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As filed with the Securities and Exchange Commission on May 12, 2000

Registration No. 333-30732

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

PRE-EFFECTIVE AMENDMENT NO. 1 TO
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: / /                          

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

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 MAY 12, 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 13 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	13
Forward-Looking Statements	22
The Exchange Offer	23
Use of Proceeds	34
Capitalization	35
Selected Historical Consolidated Financial Data	36
Management's Discussion and Analysis of Financial Condition and Results of Operations	37
Business	45
Management	63
Executive Compensation	65
Security Ownership of Management and Beneficial Owners of Five Percent or More	70
Related Party Relationships and Transactions	72
Description of Merrill Communications LLC's Credit Facility	75
Description of Exchange Notes	77
Material United States Federal Income Tax Considerations	120
Plan of Distribution	121
Where You Can Find More Information	122
Legal Matters	123
Experts	123
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.

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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 23 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 30 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.

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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 under the heading "Plan of Distribution," beginning on page 121.
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.

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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. Interest will be payable semi-annually on each May 1 and November 1, commencing November 1, 2000. No interest will be paid on the old notes following their acceptance for exchange. We refer you to the information on page 77 under the heading "Description of Exchange Notes."
Conditions to the Exchange Offer	The exchange offer is subject to the conditions described on page 30 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 30 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.

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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 28 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 26 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 under the heading "Material United States Federal Income Tax Considerations," beginning on page 120.
Appraisal or Dissenters' Rights	You will have no appraisal or dissenters' rights in connection with the exchange offer.

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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 77 through 120 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 from the most recent date to which interest has been paid on the old notes.
Interest Payment Dates	We will pay interest on the exchange notes semi-annually on May 1 and November 1, beginning November 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 81 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 82 through 84 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.

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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 Communications 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 January 31, 2000, the exchange notes and the subsidiary guarantees would have been subordinated to:
	• $221.8 million of senior indebtedness; and
	• $1.3 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;

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	• 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 86 through 98 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 98 through 100 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 34 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 103 through 105 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 under the heading "Plan of Distribution," beginning on page 121.
Trustee	Norwest Bank Minnesota, N.A. is serving as the trustee under the indenture.

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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 38 business centers in 30 cities throughout the United States, and our international clients through offices in Paris and London, a strategic alliance in Canada and other alliances with local document service providers in 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 approximately 170 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 13 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.

    As part of the realignment in our corporate structure in February 1999, 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

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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 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., Prudential Real Estate Affiliates 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., 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, investment banks and other professional services firms 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 document imaging, copying, fax management and desktop publishing. We offer these services typically over a three to five year

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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, web-based litigation support software program that enhances our clients' productivity in the storage and retrieval of legal documents associated with complex corporate and litigation matters.

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 other investors.

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™, Merrill UR Law™,and EFD™.

10

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,
	1997			1998			1999			2000
	(dollars in millions)
Operating Data:
Revenue	$	353.8		$	459.5		$	509.5		$	587.7
Gross profit		126.3			164.1			178.9			194.3
Operating income		36.3			50.0			51.2			5.3
Net income (loss) available to common		17.8			26.0			26.5			(17.6	)
Other Data:
EBITDA (1)	$	49.8		$	67.6		$	71.1		$	28.5
Adjusted EBITDA (1)		49.8			67.6			71.1			74.2
Capital expenditures		9.2			17.1			16.5			14.9
Cash interest expense		4.1			4.3			4.0			12.8
Depreciation and amortization (2)		13.4			17.6			19.9			23.4
Ratio of earnings to fixed charges		6.3	x		7.6	x		7.8	x		0.5	x
Net cash provided by (used in) operating activities		8.5			30.9			55.8			(20.0	)
Net cash used in investing activities		(35.8	)		(30.1	)		(23.1	)		(71.8	)
Net cash provided by (used in) financing activities		20.4			(3.4	)		(11.8	)		82.8

	Pro Forma
	Year Ended January 31, 2000
	(dollars in millions)
Pro Forma Data:
Revenue	$	610.0
EBITDA (1)		32.8
Adjusted EBITDA (1)		78.5
Capital expenditures		15.0
Cash interest expense		39.8
Ratio of Adjusted EBITDA to cash interest expense		2.0	x

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	As of January 31,
	1999		2000
	(dollars in millions)
Balance Sheet Data:
Cash and cash equivalents	$	23.5	$	14.5
Total assets		265.9		354.9
Total debt (3)		41.9		356.3
Preferred stock (4)		—		35.8
Shareholders' equity (deficit) (3)(4)(5)		141.2		(129.5	)

(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 accounting principles generally accepted in the United States). 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 and start-up costs related to international operations and certain new customer accounts is presented because we believe it is a meaningful indicator of our operating performance.

(2)

Depreciation and amortization includes a $1.2 million and $0.1 million goodwill writedown for the years ended January 31, 1999 and 2000, 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 a then approximately 23.4% equity interest in our company (excluding warrants).

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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.

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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.

    As of January 31, 2000 and April 30, 2000, we had (1) total indebtedness of approximately $356.3 million and $387.7 million, respectively and (2) $50.0 million and $13.9 million, respectively 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 for us 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.

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We may not have sufficient cash flow from operations, available cash and available borrowings under Merrill Communications LLC's 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 Merrill Communications LLC's 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 Merrill Communications LLC's 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 contains 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 prohibits us from prepaying our subordinated indebtedness, including the exchange notes. Merrill Communications LLC's 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. We may not have sufficient funds to repay the exchange notes or our other indebtedness.

The restrictive covenants in our indenture and Merrill Communications LLC's 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 Merrill Communications LLC's credit facility limit 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. Transactions that we may view as important opportunities, such as material 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.

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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 January 31, 2000, the exchange notes would have ranked behind in right of payment to $221.8 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 January 31, 2000, our non-guarantor subsidiaries would have had $1.3 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

16

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.

17

    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:

•

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;



•

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;



•

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

18

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

•

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. Any 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 John Castro and Rick 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

19

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, particularly 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.

20

The replacement of our international joint venture arrangement with our own direct operations and the expansion of our existing international operations involves risk.

    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 requires significant management attention and financial resources. In addition, there are many barriers to competing successfully in the international arena, including:

•

costs of customizing products and services for foreign countries;



•

difficulties in managing and staffing international operations;



•

reduced protection for intellectual property rights in some countries;



•

currency exchange rate fluctuations;



•

longer sales and payment cycles;



•

greater difficulties in collecting accounts receivable;



•

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



•

licenses, tariffs and other trade barriers;



•

potentially adverse tax consequences;



•

unexpected changes in regulatory requirements; and



•

political and economic instability.

    We cannot assure you that our direct operations in Europe will be successful, that our investments in establishing or expanding 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:

•

inaccurate assessment of undisclosed liabilities;



•

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



•

diversion of management's attention from our core businesses;



•

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



•

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

20

•

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.

    As of April 15, 2000 approximately 66.6% of the outstanding shares of class B common stock of our company was 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 has 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 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."

21

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:

•

our financial performance;



•

our growth in revenue and earnings;



•

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



•

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:

•

our ability to continue to diversify our revenue stream;



•

the pace of technological changes affecting our business;



•

the demand for printed financial documents; and



•

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.

22

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, approximately $135.3 million aggregate principal amount of old notes are outstanding. An aggregate of $4.7 million principal amount of old notes was repurchased by our unrestricted subsidiaries on March 29, 2000.

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

•

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;



•

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;



•

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:

•

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



•

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.

23

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:

•

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


•

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;


•

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


•

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

    If you do not satisfy these criteria:

•

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


•

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:

•

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


•

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:

•

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


•

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."

24

    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

•

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.


•

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.


•

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.

•

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.


•

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.

25

•

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.


•

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


•

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


•

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.


•

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:

•

amend the terms of the exchange offer in any manner;


•

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


•

extend the exchange offer; or


•

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:

•

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 such letter of transmittal; and


•

any other documents required by the letter of transmittal.

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    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



•

for the account of an eligible guarantor institution.

The following are "eligible institutions":

•

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 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.

27

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:

•

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;



•

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



•

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:

•

you make the tender through an eligible guarantor institution;



•

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



•

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.

28

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:

•

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



•

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:

•

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



•

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



•

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.

29

Conditions to 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:

•

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

30

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. 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. 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,

31

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.

32

    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.

33

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 November 1999.

34

CAPITALIZATION

    The following table presents on a consolidated basis our capitalization as of January 31, 2000. This table should be read in conjunction with our consolidated financial statements and related notes and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included elsewhere in this prospectus.

	As of January 31, 2000
	(dollars in millions)
Cash and cash equivalents	$	14.5
Long-term debt, including current portion:
Existing debt	$	2.1
Credit facility
Revolving credit facility		—
Term loans		219.6
Notes (1)		134.6
Total debt		356.3
Preferred stock, 500,000 authorized; 500,000 shares issued (2)		35.8
Shareholders' equity:
Class B common stock, 10,000,000 authorized, 4,191,943 shares issued (3)		—
Common stock, 25,000,000 authorized, no shares issued		—
Additional paid-in-capital		99.2
Retained earnings		(228.7	)
Total shareholders' equity (deficit)		(129.5	)
Total capitalization	$	262.6

(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 (deficit).

(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 (deficit).

(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).

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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, 1996 to 2000. We derived the consolidated statements of operations data and consolidated balance sheet data as of and for the five years ended January 31, 1996 to 2000 from our consolidated financial statements which have been audited by PricewaterhouseCoopers LLP, independent accountants.

    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,
	1996			1997			1998			1999			2000
	(dollars in millions)
Statement of Operations Data:
Revenue	$	245.3		$	353.8		$	459.5		$	509.5		$	587.7
Cost of revenue		165.8			227.5			295.4			330.6			393.5
Gross profit		79.5			126.3			164.1			178.9			194.3
Selling, general and administrative expenses		60.1			89.9			114.2			127.7			146.4
Merger costs		—			—			—			—			42.6
Operating income		19.5			36.3			50.0			51.2			5.3
Interest expense		(1.1	)		(4.1	)		(4.3	)		(4.0	)		(13.2	)
Other income (expense), net		0.3			0.3			0.8			0.4			(0.9	)
Income (loss) before provision for income taxes		18.7			32.5			46.5			47.7			(8.8	)
Provision for income taxes		8.0			14.6			20.4			21.2			7.5
Income (loss) before minority interest		10.7			17.8			26.0			26.5			16.3
Minority interest		—			—			—			—			0.1
Income (loss) from continuing operations		10.7			17.8			26.0			26.5			(16.4	)
Accreted preferred stock dividend		—			—			—			—			(1.2	)
Net income (loss) available to common	$	10.7		$	17.8		$	26.0		$	26.5		$	(17.6	)
Balance Sheet Data (at end of period):
Cash and cash equivalents	$	12.1		$	5.2		$	2.5		$	23.5		$	14.5
Working capital (1)		34.6			71.0			77.6			60.5			99.8
Total assets		125.5			202.0			246.5			265.9			354.9
Total debt (2)		13.8			49.6			42.7			41.9			356.3
Total shareholders' equity (deficit)		77.7			96.2			125.7			141.2			(129.5	)
Other Data:
EBITDA (3)	$	30.3		$	49.8		$	67.6		$	71.1		$	28.5
Adjusted EBITDA (3)		30.3			49.8			67.6			71.1			74.2
Capital expenditures		12.5			9.2			17.1			16.5			14.9
Depreciation and amortization (4)		10.8			13.4			17.6			19.9			23.4
Ratio of earnings to fixed charges		7.7	x		6.3	x		7.6	x		7.8	x		0.5	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 accounting principles generally accepted in the United States). 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 and start-up costs related to international operations and certain new customer accounts is presented because we believe it is a meaningful indicator of our operating performance.

(4)

Depreciation and amortization includes a $1.2 million and $0.1 million goodwill writedown for the year ended January 31, 1999 and 2000, respectively.

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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 including the notes to those statements, included elsewhere in this report. 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 under the heading "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 fiscal years ended January 31, 2000 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

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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. 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. On March 31, 2000, we acquired the financial services and training documentation business of Ames Safety Envelope Company (known as Ames On Demand), a full-service printer based in Woburn, Massachusetts. Adding Ames On Demand to our product mix enhances our presence in the New England market by bringing fulfillment and distribution capabilities to the northeastern United States where many of our financial services clients are based. On April 12, 2000, we acquired NTEXT Corporation, a translation services business located in New York. As a result of this acquisition, our Financial Document Services business unit now offers translation services to its customers as part of its regular product offering. 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 leasing arrangements with major manufacturers 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). These arrangements are 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 incurred merger costs of approximately $42.6 million, net of $10.2 million that related to financing costs that have been capitalized and amortized over the term of the finance agreements. Approximately $26.3 million of total merger costs was attributable to the cancellation of stock options and the related payments to the stock option holders. The remaining

39

$16.3 million of fees and expenses relates to non-capitalizable merger fees and expenses. A substantial one-time charge was recorded during the fourth quarter of fiscal year 2000. Because this charge was funded entirely through the proceeds of the merger financing, this charge did not have a material impact on our liquidity, ongoing operations or market position. 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.

Results of Operations

Fiscal year ended January 31, 2000 compared to fiscal year ended January 31, 1999

Revenue

    Overall revenue increased 15.3% to $587.7 million for the year ended January 31, 2000 from $509.5 million last year. Revenue in the Specialty Communication Services segment increased $63.9 million, or 14.3% to $510.5 million from $446.6 million. Within the Specialty Communication Services segment, Financial Document Services revenue increased 1.1% to $259.2 million from $256.3 million one year ago. Revenue generated by financial transactions represented 32.3% of total revenue for the year ended January 31, 2000 compared to 36.5% last year. Financial transaction revenue remained relatively stable posting a modest 2.0% increase from the same period one year ago even though we experienced delays in certain projects during the fourth quarter as a result of year 2000 concerns. Corporate regulatory compliance revenue increased 7.7% for the year ended January 31, 2000. The increase was driven by an aggressive marketing initiative implemented during the first half of fiscal year 2000. Investment Company Services' revenue increased $36.4 million, up 35.8% to $137.9 million from $101.5 million last year. This increase was driven by the positive impact of the Daniels Printing operation, new customers and added services to existing customers. Managed Communication Program revenue increased $17.7 million, or 22.0% to $98.2 million for the year ended January 31, 2000 from $80.5 million one year ago. The positive impact of Alternative Communications operation and the addition of several new national accounts drove this growth. Merrill Print Group revenue increased $6.9 million to $15.1 million for the year ended January 31, 2000 from $8.2 million for the same period one year ago. This increase is attributed to the addition of the Daniels Printing operation earlier this year.

    Revenue in the Document Services segment increased $14.3 million, or 22.7% to $77.3 million for the year ended January 31, 2000 from $63.0 million one year ago. This increase resulted from moderate transactional growth in our reprographic business and by adding new accounts in our growth cities, including Houston, New York, Los Angeles and San Francisco.

Gross profit

    Gross profit increased $15.4 million or 8.6% to $194.3 million for the year ended January 31, 2000 from $178.9 million for the same period one year ago. As a percentage of revenue, gross profit was 33.1% for the year ended January 31, 2000 compared to 35.1% for the year ended January 31, 1999. 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 continued shift in revenue mix from higher gross margin financial transaction revenue to revenue generated by our other business units that tend to be less cyclical, but carry lower gross margins.

Selling, general and administrative

    Selling, general and administrative expenses increased $18.6 million to $146.4 million for the year ended January 31, 2000 from $127.7 million last year. Selling, general and administrative expenses primarily increased as a result of variable costs associated with increased revenues and related expenses associated with the acquired Daniels Printing and Alternative Communications operations. Selling, general and administrative expenses as a percent of revenue were 24.9% for the year ended January 31,

40

2000 compared to 25.1% for the same period one year ago. During the fourth quarter for the year ended January 31, 2000, we reduced our incentive bonus accruals by approximately $2.3 million in order to reflect actual bonuses paid. The decrease in bonuses was due to the decline in our operating results. Additionally, in the fourth quarter, we decreased our allowance for doubtful accounts by approximately $1.9 million as we re-evaluated our accounts receivable portfolio after aggressively writing off accounts earlier in the year ended January 31, 2000, the net impact of which, was an increase in operating income for the year ended January 31, 2000 of approximately $0.1 million.

Merger costs

    During the year ended January 31, 2000, we recorded costs associated with the merger of $42.6 million. Approximately $26.3 million of the costs related to the cancellation and related payment for outstanding stock options at November 23, 1999. The remaining $16.3 million reflects investment banking fees, accounting, legal and othe direct expenses.

EBITDA

    EBITDA decreased $42.6 million to $28.5 million for the year ended January 31, 2000 from $71.1 million for the same period last year.

    Adjusted EBITDA, which reflects EBITDA exclusive of non-recurring merger costs and start-up costs related to international operations and certain new customer accounts, increased $3.1 million, or 4.5% or $74.2 million for the year ended January 31, 2000 up from $71.1 million a year ago. The increase in Adjusted EBITDA is a direct result of increased gross profit offset by increased selling, general and administrative expenses. Adjusted EBITDA, as a percentage of revenue, was 12.6% compared to 14.0% for the year ended January 31, 1999. The primary contribution to the decrease in Adjusted EBITDA as a percentage of revenue resulted from decreased in gross profit as a percentage of revenues, as previously discussed.

Interest expense

    Interest expense for the year ended January 31, 2000 was $13.2 million compared to $4.0 million for the same period last year. The increase in interest expense was caused by the debt incurred to finance the merger and amounts borrowed to finance the Daniels Printing and Alternatives Communications acquisitions.

Tax provision

    The tax provision decreased $13.7 million, to $7.5 million for the year ended January 31, 2000 compared to $21.2 million for the same period last year. The decrease related directly to decreased taxable income that resulted primarily from the deductible portion of the $42.6 million of merger costs previously discussed.

Net loss available to common

    The net loss available for common for the year ended January 31, 2000 was $17.6 million compared to net income available to common of $26.5 million for the same period last year. This decrease is attributable to merger costs, higher selling, general and administrative expenses, increased depreciation and amortization expense associated primarily with the Daniels Printing acquisition and higher interest expense as previously discussed.

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

41

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. 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.

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).

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.

42

Interest expense

    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.

Tax provision

    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.

Impact of Inflation

    We do not believe that inflation has had a significant impact on the results of our operations for the years ended January 31, 2000 and 1999.

Liquidity and Capital Resources

Overview

    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 $14.9 million, $16.5 million and $17.1 million for fiscal years 2000, 1999 and 1998, respectively. We anticipate that we will spend approximately $22.0 million for fiscal 2001 for computer-based production equipment, reprographics, leasehold improvements and printing equipment. 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.

Financing Sources

    As of January 31, 2000, we had: (1) total indebtedness of approximately $356.3 million; and (2) $50.0 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 range from 0.75% to 1.75% for base rate loans and 2.00% to 3.00% for LIBOR loans. The actual margin is dependent 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

43

covenants, including covenants that limit our ability to incur debt, pay dividends and make investments, and events of default.

    On November 23, 1999, we sold 140,000 units consisting of 12% senior subordinated notes and warrants to purchase 172,182 shares of our Class B common stock for $140.0 million. 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.

    In connection with the merger, we 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. 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, we issued warrants to purchase 344,263 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.

    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.

Analysis of Cash Flow

Fiscal year ended January 31, 2000 compared to fiscal year ended January 31, 1999

    Cash and cash equivalents decreased $9.0 million to $14.5 million at January 31, 2000 from $23.5 million at January 31, 1999. We used cash from operations in the fiscal year ended January 31, 2000 of $20.0 million versus generated cash from operations of $55.8 million for the fiscal year ended January 31, 1999. 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 $71.8 million and $23.1 million for the fiscal years ended January 31, 2000 and 1999, respectively. Significant uses of cash in investing activities for the current year included $54.6 million of cash used

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for the Daniels Printing and Alternatives Communications acquisitions and capital expenditures of $14.9 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 $82.8 million for the fiscal year ended January 31, 2000 compared with net cash used in financing activities of $11.8 million for the fiscal year ended January 31, 1999. This change resulted from the net impact of the merger related financing and financing significant portions of the Daniels Printing and Alternatives Communications acquisition with our revolving credit facility and the absence of non-merger stock repurchases during the current year.

Fiscal years ended January 31, 1999 compared to fiscal year ended January 31, 1998 and January 31, 1997

    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.

    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 has 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 temporarily harmed our operating results, in particular during the fourth quarter of fiscal 2000 and the first quarter of fiscal 2001. 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.

