EXERCISE.

     3.1. NOTICE.  The Option may be exercised by the Employee in whole or in
     part from time to time, subject to the conditions contained in the
     Option Plan and in the Participation Agreement, by delivery, in person,
     by facsimile or electronic transmission (with written confirmation via
     the mail to follow such electronic transmission) or through the mail, to
     Merrill at its principal executive office in St. Paul, Minnesota
     (Attention: Secretary), of a written notice of exercise. Such notice
     must be in a form satisfactory to the Committee, must identify the
     Option, must specify the number of Option Shares with respect to which
     the Option is being exercised, and must be signed by the person or
     persons so exercising the Option.  Such notice must be accompanied by
     payment in full of the total purchase price of the Option Shares
     purchased.  In the event that the Option is being exercised, as provided
     by the Option Plan and the Participation Agreement, by any person or
     persons other than the Employee, the notice must be accompanied by
     appropriate proof of right of such person or persons to exercise the
     Option.  As soon as practicable after the effective exercise of the
     Option, the Employee will be recorded on the stock transfer books of
     Merrill as the owner of the Option Shares purchased, and Merrill will
     deliver to the Employee one or more duly issued stock certificates
     evidencing such ownership.

     3.2. PAYMENT.  At the time of exercise of the Option, the Employee must
     pay the total purchase price of the Option Shares to be purchased
     entirely in cash (including a check, bank draft or money order, payable
     to the order of Merrill); provided, however, that the Committee, in its
     sole discretion, may allow such payment to be made, in whole or in part,
     by tender of a promissory note (on terms acceptable to the Committee in
     its sole discretion) or a Broker Exercise Notice or Previously Acquired
     Shares (as such terms are defined in the Option Plan), or by a
     combination of such methods.  In the event the Employee is permitted to
     pay the total purchase price of the Option in whole or in part with
     Previously Acquired Shares, the value of such shares will be equal to
     their Fair Market Value on the date of exercise of the Option.

4.   DLJMB LIQUIDATION EVENT.

     4.1. ACCELERATION OF VESTING.  Without limiting the authority of the
     Committee under the Option Plan, if a DLJ Liquidation Event (as defined
     in the Option Plan) occurs, then, unless otherwise provided by the
     Committee in its sole discretion all unvested Options will become
     immediately vested in full.

     4.2. LIMITATION ON PAYMENTS IN CONNECTION WITH A DLJMB LIQUIDATION
     EVENT. Notwithstanding anything in Section 4.1 above to the contrary,
     if, with respect to an Employee, the acceleration of the vesting of
     Options as provided in Section 4.1 (which acceleration or

                                       13



     payment could be deemed a "payment" within the meaning of Section
     280G(b)(2) of the Code), together with any other "payments" that such
     Employee has the right to receive from Merrill or any corp oration that
     is a member of an "affiliated group" (as defined in Section 1504(a) of
     the Code without regard to Section 1504(b) of the Code) of which Merrill
     is a member, would constitute a "parachute payment" (as defined in
     Section 280G(b)(2) of the Code), then the "payments" to such Employee
     pursuant to Section 4.1 will be reduced to the largest amount as will
     result in no portion of such "payments" being subject to the excise tax
     imposed by Section 4999 of the Code; provided, however, that if an
     Employee is subject to a separate agreement with Merrill or a Subsidiary
     that expressly addresses the potential application of Sections 280G or
     4999 of the Code (including, without limitation, that "payments" under
     such agreement or otherwise will be reduced, that the Employee will have
     the discretion to determine which "payments" will be reduced, that such
     "payments" will not be reduced or that such "payments" will be "grossed
     up" for tax purposes), then this Section 4.2 will not apply, and any
     "payments" to the Employee pursuant to Section 4.1 will be treated as
     "payments" arising under such separate agreement.

5.   RIGHTS OF EMPLOYEE; TRANSFERABILITY.

     5.1. EMPLOYMENT OR SERVICE.  Nothing in the Participation Agreement or
     any attachments thereto will interfere with or limit in any way the
     right of Merrill or any Subsidiary to terminate the employment or other
     service of the Employee at any time, nor confer upon the Employee any
     right to continue in the employ or other service of Merrill or any
     Subsidiary at any particular position or rate of pay or for any
     particular period of time.

     5.2. RIGHTS AS A SHAREHOLDER.  The Employee will have no rights as a
     shareholder unless and until all conditions to the effective exercise of
     the Option (including, without limitation, the conditions set forth in
     Sections 3 and 6 of this attachment to the Participation Agreement) have
     been satisfied and the Employee has become the holder of record of such
     shares.  No adjustment will be made for dividends or distributions with
     respect to the Option as to which there is a record date preceding the
     date the Employee becomes the holder of record of such shares, except as
     may otherwise be provided in the Option Plan or determined by the
     Committee in its sole discretion.

     5.3. RESTRICTIONS ON TRANSFER. Unless approved by the Committee in its
     sole discretion, no right or interest of any Employee in an Option prior
     to the exercise of such Option will be assignable or transferable, or
     subjected to any lien, during the lifetime of the Employee, either
     voluntarily or involuntarily, directly or indirectly, by operation of
     law or otherwise; provided, however, once an Employee exercises an
     Option all shares of Common Stock issued upon exercise of the Option
     will be subject to the transfer restrictions and other provisions set
     forth in the Investors' Agreement.

6.   RESTRICTIONS REGARDING EMPLOYMENT OR SERVICE.

     6.1. EFFECT OF ADVERSE ACTION.  Notwithstanding anything in the Option
     Plan, the Participation Agreement or any attachments thereto and all
     attachments thereto to the contrary, in the event that an Employee takes
     an Adverse Action with respect to Merrill or any Subsidiary (1) prior to
     such Employee's termination of employment or other service with Merrill
     and all its Subsidiaries or (2) during the period ending twelve (12)
     months following the date of the Employee's termination of employment or
     other service with Merrill and all Subsidiaries without Cause, the
     Committee in its sole discretion will have the authority to terminate
     immediately all rights of the Employee under the Option Plan and any
     agreement evidencing Options then held by the Employee without notice of
     any kind.  In addition, to the extent that the Employee takes such
     Adverse Action during

                                       14


     the period beginning twelve (12) months prior to, and ending twelve (12)
     months following, such date of termination of employment or other
     service, the Committee in its sole discretion will have the authority to
     rescind the exercise of any Options of the Employee that were exercised
     during such period and to require the Participant to pay to Merrill,
     within ten (10) days of receipt from Merrill of notice of such
     rescission, the amount of any gain realized as a result of such
     rescinded exercise.  Such payment will be made in cash (including check,
     bank draft or money order) or, with the Committee's consent, shares of
     Common Stock with a Fair Market Value on the date of payment equal to
     the amount of such payment.  Merrill will be entitled to withhold and
     deduct from future wages of the Employee (or from other amounts that may
     be due and owing to the Employee from Merrill or a Subsidiary) or make
     other arrangements for the collection of all amounts necessary to
     satisfy such payment obligations.

     6.2. DEFINITION OF ADVERSE ACTION.  An "ADVERSE ACTION" will mean any
     action by an Employee that the Committee, in its sole discretion,
     determines to be adverse to the interests of Merrill or any Subsidiary,
     including, without limitation, (i) disclosing confidential information
     of Merrill or any Subsidiary to any person not authorized by Merrill or
     Subsidiary to receive it, (ii) engaging, directly or indirectly, in any
     commercial activity that in the judgment of the Committee competes with
     the business of Merrill or any Subsidiary or (iii) interfering with the
     relationships of Merrill or any Subsidiary and their respective
     employees and customers.

7.   SECURITIES LAW AND OTHER RESTRICTIONS.

     Notwithstanding any other provision of the Option Plan, the Participation
Agreement or any attachments thereto and all attachments thereto, Merrill will
not be required to issue, and the Employee may not sell, assign, transfer or
otherwise dispose of, any Option Shares, unless (i) there is in effect with
respect to the Option Shares a registration statement under the Securities Act
of 1933, as amended, and any applicable state or foreign securities laws or an
exemption from such registration, and (ii) there has been obtained any other
consent, approval or permit from any other regulatory body which the Committee,
in its sole discretion, deems necessary or advisable. Merrill may condition such
issuance, sale or transfer upon the receipt of any representations or agreements
from the parties involved, and the placement of any legends on certificates
representing Option Shares, as may be deemed necessary or advisable by Merrill
in order to comply with such securities law or other restrictions.

8.   WITHHOLDING TAXES.

     8.1. GENERAL RULES.  Merrill is entitled to (i) withhold and deduct from
     future wages of the Employee (or from other amounts that may be due and
     owing to the Employee from Merrill or a Subsidiary), or make other
     arrangements for the collection of, all legally required amounts
     necessary to satisfy any and all foreign, federal, state and local
     withholding and employment-related tax requirements attributable to the
     Option, including, without limitation, the grant or exercise of the
     Option or a disqualifying disposition of stock received upon exercise of
     an Incentive Stock Option, or (ii) require the Employee promptly to
     remit the amount of such withholding to Merrill before taking any
     action, including issuing any shares of Common Stock, with respect to
     the Option.

     8.2. SPECIAL RULES.  The Committee may, in its sole discretion and upon
     terms and conditions established by the Committee, permit or require an
     Employee to satisfy, in whole or in part, any withholding or
     employment-related tax obligation described in Section 8.1 of the Option
     Plan by electing to tender Previously Acquired Shares, a Broker Exercise
     Notice or a promissory note (on terms acceptable to the Committee in its
     sole discretion), or by a combination of such methods.

                                       15


9.   ADJUSTMENTS.

     In the event that the Committee determines that any reorganization,
merger, consolidation, recapitalization, liquidation, reclassification, stock
dividend, stock split, combination of shares, rights offering, divestiture or
extraordinary dividend (including a spin-off) or any other similar change in the
corporate structure or shares of Merrill, affects the Option such that an
adjustment is determined by the Committee, in its sole discretion, to be
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Option Plan, the
Committee (or, if Merrill is not the surviving corporation in any such
transaction, the board of directors of the surviving corporation) shall, in such
manner as it deems equitable, adjust any or all of (i) the number of shares of
Common Stock of Merrill (or number and kind of other securities or property)
available for issuance or payment under the Option Plan, (ii) the number of
shares of Common Stock or other securities of Merrill (or number and kind of
other securities or property) subject to outstanding Options, and (iii) the
grant or exercise price with respect to any Options, or, if deemed appropriate,
make provisions for a cash payment to the holder of an outstanding Option.

10.  SUBJECT TO OPTION PLAN.

     The Option and the Option Shares granted and issued pursuant to the
Participation Agreement and the attachments thereto have been granted and issued
under, and are subject to the terms of, the Option Plan. The terms of the Option
Plan are incorporated by reference in the Participation Agreement and the
attachments thereto in their entirety, and the Employee, by execution of the
Participation Agreement, acknowledges having received a copy of the Option Plan.
The provisions of the Participation Agreement and attachments thereto will be
interpreted as to be consistent with the Option Plan, and any ambiguities in the
Participation Agreement or the attachments thereto will be interpreted by
reference to the Option Plan. In the event that any provision of the
Participation Agreement or the attachments thereto are inconsistent with the
terms of the Option Plan, the terms of the Option Plan will prevail.

                                       16


                              TERMS AND CONDITIONS
                           OF PURCHASE OF COMMON STOCK


Upon execution of the Participation Agreement, the Employee acknowledges and
represents as follows:

1.   The Employee has received copies of all documents and any other information
     requested from Merrill and has had an opportunity to ask questions of and
     receive answers from the management of Merrill concerning the terms and
     conditions of the employee offering and to obtain any additional
     information desired or has elected to waive such opportunity. The Employee
     confirms that the Employee is fully informed regarding the financial
     condition of Merrill, the administration of its business affairs and its
     prospects for the future, and that Merrill makes no assurance whatsoever
     concerning the present and prospective value of the Reinvestment Shares or
     Coinvestment Shares to be acquired.

2.   The Employee realizes that the Reinvestment Shares and Coinvestment Shares,
     as an investment, are speculative and involve a high degree of risk. The
     Employee believes that an investment in the Reinvestment Shares and/or
     Coinvestment Shares is suitable for the Employee based upon the Employee's
     investment objectives and financial needs, and the Employee has the
     financial means to undertake the risks of an investment in the Reinvestment
     Shares and/or Coinvestment Shares, to hold the Reinvestment Shares and/or
     Coinvestment Shares for an indefinite period of time, and to withstand a
     complete loss of the Employee's investment in the Reinvestment Shares
     and/or Coinvestment Shares.

3.   The Employee, either alone or with the assistance of a professional
     advisor, has such knowledge and experience in financial and business
     matters that the Employee is capable of evaluating the merits and risks of
     an investment in the Reinvestment Shares and/or Coinvestment Shares. The
     Employee has obtained, to the extent deemed necessary, personal
     professional advice with respect to the risks inherent in, and the
     suitability of, an investment in the Reinvestment Shares and/or
     Coinvestment Shares in light of the Employee's financial condition and
     investment needs.

4.   The Reinvestment Shares and/or Coinvestment Shares are being purchased by
     the Employee for investment purposes in the Employee's name solely for the
     Employee's own beneficial interest and not as nominee for, or for the
     beneficial interest of, or with the intention to transfer to, any other
     person, trust or organization.

5.   The Employee acknowledges that (i) the Employee must bear the economic risk
     of an investment in the Reinvestment Shares and/or Coinvestment Shares for
     an indefinite period of time because neither the Reinvestment Shares or
     Coinvestment Shares have been registered under the Securities Act of 1933,
     as amended, or any applicable state securities laws and therefore may not
     be sold, transferred, assigned or otherwise disposed of unless such
     disposition is subsequently registered under such laws or exemptions from
     such registrations are available, and (ii) a legend will be placed on the
     certificate evidencing the Reinvestment Shares and/or Coinvestment Shares
     stating that the Reinvestment Shares and/or Coinvestment Shares have not
     been registered under the Securities Act of 1933, as amended, and
     referencing the restrictions on the transferability of the Reinvestment
     Shares and/or Coinvestment Shares.

