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Exhibit 10.3

SECOND AMENDMENT AND RESTATEMENT

THIS IS A SECOND AMENDMENT AND RESTATEMENT, dated as of March 30, 2009 (the
“Amendment”), by and among TSG Holdings Corp., a Delaware corporation (the
“Company”), The Sheridan Group Holdings (BRS), LLC, a Delaware limited liability
company (“BRS”), The Sheridan Group Holdings (Jefferies), LLC, a Delaware
limited liability company (“Jefferies”), in respect of the Amended and Restated
Securities Holders Agreement, dated as May 16, 2007 (the “Securities Holders
Agreement”), by and among the Company and the shareholders party thereto, and
the Amended and Restated Registration Rights Agreement, dated as May 16, 2007
(the “Registration Rights Agreement” and together with the Securities Holders
Agreement, the “Original Agreements”), by and among the Company and the
shareholders party thereto.

A.           On January 9, 2009, the Company repurchased the securities of the
Company held by Participatiemaatschappij Giraffe B.V., a limited liability
company organized under the laws of The Netherlands (as successor to
Participatiemaatschappij Neushoorn B.V., a limited liability company organized
under the laws of The Netherlands, and Participatiemaatschappij Olifant B.V., a
limited liability company organized under the laws of The Netherlands) (the
“Euradius Investors”).

B.           The parties wish to amend and restate the Original Agreements to
reflect that the Euradius Investors are no longer shareholders of the Company.

C.           Pursuant to Section 5.1 of the Securities Holders Agreement and
Section 9(a) of the Registration Rights Agreement, an amendment must be set
forth in writing executed by the Company and the Required Holders (such Required
Holders being BRS and Jefferies).

D.           Capitalized terms used and not otherwise defined herein shall have
the meanings assigned to them in the Securities Holders Agreement (as amended
and restated hereby).

Accordingly, in consideration of the mutual agreements herein contained and
other good and valuable consideration, the sufficiency and receipt of which are
hereby acknowledged, the parties hereto agree as follows:

SECTION 1.    Amendment and Restatement.  Effective as of the date first set
forth above, each of the Original Agreements is hereby amended and restated in
its entirety in the form attached hereto as Exhibit A and Exhibit B,
respectively.

 
 

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SECTION 2.    Applicable Law.  This Amendment shall be governed by, and
construed in accordance with, the internal laws of the State of Delaware,
without giving effect to principles of conflicts of laws.

SECTION 3.    Counterparts.  This Amendment may be executed in two or more
counterparts, each of which shall constitute an original but all of which when
taken together shall constitute one agreement.  Delivery of an executed
counterpart of a signature page to this Agreement by fax or other electronic
transmission in “pdf” or other imaging format shall be equally as effective as
delivery of an original executed counterpart.

[signature page follows]

 
 

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IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment and
Restatement to be duly executed by their respective authorized officers as of
the day and year first written above.  

 
TSG HOLDINGS CORP.
                     
By:
/s/ Robert M. Jakobe
     
Name:
Robert M. Jakobe
   
Title:
Executive Vice President and Chief Financial Officer
           
THE SHERIDAN GROUP HOLDINGS (BRS), LLC
                     
By:
/s/ Thomas J. Baldwin
     
Name:
Thomas J. Baldwin
   
Title:
Managing Director
           
THE SHERIDAN GROUP HOLDINGS (JEFFERIES), LLC
                     
By:
/s/ James L. Luikart
     
Name:
James L. Luikart
   
Title:
Managing Member of General Partner

 
 
 

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EXHIBIT A
                                                                                                                                          

 

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SECOND AMENDED AND RESTATED SECURITIES HOLDERS AGREEMENT
 
by and among
 
TSG HOLDINGS CORP.,
 
THE SHERIDAN GROUP HOLDINGS (BRS), LLC,
 
THE SHERIDAN GROUP HOLDINGS (JEFFERIES), LLC,
 
and
 
THE OTHER INVESTORS NAMED HEREIN
 
Dated as of March 30, 2009
 

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TABLE OF CONTENTS
 

        Page          
ARTICLE I
 
RESTRICTIONS ON TRANSFER OF SECURITIES
 
2
         
1.1.
 
Restrictions on Transfers of Securities
 
2
         
1.2.
 
Legend
 
5
         
1.3.
 
Notation
 
6
         
ARTICLE II
 
OTHER COVENANTS AND REPRESENTATIONS
 
6
         
2.1.
 
Financial Statements and Other Information
 
6
         
2.2.
 
Sale of the Company
 
7
         
2.3.
 
Tag-Along Rights
 
9
         
2.4.
 
Preemptive Rights
 
11
         
2.5.
 
Corporate Opportunity
 
12
         
2.6.
 
Restrictive Covenants
 
12
         
ARTICLE III
 
CORPORATE ACTIONS
 
14
         
3.1.
 
Third Amended and Restated Certificate of Incorporation and Amended and Restated
Bylaws
 
14
         
3.2.
 
Directors and Voting Agreements
 
14
         
3.3.
 
Right to Remove Certain of the Company’s Directors
 
15
         
3.4.
 
Right to Fill Certain Vacancies in Company’s Board
 
15
         
3.5.
 
Directors of Subsidiaries
 
15
         
3.6.
 
Amendment of Certificate and Bylaws
 
15
         
3.7.
 
Termination of Voting Agreements
 
16
         
3.8.
 
Officers
 
16
 
       
3.9.
 
Committees
 
16
         
ARTICLE IV
 
ADDITIONAL RESTRICTIONS ON TRANSFERS OF MANAGEMENT SECURITIES HELD BY MANAGEMENT
INVESTORS
 
16
         
4.1.
 
Certain Definitions
 
16
         
4.2.
 
Restrictions on Transfer
 
17
         
4.3.
 
Purchase Option
 
18
         
4.4.
 
Involuntary Transfers
 
21
         
4.5.
 
Purchaser Representative
 
22

 
i

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TABLE OF CONTENTS
(continued)

ARTICLE V
 
MISCELLANEOUS
 
22
         
5.1.
 
Amendment and Modification
 
22
         
5.2.
 
Successors and Assigns
 
23
 
       
5.3.
 
Separability
 
23
 
       
5.4.
 
Notices
 
23
         
5.5.
 
Governing Law
 
25
         
5.6.
 
Headings
 
25
         
5.7.
 
Counterparts
 
25
         
5.8.
 
Further Assurances
 
25
         
5.9.
 
Termination
 
25
         
5.10.
 
Remedies
 
25
         
5.11.
 
Party No Longer Owning Securities
 
25
         
5.12.
 
No Effect on Employment
 
25
         
5.13.
 
Pronouns
 
25
         
5.14.
 
Future Individual Investors
 
25
         
5.15.
 
Entire Agreement
 
26

 
ii

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SCHEDULES
 
Schedule I
 
Investors and Securities

 
iii

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DEFINED TERMS

 
iv

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Affiliate
 
5
Agreement
 
1
Approved Sale
 
7
BRS
 
1
BRS Affiliates
 
3
BRS Associates
 
4
BRS Directors
 
14
BRS Fund II
 
3
BRS Partner
 
3
Common Stock
 
2
Company
 
1
Designated Purchaser
 
18
Escrow Amount
 
10
Escrow Notice
 
11
Exchange Act
 
4
Fair Market Value Price
 
19
Holders
 
9
ING Barings Global
 
4
ING Barings U.S.
 
4
ING Furman Selz
 
4
Investor
 
1
Investors
 
1
Jefferies Affiliates
 
4
Jefferies Associates
 
4
Jefferies Directors
 
14
Jefferies Funds
 
1, 4
Jefferies Partner
 
4
Joining Investors
 
1
Management Investors
 
1
Management Securities
 
6, 16
NASDAQ
 
19
NYSE
 
19
Option Purchase Price
 
18
Option Termination Date
 
18
Original Agreement
 
1
Other Investors
 
1
Permitted Transferee
 
3
Preemptive Notice
 
12
Preemptive Reply
 
12
Preferred Stock
 
1
Proffered Valuation
 
19
Public Offering
 
16
Purchase Number
 
18
Purchase Option
 
18

 
v

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Qualified Investors
 
11
Required Holders
 
8
Sale Notice
 
20
Securities
 
2
Securities Act
 
3
Seller
 
9
Seller’s Notice
 
9
Sheridan
 
1
Special Registration Statement
 
16
Subsidiary
 
16
Tag-Along Notice
 
9
Termination Date
 
18
Transfer
 
2
Transfer Date
 
21
Unit Offering
 
16

 
vi

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vii

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SECOND AMENDED AND RESTATED SECURITIES HOLDERS AGREEMENT

THIS IS A SECOND AMENDED AND RESTATED SECURITIES HOLDERS AGREEMENT, dated as of
March 30, 2009 (the “Agreement”), by and among TSG Holdings Corp., a Delaware
corporation (the “Company”), The Sheridan Group Holdings (BRS), LLC, a Delaware
limited liability company (“BRS”) , The Sheridan Group Holdings (Jefferies),
LLC, a Delaware limited liability company (“Jefferies”), the individuals
designated as Management Investors on the signature pages hereto (the
“Management Investors”), certain other individuals designated as investors on
the signature pages hereto (the “Other Investors”) and any other investor in the
Company who becomes a party to or agrees to be bound by this Agreement (the
“Joining Investors”).  Each of BRS, Jefferies, the Management Investors, the
Other Investors and the Joining Investors are sometimes referred to herein
individually as an “Investor” and collectively as the “Investors.”
 
Background
 
A.           Certain Investors are parties to the Securities Holders Agreement
dated as of August 1, 2003, by and among the Company and the shareholders of the
Company party thereto, as amended and restated by the Amended and Restated
Securities Holders Agreement, dated as of May 16, 2007, by and among the Company
and the shareholders of the Company party thereto (the “Original Agreement”).
 
B.            The parties wish to amend and restate the Original Agreement.
 
C.            Pursuant to Section 5.1 of the Original Agreement, an amendment
must be set forth in writing executed by the Company and the Required Holders
(such Required Holders being BRS and Jefferies).
 
D.            By entering into that certain Second Amendment and Restatement,
dated as of March 30, 2009, the Company, BRS and Jefferies have amended and
restated the Original Agreement as provided herein effective as of the date
specified therein.
 
E.            The Management Investors are employed by or serve as directors of
The Sheridan Group, Inc., a Maryland corporation (“Sheridan”), or its direct or
indirect subsidiaries.
 
F.            Each Investor currently owns the number of shares of the Company’s
Series A 10% Cumulative Compounding Preferred Stock, par value $.001 per share
(the “Series A Preferred Stock”), the number of shares of the Company’s Series B
10% Cumulative Compounding Preferred Stock, par value $.001 per share (the
“Series B Preferred Stock” and, together with the Series A Preferred Stock, the
“Preferred Stock”), and the number of shares of Common Stock, par value $.001
per share (the “Common Stock”), in each case as set forth opposite such
Investor’s name on Schedule I hereto.
 
 
 

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G.            As used herein, the term “Securities” shall mean Common Stock,
Preferred Stock, and any other shares of capital stock of the Company, and any
securities convertible into or exchangeable for such capital stock, and any
options (including any options now or hereafter issued to Management Investors),
warrants or other rights to acquire such capital stock or securities, now or
hereafter held by any party hereto, including all other securities of the
Company (or a successor to the Company) received on account of ownership of
Common Stock or Preferred Stock, including all securities issued in connection
with any merger, consolidation, stock dividend, stock distribution, stock split,
reverse stock split, stock combination, recapitalization, reclassification,
subdivision, conversion or similar transaction in respect thereof.
 
Terms
 
In consideration of the mutual covenants contained herein, and intending to be
legally bound hereby, the parties hereto agree as follows:
 
ARTICLE I

 
RESTRICTIONS ON TRANSFER OF SECURITIES
 
1.1.           Restrictions on Transfers of Securities.  The following
restrictions on Transfer (as defined in Section 1.1(a) below) shall apply to all
Securities owned by any Investor or Permitted Transferee (as defined in Section
1.1(b) below), except a Permitted Transferee by virtue of Section 1.1(b)(iv)
hereof:
 
(a)           No Investor or Permitted Transferee shall Transfer (other than in
connection with a redemption or purchase by the Company) any Securities unless
(i) such Transfer is to a person approved in advance in writing by the Required
Holders (as defined in Section 2.2(a)), and (ii) such Transfer complies with the
provisions of this Section 1.1, Article II hereof, and, in addition, in the case
of Management Securities (as defined in Section 4.1(a)), Article IV of this
Agreement.  Any purported Transfer in violation of this Agreement shall be null
and void and of no force and effect, and the purported transferee shall have no
rights or privileges in or with respect to the Company.  As used herein,
“Transfer” includes the making of any sale, exchange, assignment, hypothecation,
gift, security interest, pledge or other encumbrance, or any contract therefor,
any voting trust or other agreement or arrangement with respect to the transfer
or grant of voting rights (except for the voting agreement set forth in Article
III hereof) or any other beneficial interest in any of the Securities, the
creation of any other claim thereto or any other transfer or disposition
whatsoever, whether voluntary or involuntary, affecting the right, title,
interest or possession in or to such Securities.
 
Prior to any proposed Transfer of any Securities, the holder thereof shall give
written notice to the Company describing the manner and circumstances of the
proposed Transfer, together with, if requested by the Company, a written opinion
of legal counsel, addressed to the Company and the transfer agent for the
Company’s equity securities, if other than the Company, and reasonably
satisfactory in form and substance to the Company, to the effect that the
proposed Transfer of the Securities may be effected without registration under
the Securities Act of 1933, as amended (the “Securities Act”).  Each certificate
evidencing the Securities transferred shall bear the legends set forth in
Section 1.2(a) hereof, except that such certificate shall not bear the legend
contained in the first paragraph of Section 1.2(a) hereof if the opinion of
counsel referred to above is to the further effect that such legends is not
required in order to establish compliance with any provision of the Securities
Act.
 
 
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Nothing in this Section 1.1(a) shall prevent the Transfer, free of any
restrictions under this Agreement, of Securities by an Investor or a Permitted
Transferee to one or more of its Permitted Transferees or to the Company;
provided, however, that each such Permitted Transferee (except a Permitted
Transferee by virtue of Section 1.1(b)(iv) hereof) shall take such Securities
subject to and be fully bound by the terms of this Agreement applicable to it
with the same effect as if it were an Investor (or if the Permitted Transferee
were a Management Investor, a Management Investor) hereunder; and provided
further, however, that (i) no person (other than a Permitted Transferee by
virtue of Section 1.1(b)(iv) hereof) shall be a Permitted Transferee unless such
transferee executes and delivers a joinder to this Agreement reasonably
satisfactory in form and substance to the Company which joinder states that such
person agrees to be fully bound by this Agreement as if it were an Investor (or
if the Permitted Transferee were a Management Investor, a Management Investor)
hereunder, and (ii) no Transfer shall be effected except in compliance with the
registration requirements of the Securities Act and any applicable state
securities laws or pursuant to an available exemption therefrom.
 
