Exhibit 10.2


 


INTERCREDITOR AGREEMENT


 


This INTERCREDITOR AGREEMENT, dated as of this 21st
day of August, 2003 (this “Agreement”), is among:  (1) SHERIDAN ACQUISITION CORP. (“SAC”
or the “Company”)
and THE SHERIDAN GROUP, INC. (“TSG,” or, after consummation of the merger
described below, the “Company”); (2) THE SUBSIDIARIES OF TSG
IDENTIFIED ON THE SIGNATURE PAGES HERETO (together with other subsidiaries of
TSG parties hereto from time to time, the “Guarantors”); (3) THE BANK OF NEW YORK, as
trustee for the Noteholders pursuant to the Indenture referred to below and as
collateral agent for the Noteholders pursuant to the Collateral Agreements
referred to in the Indenture (together with its successors and assigns in such
capacities, the “Trustee”); and (4) FLEET NATIONAL BANK (together with it
successors and assigns and all replacement lenders contemplated below, the “Lender”).


 


Background


 


A.                 TSG, as survivor
to a merger with SAC, is party to a certain Indenture, dated as of the date
hereof (as the same may be amended, restated, modified, supplemented, and/or
replaced from time to time consistent with the provisions hereof, the “Indenture”)
with the Trustee.  Pursuant to the
Indenture, the Company issued certain promissory notes (together with any other
promissory notes issued thereunder from time to time, the “Indenture Notes”) in an
original aggregate principal amount equal to $105,000,000.  The Guarantors have guaranteed the
obligations of the Company in respect of the Indenture, the Indenture Notes and
related agreements and instruments.


 


B.                   TSG, as
survivor to the aforementioned merger with SAC, is also party to a certain
Credit Agreement, dated as of the date hereof (as the same may be amended,
restated, modified, supplemented, and/or replaced from time to time consistent
with the provisions hereof, the “Credit Agreement”) with the Lender.  Pursuant to the Credit Agreement, the Lender
has agreed to extend credit in an original aggregate principal amount not to
exceed $18,000,000.  The Guarantors have
guaranteed the obligations of the Company in respect of the Credit Agreement,
the letters of credit issued thereunder, the related notes and other related
agreements and instruments.


 


C.                   In connection
with the Indenture, the Credit Agreement, the related guarantees and notes and
certain other agreements and instruments entered into in connection therewith,
the Company and Guarantors have granted a lien on substantially all of their
assets to secure their obligations thereunder.


 


D.                  The Trustee and
the Lender wish to clarify their relative rights with respect to the collateral
and certain related matters as set forth below.


 

















 


NOW THEREFORE, intending
to be legally bound the parties hereto agree as follows.


 


1.                   Definitions.
 The following terms shall be used
in this Agreement as defined below.


 


1.1                                 “Bank
Documents” means, collectively, the Credit Agreement, letters of
credit, notes, collateral documents, guarantees, interest rate protection
agreements and other agreements and instruments entered into under or in connection
with the Credit Agreement from time to time, in each case as the same may be
amended, restated, modified, supplemented, and/or replaced from time to time
consistent with the provisions hereof.


 


1.2                                 “Bank
Excluded Assets” means assets, if any, that are expressly excluded
from collateral under the terms of the Bank Documents.


 


1.3                                 “Bank Junior
Lien” means the Lien in favor of the Lender in respect of the Note
Priority Collateral.


 


1.4                                 “Bank Maximum
Amount” means, with respect to Bank Obligations, up to the Bank
Permitted Principal Amount in principal amount outstanding, plus all related
interest, fees, costs, indemnities and expenses.


 


1.5                                 “Bank
Obligations” means all obligations of the Obligors under the Bank
Documents including, without limitation, principal of and interest on the notes
(including, without limitation, interest accruing at the then applicable rate
provided in the Bank Documents after the maturity date of the notes and
interest accruing at the then applicable rate provided in the Bank Documents
after the filing of any petition in bankruptcy, or the commencement of any
Insolvency Proceeding relating to the Obligors whether or not a claim for
post-filing or post-petition interest is allowed in such proceeding),
reimbursement obligations in resect of letters of credit, obligations under
interest rate protection agreements, all indemnities, costs and expenses,
whether direct or indirect, absolute or contingent, due or to become due, or
now existing or hereafter incurred under or pursuant to the Bank Documents.


 


1.6                                 “Bank
Permitted Principal Amount” shall have the meaning ascribed to such
term in Section 11.2.


 


1.7                                 “Bank
Priority Collateral” means (a) all assets constituting personal
property (whether tangible or intangible), now owned or hereafter acquired by
the Company or any Guarantor or in which the Company or any Guarantor now or in
the future has an interest and including, without limitation, all equity
interests in subsidiaries and proceeds thereof but excluding the Note Priority
Collateral and (b) the equity of the Company and proceeds thereof, provided,
however, Bank Priority Collateral shall not include Bank Excluded Assets.


 


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1.8                                 “Bankruptcy
Code” means The Bankruptcy Code of 1978, as amended from time to
time (11 U.S.C. Sections 101 et seq.), and any replacement or successor act
that has a substantially similar purpose.


 


1.9                                 “Bank Senior
Lien” means the Lien in favor of the Lender in respect of the Bank
Priority Collateral.


 


1.10                           “Collateral
Enforcement Action” means the exercise of any rights and remedies
available to the Lender or the Trustee, as applicable, pursuant to any
agreement or under applicable law to enforce its rights and remedies relative
to any collateral security provided for in the Bank Documents or Note
Documents, as applicable, including, without limitation, (a) the commencement
of any action, suit or other proceeding against any Obligors to foreclose
(whether in strict foreclosure or otherwise), attach, seize, sell or otherwise
to realize upon any of the security, (b) the exercise of any rights of set-off,
(c) any notification by a secured party to an account debtor with respect to
any account constituting collateral, which notification would direct such
account debtor to remit payments with respect to such account to the notifying
party and (d) the collection, possession, removal or sale of any collateral or
the exercise of any other self-help remedy.