                                       17


                              TERMS AND CONDITIONS
                                       OF
                            NONRECOURSE PURCHASE LOAN


This Purchase Loan is made under the terms and provisions of the DI Plan and in
connection with the Employee's purchase of Coinvestment Shares. To the extent
the provisions of the DI Plan and this attachment to the Participation Agreement
are inconsistent, the terms of the DI Plan shall govern.

Upon execution of the Participation Agreement, the Employee and Merrill hereby
acknowledge and agree to be bound by the following terms and conditions relating
to the Purchase Loan:

The entire outstanding principal amount of the Purchase Loan, together with all
accrued and unpaid interest thereon from the date of the Purchase Loan, shall be
due and payable by the Employee in a single payment on the earliest of the
following dates (the "MATURITY DATE") and in the following manner; provided,
however, that Merrill in its sole discretion may extend the Maturity Date of the
Purchase Loan pursuant to the DI Plan:

         (i)      All outstanding principal and accrued interest shall be due
                  and payable upon the Repurchase Date in the fiscal year
                  immediately following the fiscal year in which the Employee's
                  employment or other service with Merrill and all its
                  Subsidiaries is terminated, regardless of the reason for such
                  termination;

         (ii)     All outstanding principal and accrued interest shall be due
                  and payable upon a DLJMB Liquidation Event;

         (iii)    All outstanding principal and accrued interest shall be due
                  and payable upon a sale or transfer of the Coinvestment Shares
                  in accordance with the terms and conditions of the Investors'
                  Agreement, other than transfers to Permitted Transferees (as
                  defined in the Investors' Agreement) or hardship repurchases
                  under the DI Plan;

         (iv)     Within 120 days following an initial public offering of
                  Merrill's equity securities in which case the outstanding
                  principal amount of the Purchase Loan and all accrued and
                  unpaid interest thereon must be paid in cash or the Committee
                  in its sole discretion may allow Merrill to repurchase the
                  Employee's Reinvestment Shares and vested Coinvestment Shares
                  at Fair Market Value, and the Employee's unvested Coinvestment
                  Shares at a purchase price determined by the Committee in its
                  sole discretion, and apply the proceeds Merrill owes the
                  Employee against the outstanding balance of the Purchase Loan
                  and all accrued and unpaid interest thereon; provided,
                  however, that if the Employee elects to repay the Purchase
                  Loan and all accrued and unpaid interest with the Employee's
                  Shares, the Employee will not be required to repay the
                  Purchase Loan and all accrued interest if the total purchase
                  price paid for such Shares does not exceed the outstanding
                  balance of the Purchase Loan, all accrued and unpaid interest
                  thereon and any tax liability of the Employee associated with
                  the sale of the Shares; or

         (v)      All outstanding principal and accrued interest shall be due
                  and payable on the eighth anniversary of the date of the
                  Participation Agreement.

The principal of the Purchase Loan may be prepaid in full or in part at any
time, without premium or penalty. Each such prepayment shall be accompanied by
the interest accrued on the amount prepaid to the date of the prepayment.
Merrill shall be entitled to apply any payments Merrill owes the Employee for

                                       18


the repurchase of the Coinvestment Shares pursuant to the DI Plan, and all
dividends paid with respect to Coinvestment Shares (net of any tax withholdings)
to the outstanding principal balance and interest under the Purchase Loan. All
such payments shall be applied first to the payment of accrued interest and the
remainder to the outstanding principal of the Purchase Loan.

The Employee represents and warrants that the proceeds of the Purchase Loan will
be used solely for the purpose of purchasing Coinvestment Shares pursuant to the
DI Plan.

As security for the timely payment of all amounts due or to become due under the
Purchase Loan, the Employee pledges and grants to Merrill a security interest,
pursuant to the Participation Agreement and the attachments thereto, in (i) the
Coinvestment Shares to be acquired by the Employee pursuant to the DI Plan, (ii)
all securities, instruments and other property, rights or interests of any kind
at any time issued or issuable as an addition to, in substitution or exchange
for, or with respect to, the Coinvestment Shares, and (iii) all cash, dividends,
proceeds or other income or property accrued and hereafter accruing, received,
receivable or otherwise distributed in respect of, in exchange for, or upon the
sale or other disposition of the Coinvestment Shares. Merrill further
represents, and the Employee acknowledges, that the Purchase Loan is nonrecourse
against the Employee and that if the value of the Coinvestment Shares,
dividends, distributions and proceeds thereof pledged as security for repayment
of the Purchase Loan and all accrued interest on the Purchase Loan is
insufficient to repay the outstanding principal and interest thereunder, Merrill
may not proceed against the Employee to collect any remaining amount due
hereunder.

If an Event of Default, as defined below, shall occur, or if the Employee's
employment or other service with Merrill and all its Subsidiaries is terminated
or terminates for any reason, whether voluntary or involuntary, and whether
caused by death, Disability, Retirement or otherwise, Merrill may, without
notice, demand, presentment for payment and notice of nonpayment, all of which
the Employee hereby expressly waives, declare the indebtedness represented by
the Purchase Loan immediately due and payable and Merrill or other holder hereof
may, without notice, immediately exercise any and all rights and remedies
available at law or in equity for the collection of the Purchase Loan,
including, without limitation, enforcement of the security interest granted
herein. The term "Event of Default" shall mean any of the following events:

         (i)      the Employee shall default in the payment when due of any
                  principal or interest on the Purchase Loan;

         (ii)     the actual or attempted sale, conveyance, alienation, lease,
                  succession, assignment or other transfer of all or any part of
                  the Coinvestment Shares in violation of the DI Plan or the
                  Investors' Agreement;

         (iii)    the insolvency, bankruptcy, receivership, or occurrence of any
                  other adverse change in the financial condition of the
                  Employee; or

         (iv)     the Employee shall default in any of its obligations under the
                  Participation Agreement, including any attachments thereto.

If the Purchase Loan is placed with any attorney(s) for collection upon any
default, the Employee agrees to pay to Merrill or other holder its reasonable
attorneys' fees and all lawful costs and expenses of collection, whether or not
a suit is commenced.

Time is of the essence. No delay or omission on the part of Merrill or other
holder hereof in exercising any right or remedy hereunder shall operate as a
waiver of such right or of any other right or remedy

                                       19


under the Purchase Loan or any other document or agreement executed in
connection herewith. All waivers by Merrill must be in writing to be
effective and a waiver on any occasion shall not be construed as a bar to or
a waiver of any similar right or remedy on a future occasion.

The Employee hereby consents to any extension or alteration of the time or terms
of payment hereon, any renewal, any release of all or any part of any security
given for the payment hereof, any acceptance of additional security of any kind,
and any release of, or resort to any party liable for payment hereof. Any
extension of time to pay of all or any part of the amount owing on the Purchase
Loan or any variation, modification or waiver of any term or condition of the
Purchase Loan shall not affect the liability of the Employee, and the Employee
shall be absolutely and primarily liable at all times for the payment of the
indebtedness evidenced by the Purchase Loan and all accrued interest thereon
until such amounts are actually paid in full, subject to the non-recourse
provisions set forth above. Merrill shall be entitled to offset against any
amounts owed to it under the Purchase Loan against any amounts owed by Merrill
to the Employee with respect to the Pledged Securities, including, without
limitation, any amounts owed by Merrill to the Employee in connection with the
repurchase by Merrill of the Coinvestment Shares pursuant to the DI Plan, and
any dividends or distributions owed by Merrill to the Employee on the
Coinvestment Shares.

No provision of the Participation Agreement or any attachment thereto shall
require the payment or permit the collection of interest in excess of the rate
permitted by applicable law.

Any payment due on any non-business day of Merrill shall be due upon the next
business day.

The Purchase Loan represents a loan negotiated, executed and to be performed in
the State of Minnesota and shall be construed, interpreted and governed by the
laws of said State.

The Employee hereby consents to the personal jurisdiction of the state and
federal courts located in the State of Minnesota in connection with any
controversy related to the Purchase Loan, and waives any argument that venue in
such forums is not convenient.

                                       20


                              TERMS AND CONDITIONS
                                       OF
                          PLEDGE AND CUSTODY AGREEMENT


1.   DEFINED TERMS.  Unless otherwise defined herein, terms which are defined
in the DI Plan, the Participation Agreement or the attachments thereto and used
herein are used as so defined, and the following terms shall have the following
meanings:

     "COLLATERAL" means the Pledged Securities and all Proceeds.

     "COMMON STOCK" means the voting class B common stock, $0.01 par value per
share, of Merrill Corporation.

     "EVENT OF DEFAULT" means any event defined as such in the "Terms and
Conditions of the Nonrecourse Purchase Loan" attached to the Participation
Agreement.

     "OBLIGATIONS" means the unpaid principal of and interest on the Purchase
Loan and any other obligations of the Employee under the Participation
Agreement, including all attachments to the Participation Agreement, and the DI
Plan.

     "PLEDGED SECURITIES" means any Coinvestment Shares purchased by the
Employee pursuant to the DI Plan which are required to be pledged by the
Employee under the DI Plan and the Participation Agreement, and designated as
such on the books of Merrill.

     "PROCEEDS" means all "proceeds" as such term is defined in the Uniform
Commercial Code and, in any event, shall include, without limitation, all
dividends or other income from or distributions with respect to the Pledged
Securities or proceeds from the sale, disposition or other liquidation thereof.

2.   PLEDGE; GRANT OF SECURITY INTEREST.  The Employee grants to Merrill a
first priority security interest in the Collateral, as collateral security for
the prompt and complete payment and performance when due of the Obligations.
The Employee agrees and acknowledges that the pledge and security interest
granted hereby is a continuing security interest and shall continue in full
force and effect until the Purchase Loan, and all accrued and unpaid interest on
the Purchase Loan, is paid in full.

3.   CUSTODY; PERFECTION.  Promptly after the issuance of any Pledged
Securities in certificated form under the terms of the DI Plan, the Employee
shall deliver to Merrill the stock certificates representing the Pledged
Securities, together with stock transfer powers therefor executed in blank
granting Merrill the power to endorse and transfer the Pledged Securities.  If
at any time the Pledged Securities are in uncertificated form, Merrill as issuer
thereof may register itself as the owner thereof and comply with its own
instructions with respect thereto without further consent from the Employee.

4.   COVENANTS.  The Employee covenants and agrees with Merrill that, from and
after the date of the Participation Agreement until the Obligations are paid in
full, unless permitted by the terms of the DI Plan or the Investors' Agreement:

     4.1. Without the prior written consent of Merrill, the Employee will
     not (i) sell, assign, transfer, exchange or otherwise dispose of, or
     grant any option with respect to, the Collateral, or (ii) create, incur
     or permit to exist any lien or option in favor of, or claim of any person
     or entity with respect to, any of the Collateral, or any interest
     therein.

                                       21


     4.2. At any time and from time to time, upon the written request of
     Merrill, and at the sole expense of the Employee, the Employee will
     promptly and duly execute and deliver such further instruments and
     documents and take such further actions as Merrill may reasonably request
     for the purposes of obtaining or preserving the full benefits of the
     Participation Agreement, including any attachments thereto and of the
     rights and powers herein granted.

5.   ADJUSTMENTS TO PLEDGED SECURITIES.  In the event that the aggregate
market value of the Pledged Securities increases, due to market appreciation, to
more than the Employee's Obligations, Merrill may in its sole discretion
pursuant to the terms of the DI Plan, upon request of the Employee, release to
the Employee such number of Pledged Securities representing any such excess.

6.   RIGHTS OF MERRILL.

     6.1. Immediately and without further notice, Merrill shall have the
     right to require any and all Proceeds be held as Collateral or to receive
     any and all Proceeds paid in respect of the Pledged Securities and make
     application thereof to the Obligations in such order as it may determine
     in its sole discretion, including, without limitation, the right to apply
     such Proceeds against the balance of the Purchase Loan and any accrued
     interest thereon and, subject to Section 7 hereof, to exercise all rights
     pertaining to the Pledged Securities as if Merrill were the absolute
     owner thereof, including, without limitation, the right to exercise all
     conversion, exchange, subscription or other rights, privileges or
     options, pertaining to any of the Pledged Securities and, in connection
     therewith, to deliver any of the Pledged Securities to any committee,
     depository, transfer agent, registrar or other designated agency upon
     such terms and conditions as may be determined, all without liability
     except to account for property actually received by it. Merrill, however,
     shall not have any duty to exercise any of the aforesaid rights,
     privileges or options and shall not be responsible for any failure to do
     so or delay in so doing.

     6.2. The rights of Merrill hereunder shall not be conditioned or
     contingent upon the pursuit by Merrill of any right or remedy against the
     Employee or against any other person or entity which may be or become
     liable in respect of all or any part of the Obligations or against any
     other collateral security therefor, guarantee thereof or right of offset
     with respect thereto.  Merrill shall not be liable for any failure to
     demand, collect or realize upon all or any part of the Collateral or for
     any delay in doing so, nor shall it be under any obligation to sell or
     otherwise dispose of any Collateral upon the request of the Employee or
     any other person or entity or to take any other action whatsoever with
     regard to the Collateral or any part thereof.

7.   RIGHTS OF THE EMPLOYEE.  The Employee shall be entitled to exercise any
and all voting and/or consensual rights and powers relating to or pertaining to
the Pledged Securities for any purpose not inconsistent with the terms of the
Participation Agreement or any attachment thereto or the DI Plan; provided,
however, that no vote shall be cast, and no consent shall be given or action
taken which would have the effect of impairing the position or interest of
Merrill in the Collateral.