(b)           As used herein, “Permitted Transferee” shall mean:
 
(i)            in the case of any Investor or Permitted Transferee who is a
natural person, such person’s spouse or children or grandchildren (in each case,
natural or adopted), or any trust for the sole benefit of such person, such
person’s spouse or children or grandchildren (in each case, natural or adopted),
or any corporation, partnership or limited liability company in which the direct
and beneficial owner of all of the equity interest is such individual person or
such person’s spouse or children or grandchildren (in each case, natural or
adopted);
 
(ii)           in the case of any Investor or Permitted Transferee who is a
natural person, the heirs, executors, administrators or personal representatives
upon the death of such person or upon the incompetency or disability of such
person for purposes of the protection and management of such person’s assets;
 
(iii)          (A)           in the case of BRS, (I) Bruckmann, Rosser, Sherrill
& Co., II, L.P. (“BRS Fund II”),  (II) any general partner or managing member of
BRS or BRS Fund II (a “BRS Partner”) and any corporation, partnership or other
entity that is an Affiliate (as hereinafter defined) of BRS, BRS Fund II or any
BRS Partner (collectively, “BRS Affiliates”), (III) any present or former
managing director, director, general partner, limited partner, officer or
employee of BRS, BRS Fund II, a BRS Partner or any BRS Affiliate, or any spouse
or lineal descendant (natural or adopted), sibling or parent of any of the
foregoing persons in this clause (III) or any heir, executor, administrator,
testamentary trustee, legatee or beneficiary of any of the foregoing persons
described in this clause (III) (provided that no BRS Affiliate that becomes such
an entity primarily for the purpose of effecting a transfer of Securities shall
be considered a Permitted Transferee) (collectively, “BRS Associates”), and (IV)
any trust, the beneficiaries of which, or any charitable trust, the grantor of
which, or any corporation, limited liability company or partnership, the
stockholders, members or general and limited partners of which, include only
BRS, BRS Fund II, BRS Partners, BRS Affiliates, or BRS Associates; provided,
however, that prior to the Company’s initial Public Offering (as such term is
defined in Section 4.1(b) hereof), no limited partner of BRS, BRS Fund II, BRS
Partner or BRS Affiliate shall constitute a Permitted Transferee to the extent
that a Transfer of Securities to such limited partner would cause the Company to
be subject to registration under Section 12(g) of the Securities Exchange Act of
1934, as amended (the “Exchange Act”);
 
 
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(B)           in the case of Jefferies, (I) ING Furman Selz Investors III L.P.,
a Delaware limited partnership (“ING Furman Selz”), ING Barings Global Leveraged
Equity Plan Ltd., a Bermuda corporation “ING Barings Global”) and ING Barings
U.S. Leveraged Equity Plan Ltd., a Delaware limited liability company (“ING
Barings U.S.” and together with ING Furman Selz and ING Barings Global, the
“Jefferies Funds”)),  (II) any general partner or managing member of Jefferies
or the Jefferies Fund (a “Jefferies Partner”) and any corporation, partnership
or other entity that is an Affiliate (as hereinafter defined) of Jefferies, any
of the Jefferies Funds or any Jefferies Partner (including FS Private
Investments LLC, the manager of the Jefferies Funds) (collectively, “Jefferies
Affiliates”), (III) any present or former managing director, director, general
partner, limited partner, member, officer or employee of Jefferies, any of the
Jefferies Funds, a Jefferies Partner or any Jefferies Affiliate, or any spouse
or lineal descendant (natural or adopted), sibling or parent of any of the
foregoing persons in this clause (III) or any heir, executor, administrator,
testamentary trustee, legatee or beneficiary of any of the foregoing persons
described in this clause (III) (provided that no Jefferies Affiliate that
becomes such an entity primarily for the purpose of effecting a transfer of
Securities shall be considered a Permitted Transferee) (collectively, “Jefferies
Associates”), and (C) any trust, the beneficiaries of which, or any charitable
trust, the grantor of which, or any corporation, limited liability company or
partnership, the stockholders, members or general and limited partners of which,
include only Jefferies, Jefferies Funds, Jefferies Partners, Jefferies
Affiliates, or Jefferies Associates; provided, however, that prior to the
Company’s initial Public Offering, no limited partner of Jefferies, any of the
Jefferies Funds, Jefferies Partner, or Jefferies Affiliate shall constitute a
Permitted Transferee to the extent that a Transfer of Securities to such limited
partner would cause the Company to be subject to registration under Section
12(g) of the Exchange Act.
 
(iv)           in the case of any Investor or Permitted Transferee, any person
if such person takes such Securities pursuant to a sale in connection with a
Public Offering or following a Public Offering in open market transactions or
under Rule 144 under the Securities Act.
 
(c)           As used herein, “Affiliate” means, with respect to any person, any
person directly or indirectly controlling, controlled by or under common control
with such person.
 
 
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1.2.           Legend.  (a)  All Securities.  Any certificates representing
Securities shall bear the following legend (in addition to any other legend
required under applicable law):
 
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY
STATE AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR OTHERWISE DISPOSED OF
WITHOUT REGISTRATION UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE
SECURITIES LAWS OR THE DELIVERY TO THE COMPANY OF AN OPINION OF COUNSEL,
REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATION IS NOT REQUIRED.
 
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO THE TERMS AND
CONDITIONS OF A SECURITIES HOLDERS AGREEMENT BY AND AMONG THE COMPANY AND THE
HOLDERS SPECIFIED THEREIN, AS AMENDED FROM TIME TO TIME (THE “SECURITIES HOLDERS
AGREEMENT”), A COPY OF WHICH AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICE OF THE
COMPANY.  THE SALE, TRANSFER, ASSIGNMENT OR OTHER DISPOSITION OF THE SECURITIES
IS SUBJECT TO THE TERMS OF SUCH AGREEMENT AND THE SECURITIES ARE TRANSFERABLE OR
OTHERWISE DISPOSABLE ONLY UPON PROOF OF COMPLIANCE THEREWITH.
 
(b)           Management Securities.  In addition to the legends required by
Section 1.2(a) above, the following legend shall appear on certificates
representing Management Securities (as defined in Section 4.1 hereof); provided,
however, that the Company’s failure to cause certificates representing
Management Securities to bear such legend shall not affect the Company’s
Purchase Option described in Section 4.3:
 
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO A PURCHASE
OPTION OF THE COMPANY APPLICABLE TO “MANAGEMENT SECURITIES” AS DESCRIBED IN THE
SECURITIES HOLDERS AGREEMENT, A COPY OF WHICH AGREEMENT IS ON FILE AT THE
PRINCIPAL OFFICE OF THE COMPANY.
 
1.3.           Notation.  A notation will be made in the appropriate transfer
records of the Company with respect to the restrictions on transfer of the
Securities referred to in this Agreement.
 
 
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ARTICLE II
 
OTHER COVENANTS AND REPRESENTATIONS
 
2.1.           Financial Statements and Other Information.  (a) The Company
shall deliver (or cause Sheridan to deliver) to BRS (so long as BRS or its
Permitted Transferees (other than Permitted Transferees pursuant to Section
1.1(b)(iv)) own any Securities), to Jefferies (so long as  Jefferies or its
Permitted Transferees (other than Permitted Transferees pursuant to Section
1.1(b)(iv)) own any Securities):
 
(i)           as soon as available and in any event within 15 days after the end
of each calendar month, consolidated balance sheets of the Company and its
subsidiaries and of Sheridan and its subsidiaries as of the end of such calendar
month, and consolidated statements of income and cash flows of the Company and
its subsidiaries and of Sheridan and its subsidiaries for the calendar month
then ended, shown in comparison to the budgeted amounts for the same period and
the same monthly period from the prior fiscal year, prepared in conformity with
United States generally accepted accounting principles applied on a consistent
basis, except as otherwise noted therein, and subject to the absence of notes
and to year-end adjustments;
 
(ii)           as soon as available and in any event within 45 days after the
end of each of the first three quarters of each fiscal year of the Company,
consolidated balance sheets of the Company and its subsidiaries and of Sheridan
and its subsidiaries as of the end of such period, and consolidated statements
of income and cash flows of the Company and its subsidiaries and of Sheridan and
its subsidiaries for the period then ended, shown in comparison to the budgeted
amounts for the same period and the same quarterly period from the prior fiscal
year, prepared in conformity with United States generally accepted accounting
principles applied on a consistent basis, except as otherwise noted therein, and
subject to the absence of notes and to year-end adjustments;
 
(iii)           as soon as available and in any event within 90 days after the
end of each fiscal year of the Company, a consolidated and consolidating balance
sheet of the Company and its subsidiaries and of Sheridan and its subsidiaries
as of the end of such year, and consolidated and consolidating statements of
income and cash flows of the Company and its subsidiaries and of Sheridan and
its subsidiaries for the year then ended prepared in conformity with United
States generally accepted accounting principles applied on a consistent basis,
except as otherwise noted therein, together with an auditor’s report thereon of
a firm of established national reputation;
 
(iv)           to the extent the Company or Sheridan is required by law or
pursuant to the terms of any outstanding indebtedness of the Company to prepare
such reports, any annual reports, quarterly reports and other periodic reports
pursuant to Section 13 or 15(d) of the Exchange Act, actually prepared by the
Company or Sheridan as soon as such reports are generally available, together
with any other documents the Company or Sheridan are required to deliver to the
holders of any such indebtedness;
 
 
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(v)           prior to the beginning of each fiscal year, an annual budget which
has been approved by the Board of Directors of the Company, prepared on a month
by month basis for the Company and its subsidiaries and Sheridan and its
subsidiaries for such fiscal year (displaying anticipated statements of income
and cash flow), and promptly upon preparation thereof any other significant
budgets prepared by the Company, and any revisions of such annual or other
budgets; and
 
(vi)           such other documents, reports, financial data and other
information as BRS or Jefferies may reasonably request.
 
(a)           Inspection and Access.  The Company and its subsidiaries shall
provide to BRS (so long as it or its Permitted Transferees (other than Permitted
Transferees pursuant to Section 1.1(b)(iv)) own any Securities) and Jefferies
(so long as it or its Permitted Transferees (other than Permitted Transferees
pursuant to Section 1.1(b)(iv)) own any Securities) true and correct copies of
all quarterly and annual financial reports of the Company and its subsidiaries
and Sheridan and its subsidiaries and budgets prepared by or on behalf of the
Company and its subsidiaries and Sheridan and its subsidiaries, and such other
documents, reports, financial data and other information as such party may
reasonably request.  The Company shall permit any authorized representatives
designated by each such party to visit and inspect any of the properties of the
Company and its subsidiaries (including Sheridan), including its and their books
of account (and to make copies and take extracts therefrom), and to discuss its
and their affairs, finances and accounts with its and their officers and their
current and prior independent public accountants (and by this provision the
Company authorizes such accountants to discuss with such representatives the
affairs, finances and accounts of the Company and its subsidiaries, whether or
not a representative of the Company is present), all at such reasonable times
and as often as such party may reasonably request.
 
2.2.           Sale of the Company.
 
(a)           So long as the Company has not consummated a Public Offering, if
the Required Holders (as defined hereinafter) approve the sale of the Company,
whether by merger, consolidation, sale of outstanding capital stock, sale of all
or substantially all of its assets or otherwise (any of the foregoing, an
“Approved Sale”), (i) each Investor and Permitted Transferee will consent to,
vote for and raise no objections against, and waive dissenters and appraisal
rights (if any) with respect to, the Approved Sale, (ii) if the Approved Sale is
structured as a sale of stock, each Investor and Permitted Transferee will agree
to sell and will be permitted to sell all of such Investor’s or Permitted
Transferee’s Common Stock and/or Preferred Stock on the terms and conditions
approved by the Required Holders, and (iii) if the Approved Sale includes the
sale, exchange, redemption, cancellation or other disposition of securities
convertible into or exchangeable for capital stock of the Company, or options,
warrants or other rights to purchase such capital stock or securities, each
Investor or Permitted Transferee will sell, exchange, redeem, agree to cancel or
otherwise dispose of such securities or options, warrants or other rights on the
terms and conditions approved by the Required Holders.  Each Investor and
Permitted Transferee will take all necessary and desirable actions in connection
with the consummation of an Approved Sale.  As used herein, the term “Required
Holders” means, as of any date, the holders of the majority of the shares of
Common Stock then owned by BRS and the holders of the majority of the shares of
Common Stock then held by Jefferies.
 
 
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(b)           The obligations of each of the Investors and Permitted Transferees
with respect to an Approved Sale are subject to the satisfaction of the
conditions that: (i) upon the consummation of the Approved Sale, all of the
Investors and Permitted Transferees holding Common Stock will receive the same
form and amount of consideration per share of Common Stock, or if any holder of
Common Stock is given an option as to the form and amount of consideration to be
received in respect of Common Stock, all Investors and Permitted Transferees
holding Common Stock will be given the same option, (ii) upon the consummation
of the Approved Sale, all of the Investors and Permitted Transferees holding
Preferred Stock will receive the same form and amount of consideration per share
of Preferred Stock (it being understood, however, that the amount of
consideration per share of Preferred Stock may vary to reflect the accrued and
unpaid dividends thereon, to the extent different shares of Preferred Stock have
been outstanding for different periods of time), or if any holder of Preferred
Stock is given an option as to the form or amount of consideration to be
received in respect of Preferred Stock, all Investors and Permitted Transferees
holding Preferred Stock will be given the same option, and (iii) in the case of
a holder of any securities referred to in clause (iii) of paragraph (a) above,
(A) (I) in the event such Securities are vested, the holder shall receive in
such Approved Sale, unless otherwise provided in the terms of any agreement or
instrument governing or evidencing such security, either (x) the same securities
or other property that such holder would have received if such holder had
converted, exchanged or exercised such security immediately prior to such
Approved Sale (after taking into account the conversion, exchange or exercise
price applying to such Security and any applicable tax obligations of the holder
in connection with such conversion, exchange or exercise) or (y) a security
convertible or exchangeable for, or option, warrant or right to purchase,
capital stock or other securities of a successor entity having substantially
equivalent value, or (II) in the case where such securities are not vested,
unless otherwise provided in the terms of any agreement or instrument governing
or evidencing such security, such securities shall be cancelled, or (B) such
securities shall remain outstanding following such Approved Sale.
 
(c)           Each Investor and Permitted Transferee acknowledges that its or
his or her pro rata share (based upon the number of shares of Common Stock owned
(or acquirable pursuant to options, warrants or other rights to purchase Common
Stock, or securities convertible into or exchangeable for Common Stock) by such
holder) of the aggregate proceeds of an Approved Sale may be reduced by
transaction expenses related to such Approved Sale.
 
