EXHIBIT 10.12(b)
**SECOND AMENDMENT TO CREDIT AGREEMENT**
     This SECOND AMENDMENT TO CREDIT AGREEMENT (this “Second Amendment”), dated as ofFebruary 11, 2005, is by and among AMERICAN COLOR GRAPHICS, INC., a New York Corporation (the“Borrower”), EACH OF THE LENDERS SIGNATORY HERETO, GECC CAPITAL MARKETS GROUP INC., asSyndication Agent (the “Syndication Agent”), and BANK OF AMERICA, N.A., as AdministrativeAgent and Collateral Agent for the Lenders (in such capacity, the “Agent”). Capitalizedterms used herein and not otherwise defined shall have the meaning assigned such term in the CreditAgreement (as defined below).
**RECITALS:**
           A.       The Borrower, the Lenders signatory thereto, the Syndication Agent and the Agent areparties to that certain Credit Agreement, dated as of July 3, 2003 (as amended to the date hereof,the “Credit Agreement” as amended by, and together with, this Second Amendment, and ashereinafter amended, modified, supplemented, extended or restated from time to time, being calledthe “Amended Agreement”).
           B.       The parties hereto have agreed to amend the Credit Agreement as set forth below.
     **NOW, THEREFORE**, in consideration of the premises and the mutual covenants hereinaftercontained, the parties hereto agree as follows:
     **SECTION 1.01**      Amendments to Credit Agreement.
     (a)       Amendments to Section 7.22. Section 7.22 of the Credit Agreement is herebydeleted and the following new Section 7.22 is inserted in replacement thereof:
           7.22       Capital Expenditures.
     The Parent shall not make any CapitalExpenditures. Neither the Borrower nor any of its Subsidiaries shall make orincur any Capital Expenditure if, after giving effect thereto, the aggregateamount of all Capital Expenditures by the Borrower and its Subsidiaries on aconsolidated basis, in excess of insurance proceeds or condemnation awards, wouldexceed (a) $18,500,000 during the Fiscal Year ending March 31, 2004, (b)$10,800,000 during the Fiscal Year ending March 31, 2005, or (c) $14,000,000during any Fiscal Year thereafter. To the extent that the aggregate amount ofCapital Expenditures of the Borrower and the Subsidiaries during a Fiscal Year isless than the amount that is permitted by the preceding sentence (the result ofsuch permitted amount minus the actual amount of Capital Expenditures during aFiscal Year being the
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“Unused Amount”), the aggregate amount of Capital Expenditures that may bemade by the Borrower and the Subsidiaries during the next succeeding Fiscal Yearwill be the sum of the amount otherwise permitted by the preceding sentence plusthe Unused Amount from the previous Fiscal Year.
     (b)       Amendment to Section 7.23. Section 7.23 of the Credit Agreement is hereby deletedand the following new Section 7.23 is inserted in replacement thereof:
           7.23       Fixed Charge Coverage Ratio.
     The Borrower will have a Fixed ChargeCoverage Ratio of not less than (a) 1.00 to 1.00 for the one-fiscal quarter periodended December 31, 2003, (b) 0.89 to 1.00 for the two-fiscal quarter period endedMarch 31, 2004 (taken together as one accounting period), (c) 0.86 to 1.00 for thethree-fiscal quarter period ended June 30, 2004 (taken together as one accountingperiod) and (d) the ratio set forth below opposite each fiscal quarter end foreach Four Quarter Period then ended set forth below:     Four Quarter  Fixed ChargePeriod Ending  Coverage RatioSeptember 30, 2004  0.82 to 1.00 December 31, 2004  0.77 to 1.00 March 31, 2005  0.67 to 1.00 June 30, 2005  0.61 to 1.00 September 30, 2005  0.61 to 1.00 December 31, 2005  0.61 to 1.00 March 31, 2006  0.74 to 1.00 June 30, 2006 and each fiscal quarter end thereafter  1.00 to 1.00 
     (c)       Amendments to Annex A to the Credit Agreement.
     (i)       The following new defined term is hereby added to Annex A to the Credit Agreementin alphabetical position:
     “Non-Lease Capital Expenditures” means, all Capital Expenditures other thanCapital Expenditures financed by a Capital Lease.