8.   REMEDIES.  If an Event of Default shall occur and be continuing, Merrill
may exercise, in addition to all other rights and remedies granted in the
Participation Agreement or any attachment thereto, the DI Plan  or the
Investors' Agreement, all rights and remedies of a secured party under the
Minnesota Uniform Commercial Code.  Without limiting the generality of the
foregoing, Merrill, without demand of performance or other demand, presentment,
protest, advertisement or notice of any kind (except any notice required by law
referred to below) to or upon the Employee (all and each of which demands,
defenses, advertisements and notices are hereby expressly waived), may in such
circumstances upon at least ten (10) days prior written notice to the Employee,
forthwith collect, receive, appropriate and realize upon the Collateral, or any
part thereof, or interest therein, and/or may deliver the Collateral or any part

                                       22


thereof (or contract to do any of the foregoing) at public or private sale or
sales, upon such terms and conditions as it may deem advisable and at such
prices as it may deem best, for cash or on credit or for future delivery without
assumption of any credit risk.  Merrill shall have the right upon any such
public sale, and, to the extent permitted by law, upon any such private sale, to
purchase the whole or any part of the Collateral so sold, free of any right or
equity or redemption in the Employee, which right or equity is hereby expressly
waived and released.  Any disposition made in accordance with the provisions of
this Section 8 shall be deemed to have been commercially reasonable.  Merrill
shall apply any Proceeds from time to time held by it and the net proceeds of
any such collection, recovery, receipt, appropriation, realization or sale,
after deducting all reasonable costs and expenses of every kind incurred
therein, including, without limitation, reasonable attorneys' fees and
disbursements, to the payment in whole or in part of the Obligations.  The
Employee agrees that if any Collateral is sold at any public or private sale,
Merrill may elect to sell only to a buyer who will give further assurances,
satisfactory in form and substance to Merrill, respecting compliance with the
requirements of the Securities Act of 1933, as amended, and applicable state
laws and regulations ("BLUE SKY LAWS"), and a sale subject to such condition
shall be deemed commercially reasonable.  If at any time when Merrill shall
determine to exercise its right to sell all or any part of the Collateral
pursuant to this Section 8, such Collateral or the part thereof to be sold shall
not, for any reason whatsoever, be effectively registered under the Securities
Act or registered or qualified under applicable Blue Sky Laws, as then in
effect. The Employee further agrees that in any sale of any of the Collateral,
Merrill is hereby authorized to comply with any limitation or restriction in
connection with such sale as it may be advised by counsel is necessary in order
to avoid any violation of applicable law (including, without limitation,
compliance with such procedures as may restrict the number of prospective
bidders and purchasers and/or further restrict such prospective bidders or
purchasers to persons who will represent and agree that they are purchasing for
their own account for investment and not with a view to the distribution or
resale of such Collateral), or in order to obtain any required approval of the
sale or of the purchaser by any governmental regulatory authority or official,
and the Employee further agrees that such compliance shall not result in such
sale being considered or deemed not to have been made in a commercially
reasonable manner, nor shall Merrill be liable or accountable to the Employee
for any discount allowed by reason of the fact that such Collateral is sold in
compliance with any such limitation or restriction.

9.   LIMITATION ON DUTIES REGARDING COLLATERAL.  Merrill's sole duty with
respect to the custody, safekeeping and physical preservation of the Collateral
in its possession shall be to deal with it in the same manner as Merrill deals
with similar securities, instruments and property for its own account.  Neither
Merrill nor any of its affiliates, directors, officers, employees or agents
shall be liable for failure to demand, collect or realize upon any of the
Collateral or for any delay in doing so or shall be under any obligation to sell
or otherwise dispose of any of the Collateral upon the request of the Employee
or otherwise.

10.  POWERS COUPLED WITH AN INTEREST.  All authorizations and agencies herein
contained with respect to the Collateral or any part thereof are irrevocable and
powers coupled with an interest.

11.  SEVERABILITY.  Any provision of the Participation Agreement, including
any attachment thereto,  which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

12.  NO WAIVER: CUMULATIVE REMEDIES.  Merrill shall not by any act (except by
a written instrument pursuant to paragraph 12 hereof), delay, indulgence,
omission or otherwise be deemed to have waived any right or remedy hereunder or
to have acquiesced in any default or Event of Default or in any breach of any of
the terms and conditions hereof.  No failure to exercise, nor any delay in
exercising, on the part of

                                       23


Merrill, any right, power or privilege hereunder shall operate as a waiver
thereof.  No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the
exercise of any other right, power or privilege.  A waiver by Merrill of any
right or remedy hereunder on any one occasion shall not be construed as a bar
to any right or remedy which Merrill would otherwise have on any future
occasion.  The rights and remedies herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any rights or
remedies provided by law.

                                       24


                      COINVESTMENT SHARES VESTING SCHEDULE


On the Closing Date thirty-five percent (35%) of the Coinvestment Shares
purchased by the Employee shall immediately vest, and the vesting schedule for
the Coinvestment shall be as follows:




- ------------------------------------------------------------ ---------------------------------------------------------
                                                                        PERCENTAGE OF COINVESTMENT SHARES
                       VESTING DATE                                        VESTED AS OF THE VESTING DATE*

- ------------------------------------------------------------ ---------------------------------------------------------
                                                          
One Year from Closing Date                                   35% of the Coinvestment Shares
                                                             purchased by the Employee
- ------------------------------------------------------------ ---------------------------------------------------------
Two Years from Closing Date                                  35% of the Coinvestment Shares
                                                             purchased by the Employee
- ------------------------------------------------------------ ---------------------------------------------------------
Three Years from Closing Date                                57% of the Coinvestment Shares
                                                             purchased by the Employee
- ------------------------------------------------------------ ---------------------------------------------------------
Four Years from Closing Date                                 79% of the Coinvestment Shares
                                                             purchased by the Employee
- ------------------------------------------------------------ ---------------------------------------------------------
Five Years from Closing Date                                 100% of Coinvestment Shares
                                                             purchased by the Employee
- ------------------------------------------------------------ ---------------------------------------------------------



* In the event that the vesting of any Coinvestment Shares results in a
fractional Coinvestment Share, such fractional Coinvestment Share shall be
rounded up to the nearest whole Coinvestment Share.

                                       25



                   CONFIDENTIALITY AND NONCOMPETE PROVISIONS


You are being offered equity participation benefits (see accompanying
documents). In consideration of these benefits, you agree to be bound by the
restrictions described below. In addition, if you have a written employment
agreement, you also agree to the compensation modifications of that employment
agreement as described below. If any provision of this Confidentiality Agreement
conflicts with any provision of your underlying employment agreement, the
provisions of this Confidentiality Agreement will control and govern the
interpretation of both documents. Minnesota law governs the interpretation of
this Confidentiality Agreement.

If you are working under a term employment agreement that covers all or part of
FY 01 (2/1/00-1/31/01), your FY 01 salary will be as stated in your agreement.
However, for any subsequent fiscal years covered by the term of your agreement,
your salary will be the lesser of either your salary as stated in your agreement
or 120% of what your total compensation (salary and bonus) would have otherwise
been under the Merrill compensation plan in effect during the previous year.

For example, if your salary is $100,000 per year and during FY 01 your
revenues/margins do not cover your $100,000 salary but instead cover only a
$60,000 salary, your salary for FY 02 would be $72,000 (120% of $60,000, which
is less than $100,000). Then, if during FY 02 your revenues/margins cover a
total compensation of $120,000 (in other words, you would receive a total bonus
for FY 02 of $48,000), your salary for FY 03 would return to $100,000 (which is
less than $144,000 [120% of $120,000]).

Should your salary be reduced as described above, your bonus during a reduced
salary year will be calculated and paid out on a quarterly basis, instead of the
normal annual basis. In most situations, the maximum quarterly bonus will be the
difference between your quarterly salary and your original quarterly guarantee.
In other words, under the example above during FY 02, you would be entitled to a
quarterly bonus if your revenues/margins are on pace to cover $100,000. For
example, if your revenues/margins coverage stream for the quarters were:

           -   1st qtr:  $45,000
           -   2nd qtr:  $5,000
           -   3rd qtr:  $15,000
           -   4th qtr:  $55,000

you would receive:

          -    a $7,000 bonus for the first quarter ($7,000 makes up the
               difference between your quarterly salary of $18,000 and your
               original quarterly guarantee of $25,000);

          -    another $7,000 bonus for the second quarter (since you remain on
               pace to cover $100,000, you still receive a bonus);

           -   no bonus for the third quarter (you are now not on pace to cover
               $100,000); and

          -    a $34,000 bonus for the fourth quarter (for the entire year, you
               would be entitled to a $48,000 bonus, but since you have already
               received $14,000 from earlier quarters, you get the balance at
               year-end).

                                       26


Similarly, using this same example, if you covered nothing for your first
quarter, but covered $50,000 in the second quarter, you would get no bonus for
the first quarter, but would get a $14,000 bonus for the second quarter (since
you are on pace to cover $100,000, you will now in effect receive two quarterly
bonuses for your second quarter efforts).

These compensation modifications are not intended to alter the length of the
term of your agreement.

Merrill invests a significant amount of time and money on technology and
research in order to develop and maintain its goodwill and success. During your
employment, you will have access to Merrill's confidential information, which is
information that belongs to Merrill and is not generally known by third parties.
Confidential information includes, by way of example only, trade secrets,
financial information, customer lists, business plans and strategies, and
research and development work. You acknowledge that during your employment with
Merrill and for an indefinite period of time following the termination of your
employment, Merrill is entitled to protection from the use of such information
by you or a third party, or disclosure of such information to a third party. You
therefore agree that you will never disclose such information to any third
party, or use such information for your own benefit or for the benefit of
another.

One way Merrill invests in its business is to support your efforts to develop
and maintain close working relationships with Merrill's clients. You acknowledge
that for one year following the termination of your employment, Merrill is
entitled to protection from the use or disclosure of the client relationships
for the benefit of a third party or for your own benefit. You therefore agree
that for one year following the termination of your employment, you will not
directly or indirectly call upon, solicit, or provide any service or product to
any existing or potential Merrill client serviced by, assigned to, or solicited
by you working alone or in conjunction with another Merrill employee. These
restrictions apply only where the client is solicited to purchase a service or
product that competes with a service or product of Merrill. You further agree
that for one year after your employment with Merrill, you will not solicit or
cause to be solicited any employee of Merrill for the purpose of employment with
any competitor of Merrill.

If you violate these restrictions, you will cause irreparable harm to Merrill
and you agree that Merrill will be entitled to injunctive relief, in addition to
any other remedies allowed by law, and the costs incurred in enforcing the
restrictions, including reasonable attorney fees. Should a court rule that a
restriction is unreasonable or otherwise unenforceable, the court shall modify
the restriction to the extent necessary to make the provision enforceable.

You also acknowledge that while performing services for Merrill, any "Work
Product" (inventions, improvements, ideas, discoveries, works of authorship,
trademarks, trade secrets, processes, know-how, whether or not such are
patentable or copyrightable, and whether or not in writing or reduced to
practice) conceived or created by you alone or with others, belongs only to
Merrill. You will promptly disclose to Merrill all Work Product developed by
you. Such Work Product is considered a "work for hire" and is the sole and
exclusive property of Merrill and Merrill is the exclusive owner of all such
patents, copyrights and related rights. You will transfer and assign to Merrill
all rights to such Work Product and provide Merrill with all of the assistance
it reasonably requires in order for Merrill to perfect, protect, and use its
rights to such Work Product. This section does not apply to Work Product for
which no equipment, supplies, facility or trade secret information of Merrill's
was used and which was developed entirely on your own time and (1) which does
not relate (a) directly to Merrill's business or (b) to Merrill's actual or
demonstrably anticipated research or development, or (2) which does not result
from any work performed by you for Merrill.

                                       27


                                83(B) ELECTION FORM

NOTE TO IRS:  PLEASE TIME STAMP ONE COPY WITH ENDORSEMENT OF RECEIPT AND RETURN
IN THE ENCLOSED STAMPED, ADDRESSED ENVELOPE.

                          ELECTION UNDER SECTION 83(B)
                OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED

The undersigned taxpayer hereby elects, pursuant to Section 83(b) of the
Internal Revenue Code of 1986, as amended, to include in the taxpayer's gross
income for the current taxable year, the amount of compensation, if any, taxable
to the taxpayer in connection with the receipt of the property described below:

1.   The name, address, taxpayer identification number, and taxable year of the
     taxpayer and spouse, if applicable, are as follows:

Name:   Taxpayer: __________________________   Spouse:_______________________

Address:_____________________________________________________

Tax ID#:____________________________________________

Taxable Year:______________________________


2.   The property with respect to which the election is made is described as
     follows:  _______ shares of the Class B Common Stock of Merrill
     Corporation, a Minnesota corporation (the "Company").

3.   The date on which the property was transferred is:  __________, ______.

4.   The property is subject to the following restrictions:  The right of
     Merrill to repurchase the shares, or a portion thereof, at a price per
     share as calculated pursuant to the 1999 Merrill Corporation Direct
     Investment Plan, in the event of the taxpayer's termination of service with
     Merrill.

5.   The fair market value at the time of transfer (determined without regard to
     the restrictions) of such property is:  $22.00 per share.

6.   The amount (if any) paid for the property is:  $22.00 per share.

The taxpayer has submitted a copy of this statement to the person for whom the
services were performed in connection with the taxpayer's receipt of the
property.  The taxpayer is the person performing the services in connection with
the transfer of such property.