2.3.           Tag-Along Rights.
 
(a)           (i)  Except as otherwise provided in Section 2.3(a)(iii) below, no
Seller (as hereinafter defined) shall sell any shares of Common Stock in any
transaction or series of related transactions unless all “Holders” (as
hereinafter defined) are offered an equal opportunity to participate in such
transaction or transactions on a pro rata basis based on the number of shares of
Common Stock then owned by each Holder who elects to participate in such
transaction or transactions and, subject to paragraph (ii) below, on identical
terms (including amount and type of consideration paid).  For the avoidance of
doubt, such participation on a pro rata basis shall mean that such Holder shall
be entitled to sell the number of shares of Common Stock proposed to be sold by
the Seller, multiplied by a fraction, the numerator of which is the number of
shares then owned by such Holder and the denominator of which is the number of
shares of outstanding Common Stock.  If any Holder elects not to participate in
full or in part on a pro rata basis, the Seller may increase the number of
shares sold by it by the number of shares any such Holder elects not to include
pursuant to the terms hereof.  As used in this Section 2.3, a “Seller” shall
mean BRS or Jefferies; “Holders” shall mean any Investor or any of their
Permitted Transferees (other than BRS (in the case where BRS is the Seller) or
Jefferies (in the case where Jefferies is the Seller) and other than a Permitted
Transferee by virtue of Section 1.1(b)(iv)).
 
 
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(ii)            Prior to any sale of shares of Common Stock subject to these
provisions, the Seller shall notify the Company in writing of the proposed
sale.  Such notice (the “Seller’s Notice”) shall set forth: (A) the number of
shares of Common Stock subject to the proposed sale, (B) the name and address of
the proposed purchaser, and (C) the proposed amount of consideration and terms
and conditions of payment offered by such proposed purchaser.  The Company shall
promptly, and in any event within 30 days of the Company’s receipt of the
Seller’s Notice, deliver or cause to be delivered the Seller’s Notice to each
Holder.  A Holder may exercise the tag-along right by delivery of a written
notice (the “Tag-Along Notice”) to the Seller within 30 days of the date the
Company delivered or caused to be delivered the Seller’s Notice.  The Tag-Along
Notice shall state the number of shares of Common Stock that the Holder proposes
to include in the proposed sale, up to the maximum pro rata share described
above.  If a Holder entitled to participate therein delivers a Tag-Along Notice,
such holder shall be obligated to sell that number of shares of Common Stock
specified in the Tag-Along Notice upon the same terms and conditions as those
under which the Seller is selling, conditioned upon and contemporaneously with
completion of the Seller’s sale of its shares of Common Stock.  If no Tag-Along
Notice is received during the 30-day period referred to above, the Seller shall
have the right for a 120-day period to effect the proposed sale of shares of
Common Stock on terms and conditions no more favorable to the Seller than those
stated in the Seller’s Notice and in accordance with the provisions of this
Section 2.3.
 
(iii)           Notwithstanding anything herein to the contrary, a Seller may
make any of the following Transfers without offering the Holders the opportunity
to participate: (A) Transfers by a Seller to any Permitted Transferee, provided
that the proposed Permitted Transferee (except a Permitted Transferee by virtue
of Section 1.1(b)(iv) hereof) agrees in writing to be bound by the provisions of
this Agreement; (B) sales pursuant to an effective registration statement under
the Securities Act; and (C) sales in connection with an Approved Sale.
 
(iv)           Notwithstanding anything herein to the contrary, no Seller shall
be required to offer any Holder other than BRS or Jefferies the opportunity to
participate in any transaction pursuant to this Section 2.3 unless such
transaction involves sales of Common Stock to any person other than a Permitted
Transferee that, together with any previous Transfers of Common Stock by BRS or
Jefferies to persons other than Permitted Transferees, aggregate greater than
15% of the Common Stock then outstanding, and both BRS and Jefferies are Sellers
in such transactions.
 
 
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(v)           Each Investor acknowledges for itself and its transferees that BRS
or Jefferies may grant in the future tag-along rights relating to shares of
Common Stock to other holders of Common Stock and such holders will (A) have the
same opportunity to participate in sales by BRS or Jefferies as provided to the
parties hereto, and (B) be included in the calculation of the pro rata basis
upon which Holders may participate in a sale.
 
(vi)           Each of the parties hereto acknowledges that the Company (A) may
issue Securities to persons in the future and (B) has adopted an incentive
compensation plan pursuant to which employees of the Company or its subsidiaries
or other persons may be granted, subject to the terms of such plan, options to
purchase Common Stock or other Securities, and that such persons or participants
may become subject to this Agreement and may be “Holders” for purposes of this
Section 2.3.
 
(vii)          The tag-along obligations of the Sellers provided under this
Section 2.3 shall terminate upon the earlier of (A) the consummation of a Public
Offering, (B) as to BRS, the day after the date on which BRS owns less than 5%
of the outstanding Common Stock and (C) as to Jefferies, the day after the date
on which Jefferies owns less than 5% of the outstanding Common Stock.  Upon the
termination of such obligations, the rights of Holders with respect thereto
shall also terminate.
 
(viii)         Notwithstanding the requirements of this Section 2.3, a Seller
may sell shares of Common Stock at any time without complying with the
requirements of the above provisions of this Section 2.3 so long as the Seller
deposits into escrow with an independent third party at the time of the sale
that amount of the consideration received in the sale equal to the Escrow
Amount.  The “Escrow Amount” shall equal the amount of consideration as all the
Holders would have been entitled to receive if they had the opportunity to
participate in the sale on a pro rata basis, determined as if each Holder (A)
delivered a Tag-Along Notice to the Seller in the time period set forth in
Section 2.3(a)(ii) and (B) proposed to include all of its Securities which it
would have been entitled to include in the sale.  No later than the date of the
sale, the Seller shall notify the Company in writing of the proposed sale.  Such
notice (the “Escrow Notice”) shall set forth the information required in the
Seller’s Notice, and in addition, such notice shall state the name of the escrow
agent and the account number of the escrow account.  The Company shall promptly,
and in any event within 10 days, deliver or cause to be delivered the Escrow
Notice to each Holder.  A Holder may exercise the tag-along right described in
this clause (viii) by delivery to the Seller, within 15 days of the date the
Company delivered or caused to be delivered the Escrow Notice, of (I) a written
notice specifying the number of shares of Common Stock it proposes to sell, and
(II) the certificates representing such shares of Common Stock, with transfer
powers duly endorsed in blank.  Promptly after the expiration of the 15th day
after the Company has delivered or caused to be delivered the Escrow Notice, (x)
the Seller shall purchase that number of shares of Common Stock as Seller would
have been required to include in the sale had Seller complied with the
provisions of Section 2.3(a) (ii), (y) the Company shall cause to be released
from the escrow to the Holder from whom the Seller purchases shares of Common
Stock pursuant to clause (x) of this paragraph the applicable amount of
consideration due to such Holder together with any interest thereon, and (z) all
remaining funds and other consideration held in escrow shall be released to the
Seller.  If the Seller received consideration other than cash in the sale, the
Seller shall purchase the shares of Common Stock tendered by paying to the
Holders cash and non-cash consideration in the same proportion as received by
the Seller in the sale.
 
 
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2.4.           Preemptive Rights.  (a) Except for the issuance of Securities by
the Company (i) pursuant to a Public Offering, (ii) as consideration for the
acquisition of all or any substantial portion of the assets or all or any
portion of the capital stock of any person or that are otherwise issued in
connection with any merger or other business combination that is approved in
accordance with the requirements of Section 2.6 hereof, (iii) in any transaction
in respect of a Security that is available to all holders of such Security on a
pro rata basis, (iv) pursuant to the Company’s 2003 Stock-Based Incentive
Compensation Plan or any other management stock option plan approved in
accordance with the requirements Section 2.6 hereof, (v) to any employee or
director of the Company or any of its Subsidiaries, (vi) as a dividend on the
outstanding Common Stock or Preferred Stock, or (vii) with respect to which BRS
and Jefferies have waived their rights to purchase any Securities pursuant to
this Section 2.4, if, so long as the Company has not consummated a Public
Offering, the Company sells any Securities, the Company will offer to sell to
each of the Qualified Investors (as defined below) a pro rata portion of the
number of such Securities issued equal to the percentage determined by dividing
(x) the number of shares of Common Stock held by such Qualified Investor on a
fully-diluted basis, by (y) the number of shares of Common Stock of the Company
then outstanding on a fully-diluted basis.  Each Qualified Investor will be
entitled to purchase all or part of such Securities at the same price and on the
same terms as such Securities are sold by the Company pursuant to this Section
2.4.  As used in this Section 2.4, “Qualified Investors” shall mean BRS,
Jefferies and any Management Investor that has made an initial investment in the
Company valued as of the date hereof at $100,000 or greater.
 
(b)           The Company will cause to be given to each of the Qualified
Investors a written notice setting forth the terms and conditions upon which
such Qualified Investor may purchase Securities from the Company pursuant to
this Section 2.4 (the “Preemptive Notice”).  After receiving a Preemptive
Notice, a Qualified Investor may agree to purchase the Securities offered to
such Qualified Investor by the Company pursuant to this Section 2.4, on the date
specified by the Company in the Preemptive Notice, by delivery of a written
notice to the Company within 15 days of the date the Company delivered or caused
to be delivered the Preemptive Notice to the Qualified Investor (the “Preemptive
Reply”).
 
2.5.           Corporate Opportunity.  To the fullest extent permitted by any
applicable law, the doctrine of corporate opportunity, or any other analogous
doctrine, shall not apply with respect to BRS, BRS Fund II or any BRS Affiliates
or Jefferies, any of the Jefferies Funds or any Jefferies Affiliates or
representatives (including any directors of the Company designated by such
persons).  In particular, (a) BRS, BRS Fund II  and Jefferies and any of the
Jefferies Funds and their respective Affiliates shall have the right to engage
in business activities, whether or not in competition with the Company or its
subsidiaries or the Company’s or its subsidiaries’ business activities, without
consulting any other Investor, and (b) none of BRS, BRS Fund II or, Jefferies or
the Jefferies Funds shall have any obligation to any other Investor with respect
to any opportunity to acquire property or make investments at any time.
 
 
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2.6.           Restrictive Covenants.  Notwithstanding anything to the contrary
contained elsewhere in this Agreement, without the prior written consent of the
Required Holders, the Company shall not, and shall cause each of its
subsidiaries not to:
 
(a)           except in connection with an Approved Sale pursuant to Section 2.2
hereof, sell, lease or otherwise dispose of, or permit any of its subsidiaries
to sell, lease or otherwise dispose of, any assets of the Company and/or its
subsidiaries having, in the aggregate, a value of $5 million or more (computed
on the basis of book value, determined in accordance with generally accepted
accounting principles consistently applied, or fair market value, determined by
the Company’s Board of Directors in its reasonable good faith judgment) in any
transaction or series of related transactions;
 
(b)           except in connection with an Approved Sale pursuant to Section 2.2
hereof, merge or consolidate with any person or, except as permitted by
subparagraph (c) below, permit any of the Company’s subsidiaries to merge or
consolidate with any person (other than any of the Company’s wholly-owned
subsidiaries);
 
(c)           acquire, or permit any of the Company’s subsidiaries to acquire,
any interest in any company or business (whether by a purchase of assets,
purchase of stock, merger or otherwise), or enter into any joint venture,
involving an aggregate consideration (including, without limitation, the
assumption of liabilities whether direct or indirect) exceeding $5 million in
any one transaction or series of related transactions or exceeding $15 million
in the aggregate.
 
(d)           effect an initial Public Offering of Securities of the Company,
any of its subsidiaries, or any successor entity of the Company or any of its
subsidiaries;
 
(e)           liquidate, dissolve, declare or make any filing in bankruptcy or
effect a recapitalization or reorganization in any form of transaction
(including, without limitation, any reorganization of any of the Company or its
subsidiaries into a limited liability company, a partnership or any other
non-corporate entity that is treated as a partnership for federal income tax
purposes);
 
(f)           create, incur, assume or suffer to exist any indebtedness, or
permit any of the Company’s subsidiaries to create, incur, assume or suffer to
exist any indebtedness, exceeding an aggregate principal amount of $15.0 million
(based on outstanding indebtedness plus available facilities) at any time on a
consolidated basis;
 
 
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(g)           issue or sell any shares of the capital stock or other equity
securities, or any securities convertible or exchangeable for such securities,
or warrants, options, or other rights to acquire such stock or securities, of
the Company or any of its subsidiaries to any person other than the Company or
any of its wholly-owned subsidiaries, except for (i) issuances in connection
with the exercise of any warrants, options or other rights to acquire such
equity securities or shares of capital stock, so long as the initial issuance or
sale of such warrants, options or other rights was consented to in writing by
the Required Holders or (ii) any issuance of options (or shares issued upon
exercise thereof) under the Company’s 2003 Stock-Based Incentive Compensation
Plan or otherwise approved by the Board of Directors of the Company;
 
(h)           adopt or approve any annual business plan or budget for the
Company;
 
(i)            hire, fire, remove or replace any member of the senior management
of the Company or Sheridan, who, if the Company or Sheridan were a publicly
reporting company, would be one of the top five individuals whose salaries would
be required to be disclosed in its Securities and Exchange Commission reporting
documents;
 
(j)            enter into, or permit any of its subsidiaries to enter into, the
ownership, active management or operation of any business other than the
business of the Company and its subsidiaries immediately following the closing
of the transactions contemplated by the Stock Purchase Agreement;
 
(k)           enter into, amend, modify or supplement, or permit any subsidiary
to enter into, amend, modify or supplement, any agreement, transaction,
commitment or arrangement with any of its or any subsidiary’s officers,
advisors, directors, employees, stockholders, or Affiliates or with any
individual related by blood, marriage or adoption to any such individual or with
any entity in which any such person or individual owns a beneficial interest,
except for customary employment arrangements and benefit programs on reasonable
terms approved by the Board of Directors of the Company;
 
(l)            amend, modify or supplement the Amended and Restated Certificate
of Incorporation, Bylaws or any of the other organizational documents, or any
other material agreements, of the Company or any of its subsidiaries; or
 
(m)          enter into any agreement, contract, commitment or arrangement that
if completed or performed would be in contravention of any of the foregoing.
 
ARTICLE III

 
CORPORATE ACTIONS
 
3.1.           [intentionally omitted].  
 
 
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3.2.           Directors and Voting Agreements.
 
(a)           Each Investor and Permitted Transferee agrees that it shall take,
at any time and from time to time, all action necessary (including voting the
Common Stock entitled to vote owned by him, her or it, calling special meetings
of stockholders and executing and delivering written consents) to ensure that
the Board of Directors of the Company is composed at all times of eight
individuals as follows: (i) four individuals designated by BRS (who shall
initially be Thomas J. Baldwin, Gary T. DiCamillo, Nicholas R. Sheppard and John
A. Saxton) (collectively, the “BRS Directors”) and (ii) four individuals
designated by Jefferies (who shall initially be Nicholas Daraviras, Craig H.
Deery, James L. Luikart and George A. Whaling) (the “Jefferies Directors”).
 