 


1.11                           “Lien”
means any mortgage, security interest, pledge, hypothecation, lien or similar
encumbrance.


 


1.12                           “Liquidation”
means the legal termination, winding up or dissolution of an Obligor and/or the
liquidation of all or substantially all of the assets of an Obligor other than
a legal termination, winding up, dissolution or liquidation of a Guarantor in
connection with a merger or disposition permitted by the terms of the Note
Documents and the Bank Documents.


 


1.13                           “Note
Documents” means, collectively, the Indenture, the Indenture Notes,
collateral documents, guarantees, and other agreements and instruments entered
into under or in connection with the Indenture from time to time, in each case
as the same may be amended, restated, modified, supplemented, and/or replaced
from time to time consistent with the provisions hereof.


 


1.14                           “Note
Excluded Assets” means assets that are expressly excluded from
collateral under the terms of the Note Documents.


 


1.15                           “Noteholders”
means the holders of the Notes from time to time.


 


1.16                           “Note Junior
Lien” means the Lien in favor of the Trustee in respect of the Bank
Priority Collateral.


 


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1.17                           “Note Maximum
Amount” means, with respect to the Note Obligations, up to the Note
Permitted Principal Amount in principal amount outstanding, plus all related
interest, fees, costs, indemnities and expenses.


 


1.18                           “Note
Obligations” means all obligations of the Obligors under the Note
Documents including, without limitation, principal of and interest on the Notes
(including, without limitation, interest accruing at the then applicable rate
provided in the Note Documents after the maturity date of the Notes and
interest accruing at the then applicable rate provided in the Note Documents
after the filing of any petition in bankruptcy, or the commencement of any
Insolvency Proceeding relating to the Obligors whether or not a claim for
post-filing or post-petition interest is allowed in such proceeding), all
indemnities, costs and expenses, whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter incurred under
or pursuant to the Note Documents.


 


1.19                           “Note
Permitted Principal Amount” shall have the meaning ascribed to such
term in Section 11.6.


 


1.20                           “Note
Priority Collateral” means all real property, equipment and
fixtures, now owned or hereafter acquired by the Company or any Guarantor or in
which the Company or any Guarantor now or in the future has an interest,
together with all proceeds thereof resulting from a sale or other disposition
thereof, provided, however, Note Priority Collateral shall not include
Note Excluded Assets.


 


1.21                           “Note Senior
Lien” means the Lien in favor of the Trustee in respect of the Note
Priority Collateral.


 


1.22                           “Insolvency
Proceeding” means any receivership, conservatorship, general meeting
of creditors, insolvency or bankruptcy proceeding, assignment for the benefit
of creditors, or any proceeding or action by or against any of the Obligors for
any relief under the Bankruptcy Code or any other insolvency law or other laws
relating to the relief of debtors, readjustment of indebtedness,
reorganizations, dissolution, liquidation, compositions or extensions, or the
appointment of any receiver, intervenor or conservator of, or trustee, or
similar officer for, any of the Obligors or any substantial part of its
properties or assets.


 


1.23                           “Obligors”
means, collectively, the Company and the Guarantors.


 


2.                   Priority
of Security Interests and Obligations.


 


2.1                                 Pari Passu Obligations.  The payment obligations of
the Obligors under the Note Documents and Bank Documents are all senior secured
obligations of the Obligors, ranking equally in priority of payment except
certain payments in respect of or arising out of Liens as provided herein.


 


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2.2                                 Priority of Security Interest in
Bank Priority Collateral. 
The Bank Senior Lien shall at all times be and remain superior and prior
in right of payment and enforcement to the Note Junior Lien and the Note Junior
Lien shall at all times be junior and subordinate to the Bank Senior Lien with
respect to the Bank Priority Collateral, in each case up to, but not in excess
of, the Bank Maximum Amount.


 


2.3                                 Priority of Security Interest in
Note Priority Collateral 
The Note Senior Lien shall at all times be and remain superior and prior
in right of payment and enforcement to the Bank Junior Lien and the Bank Junior
Lien shall at all times be junior and subordinate to the Note Senior Lien with
respect to the Note Priority Collateral, in each case up to, but not in excess
of, the Note Maximum Amount.


 


2.4                                 Third Party Security Interest.  To the extent that the Bank Junior Lien or
the Note Junior Lien has priority over any Liens in favor of any third party
with respect to the applicable collateral (including, but not limited to, any
trustee or similar party under the Bankruptcy Code), under law or contract, or
priority over the claims of unsecured creditors, nothing in this Agreement
shall alter that priority.


 


3.                   Enforcement
Actions Against Collateral.


 


3.1                                 Collateral Enforcement Action by the
Trustee in Respect of Note Priority Collateral.  The Trustee may, at any time and from time
to time, take or refrain from taking, any Collateral Enforcement Action with
respect to the Note Priority Collateral, without notice to or provision for the
Lender except as expressly provided herein.


 


3.2                                 Collateral Enforcement Action by the
Trustee in Respect of Bank Priority Collateral.  Until the indefeasible payment in full in
cash of the Bank Obligations and the termination of any commitment by the
Lender to extend credit under the Credit Agreement and/or termination of any
provision by the Lender for a voluntary line of credit under the Credit
Agreement, as applicable (or unless the Lender consents in its sole
discretion), the Trustee shall not take any Collateral Enforcement Action with
respect to the Bank Priority Collateral.


 


3.3                                 Collateral Enforcement Action by
Lender in Respect of Bank Priority Collateral.  The Lender may, at any time and from time to
time, take or refrain from taking, any Collateral Enforcement Action with
respect to the Bank Priority Collateral, without notice to or provision for the
Trustee or the Noteholders except as expressly provided herein.