THE UNDERSIGNED UNDERSTANDS THAT THE FOREGOING ELECTION MAY NOT BE REVOKED
EXCEPT WITH THE CONSENT OF THE COMMISSIONER.

Dated:________________________       _______________________________________
                                     (Signature of the Taxpayer)

The undersigned spouse of the taxpayer joins in this election.

Dated:________________________       _______________________________________
                                     (Signature of the Spouse)


                                       28



Truth-in-Lending Disclosure

                                        FOR

                            CREDIT SALE OF CAPITAL STOCK
                                     ISSUED BY
                                MERRILL CORPORATION


                                -FIRSTNAME- -LASTNAME-

                                                                                    
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
 ANNUAL PERCENTAGE RATE      FINANCE CHARGE         AMOUNT FINANCED        TOTAL OF PAYMENTS      TOTAL SALE PRICE
The Cost of your credit     The dollar amount     The amount of credit    The amount you will     The total cost of
   as a yearly rate.      the credit will cost   provided to you or on    have paid after you     your purchase on
                                  you.                your behalf.           have made all        credit, including
                                                                              payments as       your down- payment of
                                                                              scheduled.            $-Cash_Down-
6.3789%
                                                   $-Amt_Financed-
                          $-Finance_Charge-                              $-Total_Payments-      $-Total_Sale_Price-
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------




You have the right to receive at this time an itemization of the Amount
Financed.

 /X/ I want an itemization.      / / I do not want an itemization.

Your payment schedule will be:



- ------------------------------ ---------------------------- ----------------------------------------------------------
Number of Payments             Amount of Payments           When Payments Are Due
- ------------------------------ ---------------------------- ----------------------------------------------------------
                                                      
              1                $-Total_Payments-            January 28, 2008
- ------------------------------ ---------------------------- ----------------------------------------------------------

- ------------------------------ ---------------------------- ----------------------------------------------------------



SECURITY:  You are giving a security interest in:

/X/   the Coinvestment Shares you purchased pursuant to the Participation
Agreement, dated January 28, 2000, by and between you and Merrill Corporation.

PREPAYMENT:  If you pay off early, you

/ / may     /X/ will not     have to pay a penalty.


See your contract documents for any additional information about nonpayment,
default, any required repayment in full before the schedule date, and prepayment
refunds and penalties.

                                         29




                         ITEMIZATION OF AMOUNT FINANCED

                                         FOR

                CREDIT SALE OF MERRILL CORPORATION CAPITAL STOCK


                              -FIRSTNAME- -LASTNAME-


Itemization of the Amount Financed of $-AMT_FINANCED-


          $-AMT_FINANCED- Amount credited to your account

                                           30

EX-12.1

Exhibit 12.1
Merrill Corporation
Computation of Ratio of Earnings to Fix Charges



                                                                                                                   Pro Forma
                                                                                                            -----------------------
                                                                                                                         Nine months
                                                                                        Nine months ended    Year ended      ended
                                       Year ended January 31,                              October 31,      January 31,  October 31,
                          ---------------------------------------------------------- ----------------------
                              1995      1996        1997         1998      1999         1998        1999        1999       1999
                          ---------------------------------------------------------- ---------------------- -----------------------
                                                                                             
Income before provision
for income taxes........  $   21,154 $    18,706 $    32,484 $    46,466 $    47,671 $   41,813 $    35,549 $    19,684 $    15,267
                          ---------------------------------------------------------- ---------------------- -----------------------
                          ---------------------------------------------------------- ---------------------- -----------------------
Fixed charges...........       2,742       2,807       6,157      7,068        7,035      5,090       7,733       43,732     33,718
                          ---------------------------------------------------------- ---------------------- -----------------------
                          ---------------------------------------------------------- ---------------------- -----------------------
Ratio of Earnings
to Fix Charges..........        8.7x       7.7x        6.3x        7.6x      7.8x         9.2x        5.6x        1.5x       1.5x
                          ---------------------------------------------------------- ---------------------- -----------------------
                          ---------------------------------------------------------- ---------------------- -----------------------

EX-21.1

                                  EXHIBIT 21.1

                             SUBSIDIARIES OF MERRILL



793473 Ontario Ltd.

Cetara Corporation

Document.com, Inc.

FMC Resource Management Co.

Merrill Communications LLC

Merrill Corporation, Canada

Merrill France

Merrill International Inc.

Merrill Limited

Merrill Real Estate Company

Merrill Training & Technology, Inc.

Merrill/Alternatives, Inc.

Merrill/Daniels, Inc.

Merrill/Executech, Inc.

Merrill/Global, Inc.

Merrill/Magnus Publishing Corporation

Merrill/May, Inc.

Merrill/New York Company

Quebecor Merrill Canada Inc.

EX-23.3

                                                                  Exhibit 23.3



                     CONSENT OF INDEPENDENT ACCOUNTANTS


We hereby consent to the use in this Registration Statement on Form S-4 of
Merrill Corporation of our report dated March 29, 1999 relating to the
financial statements and financial statement schedule of Merrill Corporation
which appears in such Registration Statement. We also consent to the
references to us under the headings "Experts" and "Selected Financial Data"
in such Registration Statement.


/s/ PricewaterhouseCoopers LLP


PricewaterhouseCoopers LLP
St. Paul, Minnesota
February 18, 2000

EX-25.1

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549
                         -----------------------------

                                    FORM T-1

                            STATEMENT OF ELIGIBILITY
                   UNDER THE TRUST INDENTURE ACT OF 1939 OF A
                    CORPORATION DESIGNATED TO ACT AS TRUSTEE
                          -----------------------------

___CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
   SECTION 305(b) (2)

                  NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
               (Exact name of trustee as specified in its charter)

A U.S. NATIONAL BANKING ASSOCIATION                        41-1592157
(Jurisdiction of incorporation or                          (I.R.S. Employer
organization if not a U.S. national                        Identification No.)
bank)

SIXTH STREET AND MARQUETTE AVENUE
Minneapolis, Minnesota                                     55479
(Address of principal executive offices)                   (Zip code)

                       Stanley S. Stroup, General Counsel
                  NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
                        Sixth Street and Marquette Avenue
                          Minneapolis, Minnesota 55479
                                 (612) 667-1234
                               (Agent for Service)
                          -----------------------------

                               MERRILL CORPORATION
               (Exact name of obligor as specified in its charter)

MINNESOTA                                                   41-0946258
(State or other jurisdiction of                             (I.R.S. Employer
incorporation or organization)                              Identification No.)

ONE MERRILL CIRCLE
ST. PAUL, MINNESOTA                                        55108
(Address of principal executive offices)                   (Zip code)

                          -----------------------------
                     12% SENIOR SUBORDINATED NOTES DUE 2009
                       (Title of the indenture securities)
===============================================================================





Item 1.  GENERAL INFORMATION.  Furnish the following information as to the
trustee:

                  (a)      Name and address of each examining or supervising
                           authority to which it is subject.

                           Comptroller of the Currency
                           Treasury Department
                           Washington, D.C.

                           Federal Deposit Insurance Corporation
                           Washington, D.C.

                           The Board of Governors of the Federal Reserve System
                           Washington, D.C.

                  (b)      Whether it is authorized to exercise corporate trust
                           powers.

                           The trustee is authorized to exercise corporate trust
                           powers.

Item 2.  AFFILIATIONS WITH OBLIGOR.  If the obligor is an affiliate of the
trustee, describe each such affiliation.

                  None with respect to the trustee.

No responses are included for Items 3-14 of this Form T-1 because the obligor is
not in default as provided under Item 13.

Item 15.  FOREIGN TRUSTEE.          Not applicable.

Item 16.  LIST OF EXHIBITS.         List below all exhibits filed as a part of
                                    this Statement of Eligibility. Norwest Bank
                                    incorporates by reference into this Form T-1
                                    the exhibits attached hereto.

         Exhibit 1.        a.       A copy of the Articles of Association of the
                                    trustee now in effect.*

         Exhibit 2.        a.       A copy of the certificate of authority of
                                    the trustee to commence business issued June
                                    28, 1872, by the Comptroller of the Currency
                                    to The Northwestern National Bank of
                                    Minneapolis.*

                           b.       A copy of the certificate of the Comptroller
                                    of the Currency dated January 2, 1934,
                                    approving the consolidation of The
                                    Northwestern National Bank of Minneapolis
                                    and The Minnesota Loan and Trust Company of
                                    Minneapolis, with the surviving entity being
                                    titled Northwestern National Bank and Trust
                                    Company of Minneapolis.*

                           c.       A copy of the certificate of the Acting
                                    Comptroller of the Currency dated January
                                    12, 1943, as to change of corporate title of
                                    Northwestern National Bank and Trust Company
                                    of Minneapolis to Northwestern National Bank
                                    of Minneapolis.*



                           d.       A copy of the letter dated May 12, 1983 from
                                    the Regional Counsel, Comptroller of the
                                    Currency, acknowledging receipt of notice of
                                    name change effective May 1, 1983 from
                                    Northwestern National Bank of Minneapolis to
                                    Norwest Bank Minneapolis, National
                                    Association.*

                           e.       A copy of the letter dated January 4, 1988
                                    from the Administrator of National Banks for
                                    the Comptroller of the Currency certifying
                                    approval of consolidation and merger
                                    effective January 1, 1988 of Norwest Bank
                                    Minneapolis, National Association with
                                    various other banks under the title of
                                    "Norwest Bank Minnesota, National
                                    Association."*

         Exhibit 3.        A copy of the authorization of the trustee to
                           exercise corporate trust powers issued January 2,
                           1934, by the Federal Reserve Board.*

         Exhibit 4.        Copy of By-laws of the trustee as now in effect.*

         Exhibit 5.        Not applicable.

         Exhibit 6.        The consent of the trustee required by Section 321(b)
                           of the Act.

         Exhibit 7.        A copy of the latest report of condition of the
                           trustee published pursuant to law or the requirements
                           of its supervising or examining authority.**

         Exhibit 8.        Not applicable.

         Exhibit 9.        Not applicable.











         *        Incorporated by reference to exhibit number 25 filed with
                  registration statement number 33-66026.

         **       Incorporated by reference to exhibit number 25.1 filed with
                  registration statement number 333-93499






                                    SIGNATURE


Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the
trustee, Norwest Bank Minnesota, National Association, a national banking
association organized and existing under the laws of the United States of
America, has duly caused this statement of eligibility to be signed on its
behalf by the undersigned, thereunto duly authorized, all in the City of
Minneapolis and State of Minnesota on the 11th day of January 2000.






                                            NORWEST BANK MINNESOTA,
                                            NATIONAL ASSOCIATION


                                                /s/ Timothy P. Mowdy
                                            -----------------------------
                                            Timothy P. Mowdy
                                            Corporate Trust Officer





                                    EXHIBIT 6




January 11, 2000



Securities and Exchange Commission
Washington, D.C.  20549

Gentlemen:

In accordance with Section 321(b) of the Trust Indenture Act of 1939, as
amended, the undersigned hereby consents that reports of examination of the
undersigned made by Federal, State, Territorial, or District authorities
authorized to make such examination may be furnished by such authorities to the
Securities and Exchange Commission upon its request therefor.





                                            Very truly yours,

                                            NORWEST BANK MINNESOTA,
                                            NATIONAL ASSOCIATION


                                                     /s/ Timothy P. Mowdy
                                            ---------------------------------
                                            Timothy P. Mowdy
                                            Corporate Trust Officer

EX-27.1

 


<ARTICLE> 5
<MULTIPLIER> 1,000

                                                                                            

<PERIOD-TYPE>                   YEAR                   YEAR                   YEAR                   9-MOS
9-MOS
<FISCAL-YEAR-END>                          JAN-31-1997             JAN-31-1998             JAN-31-1999             JAN-31-1999
             JAN-31-2000
<PERIOD-START>                             FEB-01-1996             FEB-01-1997             FEB-01-1998             FEB-01-1998
             FEB-01-1999
<PERIOD-END>                               JAN-31-1997             JAN-31-1998             JAN-31-1999             OCT-31-1998
             OCT-31-1999
<CASH>                                           5,161                   2,531                  23,477                   5,663
                   4,962
<SECURITIES>                                         0                       0                       0                       0
                       0
<RECEIVABLES>                                   87,760                 123,713                 110,491                 124,996
                 144,960
<ALLOWANCES>                                     6,027                   6,992                   8,126                   8,449
                   8,211
<INVENTORY>                                     29,836                  20,798                  20,198                  23,531
                  30,207
<CURRENT-ASSETS>                               126,663                 150,340                 158,293                 158,141
                 187,802
<PP&E>                                          79,216                  95,990                  11,041                 106,666
                 133,539
<DEPRECIATION>                                  44,499                  54,945                  66,106                  62,917
                  76,810
<TOTAL-ASSETS>                                 201,997                 246,479                 265,945                 257,267
                 334,684
<CURRENT-LIABILITIES>                           57,443                  71,079                  76,728                  65,876
                 124,926
<BONDS>                                         43,681                  41,841                  39,485                  39,556
                  39,152
<PREFERRED-MANDATORY>                                0                       0                       0                       0
                       0
<PREFERRED>                                          0                       0                       0                       0
                       0
<COMMON>                                            79                     163                     158                     162
                     161
<OTHER-SE>                                      96,081                 125,512                 140,993                 143,218
                 159,920
<TOTAL-LIABILITY-AND-EQUITY>                   201,997                 246,479                 265,945                 257,267
                 334,684
<SALES>                                        353,769                 459,516                 509,543                 391,731
                 442,401
<TOTAL-REVENUES>                               353,769                 459,516                 509,543                 391,731
                 442,401
<CGS>                                          227,478                 295,390                 330,632                 250,299
                 289,896
<TOTAL-COSTS>                                  227,478                 295,390                 330,632                 250,299
                 289,896
<OTHER-EXPENSES>                                89,946                 114,174                 127,705                  97,095
                 111,331
<LOSS-PROVISION>                                 2,861                   2,064                   3,273                   3,458
                   1,955
<INTEREST-EXPENSE>                               4,124                   4,321                   3,961                   3,011
                   5,009
<INCOME-PRETAX>                                 32,484                  46,466                  47,671                  41,813
                  35,549
<INCOME-TAX>                                    14,645                  20,445                  21,214                  18,607
                  17,240
<INCOME-CONTINUING>                             17,839                  26,021                  26,457                  23,206
                  18,309
<DISCONTINUED>                                       0                       0                       0                       0
                       0
<EXTRAORDINARY>                                      0                       0                       0                       0
                       0
<CHANGES>                                            0                       0                       0                       0
                       0
<NET-INCOME>                                    17,839                  26,021                  26,457                  23,206
                  18,309
<EPS-BASIC>                                       1.13                    1.61                    1.63                    1.42
                    1.14
<EPS-DILUTED>                                     1.11                    1.54                    1.55                    1.35
                    1.10