Quantitative and Qualitative Disclosures About Market Risk

    Borrowings under Merrill Communications LLC's credit facility accrue interest at variable rates. Based on outstanding borrowings under the credit facility at January 31, 2000, a one-eighth of one percent change in interest rates would impact interest expense in the amount of approximately $275,000 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 term loans A and B will be 7.5% 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.

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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 38 business centers throughout 30 cities in the United States, and our international clients through offices in Paris and London, a strategic alliance in Canada and other alliances 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 approximately 170 project managers, software developers, and support personnel responsible for the design, development and implementation of our technology-based offerings.

    As part of the realignment in our corporate structure in February 1999, 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.

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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 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. In April 2000, we acquired substantially all of the assets of NTEXT Corporation, a translation services business located in New York. As a result of this acquisition, our Financial Document Services business unit now offers translation services to its customers as part of its regular product offering.

    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:

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MerrillDirect, introduced in early 2000, is a secure business-to-business web site that assists clients in developing, preparing and distributing financial documents through the Internet. MerrillDirect offers our customers composition and alteration capabilities, in native word processing formats, such as Word or Excel, as well as EDGAR filings, document management services, and digital print and distribution services. Users submit word-processing files to MerrillDirect.com through the Internet, have it converted to EDGAR format, review it and seamlessly file it with the SEC, all using MerrillDirect.



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Merrill IR Edge, introduced in 1999, is a web-based design 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.



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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

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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.

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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.



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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.



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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.

    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.

    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 30 cities in the United States and additional conference facilities in our offices in Paris and London. We also have conference facilities available for our clients use in Canada, Asia, Latin America and Australia through a joint venture and other alliances.

    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 30 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 April 15, 2000, we employed 1,046 employees, including 261 customer service employees and 167 sales, marketing and sales support personnel.

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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 helped us increase our penetration of this market by building on Daniels' strong reputation as a service provider in this industry. In March 2000, we acquired the financial services and training documentation business of Ames Safety Envelope Company (known as Ames On Demand), a full-service printer based in Woburn, Massachusetts. Adding Ames On Demand to our product mix enhances our presence in the New England market by bringing fulfillment and distribution capabilities to the northeastern United States, where many of our financial services clients are based. We may make other acquisitions in areas that complement our core services, such as suppliers of mail and other distribution services to fund investors.

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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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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.


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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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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.

    We market our services through a direct sales force of approximately 45 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.

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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 April 15, 2000, we employed 493 employees, including 76 customer service employees and 66 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 acquisitions of Daniels Printing and Ames On Demand have 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., Prudential Real Estate Affiliates 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. 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

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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 net:Prospect, introduced in 1998, and Merrill net:Prospect Plus, introduced in 1999, are Internet ordering sites 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. Some of the additional features offered by 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.



•

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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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

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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 April 15, 2000, we employed 856 employees, including 132 customer service employees and 95 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.

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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.

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 that are dependent on print media in reaching their target markets.

    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.

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We also operate a specialized color printing facility in St. Cloud, Minnesota. This facility primarily serves our Managed Communications Programs business unit. With our plant in suburban Boston, Massachusetts, we have high-quality, high-speed presses and enhanced 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 April 15, 2000, we employed 608 employees. Our customer service and print production groups are 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 collateral 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, investment banks and other professional services firms 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 document imaging, copying, fax management and desktop publishing. 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, web-based 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

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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:

•

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.



•

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.



•

Imaging, coding and repository 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, equipment and personnel at the client's office or the Internet. We provide the images to the client on CD-ROM, using our imaging software, or through the Internet, using our Merrill UR Law 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.

•

Litigation support software, in which we provide a web-based document imaging, coding and retrieval system enabling our clients to analyze, sort, annotate, edit and print litigation documents. We offer our Merrill UR Law subscription services 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 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

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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, coding and repository 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 and subscription fees for our Merrill UR Law software.

Operations

    We operate 85 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 lease arrangements with major manufacturers 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. These arrangements are 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 UR Law 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 April 15, 2000, we employed 1,211 employees, including 43 customer service employees and 72 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 UR Law 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.

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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:

•

text processing, conversion and formatting;



•

Internet, extranet and intranet capabilities;



•

database management;



•

image and graphic processing; and



•

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 approximately 170 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.

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    The following table lists our principal proprietary communications tools.

Product	Key Features	Business Unit(s)
Creation Tools
MerrillDirect	• A secure, business-to-business web site that assists clients in developing, preparing and distributing financial documents through the Internet.	Financial Document Services
	• Using Merrill's online EDGAR component, filers can submit SEC-regulated documents directly from their word processing format to MerrillDirect for EDGAR conversion. The file is automatically converted to the preferred EDGAR format and returned to the user for review. Once the filing is approved, the user submits the document to the SEC via MerrillDirect.
	• MerrillDirect provides composition and alteration capabilities in native word processing formats, such as Word or Excel, as well as EDGAR filings.
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.

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Product	Key Features	Business Unit(s)
Merrill UR Law	• Web-based document imaging, coding and retrieval system that enables our clients to analyze, sort, annotate, edit and print litigation documents.	Document Management Services
	• Includes drag and drop folders and visual representations of searches that make Merrill UR Law easy to use.
	• Allows clients to share discovery documents over the Internet.
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.
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

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Product	Key Features	Business Unit(s)
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 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.	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
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 April 15, 2000, we had 4,157 full-time employees and 232 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.

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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
Woburn, Massachusetts	Printing, warehouse and office facility; 78,900 sq. ft.	Leased for a term expiring March 31, 2005 with options to renew for three additional five year terms
Other cities	Conference, office and warehouse facilities; 140 to 77,000 sq. ft.	Leased with expirations ranging from May 31, 2000 to March 25, 2010

    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

61

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. The proposed settlement is subject to the approval of the court, some additional limited discovery and the closing of the merger (which was completed). The limited discovery has not yet been 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, and subsequently filed a lawsuit on March 2, 2000. We removed the case to federal court. The lawsuit 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 have been attempting to settle this matter for several months. We anticipate that any settlement of this litigation will not have a material adverse effect on our financial condition, operating results or liquidity.

    On April 20, 2000, Uniscribe Professional Services Inc. filed a lawsuit against Peter Smith and us in the Superior Court, Judicial District of Fairfield at Bridgeport, Connecticut. This lawsuit alleges that Peter Smith breached a non-disclosure and non-compete agreement with Uniscribe when he accepted employment with us. This lawsuit also alleges that we tortiously interfered with this non-compete agreement. An Order to Show Cause hearing has been scheduled for May 15, 2000. On April 25, 2000, Uniscribe filed a second lawsuit against us in the Supreme Court of the State of New York, County of New York. This lawsuit alleges that we breached a non-disclosure agreement by hiring certain Uniscribe employees and by using confidential information of Uniscribe in violation of the non-disclosure agreement. In May 2000, this lawsuit was removed to federal court in the Southern District of New York. The parties have agreed in principal to consolidate these cases in the Connecticut State court, however, such agreement has not yet been finalized. We anticipate that this litigation will not have a material adverse effect on our financial condition, operating results or liquidity.

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MANAGEMENT

Executive Officers and Directors

    The following table sets forth the name, age as of April 27, 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	49	Vice President, Secretary and General Counsel
Kathleen A. Larkin	40	Vice President, Human Resources
Robert H. Nazarian	49	Executive Vice President and Chief Financial Officer
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

(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.

    Robert H. Nazarian joined our company in April 2000 as our Executive Vice President and Chief Financial Officer. Prior to joining Merrill, Mr. Nazarian served as Executive Vice President and Chief Financial Officer of Florida East Coast Industries, a diversified transportation and telecommunications company, from July 1999 to April 2000. From August 1998 to April 1999, he served as Treasurer of Northwest Airlines, Inc. From October 1995 to July 1998, he served as Chief Financial Officer for Air New Zealand Limited. Prior to joining Air New Zealand Limited, Mr. Nazarian served as Group Financial Controller for Lion Nathan Limited in Australia and New Zealand from October 1989 to September 1995.

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.

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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 with Viking Merger Sub. 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 with Viking Merger Sub. Mr. Dawson has been Managing Director of DLJ Merchant Banking II, Inc. since January 2000 and 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, WRC Media, Inc., Haights Cross Communication and Insilco Holding Company.

    It is currently contemplated that the number of our directors will be increased to eight. The identity of the four 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.

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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 2000.

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	2000 1999 1998	$	375,000 359,375 300,000	$	0 626,000 840,000	(4)   (5)	0 35,000 69,000	$	59,585 47,504 44,824
Rick R. Atterbury Executive Vice President and Chief Technology Officer	2000 1999 1998		275,000 264,583 225,000		0 375,600 504,000	(4)	0 25,000 69,000		42,641 37,700 35,890
B. Michael James President—Financial Document Services	2000 1999 1998		300,000 250,000 250,000		0 103,125 265,625		0 16,000 16,000		31,963 31,213 26,728
Mark A. Rossi President—Investment Company Services	2000 1999 1998		300,000 250,000 250,000		0 122,500 190,500		0 16,000 24,000		25,274 25,300 28,409
Joseph P. Pettirossi President—Managed Communications Program	2000 1999 1998		250,000 229,917 150,000		0 42,500 120,000		0 18,000 16,000		21,027 15,261 11,960

(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)

All options shown in this table were cashed-out in connection with the merger with Viking Merger Sub.

(3)

"All Other Compensation" for fiscal year 2000 includes: (a) $11,200 each for Mr. Castro, Mr. Atterbury, Mr. James, Mr. Rossi and Mr. Pettirossi 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 $1,402 and Mr. Atterbury $1,002; and (c) our contributions to the Supplemental Retirement Plan: Mr. Castro $46,983, Mr. Atterbury $30,439, Mr. James $20,763, Mr. Rossi $14,074 and Mr. Pettirossi $9,827.

(4)

Messrs. Castro and Atterbury elected not to receive any bonuses during fiscal 2000 even though they were each entitled to receive a bonus.

(5)

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

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Options

    We did not grant any options to our executive officers named in the Summary Compensation Table above during fiscal year 2000. The following table summarizes option exercises during fiscal year 2000 by the executive officers named in the Summary Compensation Table above.

Aggregated Option Exercises In
Last Fiscal Year and Fiscal Year-End Option Values

Name	Shares Acquired on Exercise(#)	Value Realized($)(1)
John W. Castro	27,600	$	51,750
Rick R. Atterbury	0		0
B. Michael James	49,500		244,431
Mark A. Rossi	45,300		250,204
Joseph P. Pettirossi	3,200		7,400

(1)

Value based on the difference between the fair market value of one share of common stock on the date of exercise and the exercise price of the option.

    None of the executive officers named in the Summary Compensation Table above held options as of January 31, 2000. All outstanding options whether vested or unvested were canceled upon consummation of the merger with Viking Merger Sub. 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
B. Michael James	92,500		1,014,438
Mark A. Rossi	69,700		685,563
Joseph P. Pettirossi	41,600		278,250

Employment Arrangements

    On November 23, 1999, we entered into employment agreements with John Castro and Rick Atterbury. Mr. Castro receives an annual base salary of $375,000, and Mr. Atterbury receives an annual base salary of $275,000. Their salaries will be reviewed annually by our board of directors 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.

    Messrs. Castro and Atterbury are entitled to certain payments in the event we terminate them without cause. Each would be entitled to 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

66

•

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

    In addition, the executives' 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.

Change in Control Provisions

Option and Direct Investment Plans

    Under our 1999 Stock Option Plan, 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. Under our Direct Investment Plan, if a 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 an option or coinvestment shares, together with any other payment the optionee or 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 optionee or the participant 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

67

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.

Change in Control Agreements

    In April 2000, the Compensation Committee of the Board of Directors adopted change in control agreements with all of the direct reports of our President and Chief Executive Officer. These executives are entitled to receive certain benefits if they are terminated either:

•

within 24 months of a "change in control" or



•

prior to a "change in control" if the termination was either a condition to the "change in control" or was at the request or insistence of a person related to the "change in control."

    The executives are not considered "terminated" for purposes of these agreements if they die or are terminated for "cause" (defined as the executive's (i) gross misconduct; (ii) willful and continued failure to substantially perform his or her duties after demand is given by the Chairman of the Board; or (iii) 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 (i) base salary plus (ii) 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 January 31, 2001; provided, the agreements will automatically renew for additional 12-month periods unless we give the executive 90 days' advance notice of our intent to terminate the agreements. In addition, if a "change in control" occurs during the term of the agreements, the agreements will continue for an additional 24 months.

68

    A "change in control" for purposes of these agreements means:

•

the sale, lease, exchange or other transfer of substantially all of our assets;



•

when, after February 1, 2000, any person becomes, directly or indirectly, the "beneficial owner" of 20% or more of the "combined voting power" of our outstanding securities;



•

a merger or consolidation, if our shareholders do not own more than 80% of the "combined voting power" of the surviving corporation's outstanding securities. "Combined voting power" is measured by shares of the surviving corporation that ordinarily have the right to vote at the election of directors;



•

when individuals who constitute our board of directors on February 1, 2000, cease to constitute at least a majority of the board. For purposes of determining these individuals, directors whose election or nomination is approved by a majority of the directors serving on February 1, 2000, are considered to be members of the board as of February 1, 2000; or



•

a change in control that would be required to be reported on a Form 8-K, 10-K or 10-Q, whether or not we are subject to those reporting requirements.

    The following table illustrates the amount of the lump sum payments that our executives named in the Summary Compensation Table above would have been entitled to receive if a "change in control" had occurred as of April 30, 2000:

Executive	Amount of Payment
B. Michael James	$	825,000
Mark A. Rossi		825,000
Joseph P. Pettirossi		625,000

    The above amounts exclude:

•

costs associated with medical, dental and vision benefits; and



•

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.

Board Indemnification Agreements

    In May 1999, we entered into compensation and indemnification agreements with each of the members of the special committee of our board of directors, 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 considering our merger with Viking Merger Sub, Inc. In return for their services as members of the special committee, each of Messrs. Miller, Hoge and Scott Morton received $25,000. We 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 with Viking Merger Sub. 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.

69

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 April 15, 2000 by (1) any person or group who beneficially owns more than 5% of our class B common stock or preferred stock, (2) each of our executive officers named in our "Summary Compensation" table and (3) all of our directors and executive 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	66.6	%
John W. Castro	0	0		909,091	18.4	%
Rick R. Atterbury	0	0		70,000	1.4	%
BNY Capital Corporation (3)	62,500	12.5	%	43,033	*
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	*
B. Michael James	0	0		0	0
Mark A. Rossi	0	0		0	0
Joseph P. Pettirossi	0	0		0	0
Lawrence M. Schloss (6)	0	0		0	0
William F. Dawson, Jr. (6)	0	0		0	0
All directors and executive officers as a group (12 persons) (6)	0	0		979,091	19.8	%

*

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)

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.

(4)

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.

70

(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)

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

71

RELATED PARTY RELATIONSHIPS AND TRANSACTIONS

Investors' Agreement

    On November 23, 1999, Viking Merger Sub, DLJ Merchant Banking funds, Messrs. Castro and Atterbury and certain other investors entered into an Investors' Agreement which restricts certain transfers of the shares of our capital stock. 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 their shares 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.

    Under the agreement, DLJ Merchant Banking funds have the right to nominate four of the eight members of our board of directors. Three of the eight members of our board will be nominated by Messrs. Castro and Atterbury. One member of the board will 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 subject to all the terms of this agreement, except for 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 our merger with Viking Merger Sub. 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 Merrill Communications LLC's credit facility.

72

Purchase of Shares from DLJMB

    In connection with our pending employee offering of class B common stock to our employees, we anticipate purchasing 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.

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 Mr. 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.

Executive Loan Program

Summary

    In fiscal 1999, we adopted a Stock Purchase Loan Program, which enabled employees who report to our President and Chief Executive Officer to borrow money to exercise stock options and to pay any related income and employment taxes due. We held the shares obtained upon exercise of the underlying stock options as collateral for the loan.

    Each borrowing arrangement was evidenced by a written demand promissory note executed by the executive at the time of borrowing. The total amount that any executive could borrow under the Stock Purchase Loan Program was determined by the Compensation Committee but could not exceed:

•

for the first loan request, either:



•

100% of the exercise price of the option plus 100% of the resulting income and employment taxes actually paid within 15 months of the exercise; or



•

60% of the cost to purchase stock on the open market at the fair market value at the time of purchase.



•

for any subsequent loan, the lesser of:



•

100% of the exercise price of the option plus 100% of the resulting income and employment taxes actually paid within 15 months of the exercise;



•

60% of the cost to purchase stock on the open market at the fair market value at the time of purchase;



•

the amount that, when added to the principal amount of all outstanding loans under the Stock Purchase Loan Program, will not exceed 60% of the market value of all stock pledged as collateral by the executive immediately following the loan; or



•

eight times the executive's then current base salary.

    No loan could be made that would cause the aggregate amount outstanding under all loans to an executive to exceed 100% of the market value of all stock pledged as collateral by that executive under the Stock Purchase Loan Program. If the market value of all shares held as collateral fell below an executive's loan balance, the executive was required to make arrangements to repay that portion of the loan, or pledge additional shares, equal to the difference between the market value and the loan

73

balance. The loans made to executives under the Stock Purchase Loan Program were made on an interest-free basis.

Repayment Terms

    Loans under the program were required to be repaid within five years of the grant of the loan. The term of the loan, however, could have been extended at the discretion of the Compensation Committee. The note provided that 30% of the employee's bonus compensation received under our bonus plan, net of applicable estimated taxes and other withholdings, must be applied to repay the principal balance under the note. In addition, 50% of the proceeds from any sale of stock pledged under the Stock Purchase Loan Program was required to be applied to the repayment of amounts outstanding under the Stock Purchase Loan Program. All dividends received by an executive were also required to be applied to the loan.

Aggregate Amount Outstanding During Fiscal 2000

    During fiscal year 2000, the following executive officers had loans outstanding under our Stock Purchase Loan Program as follows:

Executive Officer	Largest Aggregate Amount Outstanding During Fiscal 2000
John W. Castro, President and Chief Executive Officer	$	367,313
Rick R. Atterbury, Executive Vice President and Chief Technology Officer		0
B. Michael James, President—Financial Document Services		493,238
Mark A. Rossi, President—Investment Company Services		441,992
Joseph P. Pettirossi, President—Managed Communications Program		0
Allen J. McNee, President—Document Management Services		76,165
Raymond J. Goodwin, President—Merrill Print Group		75,142
Steven J. Machov, Vice President, General Counsel and Secretary		298,156
Kathleen A. Larkin, Vice President—Human Resources		182,757
Kay A. Barber, Former Chief Financial Officer		321,212

    Upon completion of the merger with Viking Merger Sub, all borrowings under the Stock Purchase Loan Program were paid in full.

74

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	%

75

    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.

76

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.

    As of January 31, 2000, Merrill and the Guarantors had outstanding approximately $221.8 million of Senior Indebtedness and our non-guarantor subsidiaries had $1.3 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

77

"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."

    All of our Subsidiaries except Merrill Corporation Ltd., Merrill Corporation S.A.R.L., Document.com, Inc. and Cetara Corporation are Restricted Subsidiaries. For the fiscal year ended January 31, 2000, these four subsidiaries accounted for less than 2.0% of our revenue and 6.0% of our 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 November 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.



•

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.

78

    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

79

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—Risks relating to our indebtedness and your notes—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—Risks relating to our indebtedness and your notes—Fraudulent transfer statutes may limit your rights as a noteholder."

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    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.

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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;

82

(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 generally 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 generally 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;

83

(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;

84

(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.

85

    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"),

86

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;

87

(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;

88

(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

89

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.

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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

91

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

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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.

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    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.

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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,

95

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

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(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

97

(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

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(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

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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;

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(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.

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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.

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    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,

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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").

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    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

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(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;

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(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.

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    "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.

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    "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,

109

(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.

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    "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

111

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.

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    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

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(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

114

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.

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    "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;

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(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);

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(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.

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    "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

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(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

120

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.

121

    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

122

EDGAR system are available to the public at the SEC's web site at http://www.sec.gov. The Securities Act file number for our SEC filings is 333-30732.

    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 as a result of the effectiveness of this registration statement 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 Securities Exchange Act of 1934.

    Anyone who receives this prospectus may obtain a copy of the indenture and A/B exchange 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, 1999 and 2000 and for each of the three years in the period ended January 31, 2000, 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.