 


3.4                                 Collateral Enforcement Action by
Lender in Respect of Note Priority Collateral.  Until the indefeasible payment in full in
cash of the Note Obligations or a defeasance of the obligations under the
Indenture (or unless the Trustee otherwise consents in its sole discretion),
the Lender shall not take any Collateral Enforcement Action with respect to the
Note Priority Collateral.


 


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4.                   Distributions
From Dispositions of Collateral; Bankruptcy or Liquidation.


 


4.1                                 Proceeds of Note Priority Collateral
in General.  Until the
indefeasible payment in full in cash of the Note Obligations or a defeasance of
the obligations under the Indenture (or unless the Trustee consents in its sole
discretion), except for a sale or other disposition in connection with an
Insolvency Proceeding or Liquidation of an Obligor (which sale or other
disposition shall be governed by Section 4.2), in the event of a sale or
other disposition by the Trustee (whether in connection with a Collateral
Enforcement Action or otherwise) of any or all of the Note Priority Collateral,
except as otherwise provided in the Note Documents, proceeds of such sale or
other disposition, to the extent necessary to satisfy the Note Obligations,
shall be paid over to the Trustee in respect of the Note Obligations to be
applied by the Trustee against such Note Obligations in any order that the
Trustee determines.


 


4.2                                 Distributions in Respect of Note
Priority Collateral in Insolvency Proceeding or Liquidation.  Notwithstanding any other provisions of this
Agreement, until the indefeasible payment in full in cash of the Note
Obligations or a defeasance of the obligations under the Indenture, in the
event of any distribution, division or application, partial or complete,
voluntary or involuntary, by operation of law or otherwise, of all or any part
of the assets of an Obligor or the proceeds thereof, to creditors of such
Obligor by reason of a Liquidation or Insolvency Proceeding, then and in any
such event any payment or distribution or benefit of any kind whatsoever or character,
whether in cash, securities or other property in respect of or arising out of
the Note Priority Collateral shall be payable and paid or delivered directly to
the Trustee, to the extent necessary to satisfy the Note Obligations, for
application to the Note Obligations, whether then due or not due, to be applied
by the Trustee against such Note Obligations in any order that the Trustee
determines.


 


4.3                                 Proceeds of Bank Priority Collateral
in General.  Until the
indefeasible payment in full in cash of the Bank Obligations and the
termination of any commitment by the Lender to extend credit under the Credit
Agreement and/or termination of any provision by the Lender for a voluntary
line of credit under the Credit Agreement, as applicable (or unless the Lender
consents in its sole discretion), except for a sale or other disposition in
connection with an Insolvency Proceeding or Liquidation of an Obligor (which
sale or other disposition shall be governed by Section 4.4), in the event
of a sale or other disposition by the Lender (whether in connection with a
Collateral Enforcement Action or otherwise) of any or all of the Bank Priority
Collateral of such Obligor, except as otherwise provided in the Bank Documents,
all proceeds of such sale or other disposition shall be paid over to the Lender
in respect of the Bank Obligations, to the extent necessary to satisfy the Bank
Obligations, to be applied by the Lender against such Bank Obligations in any
order that the Lender determines.


 


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4.4                                 Distributions in Respect of Bank
Priority Collateral in Insolvency Proceeding or Liquidation.  Notwithstanding any other provisions of this
Agreement, until the indefeasible payment in full in cash of the Bank
Obligations and the termination of any commitment by the Lender to extend
credit under the Credit Agreement and/or termination of any provision by the
Lender for a voluntary line of credit under the Credit Agreement, as applicable
(or unless the Lender consents in its sole discretion), in the event of any
distribution, division or application, partial or complete, voluntary or
involuntary, by operation of law or otherwise, of all or any part of the assets
of an Obligor or the proceeds thereof, to creditors of such Obligor by reason
of a Liquidation or Insolvency Proceeding, then and in any such event any
payment or distribution or benefit of any kind whatsoever or character, whether
in cash, securities or other property in respect of or arising out of the Bank
Priority Collateral shall be payable and paid or delivered directly to the
Lender for application to the Bank Obligations, to the extent necessary to
satisfy the Bank Obligations, whether then due or not due, to be applied by the
Lender against such Bank Obligations in any order that the Lender determines.


 


4.5                                 Excess Proceeds.  Any proceeds from sales or distributions
of, or any other realization on, Note Priority Collateral in excess of the Note
Obligations (subject to Section 11.6) shall be delivered to the Lender to
be applied to the Bank Obligations, or to the Company if the Bank Obligations
have been paid in full in accordance with this Agreement.  Any proceeds from sales or distributions of,
or any other realization on, Bank Priority Collateral in excess of the Bank
Obligations (subject to Section 11.6) shall be delivered to the Trustee to
be applied to the Note Obligations, or to the Company if the Note Obligations
have been paid in full in accordance with this Agreement.


 


5.                   Release
of Junior Liens in Connection with Sales or other Dispositions of Collateral.


 


5.1                                 Release of Note Priority Collateral
in Connection with Collateral Enforcement Action.  At the request of the Trustee, the Lender
shall release its Lien on the Note Priority Collateral in connection with any
transfer, sale or other disposition pursuant to a Collateral Enforcement Action
(including, without limitation, in an action for strict foreclosure) related to
such Note Priority Collateral so that such collateral may be transferred, sold
or otherwise disposed of free of the Bank Junior Lien.


 


5.2                                 Release of Note Priority Collateral
in Connection with Sale Under Indenture.  If any Note Priority Collateral is
transferred, sold or otherwise disposed of by the applicable Obligor in
accordance with the terms of the Indenture and if, in connection therewith, the
Trustee releases the Note Senior Lien on such collateral, at the request of the
Trustee, the Lender shall release the Bank Junior Lien on such collateral, provided,
however, that nothing herein shall serve to waive any default under the Bank
Documents if such transfer, sale or other disposition is not permitted by the
terms thereof.