 

EX-99.1

                                                                   EXHIBIT 99.1
                              LETTER OF TRANSMITTAL

                                    TO TENDER
                 12% SERIES A SENIOR SUBORDINATED NOTES DUE 2009
                                 IN EXCHANGE FOR
                 12% SERIES B SENIOR SUBORDINATED NOTES DUE 2009
                                       OF
                       M E R R I L L  C O R P O R A T I ON
                 PURSUANT TO THE PROSPECTUS DATED         , 2000

- --------------------------------------------------------------------------------
        THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME,
                      ON           , 2000, UNLESS EXTENDED.
- --------------------------------------------------------------------------------


                   DELIVERY TO: NORWEST BANK MINNESOTA, N.A.,
                                AS EXCHANGE AGENT
                               -------------------


 BY REGISTERED OR CERTIFIED MAIL:             BY REGULAR MAIL OR                     BY HAND:
                                              OVERNIGHT COURIER:                 (IN PERSON ONLY)

   Norwest Bank Minnesota, N.A.          Norwest Bank Minnesota, N.A.      Norwest Bank Minnesota, N.A.
           MAC N9303-121                         MAC N9303-121                     12th Floor -
           P.O. Box 1517                   Sixth & Marquette Avenue          Northstar East Building
       Minneapolis, MN 55480                 Minneapolis, MN 55479           Corporate Trust Services
 Attn: Corporate Trust Operations      Attn: Corporate Trust Operations      608 Second Avenue North
                                                                              Minneapolis, Minnesota

       BY FACSIMILE TRANSMISSION:                            GENERAL QUESTIONS AND REQUESTS:
    (FOR ELIGIBLE INSTITUTIONS ONLY)
             (612) 667-4924                                          (612) 667-9764



         DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN THOSE
ABOVE OR TRANSMISSION VIA A FACSIMILE NUMBER OTHER THAN THE ONE LISTED ABOVE
WILL NOT CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS BEGINNING OF PAGE 8 OF
THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF
TRANSMITTAL IS COMPLETED.

         The undersigned acknowledges receipt of the prospectus dated
        , 2000 (the "Prospectus") of Merrill Corporation, a Minnesota
corporation (the "Company"), and this Letter of Transmittal, which together
constitute the Company's offer (the "Exchange Offer") to exchange $1,000
principal amount of its 12% Series B Senior Subordinated Notes due 2009 (the
"Exchange Notes"), which have been registered under the Securities Act of 1933,
as amended (the "Securities Act"), pursuant to a Registration Statement of which
the Prospectus is a part, for each $1,000 principal amount of its outstanding
12% Series A Senior Subordinated Notes due 2009 (the "Old Notes"). The term
"Expiration Date" means 5:00 p.m., New York City time, on              ,  2000,
unless the Exchange Offer is extended, in which case the term "Expiration Date"
means the latest date and time to which the Exchange Offer is extended.
Capitalized terms used but not defined in this Letter of Transmittal have the
meanings given to them in the Prospectus.

         YOUR BANK OR BROKER CAN ASSIST YOU IN COMPLETING THIS FORM. THE
INSTRUCTIONS INCLUDED WITH THIS LETTER OF TRANSMITTAL MUST BE FOLLOWED. ANY
QUESTIONS AND REQUESTS FOR ASSISTANCE OR FOR ADDITIONAL COPIES OF THE PROSPECTUS
AND THIS LETTER OF TRANSMITTAL MAY BE DIRECTED TO THE EXCHANGE AGENT.


                                       1


         Please list below the Old Notes you wish to exchange. If the space
indicated is inadequate, the certificate or registration numbers and the
principal amounts should be listed on a separately signed schedule attached to
this Letter of Transmittal.

                        DESCRIPTION OF OLD NOTES TENDERED



- --------------------------------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) OF
 OLD NOTE(S), EXACTLY AS NAME(S) APPEAR(S) ON OLD                               AGGREGATE PRINCIPAL              PRINCIPAL
              NOTE(S) CERTIFICATE(S)                     CERTIFICATE OR        AMOUNT REPRESENTED BY               AMOUNT
            (PLEASE FILL IN, IF BLANK)                REGISTRATION NUMBERS*          OLD NOTES                   TENDERED**
- --------------------------------------------------------------------------------------------------------------------------------
                                                                                                        

- --------------------------------------------------------------------------------------------------------------------------------

- --------------------------------------------------------------------------------------------------------------------------------

- --------------------------------------------------------------------------------------------------------------------------------

- --------------------------------------------------------------------------------------------------------------------------------
                                                        TOTAL
                                                                              --------------------------------------------------


- -----------------------

*        Need not be completed by Book-Entry Holders.
**       Unless otherwise indicated, the Holder will be deemed to have tendered
         the full aggregate principal amount represented by such Old Notes. All
         tenders must be in integral multiples of $1,000.

                             -----------------------


         This Letter of Transmittal is to be used:

         -        if certificates of Old Notes are to be forwarded to the
                  Exchange Agent;

         -        if delivery of Old Notes is to be made by book-entry transfer
                  to an account maintained by the Exchange Agent at The
                  Depository Trust Company (the "Depository" or "DTC"), pursuant
                  to the procedures set forth in the "The Exchange
                  Offer--Procedures for Tendering" in the Prospectus; or

         -        if tender of the Old Notes is to be made according to the
                  guaranteed delivery procedures described in the Prospectus
                  under the caption "The Exchange Offer--Guaranteed Delivery
                  Procedures."

         Delivery of documents to a book-entry transfer facility does not
constitute delivery to the Exchange Agent. Holders who cannot deliver this
Letter of Transmittal or any other required documents to the Exchange Agent
prior to the Expiration Date or cannot complete the procedure for book-entry
transfer on a timely basis must tender their Old Notes according to the
guaranteed delivery procedures set forth in the Prospectus under the caption
"The Exchange Offer--Guaranteed Delivery Procedures." See Instruction 2.

         The term "Holder" with respect to the Exchange Offer means any person
who is the registered Holder of the Old Notes as set forth on the books of the
Company or any other person who has obtained a properly completed bond power
from the registered holder.

         The undersigned has completed, executed and delivered this Letter of
Transmittal to indicate the action the undersigned desires to take with respect
to the Exchange Offer. Holders who wish to tender their Old Notes must complete
this Letter of Transmittal in its entirety.


                                       2




/ /      CHECK HERE IF TENDERED OLD NOTES ARE ENCLOSED HEREWITH.



/ /      CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED BY BOOK-ENTRY
         TRANSFER MADE TO AN ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH DTC
         AND COMPLETE THE FOLLOWING (FOR USE BY ELIGIBLE INSTITUTIONS (AS
         DEFINED IN INSTRUCTION 2) ONLY):

         Name of Tendering Institution:
                                       ----------------------------------------

         Account Number:
                        -------------------------------------------------------

         Transaction Code Number:
                                 ----------------------------------------------


/ /      CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED PURSUANT TO A
         NOTICE OF GUARANTEED DELIVERY ENCLOSED HEREWITH AND COMPLETE THE
         FOLLOWING (FOR USE BY ELIGIBLE INSTITUTIONS ONLY):

         Name of Registered Holder(s):
                                      -----------------------------------------

         Name of Eligible Institution that Guaranteed Delivery:
                                                               ----------------


         If delivery by book-entry transfer:
                                            -----------------------------------

         Account Number:
                        -------------------------------------------------------

         Transfer Code Number:
                              -------------------------------------------------


/ /      CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL
         COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS
         THERETO.

         Name:
              -----------------------------------------------------------------

         Address:
                 --------------------------------------------------------------

                 --------------------------------------------------------------


                                       3


               PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY

Ladies and Gentlemen:

         Upon the terms and subject to the conditions of the Exchange Offer, the
undersigned hereby tenders to the Company the principal amount of the Old Notes
described under "Description of Old Notes Tendered" on page 2 of this Letter of
Transmittal. Subject to, and effective upon, the acceptance for exchange of such
Old Notes tendered hereby, the undersigned hereby exchanges, assigns and
transfers to, or upon the order of, the Company all right, title and interest in
and to such Old Notes being tendered, including all rights to accrued and unpaid
interest as of the Expiration Date. The undersigned irrevocably constitutes and
appoints the Exchange Agent the true and lawful agent and attorney-in-fact of
the undersigned (with full knowledge that said Exchange Agent acts as the agent
of the Company in connection with the Exchange Offer) to cause the Old Notes to
be assigned, transferred and exchanged. The undersigned represents and warrants
that it has full power and authority to tender, exchange, assign and transfer
the Old Notes and to acquire Exchange Notes issuable upon the exchange of such
tendered Old Notes, and that when the same are accepted for exchange, the
Company will acquire good and unencumbered title to the tendered Old Notes, free
and clear of all liens, restrictions, charges and encumbrances and not subject
to any adverse claim.

         The undersigned represents to the Company that:

         -        the Exchange Notes acquired pursuant to the Exchange Offer are
                  being obtained in the ordinary course of business of the
                  person receiving such Exchange Notes, whether or not such
                  person is the undersigned;

         -        neither the undersigned nor any such other person is
                  participating, intends to participate or has an arrangement or
                  understanding with any person to participate in a distribution
                  (within the meaning of the Securities Act of 1933) of such
                  Exchange Notes;

         -        the undersigned is not an affiliate (as defined under Rule 405
                  of the Securities Act of 1933) of the Company or, if the
                  undersigned or the person receiving the Exchange Notes covered
                  by this letter is an affiliate of the Company, the Exchange
                  Notes may not be offered for resale, resold or otherwise
                  transferred by the undersigned or such other person without
                  registration under the Securities Act of 1933 or an exemption
                  therefrom; and

         -        neither the undersigned nor any such other person is a
                  broker-dealer tendering Old Notes acquired directly from the
                  Company.

         The undersigned also warrants that it will, upon request, execute and
deliver any additional documents deemed by the Exchange Agent or the Company to
be necessary or desirable to complete the exchange, assignment and transfer of
tendered Old Notes or transfer ownership of such Old Notes on the account books
maintained by a book-entry transfer facility. The undersigned further agrees
that acceptance of any tendered Old Notes by the Company and the issuance of
Exchange Notes in exchange therefor shall constitute performance in full by the
Company of its obligations under the A/B Exchange Registration Rights Agreement
dated as of November 23, 1999 among the Company, its subsidiary guarantors and
Donaldson Lufkin & Jenrette Securities Corporation and that the Company shall
have no further obligations or liabilities thereunder for the registration of
the Old Notes or the Exchange Notes.

         The Exchange Offer is subject to certain conditions set forth in the
Prospectus under the caption "The Exchange Offer--Conditions of the Exchange
Offer." The undersigned recognizes that as a result of these conditions (which
may be waived, in whole or in part, by the Company), as more particularly set


                                       4


forth in the Prospectus, the Company may not be required to exchange any of the
Old Notes tendered hereby and, in such event, the Old Notes not exchanged will
be returned to the undersigned at the address shown below the signature of the
undersigned.

         All authority herein conferred or agreed to be conferred shall survive
the death or incapacity of the undersigned and every obligation of the
undersigned hereunder shall be binding upon the heirs, personal representatives,
successors and assigns of the undersigned. Tendered Old Notes may be withdrawn
at any time prior to the Expiration Date.

         Unless otherwise indicated in the box below entitled "Special Issuance
Instructions" or the box below entitled "Special Delivery Instructions" in this
Letter of Transmittal, certificates for all Exchange Notes delivered in exchange
for tendered Old Notes, and any Old Notes delivered herewith but not exchanged,
will be registered in the name of the undersigned and shall be delivered to the
undersigned at the address shown below the signature of the undersigned. If an
Exchange Note is to be issued to a person other than the person(s) signing this
Letter of Transmittal, or if the Exchange Note is to be mailed to someone other
than the person(s) signing this Letter of Transmittal or to the person(s)
signing this Letter of Transmittal at an address different than the address
shown on this Letter of Transmittal, the appropriate boxes of this Letter of
Transmittal should be completed. If Old Notes are surrendered by Holder(s) that
have completed either the box below entitled "Special Issuance Instructions" or
the box below entitled "Special Delivery Instructions" in this Letter of
Transmittal, signature(s) on this Letter of Transmittal must be guaranteed by an
Eligible Institution (as defined in Instruction 2).


- -------------------------------------------------------------------------------
                          SPECIAL ISSUANCE INSTRUCTIONS

To be completed ONLY if the Exchange Notes are to be be issued in the name of
someone other than the undersigned.



Name:..........................................................................
                                 (Please Print)

Address:.......................................................................