(b)           Each Investor and Permitted Transferee agrees to take all
necessary action to cause the composition of the Board of Directors of the
Company to remain in accordance with Section 3.2(a) hereof (including, without
limitation, voting or causing to vote or acting by written consent with respect
to, all shares of Common Stock entitled to vote thereon or any other voting
capital stock of the Company now or hereafter owned or held by such Investor or
Permitted Transferee in favor of such persons) and to act itself (if a member of
the Board of Directors) or cause its designee (if any) on the Board of Directors
to vote or act by written consent to cause the Board of Directors of the Company
to be in accordance with Section 3.2(a) hereof.
 
(c)           Any of the rights to designate directors of the Company of BRS set
forth in paragraph (a) above shall terminate on such date as BRS, together with
its respective Affiliates and Permitted Transferees, collectively own less than
5% of the outstanding Common Stock.  Any of the rights to designate directors of
the Company of Jefferies set forth in paragraph (a) above shall terminate on
such date as Jefferies, together with its respective Affiliates and Permitted
Transferees, collectively own less than 5% of the outstanding Common Stock.
 
3.3.           Right to Remove Certain of the Company’s Directors.  Each of BRS
and Jefferies may request that any director subject to designation by it or them
be removed (with or without cause) by written notice to the other Investors,
and, in any such event, each Investor and Permitted Transferee shall promptly
consent in writing or vote or cause to be voted all shares of Common Stock
entitled to vote thereon now or hereafter owned or controlled by it for the
removal of such person as a director.
 
3.4.           Right to Fill Certain Vacancies in Company’s Board.  In the event
that a vacancy is created on the Company’s Board of Directors at any time by the
death, disability, retirement, resignation or removal (with or without cause) of
a BRS Director or a Jefferies Director, or if otherwise there shall exist or
occur any vacancy on the Company’s Board of Directors of a BRS Director or a
Jefferies Director, such vacancy shall not be filled by the remaining members of
the Company’s Board of Directors, but each Investor and Permitted Transferee
hereby agrees promptly to consent in writing or vote or cause to be voted all
shares of Common Stock entitled to vote thereon or any other voting capital
stock of the Company now or hereafter owned or controlled by it to elect that
individual designated to fill such vacancy and serve as a director, as shall be
designated by the Investor or Investors then entitled to designate such director
under Section 3.2 hereof in accordance with the terms of such section.
 
 
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3.5.           Directors of Subsidiaries.  The Company shall cause the Board of
Directors of Sheridan to be identical to the Board of Directors of the
Company.  In addition, if requested by BRS or Jefferies (so long as the
requesting party, together with its or their respective Affiliates or Permitted
Transferees, owns not less than 5% of the outstanding Common Stock) the Company
shall take, and each of the Investors and Permitted Transferees agrees that it
shall cause the Company to take, at any time and from time to time, all action
necessary (including voting all shares of capital stock or other voting equity
interests of any subsidiary owned by the Company, calling special meetings of
stockholders and executing and delivering written consents) to ensure that the
Board of Directors of any other Subsidiary (as defined in Section 4.1) is
identical to the Board of Directors of the Company.
 
3.6.           Amendment of Certificate and Bylaws.  Each Investor and Permitted
Transferee agrees that it shall not consent in writing or vote or cause to be
voted any shares of Common Stock now or hereafter owned or controlled by it in
favor of any amendment, repeal, modification, alteration or rescission of, or
the adoption of any provision in the Company’s Third Amended and Restated
Certificate of Incorporation or Amended and Restated Bylaws inconsistent with
Article III of this Agreement unless BRS and Jefferies consent in writing
thereto.
 
3.7.           Termination of Voting Agreements.  If not earlier terminated
under Section 3.2, the voting agreements in Sections 3.2, 3.3, 3.4, 3.5 and 3.6
hereof shall terminate on the date the Company consummates a Public Offering (if
requested by the underwriter with respect to such offering).
 
3.8.           Officers.  Each Investor approves the election of such officers
as may be elected or appointed by the Company or its Board of Directors.
 
3.9.           Committees.  BRS and Jefferies each have the right to appoint not
less than one director to any committee of the Board of Directors.  
 
ARTICLE IV

 
ADDITIONAL RESTRICTIONS ON TRANSFERS OF
MANAGEMENT SECURITIES HELD BY MANAGEMENT INVESTORS
 
4.1.           Certain Definitions.  The terms defined below shall have the
following meanings when used in this Article IV:
 
(a)           “Management Securities” means the shares of Preferred Stock or
Common Stock or other Securities now or hereafter owned by a Management
Investor, and all other securities of the Company (or a successor to the
Company) received on account of ownership of the Management Securities,
including any and all management securities issued in connection with any
merger, consolidation, stock dividend, stock distribution, stock split, reverse
stock split, stock combination, recapitalization, reclassification, subdivision,
conversion or similar transaction in respect thereof.
 
 
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(b)           “Public Offering” means a successfully completed firm commitment
underwritten public offering pursuant to an effective registration statement
under the Securities Act (other than a Special Registration Statement) in
respect of the offer and sale of shares of Common Stock for the account of the
Company resulting in aggregate net proceeds to the Company and any stockholder
selling shares of Common Stock in such offering of not less than $50,000,000.
 
(c)           “Special Registration Statement” means (i) a registration
statement on Form S-8 or S-4 or any similar or successor form or any other
registration statement relating to an exchange offer or an offering of
securities solely to the Company’s employees or security holders or to security
holders of a corporation or other entity being acquired by, or merged with, the
Company or (ii) a registration statement registering a Unit Offering;
 
(d)           “Subsidiary” means a corporation, partnership, limited liability
or other business entity with respect to which the Company (or another
Subsidiary) owns 50% or more of the total combined voting power of all classes
of stock (or other voting interests).
 
(e)           “Unit Offering” means a public offering of a combination of debt
and equity securities of the Company in which (i) not more than 10% of the gross
proceeds received from the sale of such securities is attributed to such equity
securities, and (ii) after giving effect to such offering, the Company does not
have a class of equity securities required to be registered under the Exchange
Act.
 
4.2.           Restrictions on Transfer.  In addition to the restrictions
imposed by Section 1.1 hereof, and notwithstanding anything to the contrary
contained herein, none of the Management Investors (it being understood that,
any reference to a Management Investor in this Article IV as a holder of
Management Securities shall also include such Management Investor’s heirs,
executors, administrators, transferees, successors and assigns, as the case may
be) shall effect a Transfer of any Management Securities other than (a) pursuant
to Section 2.2 hereof in connection with an Approved Sale, (b) pursuant to
Section 4.3 hereof in connection with an exercise of the Purchase Option (as
such term is hereinafter defined), (c) with the consent of the Company (as
evidenced by a resolution duly adopted by at least a majority of the
non-employee members of the Company’s Board of Directors) and the Required
Holders, (d) to a Permitted Transferee of such Management Investor in question
or (e) in connection with a Public Offering in which such Management Investor is
permitted to participate.  In exercising the consent and approval provided for
in clause (c), each of the Company and the Required Holders may employ their
sole discretion in evaluating the nature of the proposed transferee and each of
the Company and the Required Holders may impose such conditions on Transfer as
they deem appropriate in their sole discretion, including, but not limited to,
requirements that the transferee be an employee or director of the Company or a
Subsidiary and that the transferee purchase such Management Investor’s
Management Securities as a “Management Investor” subject to the restrictions of
this Article IV.  In the event any Transfer is authorized pursuant to clause (c)
above to an employee or director of the Company or a majority-owned direct or
indirect subsidiary of the Company as a “Management Investor,” such employee or
director shall execute an agreement, in form and substance reasonably
satisfactory to the Company, pursuant to which such employee or director shall
agree to be bound by the terms and conditions of this Agreement, and such other
provisions as the Company may determine, and upon such execution, such employee
or director shall be entitled to the benefit of such provisions hereof and such
other provisions as the Company determines and are set forth in such
agreement.  Any purported Transfer in violation of this Agreement shall be null
and void and of no force and effect, and the purported transferees shall have no
rights or privileges in or with respect to the Company.  Notwithstanding the
foregoing provisions, each Management Investor agrees that he or she will not
effect a Transfer of any Management Securities prior to the lapse of such period
of time following acquisition thereof as may be required to comply with
applicable securities laws.
 
 
16

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For the purposes of this Agreement, the “Permitted Transferees” of any of the
Management Investors shall be as set forth in Section 1.1(b)(i) or (ii) hereof;
provided, however, that as a condition to a Transfer to any Permitted
Transferee, such Permitted Transferee shall agree, in writing and in form and
substance reasonably satisfactory to the Company, to become bound, and thereby
shall become bound, by all the terms of this Agreement applicable to the
Management Investor transferring such Management Securities.  The Termination
Date (as hereinafter defined) for a Permitted Transferee shall be the
Termination Date with respect to the Management Investor who first acquired the
Management Securities held by such Permitted Transferee pursuant to this
Agreement.
 
4.3.           Purchase Option.
 
(a)           General Terms.  In the event that any Management Investor who is
an employee of the Company or a Subsidiary shall cease to be employed by the
Company or a Subsidiary for any reason (including, but not limited to, death,
temporary or permanent disability, retirement at age 65 or more under normal
retirement policies, resignation or termination by the Company or a Subsidiary)
or any Management Investor who is a director shall cease to serve as a member of
the Board of Directors of the Company or a Subsidiary for any reason (including,
but not limited to, death, resignation or removal), other than by reason of a
leave of absence approved by the Company or a Subsidiary, such Management
Investor (or his or her heirs, executors, administrators, transferees,
successors or assigns) shall give prompt notice to the Company of such
termination or cessation of service (except in the case of termination of
employment or service by the Company or a Subsidiary, in which case no notice
need be given), and the Company or one or more designee(s) selected by the
Required Holders (a “Designated Purchaser”), shall have the right and option by
written notice given at any time, within 180 days after the later of the
effective date of such termination of employment or cessation of service (the
“Termination Date”) or the date of the Company’s receipt of the aforesaid notice
(the later of such dates, the “Option Termination Date”), to purchase from such
Management Investor and his or her Permitted Transferees, or his or her heirs,
executors, administrators, transferees, successors or assigns, as the case may
be, any or all of the Management Securities then owned by such Management
Investor (and his or her Permitted Transferees), at a purchase price equal to
the Option Purchase Price (as hereinafter defined).  The right of the Company
and the Company’s designee(s) set forth in this Section 4.3 to purchase a
terminated Management Investor’s Management Securities is hereinafter referred
to as the “Purchase Option”.
 
 
17

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(i)           Exercise of Purchase Option.  The Purchase Option shall be
exercised by written notice to the Management Investor (or his or her heirs,
executors, administrators, transferees, successors or assigns, as the case may
be) executed by the Company or the Designated Purchaser, as the case may be,
given at any time not later than the Option Termination Date.  Such notice shall
set forth the number and type of Management Securities desired to be purchased
and shall set forth a time and place of closing which shall be no earlier than
10 days and no later than 60 days after the date such notice is sent.  At such
closing, the seller shall deliver, or cause to be delivered, the certificates
evidencing the number of Management Securities to be purchased by the Company
and/or its Designated Purchaser, accompanied by stock powers duly endorsed in
blank or duly executed instruments of transfer, and any other documents that are
necessary to transfer to the Company and/or its Designated Purchaser, as the
case may be, good title to such of the Management Securities to be transferred,
free and clear of all pledges, security interests, liens, charges, encumbrances,
equities, claims and options of whatever nature, other than those imposed under
this Agreement, and concurrently with such delivery, the Company and/or its
Designated Purchaser, as the case may be, shall deliver to the seller the full
amount of the Option Purchase Price (or the portion thereof to be paid by such
party) for such Management Securities in cash by certified or bank cashier’s
check.
 
(ii)           Option Purchase Price.  The “Option Purchase Price” for the
Management Securities to be purchased from such Management Investor, and his or
her Permitted Transferees, or his or her heirs, executors, administrators,
transferees, successors and assigns, pursuant to the Purchase Option (the number
of Management Securities to be so purchased being the “Purchase Number”) shall
equal the Fair Market Value Price multiplied by the Purchase Number.
 
As used herein:
 
 
18

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(A)           “Fair Market Value Price” for each share of Common Stock or
Preferred Stock (or option to purchase Common Stock) means, the amount
determined as follows:  the average of the high and low sales prices per share
of Preferred Stock or Common Stock (or their equivalent) as reported either on
the National Association of Security Dealers, Inc. Automated Quotation System
(“NASDAQ”) or the New York Stock Exchange (“NYSE”) for the five business days
immediately preceding the Termination Date or, if not reported on the NASDAQ or
NYSE, a valuation based upon the price that would be paid for the shares of
Preferred Stock and Common Stock in an acquisition of all outstanding shares of
capital stock of the Company on a stand alone basis in a privately negotiated
arm’s length transaction between a willing seller under no compulsion to sell
and a willing buyer under no compulsion to buy, (I) without regard to the
restrictions upon transfer of Securities contained in this Agreement or in any
other agreement, (II) without regard to any discount for illiquidity, or other
factors affecting the transferability of any of the capital stock of the
Company, if applicable, (III) taking into account the aggregate amount of the
Company’s indebtedness for borrowed money (including all acquisition and working
capital indebtedness incurred by the Company after the date hereof), (IV) taking
into account the aggregate amount payable in respect of the liquidation
preference of any capital stock of the Company having a liquidation preference
senior to Common Stock, and (V) taking into account the aggregate amount payable
in respect of any accrued and unpaid dividends on any capital stock of the
Company whose holders have rights to dividends that are senior to the rights of
holders of Common Stock (the valuation hereinafter referred to as the “Proffered
Valuation”).  If the Company or its Designated Purchaser is considering
exercising the Purchase Option, then within 60 days after the Termination Date,
the Company or the Designated Purchaser, as the case may be, shall prepare and
deliver to the Management Investor its calculation of the Fair Market Value
Price per share and, if applicable, the Company’s or its Designated Purchaser’s
Proffered Valuation.  If the Management Investor does not agree with the
Company’s or its Designated Purchaser’s Proffered Valuation and the Company or
its Designated Purchaser and the Management Investor are unable to agree on the
Fair Market Value Price per share within ten days after delivery of the
Company’s or its Designated Purchaser’s Proffered Valuation, then the Management
Investor shall prepare his own Proffered Valuation, a copy of which shall be
delivered to the Company or its Designated Purchaser within 20 days after
delivery of the Company’s or its Designated Purchaser’s Proffered Valuation, as
the case may be.  The parties shall then select a mutually acceptable investment
banking or other firm to choose either the Company’s or its Designated
Purchaser’s Proffered Valuation, or the Management Investor’s Proffered
Valuation.  Such firm (x) shall not be an Affiliate of the Company or the
Management Investor; and (y) shall have demonstrable skills and expertise in the
valuation of equity securities in relevant industries.  If the parties are
unable to agree on a mutually acceptable investment banking or other firm within
ten days after delivery of the Management Investor’s Proffered Valuation, each
party shall select its own investment banking or other firm and the two selected
firms shall select a mutually acceptable investment banking or other firm
(meeting the criteria set forth in the preceding sentence) for the purpose of
determining the Fair Market Value Price per share.  If either party fails to
select its own investment banking or other firm, which is to select the
determining firm, within five days after the expiration of such ten day period,
the other party’s selected firm shall act as the determining firm.  The
determination of an investment banking or other firm will be set forth in
writing and will be conclusive and binding on the parties.  The parties shall
instruct the selected firm to select, within 20 days thereafter, such of the two
Proffered Valuations as more accurately reflects the Fair Market Value Price per
share, and the Company or its Designated Purchaser and the Management Investor
hereby agrees to be bound by such decision.  The fees and expenses of the
determining firm shall be borne by the party whose Proffered Valuation was not
selected by the investment banking or other firm.  The Company or its Designated
Purchaser and the Management Investor shall be responsible for their own fees
and expenses, including the fees and expenses of their respective counsel and,
if applicable, their own investment banking or other firm.  Notwithstanding
anything to the contrary contained herein, the termination of the exercise
period set forth in this Section 4.3 shall be tolled during the pendency of and
until ten days following the conclusion of any negotiation or arbitration of the
Fair Market Value Price.  In the event of such negotiation or arbitration of the
Fair Market Value Price, the Company or its Designated Purchaser shall have the
right to revoke any notice of exercise of the Purchase Option previously given
by such party.  Notwithstanding the foregoing, the parties agree that in the
case of any security convertible into or exchangeable for Common Stock or
option, warrant or other right to purchase Common Stock, the Fair Market Value
Price for such security shall be based upon the Fair Market Value Price of the
underlying Common Stock, after taking into account the conversion exchange or
exercise price applying to such security and any applicable tax obligations of
the holder in connection with such conversion, exercise or exchange.
 