123

INDEX TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL DATA

	Page
Unaudited Pro Forma Consolidated Financial Data	P-2
Unaudited Pro Forma Consolidated Statement of Operations for the Year Ended January 31, 2000	P-3
Notes to Unaudited Pro Forma Consolidated Statement of Operations	P-4

P-1

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 statement of operations for the year ended January 31, 2000 gives effect to the following as if each had occurred at the beginning of the period presented:

(1)

the merger with Viking Merger Sub., 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.

    The pro forma adjustments are described in the accompanying notes to the financial statement 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.

P-2

MERRILL CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
for the year ended January 31, 2000
(dollars in thousands, except ratio)

				Acquisitions
	Company Historical			Daniels Printing		Alternatives Communications			Net Acquisition Adjustments			Superstar Computing			Merger Adjustments			Pro-Forma(9)
Revenue	$	587,737		$	15,725	$	6,837		$	—		$	(294	)	$	—		$	610,005
Cost of revenue		393,452			10,622		4,954			116	(1)		(178	)		—			408,353
										(613	)(2)
Gross profit		194,285			5,103		1,883			497			(116	)		—			201,652
Selling, general and administrative expenses		146,352			2,814		2,295			326	(3)		(428	)		(429	)(4)		150,341
										(852	)(2)					263	(5)
Merger costs		42,628			—		—			—			—			(42,628	)		—
Operating income		5,305			2,289		(412	)		1,023			312			42,794			51,311
Interest expense		13,235			231		63			—			—			27,888	(6)		41,417
Other expense, net		871			37		—			—			—			—			908
(Loss) income before provision for income taxes		(8,801	)		2,021		(475	)		1,023			312			14,906			8,986
Provision for income taxes		7,491			—		—						—			380	(7)		7,871
Loss (income) before minority interest		(16,292	)		2,021		(475	)		1,023			312			14,526			1,115
Minority interest		106			—		—			—			—			—			106
Loss (income) from continuing operations		(16,398	)		2,021		(475	)		1,023			312			14,526			1,009
Accreted preferred stock dividend		1,163			—		—			—			—			5,021	(8)		6,184
Net (loss) income available to common	$	(17,561	)	$	2,021	$	(475	)	$	1,023		$	312		$	9,505		$	(5,175	)
Other Data:
EBITDA	$	28,475		$	2,694	$	(382	)	$	1,465		$	300			203		$	32,755
Adjusted EBITDA(10)		74,247			2,694		(382	)		1,465			300			203			78,527
Depreciation and amortization of intangibles		23,170			405		30			442			(12	)		(37	)		23,998
Capital expenditures		14,854			37		93			—			—			—			14,984
Cash interest expense		12,771																	39,795
Ratio of earnings to fixed charges		0.5x																	1.2x

P-4

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:

	For the Period February 1, 1999 to November 23, 1999
	Daniels		Alternatives		Total
	(dollars in thousands)
Contractual executive compensation	$	442	$	202	$	644
Services and facilities(a)		371		—		371
Reduced employee compensation and benefits		450		—		450
	$	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:

	For the Period February 1, 1999 to November 23, 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 $37,000 for the period February 1, 1999 to November 23, 1999.

P-5

(6)

Reflects the additional interest expense attributable to the merger financing:

	For the Period February 1, 1999 to November 23, 1999
	(dollars in thousands)
Increase in interest expense
Revolving credit facility (a)	$	139
Term loan A (a)		4,814
Term loan B (b)		12,426
Notes (c)		13,673
Commitment fees on undrawn revolving credit facility		195
Amortization of discount		182
Accretion of unit warrant value (d)		80
Amortization of deferred financing costs		1,056
Total		32,565
Elimination of historical interest expense associated with repaid indebtedness		(4,677	)
Net increase in interest expense	$	27,888

(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 $275,000 for the year ended January 31, 2000.

(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, 2000 would have been $170,000.

(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, 2000 do not include any related compensation expenses associated with the direct investment plan.

(10)

Adjusted EBITDA reflects EBITDA exclusive of merger costs and start-up costs related to international operations and certain new customer accounts in the year ended January 31, 2000.

P-6

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	Page
Report of Independent Accountants	F-2
Consolidated Balance Sheet as of January 31, 1999 and 2000	F-3
Consolidated Statement of Operations for the Years Ended January 31, 1998, 1999 and 2000	F-4
Consolidated Statement of Changes in Shareholders' Equity (Deficit) for the Years Ended January 31, 1998, 1999 and 2000	F-5
Consolidated Statement of Cash Flows for the Years Ended January 31, 1998, 1999 and 2000	F-6
Notes to Consolidated Financial Statements	F-7

F-1

REPORT OF INDEPENDENT ACCOUNTANTS

To the Shareholders and Board of Directors
of Merrill Corporation:

    In our opinion, the accompanying consolidated balance sheet and the related consolidated statements of operations, changes in shareholders' equity (deficit) and cash flows present fairly, in all material respects, the financial position of Merrill Corporation and Subsidiaries as of January 31, 1999 and 2000 and the results of their operations and their cash flows for each of the three years in the period ended January 31, 2000, in conformity with accounting principles generally accepted in the United States. 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 auditing standards generally accepted in the United States 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
April 27, 2000
Saint Paul, Minnesota

F-2

Merrill Corporation

Consolidated Balance Sheet

(dollars in thousands)

	As of January 31,
	1999		2000
Assets
Current assets
Cash and cash equivalents	$	23,477	$	14,458
Trade receivables, less allowance for doubtful accounts of $8,126 and $5,905, respectively		102,365		129,186
Work-in-process inventories		12,639		19,110
Other inventories		7,559		8,240
Other current assets		12,253		22,374
Total current assets		158,293		193,368
Property, plant and equipment, net		44,935		59,491
Goodwill, net		49,744		75,945
Other assets		12,973		26,056
Total assets	$	265,945	$	354,860
Liabilities and Shareholders' Equity (Deficit)
Current liabilities
Current maturities of long-term debt	$	2,210	$	2,300
Current maturities of capital lease obligations		236		201
Accounts payable		29,640		35,808
Accrued expenses		44,642		43,318
Total current liabilities		76,728		81,627
Long-term debt, net of current maturities		38,110		352,615
Capital lease obligations, net of current maturities		1,375		1,196
Other liabilities		8,581		13,134
Total liabilities		124,794		448,572
Commitments and contingencies (Notes 4 and 6)
Minority interest		—		106
Preferred stock $.01 par value: 500,000 shares authorized; no shares and 500,000 shares, respectively, issued and outstanding. Liquidation value at January 31, 2000 was $41.1 million		—		35,697
Shareholders' equity (deficit)
Common stock, $.01 par value: 25,000,000 shares authorized; 15,823,155 and no shares, respectively, issued and outstanding		158		—
Class B common stock, $.01 par value: 10,000,000 shares authorized; no and 4,191,943 shares, respectively, issued and outstanding		—		42
Additional paid-in capital		12,722		99,158
Retained earnings (deficit)		128,271		(228,715	)
Total shareholders' equity (deficit)		141,151		(129,515	)
Total liabilities and shareholders' equity (deficit)	$	265,945	$	354,860

The accompanying notes are an integral part of the consolidated financial statements.

F-3

Merrill Corporation

Consolidated Statement of Operations

(dollars in thousands)

	For the Years Ended January 31,
	1998			1999			2000
Revenue	$	459,516		$	509,543		$	587,737
Cost of revenue		295,390			330,632			393,452
Gross profit		164,126			178,911			194,285
Selling, general and administrative expenses		114,174			127,705			146,352
Merger costs		—			—			42,628
Operating income		49,952			51,206			5,305
Interest expense		(4,321	)		(3,961	)		(13,235	)
Other income (expense), net		835			426			(871	)
Income (loss) before provision for income taxes		46,466			47,671			(8,801	)
Provision for income taxes		20,445			21,214			7,491
Net income (loss) before minority interest		26,021			26,457			(16,292	)
Minority interest		—			—			106
Net income (loss) from continuing operations		26,021			26,457			(16,398	)
Accreted preferred stock dividend		—			—			1,163
Net income (loss) available to common	$	26,021		$	26,457		$	(17,561	)

The accompanying notes are an integral part of the consolidated financial statements.

F-4

Merrill Corporation

Consolidated Statement of Changes in Shareholders' Equity (Deficit)

(dollars in thousands)

		For the Years Ended January 31, 1998, 1999 and 2000
	Common Stock			Class B Common Stock		Additional Paid-in Capital			Retained Earnings			Total
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 available to common		—			—		—			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 available to common		—			—		—			26,457			26,457
Balance, January 31, 1999		158			—		12,722			128,271			141,151
Exercise of stock options		3			—		3,000			—			3,003
Tax benefit realized upon exercise of stock options		—			—		521			—			521
Other		—			—		(5	)		—			(5	)
Cash dividends		—			—		—			(963	)		(963	)
Merger related:
Repurchase of common stock		(161	)		—		(16,412	)		(338,462	)		(355,035	)
Issuance of Class B common stock		—			42		92,181			—			92,223
Value ascribed to preferred stock warrants		—			—		5,466			—			5,466
Value ascribed to the note warrants		—			—		1,685			—			1,685
Net loss available to common		—			—		—			(17,561	)		(17,561	)
Balance, January 31, 2000	$	—		$	42	$	99,158		$	(228,715	)	$	(129,515	)

The accompanying notes are an integral part of the consolidated financial statements.

F-5

Merrill Corporation

Consolidated Statement of Cash Flows

(dollars in thousands)

	For the Years Ended January 31,
	1998			1999			2000
Operating activities:
Net income (loss) available for common	$	26,021		$	26,457		$	(17,561	)
Adjustments to reconcile net income (loss) available for common to net cash provided by (used in) operating activities:
Depreciation and amortization		11,147			13,066			16,318
Amortization of intangible assets		6,500			5,617			6,943
Writedown of goodwill		—			1,180			125
Writedown of investment		—			—			594
Provision for losses on trade receivables		2,064			3,273			(80	)
Provision for unbillable inventories		(1,063	)		67			(660	)
Deferred income taxes		(2,592	)		(3,518	)		(559	)
Change in deferred compensation		1,285			1,807			(4,476	)
Minority interest in earnings of subsidiary		—			—			106
Accreted preferred stock dividend		—			—			1,163
Changes in operating assets and liabilities, net of effects from business acquisitions
Trade receivables		(36,706	)		11,796			(10,227	)
Work-in-process inventories		12,082			865			(1,554	)
Other inventories		(1,667	)		(333	)		819
Other current assets		(4,012	)		257			(1,085	)
Accounts payable		7,336			(348	)		(1,950	)
Accrued expenses		11,537			(3,267	)		(3,239	)
Income taxes		(1,059	)		(1,109	)		(4,700	)
Net cash provided by (used in) operating activities		30,873			55,810			(20,023	)
Investing activities:
Purchase of property, plant and equipment		(17,069	)		(16,479	)		(14,854	)
Business acquisitions, net of cash acquired		(13,179	)		(4,039	)		(55,245	)
Other investing activities, net		137			(2,551	)		(1,660	)
Net cash used in investing activities		(30,111	)		(23,069	)		(71,759	)
Financing activities:
Borrowings on notes payable to banks		104,275			86,600			157,575
Repayments on notes payable to banks		(110,225	)		(86,600	)		(159,707	)
Proceeds from issuance of long-term debt		—			—			356,237
Debt issuance costs		—			—			(10,160	)
Principal payments on long-term debt and capital lease obligations		(936	)		(814	)		(40,926	)
Issuance of Class B common stock		—			—			70,683
Issuance of preferred stock		—			—			40,000
Repurchase of common stock		(3,065	)		(12,813	)		(333,495	)
Dividends paid		(1,133	)		(1,297	)		(963	)
Exercise of stock options		5,417			2,149			3,003
Tax benefit realized upon exercise of stock options		2,192			884			521
Other equity transactions, net		83			96			(5	)
Net cash (used in) provided by financing activities		(3,392	)		(11,795	)		82,763
(Decrease) increase in cash and cash equivalents		(2,630	)		20,946			(9,019	)
Cash and cash equivalents, beginning of year		5,161			2,531			23,477
Cash and cash equivalents, end of year	$	2,531		$	23,477		$	14,458
Supplemental cash flow disclosures
Income taxes paid	$	22,000		$	24,724		$	11,291
Interest paid		3,757			3,599			9,912

In connection with the merger on November 23, 1999 (Note Two), 979,091 shares of our common stock with a total value of $21.5 million were exchanged for the same number of shares of our Class B common stock.

The accompanying notes are an integral part of the consolidated financial statements.

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Merrill Corporation

Notes to Consolidated Financial Statements

ONE—Nature of Business and Significant Accounting Policies

    Nature of Business  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.

    Use of Estimates  The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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.

    Principles of Consolidation  The consolidated financial statements include all majority-owned subsidiaries. All significant intercompany transactions and balances have been eliminated.

    Cash Equivalents  We consider 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, generally over 15 to 20 years. We periodically evaluate 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  We recognize revenue when service projects are completed or products are shipped.

    Business Segments  Effective January 31, 1999, we adopted Statement of Financial Accounting Standards (SFAS) No. 131, "Disclosures About Segments of an Enterprise and Related Information," which requires us to report information about our operating segments according to the management

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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 Ten.

    Stock-based Compensation  We account 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 our 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. We account 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.

    Insurance Obligations  We employ large deductible insurance policies covering workers compensation and employee healthcare costs. Costs are accrued that relate to these policies based on claims filed and estimates for claims incurred but not reported.

TWO—Merger

    On November 23, 1999, we merged with Viking Merger Sub, Inc. (Viking), an affiliate of DLJ Merchant Banking Partners II L.P. and certain of its affiliates and we continued as the surviving company. The transaction was accounted for as a recapitalization and did not have any impact on our historical basis of assets and liabilities. The transaction was principally financed by DLJ Merchant Banking Partners II L.P. and certain of its affiliates who, as a result of the merger, hold approximately 76.6% of the issued and outstanding Class B common shares. Certain members of management retained a 23.4% ownership of the issued and outstanding Class B common shares as a result of the merger.

    In connection with the merger, we entered into a new $270.0 million senior secured credit facility and issued $140.0 million of 12.0% senior subordinated notes with warrants to purchase 172,182 shares of Class B common stock. (Notes Five and Nine).

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THREE—Selected Balance Sheet Data

	As of January 31,
	1999			2000
	(dollars in thousands)
Property, plant and equipment, net
Land	$	1,951		$	2,296
Buildings		12,111			18,477
Equipment		63,068			68,901
Furniture and fixtures		14,157			23,756
Leasehold improvements		18,664			22,751
Construction in progress		1,090			2,875
		111,041			139,056
Less accumulated depreciation and amortization		(66,106	)		(79,565	)
	$	44,935		$	59,491
Goodwill, net
Goodwill	$	63,462		$	94,417
Less accumulated amortization		(13,718	)		(18,472	)
	$	49,744		$	75,945
Accrued expenses
Commissions and compensation	$	22,089		$	23,759
Defined contribution plan		3,970			4,791
Purchase price consideration		7,734			800
Accrued interest		869			3,103
Other		9,980			10,865
	$	44,642		$	43,318

FOUR—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.

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    Pro forma (unaudited) results for the year ended January 31, 1998, 1999 and 2000, as if the acquisition had been effective at February 1, 1998, are as follows:

	For the Year Ended January 31,
	1998		1999		2000
	(dollars in thousands)
Revenues	$	524,794	$	575,702	$	603,462
Net income (loss) available to common	$	24,674	$	26,737	$	(16,376	)

    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 $3.6 million and is being amortized using the straight-line method over 15 years.

    On June 11, 1998, we purchased substantially all operating assets and assumed certain liabilities of Executech, Inc. and an affiliated company, World Wide Scan Services, LLC for approximately $3.2 million in cash and the assumption of certain ordinary course liabilities of $0.9 million. The agreement called for additional consideration totaling approximately $10.0 million through fiscal year 2003. 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 $12.8 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. Results of the acquired companies' operations have been included in the Consolidated Statement of Operations from their respective date of acquisitions.

    Subsequent to January 31, 2000, we acquired certain assets and assumed certain ordinary course liabilities of NTEXT Corporation and Ames Envelope Company. These acquisitions have been accounted for as purchases and are not significant to our financial position or operating results.

FIVE—Financing Arrangements

    Bank Financing  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). 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 uncommited, 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 our consolidated assets. Beginning August 1, 2000, the applicable

F-10

margins for revolving credit loans, the 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 is subject to mandatory principal prepayments if certain events occur as defined in the credit agreement. In addition, the new credit facility includes various covenants, including minimum requirements for Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA), other financial ratios and limitations on the amounts of certain transactions, including payment of dividends.

    Amounts borrowed under the revolving 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%. The revolving credit facility also requires commitment fees in an amount equal to 0.50% per year on the daily average unused portion of the revolving crdit facility. There were no borrowings outstanding under the revolving credit facility at January 31, 2000 or under the old revolving credit facility at January 31, 1999. The weighted average interest rates on borrowings on all revolving credit facilities were 8.26%, 8.44% and 6.35% for the years ended January 31, 1998, 1999 and 2000, respectively.

    Long-term debt  Long-term debt consisted of the following:

	As of January 31,
	1999		2000
	(dollars in thousands)
Term loan A, bearing interest at our option, at the reserve adjusted LIBOR rate plus 3.00% or at the alternate base rate plus 1.75%, with interest only payments through January 31, 2001, at which time quarterly principal and interest payments are due through November 2005. The reserve adjusted LIBOR rate at January 31, 2000 was 7.25%.	$	—	$	65,000
Term loan B, bearing interest at our option, at the reserve adjusted LIBOR rate plus 3.75% or at the alternate base rate plus 2.50%, with quarterly principal and interest payments due through November 2007.		—		154,613
Senior subordinated notes, face value of $140.0 million, net of $1.7 million of value subscribed to warrants to purchase 172,182 of our Class B common stock (Note Nine) and $3.8 million of unamortized discount, bearing interest at 12.0%. 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 value will be redeemable on or prior to November 1, 2002, with the net proceeds of a public equity offering should one occur. The notes include various covenants, including limitations on the amounts of certain transactions, including payments of dividends.
		—		134,552

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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 were paid in full on November  23, 1999 in connection with the merger (Note Two).		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. The industrial development bonds were paid in full on November 23, 1999 in connection with the merger. (Note Two).		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, 1999 was 6.8125%.		2,000			—
Other		—			750
		40,320			354,915
Less current maturities of long-term debt		(2,210	)		(2,300	)
	$	38,110		$	352,615

    The aggregate cash maturities of long-term debt at January 31, 2000 are as follows:

(dollars in thousands)
2001	$	2,300
2002		4,802
2003		8,050
2004		14,550
2005		17,798
Thereafter		312,863
	$	360,363

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    Based on quoted market prices for similar issues, the fair value of long-term debt approximates its carrying value at January 31, 1999 and 2000.

    On December 22, 1999, we entered into an interest rate cap transaction with an affiliate of a shareholder 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 new credit facility.

SIX—Leases

    We lease 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 property under capital leases, which is classified as property, plant and equipment, is as follows:

	As of January 31,
	1999			2000
	(dollars in thousands)
Land	$	333		$	333
Building		2,439			2,439
Equipment		389			389
Less accumulated amortization		(1,334	)		(1,458	)
	$	1,827		$	1,703

    We also lease office space and equipment under noncancelable operating leases which expire at various dates through October 31, 2014. Rental expense charged to operations was $8.0 million, $9.0 million and $11.2 million for the years ended January 31, 1998, 1999 and 2000, respectively.