     (ii)       The definition of “EBITDA” set forth in Annex A to the Credit Agreement ishereby deleted in its entirety and replaced with the following:
           “EBITDA” means, with respect to any fiscal period of the Parent, Adjusted NetEarnings from Operations, plus, to the extent deducted in the
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determination of Adjusted Net Earnings from Operations for that fiscal period, InterestExpense, Federal, state, local, foreign and deferred income tax expense, depreciation andamortization, and restructuring charges, severance expenses and other non-recurring chargesaccrued during such period.
     (iii)       definition of “Fixed Charge Coverage Ratio” set forth in Annex A to the CreditAgreement is hereby deleted in its entirety and replaced with the following:
     “Fixed Charge Coverage Ratio” means, with respect to anyfiscal period of the Parent, the ratio of (a) EBITDA to (b) Fixed Charges.
     (iv)       The definition of “Fixed Charges” set forth in Annex A to the Credit Agreementis hereby deleted in its entirety and replaced with the following:
           “Fixed Charges” means, with respect to any fiscal period ofthe Parent and its Subsidiaries on a consolidated basis, withoutduplication, the sum of (a) Interest Expense (excluding amortization ofdeferred financing costs), (b) scheduled principal payments of Debt (butnot Permitted Prepayments), (c) Federal, state, local and foreign incometaxes paid in cash, (d) the greater of (i) restructuring charges,severance expenses and other non-recurring charges (“Non-RecurringCharges”) paid during such period and (ii) the minimum Non-RecurringCharges set forth in the table below, (e) contributions to the Borrower’sthree qualified defined-benefit pension plans made during such period and(f) the greater of (i) Non-Lease Capital Expenditures paid in cash duringsuch period and (ii) the minimum Non-Lease Capital Expenditures set forthin the table below.           Minimum Non-Recurring Minimum Non-LeaseIf determined Charges for the Capital Expendituresduring the fiscal Four-Quarter Period for the Four-Quarterquarter ending below: then ending Period then endingMarch 31, 2005 $5,599,000  $7,857,000 June 30, 2005 $7,982,000  $9,241,000 September 30, 2005 $9,213,000  $9,906,000 December 31, 2005 $9,931,000  $10,461,000 March 31, 2006 $8,392,000  $7,500,000 Thereafter $0  $0 
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     **SECTION 1.02**      Representations and Warranties.
     The Borrower hereby represents and warrants to each Lender and the Agent, on the Second Amendment Effective Date (as hereinafterdefined), as follows:
     (a)       After giving effect to this amendment, the representations and warranties set forth inArticle 6 of the Credit Agreement, and in each other Loan Document, are true and correct in allmaterial respects on and as of the date hereof and on and as of the Second Amendment Effective Date(as defined in Section 1.03) with the same effect as if made on and as of the date hereofor the Second Amendment Effective Date, as the case may be, except to the extent suchrepresentations and warranties expressly relate solely to an early date.
     (b)       Each of the Borrower and the other Credit Parties is in compliance with all terms andconditions of the Credit Agreement and the other Loan Documents on its part to be observed andperformed and no Default or Event of Default has occurred and is continuing.
     (c)       The execution, delivery and performance by the Borrower of this Second Amendment have beenduly authorized by the Borrower.
     (d)       This Second Amendment constitutes the legal, valid and binding obligation of the Borrower,enforceable against the Borrower in accordance with its terms, except to the extent thatenforceability may be limited by applicable bankruptcy, insolvency, moratorium, reorganization orother similar laws affecting the enforcement of creditors’ rights or by the effect of generalequitable principles.
     (e)       The execution, delivery and performance by the Borrower of this Second Amendment do notand will not conflict with, or constitute a violation or breach of, or result in the imposition ofany Lien upon the property of the Borrower or any of its Subsidiaries, by reason of the terms of(i) any contract, mortgage, lease, agreement, indenture, or instrument to which the Borrower is aparty or which is binding upon it, (ii) any Requirement of Law applicable to the Borrower, or (iii)the certificate or articles of incorporation or by-laws or the limited liability company or limitedpartnership agreement of the Borrower.
     **SECTION 1.03**      Effectiveness.
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     This Second Amendment shall become effective only upon satisfaction of the followingconditions precedent (the first date upon which each such condition has been satisfied being hereincalled the “Second Amendment Effective Date”):
     (a)       The Agent shall have received duly executed counterparts of this Second Amendment which,when taken together, bear the authorized signatures of the Borrower, the Agent and the Lenders.