 
19

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(b)           Right of First Refusal.  In the event that, after receiving the
consent of the Company and the Required Holders as required by Section 4.2
hereof, on or prior to the Company’s initial Public Offering, any Management
Investor proposes to sell any or all of such Management Investor’s Management
Securities, such Management Investor shall do so only pursuant to a bona fide
written offer from an unaffiliated third party.  Prior to accepting such offer,
the Management Investor will first offer to sell such Management Securities to
the Company pursuant to this Section 4.3(b).
 
Such Management Investor shall deliver a written notice of any such bona fide
offer (a “Sale Notice”) to the Company describing in reasonable detail the
Management Securities proposed to be sold, the name of the transferee, the
purchase price and all other material terms of the proposed Transfer.  Upon
receipt of the Sale Notice, the Company, or one or more designee(s) selected by
a majority of the non-employee members of the Board of Directors of the Company,
shall have the right and option to purchase all, but not less than all, of the
Management Securities proposed to be sold by the Management Investor at the
price and on the terms of the proposed Transfer set forth in the Sale
Notice.  Within 30 days after receipt of the Sale Notice, the Company shall
notify such Management Investor whether or not it or its designee wishes to
purchase all of the offered Management Securities.  In any case where
non-fungible property such as real estate constitutes part of the purchase price
included in the bona fide offer or where any aspect of the terms of such offer
depend on the unique attributes of the proposed transferee or otherwise cannot
be precisely and reasonably duplicated by someone other than such transferee,
purchases by the Company or its designee(s) shall be made on terms that
constitute the reasonable economic equivalent of the price and terms of such
bona fide offer.  If the Company or its designee(s) elects to purchase the
offered Management Securities, the closing of the purchase and sale of such
Management Securities shall be held at the place and on the date established by
the buyer in its notice to such Management Investor in response to the Sale
Notice, which in no event shall be less than 10 or more than 60 days from the
date of such notice.
 
In the event that the Company or its designee does not elect to purchase all the
offered Management Securities, such Management Investor may, subject to the
other provisions of this Agreement, sell the offered Management Securities to
the transferee specified in the Sale Notice at a price no less than the price
specified in the Sale Notice and on other terms no more favorable to the
transferee(s) thereof than specified in the Sale Notice during the 180-day
period immediately following the last date on which the Company or its designee
could have elected to purchase the offered Management Securities; provided,
however, that no such sale shall be made unless the transferee executes and
delivers a joinder to this Agreement satisfactory in form and substance to the
Company which joinder states that such transferee agrees to be fully bound by
this Agreement as if it were a party hereto.  Any such Management Securities not
transferred within such 180-day period will be subject to the provisions of this
Section 4.3(b) upon subsequent Transfer.
 
 
20

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4.4.           Involuntary Transfers.  In the event that the Management
Securities owned by any Management Investor shall be subject to sale or other
Transfer (the date of such sale or transfer shall hereinafter be referred to as
the “Transfer Date”) by reason of (i) bankruptcy or insolvency proceedings,
whether voluntary or involuntary, or (ii) distraint, levy, execution or other
involuntary Transfer, then such Management Investor shall give the Company
written notice thereof promptly upon the occurrence of such event stating the
terms of such proposed Transfer, the identity of the proposed transferee, the
price or other consideration, if readily determinable, for which the Management
Securities are proposed to be transferred, and the number of Management
Securities to be transferred.  After its receipt of such notice or, failing such
receipt, after the Company otherwise obtains actual knowledge of such a proposed
Transfer, the Company or one or more designee(s) selected by a majority of the
non-employee members of the Board of Directors of the Company shall have the
right and option to purchase any or all of such Management Securities which
right shall be exercised by written notice given by the Company (or its
designee) to such proposed transferor within 60 days following the Company’s
receipt of such notice or, failing such receipt, the Company’s obtaining actual
knowledge of such proposed Transfer.  Any purchase pursuant to this Section 4.4
shall be at the price and on the terms applicable to such proposed Transfer.  If
the nature of the event giving rise to such involuntary Transfer is such that no
readily determinable consideration is to be paid for the Transfer of the
Management Securities, the price to be paid by the buyer shall be the Option
Purchase Price that would have been applicable hereunder had such Management
Investor incurred a Termination Date as of the date of such proposed Transfer
for the Management Securities.  The closing of the purchase and sale of
Management Securities shall be held at the place and the date to be established
by the buyer, which in no event shall be less than 10 or more than 60 days from
the date on which the buyer gives notice of its election to purchase the
Management Securities.  At such closing, such Management Investor shall deliver
the certificates evidencing the number of Management Securities to be purchased
by the buyer, accompanied by stock powers duly endorsed in blank or duly
executed instruments of transfer, and any other documents that are necessary to
transfer to the buyer good title to such of the securities to be transferred,
free and clear of all pledges, security interests, liens, charges, encumbrances,
equities, claims and options of whatever nature other than those imposed under
this Agreement, and concurrently with such delivery, the buyer shall deliver to
such Management Investor the full amount of the purchase price for such
Management Securities in cash by certified or bank cashier’s check.
 
4.5.           Purchaser Representative.  If the Company or any Investor enters
into any negotiation or transaction for which Rule 506 (or any similar rule then
in effect) promulgated by the Securities and Exchange Commission under the
Securities Act may be available with respect to such negotiation or transaction
(including a merger, consolidation or other reorganization), each of the
Management Investors will, at the request of the Company, appoint a purchaser
representative (as such term is defined in Rule 501(h) promulgated by the
Securities and Exchange Commission under the Securities Act) reasonably
acceptable to the Company.  If each of the Management Investors appoints the
purchaser representative designated by the Company, the Company will pay the
fees of such purchaser representative, but if a Management Investor declines to
appoint the purchaser representative designated by the Company, such Management
Investor will appoint another purchaser representative (reasonably acceptable to
the Company), and such Management Investor will be responsible for the fees of
the purchaser representative so appointed.
 
 
21

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ARTICLE V
 
MISCELLANEOUS
 
5.1.           Amendment and Modification.  This Agreement may be amended or
modified, or any provision hereof may be waived, provided that such amendment,
modification or waiver is set forth in a writing executed by the Company and the
Required Holders; provided, however, that any amendment of this Agreement which
materially adversely affects any Investor in a manner materially different from
other Investors (other than due to any difference in the number of shares owned
by any such Investor) shall require the prior written consent of such
Investor.  No course of dealing between or among any persons having any interest
in this Agreement will be deemed effective to modify, amend or discharge any
part of this Agreement or any rights or obligations of any person under or by
reason of this Agreement.
 
5.2.           Successors and Assigns.  This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the successors and permitted
assigns and executors, administrators and heirs of each party hereto.  Except as
contemplated hereby in connection with Transfers of Securities, this Agreement,
and any rights or obligations existing hereunder, may not be assigned or
otherwise transferred by any party without the prior written consent of the
other parties hereto.
 
5.3.           Separability.  In the event that any provision of this Agreement
or the application of any provision hereof is declared to be illegal, invalid or
otherwise unenforceable by a court of competent jurisdiction, the remaining
provisions shall remain in full force and effect unless deletion of such
provision causes this Agreement to become materially adverse to any party, in
which event the parties shall use reasonable efforts to arrive at an
accommodation which best preserves for the parties the benefits and obligations
of the offending provision.
 
5.4.           Notices.  All notices provided for or permitted hereunder shall
be made in writing by hand-delivery, registered or certified first-class mail,
fax or reputable courier guaranteeing overnight delivery to the other party at
the following addresses (or at such other address as shall be given in writing
by any party to the others):
 
22

--------------------------------------------------------------------------------

 
If to the Company, to:
 
TSG Holdings Corp.
11311 McCormick Road
Suite 260
Hunt Valley, MD  21031-1437
Attention:  John A. Saxton
Fax:  (410) 785-7217
 
with a required copy to:
 
Dechert LLP
Cira Centre
2929 Arch Street
Philadelphia, PA 19104
Attention: Carmen J. Romano, Esq.
Fax:  (215) 994-2222
 
If to BRS, to:
 
c/o Bruckmann, Rosser, Sherrill & Co., L.P.
126 East 56th Street, 29th Floor
New York, NY 10022
Attention:  Harold O. Rosser, II
Fax:  (212) 521-3799
 
with a required copy to:
 
Dechert LLP
Cira Centre
2929 Arch Street
Philadelphia, PA 19104
Attention: Carmen J. Romano, Esq.
Fax:  (215) 994-2222
 
If to Jefferies, to:

c/o Jefferies Capital Partners
520 Madison Avenue
8th Floor
New York, NY  10022
Attention:  James Luikart
Fax:  (212) 284-1717
 
 
23

--------------------------------------------------------------------------------

 

with a required copy to:
 
Dechert LLP
Cira Centre
2929 Arch Street
Philadelphia, PA 19104
Attention: Carmen J. Romano, Esq.
Fax:  (215) 994-2222
 
If to any of the Management Investors, to such Investor’s address as set forth
on the signature pages hereto or such other address as may be specified from
time to time in writing to the Company by any Investor.
 
All such notices shall be deemed to have been duly given: when delivered by
hand, if personally delivered; four business days after being deposited in the
mail, postage prepaid, if mailed; when confirmation of transmission is received,
if faxed during normal business hours (or, if not faxed during normal business
hours, the next business day after confirmation of transmission); and on the
next business day, if timely delivered to a reputable courier guaranteeing
overnight delivery.
 
5.5.           Governing Law.  This Agreement shall be governed by and construed
in accordance with the internal laws of the State of Delaware, without giving
effect to principles of conflicts of law.
 
5.6.           Headings.  The headings preceding the text of the sections and
subsections of this Agreement are for convenience of reference only and shall
not constitute a part of this Agreement, nor shall they affect its meaning,
construction or effect.
 
5.7.           Counterparts.  This Agreement may be executed in two or more
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original, and all of which taken
together shall constitute one and the same instrument.
 
5.8.           Further Assurances.  Each party shall cooperate and take such
action as may be reasonably requested by another party in order to carry out the
provisions and purposes of this Agreement and the transactions contemplated
hereby.
 
5.9.           Termination.  This Agreement shall terminate on the written
agreement of the Investors who are parties hereto or when all the Investors
except any one Investor no longer hold any Securities.
 
5.10.         Remedies.  In the event of a breach or a threatened breach by any
party to this Agreement of its obligations under this Agreement, any party
injured or to be injured by such breach, in addition to being entitled to
exercise all rights granted by law, including recovery of damages, will be
entitled to specific performance of its rights under this Agreement.  The
parties agree that the provisions of this Agreement shall be specifically
enforceable, it being agreed by the parties that the remedy at law, including
monetary damages, for breach of such provision will be inadequate compensation
for any loss and that any defense in any action for specific performance that a
remedy at law would be adequate is waived.
 
 
24

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5.11.         Party No Longer Owning Securities.  If a party hereto ceases to
own any Securities, such party will no longer be deemed to be an Investor or
Management Investor for purposes of this Agreement.
 
5.12.         No Effect on Employment.  Nothing herein contained shall confer on
the Management Investor the right to remain in the employ or service of the
Company or any of its subsidiaries or Affiliates.
 
5.13.         Pronouns.  Whenever the context may require, any pronouns used
herein shall be deemed also to include the corresponding neuter, masculine or
feminine forms.
 
5.14.         Future Individual Investors.  The parties hereto agree that any
current or future employee of the Company or other person who purchases
Securities from the Company subsequent to the date hereof may become a signatory
to this Agreement by executing a written instrument setting forth that such
person agrees to be bound by the terms and conditions of this Agreement and this
Agreement will be deemed to be amended to include such person as a Management
Investor (or Investor, as the case may be) and the number of Securities
purchased by him or her.
 
5.15.         Entire Agreement.  This Agreement sets forth the entire agreement
and understanding among the parties and supersedes all prior agreements and
understandings, written or oral, relating to the subject matter of this
Agreement, it being understood the Investors are also entering into other
agreements and instruments on the date hereof, including an Amended and Restated
Registration Rights Agreement, dated as of the date hereof, among the Company
and the Investors.
 
 
25

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IN WITNESS WHEREOF, the parties hereto have executed this Securities Holders
Agreement the day and year first above written.
 

 
TSG HOLDINGS CORP.
             