F-13

    Future minimum rental commitments under noncancelable leases at January 31, 2000, are as follows:

	Capital Leases			Operating Leases
	(dollars in thousands)
2001	$	334		$	9,155
2002		330			8,410
2003		330			7,859
2004		330			6,490
2005		330			4,518
Thereafter		275			23,141
		1,929		$	59,573
Imputed interest		(532	)
Present value of minimum lease payments		1,397
Less current maturities of capital lease obligations		(201	)
Capital lease obligations, net of current maturities	$	1,196

SEVEN—Income Taxes

    Components of the provision for income taxes are as follows:

	For the Years Ended January 31,
	1998			1999			2000
	(dollars in thousands)
Current
Federal	$	19,974		$	21,204		$	6,955
State		3,063			3,528			1,095
		23,037			24,732			8,050
Deferred		(2,592	)		(3,518	)		(559	)
Provision for income taxes	$	20,445		$	21,214		$	7,491

F-14

    Temporary differences comprising the net deferred tax asset recognized in the accompanying Consolidated Balance Sheet are as follows:

	As of January 31,
	1999		2000
	(dollars in thousands)
Deferred compensation	$	3,997	$	3,897
Property, plant and equipment		2,359		2,728
Vacation accrual		1,228		1,565
Allowance for doubtful accounts		1,188		1,511
Insurance reserves		1,406		1,248
Inventories		1,038		1,006
Goodwill amortization		1,131		1,001
International operating loss carryforward		—		963
Other, net		1,204		1,441
Net deferred tax asset before valuation allowance		13,551		15,360
Less valuation allowance		—		(1,250	)
Net deferred tax asset	$	13,551	$	14,110

    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,
	1998		1999		2000
		(dollars in thousands)
Provision (benefit) for federal income taxes at statutory rate	$	16,263	$	16,684	$	(3,080	)
State income taxes, net of federal benefit		1,646		1,967		717
Non-deductible merger costs		—		—		4,913
Non-deductible business meeting and entertainment expenses		1,832		2,003		2,612
Change in valuation allowance		—		—		1,250
Other		704		560		1,079
	$	20,445	$	21,214	$	7,491

    Our consolidated federal income tax returns filed have been examined by the Internal Revenue Service through fiscal year 1998.

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EIGHT—Defined Contribution Plan

    On February 1, 1998, we combined our defined contribution retirement plan and our 401(k) incentive savings plan. Under the new plan, Company contributions are based on 4% of eligible employee compensation plus a 100% matching contributions up to a maximum of the first 3% of a participant's 401(k) contribution. Substantially all of our employees are covered by the new plan. Related costs of all retirement plans charged to operations were $5.1 million, $6.1 million and $6.7 million for the years ended January 31, 1998, 1999 and 2000, respectively.

NINE—Preferred Stock

    Shares of preferred stock are non-voting, except as otherwise provided by law or by agreement and are due November 15, 2011. Each share of preferred stock is entitled to cumulative, quarterly dividends at a compound rate of 14.5% and a liquidation preference of $80.00 plus accrued dividends. 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. 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 accured dividends. The preferred stock is subject to redemption at our option at 114.5% of liquidation preference, prior to November 15, 2004, declining to 100.0% of such liquidation preference after November 15, 2007. Upon the occurrence of a change of control, as defined in the terms of the preferred stock, each holder of preferred stock will have the right to require us to repurchase all or any part of the holder's preferred stock at an offer price in cash equal to 101.0% of the liquidation preference.

TEN—Shareholders' Equity

    Common Stock  The holders of common stock are entitled to one vote for each share on all matters voted upon by the shareholders and may not cumulate votes for the election of directors. Subject to the preferential rights of the Class B common stock and preferred stock, any shares of common stock outstanding will be entitled to participate equally in any distribution of net assets made to the shareholders in liquidation of our company and will be entitled to participate equally in dividends as when declared by the board of directors. There are no redemption, sinking fund, conversion or preemptive rights with respect to the shares of common stock.

    Class B Common Stock  The Class B common stock is identical in all respects to the common stock and has equal rights and privileges, except that the Class B common stock, with the respect to rights on liquidation, winding up or dissolution of our company, ranks prior to the common stock. Subject to the preferential rights of the preferred stock, in the event of any voluntary or involuntary liquidation, dissolution or winding up of our company, the holders of outstanding shares of Class B common stock are entitled to receive out of our assets available for distribution to shareholders, before any distribution of assets to holders of common stock, an amount equal to $1.00 per share of Class B common stock. After such payment, the holders of common stock and Class B common stock will share on a pro rata basis in any distribution of our assets, subject to the preferential rights of the preferred stock.

    Subsequent to the merger, our board of directors and shareholders adopted the Direct Investment Plan where 1,459,091 shares of our Class B common stock are reserved for issuance to certain of our employees, non-employee directors, consultants and independent contractors. Of the 1,459,091 shares,

F-16

227,272 shares are designated as reinvestment shares and 1,231,819 shares are designated as coinvestment shares. Reinvestment shares are the shares of our Class B common stock where participants purchase the shares with their own funds. Coinvestment shares are the shares of our Class B common stock where we lend participants up to 65% of the total amount each participant elects to purchase. As a condition to us making the loan, all of a participant's coinvestment shares must be pledged as collateral for the loan. The loan is a non-recourse promissory note that accrues interest at a fixed annual rate of 8%. Coinvestment shares, for which 65% of the total purchase price is funded by us, are immediately vested for 35% of the shares, with the remaining shares vesting over the next five years. While interest on the loan will accrue, the participant will not be required to pay any interest during the term of the note. The accrued interest and the principal balance will be due generally on the earlier of certain events or eight years. We have the right to repurchase all or any portion of the participant's shares upon their termination. The repurchase price is dependent on whether the participant was terminated for cause, however, in no event, will the repurchase price be greater than the fair market value. The fair market value will be determined by the compensation committee of the board of directors and will be based on a specific formula or such other value as the compensation committee determines. Upon termination, other than for cause, the participant has the right to put all or any portion of their reinvestment shares and vested coinvestment shares to us at fair market value.

    At January 31, 2000, there were no shares outstanding under the Direct Investment Plan. As of April 15, 2000, there were 128,514 reinvestment and 614,928 coinvestment shares outstanding. For accounting purposes, the Plan is considered a variable plan. Accordingly, a non-cash compensation charge will be recorded in the future when the fair market value of coinvestment shares exceed the original purchase price of such shares.

    Warrants  Together with the issuance of preferred stock, we issued warrants to purchase 344,263 shares of our Class B common stock. Each warrant entitles the holder to purchase one share of our Class B common stock at an exercise price of $0.01 per share subject to antidilution provisions. The warrants are exercisable prior to November 16, 2011. For accounting purposes, $5.5 million from the proceeds of the preferred stock offering were allocated to the estimated value of the warrants and has been classified as additional paid in capital on our Consolidated Statement of Changes in Shareholders' Equity (Deficit).

    Together with the issuance of $140.0 million senior subordinated notes, we issued warrants to purchase 172,182 shares of our Class B common stock. Each warrant entitles the holder to purchase one share of our Class B common stock at an exercise price of $22.00 per share subject to antidilution provisions. The warrants become exercisable after October 31, 2001 and expire May 1, 2009. For accounting purposes, $1.7 million from the proceeds of the issuance of the $140.0 million senior subordinated notes were allocated to the estimated value of the warrants and has been classified as additional paid in capital on our Consolidated Statement of Changes in Shareholders' Equity (Deficit).

    Stock Options  Prior to the merger, we sponsored various incentive and stock option plans and the 1996 Non-employee Director Plan which provided for the issuance of no more than 6,506,000 shares and 400,000 shares, respectively of common stock to eligible participants and nonemployee directors. In connection with the merger, each of the 3,015,118 outstanding options and restricted stock awards whether or not vested was canceled and in lieu thereof, each holder of an option or restricted stock award received a cash payment in an amount equal to the excess, if any, of $22.00 over the

F-17

exercise price of the option multiplied by the number of shares subject to the option, less applicable withholding taxes.

    Subsequent to the merger, our board of directors and shareholders adopted the 1999 Stock Option Plan where 825,000 shares of Class B common stock are reserved for granting incentive and non-statutory stock options to employees, non-employee directors, consultants and independent contractors. Options granted will generally become exercisable over a six-year period, or in the case of some options, when certain performance milestones are met. The option plan will terminate on December 19, 2009, unless our board of directors decides to terminate it earlier.

    A summary of selected information regarding all stock options for the three years ended January 31, 2000, is as follows:

	Number of Shares		Exercise Price Per Share	Weighted Average Exercise Price Per Share
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
Granted	196,000		14.125 - 20.00		17.74
Exercised	(309,160	)	8.125 - 14.875		9.72
Canceled	(141,800	)	8.125 - 21.375		13.81
Canceled at Merger date	(3,015,118	)	3.68 - 22.75		13.49
Granted post merger	406,230		22.00		22.00
Balance, January 31, 2000	406,230		$22.00	$	22.00

    At January 31, 2000, no options were exercisable.

    Had we used the fair value-based method of accounting for our incentive and stock option plans beginning on February 1, 1995, and charged compensation cost against income, over the vesting period

F-18

based on the fair value of options at the date of grant, net income would have been reduced to the following pro forma amounts:

	For the Years Ended January 31,
	1998		1999		2000
	(dollars in thousands)
Net income (loss) available to common
As reported	$	26,021	$	26,457	$	(17,561	)
Pro forma		24,541		24,300		(11,352	)

    The pro forma information above includes only stock options granted since fiscal year 1996.

    The weighted average grant date fair value of options granted during fiscal years 1998, 1999 and 2000 was $6.68, $10.32 and $5.67, 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 Year Ended January 31,
	1998	1999	2000
Risk free interest rate	6.50%	5.50%	5.20%
Expected life	5 years	5 years	5 years
Expected volatility	43.52%	51.18%	49.59%
Expected dividend yield	0.38%	0.41%	0.46%

ELEVEN—Segment and Related Information

    Our business units have been aggregated into two reportable segments comprising 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—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, document imaging, electronic document storage and retrieval, binding and post-production shipping. The principal markets for this

F-19

segment are major metropolitan areas in North America. Customers include law firms, corporate legal departments, investment banks and other professional service firms.

    The accounting policies of the reportable segments are the same as those described in Note One of Notes to Consolidated Financial Statements. We evaluate 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 our reportable segments is shown in the following table. The "Interest & Other" column includes corporate-related items and, as it relates to income (loss) before provision for income taxes, income and expense not allocated to reportable segments.

As of and for the year ended:	Specialty Communication Services		Document Services			Interest & Other			Total
		(dollars in thousands)
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
2000
Revenue	$	510,482	$	77,255		$	—		$	587,737
Income (loss) before provision for income taxes		3,174		2,131			(14,106	)		(8,801	)
Total assets	$	253,587	$	37,796		$	63,477		$	354,860

TWELVE—Guarantor Subsidiaries

    In connection with the November 1999 issuance of $140.0 million of 12% senior subordinated notes, our wholly-owned domestic subsidiaries (Guarantors) unconditionally guaranteed the notes.

    The guarantees are general unsecured obligations of the Guarantors, are subordinated in right of payment to all existing and future senior indebtedness of the Guarantors (including indebtedness of the credit facility) and will rank senior in right of payment to any future subordinated indebtedness of the Guarantors. The following consolidating financial information includes the accounts of the Guarantors and the combined accounts of the Non-Guarantors. Separate financial statements of each of the Guarantors are not presented because we believe that such information is not material in assessing the Guarantors.

F-20

Consolidating Balance Sheet
January 31, 1999
(dollars in thousands)

	Issuer/ Guarantors		Non-Guarantors		Eliminations			Consolidated
Assets
Current assets
Cash and cash equivalents	$	19,582	$	3,895	$	—		$	23,477
Accounts receivable		100,322		2,043		—			102,365
Work-in-process inventories		12,166		473		—			12,639
Other inventories		7,559		—		—			7,559
Other current assets		12,253		—		—			12,253
Total current assets		151,882		6,411		—			158,293
Property, plant and equipment, net		44,921		14		—			44,935
Goodwill, net		49,744		—					49,744
Other assets		19,219		713		(6,959	)		12,973
Total assets	$	265,766	$	7,138	$	(6,959	)	$	265,945
Liabilities and Shareholders' Equity
Current liabilities
Current maturities of long-term debt	$	2,210	$	—	$	—		$	2,210
Current maturities of capital lease obligations		236		—		—			236
Accounts payable		29,622		18		—			29,640
Accrued expenses		44,481		161		—			44,642
Total current liabilities		76,549		179		—			76,728
Long-term debt, net of current maturities		38,110		—		—			38,110
Capital lease obligations, net of current maturities		1,375		—		—			1,375
Other liabilities		8,581		5,636		(5,636	)		8,581
Total liabilities		124,615		5,815		(5,636	)		124,794
Shareholders' equity		141,151		1,323		(1,323	)		141,151
Total liabilities and shareholders' equity	$	265,766	$	7,138	$	(6,959	)	$	265,945

F-21

Consolidating Balance Sheet
January 31, 2000
(dollars in thousands)

	Issuer/ Guarantors			Non-Guarantors		Eliminations			Consolidated
Assets
Current assets
Cash and cash equivalents	$	7,101		$	7,357	$	—		$	14,458
Accounts receivable		123,928			5,258		—			129,186
Work-in-process inventories		18,321			789		—			19,110
Other inventories		8,240			—		—			8,240
Other current assets		21,332			1,042		—			22,374
Total current assets		178,922			14,446		—			193,368
Property, plant and equipment, net		55,553			3,938		—			59,491
Goodwill, net		75,945			—		—			75,945
Other assets		42,570			1,089		(17,603	)		26,056
Total assets	$	352,990		$	19,473	$	(17,603	)	$	354,860
Liabilities and Shareholders' (Deficit) Equity
Current liabilities
Current maturities of long-term debt	$	2,300		$	—	$	—		$	2,300
Current maturities of capital lease obligations		201			—		—			201
Accounts payable		35,362			446		—			35,808
Accrued expenses		42,507			811		—			43,318
Total current liabilities		80,370			1,257		—			81,627
Long-term debt, net of current maturities		352,615			—		—			352,615
Capital lease obligations, net of current maturities		1,194			2		—			1,196
Other liabilities		12,629			14,507		(14,002	)		13,134
Total liabilities		446,808			15,766		(14,002	)		448,572
Minority interest		—			—		106			106
Preferred Stock		35,697			—		—			35,697
Shareholders' (deficit) equity		(129,515	)		3,707		(3,707	)		(129,515	)
Total liabilities and shareholders' (deficit) equity	$	352,990		$	19,473	$	(17,603	)	$	354,860

F-22

Consolidating Statement of Operations
For the Year Ended January 31, 1998
(dollars in thousands)

	Issuer/ Guarantors			Non-Guarantors		Eliminations			Consolidated
Revenue	$	456,728		$	4,779	$	(1,991	)	$	459,516
Cost of revenue		294,024			3,357		(1,991	)		295,390
Gross profit		162,704			1,422		—			164,126
Selling, general and administrative expenses		113,867			307		—			114,174
Operating income		48,837			1,115		—			49,952
Interest expense		(4,321	)		—					(4,321	)
Other income (expense), net		1,437			25		(627	)		835
Income (loss) before provision for income taxes		45,953			1,140		(627	)		46,466
Provision for income taxes		19,932			513		—			20,445
Net income (loss) available to common	$	26,021		$	627	$	(627	)	$	26,021

F-23

Consolidating Statement of Operations
For the Year Ended January 31, 1999
(dollars in thousands)

	Issuer/ Guarantors			Non-Guarantors			Eliminations			Consolidated
Revenue	$	506,401		$	6,469		$	(3,327	)	$	509,543
Cost of revenue		329,607			4,352			(3,327	)		330,632
Gross profit		176,794			2,117						178,911
Selling, general and administrative expenses		127,702			3						127,705
Operating income		49,092			2,114						51,206
Interest expense		(3,961	)		(60	)		60			(3,961	)
Other income (expense), net		1,458			351			(1,383	)		426
Income (loss) before provision for income taxes		46,589			2,405			(1,323	)		47,671
Provision for income taxes		20,132			1,082						21,214
Net income (loss) available to common	$	26,457		$	1,323		$	(1,323	)	$	26,457

F-24

Consolidating Statement of Operations
For the Year Ended January 31, 2000
(dollars in thousands)

	Issuer/ Guarantors			Non-Guarantors			Eliminations			Consolidated
Revenue	$	581,688		$	8,581		$	(2,532	)	$	587,737
Cost of revenue		387,704			7,198			(1,450	)		393,452
Gross profit		193,984			1,383			(1,082	)		194,285
Selling, general and administrative expenses		145,656			1,778			(1,082	)		146,352
Merger costs		42,392			236			—			42,628
Operating income (loss)		5,936			(631	)		—			5,305
Interest expense		(13,235	)		(33	)		33			(13,235	)
Other (expense) income, net		(2,521	)		220			1,430			(871	)
(Loss) income before provision for income taxes		(9,820	)		(444	)		1,463			(8,801	)
Provision for income taxes		6,366			1,125			—			7,491
(Loss) income before minority interest		(16,186	)		(1,569	)		1,463			(16,292	)
Minority interest		—			—			106			106
Net (loss) income from continuing operations		(16,186	)		(1,569	)		1,357			(16,398	)
Accreted preferred stock dividend		1,163			—			—			1,163
Net (loss) income available to common	$	(17,349	)	$	(1,569	)	$	1,357		$	(17,561	)

F-25

Consolidating Statement of Cash Flows
For the Year Ended January 31, 1998
(dollars in thousands)

	Issuer/ Guarantors			Non-Guarantors			Eliminations			Consolidated
Operating activities:
Net income available to common	$	26,021		$	627		$	(627	)	$	26,021
Adjustments to reconcile net income available to common to net cash provided by (used in) operating activities
Depreciation and amortization		11,112			35			—			11,147
Amortization of intangible assets		6,500			—			—			6,500
Provision for losses on trade receivables		2,064			—			—			2,064
Provision for unbillable inventories		(1,063	)		—			—			(1,063	)
Deferred income taxes		(2,592	)		—			—			(2,592	)
Changes in deferred compensation		1,285			—			—			1,285
Earnings of subsidiaries		(627	)		—			627			—
Changes in operating assets and liabilities, net of effects from business acquisitions
Trade receivables		(33,920	)		(2,786	)		—			(36,706	)
Work-in-process inventories		12,035			47			—			12,082
Other inventories		(1,667	)		—			—			(1,667	)
Other current assets		(3,505	)		(507	)		—			(4,012	)
Accounts payable		7,350			(14	)		—			7,336
Accrued expenses		11,582			(45	)		—			11,537
Income taxes		(1,059	)		—			—			(1,059	)
Net cash provided by (used in) operating activities:		33,516			(2,643	)		—			30,873
Investing activities:
Purchase of property, plant and equipment		(17,069	)		—			—			(17,069	)
Business acquisitions, net of cash acquired		(13,179	)		—			—			(13,179	)
Other investing activities, net		(2,718	)		141			2,714			137
Net cash (used in) provided by investing activities:		(32,966	)		141			2,714			(30,111	)
Financing activities:
Borrowing on notes payable to banks		104,275			—			—			104,275
Repayments on notes payable to banks		(110,225	)		—			—			(110,225	)
Proceeds from intercompany borrowings		—			2,714			(2,714	)		—
Principal payments on long-term debt and capital lease obligations		(936	)		—			—			(936	)
Repurchase of common stock		(3,065	)		—			—			(3,065	)
Dividends paid		(1,133	)		—			—			(1,133	)
Exercise of stock options		5,417			—			—			5,417
Tax benefit realized upon exercise of stock options		2,192			—			—			2,192
Other equity transactions, net		83			—			—			83
Net cash (used in) provided by financing activities:		(3,392	)		2,714			(2,714	)		(3,392	)
(Decrease) increase in cash and cash equivalents		(2,842	)		212			—			(2,630	)
Cash and cash equivalents, beginning of year		4,803			358			—			5,161
Cash and cash equivalents, end of year	$	1,961			570			—		$	2,531

F-26

Consolidating Statement of Cash Flows
For the Year Ended January 31, 1999
(dollars in thousands)