     (b)       The Agent and the Lenders shall be satisfied that the representations and warranties setforth in Section 1.02 of this Second Amendment are true and correct on and as of the SecondAmendment Effective Date and that no Default or Event of Default has occurred and is continuing onand as of the Second Amendment Effective Date.
     (c)       The Agent shall have received an amendment fee for the pro rata benefit of each Lenderthat has executed a counterpart hereof on or prior to the date hereof in the aggregate amount of$250,000 in the event that all Lenders so execute and subject to pro rata reduction to the extentthat any one or more Lenders is not entitled to share in the amendment fee.
     (d)       There shall not be any action pending or any judgment, order or decree in effect which, inthe judgment of the Agent or the Lenders, is likely to restrain, prevent or impose materiallyadverse conditions upon the performance by the Borrower or any other Credit Party of itsobligations under the Credit Agreement or the other Loan Documents.
     (e)       The Agent shall have received such other documents, legal opinions, instruments andcertificates relating to this Second Amendment as it shall reasonably request and such otherdocuments, legal opinions, instruments and certificates that shall be reasonably satisfactory inform and substance to the Agent and the Lenders. All corporate proceedings taken or to be taken inconnection with this Second Amendment and documents incidental thereto whether or not referred toherein shall be reasonably satisfactory in form and substance to the Agent and the Lenders.
     **SECTION 1.04**      Guarantor’s Reaffirmation.
     By its acknowledgement below, the Guarantor hereby(i) consents to the terms of this Second Amendment, (ii) acknowledges and reaffirms all of itsobligations and undertakings under the Facility Guaranty and (iii) acknowledges and agrees that theFacility Guaranty is and shall remain in full force and effect in accordance with the termsthereof.
     **SECTION 1.05**      Expenses.
     The Borrower shall pay all reasonable out-of-pocket expensesincurred by Agent in connection with the preparation, negotiation, execution and delivery of thisSecond
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Amendment, including, but not limited to, the reasonable fees and disbursements of counsel tothe Agent.
     **SECTION 1.06**      Cross-References.
     References in this Second Amendment to any Sectionare, unless otherwise specified, to such Section of this Second Amendment.
     **SECTION 1.07**      Instrument Pursuant to Credit Agreement.
     This Second Amendment is a LoanDocument executed pursuant to the Credit Agreement and shall (unless otherwise expressly indicatedherein) be construed, administered and applied in accordance with the terms and provisions of theCredit Agreement.
     **SECTION 1.08**      Further Acts.
     Each of the parties to this Second Amendment agrees thatat any time and from time to time upon the written request of any other party, it will execute anddeliver such further documents and do such further acts and things as such other party mayreasonably request in order to effect the purposes of this Second Amendment.
     **SECTION 1.09**      Governing Law; Submission to Jurisdiction; Waiver of Jury Trial.
     (a)       THIS SECOND AMENDMENT AND EACH OF THE OTHER LOAN DOCUMENTS SHALL BE INTERPRETED AND THERIGHTS AND LIABILITIES OF THE PARTIES HERETO DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OFNEW YORK; PROVIDED THAT THE AGENT AND THE LENDERS SHALL RETAIN ALL RIGHTS ARISING UNDERFEDERAL LAW.
     (b)       ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS SECOND AMENDMENT OR ANY OTHER LOANDOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK IN THE BOROUGH OF MANHATTAN OR OFTHE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THISSECOND AMENDMENT, EACH OF THE BORROWER, EACH OTHER CREDIT PARTY, THE AGENT AND THE LENDERSCONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSECOURTS. EACH OF THE BORROWER, EACH OTHER CREDIT PARTY, THE AGENT AND THE LENDERS IRREVOCABLYWAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OFFORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION ORPROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS SECOND AMENDMENT OR ANY DOCUMENT RELATED
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HERETO. NOTWITHSTANDING THE FOREGOING: (1) THE AGENT AND THE LENDERS SHALL HAVE THE RIGHT TOBRING ANY ACTION OR PROCEEDING AGAINST THE BORROWER OR ANY OTHER CREDIT PARTY OR THEIR RESPECTIVEPROPERTY IN THE COURTS OF ANY OTHER JURISDICTION THE AGENT OR THE LENDERS DEEM NECESSARY ORAPPROPRIATE IN ORDER TO REALIZE ON THE COLLATERAL OR OTHER SECURITY FOR THE OBLIGATIONS AND (2)EACH OF THE PARTIES HERETO ACKNOWLEDGES THAT ANY APPEALS FROM THE COURTS DESCRIBED IN THEIMMEDIATELY PRECEDING SENTENCE MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE THOSE JURISDICTIONS.