 


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5.3                                 Release of Bank Priority Collateral
in Connection with Collateral Enforcement Action. At the request
of the Lender, the Trustee shall release its Lien on Bank Priority Collateral
in connection with any transfer, sale or other disposition pursuant to a
Collateral Enforcement Action (including, without limitation, in an action for
strict foreclosure) related to such Bank Priority Collateral so that such
collateral may be transferred, sold or otherwise disposed of free of the Note
Junior Lien.


 


5.4                                 Release of Bank Priority Collateral
in Connection with Sale Under Credit Agreement. 
If any Bank Priority Collateral is transferred, sold or
otherwise disposed of by the applicable Obligor in accordance with the terms of
the Credit Agreement and if, in connection therewith, the Lender releases the
Bank Senior Lien on such collateral, at the request of the Lender, the Trustee
shall release the Note Junior Lien on such collateral, provided,
however, that nothing herein shall serve to waive any default under the Note
Documents if such transfer, sale or other disposition is not permitted by the
terms thereof.


 


6.                   Certain
Notices.


 


6.1                                 The
Lender shall give the Trustee such notices of sales or other dispositions of
the Bank Priority Collateral as is expressly provided in this Agreement.


 


6.2                                 The
Trustee shall give the Lender such notices of sales or other dispositions of
the Note Priority Collateral as is expressly provided in this Agreement.


 


6.3                                 The
Company shall immediately give the Trustee a copy of any notice of acceleration
it receives from the Lender.  The
Company shall immediately give the Lender a copy of any notice of acceleration
it receives from the Trustee.


 


7.                   Further
Assurances; Cooperation of Parties.


 


7.1                                 Trustee Authorized to Act.  The Lender hereby authorizes and empowers
the Trustee, in its discretion, to demand, sue for, collect and receive every
payment or distribution in respect of and give acquittance for the Note
Priority Collateral as the Trustee may deem necessary or advisable for the
enforcement of this Agreement and to collect all payments, distributions or disbursements
made thereon in whatever form the same may be paid or issued, and, in its
discretion, to apply the same on account of any of the Note Obligations,
without regard to the validity of the Bank Junior Lien.  In furtherance of the foregoing, the Lender
agrees duly and promptly to take such action as may be reasonably requested by
the Trustee to assist in the collection of the Note Priority Collateral for the
account of the Trustee and to execute and deliver to the Trustee on demand such
powers of attorney, proofs of claim, assignments of claim or other instruments
as may be reasonably requested by the Trustee to enable the Trustee to enforce
any and all rights upon or with respect to the Note Priority Collateral, and to
collect and receive any and all payments or distributions which may be payable
or 


 


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deliverable at any time upon or with respect to the Note Priority
Collateral as if the Bank Junior Liens had originally been granted in favor of
the Trustee.


 


7.2                                 Payments For the Benefit of Trustee.  If any payment in respect of Note Senior
Collateral is received by the Lender in violation of the terms of this
Agreement prior to the indefeasible payment in full in cash of the Note
Obligations or a defeasance of the obligations under the Indenture (unless
consented to by the Trustee in its sole discretion) the payment or distribution
to the Lender shall be received in trust for the benefit of the Trustee and the
Lender will forthwith deliver the same to the Trustee in precisely the form
received (except for the endorsement of or assignment by the Lender where
necessary), for application to the Note Obligations, whether then due or not
due in such order and manner as the Trustee may elect.


 


7.3                                 Appointment of Lender as
Representative.  If at
any time perfection of the Lien on any Bank Priority Collateral or Note
Priority Collateral is effected by possession or control and the Lender (but
not the Trustee) has such possession or control of such Bank Priority Collateral
or Note Priority Collateral, the Trustee hereby appoints the Lender as its
non-exclusive representative for purposes of perfection by possession or
control and the Lender hereby accepts such appointment, provided that, the
Lender shall not incur liability to the Trustee by virtue of acting as its
representative hereby.  The Lender
agrees that, upon the indefeasible payment in full in cash of the Bank
Obligations and the termination of any commitment by the Lender to extend
credit under the Credit Agreement [and/or termination of any provision by the
Lender for a voluntary line of credit under the Credit Agreement, as
applicable], and provided that any Note Obligations are still outstanding, it
shall promptly transfer possession or control of such collateral to the
Trustee.


 


7.4                                 General Further Assurances by Lender.  The Lender agrees to take such further
action as is reasonably requested by the Trustee to effect the purposes hereof.


 


7.5                                 Limitations on Required Lender
Actions. Notwithstanding anything herein to the contrary, the
Lender shall not be obligated to take action (a) that could, in the reasonable
determination of the Lender, expose the Lender to any liability that would not
be fully reimbursed by the Company as a result of the indemnification provided
herein or otherwise (which determination may take account of the financial
condition of the Company) or other indemnification reasonably satisfactory to
the Lender or (b) that could, in the reasonable determination of the Lender,
cause the Lender to incur costs or expenses that would not be fully reimbursed
by the Company as a result of the expense reimbursement provision provided
herein or otherwise (which determination may take account of the financial
condition of the Company) or other cost reimbursement provision reasonably
satisfactory to the Lender.


 


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7.6                                 Lender Authorized to Act.  The Trustee hereby authorizes and empowers the Lender, in its
discretion, to demand, sue for, collect and receive every payment or
distribution in respect of and give acquittance for the Bank Priority
Collateral as the Lender may deem necessary or advisable for the enforcement of
this Agreement and to collect all payments, distributions or disbursements made
thereon in whatever form the same may be paid or issued, and, in its
discretion, to apply the same on account of any of the Bank Obligations,
without regard to the validity of the Note Junior Lien.  In furtherance of the foregoing, the Trustee
agrees duly and promptly to take such action as may be reasonably requested by
the Lender to assist in the collection of the Bank Priority Collateral for the
account of the Lender and to execute and deliver to the Lender on demand such
powers of attorney, proofs of claim, assignments of claim or other instruments
as may be reasonably requested by the Lender to enable the Lender to enforce
any and all rights upon or with respect to the Bank Priority Collateral, and to
collect and receive any and all payments or distributions which may be payable
or deliverable at any time upon or with respect to the Bank Priority Collateral
as if the Note Junior Liens had originally been granted in favor of the Lender.