	Issuer/ Guarantors			Non-Guarantors			Eliminations			Consolidated
Operating activities:
Net income (loss) available to common	$	26,457		$	1,323		$	(1,323	)	$	26,457
Adjustments to reconcile net income (loss) available to common to net cash provided by operating activities
Depreciation and amortization		13,066			—			—			13,066
Amortization of intangible assets		5,617			—			—			5,617
Writedown of goodwill		1,180			—			—			1,180
Provision for losses on trade receivables		3,273			—			—			3,273
Provision for unbillable inventories		67									67
Deferred income taxes		(3,518	)		—			—			(3,518	)
Changes in deferred compensation		1,807			—			—			1,807
Earnings of subsidiaries		(1,323	)		—			1,323			—
Changes in operating assets and liabilities, net of effects from business acquisitions
Trade receivables		10,594			1,202			—			11,796
Work-in-process inventories		1,338			(473	)		—			865
Other inventories		(333	)		—			—			(333	)
Other current assets		(250	)		507			—			257
Accounts payable		(347	)		(1	)		—			(348	)
Accrued expenses		(3,387	)		120			—			(3,267	)
Income taxes		(1,109	)		—			—			(1,109	)
Net cash provided by operating activities:		53,132			2,678			—			55,810
Investing activities:
Purchase of property, plant and equipment		(16,477	)		(2	)		—			(16,479	)
Business acquisitions, net of cash acquired		(4,039	)		—			—			(4,039	)
Other investing activities, net		(3,200	)		(487	)		1,136			(2,551	)
Net cash (used in) provided by investing activities:		(23,716	)		(489	)		1,136			(23,069	)
Financing activities:
Borrowing on notes payable to banks		86,600			—			—			86,600
Repayments on notes payable to banks		(86,600	)		—			—			(86,600	)
Proceeds from intercompany borrowings		—			1,136			(1,136	)		—
Principal payments on long-term debt and capital lease obligations		(814	)		—			—			(814	)
Repurchase of common stock		(12,813	)		—			—			(12,813	)
Dividends paid		(1,297	)		—			—			(1,297	)
Exercise of stock options		2,149			—			—			2,149
Tax benefit realized upon exercise of stock options		884			—			—			884
Other equity transactions, net		96			—			—			96
Net cash (used in) provided by financing activities:		(11,795	)		1,136			(1,136	)		(11,795	)
Increase in cash and cash equivalents		17,621			3,325			—			20,946
Cash and cash equivalents, beginning of year		1,961			570			—			2,531
Cash and cash equivalents, end of year	$	19,582		$	3,895		$	—		$	23,477

F-27

Consolidating Statement of Cash Flows
For the Year Ended January 31, 2000
(dollars in thousands)

	Issuer/ Guarantors			Non-Guarantors		Eliminations		Consolidated
Operating activities:
Net (loss) income available to common	$	(17,561	)	1,569		(1,569	)	$	(17,561	)
Adjustments to reconcile net (loss) income available to common to net cash used in operating activities
Depreciation and amortization		16,053		265		—			16,318
Amortization of intangible assets		6,943		—		—			6,943
Writedown of goodwill		125		—		—			125
Writedown of investment		594		—		—			594
Provision for losses on trade receivables		(80	)	—		—			(80	)
Provision for unbillable inventories		(660	)	—		—			(660	)
Deferred income taxes		(559	)	—		—			(559	)
Changes in deferred compensation		(4,476	)	—		—			(4,476	)
Minority interest in earnings of subsidiary		—		—		106			106
Accreted preferred stock dividend		1,163		—		—			1,163
Interest in earnings of subsidiaries		(1,463	)	—		1,463			—
Changes in operating assets and liabilities, net of effects from business acquisitions
Trade receivables		(7,012	)	(3,215	)	—			(10,227	)
Work-in-process inventories		(1,238	)	(316	)	—			(1,554	)
Other inventories		819		—		—			819
Other current assets		(43	)	(1,042	)	—			(1,085	)
Accounts payable		(2,378	)	428		—			(1,950	)
Accrued expenses		(3,889	)	650		—			(3,239	)
Income taxes		(4,700	)	—		—			(4,700	)
Net cash used in operating activities:		(18,362	)	(1,661	)	—			(20,023	)
Investing activities:
Purchase of property, plant and equipment		(10,667	)	(4,187	)	—			(14,854	)
Business acquisitions, net of cash acquired		(55,245	)	—		—			(55,245	)
Other investing activities, net		(10,970	)	129		9,181			(1,660	)
Net cash (used in) provided by investing activities:		(76,882	)	(4,058	)	9,181			(71,759	)
Financing activities:
Borrowing on notes payable to banks		157,575		—		—			157,575
Repayments on notes payable to banks		(159,707	)	—		—			(159,707	)
Proceeds from issuance of long-term debt		356,237		—		—			356,237
Proceeds from intercompany borrowings		—		9,181		(9,181	)		—
Debt issuance costs		(10,160	)	—		—			(10,160	)
Principal payments on long-term debt and capital lease obligations		(40,926	)	—		—			(40,926	)
Issuance of Class B common stock		70,683		—		—			70,683
Issuance of preferred stock		40,000		—		—			40,000
Repurchase of common stock		(333,495	)	—		—			(333,495	)
Dividends paid		(963	)	—		—			(963	)
Exercise of stock options		3,003		—		—			3,003
Tax benefit realized upon exercise of stock options		521		—		—			521
Other equity transactions, net		(5	)	—		—			(5	)
Net cash provided by (used in) financing activities:		82,763		9,181		(9,181	)		82,763
(Decrease) increase in cash and cash equivalents		(12,481	)	3,462		—			(9,019	)
Cash and cash equivalents, beginning of year		19,582		3,895		—			23,477
Cash and cash equivalents, end of year		7,101		7,357		—		$	14,458

F-28

THIRTEEN—Quarterly Data (unaudited)

    The following is a summary of unaudited quarterly data for the years ended January 31, 1999 and 2000:

(dollars in thousands)		First Quarter		Second Quarter		Third Quarter		Fourth Quarter			Total
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 available to common		8,012		8,706		6,488		3,251			26,457
2000	Revenue	$	131,836	$	166,237	$	144,328	$	145,336		$	587,737
	Gross profit		47,272		56,839		48,394		41,780			194,285
	Net income (loss) available to common		4,521		8,221		5,568		(35,871	)		(17,561	)

F-29

[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/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.

II-2

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*	Restated Bylaws of Merrill Corporation, as amended.
3.16*	Amended and Restated Limited Liability Company Agreement of Merrill Communications LLC.
3.17*	Bylaws of Merrill Real Estate Company.
3.18*	Bylaws of Merrill/Magnus Publishing Corporation.
3.19*	Bylaws of Merrill/New York Company.
3.20*	Bylaws of Merrill/May, Inc.
3.21*	Bylaws of Merrill/Alternatives, Inc.
3.22*	Bylaws of Merrill International Inc.
3.23*	Amended and Restated Bylaws of FMC Resource Management Corporation.
3.24*	Bylaws of Merrill Training & Technology, Inc.
3.25*	Bylaws of Merrill/Global Inc.
3.26*	Bylaws of Merrill/Executech, 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.

II-3

4.4*	Form of Warrant to purchase shares of class B common stock 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 with B. Michael James, Mark A. Rossi and Joseph P. Pettirossi.
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.

II-4

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) .
10.20	Amendment No. 1 to Investors' Agreement.
10.21	Lease of 15 Presidential Way dated March 31, 2000 between the Ames Realty Trust and Merrill Communications LLC.
12.1	Statement of Earnings to Fixed 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.
27.2	Financial Data Schedule.
27.3	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.

*

Previously filed.

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.

II-5

    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.

II-6

SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this amendment to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of St. Paul, State of Minnesota, on May 11, 2000.

MERRILL CORPORATION
By:	/s/ JOHN W. CASTRO John W. Castro President and Chief Executive Officer (Principal Executive Officer)

    Pursuant to the requirements of the Securities Act of 1933, this amendment has been signed on May 11, 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)
* Rick R. Atterbury	Executive Vice President, Chief Technology Officer and Director
/s/ ROBERT H. NAZARIAN Robert H. Nazarian	Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)
* Lawrence M. Schloss	Director
* William F. Dawson, Jr.	Director
/s/ STEVEN J. MACHOV Steven J. Machov	Attorney-in-Fact

II-7

SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this amendment to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of St. Paul, State of Minnesota, on May 11, 2000.

MERRILL COMMUNICATIONS LLC
By:	/s/ JOHN W. CASTRO John W. Castro President and Chief Executive Officer (Principal Executive Officer)

    Pursuant to the requirements of the Securities Act of 1933, this amendment has been signed on May 11, 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)
* Rick R. Atterbury	Vice President and Chief Technology Officer
/s/ ROBERT H. NAZARIAN Robert H. Nazarian	Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer)
* Lawrence M. Schloss	Director
* William F. Dawson, Jr.	Director
/s/ STEVEN J. MACHOV Steven J. Machov	Attorney-in-Fact

II-8

SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this amendment to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of St. Paul, State of Minnesota, on May 11, 2000.

MERRILL REAL ESTATE COMPANY
By:	/s/ JOHN W. CASTRO John W. Castro President and Chief Executive Officer (Principal Executive Officer)

    Pursuant to the requirements of the Securities Act of 1933, this amendment has been signed on May 11, 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)
* Rick R. Atterbury	Executive Vice President and Director
/s/ ROBERT H. NAZARIAN Robert H. Nazarian	Treasurer (Principal Financial and Accounting Officer)
/s/ STEVEN J. MACHOV Steven J. Machov	Secretary and Director
/s/ STEVEN J. MACHOV Steven J. Machov	Attorney-in-Fact

II-9

SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this amendment to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of St. Paul, State of Minnesota, on May 11, 2000.

MERRILL/MAGNUS PUBLISHING CORPORATION
By:	/s/ STEVEN J. MACHOV Steven J. Machov President and Secretary (Principal Executive Officer)

    Pursuant to the requirements of the Securities Act of 1933, this amendment has been signed on May 11, 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)
* John W. Castro	Chairman of the Board and Director
* Rick R. Atterbury	Vice President and Director
/s/ ROBERT H. NAZARIAN Robert H. Nazarian	Treasurer and Director (Principal Financial and Accounting Officer)
*	Director
/s/ STEVEN J. MACHOV Steven J. Machov	Attorney-in-Fact

II-10

SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this amendment to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of St. Paul, State of Minnesota, on May 11, 2000.

MERRILL/NEW YORK COMPANY
By:	/s/ B. MICHAEL JAMES B. Michael James President (Principal Executive Officer)

    Pursuant to the requirements of the Securities Act of 1933, this amendment has been signed on May 11, 2000 by the following persons in the capacities indicated.

Signature	Title
/s/ B. MICHAEL JAMES B. Michael James	President and Director (Principal Executive Officer)
* John W. Castro	Chairman of the Board and Director
* Rick R. Atterbury	Director
/s/ ROBERT H. NAZARIAN Robert H. Nazarian	Treasurer (Principal Financial and Accounting Officer)
/s/ STEVEN J. MACHOV Steven J. Machov	Attorney-in-Fact

II-11

SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this amendment to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of St. Paul, State of Minnesota, on May 11, 2000.

MERRILL/MAY INC.
By:	/s/ JOSEPH PETTIROSSI Joseph Pettirossi President (Principal Executive Officer)

    Pursuant to the requirements of the Securities Act of 1933, this amendment has been signed on May 11, 2000 by the following persons in the capacities indicated.

Signature	Title
/s/ JOSEPH PETTIROSSI Joseph Pettirossi	President (Principal Executive Officer)
/s/ ROBERT H. NAZARIAN Robert H. Nazarian	Treasurer and Director (Principal Financial and Accounting Officer)
* John W. Castro	Director
/s/ STEVEN J. MACHOV Steven J. Machov	Secretary and Director
/s/ STEVEN J. MACHOV Steven J. Machov	Attorney-in-Fact

II-12

SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this amendment to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of St. Paul, State of Minnesota, on May 11, 2000.

MERRILL/ALTERNATIVES, INC.
By:	/s/ JOSEPH PETTIROSSI Joseph Pettirossi President (Principal Executive Officer)

    Pursuant to the requirements of the Securities Act of 1933, this amendment has been signed on May 11, 2000 by the following persons in the capacities indicated.

Signature	Title
/s/ JOSEPH PETTIROSSI Joseph Pettirossi	President and Director (Principal Executive Officer)
/s/ ROBERT H. NAZARIAN Robert H. Nazarian	Chief Financial Officer (Principal Financial and Accounting Officer)
* John W. Castro	Director
/s/ STEVEN J. MACHOV Steven J. Machov	Attorney-in-Fact

II-13

SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this amendment to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of St. Paul, State of Minnesota, on May 11, 2000.

MERRILL INTERNATIONAL INC.
By:	/s/ ROBERT M. CHEPAK Robert M. Chepak President (Principal Executive Officer)

    Pursuant to the requirements of the Securities Act of 1933, this amendment has been signed on May 11, 2000 by the following persons in the capacities indicated.

Signature	Title
/s/ ROBERT M. CHEPAK Robert M. Chepak	President (Principal Executive Officer)
/s/ ROBERT H. NAZARIAN Robert H. Nazarian	Treasurer (Principal Financial and Accounting Officer)
* Rick R. Atterbury	Director
/s/ STEVEN J. MACHOV Steven J. Machov	Secretary and Director
* Kathleen A. Larkin	Director
/s/ STEVEN J. MACHOV Steven J. Machov	Attorney-in-Fact

II-14

SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this amendment to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of St. Paul, State of Minnesota, on May 11, 2000.

FMC RESOURCE MANAGEMENT CORPORATION
By:	/s/ JOSEPH PETTIROSSI Joseph Pettirossi   Chief Executive Officer (Principal Executive Officer)

    Pursuant to the requirements of the Securities Act of 1933, this amendment has been signed on May 11, 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/ ROBERT H. NAZARIAN Robert H. Nazarian	Treasurer (Principal Financial and Accounting Officer)
* John W. Castro	Director
/s/ STEVEN J. MACHOV Steven J. Machov	Secretary and Director
/s/ STEVEN J. MACHOV Steven J. Machov	Attorney-in-Fact

II-15

SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this amendment to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of St. Paul, State of Minnesota, on May 11, 2000.

MERRILL TRAINING & TECHNOLOGY, INC.
By:	/s/ JOHN W. CASTRO John W. Castro Chief Executive Officer (Principal Executive Officer)

    Pursuant to the requirements of the Securities Act of 1933, this amendment has been signed on May 11, 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)
* Rick R. Atterbury	Vice President and Director
/s/ ROBERT H. NAZARIAN Robert H. Nazarian	Treasurer (Principal Financial and Accounting Officer)
/s/ STEVEN J. MACHOV Steven J. Machov	Secretary and Director
/s/ STEVEN J. MACHOV Steven J. Machov	Attorney-in-Fact

II-16

SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this amendment to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of St. Paul, State of Minnesota, on May 11, 2000.

MERRILL/GLOBAL, INC.
By:	/s/ ROBERT M. CHEPAK Robert M. Chepak President (Principal Executive Officer)

    Pursuant to the requirements of the Securities Act of 1933, this amendment has been signed on May 11, 2000 by the following persons in the capacities indicated.

Signature	Title
/s/ ROBERT M. CHEPAK Robert M. Chepak	President (Principal Executive Officer)
* Rick R. Atterbury	Vice President and Director
/s/ ROBERT H. NAZARIAN Robert H. Nazarian	Treasurer (Principal Financial and Accounting Officer)
/s/ STEVEN J. MACHOV Steven J. Machov	Secretary and Director
* Kathleen A. Larkin	Director
/s/ STEVEN J. MACHOV Steven J. Machov	Attorney-in-Fact

II-17

SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this amendment to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of St. Paul, State of Minnesota, on May 11, 2000.

MERRILL/EXECUTECH, INC.
By:	/s/ JOHN W. CASTRO John W. Castro President (Principal Executive Officer)

    Pursuant to the requirements of the Securities Act of 1933, this amendment has been signed on May 11, 2000 by the following persons in the capacities indicated.

Signature	Title
/s/ JOHN W. CASTRO John W. Castro	President (Principal Executive Officer)
* Rick R. Atterbury	Vice President and Director
/s/ ROBERT H. NAZARIAN Robert H. Nazarian	Treasurer (Principal Financial and Accounting Officer)
/s/ STEVEN J. MACHOV Steven J. Machov	Secretary and Director
/s/ STEVEN J. MACHOV Steven J. Machov	Attorney-in-Fact

II-18

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.	Previously filed.
3.4	Certificate of Formation of Merrill Communications LLC.	Previously filed.
3.5	Articles of Incorporation of Merrill Real Estate Company.	Previously filed.
3.6	Articles of Incorporation of Merrill/Magnus Publishing Corporation, as amended.	Previously filed.
3.7	Articles of Incorporation of Merrill/New York Company, as amended.	Previously filed.
3.8	Articles of Incorporation of Merrill/May, Inc., as amended.	Previously filed.
3.9	Articles of Incorporation of Merrill/Alternatives, Inc., as amended.	Previously filed.
3.10	Articles of Incorporation of Merrill International Inc.	Previously filed.
3.11	Articles of Incorporation of FMC Resource Management Corporation, as amended.	Previously filed.
3.12	Articles of Incorporation of Merrill Training & Technology, Inc., as amended.	Previously filed.
3.13	Articles of Incorporation of Merrill/Global Inc.	Previously filed.
3.14	Articles of Incorporation of Merrill/Executech, Inc., as amended.	Previously filed.
3.15	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.
3.16	Amended and Restated Limited Liability Company Agreement of Merrill Communications LLC.	Previously filed.
3.17	Bylaws of Merrill Real Estate Company.	Previously filed.
3.18	Bylaws of Merrill/Magnus Publishing Corporation.	Previously filed.
3.19	Bylaws of Merrill/New York Company.	Previously filed.
3.20	Bylaws of Merrill/May, Inc.
	Previously filed.

3.21	Bylaws of Merrill/Alternatives, Inc.	Previously filed.
3.22	Bylaws of Merrill International Inc.	Previously filed.
3.23	Amended and Restated Bylaws of FMC Resource Management Corporation.	Previously filed.
3.24	Bylaws of Merrill Training & Technology, Inc.	Previously filed.
3.25	Bylaws of Merrill/Global Inc.	Previously filed.
3.26	Bylaws of Merrill/Executech, Inc.	Previously filed.
4.1	Indenture dated as of November 23, 1999 among Merrill, the Guarantors and Norwest Bank Minnesota, N.A., as Trustee.	Previously filed.
4.2	A/B Exchange Registration Rights Agreement dated November 23, 1999 among Merrill, the Guarantors and Donaldson, Lufkin & Jenrette Securities Corporation.	Previously filed.
4.3	Warrant Registration Rights Agreement dated November 23, 1999 among Merrill, the Guarantors and Donaldson, Lufkin & Jenrette Securities Corporation.	Previously filed.
4.4	Form of Warrant to purchase shares of class B common stock dated November 23, 1999 issued in connection with November 1999 unit offering.	Previously filed.
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.	Previously filed.
5.1	Opinion and Consent of Oppenheimer Wolff & Donnelly LLP.	Previously filed.
10.1	Purchase Agreement dated as of November 18, 1999 among Merrill, the Guarantors and Donaldson Lufkin & Jenrette Securities Corporation.	Previously filed.
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.	Previously filed.
10.3	Investors' Agreement dated November 23, 1999 among Merrill and the shareholders party thereto.	Previously filed.
10.4	Employment Agreement effective as of November 23, 1999 between Merrill and John W. Castro.
	Previously filed.

10.5	Employment Agreement effective as of November 23, 1999 between Merrill and Rick R. Atterbury.	Previously filed.
10.6	1999 Stock Option Plan.	Previously filed.
10.7	Direct Investment Plan.	Previously filed.
10.8	Form of Participation Agreement in 1999 Stock Option Plan and Direct Investment Plan between Merrill and each of its executive officers.	Previously filed.
10.9	Form of Letter Agreement with B. Michael James, Mark A. Rossi and Joseph P. Pettirossi, Kay A. Barber, Steven J. Machov and Kathleen A. Larkin.	Filed herewith.
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.
10.20	Amendment No. 1 to Investors' Agreement	Incorporated by reference to our Registration Statement on Form S-1 (File No. 333-32952).
10.21	Lease of 15 Presidential Way dated March 31, 2000 between the Ames Realty Trust and Merrill Communications LLC.	Filed herewith.
12.1	Statement of Earnings to Fixed 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.	Previously filed.
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.	Previously filed.
27.1	Financial Data Schedule.	Filed herewith.
27.2	Financial Data Schedule.	Filed herewith.
27.3	Financial Data Schedule.	Filed herewith.
99.1	Form of Letter of Transmittal.	Previously filed.
99.2	Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees.	Previously filed.
99.3	Form of Letter to Clients.	Previously filed.
99.4	Form of Notice of Guaranteed Delivery.	Previously filed.