    ...........................................................................
                               (Include Zip Code)

Book-Entry Transfer Facility Account:..........................................
Employer Identification or
 Social Security Number:.......................................................

- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------
                          SPECIAL DELIVERY INSTRUCTIONS

To be completed ONLY if the Exchange Notes are to be sent to someone other than
the undersigned, or to the undersigned at an address other than that shown above
under "Description of Old Notes Tendered."



Name:..........................................................................
                                 (Please Print)



Address:.......................................................................

    ...........................................................................
                               (Include Zip Code)

- -------------------------------------------------------------------------------


                                       5


- --------------------------------------------------------------------------------
                                    IMPORTANT

                                    SIGN HERE
                      (COMPLETE SUBSTITUTE FORM W-9 BELOW)

 ...............................................................................
 ...............................................................................
                            Signature(s) of Owner(s)

Dated:............................................., 2000

       (Must be signed by registered holder(s) exactly as name(s) appear(s) on
the Old Notes or on a security position listing as the owner of the Old Notes or
by person(s) authorized to become registered holder(s) by properly completed
bond powers transmitted with this Letter of Transmittal. If signature is by
trustees, executors, administrators, guardians, attorneys-in-fact, agents,
officers of corporations or others acting in a fiduciary or representative
capacity, please provide the following information.)

Name(s):.......................................................................
 ...............................................................................
                                 (Please Print)

Capacity (full title):.........................................................

Address:.......................................................................
 ...............................................................................
 ...............................................................................
                                                 (Include Zip Code)

Area Code and Telephone Numbers:...............................................

Taxpayer Identification
  or Social Security No.:......................................................
      (See Substitute Form W-9)

                            GUARANTEE OF SIGNATURE(S)
                       (If Required -- See Instruction 5)

Authorized Signature:..........................................................

Name and Title:................................................................
                                 (Please Print)

Dated:.........................................................................

Name of Firm:..................................................................

Address:.......................................................................
 ...............................................................................
                               (Include Zip Code)

Area Code and Telephone Number:................................................
Dated:......................................., 2000
- -------------------------------------------------------------------------------


                                       6


              THIS SUBSTITUTE FORM W-9 MUST BE COMPLETED AND SIGNED

PLEASE PROVIDE YOUR SOCIAL SECURITY NUMBER OR OTHER TAXPAYER IDENTIFICATION
NUMBER ON THE FOLLOWING SUBSTITUTE FORM W-9 AND CERTIFY THAT YOU ARE NOT SUBJECT
TO BACKUP WITHHOLDING.


- ------------------------------------------------------------------------------------------------------------------------

                                     PAYER'S NAME: NORWEST BANK MINNESOTA, N.A.

- ------------------------------------------------------------------------------------------------------------------------
SUBSTITUTE
                                    PART 1 - PLEASE PROVIDE YOUR        ___________________________________________
FORM W-9                            TIN IN THE BOX AT RIGHT AND                  Social Security Number
                                    CERTIFY BY SIGNING AND DATING    OR
                                    BELOW.                              ____________________________________________
                                                                              Employer Identification Number

                                    ------------------------------------------------------------------------------------
Department of the Treasury,
Internal Revenue Service            PART 2 - Certification - Under Penalties of   PART 3 - / / -  I   am awaiting a TIN.
                                    Perjury, I certify that:

Payer's Request for Taxpayer
Identification Number (TIN)         (1) The number shown on this form is my
                                    correct Taxpayer Identification Number
                                    (or I am waiting for a number to be
                                    issued to me and have checked the box in
                                    Part 3) and


                                    (2) I am not subject to backup withholding
                                    because: (a) I am exempt from backup
                                    withholding, or (b) I have not been notified
                                    by the Internal Revenue Service (the "IRS")
                                    that I am subject to backup withholding as a
                                    result of a failure to report all interest
                                    or dividends, or (c) the IRS has notified me
                                    that I am no longer subject to backup
                                    withholding.
                                    ------------------------------------------------------------------------------------

                                    CERTIFICATION INSTRUCTIONS - You must cross out item (2) above if you have been
                                    notified by the IRS that you are currently subject to backup withholding because of
                                    underreporting interest or dividends on your tax return. However, if after being
                                    notified by the IRS that you were subject to backup withholding you received another
                                    notification from the IRS that you are no longer subject to backup withholding, do
                                    not cross out such item (2).


                                    SIGNATURE_______________________________________________________
                                    DATE______________________

- ------------------------------------------------------------------------------------------------------------------------



NOTE:    FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
         WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE EXCHANGE
         OFFER.

               YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU
                CHECKED THE BOX IN PART 3 OF SUBSTITUTE FORM W-9.

- -------------------------------------------------------------------------------
             CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER


I certify under penalties of perjury that a Taxpayer Identification Number has
not been issued to me, and either (1) I have mailed or delivered an application
to receive a Taxpayer Identification Number to the appropriate Internal Revenue
Service Center or Social Security Administration Office or (2) I intend to mail
or deliver an application in the near future. I understand that if I do not
provide a Taxpayer Identification Number by the time of the exchange, 31% of all
reportable payments made to me thereafter will be withheld, until I provide a
number.

                                                                        , 2000
- ----------------------------------         -----------------------------
         Signature                                     Date

- -------------------------------------------------------------------------------


                                       7


                                  INSTRUCTIONS

                          FORMING PART OF THE TERMS AND
                        CONDITIONS OF THE EXCHANGE OFFER

1.       DELIVERY OF THIS LETTER OF TRANSMITTAL AND CERTIFICATES.

         All physically delivered Old Notes or confirmation of any book-entry
transfer to the Exchange Agent's account at a book-entry transfer facility of
Old Notes tendered by book-entry transfer, as well as a properly completed and
duly executed copy of this Letter of Transmittal or facsimile thereof, and any
other documents required by this Letter of Transmittal, must be received by the
Exchange Agent at any of its addresses set forth on the cover page of this
Letter of Transmittal on or prior to the Expiration Date. The method of delivery
of this Letter of Transmittal, the Old Notes and all other required documents is
at the election and risk of the Holder. Instead of delivery by mail, it is
recommended that Holders use an overnight or hand delivery service. Except as
otherwise provided below, the delivery will be deemed made only when actually
received by the Exchange Agent.

         No alternative, conditional, irregular or contingent tenders will be
accepted. All tendering Holders, by execution of this Letter of Transmittal (or
facsimile thereof), shall waive any right to receive notice of the acceptance of
the Old Notes for exchange.

         Delivery to an address other than as set forth on the cover page of
this Letter of Transmittal will not constitute a valid delivery.

2.       GUARANTEED DELIVERY PROCEDURES.

         Holders who wish to tender their Old Notes, and (1) cannot deliver the
Letter of Transmittal or any other required documents to the Exchange Agent
prior to the Expiration Date or (2) cannot complete the procedure for book-entry
transfer on a timely basis, may effect a tender if:

         -    the tender is made through a member firm of a registered national
              securities exchange or of the National Association of Securities
              Dealers, Inc., a commercial bank or trust company having an office
              or correspondent in the United States or an "eligible guarantor
              institution" within the meaning of Rule 17Ad-15 under the
              Securities Exchange Act of 1934 (an "Eligible Institution");

         -    prior to the Expiration Date, the Exchange Agent receives from
              such Eligible Institution a properly completed and duly executed
              Notice of Guaranteed Delivery (by facsimile transmittal, mail or
              hand delivery) specifying the name and address of the Holder and
              the principal amount of such Old Notes tendered, stating that the
              tender is being made, and guaranteeing that, within three New York
              Stock Exchange trading days after the date of execution of the
              Notice of Guaranteed Delivery, the Old Notes being tendered, a
              properly completed and duly executed Letter of Transmittal or a
              confirmation of a book-entry transfer into the Exchange Agent's
              account at The Depository Trust Company and an agent's message and
              any other documents required by the Letter of Transmittal, will be
              deposited by the Eligible Institution with the Exchange Agent; and

         -    the Exchange Agent receives such Old Notes and Letter of
              Transmittal or confirmation of a book-entry transfer into its
              account at The Depository Trust Company and an agent's message and
              all other documents required by the Letter of Transmittal within
              three New York Stock


                                       8


              Exchange trading days after the date of execution of the Notice
              of Guaranteed Delivery.

         Upon request to the Exchange Agent, a Notice of Guaranteed Delivery
will be sent to Holders who wish to tender their Old Notes according to the
guaranteed delivery procedures set forth above. Any Holder who wishes to tender
Old Notes pursuant to the guaranteed delivery procedures described above must
ensure that the Exchange Agent receives the Notice of Guaranteed Delivery
relating to such Old Notes prior to the Expiration Date. Failure to complete the
guaranteed delivery procedures outlined above will not, of itself, affect the
validity or effect a revocation of any Letter of Transmittal form properly
completed and executed by a Holder who attempted to use the guaranteed delivery
procedures.

3.       PARTIAL TENDERS.

         Tenders of Old Notes will be accepted only in integral multiples of
$1,000 principal amounts. If less than the entire principal amount of Old Notes
evidenced by a submitted certificate is tendered, the tendering Holder should
fill in the principal amount tendered in the column entitled "Principal Amount
Tendered" of the box entitled "Description of Old Notes Tendered Hereby." A
newly issued Old Note for the principal amount of Old Notes submitted but not
tendered will be sent to such Holder as soon as practicable after the Expiration
Date. All Old Notes delivered to the Exchange Agent will be deemed to have been
tendered in full unless otherwise indicated.

4.       WITHDRAWALS.

         Any Old Notes tendered pursuant to the Exchange Offer may be withdrawn
at any time prior to the Expiration Date, after which tenders of Old Notes are
irrevocable. To withdraw a tender of Old Notes in the Exchange Offer, a written
or facsimile transmission notice of withdrawal must be received by the Exchange
Agent by 5:00 p.m., New York City time, on the Expiration Date.
Any such notice of withdrawal must:

         -    specify the name of the person having deposited the Old Notes to
              be withdrawn (the "Depositor");

         -    identify the Old Notes to be withdrawn (including the certificate
              or registration number(s) and principal amount of such Old Notes,
              or, in the case of Old Notes transferred by book-entry transfer,
              the name and number of the account at the DTC to be credited);

         -    be signed by the Depositor in the same manner as the original
              signature on this Letter of Transmittal (including any required
              signature guarantees) or be accompanied by documents of transfer
              sufficient to have the Trustee with respect to the Old Notes
              register the transfer of such Old Notes into the name of the
              Depositor withdrawing the tender;

         -    specify the name in which such Old Notes are to be registered, if
              different from that of the Depositor; and

         -    include a statement that such Depositor is withdrawing his or her
              election to have such Old Notes exchanged.

         All questions as to the validity, form and eligibility (including time
of receipt) of such notices will be determined by the Company, whose
determination shall be final and binding on all parties. Any Old Notes so
withdrawn will be deemed not to have been validly tendered for purposes of the
Exchange Offer and no Exchange Notes will be issued with respect thereto unless
the Old Notes so withdrawn are


                                       9


validly retendered prior to the Expiration Date. Any Old Notes which have been
tendered but which are not accepted for exchange, will be returned to the Holder
thereof without cost to such Holder as soon as practicable after withdrawal,
rejection of tender or termination of Exchange Offer.

5.       SIGNATURE ON THIS LETTER OF TRANSMITTAL; WRITTEN INSTRUMENTS AND
         ENDORSEMENTS; GUARANTEE OF SIGNATURES.

         If this Letter of Transmittal is signed by the registered Holder(s) of
the Old Notes tendered hereby, the signature must correspond with the name(s) as
written on the face of the certificates without alteration or enlargement or any
change whatsoever. If this Letter of Transmittal is signed by a participant in
the Depository, the signature must correspond with the name as it appears on the
security position listing as the owner of the Old Notes.

         If any of the Old Notes tendered hereby are owned of record by two or
more joint owners, all such owners must sign this Letter of Transmittal.

         If a number of Old Notes registered in different names are tendered, it
will be necessary to complete, sign and submit as many separate copies of this
Letter of Transmittal as there are different registrations of Old Notes.

         Signatures on this Letter of Transmittal or a notice of withdrawal, as
the case may be, must be guaranteed by an Eligible Institution unless the Old
Notes tendered hereby are tendered (1) by a registered Holder who has not
completed the box entitled "Special Issuance Instructions" or "Special Delivery
Instructions" on page 5 of this Letter of Transmittal or (2) for the account of
an Eligible Institution.

         If this Letter of Transmittal is signed by the registered Holder or
Holders of Old Notes (which term, for the purposes described herein, shall
include a participant in the Depository whose name appears on a security listing
as the owner of the Old Notes) listed and tendered hereby, no endorsements of
the tendered Old Notes or separate written instruments of transfer or exchange
are required. In any other case, the registered Holder (or acting Holder) must
either properly endorse the Old Notes or transmit properly completed bond powers
with this Letter of Transmittal (in either case, executed exactly as the name(s)
of the registered Holder(s) appear(s) on the Old Notes, and, with respect to a
participant in the Depository whose name appears on a security position listing
as the owner of Old Notes, exactly as the name of the participant appears on
such security position listing), with the signature on the Old Notes or bond
power guaranteed by an Eligible Institution (except where the Old Notes are
tendered for the account of an Eligible Institution).

         If this Letter of Transmittal, any certificates or separate written
instruments of transfer or exchange are signed by trustees, executors,
administrators, guardians, attorneys-in-fact, officers of corporations or others
acting in a fiduciary or representative capacity, such persons should so
indicate when signing, and, unless waived by the Company, proper evidence
satisfactory to the Company of their authority so to act must be submitted.