 


7.7                                 Payments For the Benefit of Lender.  If any payment in respect of Bank Senior
Collateral is received by the Trustee in violation of the terms of this
Agreement prior to the indefeasible payment in full in cash of the Bank
Obligations and the termination of any commitment by the Lender to extend
credit under the Credit Agreement and/or termination of any provision by the
Lender for a voluntary line of credit under the Credit Agreement, as applicable
(or unless the Lender consents in its sole discretion), the payment or
distribution to the Trustee shall be received in trust for the benefit of the
Lender and the Trustee will forthwith deliver the same to the Lender in
precisely the form received (except for the endorsement of or assignment by the
Trustee where necessary), for application to the Bank Obligations, whether then
due or not due in such order and manner as the Lender may elect.


 


7.8                                 Appointment of Trustee as
Representative.  If at
any time perfection of the Lien on any Bank Priority Collateral or Note
Priority Collateral is effected by possession or control and the Trustee (but
not the Lender) has such possession or control of such Bank Priority Collateral
or Note Priority Collateral, the Lender hereby appoints the Trustee as its
non-exclusive representative for purposes of perfection by possession or
control and the Trustee hereby accepts such appointment, provided that, the
Trustee shall not incur liability to the Lender by virtue of acting as its
representative hereby.  The Trustee
agrees that, upon the indefeasible payment in full in cash of the Note
Obligations and provided that any Bank Obligations are still outstanding, it
shall promptly transfer possession or control of such collateral to the Lender.


 


7.9                                 General Further Assurances by the
Trustee.  The Trustee
agrees to take such further action as is reasonably requested by the Lender to
effect the purposes hereof.


 


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7.10                           Limitations on Required Trustee
Actions. Notwithstanding anything herein to the contrary, the
Trustee shall not be obligated to take action (a) that could, in the reasonable
determination of the Trustee, expose the Trustee to any liability that would
not be fully reimbursed by the Company as a result of the indemnification
provided herein or otherwise (which determination may take account of the financial
condition of the Company) or other indemnification reasonably satisfactory to
the Trustee or (b) that could, in the reasonable determination of the Trustee,
cause the Trustee to incur costs or expenses that would not be fully reimbursed
by the Company as a result of the expense reimbursement provision provided
herein or otherwise (which determination may take account of the financial
condition of the Company) or other cost reimbursement provision reasonably
satisfactory to the Trustee.


 


7.11                           General Further Assurances by
Company.  The Company
agrees to take such further action as is reasonably requested by the Lender or
the Trustee to effect the purposes hereof. 
Without limiting the generality of the foregoing, the Company shall
provide the Lender and the Trustee with access to its properties as
contemplated in Section 8 below.


 


8.                   Limited
Right of Access.


 


8.1                                 Without
limiting any rights the Lender may otherwise have under applicable law or by
agreement, and so long as the Trustee has not commenced, or is not continuing,
a Collateral Enforcement Action with respect to any particular Note Priority
Collateral, the Lender may, during normal business hours, access Bank Priority
Collateral that (A) is stored or located in or on, (B) has become an accession
with respect to (within the meaning of Section 9-335 of the Uniform
Commercial Code), or (C) has been commingled with (within the meaning of
Section 9-336 of the Uniform Commercial Code), such  Note Priority Collateral (collectively, the
“Bank
Commingled Collateral”),  for
the limited purposes of assembling, inspecting, copying or downloading
information stored on, taking actions to perfect its Lien on, completing a
production run of inventory involving, taking possession of, moving, selling
storing or taking Collateral Enforcement Actions with respect to, the Bank
Commingled Collateral (collectively, “Lender Permitted Access Purposes”).


 


8.2                                 Without
limiting any rights the Trustee may otherwise have under applicable law or by
agreement, and so long as the Lender has not commenced, or is not continuing, a
Collateral Enforcement Action with respect to any particular Bank Priority
Collateral, the Trustee may, during normal business hours, access Note Priority
Collateral that (A) is stored or located in or on, (B) has become an accession
with respect to (within the meaning of Section 9-335 of the Uniform
Commercial Code), or (C) has been commingled with (within the meaning of
Section 9-336 of the Uniform Commercial Code), such  Bank Priority Collateral (collectively, the
“Note
Commingled Collateral”), for the limited purposes of assembling,
inspecting, copying or downloading information stored on, taking 


 


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actions to perfect its Lien on, operating, taking possession of,
moving, selling storing or taking Collateral Enforcement Actions with respect
to, the Note Commingled Collateral (collectively, “Trustee Permitted Access Purposes”).


 


8.3                                 Without
limiting any rights the Lender may otherwise have under applicable law or by
agreement and at any time that the Trustee has commenced, and is continuing, a
Collateral Enforcement Action with respect to any particular Note Priority
Collateral, the Lender may, during normal business hours, access the related
Bank Commingled Collateral for Lender Permitted Access Purposes until the
consummation of any sale of such Note Priority Collateral; provided that, the Lender
shall use commercially reasonable efforts to not interfere with the Trustee’s
Collateral Enforcement Action; and provided further that the Trustee shall give
the Lender at least 30 days’ prior written notice (or such shorter period as
shall be agreed to by the Lender), of the consummation of the  sale of such Note Priority Collateral or (b)
arrange for the Lender to access the related Note Priority Collateral
notwithstanding such sale.  The Lender’s
access rights under this Section 8.3 and Section 8.1 are collectively
referred to as the “Lender’s Access Right”.  The Trustee shall give Lender written notice
within three (3) days after it commences any Collateral Enforcement Action
referenced in subsections (a) or (d) of the definition of such term.