QuickLinks

TABLE OF CONTENTS
PROSPECTUS SUMMARY
SUMMARY OF THE TERMS OF THE EXCHANGE OFFER
SUMMARY OF THE TERMS OF THE EXCHANGE NOTES
OUR COMPANY
THE MERGER
OUR ADDRESS
SUMMARY HISTORICAL AND UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL DATA
RISK FACTORS
FORWARD-LOOKING STATEMENTS
THE EXCHANGE OFFER
Delivery To: Norwest Bank Minnesota, N.A., Exchange Agent
USE OF PROCEEDS
CAPITALIZATION
SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA
BUSINESS
MANAGEMENT
EXECUTIVE COMPENSATION
Summary Compensation Table
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
INDEX TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL DATA
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL DATA
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
SIGNATURES
INDEX TO EXHIBITS

EX-10.9

                       FORM OF CHANGE IN CONTROL AGREEMENT
          WITH B. MICHAEL JAMES, MARK A. ROSSI AND JOSEPH P. PETTIROSSI





Effective  February 1, 2000




[Name and address of Executive]

Dear [executive]:

         The Board considers the establishment and maintenance of a sound and
vital management to be essential to protecting and enhancing the best
interests of the Company and its stockholders. In this connection, the Board
recognizes that the possibility of a Change in Control may raise uncertainty
and questions among management which may result in the departure or
distraction of management personnel to the detriment of the Company and its
stockholders.

         Accordingly, the Board has determined that appropriate steps should
be taken to minimize the risk that Company executive management will depart
prior to a Change in Control, thereby leaving the Company without adequate
executive management personnel during such a critical period, and to
reinforce and encourage the continued attention and dedication of members of
the Company's executive management to their assigned duties without
distraction in circumstances arising from the possibility of a Change in
Control.

         The Board recognizes that continuance of your position with the
Company involves a substantial commitment to the Company in terms of your
personal life and professional career and the possibility of foregoing
present and future career opportunities, for which the Company receives
substantial benefits. Therefore, to induce you to remain in the employ of the
Company, this Agreement, which has been approved by the Board, sets forth the
benefits that the Company agrees will be provided to you in the event your
employment with the Company is terminated in connection with a Change in
Control under the circumstances described below.

     1.   DEFINITIONS. The following terms have the meaning set forth below
unless the context clearly requires otherwise. Terms defined elsewhere in this
Agreement have the same meaning throughout this Agreement.

          (a)  "AFFILIATE" means (i) any corporation at least a majority of
     whose outstanding securities ordinarily having the right to vote at
     elections of directors is owned directly or indirectly by the Parent
     Corporation or (ii) any other form of business entity in which the Parent
     Corporation, by virtue of a direct or indirect ownership interest, has the
     right to elect a majority of the members of such entity's governing body.

          (b)  "AGREEMENT" means this letter agreement as amended, extended or
     renewed from time to time in accordance with its terms.



          (c)  "BASE PAY" means your annual base salary from the Company at the
     rate in effect immediately prior to a Change in Control or at the time
     Notice of Termination is given, whichever is greater. Base Pay includes
     only regular cash salary and is determined before any reduction for
     deferrals pursuant to any nonqualified deferred compensation plan or
     arrangement, qualified cash or deferred arrangement or cafeteria plan.

          (d)  "BENEFIT PLAN" means any

               (i)  employee benefit plan as defined in Section 3(3) of the
          Employee Retirement Income Security Act of 1974, as amended;

               (ii) cafeteria plan described in Code Section 125;

               (iii) plan, policy or practice providing for paid vacation, other
          paid time off or short-or long-term profit sharing, bonus or incentive
          payments; or

               (iv) stock option, stock purchase, restricted stock, phantom
          stock, stock appreciation right or other equity-based compensation
          plan with respect to the securities of any Affiliate made available to
          employees of the Company generally or any group of employees or you in
          particular.

          (e)  "BOARD" means the board of directors of the Parent Corporation
     duly qualified and acting at the time in question. On and after the date of
     a Change in Control, any duty of the Board in connection with this
     Agreement is nondelegable and any attempt by the Board to delegate any such
     duty is ineffective.

          (f)  "CAUSE" means:

               (i)  your gross misconduct;

               (ii) your willful and continued failure to perform substantially
          your duties with the Company (other than any such failure (1)
          resulting from your incapacity due to bodily injury or physical or
          mental illness or (2) relating to changes in your duties after a
          Change in Control which constitute Good Reason) after a demand for
          substantial performance is delivered to you by the chair of the Board
          which specifically identifies the manner in which you have not
          substantially performed your duties and provides for a reasonable
          period of time within which you may take corrective actions; or

               (iii) your conviction (including a plea of nolo contendere) of
          willfully engaging in illegal conduct constituting a felony or gross
          misdemeanor under federal or state law which is materially and
          demonstrably injurious to the Company or which impairs your ability to
          perform substantially your duties for the Company.

         An act or failure to act will be considered "gross or willful" for
this purpose only if done, or omitted to be done, by you in bad faith and
without reasonable belief that it was in, or not opposed to, the best
interests of the Company. Any act, or failure to act, based upon authority
given pursuant to a resolution duly adopted by the Board (or a committee
thereof) or based upon the advice of counsel for the Company will be
conclusively presumed to be done, or omitted to be done, by you in good faith
and in the best interests of the Company. It is also expressly understood
that your attention to matters not directly related to the business of the
Company will not provide a basis for termination for Cause so long as the
Board did not expressly disapprove in writing of your engagement in such
activities either before or


                                       2


within a reasonable period of time after the Board knew or could reasonably
have known that you engaged in those activities. Notwithstanding the
foregoing, you may not be terminated for Cause unless and until there has
been delivered to you a copy of a resolution duly adopted by the affirmative
vote of not less than a majority of the entire membership of the Board at a
meeting of the Board called and held for the purpose (after reasonable notice
to you and an opportunity for you, together with your counsel, to be heard
before the Board), finding that in the good faith opinion of the Board you
were guilty of the conduct set forth above in clauses (i), (ii) or (iii) of
this definition and specifying the particulars thereof in detail.

     (g)  "CHANGE IN CONTROL" means any of the following:

          (i)  the sale, lease, exchange or other transfer, directly or
     indirectly, of substantially all of the assets of the Parent Corporation,
     in one transaction or in a series of related transactions, to any Person;


          (ii) any Person, other than a "bona fide underwriter," becomes, after
     the date of this Agreement, the "beneficial owner" (as defined in Rule
     13d-3 under the Exchange Act), directly or indirectly, of 20 percent or
     more of the combined voting power of the Parent Corporation's outstanding
     securities ordinarily having the right to vote at elections of directors;

          (iii) a merger or consolidation to which the Parent Corporation is a
     party if the stockholders of the Parent Corporation immediately prior to
     the effective date of such merger or consolidation have, solely on account
     of ownership of securities of the Parent Corporation at such time,
     "beneficial ownership" (as defined in Rule 13d-3 under the Exchange Act)
     immediately following the effective date of such merger or consolidation of
     securities of the surviving corporation representing less than 80 percent
     of the combined voting power of the surviving corporation's then
     outstanding securities ordinarily having the right to vote at elections of
     directors;

          (iv) the continuity directors cease for any reason to constitute at
     least a majority of the Board; or

          (v)  a change in control of a nature that is determined by outside
     legal counsel to the Parent Corporation, in a written opinion specifically
     referencing this provision of the Agreement, to be required to be reported
     (assuming such event has not been "previously reported") pursuant to
     Section 13 or 15(d) of the Exchange Act, whether or not the Parent
     Corporation is then subject to such reporting requirement.

     For purposes of this Section 1(g), a "continuity director" means any
individual who is a member of the Board on February 1, 2000, while he or she
is a member of the Board, and any individual who subsequently becomes a
member of the Board whose election or nomination for election by the Parent
Corporation's stockholders was approved by a vote of at least a majority of
the directors who are continuity directors (either by a specific vote or by
approval of the proxy statement of the Parent Corporation in which such
individual is named as a nominee for director without objection to such
nomination). For example, if a majority of the 10 individuals constituting
the Board on February 1, 2000 approved a proxy statement in which six
different individuals were nominated to replace six of the individuals who
were members of the Board on February 1, 2000, upon their election by the
Parent Corporation's stockholders, the six newly elected directors would join
the four directors who were members of the Board on February 1, 2000 as
continuity directors. Similarly, if a majority of those 10 directors approved
a proxy statement in which four different individuals were nominated to
replace the


                                       3


four remaining directors who were members of the Board on February 1, 2000,
upon their election by the Parent Corporation's stockholders, the four newly
elected directors would also become, along with the other six directors,
continuity directors. Individuals subsequently joining the Board could become
continuity directors under the principles reflected in this example.

     For purposes of this Section 1(g), a "bona fide underwriter" means a
Person engaged in business as an underwriter of securities that acquires
securities of the Parent Corporation through such Person's participation in
good faith in a firm commitment underwriting until the expiration of 40 days
after the date of such acquisition.


     (h) "CODE" means the Internal Revenue Code of 1986, as amended. Any
reference to a specific provision of the Code includes a reference to such
provision as it may be amended from time to time and to any successor provision.


     (i) "COMPANY" means the Parent Corporation, any Successor and any
Affiliate.


     (j) "DATE OF TERMINATION" following a Change in Control (or prior to a
Change in Control if your termination was either a condition of the Change in
Control or was at the request or insistence of any Person related to the
Change in Control) means:

               (i)  if your employment is to be terminated by you for Good
          Reason, the date specified in the Notice of Termination which in no
          event may be a date more than 15 days after the date on which Notice
          of Termination is given unless the Company agrees in writing to a
          later date;

               (ii) if your employment is to be terminated by the Company for
          Cause, the date specified in the Notice of Termination;

               (iii) if your employment is terminated by reason of your death,
          the date of your death; or

               (iv) if your employment is to be terminated by the Company for
          any reason other than Cause or your death, the date specified in the
          Notice of Termination, which in no event may be a date earlier than 15
          days after the date on which a Notice of Termination is given, unless
          you expressly agree in writing to an earlier date.

     In the case of termination by the Company of your employment for Cause,
if you have not previously expressly agreed in writing to the termination,
then within the 30-day period after your receipt of the Notice of
Termination, you may notify the Company that a dispute exists concerning the
termination, in which event the Date of Termination will be the date set
either by mutual written agreement of the parties or by the judge or
arbitrators in a proceeding as provided in Section 11 of this Agreement.
During the pendency of any such dispute, you will continue to make yourself
available to provide services to the Company and the Company will continue to
pay you your full compensation and benefits in effect immediately prior to
the date on which the Notice of Termination is given (without regard to any
changes to such compensation or benefits that constitute Good Reason) and
until the dispute is resolved in accordance with Section 11 of this
Agreement. You will be entitled to retain the full amount of any such
compensation and benefits without regard to the resolution of the dispute
unless the judge or arbitrators decide(s) that your claim of a dispute was
frivolous or advanced by you in bad faith.


     (k)  "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended. Any reference to a specific provision of the Exchange Act or to any
rule or regulation thereunder


                                       4


     includes a reference to such provision as it may be amended from time to
     time and to any successor


          (l)  "GOOD REASON" means:

               (i)  a change in your title(s), status, position(s), authority,
          duties or responsibilities as an executive of the Company as in effect
          immediately prior to the Change in Control which, in your reasonable
          judgment, is material and adverse (other than, if applicable, any such
          change directly attributable to the fact that the Parent Corporation
          is no longer publicly owned); provided, however, that Good Reason does
          not include such a change that is remedied by the Company promptly
          after receipt of notice of such change is given by you;

               (ii) a reduction by the Company in your Base Pay, or an adverse
          change in the form or timing of the payment thereto, as in effect
          immediately prior to the Change in Control or as thereafter increased;

               (iii) the failure by the Company to cover you under Benefit Plans
          that, in the aggregate, provide substantially similar benefits to you
          and/or your family and dependents at a substantially similar total
          cost to you (e.g., premiums, deductibles, co-pays, out of pocket
          maximums, required contributions and the like) relative to the
          benefits and total costs under the Benefit Plans in which you (and/or
          your family or dependents) were participating at any time during the
          90-day period immediately preceding the Change in Control;

               (iv) the Company's requiring you to be based more than 30 miles
          from where your office is located immediately prior to the Change in
          Control, except for required travel on the Company's business, and
          then only to the extent substantially consistent with the business
          travel obligations which you undertook on behalf of the Company during
          the 90-day period immediately preceding the Change in Control (without
          regard to travel related to or in anticipation of the Change in
          Control);

               (v)  the failure by the Company to obtain from any Successor the
          assent to this Agreement contemplated by Section 5 of this Agreement;

               (vi) any purported termination by the Company of your employment
          that is not properly effected pursuant to a Notice of Termination and
          pursuant to any other requirements of this Agreement, and, for
          purposes of this Agreement, no such purported termination will be
          effective; or

               (vii) any refusal by the Company to continue to allow you to
          attend to matters or engage in activities not directly related to the
          business of the Company which, at any time prior to the Change in
          Control, you were not expressly prohibited in writing by the Board
          from attending to or engaging in.

     Your continued employment does not constitute consent to, or waiver of any
rights arising in connection with, any circumstances constituting Good Reason.
Your termination of employment for Good Reason as defined in this Section 1(1)
will constitute Good Reason for all purposes of this Agreement notwithstanding
that you may also thereby be deemed to have retired under any applicable benefit
plan, policy or practice of the Company.


                                       5



     (m)  "NOTICE OF TERMINATION" means a written notice given on or after
the date of a Change in Control (unless your termination before the date of
the Change in Control was either a condition of the Change in Control or was
at the request or insistence of any Person related to the Change in Control)
which indicates the specific termination provision in this Agreement pursuant
to which the notice is given. Any purported termination by the Company or by
you for Good Reason on or after the date of a Change in Control (or before
the date of a Change in Control if your termination was either a condition of
the Change in Control or was at the request or insistence of any Person
related to the Change in Control) must be communicated by written Notice of
Termination to be effective; provided, that your failure to provide Notice of
Termination will not limit any of your rights under this Agreement except to
the extent the Company demonstrates that it suffered material actual damages
by reason of such failure.


     (n)  "PARENT CORPORATION" means Merrill Corporation and any Successor.


     (o)  "PERSON" means any individual, corporation partnership, group,
association or other "person," as such term is used in Section 13(d) or
Section 14(d) of the Exchange Act, other than the Parent Corporation, any
Affiliate or any benefit plan(s) sponsored by the Parent Corporation or an
Affiliate.


     (p)  "SUCCESSOR" means any Person that succeeds to, or has the practical
ability to control (either immediately or solely with the passage of time),
the Parent Corporation's business directly, by merger, consolidation or other
form of business combination, or indirectly, by purchase of the Parent
Corporation's outstanding securities ordinarily having the right to vote at
the election of directors or all or substantially all of its assets or
otherwise.


     2.   TERM OF AGREEMENT. This Agreement is effective immediately and will
continue in effect until January 31, 2001; provided, however, that commencing
on January 31, 2001 and each January 31 thereafter, the term of this Agreement
will automatically be extended for 12 additional months beyond the expiration
date otherwise then in effect, unless at least 90 calendar days prior to any
such January 31, the Company or you has given notice that this Agreement will
not be extended; and, provided, further, that if a Change in Control has
occurred during the term of this Agreement, this Agreement will continue in
effect beyond the termination date then in effect for a period of 24 months
following the month during which the Change in Control occurs or, if later,
until the date on which the Company's obligations to you arising under or in
connection with this Agreement have been satisfied in full.


     3.   BENEFITS UPON A CHANGE IN CONTROL TERMINATION. You will become
entitled to the benefits described in this Section 3 if and only if (i) the
Company terminates your employment for any reason other than your death or
Cause, or you terminate your employment with the Company for Good Reason and
(ii) the termination occurs either within the period beginning on the date of
a Change in Control and ending on the last day of the twenty-fourth month
that begins after the month during which the Change in Control occurs or
prior to a Change in Control if your termination was either a condition of
the Change in Control or was at the request or insistence of a Person related
to the Change in Control.

          (a)  CASH PAYMENT. Not more than five business days following the Date
     of Termination, or, if later, not more than five business days following
     the date of the Change in Control, the Company will make a lump-sum cash
     payment to you in an amount equal to two times the sum of (i) your Base Pay
     plus (ii) your target cash bonus for the year during which the Change in
     Control occurs or the average of your cash bonus for the three fiscal years
     ending immediately prior to the Change in Control, whichever is greater.
     This payment is in lieu of any other cash bonus payment to which you may
     otherwise be entitled under any bonus plan for any


                                       6


     period ending after your Date of Termination. Cash bonus payments
     relating to any period ending on or before your Date of Termination will
     be paid to you in accordance with the terms of the bonus plan.

          (b)  HEALTH BENEFITS. During the period beginning on your Date of
     Termination and ending on the last day of the twenty-fourth month that
     begins after your Date of Termination, the Company will provide, or arrange
     to provide, medical, dental and vision benefits (excluding premium
     conversion or flexible spending accounts under any cafeteria plan) to you
     (and your family members and dependents who were eligible to be covered at
     any time during the 90-day period immediately prior to the date of a Change
     in Control for the period after the Change in Control in which such family
     members and dependents would otherwise continue to be covered under the
     terms of the applicable Benefit Plan in effect immediately prior to the
     Change in Control) under the same terms and at the same cost to you and
     your family members and dependents as similarly situated individuals who
     continue to be employed by the Company (without regard to any reduction in
     such benefits that constitutes Good Reason). To the extent you incur a tax
     liability (including federal, state and local taxes and any interest and
     penalties with respect thereto) in connection with a benefit provided
     pursuant to this Section 3(b) which you would not have incurred had you
     been an active employee of the Company participating in the Company's group
     health plan, the Company will make a payment to you in an amount equal to
     such tax liability plus an additional amount sufficient to permit you to
     retain a net amount after all taxes (including penalties and interest)
     equal to the initial tax liability in connection with the benefit. For
     purposes of applying the foregoing, your tax rate will be deemed to be the
     highest statutory marginal state and federal tax rate (on a combined basis)
     then in effect. The payment pursuant to this Section 3(b) will be made
     within 10 days after your remittal of a written request for payment
     accompanied by a statement indicating the basis for and amount of the
     liability.

          (c)  SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN. The Company will cause
     your account balance under the Merrill Corporation Supplemental Executive
     Retirement Plan to become fully vested and nonforfeitable effective as of
     the Date of Termination and at all times thereafter. In addition, the
     Company will cause any distribution to which you are entitled under the
     Merrill Corporation Supplemental Executive Retirement Plan to be made
     without regard to any provision of the Plan that permits your distribution
     to be deferred to the extent necessary to ensure that no part of the
     distribution is nondeductible pursuant to Code Section 162(m).

          (d)  GROSS-UP PAYMENTS. Following a Change in Control, the Company
     will cause its independent auditors promptly to review, at the Company's
     sole expense, the applicability of Code Section 4999 to any payment or
     distribution of any type by the Company to or for your benefit, whether
     paid or payable or distributed or distributable pursuant to the terms of
     this Agreement, any Benefit Plan or otherwise (the "Total Payments"). If
     the auditor determines that the Total Payments result in an excise tax
     imposed by Code Section 4999 or any comparable 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, are collectively referred to
     as the "Excise Tax"), the Company will make an additional cash payment (a
     "Gross-Up Payment") to you within 10 days after such determination equal to
     an amount such that after payment by you of all taxes (including any
     interest or penalties imposed with respect to such taxes), including any
     Excise Tax, imposed upon the Gross-Up Payment, you would retain an amount
     of the Gross-Up Payment equal to the Excise Tax imposed upon the Total
     Payments. For purposes of the foregoing determination, your 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 you are required to file a tax return
     reflecting the Total Payments, you will be entitled to receive from the
     Company a Gross-Up Payment calculated on the basis of the Excise Tax you


                                       7


     reported in such tax return, within 10 days after the later of the date on
     which you file such tax return or the date on which you provide a copy
     thereof to the Company. In all events, if any tax authority determines that
     a greater Excise Tax should be imposed upon the Total Payments than is
     determined by the Company's independent auditors or reflected in your tax
     return pursuant to this Section 3(d), you will be entitled to receive from
     the Company the full Gross-Up Payment calculated on the basis of the amount
     of Excise Tax determined to be payable by such tax authority within 10 days
     after you notify the Company of such determination. If any other Benefit
     Plan or other plan, policy or practice of the Company or any other
     agreement between you and the Company (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.

     If, on or after the date of a Change in Control, an Affiliate is sold,
merged, transferred or in any other manner or for any other reason ceases to
be an Affiliate or all or any portion of the business or assets of an
Affiliate are sold, transferred or otherwise disposed of and the acquiror is
not the Parent Corporation or an Affiliate (a "Disposition"), and you remain
or become employed by the acquiror or an affiliate of the acquiror (as
defined in this Agreement but substituting "acquiror" for "Parent
Corporation") in connection with the Disposition. you will be deemed to have
terminated employment on the effective date of the Disposition for purposes
of this Section 3 unless (x) the acquiror and its affiliates jointly and
severally expressly assume and agree, in a manner that is enforceable by you,
to perform the obligations of this Agreement to the same extent that the
Company would be required to perform if the Disposition had not occurred and
(y) the Successor guarantees, in a manner that is enforceable by you, payment
and performance by the acquiror.