6.       SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS.

         Tendering Holders should indicate, in the applicable box on page 5 of
this Letter of Transmittal, the name and address (or account at the Depository)
in which the Exchange Notes or substitute Old Notes for principal amounts not
tendered or not accepted for exchange are to be issued (or deposited), if
different from the names and addresses or accounts of the person signing this
Letter of Transmittal. In the case of issuance in a different name, the employer
identification number or social security number of the person named must also be
indicated and the tendering Holder should complete the applicable box.


                                       10



         If no instructions are given, the Exchange Notes (and any Old Notes not
tendered or not accepted) will be issued in the name of and sent to the acting
Holder of the Old Notes or deposited at such Holder's account at DTC.

7.       TAX IDENTIFICATION NUMBER.

         Under current federal income tax law, a Holder tendering Old Notes is
required to provide the Exchange Agent with such Holder's correct taxpayer
identification number ("TIN") on Substitute Form W-9 on page 7 of this Letter of
Transmittal. If such Holder is an individual, the TIN is the Holder's social
security number. The Certificate of Awaiting Taxpayer Identification Number
should be completed if the tendering Holder has not been issued a TIN and has
applied for a number or intends to apply for a number in the near future. If the
Exchange Agent is not provided with the correct TIN, the Holder may be subject
to a $50 penalty imposed by the Internal Revenue Service. In addition, payments
that are made to such Holder with respect to tendered Old Notes may be subject
to backup withholding.

         Certain Holders (including, among others, all domestic corporations and
certain foreign individuals and foreign entities) are not subject to these
backup withholding and reporting requirements. See the enclosed "Guidelines For
Certification of Taxpayer Identification Number on Substitute Form W-9" (the
"W-9 Guidelines") for additional information. Such a Holder, who satisfies one
or more of the conditions set forth in Item 2 of Part 2 of the Substitute Form
W-9, should execute the certification following such Part 2. In order for a
foreign Holder to qualify as an exempt recipient, that Holder must submit to the
Exchange Agent a properly completed Internal Revenue Service Form W-8, signed
under penalties of perjury, attesting to that Holder's exempt status. Several
versions of Form W-8 are available depending on the foreign Holder's particular
situation. Such forms can be obtained from the Exchange Agent.

         If backup withholding applies, the Exchange Agent is required to
withhold 31% of any amounts otherwise payable to the Holder. Backup withholding
is not an additional tax. Rather, the tax liability of persons subject to backup
withholding will be reduced by the amount of tax withheld. If withholding
results in an overpayment of taxes, a refund may be obtained from the Internal
Revenue Service.

         To prevent backup withholding on payments that are made to a Holder
with respect to Old Notes tendered for exchange, the Holder is required to
notify the Exchange Agent of his or her correct TIN by completing the form set
forth above certifying that the TIN provided on such Substitute Form W-9 is
correct (or that such Holder is awaiting a TIN) and that:

         -    such Holder is exempt;

         -    such Holder has not been notified by the Internal Revenue Service
              that the Holder is subject to backup withholding as a result of a
              failure to report all interest or dividends; or

         -    the Internal Revenue Service has notified such Holder that the
              Holder is no longer subject to backup withholding.

         Each Holder is required to give the Exchange Agent the social security
number or employer identification number of the record Holder(s) of the Old
Notes. If Old Notes are in more than one name or are not in the name of the
actual Holder, consult the W-9 Guidelines enclosed herewith for instructions on
which identification number to report.

         If the tendering Holder has not been issued a TIN and has applied for a
number or intends to apply for a number in the near future, write "Applied For"
in the space for the TIN on Substitute Form W-


                                       11


9, sign and date the form and the Certificate of Awaiting Taxpayer
Identification Number and return them to the Exchange Agent. If such certificate
is completed and the Exchange Agent is not provided with the TIN by the time of
the exchange, the Exchange Agent will withhold 31% of all payments made
thereafter until a TIN is provided to the Exchange Agent.

8.       TRANSFER TAXES.

         The Company shall pay all transfer taxes, if any, applicable to the
exchange of Old Notes pursuant to the Exchange Offer. If, however, certificates
representing Exchange Notes or Old Notes for principal amounts not tendered or
accepted for exchange 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 Old Notes
tendered, or if tendered Old Notes are registered in the name of any person
other than the person signing the Letter of Transmittal, or if a transfer tax is
imposed for any reason other than the exchange of Old Notes pursuant to the
Exchange Offer, then the amount of any such transfer taxes (whether imposed on
the registered Holder or any other person) will be payable by the tendering
Holder. If satisfactory evidence of payment of such taxes or exemption therefrom
is not submitted herewith, the amount of such transfer taxes will be billed
directly to such tendering Holder.

         Except as provided in this Instruction 8, it will not be necessary for
transfer stamps to be affixed to the Old Notes listed in the Letter of
Transmittal.

9.       WAIVER OF CONDITIONS.

         The Company reserves the right, in its reasonable judgment, to waive,
in whole or in part, any of the conditions to the Exchange Offer set forth in
the Prospectus.

10.      MUTILATED, LOST, STOLEN OR DESTROYED NOTES.

         Any Holder whose Old Notes have been mutilated, lost, stolen or
destroyed should contact the Exchange Agent at the address indicated above for
further instructions.

11.      REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES.

         Questions relating to the Exchange Offer or the procedure for
tendering, as well as requests for assistance or additional copies of the
Prospectus and this Letter of Transmittal may be directed to the Exchange Agent
at the address and telephone number set forth on the cover of this Letter of
Transmittal.

12.      VALIDITY AND FORM.

         All questions as to the validity, form, eligibility (including time of
receipt), acceptance of tendered Old Notes and withdrawal of tendered Old Notes
will be determined by the Company in its sole discretion, which determination
will be final and binding. The Company reserves the absolute right to reject any
and all Old Notes not properly tendered or any Old Notes the Company's
acceptance of which would, in the opinion of counsel for the Company, be
unlawful. The Company also reserves the right to waive any irregularities or
conditions of tender as to particular Old Notes. The Company's interpretation of
the terms and conditions of the Exchange Offer (including the instructions in
this Letter of Transmittal) will be final and binding on all parties. Unless
waived, any defects or irregularities in connection with tenders of Old Notes
must be cured within such time as the Company shall determine. Neither the
Company, the Exchange Agent nor any other person shall be under any duty to give
notification of defects or irregularities with respect to tenders of Old Notes,
nor shall any of them incur any liability for failure to give such notification.
Tenders of Old Notes will not be deemed to have been made until such


                                       12


irregularities have been cured or waived. Any Old Notes received by the Exchange
Agent that are not properly tendered and as to which the defects or
irregularities have not been cured or waived will be returned without cost to
such holder by the Exchange Agent to the tendering Holders of Old Notes, unless
otherwise provided herein, as soon as practicable following the Expiration Date.

         IMPORTANT: THIS LETTER OF TRANSMITTAL OR A FACSIMILE THEREOF (TOGETHER
WITH OLD NOTES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL OTHER REQUIRED
DOCUMENTS) OR A NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY THE EXCHANGE
AGENT ON OR PRIOR TO THE EXPIRATION DATE.











                                       13

EX-99.2

                                                                   EXHIBIT 99.2

                       M E R R I L L  C O R P O R A T I ON

      OFFER FOR OUTSTANDING 12% SERIES A SENIOR SUBORDINATED NOTES DUE 2009
                                 IN EXCHANGE FOR
                 12% SERIES B SENIOR SUBORDINATED NOTES DUE 2009,
     WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED

- --------------------------------------------------------------------------------
       THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
                            , 2000, UNLESS EXTENDED.
- --------------------------------------------------------------------------------

To:      Brokers, Dealers, Commercial Banks,
         Trust Companies and Other Nominees:

         Upon and subject to the terms and conditions set forth in the
prospectus, dated         , 2000 (the "Prospectus"), and the enclosed Letter of
Transmittal (the "Letter of Transmittal"), an offer to exchange (the "Exchange
Offer") the registered 12% Series B Senior Subordinated Notes due 2009 (the
"Exchange Notes") for any and all outstanding 12% Series A Senior Subordinated
Notes due 2009 (the "Old Notes") is being made pursuant to such Prospectus. The
Exchange Offer is being made in order to satisfy certain obligations of Merrill
Corporation, a Minnesota corporation (the "Company"), contained in the A/B
Exchange Registration Rights Agreement, dated November 23, 1999, among the
Company, certain subsidiaries of the Company and Donaldson Lufkin & Jenrette
Securities Corporation.

         We are requesting that you contact your clients for whom you hold Old
Notes regarding the Exchange Offer. For your information and for forwarding to
your clients for whom you hold Old Notes registered in your name or in the name
of your nominee, or who hold Old Notes registered in their own names, we are
enclosing the following documents:

         1.       Prospectus dated                  , 2000;

         2.       The Letter of Transmittal for your use and for the information
                  of your clients;

         3.       A Notice of Guaranteed Delivery to be used to accept the
Exchange Offer if certificates for Old Notes are not immediately available or
time will not permit all required documents to reach the Exchange Agent prior to
the Expiration Date (as defined below) or if the procedure for book-entry
transfer cannot be completed on a timely basis; and

         4.       A form of letter which may be sent to your clients for whose
account you hold Old Notes registered in your name or the name of your nominee,
with space provided for obtaining such clients' instructions with regard to the
Exchange Offer.

         YOUR PROMPT ACTION IS REQUESTED. THE EXCHANGE OFFER WILL EXPIRE AT 5:00
P.M., NEW YORK CITY TIME, ON           , 2000 (THE "EXPIRATION DATE"), UNLESS
EXTENDED BY THE COMPANY. OLD NOTES TENDERED PURSUANT TO THE EXCHANGE OFFER MAY
BE WITHDRAWN AT ANY TIME BEFORE THE EXPIRATION DATE.



         To participate in the Exchange Offer, a duly executed and properly
completed Letter of Transmittal (or facsimile thereof), with any required
signature guarantees and any other required documents, should be sent to the
Exchange Agent and certificates representing the Old Notes should be delivered
to the Exchange Agent, all in accordance with the instructions set forth in the
Letter of Transmittal and the Prospectus.

         If holders of Old Notes wish to tender, but it is impracticable for
them to forward their certificates for Old Notes or other required documents
prior to the expiration of the Exchange Offer or to comply with the book-entry
transfer procedures on a timely basis, a tender may be effected by following the
guaranteed delivery procedures described in the Prospectus under the caption
"The Exchange Offer--Guaranteed Delivery Procedures."

         The Company will, upon request, reimburse brokers, dealers, commercial
banks and trust companies for reasonable costs and expenses incurred by them in
forwarding the Prospectus and the related documents to the beneficial owners of
Old Notes held by them as nominee or in a fiduciary capacity. The Company will
pay or cause to be paid all stock transfer taxes applicable to the exchange of
Old Notes pursuant to the Exchange Offer, except as set forth in the
Instructions to the Letter of Transmittal.

         Any inquiries you may have with respect to the Exchange Offer, or
requests for additional copies of enclosed materials, should be directed to
Norwest Bank Minnesota, N.A., as Exchange Agent for the Exchange Offer, at the
address and telephone number set forth on the front of the Letter of
Transmittal.

                                                 Very truly yours,


                                                 MERRILL CORPORATION


         NOTHING HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY
PERSON AS AN AGENT OF THE COMPANY OR THE EXCHANGE AGENT, OR AUTHORIZE YOU OR ANY
OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENT ON BEHALF OF EITHER OF
THEM WITH RESPECT TO THE EXCHANGE OFFER, EXCEPT FOR STATEMENTS EXPRESSLY MADE IN
THE PROSPECTUS OR THE LETTER OF TRANSMITTAL.


                                       2

EX-99.3

                                                                   EXHIBIT 99.3

                       M E R R I L L  C O R P O R A T I ON

      OFFER FOR OUTSTANDING 12% SERIES A SENIOR SUBORDINATED NOTES DUE 2009
                                 IN EXCHANGE FOR
                12% SERIES B SENIOR SUBORDINATED NOTES DUE 2009,
    WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED

- -------------------------------------------------------------------------------
       THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
                                  , 2000, UNLESS EXTENDED.
- -------------------------------------------------------------------------------

To Our Clients:

         Enclosed please find a prospectus dated              , 2000 of Merrill
Corporation, a Minnesota corporation (the "Company"), and a related Letter of
Transmittal (which together constitute the "Exchange Offer") relating to the
offer by the Company to exchange its 12% Series B Senior Subordinated Notes due
2009 (the "Exchange Notes"), pursuant to an offering registered under the
Securities Act of 1933, as amended (the "Securities Act"), for a like principal
amount of its issued and outstanding 12% Series A Senior Subordinated Notes due
2009 (the "Old Notes") upon the terms and subject to the conditions set forth in
the Exchange Offer.

         We are the holder of record and/or participant in the book-entry
transfer facility of Old Notes held by us for your account. A tender of such Old
Notes can be made only by us as the record holder and/or participant in the
book-entry transfer facility and pursuant to your instructions. The Letter of
Transmittal is furnished to you for your information only and cannot be used by
you to tender Old Notes held by us for your account.

         We request instructions as to whether you wish to tender any or all of
the Old Notes held by us for your account pursuant to the terms and conditions
of the Exchange Offer. We also request that you confirm that we may on your
behalf make the representations and warranties contained in the Letter of
Transmittal.

         Pursuant to the Letter of Transmittal, each holder of Old Notes will
represent to the Company that:

         -        the holder is not an "affiliate" of the Company (within the
                  meaning of the Securities Act);

         -        any Exchange Notes to be received by the holder are being
                  acquired in the ordinary course of its business;

         -        the holder is not participating, does not intend to
                  participate and has no arrangement or understanding with any
                  person to participate, in a distribution (within the meaning
                  of the Securities Act) of such Exchange Notes; and

         -        the holder is not a broker-dealer tendering Old Notes acquired
                  directly from the Company.