 


8.4                                 Without
limiting any rights the Trustee may otherwise have under applicable law or by
agreement and at any time that the Lender has commenced, and is continuing, a
Collateral Enforcement Action with respect to any particular Bank Priority
Collateral, the Trustee may, during normal business hours, access the related
Note Commingled Collateral for Trustee Permitted Access Purposes until the
consummation of any sale of such Bank Priority Collateral; provided that, the Trustee
shall use commercially reasonable efforts to not interfere with the Lender’s
Collateral Enforcement Action; and provided further that the Lender shall (a)
give the Trustee at least 30 days’ prior written notice (or such shorter period
as shall be agreed to by the Lender), of the consummation of the  sale of such Bank Priority Collateral or (b)
arrange for the Trustee to access the related Note Priority Collateral
notwithstanding such sale.  The
Trustee’s access rights under this Section 8.4 and Section 8.2 are
collectively referred to as the “Trustee’s Access Right”.  The Lender shall give the Trustee written
notice within three (3) days after it commences any Collateral Enforcement
Action referenced in subsections (a) or (d) of the definition of such term
against tangible Bank Priority Collateral.


 


8.5                                 If
the Lender damages, destroys or sells any Note Priority Collateral in the
exercise of the Lender’s Access Right or any Collateral Enforcement Action, the
Lender shall, at its expense (but subject to the Company’s indemnification and
reimbursement obligations and application of any available insurance proceeds)
repair or replace such damaged or destroyed Note Priority Collateral or
reimburse the Trustee for its loss.


 


12

















 


8.6                                 The
Lender confirms that, in the event of the sale or other transfer of or exercise
of any Collateral Enforcement Action respecting the Bank Priority Collateral,
none of the Note Priority Collateral shall be sold or otherwise transferred
with the Bank Priority Collateral (without the Trustee’s consent) or shall be
damaged or destroyed in connection therewith.


 


8.7                                 The
Trustee shall use commercially reasonable efforts to not hinder or obstruct the
Lender from exercising the Lender’s Access Right.  The Lender shall use commercially reasonable efforts to not
hinder or obstruct the Trustee from exercising the Trustee’s Access Right.


 


8.8                                 The
Trustee confirms that, in the event of the sale or other transfer of or
exercise of any Collateral Enforcement Action respecting the Note Priority
Collateral, none of the Bank Priority Collateral shall be sold or otherwise
transferred with the Note Priority Collateral (without the Lender’s consent) or
shall be damaged or destroyed in connection therewith.


 


8.9                                 If
the Trustee damages, destroys or sells any Bank Priority Collateral in the
exercise of the Trustee’s Access Right or any Collateral Enforcement Action,
the Trustee shall, at its expense (but subject to the Company’s indemnification
and reimbursement obligations and application of any available insurance
proceeds) repair or replace such damaged or destroyed Bank Priority Collateral
or reimburse the Lender for its loss.


 


9.                   Certain
Waivers.


 


9.1                                 Validity of Note Senior Lien.
The Lender waives any right to contest the validity, perfection, enforceability
or priority of the Note Senior Lien, whether in connection with an Insolvency
Proceeding or otherwise.


 


9.2                                 Certain Waivers of Lender Relative
to Note Priority Collateral, Marshalling, Etc. 
The Lender waives (a) any right it may have to object to
any sale or other disposition of or realization on Note Priority Collateral by
or on behalf of the Trustee, including, without limitation, on the grounds of
failure to provide adequate notice, so long as the Lender shall have received
at least five business days’ notice of such sale or other disposition (which
notice is deemed to be reasonable by the Lender) (b) any right to claim or take
advantage of any appraisal, valuation, stay, extension, moratorium, turnover,
redemption or similar law that may prevent, delay, hinder or otherwise
adversely affect a Collateral Enforcement Action relative to any Note Priority
Collateral, (c) any right it may have to require the Trustee to marshal any
assets of the Obligors in favor of the Lender, (d) any rights of subrogation
relative to the Note Priority Collateral, and (e) presentment, demand, protest
and notice of any kind (except as expressly required herein), in each case to
the fullest extent permitted by applicable law.  Without limiting the generality of the foregoing, except to the
extent specifically provided for in this Agreement, the Lender hereby agrees
that any lawful action 


 


13

















 


taken by or on behalf of the Trustee in the exercise of any Collateral
Enforcement Action in respect of the Note Priority Collateral shall be deemed
to be consented to and approved by the Lender in all respects, including,
without limitation, at the option of the Trustee, the sale or other disposition
or realization on or of any or all of the Note Priority Collateral, free of the
Bank Junior Lien.


 


9.3                                 Validity of Bank Senior Lien.  The Trustee waives any right to contest the
validity, perfection, enforceability or priority of the Bank Senior Lien,
whether in connection with an Insolvency Proceeding or otherwise.


 


9.4                                 Certain Waivers of Trustee Relative
to Bank Priority Collateral, Marshalling, Etc. 
The Trustee waives (a) any right it may have to object to
any sale or other disposition of or realization on Bank Priority Collateral by
or on behalf of the Bank, including, without limitation, on the grounds of
failure to provide adequate notice, so long as the Trustee shall have received
at least five business days’ notice of such sale or other disposition (which
notice is deemed to be reasonable by the Trustee), or on the grounds that
equity collateral could yield greater proceeds if it were registered under
applicable securities laws, (b) any right to claim or take advantage of any
appraisal, valuation, stay, extension, moratorium, turnover, redemption or
similar law that may prevent, delay, hinder or otherwise adversely affect a
Collateral Enforcement Action relative to any Bank Priority Collateral, (c) any
right it may have to require the Bank to marshal any assets of the Obligors in
favor of the Trustee, (d) any rights of subrogation relative to the Bank
Priority Collateral, and (e) presentment, demand, protest and notice of any
kind (except as expressly required herein), in each case to the fullest extent
permitted by applicable law.  Without
limiting the generality of the foregoing, except to the extent specifically
provided for in this Agreement, the Trustee hereby agrees that any lawful
action taken by or on behalf of the Lender in the exercise of any Collateral
Enforcement Action in respect of the Bank Priority Collateral shall be deemed
to be consented to and approved by the Trustee in all respects, including,
without limitation, at the option of the Lender, the sale or other disposition
or realization on or of any or all of the Bank Priority Collateral, free of the
Note Junior Lien.