     4.   INDEMNIFICATION. Following a Change in Control, the Company will
indemnify and advance expenses to you for damages, costs and expenses
(including, without limitation, judgments, fines, penalties, settlements and
reasonable fees and expenses of your counsel) incurred in connection with all
matters, events and transactions relating to your service to or status with
the Company or any other corporation, employee benefit plan or other entity
with whom you served at the request of the Company to the extent that the
Company would have been required to do so under applicable law, corporate
articles, bylaws or agreements or instruments of any nature with or covering
you, as in effect immediately prior to the Change in Control and to any
further extent as may be determined or agreed upon following the Change in
Control.


     5.   SUCCESSORS. The Parent Corporation will seek to have any Successor,
by agreement in form and substance satisfactory to you, assent to the
fulfillment by the Company of the Company's obligations under this Agreement.
Failure of the Parent Corporation to obtain such assent at least three
business days prior to the time a Person becomes a Successor (or where the
Parent Corporation does not have at least three business days' advance notice
that a Person may become a Successor, within one business day after having
notice that such Person may become or has become a Successor) will constitute
Good Reason for termination by you of your employment. The date on which any
such succession becomes effective will be deemed the Date of Termination, and
Notice of Termination will be deemed to have been given on that date. A
Successor has no rights, authority or power with respect to this Agreement
prior to a Change in Control.


     6.   BINDING AGREEMENT. This Agreement inures to the benefit of, and is
enforceable by, you, your personal and legal representatives, executors,
administrators, successors, heirs, distributees,


                                       8


devisees and legatees. If you die while any amount would still be payable to
you under this Agreement if you had continued to live, all such amounts,
unless otherwise provided in this Agreement, will be paid in accordance with
the terms of this Agreement to your devisee, legatee or other designee or, if
there be no such designee, to your estate.


      7.   NO MITIGATION. You will not be required to mitigate the amount of
any benefits the Company becomes obligated to provide to you in connection
with this Agreement by seeking other employment or otherwise. The benefits to
be provided to you in connection with this Agreement may not be reduced,
offset or subject to recovery by the Company by any benefits you may receive
from other employment or otherwise.


      8.   NO SETOFF. The Company has no right to setoff benefits owed to you
under this Agreement against amounts owed or claimed to be owed by you to the
Company under this Agreement or otherwise.


      9.  TAXES. All benefits to be provided to you in connection with this
Agreement will be subject to required withholding of federal, state and local
income, excise and employment-related taxes. The Company's good faith
determination with respect to its obligation to withhold such taxes relieves
it of any obligation that such amounts should have been paid to you.


     10.  NOTICES. For the purposes of this Agreement, notices and all other
communications provided for in, or required under, this Agreement must be in
writing and will be deemed to have been duly given when personally delivered
or when mailed by United States registered or certified mail, return receipt
requested, postage prepaid and addressed to each party's respective address
set forth on the first page of this Agreement (provided that all notices to
the Company must be directed to the attention of the chair of the Board), or
to such other address as either party may have furnished to the other in
writing in accordance with these provisions, except that notice of change of
address will be effective only upon receipt.


     11.  DISPUTES. If you so elect, any dispute, controversy or claim
arising under or in connection with this Agreement will be settled
exclusively by binding arbitration administered by the American Arbitration
Association in Minneapolis, Minnesota in accordance with the Commercial
Arbitration Rules of the American Arbitration Association then in effect;
provided that you may seek specific performance of your right to receive
benefits until the Date of Termination during the pendency of any dispute or
controversy arising under or in connection with this Agreement. Judgment may
be entered on the arbitrator's award in any court having jurisdiction. If any
dispute, controversy or claim for damages arising under or in connection with
this Agreement is settled by arbitration, the Company will pay, or if elected
by you, reimburse, all fees, costs and expenses incurred by you related to
such arbitration unless the arbitrators decide that your claim was frivolous
or advanced by you in bad faith. If you do not elect arbitration, you may
pursue all available legal remedies. The Company will pay, or if elected by
you, reimburse you for, all fees, costs and expenses incurred by you in
connection with any actual, threatened or contemplated litigation relating to
this Agreement to which you are or reasonably expect to become a party,
whether or not initiated by you, if you are successful in recovering any
benefit under this Agreement as a result of such action. The parties agree
that any litigation arising under or in connection with this Agreement must
be brought in a court of competent jurisdiction in the State of Minnesota,
and hereby consent to the exclusive jurisdiction of said courts for this
purpose and agree not to assert that such courts are an inconvenient forum.
The Company will not assert in any dispute or controversy with you arising
under or in connection with this Agreement your failure to exhaust
administrative remedies.


                                       9



     12.  RELATED AGREEMENTS. To the extent that any provision of any Benefit
Plan or other benefit plan, policy, practice or agreement between the Company
or any Affiliate and you (an "Other Arrangement") limits, qualifies or is
inconsistent with any provision of this Agreement, then for purposes of this
Agreement, while such Other Arrangement remains in force, the provision of
this Agreement will control and such provision of such Other Arrangement will
be deemed to have been superseded, and to be of no force or effect, as if
such Other Arrangement had been formally amended to the extent necessary to
accomplish such purpose. Nothing in this Agreement prevents or limits your
continuing or future participation in any Other Arrangement for which you may
qualify, and nothing in this Agreement limits or otherwise affects the rights
you may have under any Other Arrangement. Amounts that are vested benefits or
which you are otherwise entitled to receive under any Other Arrangement at or
subsequent to the Date of Termination will be payable in accordance with such
Other Arrangement.


     13.  NO EMPLOYMENT OR SERVICE CONTRACT. Nothing in this Agreement is
intended to provide you with any right to continue in the employ of the
Company for any period of specific duration or interfere with or otherwise
restrict in any way your rights or the rights of the Company, which rights
are hereby expressly reserved to each, to terminate your employment at any
time for any reason or no reason whatsoever, with or without cause.


     14.  PAYMENT; ASSIGNMENT. Benefits payable under this Agreement will be
paid only from the general assets of the Company. No person has any right to
or interest in any specific assets of the Company by reason of this
Agreement. To the extent benefits under this Agreement are not paid when due
to any individual, he or she is a general unsecured creditor of the Company
with respect to any amounts due. Benefits payable pursuant to this Agreement
and the right to receive future benefits may not be anticipated, alienated,
sold, transferred, assigned, pledged, encumbered or subject to any charge.


     15.  SURVIVAL. The respective obligations of, and benefits afforded to,
the Company and you which by their express terms or clear intent survive
termination of your employment with the Company or termination of this
Agreement, as the case may be, will survive termination of your employment
with the Company or termination of this Agreement, as the case may be, and
will remain in full force and effect according to their terms.


     16.  MISCELLANEOUS. No provision of this Agreement may be modified,
waived or discharged unless such modification, waiver or discharge is agreed
to in a writing signed by you and a duly authorized officer of the Parent
Corporation. No waiver by any party to this Agreement at any time of any
breach by another party to this Agreement of, or of compliance with any
condition or provision of this Agreement to be performed by such party will
be deemed a waiver of similar or dissimilar provisions or conditions at the
same or at any prior or subsequent time. No agreements or representations,
oral or otherwise, express or implied, with respect to the subject matter to
this Agreement have been made by any party which are not expressly set forth
in this Agreement. This Agreement and the legal relations among the parties
as to all matters, including, without limitation, matters of validity,
interpretation, construction, performance and remedies, will be governed by
and construed exclusively in accordance with the internal laws of the State
of Minnesota (without regard to the conflict of laws principles of any
jurisdiction). Headings are for purposes of convenience only and do not
constitute a part of this Agreement. The parties to this Agreement agree to
perform, or cause to be performed, such further acts and deeds and to execute
and deliver or cause to be executed and delivered, such additional or
supplemental documents or instruments as may be reasonably required by the
other party to carry into effect the intent and purpose of this Agreement.
The invalidity or unenforceability of all or any part of any provision of
this Agreement will not affect the validity or enforceability of the
remainder of such provision or of any other provision of this Agreement,
which will remain in full force and effect. This


                                       10


Agreement may be executed in several counterparts, each of which will be
deemed to be an original, but all of which together will constitute one and
the same instrument.


     If this letter correctly sets forth our agreement on the subject matter
discussed above, kindly sign and return to the Company the enclosed copy of
this letter which will then constitute our agreement on this subject.

MERRILL CORPORATION

By:  _______________________________________



____________________________________________
[Executive]


                                       11

EX-10.21

                       LEASE OF 15 PRESIDENTIAL WAY WOBURN

1.    PARTIES. Walter H. McLaughlin Jr., William E. Shea, and Constance M.
Ramsauer, as they are trustees of the Ames Realty Trust, a declaration of Trust
dated December 31, 1985 and recorded in Middlesex South District Registry of
Deeds at Book 16678, Page 197 with a principal place of business in Somerville,
Middlesex County, Massachusetts ("Lessor"), which expression shall include its
successors and assigns, when the context so admits, does hereby lease to Merrill
Communications LLC, a Delaware limited liability company with a principal place
of business in St. Paul, Minnesota ("Lessee"), which expression shall include
its successors, legal representatives, and assigns where the context so admits.

2.    PREMISES. Lessor does hereby lease to Lessee and the Lessee hereby leases
and shall peaceably hold and enjoy the following described premises
(hereinafter, the "Leased Premises").

The "Leased Premises" consists of a parcel of land shown as lot 7 on a plan
entitled Subdivision Plan of Land in Woburn Massachusetts, June 5, 1995,
prepared by Edward J. Farrell, Professional Land Surveyor, recorded in Middlesex
South District Registry of Deeds at Book 25637, Page 476 on which there is
constructed an industrial flex building containing 78,900 square feet as shown
on the plan annexed hereto and marked "Exhibit A." The premises are leased in
their present condition "as is."

3.    TERM. The term of this Lease shall be for a period of five years
commencing April 1, 2000 and terminating on March 31, 2005 (the "Initial Term").

4.    OPTION TO EXTEND TERM. Lease will automatically renew for three (3)
additional five-year terms unless Lessee provided six (6) months advance written
notice of its intent not to renew (such additional terms are hereinafter
referred to as the "Renewal Terms").

5.    RENT DURING INITIAL TERM.

      The base rent for the period from April 1, 2000 through March 31, 2001
shall be $394,500.

      The base rent for the period from April 1, 2001 through March 31, 2002
shall be $473,400.

      The base rent for the period from April 1, 2002 through March 31, 2005
shall be $552,300 per annum.

      The Lessee shall pay to the Lessor Base Rent during the term in equal
monthly installments one the first day of each month unless the Lessor and
Lessee agree to a different payment schedule.

                                       1


6.    RENT DURING EXTENDED TERM.

      The base rent during each Renewal Term shall be the fair rental value of
the premises. The parties shall first attempt to agree on fair rental value. In
the event that the parties shall fail to agree on fair rental value within
ninety (90) days after the beginning of each Renewal Term, the matter shall be
submitted to arbitration under the rules of the American Arbitration
Association. Each party shall choose as an arbitrator a licensed real estate
broker whose principal business is the leasing of commercial real estate in the
greater Boston Area, and the two arbitrators shall choose a third arbitrator
with similar qualifications. The decision of two arbitrators shall be binding on
the parties. The arbitrators shall attempt to reach a decision before the
commencement of the extended term. In the event that they have not reached a
decision by that time, the Lessee shall pay the same rent as in the last year of
the previous term and pay any additional rent due within ten (10) days of the
arbitrator's decision. The arbitrators shall determine fair rental value by
considering the age and condition of the building, market location and other
customary factors of the Leased Premises compared to properties of similar size
and location.

      The Lessee shall pay to the Lessor Base Rent annually during each Renewal
Term in equal monthly installments on the first day of each month unless the
Lessor and Lessee agree to a different payment schedule.

7.    EXPANSION OF PREMISES. If at any time during the term of this Lease, the
Lessee determines that it needs additional space, the Lessor and the Lessee
shall negotiate in good faith to provide said additional space through the
construction of additional space on the premises. If during any Renewal Term,
the Lessee determines that the premises and any reasonable expansion are not
sufficient to meet their needs, the Lessee may terminate this lease by notice to
the Lessor, and the lease shall terminate six (6) months after the Lessee
delivers said notice.

8.    TAXES. The Lessee shall be responsible for the payment, before the same
become delinquent, all general and special taxes, including real estate taxes
and assessments for local improvements, and other governmental charges which may
be lawfully charged, assessed or imposed (herein collectively called the
"Taxes") upon the Leased Premises.

      If the Lessor's mortgagee requires the Lessor to impound taxes on a
monthly basis, then beginning with the calendar year 2000 occurs and in
subsequent years during the term of this Lease, or written notice from Lessor
therefore, Lessee shall pay to the Lessor pro rata monthly installments of
amounts due for taxes on account of projected taxes for such year, reasonably
calculated by the Lessor on the basis of the best and most recent data
available. A final adjustment shall be made between Lessor and Lessee promptly
after Lessor shall have received the tax bill for any such period.

                                       2


      If the Lessor's mortgage does not require the impoundment of taxes on a
monthly basis, the Lessor shall forward each tax bill received to the Lessee and
the Lessee shall forward its share of the taxes to the Lessor ten (10) days
before said taxes are due or ten (10) days after receipt of the tax bill,
whichever comes later.

      If the Lessor shall exercise its option to pay the municipality the amount
of any betterments assessed upon the premises on an installment basis for the
maximum period of time then permitted by law, Lessee shall pay Lessor each year
within thirty (30) days after receipt of a bill therefore, its appropriate
proportionate share of such annual installment payment and of the interest, if
any, due in such year.

      The Lessee may from time to time request that the Lessor contest the
validity of and seek an abatement of the taxes upon the Leased Premises. The
Lessor will file such abatement and charge the Lessee its pro rata cost of
filing for such abatement. The Lessee shall be entitled to a refund of its pro
rata share of the abatement recovered.

9,    UTILITIES AND OTHER SERVICES. The Lessee shall pay for all of the water,
      electricity and gas used on the demised premises.

10    USE OF LEASED PREMISES. The building must be used as a manufacturing
facility. For this purpose a manufacturing facility is a facility that is used
for the manufacture or production of tangible personal property (including the
processing resulting in a change in the condition of such property). A
manufacturing facility includes ancillary facilities located on the same site as
the actual production facilities, but only to the extent that (i) manufacturing
constitutes substantially all the on-site economic activity, and (ii) the
activities conducted at the ancillary facilities are subordinate and integral to
the manufacturing process (e.g. loading docks, parking for employees, or
warehouse space for raw materials and finished products )

11    RIGHT OF FIRST REFUSAL If at any time while the Lessee is not in material
breach of this lease, the Lessor enters into an agreement to sell the Leased
Premises to a person other than the Lessee (the "offering person") it shall
offer in writing to sell the Premises to the Lessee on the same terms and
conditions as those contained in said agreement. The Lessee shall have 30 days
from the date it receives the offer to accept it by a written notice to the
Lessor which must be received during said thirty day period. If the Lessee
accepts the offer then the Lessor shall convey the Leased Premises to the Lessee
in accordance with the offer within 30 days from the date the offer is accepted.
If the Lessee fails to exercise the right of first refusal within 30 days of the
receipt of the offer, then the offer shall expire and the Lessor shall
thereafter have the right to sell the Leased Premises, without notice to the
Lessee, to the Offering Person, provide the sale is consummated within 90 days
of the date the Lessee receives the notice from the Lessor. If the sale is not
consummated within such ninety (90) day period or if the terms of the offer
change in a material way, then the provision of this paragraph 11 will again
apply to a proposed sale of the Leased Premises.

                                       3


12.   COMPLIANCE WITH LAWS. The Lessee acknowledges that no trade or occupation
shall be conducted in the Leased Premises or use made thereof which shall be
unlawful, improper, noisy or offensive be contrary to any law or any municipal
by-law or ordinance in force in the City of Woburn now existing or hereinafter
enacted. Lessee shall keep the Leased Premises equipped with all reasonable
safety appliances and shall procure and keep in force all licenses and permits
required by law or ordinance of any public authority because of the uses made of
the Leased Premises by Lessee and shall maintain in good condition on the Leased
Premises all existing safety and fire protection devices required by the Board
of Fire Underwriters, or other body having similar functions, and of every
insurance company and policy by which Lessee is insured. If the Lessee shall
install additional storage racks on the demised premises, it shall sprinkler
said racks in accordance with the directions of the Lessor's insurance company.

      In furtherance of the obligations set forth under this paragraph, Lessee
shall take no action with respect to the demised premises which shall violate
and Federal or State environmental statutes governing the use of this property,
and shall indemnify the Lessor against any costs or remediation or cleanup
caused by the Lessee's use of the premises in violation of environmental law.

      Lessor covenants and warrants that as of the Commencement Date hereof,
April 1, 2000, the Leased Premises, shall be in full compliance with all
applicable statutes, ordinances, regulations, including without limitation all
environmental laws and the ADA, and by-laws and that the Lessee's proposed use
is permissible as of right in the zoning district in which the Leased Premises
are located. In addition, notwithstanding the provisions of this Paragraph 12,
Lessee shall not be required to make any alteration addition or improvement to
the Leased Premises to comply with any statute ordinance regulation or by-law
unless said alteration addition or improvement is required by reason of Lessee's
particular use of the Leased Premises. Lessor shall indemnify the Lessee for
direct damages incurred because of a breach of this paragraph.

13.   INSURANCE - WAIVER OF SUBROGATION. Lessee, as to its own personal property
and on behalf of the Lessor with respect to the building, agrees to keep the
Leased Premises insured in amounts equal to the actual cash replacement value of
the same against fire and other perils included in a standard extended coverage
endorsement, and against breakdown of boilers and other machinery and equipment.
Lessor and Lessee further agree that with respect to any loss which is covered
(or required by this Paragraph 13 to be covered) by insurance then being carried
by or on behalf of either of them, that each party releases the other of and
from any and all claims with respect to such loss to the extent of the insurance
proceeds payable with respect to such loss; and they further mutually agree that
their respective insurance companies shall have no right of subrogation against
the other on account thereof. If requested, each party agrees to furnish the
other from time to time with certificates of all such insurance coverages issued
by or on behalf of their respective insurers.

14.   RISK OF LOSS OF PERSONAL EFFECTS. Lessee acknowledges and agrees that all

                                       4


of the furnishings, equipment, effects and personal property of Lessee and of
all persons claiming by, through or under Lessee which may be on the Leased
Premises shall be at the sole risk and hazard of Lessee and if the whole or any
part thereof shall be destroyed or damaged by fire, water or otherwise, or by
the leakage or bursting of water pipes, steam pipes, or other pipes, by theft or
from any other cause, no part of said loss or damage is to be charged to or to
be borne by Lessor, except that Lessor shall in no event be indemnified or held
harmless or exonerated from any liability to Lessee or to any other person,
arising from any injury, loss, damage or liability caused by Lessor's negligence
or willful misconduct.

15.   MAINTENANCE OF LEASED PREMISES. The Lessee agrees to maintain the Leased
Premises including its structural elements in the same condition as they are at
the commencement of the term or as they may be put in during the term of this
Lease, reasonable wear and tear, damage by fire, other casualty and eminent
domain, and matters for which the Lessor is responsible hereunder only excepted,
to replace plate glass and other glass therein damaged due to negligence of the
Lessee or its agents. The Lessee shall not permit the Leased Premises to be
overloaded, damaged, stripped, or defaced, nor suffer any waste. Lessee shall
obtain written consent of Lessor before erecting any sign on or about the Leased
Premises and on or about the Building of which the Leased Premises are a part,
which consent shall not be unreasonably withheld or delayed.