By:
     
Name:
   
Title:
     
THE SHERIDAN GROUP HOLDINGS (BRS), LLC
     
By:
     
Name:
   
Title:

 

--------------------------------------------------------------------------------

 
 

 
THE SHERIDAN GROUP HOLDINGS (JEFFERIES), LLC
             
By:
     
Name:
   
Title:

 

--------------------------------------------------------------------------------

 
 

 
MANAGEMENT INVESTORS:
         
 
 
John A. Saxton
     
Address:
     
Telephone No.:
         
 
 
G. Paul Bozuwa
     
Address:
     
Telephone No.:
         
 
 
Robert M. Jakobe
     
Address:
     
Telephone No.:
         
 
 
Joan B. Davidson
     
Address:
     
Telephone No.:
         
 
 
John M. Elliot
     
Address:
     
Telephone No.:

 

--------------------------------------------------------------------------------

 
 

 
 
 
Chris M. Azbill
     
Address:
     
Telephone No.:
         
 
 
Douglas R. Ehmann
     
Address:
     
Telephone No.:
         
 
 
J. Kenneth Garner
     
Address:
     
Telephone No.:
         
 
 
Michael E. Klauer
     
Address:
     
Telephone No.:
         
 
 
Patricia A. Stricker
     
Address:
     
Telephone No.:

 

--------------------------------------------------------------------------------

 
 

 
 
 
Robert M. Moore
     
Address:
     
Telephone No.:
         
 
 
Gary J. Kittredge
     
Address:
     
Telephone No.:
         
 
 
Arthur R. Myers
     
Address:
     
Telephone No.:
         
 
 
Jennifer A. Bedell
     
Address:
     
Telephone No.:
         
 
 
Michael J. Sartorelli
     
Address:
     
Telephone No.:

 

--------------------------------------------------------------------------------

 
 

 
 
 
Jeffrey S. Cohen
     
Address:
     
Telephone No.:
         
 
 
J. Dennis Smith
     
Address:
     
Telephone No.:
         
 
 
Catherine R. Budd
     
Address:
     
Telephone No.:
         
 
 
George A. Whaling
     
Address:
     
Telephone No.:
         
 
 
Gary T. DiCamillo
     
Address:
     
Telephone No.:

 

--------------------------------------------------------------------------------

 
 

 
 
 
Craig H. Deery
     
Address:
     
Telephone No.:
         
 
 
Christopher A. Peirce
     
Address:
     
Telephone No.:
         
 
 
Eric D. Lane
     
Address:
     
Telephone No.:
         
 
 
Kenneth R. Stickley
     
Address:
     
Telephone No.:
         
 
 
William P. Walters
     
Address:
     
Telephone No.:

 

--------------------------------------------------------------------------------

 
 

 
OTHER INVESTORS:
         
 
 
J.M. Dryden Hall, Jr.
     
Address:
     
Telephone No.:
         
 
 
David C. Hewitt
     
Address:
     
Telephone No.:
         
 
 
Edward H. Hartman
     
Address:
     
Telephone No.:
         
 
 
Cynthia L. Beauchamp
     
Address:
     
Telephone No.:
         
 
 
Kenneth W. Raker
     
Address:
     
Telephone No.:

 

--------------------------------------------------------------------------------

 

Schedule I
 
Investors and Securities
 
This schedule has been omitted.  The registrant agrees to furnish to the
Securities and Exchange Commission supplementally a copy of the omitted schedule
upon request.
 
 
 

--------------------------------------------------------------------------------

 
 
EXHIBIT B

 

--------------------------------------------------------------------------------

 
SECOND AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
 
by and among
 
TSG HOLDINGS CORP.,
 
THE SHERIDAN GROUP HOLDINGS (BRS), LLC,
 
THE SHERIDAN GROUP HOLDINGS (JEFFERIES), LLC,
 
and
 
THE OTHER INVESTORS NAMED HEREIN
 
Dated as of March 30, 2009

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TABLE OF CONTENTS
 

       
Page
         
1.
 
Definitions.
 
1
         
2.
 
Registrable Securities.
 
3
         
3.
 
Incidental Registration.
 
3
         
4.
 
Demand Registration.
 
5
         
5.
 
Registration Procedures.
 
6
         
6.
 
Indemnification.
 
9
         
7.
 
Hold-Back Agreements.
 
11
         
8.
 
Underwritten Registration.
 
11
         
9.
 
Miscellaneous.
 
12

 
- i -

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1.
 
Definitions
 
1
         
2.
 
Registrable Securities
 
3
         
3.
 
Incidental Registration.
 
3
         
4.
 
Demand Registration.
 
5
         
5.
 
Registration Procedures
 
6
         
6.
 
Indemnification
 
9
         
7.
 
Hold-Back Agreements
 
11
         
8.
 
Underwritten Registration
 
11
         
9.
 
Miscellaneous
 
12

 
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DEFINED TERMS

Additional Party
 
13
Affiliate
 
1
Agreement
 
1
BRS
 
1
Commission
 
1
Common Stock
 
2
Company
 
1
Damages
 
9
Demand Registration
 
2
Demand Registration Request
 
2
Exchange Act
 
2
Incidental Registration
 
4
Inspector
 
8
Inspectors
 
8
Investor
 
1
Investors
 
1
Jefferies Funds
 
1
Joining Investors
 
1
Management Investors
 
1
Notice
 
4
Original Agreement
 
1
Person
 
2
Prospectus
 
2
Public Offering
 
2
Records
 
8
Registrable Securities
 
3
Registration Expenses
 
2
Registration Statement
 
2
S-3 Registration
 
5
S-3 Registration Request
 
5
Securities Act
 
3
Securities Holders Agreement
 
3
Special Registration Statement
 
3
Underwritten Offering
 
3
Underwritten Registration
 
3

 
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SECOND AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
 
THIS IS A SECOND AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT, dated as of
March 30, 2009 (the “Agreement”), by and among TSG Holdings Corp., a Delaware
corporation (the “Company”), The Sheridan Group Holdings (BRS), LLC, a Delaware
limited liability company (“BRS”), The Sheridan Group Holdings (Jefferies), LLC,
a Delaware limited liability company (“Jefferies”), and the individuals
designated as Management Investors on the signature pages hereto (the
“Management Investors”) and any other investor in the Company who becomes a
party to or agrees to be bound by this Agreement (the “Joining
Investors”).  Each of BRS, Jefferies, the Management Investors and the Joining
Investors are sometimes referred to herein individually as an “Investor” and
collectively as the “Investors.”
 
Certain Investors are parties to the Registration Rights Agreement dated as of
August 1, 2003, by and among the Company and the shareholders of the Company
party thereto, as amended and restated by the Registration Rights Agreement
,dated as of May 16, 2007, by and among the Company and the shareholders of the
Company party thereto (the “Original Agreement”).
 
This parties hereto desire to amend and restate the Original Agreement.
 
Pursuant to Section 9(a) of the Original Agreement, an amendment must be set
forth in writing executed by the Company and the Required Holders (such Required
Holders being BRS and Jefferies).
 
By entering into that certain Second Amendment and Restatement, dated as of
March 30, 2009, the Company, BRS and Jefferies have amended and restated the
Original Agreement as provided herein effective as of the date set forth
therein.
 
In consideration of the mutual covenants contained herein and intending to be
legally bound hereby, the parties agree as follows:
 
1.             Definitions.
 
As used in this Agreement, the following capitalized terms shall have the
following meanings:
 
“Affiliate” has the meaning set forth in Rule 12b-2 of the Rules promulgated
under the Exchange Act.
 
“Commission” means the Securities and Exchange Commission.
 
“Common Stock” means the Common Stock, par value $.001 per share, of the
Company, as adjusted for any stock dividend or distribution payable thereon or
stock split, reverse stock split, recapitalization, reclassification,
reorganization, exchange, subdivision or combination thereof.
 
“Demand Registration” has the meaning set forth in Section 4(a) of this
Agreement.
 
 
 

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“Demand Registration Request” has the meaning set forth in Section 4(a) of this
Agreement.
 
“Exchange Act” means the Securities Exchange Act of 1934, as amended from time
to time.
 
“Person” means an individual, partnership, limited liability company,
corporation, trust or unincorporated organization, or a government or agency or
political subdivision thereof or any other entity of any kind.
 
“Prospectus” means the prospectus included in any Registration Statement, as
amended or supplemented by any prospectus supplement with respect to the terms
of the offering of any portion of the Registrable Securities covered by such
Registration Statement and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated
by reference in such Prospectus.
 
“Public Offering” means a successfully completed firm commitment underwritten
public offering pursuant to an effective registration statement under the
Securities Act (other than a Special Registration Statement) in respect of the
offer and sale of shares of Common Stock for the account of the Company
resulting in aggregate net proceeds to the Company and any stockholder selling
shares of Common Stock in such offering of not less than $50,000,000.
 
“Registration Expenses” means the costs and expenses of all registrations and
qualifications under the Securities Act, and of all other actions the Company is
required to take in order to effect the registration of Registrable Securities
under the Securities Act pursuant to this Agreement (including all federal and
state registration and filing fees, printing expenses, fees and disbursements of
counsel for the Company and the fees and expenses of the Company’s independent
public accountants (including the expenses of any special audit and “cold
comfort” letters required by or incident to such registration)) other than the
costs and expenses of any Investors whose Registrable Securities are to be
registered pursuant to this Agreement comprising underwriters’ commissions,
brokerage fees, transfer taxes or the fees and expenses of any accountants or
other representatives retained by any Investor; provided, however, that the term
“Registration Expenses” shall include the fees and expenses of one counsel for
the holders of Registrable Securities designated by the holder of a majority of
Registrable Securities being registered, or proposed to be registered, in any
offering that is the subject of this Agreement.
 
“Registration Statement” means any registration statement of the Company which
covers any of the Registrable Securities pursuant to the provisions of this
Agreement, including the Prospectus, amendments and supplements to such
Registration Statement, including post-effective amendments, all exhibits and
all material incorporated by reference in such Registration Statement.
 
“Registrable Securities” has the meaning set forth in Section 2 of this
Agreement.
 
“Securities Act” means the Securities Act of 1933, as amended from time to time.
 
“Securities Holders Agreement” means the Amended and Restated Securities Holders
Agreement, dated as of the date hereof, among the Company and the Investors.
 
 
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“Special Registration Statement” means a registration statement on Form S-8 or
S-4 or any similar or successor form or any other registration statement
relating to an exchange offer or an offering of securities solely to the
Company’s employees or security holders or to security holders of a corporation
or other entity being acquired by, or merged with, the Company or used to offer
or sell a combination of debt and equity securities of the Company in which (i)
not more than 10% of the gross proceeds from such offering is attributable to
the equity securities and (ii) after giving effect to such offering, the Company
does not have a class of equity securities required to be registered under the
Securities Exchange Act of 1934, as amended.
 
“Underwritten Registration” or “Underwritten Offering” means a registration in
which securities of the Company are sold to an underwriter for reoffering to the
public.
 
2.             Registrable Securities.  The securities entitled to the benefits
of this Agreement are the Registrable Securities.  As used herein, “Registrable
Securities” means the shares of Common Stock owned by the Investors or their
Affiliates that are issued and outstanding on the date hereof and the shares of
Common Stock that become issued and outstanding after the date hereof that are
owned by the Investors or their Affiliates; provided, however, that any share of
Common Stock shall cease to be a Registrable Security when (a) it has been
effectively registered under the Securities Act and disposed of in accordance
with the registration statement covering such Common Stock; (b) it is
distributed to the public pursuant to Rule 144 (or any similar provisions then
in force) under the Securities Act; or (c) it has otherwise been transferred and
a new certificate or other evidence of ownership for such Common Stock not
bearing or required to bear a legend as set forth in Section 1.2 of the
Securities Holders Agreement (or other legend of similar import) and not subject
to any stop transfer order has been delivered by or on behalf of the Company and
no other restriction on transfer exists under the Securities Act.  
 
3.             Incidental Registration.
 
(a)           Right to Include Common Stock.  If at any time after the
completion of the Company’s initial Public Offering the Company at any time
proposes to register any offer or sale of its Common Stock under the Securities
Act (other than on a Special Registration Statement, but expressly including a
Demand Registration pursuant to Section 4(a) hereof or an S-3 Registration under
Section 4(c) hereof), whether or not for sale for its own account, it will give
at least 30 days prior written notice (the “Notice” (which request shall specify
the aggregate number of the Registrable Securities to be registered and will
also specify the intended method of disposition thereof) to all holders of
Registrable Securities of its intention to file a registration statement under
the Securities Act and of such holders’ rights under this Section 3.  Upon the
written request of any such holders of Registrable Securities made within 20
days of the date of the Notice, the Company will use its best efforts to effect
the registration under the Securities Act of the offer and sale of all
Registrable Securities which the Company has been so requested to register by
the holders thereof (an “Incidental Registration”), to the extent required to
permit the public disposition (in accordance with such intended methods thereof)
of the Registrable Securities subject to such requests; provided, however, that
(i) if, any time after giving written notice of its intention to register the
offer and sale of shares of Common Stock and prior to the effective date of the
registration statement filed in connection with such registration, the Company
shall determine for any reason not to register the Company’s Common Stock, the
Company shall give written notice of such determination to each holder of
Registrable Securities and, thereupon, shall be relieved of its obligation to
register any offer and sale of Registrable Securities in connection with such
registration (but not from its obligation to pay the Registration Expenses in
connection therewith); (ii) if a registration undertaken pursuant to this
Section 3 shall involve an Underwritten Offering, any holder of Registrable
Securities requesting to be included in such registration may elect, in writing
at least 20 days prior to the effective date of the registration statement filed
in connection with such registration, not to register the offer and sale of such
holder’s Registrable Securities in connection with such registration; and (iii)
if, at any time after the 180-day or shorter period specified in Section 5(b),
the sale of the securities has not been completed, the Company may withdraw from
the registration on a pro rata basis (based on the number of Registrable
Securities requested by each holder of Registrable Securities to be subject to
such registration) of the offer and sale of the Registrable Securities of which
the Company has been requested to register and which have not been sold.
 
 
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(b)           Priority in Incidental Registrations.  If a registration pursuant
to Section 3(a) (other than a Demand Registration or S-3 Registration, it being
understood the priority for such registrations is set forth in Section 4(d))
involves an Underwritten Offering and the managing underwriter or underwriters
advise the Company in writing that, in its or their opinion, the total number of
shares of Common Stock to be included in such registration, including the
Registrable Securities requested to be included pursuant to this Section 3,
exceeds the maximum number of shares of Common Stock specified by the managing
underwriter or underwriters that may be distributed without materially and
adversely affecting the price, timing or distribution of such shares of Common
Stock, then the Company shall include in such registration only such maximum
number of Registrable Securities which, in the reasonable opinion of such
underwriter or underwriters, can be sold in the following order of
priority:  (i) first, all of the shares of Common Stock that the Company
proposes to sell for its own account, if any, (ii) second, the Registrable
Securities of BRS and Jefferies, and (iii) third, the Registrable Securities of
any of the Management Investors and any other holder of Registrable Securities
that are requested to be included in such Incidental Registration.  To the
extent that shares of Common Stock to be included in the Incidental Registration
must be allocated among the holder(s) of Registrable Securities pursuant to
clause (ii) or clause (iii) above, such shares shall be allocated pro rata among
the applicable holder(s) of Registrable Securities based on the number of shares
of Common Stock that such holder(s) of Registrable Securities shall have
requested to be included therein.
 