         In addition, if the tendering holder is a broker-dealer that will
receive Exchange Notes for its own account in exchange for Old Notes, we will
represent on behalf of such broker-dealer that the Old Notes to be exchanged for
the Exchange Notes were acquired by it as a result of market-making activities
or other trading activities, and acknowledge on behalf of such broker-dealer
that it will deliver a prospectus meeting the requirements of the Securities Act
in connection with any resale of such Exchange Notes. By acknowledging that it
will deliver and by delivering a prospectus meeting the requirements of the
Securities Act in connection with any resale of such Exchange Notes, such
broker-dealer is not deemed to admit that it is an "underwriter" within the
meaning of the Securities Act.

         Your instructions should be forwarded to us as promptly as possible in
order to permit us to tender the Old Notes on your behalf in accordance with the
provisions of the Exchange Offer. THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON           , 2000 (THE "EXPIRATION DATE"), UNLESS EXTENDED
BY THE COMPANY. ANY OLD NOTES TENDERED PURSUANT TO THE EXCHANGE OFFER MAY BE
WITHDRAWN AT ANY TIME BEFORE 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION
DATE.

         Your attention is directed to the following:

         1.       The Exchange Offer is for any and all of the Old Notes.

         2.       The Exchange Offer is not conditioned upon any minimum number
of Old Notes being tendered.

         3.       The Exchange Offer is subject to certain conditions set forth
in the Prospectus in the section captioned "The Exchange Offer--Conditions of
the Exchange Offer."

         4.       Any transfer taxes incident to the transfer of the Old Notes
from the holder to the Company will be paid by the Company, except as otherwise
provided in the Instructions in the Letter of Transmittal.

         5.       The Exchange Offer expires at 5:00 p.m., New York City time,
on the Expiration Date, unless extended by the Company.

         IF YOU WISH TO HAVE US TENDER YOUR OLD NOTES, PLEASE SO INSTRUCT US BY
COMPLETING, EXECUTING AND RETURNING TO US THE INSTRUCTION FORM ATTACHED TO THIS
LETTER.


                                       2


                 INSTRUCTIONS WITH RESPECT TO THE EXCHANGE OFFER

         The undersigned acknowledge(s) receipt of your letter enclosing the
Prospectus, dated                  , 2000, of Merrill Corporation, a Minnesota
corporation, and the related specimen Letter of Transmittal.

         The undersigned further acknowledge(s) that pursuant to the Letter of
Transmittal, you will make the following representations on behalf of the
undersigned: (i) the undersigned is not an "affiliate" of the Company (within
the meaning of the Securities Act); (ii) any Exchange Notes to be received by
the undersigned are being acquired in the ordinary course of its business; (iii)
the undersigned is not participating, does not intend to participate and has no
arrangement or understanding with any person to participate, in a distribution
(within the meaning of the Securities Act) of such Exchange Notes; and (iv) the
undersigned is not a broker-dealer tendering Old Notes acquired directly from
the Company.

         In addition, if the undersigned is a broker-dealer that will receive
Exchange Notes for its own account in exchange for Old Notes, the undersigned
acknowledge(s) that you will represent on behalf of the undersigned that the Old
Notes to be exchanged for the Exchange Notes were acquired by the undersigned as
a result of market-making activities or other trading activities, and
acknowledge on behalf of the undersigned that the undersigned will deliver a
prospectus meeting the requirements of the Securities Act in connection with any
resale of such Exchange Notes.

         This will instruct you to tender the number of Old Notes indicated
below held by you for the account of the undersigned, pursuant to the terms and
conditions set forth in the Prospectus and the related letter of Transmittal.

(Check one).

Box 1  / /   Please tender my Old Notes held by you for my account. If I
             do not wish to tender all of the Old Notes held by you for my
             account, I have identified on a signed schedule attached hereto
             the number of Old Notes that I do not wish tendered.

Box 2  / /   Please do not tender any Old Notes held by you for my account.

Date:                          , 2000
     --------------------------
                                              ---------------------------------
                                              Signature(s)


                                              ---------------------------------

                                              ---------------------------------
                                              Please Print Name(s) Here


                                              ---------------------------------
                                              Area Code and Telephone No.


         UNLESS A SPECIFIC CONTRARY INSTRUCTION IS GIVEN IN THE SPACE PROVIDED,
YOUR SIGNATURE(S) HEREON SHALL CONSTITUTE AN INSTRUCTION TO US TO TENDER ALL OLD
NOTES.


                                      3

EX-99.4

                                                                   EXHIBIT 99.4
                          NOTICE OF GUARANTEED DELIVERY

                                 WITH RESPECT TO
                 12% SERIES A SENIOR SUBORDINATED NOTES DUE 2009
                                 IN EXCHANGE FOR
                 12% SERIES B SENIOR SUBORDINATED NOTES DUE 2009
                                       OF
                       M E R R I L L  C O R P O R A T I ON
         PURSUANT TO THE PROSPECTUS DATED                   , 2000

- -------------------------------------------------------------------------------
        THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME,
                      ON                , 2000, UNLESS EXTENDED.
- -------------------------------------------------------------------------------


         This form, or one substantially equivalent hereto, must be used by any
holder of 12% Series A Senior Subordinated Notes due 2009 (the "Old Notes") of
Merrill Corporation, a Minnesota corporation (the "Company"), who wishes to
tender Old Notes pursuant to the guaranteed delivery procedures described in
"The Exchange Offer--Guaranteed Delivery Procedures" of the Company's prospectus
dated             , 2000 (the "Prospectus") and in Instruction 2 to the related
Letter of Transmittal. Any holder who wishes to tender Old Notes pursuant to
such guaranteed delivery procedures must ensure that Norwest Bank Minnesota,
N.A., as Exchange Agent, receives this Notice of Guaranteed Delivery by
facsimile transmission, mail, overnight courier or hand delivery before the
Expiration Date of the Exchange Offer. The term "Expiration Date" means 5:00
p.m., New York City time, on             , 2000, unless the Exchange Offer is
extended, in which case the term "Expiration Date" means the latest date and
time to which the Exchange Offer is extended.

                  THE EXCHANGE AGENT FOR THE EXCHANGE OFFER IS:
                          NORWEST BANK MINNESOTA, N.A.
                               -------------------


   BY REGISTERED OR CERTIFIED MAIL:              BY REGULAR MAIL OR                          BY HAND:
                                                  OVERNIGHT COURIER:                     (IN PERSON ONLY)

     Norwest Bank Minnesota, N.A.           Norwest Bank Minnesota, N.A.           Norwest Bank Minnesota, N.A.
            MAC N9303-121                           MAC N9303-121                          12th Floor -
            P.O. Box 1517                      Sixth & Marquette Avenue              Northstar East Building
        Minneapolis, MN 55480                   Minneapolis, MN 55479                Corporate Trust Services
   Attn: Corporate Trust Operations       Attn: Corporate Trust Operations           608 Second Avenue North
                                                                                      Minneapolis, Minnesota

                BY FACSIMILE TRANSMISSION:                              GENERAL QUESTIONS AND REQUESTS:
             (FOR ELIGIBLE INSTITUTIONS ONLY)
                      (612) 667-4924                                            (612) 667-9764



         DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN
AS SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE TRANSMISSION
TO A NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.

         This Notice of Guaranteed Delivery is not to be used to guarantee
signatures. If a signature on a 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 Letter of Transmittal.



               PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY

Ladies and Gentlemen:

         The undersigned hereby tenders to the Company upon the terms and
subject to the conditions set forth in the Prospectus and the related Letter of
Transmittal, receipt of which is hereby acknowledged, the principal amount of
Old Notes or book-entry interests in Old Notes, as applicable, specified below
pursuant to the guaranteed delivery procedures set forth under the caption "The
Exchange Offer--Guaranteed Delivery Procedures" in the Prospectus. By so
tendering, the undersigned does hereby make, at and as of the date hereof, the
representations and warranties of a tendering holder of Old Notes set forth in
the Letter of Transmittal. The undersigned hereby tenders the Old Notes listed
below:



- ---------------------------------------------------------------------------------------------------------------------
 NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) OF
  OLD NOTE(S), EXACTLY AS NAME(S) APPEAR(S) ON OLD      CERTIFICATE OR      AGGREGATE PRINCIPAL        PRINCIPAL
               NOTE(S) CERTIFICATE(S)                    REGISTRATION      AMOUNT REPRESENTED BY        AMOUNT
             (PLEASE FILL IN, IF BLANK)                    NUMBERS*              OLD NOTES            TENDERED**
- ---------------------------------------------------------------------------------------------------------------------
                                                                                             

- ---------------------------------------------------------------------------------------------------------------------

- ---------------------------------------------------------------------------------------------------------------------

- ---------------------------------------------------------------------------------------------------------------------
                                      TOTAL
                                                                          -------------------------------------------


- -----------------------
*        Need not be completed by book-entry holders.
**       Unless otherwise indicated, the holder will be deemed to have tendered
         the full aggregate principal amount represented by such Old Notes. All
         tenders must be in integral multiples of $1,000.

If Old Notes will be tendered by book-entry transfer:
The Depository Trust Company


Name of Tendering Institution:                      Account No:
                              --------------------             ----------------

         All authority herein conferred or agreed to be conferred shall survive
the death, incapacity, or dissolution of the undersigned and every obligation of
the undersigned hereunder shall be binding upon the heirs, personal
representatives, successors and assigns of the undersigned.

                                      SIGN HERE


                                      -----------------------------------------
                                      Signature(s)


                                      -----------------------------------------
                                      Name(s) (Please Print)

                                      -----------------------------------------
                                      Address

                                      -----------------------------------------
                                      Zip Code

                                      -----------------------------------------
                                      Area Code and Telephone Number

                                      -----------------------------------------
                                      Date:


                                       2


                                    GUARANTEE

                    (NOT TO BE USED FOR SIGNATURE GUARANTEE)

         The undersigned, a member firm of a registered national securities
exchange or of the National Association of Securities Dealers, Inc. or a
commercial bank or trust company having an office or a correspondent in the
United States or an "eligible guarantor institution" as defined by Rule 17Ad-15
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
hereby guarantees deposit with the Exchange Agent of the Letter of Transmittal
(or facsimile thereof or Agent's message in lieu thereof), together with the Old
Notes tendered hereby in proper form for transfer, or confirmation of the
book-entry transfer of such Old Notes into the Exchange Agent's account at The
Depository Trust Company, pursuant to the procedure for book-entry transfer set
forth in the Prospectus, and any other required documents, all by 5:00 p.m., New
York City time, on the third New York Stock Exchange trading day following the
Expiration Date.

         The undersigned acknowledges that it must deliver the Letter of
Transmittal and Old Notes tendered hereby to the Exchange Agent within the time
period set forth above and that failure to do so could result in a financial
loss to the undersigned.


                                      SIGN HERE


                                      -----------------------------------------
                                      Name of Firm


                                      -----------------------------------------
                                      Authorized Signature


                                      -----------------------------------------
                                      Name (Please Print)

                                      -----------------------------------------

                                      -----------------------------------------
                                      Address


                                      -----------------------------------------
                                      Zip Code


                                      -----------------------------------------
                                      Area Code and Telephone No.

                                      -----------------------------------------
                                      Date:



DO NOT SEND CERTIFICATES FOR OLD NOTES WITH THIS FORM. ACTUAL SURRENDER OF
CERTIFICATES FOR OLD NOTES MUST BE MADE PURSUANT TO, AND BE ACCOMPANIED BY, A
COPY OF THE PREVIOUSLY EXECUTED LETTER OF TRANSMITTAL.


                                       3


                                  INSTRUCTIONS


         1.       DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY. A properly
completed and duly executed copy of this Notice of Guaranteed Delivery and any
other documents required by this Notice of Guaranteed Delivery must be received
by the Exchange Agent at one of its addresses set forth on the cover hereof
prior to 5:00 p.m. on the Expiration Date. The method of delivery of this Notice
of Guaranteed Delivery and all other required documents to the Exchange Agent is
at the election and risk of the holder but, except as otherwise provided below,
the delivery will be deemed made only when actually received by the Exchange
Agent. Instead of delivery by mail, it is recommended that holders use an
overnight or hand delivery service, properly insured. If such delivery is by
mail, it is recommended that the holder use properly insured, registered mail
with return receipt requested. For a full description of the guaranteed delivery
procedures, see the Prospectus under the caption "The Exchange Offer--Guaranteed
Delivery Procedures." In all cases, sufficient time should be allowed to assure
timely delivery. No Notice of Guaranteed Delivery should be sent to the Company.

         2.       SIGNATURE ON THIS NOTICE OF GUARANTEED DELIVERY; GUARANTEE OF
SIGNATURES. If this Notice of Guaranteed Delivery is signed by the holder(s) of
the Old Notes referred to herein, then the signature must correspond exactly
with the name(s) of the holder(s) that appear on the security position listing
maintained by the Depository.

         If this Notice of Guaranteed Delivery is signed by a person other than
the holder(s) of any Old Notes listed, this Notice of Guaranteed Delivery must
be accompanied by appropriate powers of attorney, in either case signed exactly
as the name or names of the holder(s) that appear on the security position
listing maintained by the Depository.

         If this Notice of Guaranteed Delivery is 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, unless waived by the Company, proper evidence
satisfactory to the Company of such person's authority so to act must be
submitted with this Notice of Guaranteed Delivery.

         3.       REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions
relating to the Exchange Offer or the procedure for consenting and tendering as
well as requests for assistance or for additional copies of the Prospectus, the
Letter of Transmittal and this Notice of Guaranteed Delivery, may be directed to
the Exchange Agent at the address set forth on the cover hereof or to your
broker, dealer, commercial bank or trust company.


                                       4