16.   ALTERATIONS - ADDITIONS. The Lessee may make any non-structural
alterations additions or improvements to the Leased Premises that it deems
necessary or advisable for the conduct of its business thereon as long as they
are in compliance with law. The Lessee shall not make any structural
alterations, additions or improvements to the Leased Premises, unless the Lessor
consents thereto in advance in writing, which consent shall not be unreasonably
withheld or delayed, but such consent may be conditioned upon the Lessee's
obligation to restore the Leased Premises to its original condition, all at
Lessee's sole cost and expense and may be conditioned upon approval by the
Lessor's mortgagee. All such allowed alterations or additions shall be at
Lessee's expense and shall be in quality at least equal to the present
construction. Lessee shall not permit any mechanics' liens, or similar liens, to
remain upon the Leased Premises for labor and materials furnished to Lessee or
claimed, to have been furnished to Lessee in connection with the work of any
character performed or claimed to have been performed at the direction of
Lessee, and shall cause any such lien to be released of record forthwith without
cost to Lessor. Any alterations, additions or improvements made by the Lessee,
except for moveable partitions, trade fixtures, equipment, and furnishings,
installed at the Lessee's cost, shall become the property of the Lessor at the
termination of the Lease as provided herein, but the Lessor may at its option
require that the Lessee remove any or all non-structural additions.

17.   ASSIGNMENT - SUBLETTING. The Lessee shall not assign or sublet the whole
or any part of the Leased Premises without the Lessor's prior written consent
which will not be unreasonably withheld or delayed. Notwithstanding, Lessee
shall remain liable to Lessor for the payment of all rent and for the full
performance of the covenants and conditions of this Lease.

                                       5


18.   QUIET ENJOYMENT, COVENANT OF TITLE. The Lessee, on paying the rent and
other charges hereunder, as and when the same shall become due and payable and
observing and performing the covenants, conditions and agreements contained in
this Lease on the part of the Lessee to be observed and performed, all as herein
provided, shall and may lawfully, peaceably and quietly have, hold and enjoy the
Leased Premises during the Initial Term and any Renewal Term and any extensions
or renewals thereof, without hindrance, ejection or disturbance by the Lessor or
by any person or persons claiming by, through or under the Lessor or by anyone
claiming paramount title.

19.   SUBORDINATION. The Lease and Lessee's interest hereunder, subject to the
provisions of this Paragraph 19, shall be subordinate to the lien of any present
or future mortgage or mortgages upon the Leased Premises or any property of
which the Leased Premises are a part, regardless of the time of execution or the
time of recording of any such mortgage or mortgages. Any subordination of this
Lease pursuant to the provisions of this Paragraph 19 is made and granted upon
the condition that, the holder of any such mortgage enters into an agreement
with Lessee by the terms of which such holder agrees (i) not to disturb the
possession and other rights of Lessee and (ii) in the event of any entry by the
holder of, any such mortgage to foreclose, a default under any such mortgage, a
foreclosure of any such mortgage of Lessor's interest under this Lease or in the
Leased Premises through foreclosure or otherwise, the Lessee shall (provided the
Lessee is not then in default beyond any applicable cure period) peaceably hold
and enjoy the Leased Premises as a Lessee of such holder, during the Lease Term
and any extensions or renewals thereof upon the terms, covenants and conditions
as set forth in this Lease without any hindrance or interruption from such
holder and shall not be named as a party defendant in any such action. In the
event of such entry, foreclosure, acquisition or other action by such holder,
Lessee shall recognize the holder of the mortgage with respect to which such
action is taken as the Lessor under this Lease. As used in this Paragraph 19,
the word "holder" includes any person claiming through or under any such
mortgage, including any purchaser at a foreclosure sale, and the word "Lessee"
shall include Lessee's successors and assigns, The word "mortgage" as used in
this Paragraph shall mean mortgages, deeds of trust, and other similar
instruments held by any institutional lender and all modifications, extensions,
renewals and replacements thereof.

      The Lessee agrees to execute such further documents in recordable form as
the Lessor or any lender may reasonably require, consistent with the terms of
this Paragraph 19 and 28.

20.   LESSOR'S ACCESS. The Lessor or agents of the Lessor may, at reasonable
times and upon reasonable prior notice to the Lessee, enter to view the Leased
Premises, and may remove placards and signs not approved and affixed as herein
provided, and make repairs and alterations all in a manner so as not to
unreasonably interfere with the normal conduct of Lessee's business. At any time
within the six (6)-month period prior to the expiration of the final Renewal
Term, or in the event that Lessee has given notice of its intention to terminate
this lease, the Lessor may show the Leased Premises to others, with reasonable
prior notice, all in a manner so as not to unreasonably interfere with the
normal conduct of the Lessee's business and the Lessor may affix to any suitable
part of the Leased Premises a notice for letting or selling the Leased Premises
or

                                       6


property of which the Leased Premises are a part and keep the same so affixed
without hindrance or molestation.

21.   INDEMNIFICATION AND LIABILITY. The Lessee shall save the Lessor harmless
from all loss and damage occasioned by the use or escape of water or by the
bursting of pipes to the extent caused by the negligence of the Lessee or by any
nuisance made or suffered on the Leased Premises.

22.   LESSEE'S LIABILITY INSURANCE. The Lessee warrants and represents that
throughout the term of the Lease, Lessee shall carry liability insurance in the
amount of $2,000,000. Lessee shall name the Lessor as insured party on any
policy or policies of comprehensive public liability insurance and property
damage insurance maintained by Lessee now or hereafter that covers the premises
and shall provide Lessor with a certificate of such insurance prior to the
commencement date and thereafter upon the request of the Lessor. Lessor shall
maintain insurance on the Leased Premises for its full replacement value.

23.   FIRE, CASUALTY - EMINENT DOMAIN. Should the Leased Premises, or of the
property of which they are a part, be damaged by fire or other casualty, the
Lessor shall rebuild, repair or restore the Leased Premises to substantially the
same condition as they were in immediately prior to such damage except that the
Lessor shall not be required to do so by expenditure of more than the insurance
proceeds which it recovers. If the necessary work is such that it cannot be
completed within ninety (90) days or the damage occurs during the last six (6)
months of the term hereof and Lessee has not exercised its option to extend, the
Lessor may terminate this Lease. If there is a taking of a portion of the Leased
Premises by eminent domain, Lessor shall, if possible, attempt to provide an
equivalent facility upon the portion of the Leased Premises not taken. When such
fire, casualty, or taking renders the Leased Premises substantially unsuitable
for their intended use, a just and proportionate abatement of rent shall be
made, until such time as the Leased Premises or, the applicable portion thereof
are rebuilt, repaired so as to be suitable for Lessee's use. The Lessee may
elect to terminate this Lease if:

      (a)   in the case of fire or other casualty, if the insurance proceeds
            recovered or recoverable are insufficient to rebuild repair or
            restore the Leased Premises to the condition they were in
            immediately prior to such fire or other casualty,

      (b)   the Lessor in the case of fire or other casualty fails to file
            written notice within thirty (30) days of intention to restore
            Leased Premises; or

      (c)   the Lessor fails to restore the Leased Premises to substantially the
            same condition they were in prior to the fire, casualty or taking
            within ninety (90) days of said fire, casualty, or taking.

      The Lessor reserves, and the Lessee grants to the Lessor, all rights which
the Lessee may have for damages or injury to the Leased Premises for any taking
by eminent domain, except for

                                       7


damage to the Lessee's fixtures, property or equipment, and Lessee's right to
relocation expenses. Nothing in this paragraph is to be construed to waive
Lessee's right to recover from Lessor a just and proportional abatement of rent
and additional rent paid in advance of any such taking by eminent domain.

24    DEFAULT AND BANKRUPTCY. In the event that:

      (a)   The Lessee shall default in the payment of any installment of rent
            or other sum herein specified and such default shall continue for
            fourteen (14) days after receipt of written notice that said sum is
            due and payable ; or

      (b)   The Lessee shall default in the observance or performance of the
            Lessee's covenants, agreements, or obligations hereunder and the
            Lessee shall not cure such default within thirty (30) days after
            receipt of written notice thereof or if such default cannot be cured
            within thirty (30) days, then if Lessee shall not commence to cure
            the same within thirty (30) days and diligently pursue the curing of
            the same; or

      (c)   The Lessee files a voluntary petition under the Bankruptcy Act or
            any other law seeking relief from debts, or if any assignment shall
            be made of Lessee's property for the benefit of creditors, or if any
            involuntary such proceeding shall be filed against the Lessee not
            discharged within sixty (60) days thereof.

      Then the Lessor shall have the right after the due process of law, while
such default continues, to re-enter and take complete possession of the Leased
Premises, to declare the term of this Lease ended, and remove the Lessee's
effects, without prejudice to any remedies which might be otherwise used for
arrears of rent or other default. The Lessee shall indemnify the Lessor against
all loss and reasonable payment of rent and other payments which the Lessor may
incur by reason of such termination during the residue of the term. In the event
of default, Lessor shall use its reasonable efforts to re-let the Leased
Premises so as to mitigate any damages to the Lessee hereunder. If Lessor
re-lets the Leased Premises, Lessee may offset its payable rent against the
amount of rent received by Lessor.

      If the Lessor shall default, after written notice thereof in the
observance or performance of any conditions or covenants on its part to be
observed or performed under or by virtue of any of the provisions of this Lease,
and Lessor shall not cure such default within thirty (30) days after written
notice thereof, or if such default cannot be cured within thirty (30) days, then
if Lessor shall not commence to cure the same within thirty (30) days and
diligently pursue the curing of the same, then Lessee, without being under any
obligation to do so, may remedy such default for the account and at the expense
of Lessor or may terminate the Lease, but in no event shall Lessee set off such
claim against its rental obligation.

      If the Lessee shall default, after written notice thereof as provided
herein, in the

                                       8


observance or performance of any conditions or covenants on its part to be
observed or performed under or by virtue of any of the provisions of this Lease
and after the expiration of any period within which the Lessee is entitled to
cure such default as is provided above in this Paragraph 24, the Lessor without
being under any obligation to do so and without thereby waiving such default,
may remedy such default for the account and at the expense of the Lessee. If the
Lessor makes any expenditures or incurs any obligations for the payment of money
in connection therewith, such sums paid or obligations incurred, with interest
at the rate of eight (8.0%) per annum and costs, shall be paid to the Lessor by
the Lessee as additional rent.

      Lessor shall not be liable to Lessee for any compensation or reduction of
rent by reason of inconvenience or annoyance or for loss of business arising
from the necessity of Lessor or its agents entering the Leased Premises, or for
Lessor's repairing the Leased Premises if such repair is not performed by
Lessee, or for making repairs to the Leased Premises or part thereof, however
the necessity may occur. In case Lessor is prevented or delayed from making any
such repairs, or supplying the utilities or services provided for herein, or
performing any other covenant or duty to be performed on Lessor's part, by
reason of any cause beyond Lessor's control, Lessor shall not be liable to
Lessee therefor, nor shall Lessee be entitled to any abatement or reduction of
rent by reason thereof, nor shall the same give rise to a claim in Lessee's
favor that such failure constitutes actual or constructive, total or partial,
eviction from the Leased Premises, or any portion thereof, provided however that
if such failure to provide utilities, services, or repairs shall render the
Leased Premises untenantable and shall continue for five (5) consecutive days
after written notice from Lessee to Lessor, then Lessee shall be entitled to an
abatement of rent and if the failure continues for a total of twenty (20)
consecutive days then Lessee may terminate this Lease.

23.   PARAGRAPH HEADINGS. The paragraph headings throughout this instrument are
for convenience and reference only, and the words contained therein shall in no
way be held to explain, modify, amplify or aid in the interpretation,
construction or meaning of the provisions of this Lease.

24.   ESTOPPEL CERTIFICATE. Lessor and Lessee each agree at any time from time
to time, upon not less than ten (10) days prior notice to execute, acknowledge
and deliver to the other, a statement in writing, certifying to the extent
possible that this Lease is unmodified and in full force and effect, or if there
have been modifications, that the same is in full force and effect as modified
and stating such modifications and otherwise certifying if there exists any
default under the terms of this Lease and such other information as may be
reasonably requested concerning this Lease by the other party or any other third
party with a bona fide interest.

25.   NOTICE. Any notice from the Lessor to the Lessee relating to the Leased
Premises or to the occupancy thereof shall be deemed duly served, if in writing
and mailed, registered or certified mail, return receipt requested, postage
prepaid, addressed to the Lessee at the Leased Premises with a copy to,

                                       9


               Mark A Rossi and General Counsel
               Merrill Communications LLC
               One Merrill Circle
               St Paul, Minnesota 55108
or at such address as the Lessee may from time to time advise in writing. Any
notice from the Lessee to the Lessor relating to the Leased Premises or to the
occupancy thereof, shall be deemed duly served, if in writing and mailed to the
Lessor by registered or certified mail, return receipt requested, postage
prepaid, addressed to the Lessor at such address as the Lessor may from time to
time advise in writing. All rent and notices shall be paid and sent to the
Lessor at:

               William Shea, General Partner
               Ames Realty Associates
               21 Properzi Way
               Somerville, MA 02143

26.   SURRENDER. The Lessee shall at the expiration or other termination of this
Lease remove all Lessee's goods and effects from the Leased Premises (including,
without hereby limiting the generality of the foregoing, all signs and lettering
affixed or painted by the Lessee, either inside or outside the Leased Premises).
Lessee shall deliver to the Lessor the Leased Premises and all keys, locks
thereto, and all fixtures, alterations and additions made to or upon the Leased
Premises, except for moveable partitions trade fixtures, equipment and
furnishings installed at the Lessee's expense, in the same condition as they
were at the commencement of the term, or as they were put in during the term
hereof, reasonable wear and tear and damage by fire, other casualty or eminent
domain and matters for which the Lessor is responsible hereunder only excepted.
All movable partitions, trade fixtures equipment and furnishings, installed in
the Leased Premises at the Lessee's expense during the term of the Lease may be
removed by the Lessee at the expiration or other termination of this Lease The
Lessee at its expense promptly repair any and all damages to the Leased Premises
resulting from such removal. In the event of the failure of the Lessee to remove
any of the Lessee's property from the Leased Premises, Lessor is hereby
authorized, upon fifteen (15) days' written notice to the Lessee without
liability to the Lessee for loss or damage thereto, and at the sole risk of
Lessee to remove and store any of the property at Lessee's expense.


                                       10


      IN WITNESS WHEREOF, the Lessor, and the Lessee, have hereunto set their
hands and common seals as of this 31st day of March, 2000.

LESSOR:

AMES REALTY TRUST


By:   /s/ Walter Mclaughlin                      /s/ Illegible
      ---------------------------------          -------------------------------
      Trustee                                    Witness

      /s/ William Shea                           /s/ Illegible
      ---------------------------------          -------------------------------
      Trustee                                    Witness

      ---------------------------------          -------------------------------
      Trustee                                    Witness



LESSEE:

MERRILL COMMUNICATIONS LLC


By: /s/ Mark A. Rossi
    ----------------------------------------
      Mark A. Rossi

Its:  President
      Investment Company Services


                                       11

EX-12.1

Exhibit 12.1
Merrill Corporation
Computation of Ratio of Earnings to Fix Charges
(dollars in thousands)




                                                                                                      Pro Forma
                                                                                                     Year Ended
                                                      For the Year Ended January 31,                 January 31,
                                   ==============================================================
                                        1996         1997         1998         1999          2000       2000
                                   ==============================================================   ============
                                                                                   
Income (loss) before provision
  for income taxes ...........     $ 18,706     $ 32,484     $ 46,466     $ 47,671     $ (8,801)     $  8,986
                                   --------------------------------------------------------------   ------------
Fixed charges
  Cash interest expense ......        1,099        4,124        4,321        3,961       12,771        40,953
  Amortization of deferred
    financing costs ..........            -           30           74           64          253           253
  1/3 rent expense from
    operating leases .........        1,708        2,003        2,673        3,010        3,722         3,799
                                   --------------------------------------------------------------   ------------
  Total fixed charges                 2,807        6,157        7,068        7,035       16,746        45,005
                                   --------------------------------------------------------------   ------------
Earnings + fixed charges           $ 21,513     $ 38,641     $ 53,534     $ 54,706     $  7,945      $ 53,991
                                   --------------------------------------------------------------   ------------
Earnings to fix charges ......          7.7x         6.3x         7.6x         7.8x         0.5x          1.2x

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 Corporation S.A.R.L.

Merrill International Inc.

Merrill Corporation Ltd.

Merrill Real Estate Company

Merrill Training & Technology, Inc.

Merrill/Alternatives, 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 April 27, 2000 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
May 12, 2000

EX-27.1

 


<ARTICLE> 5
<MULTIPLIER> 1,000

                             
<PERIOD-TYPE>                   YEAR
<FISCAL-YEAR-END>                          JAN-31-1998
<PERIOD-START>                             FEB-01-1997
<PERIOD-END>                               JAN-31-1998
<CASH>                                               0
<SECURITIES>                                         0
<RECEIVABLES>                                        0
<ALLOWANCES>                                         0
<INVENTORY>                                          0
<CURRENT-ASSETS>                                     0
<PP&E>                                               0
<DEPRECIATION>                                       0
<TOTAL-ASSETS>                                       0
<CURRENT-LIABILITIES>                                0
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<PREFERRED-MANDATORY>                                0
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<COMMON>                                             0
<OTHER-SE>                                           0
<TOTAL-LIABILITY-AND-EQUITY>                         0
<SALES>                                        459,516
<TOTAL-REVENUES>                               459,516
<CGS>                                          295,390
<TOTAL-COSTS>                                  295,390
<OTHER-EXPENSES>                               114,174
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<INTEREST-EXPENSE>                               4,321
<INCOME-PRETAX>                                 46,466
<INCOME-TAX>                                    20,445
<INCOME-CONTINUING>                             26,021
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                    26,021
<EPS-BASIC>                                          0
<EPS-DILUTED>                                        0


 

EX-27.2

 


<ARTICLE> 5
<MULTIPLIER> 1,000

                             
<PERIOD-TYPE>                   YEAR
<FISCAL-YEAR-END>                          JAN-31-1999
<PERIOD-START>                             FEB-01-1998
<PERIOD-END>                               JAN-31-1999
<CASH>                                          23,477
<SECURITIES>                                         0
<RECEIVABLES>                                  110,491
<ALLOWANCES>                                     8,126
<INVENTORY>                                     20,198
<CURRENT-ASSETS>                               158,293
<PP&E>                                         111,041
<DEPRECIATION>                                  66,106
<TOTAL-ASSETS>                                 265,945
<CURRENT-LIABILITIES>                           76,728
<BONDS>                                         39,485
<PREFERRED-MANDATORY>                                0
<PREFERRED>                                          0
<COMMON>                                           158
<OTHER-SE>                                     140,993
<TOTAL-LIABILITY-AND-EQUITY>                   265,945
<SALES>                                        509,543
<TOTAL-REVENUES>                               509,543
<CGS>                                          330,632
<TOTAL-COSTS>                                  330,632
<OTHER-EXPENSES>                               127,705
<LOSS-PROVISION>                                 3,273
<INTEREST-EXPENSE>                               3,961
<INCOME-PRETAX>                                 47,671
<INCOME-TAX>                                    21,214
<INCOME-CONTINUING>                             26,457
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                    26,457
<EPS-BASIC>                                          0
<EPS-DILUTED>                                        0


 

EX-27.3

 


<ARTICLE> 5
<MULTIPLIER> 1,000

                             
<PERIOD-TYPE>                   YEAR
<FISCAL-YEAR-END>                          JAN-31-2000
<PERIOD-START>                             FEB-01-1999
<PERIOD-END>                               JAN-31-2000
<CASH>                                          14,458
<SECURITIES>                                         0
<RECEIVABLES>                                  135,091
<ALLOWANCES>                                     5,905
<INVENTORY>                                     27,350
<CURRENT-ASSETS>                               193,368
<PP&E>                                         139,056
<DEPRECIATION>                                  79,565
<TOTAL-ASSETS>                                 354,860
<CURRENT-LIABILITIES>                           81,627
<BONDS>                                        353,811
<PREFERRED-MANDATORY>                                0
<PREFERRED>                                     35,697
<COMMON>                                            42
<OTHER-SE>                                     129,557
<TOTAL-LIABILITY-AND-EQUITY>                   354,860
<SALES>                                        587,737
<TOTAL-REVENUES>                               587,737
<CGS>                                          393,452
<TOTAL-COSTS>                                  393,452
<OTHER-EXPENSES>                               188,980
<LOSS-PROVISION>                                  (80)
<INTEREST-EXPENSE>                              13,235
<INCOME-PRETAX>                                (8,801)
<INCOME-TAX>                                     7,491
<INCOME-CONTINUING>                           (16,398)
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                  (17,561)
<EPS-BASIC>                                          0
<EPS-DILUTED>                                        0