     (c)       THE BORROWER AND EACH OTHER CREDIT PARTY HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALLPROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY REGISTERED MAIL(RETURN RECEIPT REQUESTED) DIRECTED TO THE BORROWER AT ITS ADDRESS SET FORTH IN SECTION13.8 OF THE CREDIT AGREEMENT AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED FIVE (5) DAYSAFTER THE SAME SHALL HAVE BEEN SO DEPOSITED IN THE U.S. MAILS POSTAGE PREPAID. NOTHING CONTAINEDHEREIN SHALL AFFECT THE RIGHT OF AGENT OR THE LENDERS TO SERVE LEGAL PROCESS BY ANY OTHER MANNERPERMITTED BY LAW.
     (d)       THE BORROWER, EACH OTHER CREDIT PARTY, THE LENDERS AND THE AGENT EACH IRREVOCABLY WAIVETHEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISINGOUT OF OR RELATED TO THIS SECOND AMENDMENT, THE OTHER LOAN DOCUMENTS, OR THE TRANSACTIONSCONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHTBY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR ANY AGENT-RELATED PERSON, PARTICIPANT OR ASSIGNEE,WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. THE BORROWER, EACH OTHERCREDIT PARTY, THE LENDERS AND THE AGENT EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BETRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREETHAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANYACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THEVALIDITY OR ENFORCEABILITY OF THIS SECOND AMENDMENT OR THE OTHER LOAN DOCUMENTS OR ANY PROVISIONHEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS ORMODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
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     **SECTION 1.10**      Counterparts.
     This Second Amendment may be executed in any number ofcounterparts and by the different parties hereto in separate counterparts, each of which when soexecuted and delivered shall be an original, but all of which shall together constitute one and thesame instrument.
     **SECTION 1.11**      Severability.
     In case any provision in or obligation under this SecondAmendment or the other Loan Documents shall be invalid, illegal or unenforceable in anyjurisdiction, the validity, legality and enforceability of the remaining provisions or obligations,or of such provision or obligation in any other jurisdiction, shall not in any way be affected orimpaired thereby.
     **SECTION 1.12**      Benefit of Agreement.
     This Second Amendment shall be binding upon andinure to the benefit of and be enforceable by the respective successors and assigns of the partieshereto; provided that the Borrower may not assign or transfer any of its interest hereunder withoutthe prior written consent of the Lenders.
     **SECTION 1.13**      Integration.
     This Second Amendment represents the agreement of theBorrower, each other Credit Party, the Agent and each of the Lenders signatory hereto with respectto the subject matter hereof, and there are no promises, undertakings, representations orwarranties relative to the subject matter hereof not expressly set forth or referred to herein orin the other Loan Documents.
     **SECTION 1.14**      Confirmation.
     Except as expressly amended by the terms hereof, all ofthe terms of the Credit Agreement and the other Loan Documents shall continue in full force andeffect and are hereby ratified and confirmed in all respects.
     **SECTION 1.15**      Loan Documents.
     Except as expressly set forth herein, the amendmentsprovided herein shall not by implication or otherwise limit, constitute a waiver of, or otherwiseaffect the rights and remedies of the Lenders or the Agent under the Amended Agreement or any otherLoan Document, nor shall they constitute a waiver of any Event of Default, nor shall they alter,modify, amend or in any way affect any of the terms, conditions, obligations, covenants oragreements contained in the Amended Agreements or any other Loan Document. Each of the amendmentsprovided herein shall apply and be effective only with respect to
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the provisions of the Amended Agreement specifically referred to by such amendments. Exceptas expressly amended herein, the Amended Agreement and the other Loan Documents shall continue infull force and effect in accordance with the provisions thereof. As used in the Amended Agreement,the terms “Agreement”, “herein”, “hereinafter”, “hereunder”, “hereto” and words of similar importshall mean, from and after the date hereof, the Amended Agreement.
**[**Signature Pages to Follow**]**
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     IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this SecondAmendment to be duly executed and delivered as of the date first above written.      **BORROWER****:**