 


9.5                                 Waiver of Certain Objections In
Connection with Bankruptcy Financing.  If any of the Obligors shall become subject to an Insolvency
Proceeding and if the Lender desires to permit the use of any Bank Priority
Collateral consisting of cash collateral and/or to provide or permit financing
to such Obligor under either Section 363 or Section 364 of the
Bankruptcy Code (or any subsequent provision relating to such matters) secured
by any Bank Priority Collateral, the Trustee agrees not to object to any such
financing secured by Bank Priority Collateral or such use of Bank Priority
Collateral consisting of cash collateral on the grounds of a failure to provide
“adequate protection” for the Trustee; it being understood that, in the case of
any such post-petition financing provided by the Lender, the Trustee shall have
a post-petition Lien on the affected Bank Priority Collateral subordinated to
the Lender’s replacement Lien on such collateral to the same 


 


14

















 


extent as the Note Junior Lien is subordinated to the Bank Senior Lien
pursuant to this Agreement.


 


10.            Continuing
Lien Priorities.


 


10.1                           The
lien priorities provided in this Agreement and obligations and rights of the
parties hereunder shall not be altered or otherwise affected by:


 


(a)                                  the
order, time, manner of attachment, perfection or recording of the Liens in
favor of the Lender or the Trustee;


 


(b)                                 any
refinancing of or amendments to the terms of or any assignments under the Bank
Documents or the Note Documents, subject only to the provisions of
Section 11;


 


(c)                                  any
action or inaction by the Lender with respect to the Bank Priority Collateral
or its other rights and obligations under the Bank Documents or any action or
inaction by the Trustee with respect to the Note Priority Collateral or its
other rights and obligations under the Note Documents;


 


(d)                                 the
institution or pendency of any Insolvency Proceeding or Liquidation of any
Obligor;


 


(e)                                  the
availability of any other right of the Trustee or the Lender; or


 


(f)                                    Any
other event or condition that could otherwise affect the enforceability of the
terms of this Agreement.


 


11.            Modifications
of Debt Documents, Assignments and Refinancings.


 


11.1                           Modifications, Assignments and
Refinancings of Bank Obligations in General.  From time to time, the Bank Documents may be
amended, restated, modified and/or supplemented, the Bank Obligations may be
refinanced pursuant to new Bank Documents and the Lender may assign any or all
of its rights and obligations under the Bank Documents, in each case, secured
by the Bank Senior Lien and Bank Junior Lien, subject only to the provisions of
the following Sections 11.2 and 11.3 below.


 


11.2                           Limitations on Amount of Bank
Obligations. 
Notwithstanding anything else provided herein, until the indefeasible
payment in full in cash of the Note Obligations or a defeasance of the
obligations under the Indenture (or unless the Trustee otherwise consents in
its sole discretion), if the Lender amends, restates, modifies, supplements,
and or refinances the Bank Obligations in any manner that results in the
Company being permitted to incur indebtedness under the Bank Documents in an
aggregate principal amount (the “Bank Actual Principal Amount”) in excess of
the greater of (a) $20,000,000 and (b) the sum of 85% of 


 


15

















 


the amount of the net book value of the accounts receivable of the
Company and its subsidiaries, on a consolidated basis, and 50% of the net book
value of inventory of the Company and its subsidiaries, on a consolidated
basis, in each case determined in accordance with generally accepted accounting
principles (the greater being referred to as the “Bank Permitted Principal Amount”),
then the excess of the Bank Actual Principal amount over the Bank Permitted
Principal Amount (and all interest on (including interest rate protection
obligations) and fees in respect of such excess amount) shall not be entitled
to the Bank Senior Lien.


 


11.3                           Bank Obligations to Remain Subject
to this Agreement.  Any
amendment, restatement, modification, supplement, and /or refinancing of the
Bank Obligations shall be expressly subject to the terms of this Agreement.


 


11.4                           No Waiver of Default Under Note
Documents.  Nothing
herein shall serve to waive any default under the Note Documents if such
amendment, restatement, modification, supplement, and /or refinancing of the
Bank Obligations is not permitted by the terms thereof.


 


11.5                           Modifications, Assignments and
Refinancings of Note Obligations in General.  From time to time, the Note Documents may be
amended, restated, modified and/or supplemented, the Note Obligations may be
refinanced pursuant to new Note Documents and the Trustee (and Noteholders) may
assign any or all of its (their) rights and obligations under the Note
Documents, in each case, secured by the Note Senior Lien and Note Junior Lien,
subject only to the provisions of the following Sections 11.6 and 11.7 below.


 


11.6                           Limitations on Amount of Note
Obligations. 
Notwithstanding anything else provided herein, until the indefeasible
payment in full in cash of the Bank Obligations and the termination of any
commitment by the Lender to extend credit under the Credit Agreement (or unless
the Lender consents in its sole discretion), if the Trustee amends, restates,
modifies, supplements, and/or refinances the Note Obligations in any manner
that results in the Company being permitted to incur indebtedness under the
Note Documents in an aggregate principal amount (the “Note Actual Principal Amount”)
in excess of $105,000,000 (the “Note Permitted Principal Amount”), then the
excess of the Note Actual Principal Amount over the Note Permitted Principal
Amount (and all interest on (including interest rate protection obligations)
and fees in respect of such excess amount) shall not be entitled to the Note
Senior Lien.