(c)           Expenses.  The Company will pay all Registration Expenses in
connection with any registration of Registrable Securities requested pursuant to
this Section 3.
 
(d)           Liability for Delay.  The Company shall not be held responsible
for any delay in the filing or processing of a registration statement which
includes any Registrable Securities due to requests by holders of Registrable
Securities pursuant to this Section 3 nor for any delay in requesting the
effectiveness of such registration statement.
 
 
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(e)           Participation in Underwritten Registrations.  No holder of
Registrable Securities may participate in any Underwritten Registration
hereunder unless such holder (i) agrees to sell his, her or its Common Stock on
the basis provided in any underwriting arrangements approved by the persons who
have selected the underwriter and (ii) accurately completes in a timely manner
and executes all questionnaires, powers of attorney, escrow agreements,
underwriting agreements and other documents customarily required under the terms
of such underwriting arrangements; provided, however, that no holder of
Registrable Securities will be required to provide representations and
warranties or indemnities or otherwise become subject to liabilities or
obligations in any such underwriting agreement that are not customary for
investors of its type in such transaction.
 
4.             Demand Registration.
 
(a)           Right to Demand Registration.  Subject to Section 4(b) below, each
of (i) BRS and (ii) Jefferies shall be entitled to make written request (a
“Demand Registration Request”) (which Demand Registration Request shall specify
the intended number of Registrable Securities to be disposed of by such holder
or holders and the intended method of disposition thereof) to the Company for
registration with the Commission under and in accordance with the provisions of
the Securities Act of the offer and sale of all or part of the Registrable
Securities owned by it or them (a “Demand Registration”).
 
(b)           Number of Demand Registrations.  BRS, on the one hand, and
Jefferies, on the other, shall each be entitled to make two Demand Registration
Requests under Section 4(a) above provided that no such Demand Registration
Request is made within six months of any Incidental Registration or Demand
Registration.  In any Demand Registration, all Registration Expenses shall be
borne by the Company.
 
(c)           In addition to the rights under paragraph (a) above, upon the
written request (a “S-3 Registration Request”) by BRS or Jefferies, the Company
shall use its best efforts to effect the registration of all of the Registrable
Securities held by the holder, or holders making a request pursuant to this
paragraph (c) (a “S-3 Registration”); provided, however, that the Company shall
be obligated to use best efforts to effect a registration requested pursuant to
this paragraph (c) only if the Company is then eligible to file the related
registration statement on Form S-3 (or any successor form) under the Securities
Act.  The Company shall pay all Registration Expenses related to each
registration requested pursuant to this Section 4(c).  If and to the extent that
any holder or holders of any Registrable Securities shall have, at the time of
delivery of the written request referred to in this paragraph, no present
intention of selling or distributing such Registrable Securities, the Company
shall be obligated to effect the registration of such Registrable Securities of
such holder or holders only if and to the extent, in each case, that such
registration is at the time permitted by the applicable statutes or rules and
regulations thereunder or the practices of the governmental authority concerned.
 
 
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(d)           Priority on Demand Registration.  If any of the Registrable
Securities subject to a Demand Registration or an S-3 Registration are to be
sold in a firm commitment Underwritten Offering and the managing underwriter or
underwriters of a Demand Registration or a S-3 Registration advise the Company
and the holders of such Registrable Securities in writing that in its or their
opinion the number of shares of Common Stock proposed to be sold in such Demand
Registration or a S-3 Registration exceeds the maximum number of shares
specified by the managing underwriter that may be distributed without materially
and adversely affecting the price, timing or distribution of the Common Stock,
the Company shall include in such registration only such maximum number of
Registrable Securities which, in the reasonable opinion of such managing
underwriter can be sold in the following order of priority:  (i) first, the
Registrable Securities requested to be included in such Demand Registration or
S-3 Registration, as the case may be, by BRS and Jefferies, (ii) second, the
Registrable Securities that are requested to be included in such Demand
Registration or S-3 Registration, as the case may be, of any other holder of
Registrable Securities, and (iii) third, shares of Common Stock to be offered by
the Company in such Demand Registration or S-3 Registration.  To the extent that
shares of Common Stock to be included in the Demand Registration or S-3
Registration must be allocated among the holder(s) of Registrable Securities
pursuant to clauses (i), (ii) or (iii) above, such shares shall be allocated pro
rata among the applicable holder(s) of Registrable Securities based on the
number of shares of Common Stock that such holder(s) of Registrable Securities
shall have requested to be included therein.
 
(e)           A Demand Registration or S-3 Registration requested pursuant to
this Section 4 will not be deemed to have been effected unless it has become
effective under the Securities Act; provided, however, that if after a Demand
Registration or S-3 Registration has so become effective, the offering of
Registrable Securities pursuant to such Demand Registration or S-3 Registration
is terminated, suspended or interfered with (so as to prevent the sale of more
than 25% of the Registrable Securities requested to be registered thereunder) by
any stop order, injunction or other order or requirement of the Commission or
other governmental agency or court, such Demand Registration or S-3 Registration
will be deemed not to have been effected.
 
5.             Registration Procedures.  If and whenever the Company is required
to use its best efforts to effect or cause the registration of any Registrable
Securities under the Securities Act as provided in this Agreement (including
pursuant to a Demand Registration Request given under Section 4(a)), the Company
will, as expeditiously as reasonably possible:
 
(a)           prepare and file with the Commission a registration statement with
respect to such Registrable Securities, and use its best efforts to cause such
registration statement to become effective and to keep the sellers of
Registrable Securities advised in writing of the initiation and progress of
proceedings regarding such registration, provided, however, that the Company may
discontinue any registration of its securities which is being effected pursuant
to Sections 3 or 4 herein at any time prior to the effective date of the
registration statement relating thereto (but only to the extent set forth in the
proviso contained in Section 3(a));
 
(b)           prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective for
a period of not less than 180 days or such shorter period which will terminate
when all Registrable Securities covered by such registration statement have been
sold (but not before the expiration of the 90-day period referred to in Section
4(3) of the Securities Act and Rule 174 thereunder, if applicable) and comply
with the provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement during such period in
accordance with the intended methods of disposition by the seller or sellers
thereof set forth in such registration statement; provided, however, that prior
to filing with the Commission any such registration statement, prospectus or
amendment or supplement thereto, the Company shall furnish copies thereof to
counsel for the sellers of Registrable Securities under such registration
statement, which document will be subject to reasonably prompt review by such
counsel;
 
 
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(c)           furnish to each seller of such Registrable Securities such number
of copies of such registration statement and of each such amendment and
supplement thereof (in each case including all exhibits), such number of copies
of the prospectus included in such registration statement (including each
preliminary prospectus and summary prospectus), in conformity with the
requirements of the Securities Act, and such other documents as such seller may
reasonably request in order to facilitate the disposition of the Registrable
Securities by such seller;
 
(d)           use its best efforts to register or qualify such Registrable
Securities covered by such registration statement under such other securities or
blue sky laws of such jurisdictions as each seller shall request, and do any and
all other acts and things which may be necessary or advisable to enable such
seller to consummate the disposition in such jurisdictions of the Registrable
Securities owned by such seller; provided, however, that the Company shall not
be required to qualify generally to do business in any jurisdiction where it is
not then so qualified or to take any action which would subject it to general
service of process in any such jurisdiction where it is not then so subject or
subject itself to general taxation in any jurisdiction where it is not then so
subject;
 
(e)           immediately notify each seller of any Registrable Securities
covered by such registration statement, at any time when a prospectus relating
thereto is required to be delivered under the Act within the appropriate period
mentioned in clause (b) of this Section 5, of the Company becoming aware that
the prospectus included in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances then existing, and within ten
days prepare and furnish to all sellers a reasonable number of copies of an
amended or supplemental prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such Registrable Securities, such prospectus
shall not include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing;
 
(f)            use its best efforts to list such Registrable Securities on any
securities exchange on which the Common Stock is then listed or NASDAQ if the
Common Stock is then quoted on NASDAQ, if such Registrable Securities are not
already so listed or quoted and if such listing is then permitted under the
rules of such exchange or NASDAQ, and provide an independent transfer agent and
registrar for such Registrable Securities covered by such registration statement
not later than the effective date of such registration statement;
 
(g)           furnish to each seller of Registrable Securities covered by such
registration statement a signed counterpart, addressed to such seller (and the
underwriters, if any) of:
 
 
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(i)            an opinion of counsel for the Company, dated the effective date
of such registration statement (or, if such registration involves an
underwritten public offering, dated the date of the closing under the
underwriting agreement), reasonably satisfactory in form and substance to the
sellers of not less than 50% of such Registrable Securities (and the managing
underwriter, if any); and
 
(ii)           a “comfort” letter, dated the effective date of such registration
statement (or, if such registration involves an underwritten Public Offering,
dated the date of the underwriting agreement and a “bring down” letter dated the
date of the closing under the underwriting agreement), signed by the independent
public accountants who have certified the Company’s financial statements
included in such registration statement, covering such matters with respect to
such registration statement as are customarily covered in accountants’ letters
delivered to the underwriters in Underwritten Offerings of securities as may
reasonably be requested by the sellers of not less than 50% of such Registrable
Securities (and the managing underwriter, if any); and
 
(h)           make available for inspection by any seller of such Registrable
Securities covered by such registration statement, by any underwriter
participating in any disposition to be effected pursuant to such registration
statement and by any attorney, accountant or other agent retained by any such
seller or any such underwriter (individually, an “Inspector” and collectively,
the “Inspectors”), all pertinent financial and other records, pertinent
corporate documents and properties of the Company as shall be reasonably
necessary to enable them to exercise their due diligence responsibilities
(collectively, the “Records”), and cause all of the Company’s officers,
directors and employees to supply all information reasonably requested by any
such seller, underwriter, or Inspector in connection with such registration
statement; provided that any Records that are designated by the Company in
writing as confidential shall be kept confidential by the Inspectors unless (i)
the disclosure of such Records is necessary to avoid or correct a misstatement
or omission of material fact in such registration statement or (ii) the release
of such Records is ordered pursuant to a subpoena or other order from a court of
competent jurisdiction or by any regulatory authority having jurisdiction.  Each
Investor agrees that non-public information obtained by it as a result of such
Inspections shall be deemed confidential and acknowledges its obligations under
the Federal securities laws not to trade any securities of the Company on the
basis of material non-public information.
 
The Company may require each seller of Registrable Securities as to which any
registration is being effected promptly to furnish to the Company (i) an opinion
of counsel for such seller dated the effective date of the registration
statement relating to such seller’s Registrable Securities (or, if such
registration involves an underwritten Public Offering, dated the date of the
closing under the underwriting agreement), reasonably satisfactory in form and
substance to the Company (and the managing underwriter, if any) and (ii) such
information regarding the distribution of such Registrable Securities as may be
legally required.  Such information shall be furnished in writing and shall
state that it is being furnished for use in the registration statement.
 
 
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Each holder of Registrable Securities agrees by acquisition of such Registrable
Securities that, upon receipt of any notice from the Company of the happening of
any event of the kind described in clause (e) of this Section 5, such holder
will forthwith discontinue disposition of Registrable Securities pursuant to the
registration statement covering such Registrable Securities until such holder’s
receipt of the supplemented or amended prospectus contemplated by clause (e) of
this Section 5, and, if so directed by the Company, such holder will deliver to
the Company (at the Company’s expense) all copies, other than permanent file
copies then in such holder’s possession, of the prospectus covering such
Registrable Securities current at the time of receipt of the Company’s
notice.  In the event the Company shall give any such notice, the period
mentioned in clause (b) of this Section 5 shall be extended by the number of
days during the period from and including the date of the giving of such notice
pursuant to clause (e) of this Section 5 and including the date when each seller
of Registrable Securities covered by such registration statement shall have
received the copies of the supplemented or amended prospectus contemplated by
clause (e) of this Section 5.
 
6.             Indemnification.
 
(a)           Indemnification by the Company.  The Company hereby agrees to
indemnify and hold harmless each holder of Registrable Securities which shall
have been registered under the Securities Act, and such holder’s officers,
directors, employees and agents and each other Person, if any, who controls such
holder within the meaning of the Securities Act and each other Person (including
underwriters) who participates in the offering of such Registrable Securities
against any losses, claims, damages, liabilities, reasonable attorneys’ fees,
costs or expenses (collectively, the “Damages”), joint or several, to which such
holder or controlling Person or participating Person may become subject under
the Securities Act or otherwise, insofar as such Damages (or proceedings in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact made by the Company or its agents
contained in any registration statement under which such Registrable Securities
are registered under the Securities Act, in any preliminary prospectus or final
prospectus contained therein, or in any amendment or supplement thereof, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse such holder of Registrable
Securities or such controlling Person or participating Person in connection with
investigating or defending any such Damages or proceeding; provided, however,
that the Company will not be liable in any such case to the extent that any such
Damages arise out of or are based upon (i) an untrue statement or alleged untrue
statement or omission or alleged omission made in such registration statement,
said preliminary or final prospectus or said amendment or supplement thereto in
reliance upon and in conformity with written information furnished to the
Company by such holder or such controlling or participating Person, as the case
may be, specifically for use in the preparation thereof; or (ii) an untrue
statement or alleged untrue statement, omission or alleged omission in a
prospectus if such untrue statement or alleged untrue statement, omission or
alleged omission is corrected in an amendment or supplement to the prospectus
which amendment or supplement is delivered to such holder in a timely manner and
such holder thereafter fails to deliver such prospectus as so amended or
supplemented prior to or concurrently with the sale of such Registrable
Securities to the Person asserting such Damages.
 
 
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(b)           Indemnification by the Holders of Registrable Securities Which Are
Registered.  It shall be a condition of the Company’s obligations under this
Agreement to effect any registration under the Securities Act that there shall
have been delivered to the Company an agreement or agreements duly executed by
each holder of Registrable Securities to be so registered, whereby each such
holder agrees to indemnify and hold harmless the Company, its directors,
officers, employees and agents and each other Person, if any, which controls the
Company within the meaning of the Securities Act against any Damages, joint or
several, to which the Company, or such other Person or such Person controlling
the Company may become subject under the Securities Act or otherwise, but only
to the extent that such Damages (or proceedings in respect thereof) arise out of
or are based upon any untrue statements or alleged untrue statement of any
material fact contained, on the effective date thereof, in any registration
statement under which such Registrable Securities are registered under the
Securities Act, in any preliminary prospectus or final prospectus contained
therein or in any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
which, in each such case, has been made in or omitted from such registration
statement, said preliminary or final prospectus or said amendment or supplement
in reliance upon, and in conformity with, written information furnished to the
Company by such holder of Registrable Securities specifically for use in the
preparation thereof.  The Company shall be entitled to receive indemnities from
underwriters, selling brokers, dealer managers and similar securities industry
professionals participating in the distribution, to the same extent as provided
above, with respect to information furnished in writing by such Persons
specifically for inclusion in any prospectus or registration statement.
 
(c)           Conduct of Indemnification Proceedings.  Any Person entitled to
indemnification hereunder shall (i) give prompt written notice to the
indemnifying party of the commencement of any action or proceeding involving a
claim referred to in the preceding paragraphs of this Section 6 (provided the
failure of any indemnified party to give such notice shall not relieve the
indemnifying party of its obligations under this Section 6 except to the extent
of any damages caused solely by such failure), and (ii) unless the indemnified
party has been advised by its counsel that a conflict of interest exists or may
exist between such indemnified and indemnifying parties under applicable
standards of professional responsibility, with respect to such claim, permit
such indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to the indemnified party.  Whether or not such defense
is assumed by the indemnifying party, the indemnifying party will not be subject
to any liability for any settlement made without its consent (but such consent
will not be unreasonably withheld).  No indemnifying party will consent to the
entry of any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect of such claim or
litigation; provided, however, that no indemnifying party will consent to the
entry of any judgment or enter into any settlement (other than for the payment
of money only) without the consent of the indemnified party (which consent will
not be unreasonably withheld).  An indemnifying party who is not entitled to, or
elects not to, assume the defense of the claim, will not be obligated to pay the
fees and expenses of more than one counsel for all parties indemnified by such
indemnifying party with respect to such claim, unless in the reasonable judgment
of any indemnified party a conflict of interest exists or may exist between such
indemnified party and any other such indemnified parties with respect to such
claim, in which event the indemnifying party shall be obligated to pay the fees
and expenses of such additional counsel or counsels.
 
 
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(d)           Contribution.  If for any reason the indemnification provided for
in the preceding Sections 6(a) or 6(b) is unavailable to an indemnified party in
respect of any Damages referred to therein, the indemnifying party shall
contribute to the amount paid or payable by the indemnified party as a result of
such Damages in such proportion as is appropriate to reflect the relative
benefits received by, and the relative fault of, the indemnified party and the
indemnifying party, as well as any other appropriate equitable considerations;
provided, however, that in no event shall the liability of any selling holder of
Registrable Securities hereunder (whether in respect of indemnification or
contribution obligations) be greater in amount than the difference between the
dollar amount of the proceeds received by such holder upon the sale of the
Registrable Securities giving rise to such contribution obligation and all
amounts previously contributed by such holder with respect to such Damages.  No
Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any Person
who was not guilty of fraudulent misrepresentation.
 
7.             Hold-Back Agreements.
 
(a)           Restrictions on Public Sale by Holder of Registrable
Securities.  Each holder of Registrable Securities whose Registrable Securities
are eligible for inclusion in a Registration Statement filed pursuant to
Sections 3 or 4 agrees, if requested by the managing underwriter or underwriters
in an Underwritten Offering of any Registrable Securities, not to effect any
public sale or distribution of Registrable Securities, including a sale pursuant
to Rule 144 (or any similar provision then in force) under the Securities Act
(except as part of such Underwritten Registration), during the 10-day period
prior to, and during the 180-day period (in the case of the Company’s initial
Public Offering) or 90-day period (in the case of an offering after the initial
Public Offering) beginning on the effective date of such Registration Statement,
to the extent timely notified of such offering in writing by the Company or the
managing underwriter or underwriters.
 
(b)           Restrictions on Public Sale by the Company and Others.  The
Company shall (i) not effect any public sale or distribution of any of its
Common Stock for its own account during the 10-day period prior to, and during
the 180-day period (in the case of the Company’s initial Public Offering) or
90-day period (in the case of an offering after the initial Public Offering)
beginning on, the effective date of a Registration Statement filed pursuant to
Sections 3 or 4 (except as part of a Special Registration Statement), and (ii)
use reasonable efforts to cause each holder of Common Stock purchased from the
Company at any time after the date of this Agreement (other than in a registered
public offering) to agree not to effect any public sale or distribution of any
such securities during such period, including a sale pursuant to Rule 144 under
the Securities Act (except as part of such Underwritten Registration, if
permitted).
 
8.             Underwritten Registration.
 
If any of the Registrable Securities covered by any Incidental Registration that
is not also a Demand Registration or S-3 Registration are to be sold in an
Underwritten Offering, the investment banker or investment bankers and manager
or managers that will administer and underwrite the offering will be selected by
the Company.  In any Demand Registration or S-3 Registration, such underwriters
shall be selected by the holders of a majority of the Registrable Securities
being registered.
 
 
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Notwithstanding anything herein to the contrary, no Person may participate in
any Underwritten Registration hereunder unless such Person (a) agrees to sell
such Person’s securities on the basis provided in any underwritten arrangements
approved by the Persons entitled hereunder to approve such arrangement and
(b) accurately completes and executes all questionnaires, powers of attorney,
indemnities, custody agreements, underwriting agreements and other customary
documents required under the terms of such underwriting arrangements; provided,
however, that no holder of Registrable Securities will be required to provide
representations and warranties or indemnities or otherwise become subject to
liabilities or obligations in any such underwriting agreement that are not
customary for investors of its type in such transaction.
 
9.             Miscellaneous.
 
(a)           Amendment and Modification.  This Agreement may be amended or
modified, or any provision hereof may be waived, provided that such amendment or
waiver is set forth in a writing executed by (i) the Company, (ii) the Required
Holders (as defined in the Securities Holders Agreement) and (iii) in the case
of any amendment which materially and adversely affects any Investor differently
from any other Investor (other than due to any difference in the number of
shares owned by any such Investor), such Investor.  No course of dealing between
or among any persons having any interest in this Agreement will be deemed
effective to modify, amend or discharge any part of this Agreement or any rights
or obligations of any person under or by reason of this Agreement.
 
(b)           Additional Parties.  The Board of Directors of the Company shall
be entitled, but not obligated, with the consent of Person(s) holding at least
70% of the Registrable Securities, to allow any purchaser or acquirer of equity
securities (or securities or rights convertible or exercisable into equity
securities), of the same type and class of the Registrable Securities, to
execute a counterpart to this Agreement and become a party hereto (each, an
“Additional Party”), in which case the equity securities issued or issuable to
any such Additional Party shall be deemed to be “Registrable Securities” subject
to the terms and conditions hereof and such Additional Party shall be deemed to
be a holder of “Registrable Securities” for purposes hereof.  Except as set
forth in this Section 9(b), the Company will not grant to any other persons any
registration rights.
 
(c)           Survival of Representations and Warranties.  All representations,
warranties, covenants and agreements set forth in this Agreement will survive
the execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby, regardless of any investigation made by an
Investor or on its behalf.
 
(d)           Successors and Assigns.  This Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns and executors, administrators
and heirs.
 
 
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(e)           Separability.  In the event that any provision of this Agreement
or the application of any provision hereof is declared to be illegal, invalid or
otherwise unenforceable by a court of competent jurisdiction, the remainder of
this Agreement shall not be affected except to the extent necessary to delete
such illegal, invalid or unenforceable provision unless that provision held
invalid shall substantially impair the benefits of the remaining portions of
this Agreement.
 
(f)            Notices.  All notices provided for or permitted hereunder shall
be made in writing by hand-delivery, registered or certified first-class mail,
fax, telex or air courier guaranteeing overnight delivery to the other party at
the following addresses (or at such other address as shall be given in writing
by any party to the others):
 
If to the Company:
 
TSG Holdings Corp.
11311 McCormick Road
Suite 260
Hunt Valley, MD  21031-1437
Attention:  John A. Saxton
Fax:  (410) 785-7217
 
with a required copy to:
 
Dechert LLP
Cira Centre
2929 Arch Street
Philadelphia, PA 19104
Attention:  Carmen J. Romano, Esq.
Fax:  (215) 994-2222
 
If to BRS, to:
 
c/o Bruckmann, Rosser, Sherril & Co., L.P.
126 East 56th Street, 29th Floor
New York, NY 10022
Attention:  Harold O. Rosser, II
Fax:  (212) 521-3799
 
with a required copy to:
 
Dechert LLP
Cira Centre
2929 Arch Street
Philadelphia, PA 19104
Attention:  Carmen J. Romano, Esq.
Fax:  (215) 994-2222
 
 
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If to Jefferies, to:

c/o Jefferies Capital Partners
520 Madison Avenue
8th Floor
New York, NY  10022
Attention:  James Luikart
Fax:  (212) 284-1717
 
with a required copy to:

Dechert LLP
Cira Centre
2929 Arch Street
Philadelphia, PA 19104
Attention:  Carmen J. Romano, Esq.
Fax:  (215) 994-2222
 
If to any of the Management Investors, to such Investor’s address as set forth
on the signature pages hereto or such other address as may be specified from
time to time in writing to the Company by any Investor.
 
All such notices shall be deemed to have been duly given: when delivered by
hand, if personally delivered; five business days after being deposited in the
mail, postage prepaid, if mailed; when transmission is confirmed, if faxed
during normal business hours (or if not, on the next succeeding business day);
when answered back, if telexed; and on the next business day, if timely
delivered to an air courier guaranteeing overnight delivery.
 
(g)           Governing Law.  The validity, performance, construction and effect
of this Agreement shall be governed by and construed in accordance with the
internal laws of the State of Delaware, without giving effect to principles of
conflicts of law.
 
(h)           Headings.  The headings in this Agreement are for convenience of
reference only and shall not constitute a part of this Agreement, nor shall they
affect their meaning, construction or effect.
 
(i)            Counterparts.  This Agreement may be executed in two or more
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original, and all of which taken
together shall constitute one and the same instrument.
 
(j)            Further Assurances.  Each party shall cooperate and take such
action as may be reasonably requested by another party in order to carry out the
provisions and purposes of this Agreement and the transactions contemplated
hereby.
 
(k)           Termination.  Unless sooner terminated in accordance with its
terms, this Agreement shall terminate on the fifteenth anniversary of the date
of this Agreement; provided that the indemnification rights and obligations set
forth in Section 6 hereof shall survive the termination of this Agreement.
 
 
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(l)            Remedies.  In the event of a breach or a threatened breach by any
party to this Agreement of its obligations hereunder, any party injured or to be
injured by such breach, in addition to being entitled to exercise all rights
granted by law, including recovery of damages, will be entitled to specific
performance of its rights under this Agreement, it being agreed by the parties
that the remedy at law, including monetary damages, for breach of such provision
will be inadequate compensation for any loss and that any defense in any action
for specific performance that a remedy at law would be adequate is waived.
 
(m)          Party No Longer Owning Securities.  If a party hereto ceases to own
any Common Stock, such party will no longer be deemed to be an Investor for
purposes of this Agreement; provided that the indemnification rights and
obligations set forth in Section 6 hereof shall survive any such cessation of
ownership.
 
(n)           Pronouns.  Whenever the context may require, any pronouns used
herein shall be deemed also to include the corresponding neuter, masculine or
feminine forms.
 
(o)           No Effect on Employment.  Nothing herein contained shall confer on
any Investor the right to remain in the employ or service of the Company or any
of its subsidiaries or Affiliates.
 
(p)           Attorneys’ Fees.  In the event any party hereto commences any
action to enforce any rights of such party hereunder, the prevailing party in
such action shall be entitled to recover such party’s costs and expenses
incurred in such action, including, without limitation, reasonable attorneys’
fees.
 
(q)           Current Public Information.  At all times after the Company has
filed a registration statement with the Commission pursuant to the requirements
of either the Securities Act or the Exchange Act, and as long as the Investors
shall hold any Registrable Securities, the Company will file all reports
required to be filed by it under the Securities Act and the Exchange Act and the
rules and regulations adopted by the Commission thereunder, and will take such
further action as any holder or holders of Registrable Securities may reasonably
request, all to the extent required to enable such holders to sell Registrable
Securities pursuant to Rule 144 under the Securities Act (as such rule may be
amended from time to time) or any similar rule or regulation hereafter adopted
by the Commission.
 
(r)            Entire Agreement.  This Agreement sets forth the entire agreement
and understandings among the parties as to the subject matter hereof and merges
and supersedes all prior discussions and understandings of any and every nature
among them, it being understood the Investors are also entering into other
agreements and instruments on the date hereof, including the Securities Holders
Agreement.
 
 
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IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
as of the date first written above.
 

 
TSG HOLDINGS CORP.
             
By:
     
Name:
   
Title:
       
THE SHERIDAN GROUP HOLDINGS (BRS), LLC
             
By:
     
Name:
   
Title:

 

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THE SHERIDAN GROUP HOLDINGS (JEFFERIES), LLC
             
By:
     
Name:

 

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MANAGEMENT INVESTORS:
         
 
 
John A. Saxton
 
Address:
     
Telephone No.:
         
 
 
David C. Hewitt
 
Address:
     
Telephone No.:
         
 
 
G. Paul Bozuwa
 
Address:
     
Telephone No.:
         
 
 
Robert M. Jakobe
 
Address:
     
Telephone No.:
         
 
 
Joan B. Davidson
 
Address:
     
Telephone No.:

 

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John M. Elliot
 
Address:
     
Telephone No.:
         
 
 
Chris M. Azbill
 
Address:
     
Telephone No.:
         
 
 
Douglas R. Ehmann
 
Address:
     
Telephone No.:
         
 
 
J. Kenneth Garner
 
Address:
     
Telephone No.:
         
 
 
Michael E. Klauer
 
Address:
     
Telephone No.:
         
 
 
Patricia A. Stricker
 
Address:
     
Telephone No.:

 

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Robert M. Moore
 
Address:
     
Telephone No.:
         
 
 
Gary J. Kittredge
 
Address:
     
Telephone No.:
         
 
 
Edward H. Hartman
 
Address:
     
Telephone No.:
         
 
 
Arthur R. Myers
 
Address:
     
Telephone No.:
         
 
 
Jennifer A. Bedell
 
Address:
     
Telephone No.:
         
 
 
Cynthia L. Beauchamp
 
Address:
     
Telephone No.:

 

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Michael J. Sartorelli
 
Address:
     
Telephone No.:
         
 
 
Kenneth W. Raker
 
Address:
     
Telephone No.:
         
 
 
Jeffrey S. Cohen
 
Address:
     
Telephone No.:
         
 
 
J. Dennis Smith
 
Address:
     
Telephone No.:
         
 
 
Catherine R. Budd
 
Address:
     
Telephone No.:
         
 
 
George A. Whaling
 
Address:
     
Telephone No.:

 

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J.M. Dryden Hall, Jr.
 
Address:
     
Telephone No.:
         
 
 
Gary T. DiCamillo
 
Address:
     
Telephone No.:
         
 
 
Craig H. Deery
 
Address:
     
Telephone No.:
         
 
 
Christopher A. Peirce
 
Address:
     
Telephone No.:
         
 
 
Eric D. Lane
 
Address:
     
Telephone No.:
     
 
 
Kenneth R. Stickley
 
Address:
     
Telephone No.:

 

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William P. Walters
 
Address:
     
Telephone No.:

 
 

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