 


11.7                           Note Obligations to Remain Subject
to this Agreement.  Any
amendment, restatement, modification, supplement, and /or refinancing of the
Note Obligations shall be expressly subject to the terms of this Agreement.


 


11.8                           No Waiver of Default Under Bank
Documents.  Nothing
herein shall serve to waive any default under the Bank Documents if such
amendment, restatement, 


 


16

















 


modification, supplement, and /or refinancing of the Note Obligations
is not permitted by the terms thereof.


 


11.9                           Insolvency Proceeding Limitation.  The provisions of this Section 11 shall
not apply to any financing provided in connection with an Insolvency Proceeding
in accordance with Section 9.5.


 


12.            Joinder
of Additional Guarantors.


 


12.1                           Additional Guarantors.  Pursuant to the Bank Documents and the Note
Documents, subsidiaries of the Company which are acquired or organized after
the date of this Agreement may be required to become guarantors of the Bank
Obligations and/or the Note Obligations and provide security in connection
therewith.  At any time that such a
subsidiary becomes a guarantor of the Bank Obligations and the Note
Obligations, it shall join in this Agreement, with the same effect and to the
same extent as if such subsidiary had been named herein as a Guarantor.  The Company covenants and agrees that it
will cause any such subsidiary which becomes obligated to guarantee the
obligations of the Company under the Bank Documents and the Note Documents to
execute a joinder agreement satisfactory in form and substance to the Lender
and the Trustee.  The execution and
delivery of such joinder shall not require the consent of any other party
hereunder, and will be acknowledged by the Lender and the Trustee.  The rights and obligations of each Guarantor
hereunder shall remain in full force and effect notwithstanding the addition of
any new Guarantor as a party to this Agreement.


 


13.            Miscellaneous.


 


13.1                           Rights and Obligations.


 


13.1.1                  It is acknowledged that any interest
rate protection agreements that are issued in accordance with the Credit
Agreement from time to time may be issued by an affiliate of the Lender, and in
such event, that affiliate shall be bound by the obligations and entitled to
the benefits of the Lender hereunder with respect to such interest rate
protection agreements.


 


13.1.2                  All of the rights and obligations of
the Trustee hereunder are for the benefit of and binding on the Noteholders.


 


13.1.3                  The terms of this Agreement are
intended to set forth the relative rights and obligations of the Trustee and
the Lender as between each other and nothing in this Agreement shall confer any
rights on any Obligors.  Without
limiting the generality of the foregoing, the Obligors shall not be entitled to
require any release or subordination of Liens in connection with this
Agreement.


 


17

















 


13.2                           Lender and Trustee May Act
through Agents.  The
Lender and the Trustee may execute any of their respective rights or
obligations under this Agreement (including but not limited to, Collateral
Enforcement Actions) directly or indirectly by delegating such right to any
agent or agents chosen by the Lender or the Trustee, as applicable (each such
person, an “Agent”) and neither the Lender, nor the Trustee, shall be
responsible for any misconduct on the part of any such Agent, appointed with
due care by it hereunder.  Any Agent
shall be entitled to reimbursed for costs and expenses in accordance with
Section 13.3 hereof, be entitled to indemnification pursuant to
Section 13.4 hereof and be entitled to the limitations on liability
provided in Section 13.5 hereof.


 


13.3                           Costs and Expenses.  Without limiting the generality of any other
cost reimbursement provisions that may be provided for in the Bank Documents or
the Note Documents, the Company and each of the Guarantors, jointly and
severally, agree to pay to the Lender, the Trustee and their respective Agents,
from time to time upon demand all of fees, costs and expenses of the Lender,
the Trustee and their respective Agents (including, without limitation, the
fees and disbursements of counsel and other professionals and consultants as
such party elects to retain) arising in connection with the preparation,
execution, delivery, modification and termination of this Agreement, any
actions of the Lender or the Trustee contemplated by this Agreement or the
enforcement of any provisions hereof, the Note Documents and the Bank
Documents.  The obligations under this
Section 132.3 shall survive the termination of this Agreement.


 


13.4                           Indemnification.  Without limiting any indemnification
obligations of the Obligors that may be contained in any of the Bank Documents
or the Note Documents, the Company and each of the Guarantors, jointly and
severally, agree to pay, indemnify, and hold each of the Lender, the Trustee
and their respective Agents harmless from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever (collectively, “Liabilities”)
with respect to the execution, delivery, and performance of their obligations
under this Agreement, any actions contemplated by this Agreement, any failure
to act in accordance with the terms of this Agreement or any other Liabilities
arising out of this Agreement, or the enforcement of any provisions hereof, the
Note Documents and the Bank Documents. 
The obligations under this Section 132.4 shall survive the termination
of this Agreement.


 


13.5                           Limitation of Liabilities.  Except
as provided in Sections 8.5 and 8.9, each of the Lender, the Trustee and their
respective Agents shall not be liable for any action taken or omitted by it, or
any action suffered by it to be taken or omitted, in good faith, unless arising
as a result of the gross negligence or willful misconduct of such party.  The provisions of this
Section 13.5 shall survive the termination of this Agreement.


 


18

















 


13.6                           Notices.  Unless otherwise expressly provided under
this Agreement all notices, requests, demands, directions and other
communications (collectively “Notices”) given to or made upon any
party under the provisions of this Agreement shall be in writing (including
facsimile communication) and if in writing shall be delivered by hand,
nationally recognized overnight courier or U.S. mail or sent by facsimile, if
to the Trustee to the following address: 101 Barclay Street, Fl. 8 West, New
York, NY 10286 and if to the other parties hereto, to their respective  addresses and numbers set forth in the
Credit Agreement or in accordance with any subsequent unrevoked confirmed
written direction from any party to the others.  All Notices shall, except as otherwise expressly provided in this
Agreement, be effective (a) in the case of facsimile, when received, (b) in the
case of hand-delivered Notice, when hand delivered, (c) if given by U.S. mail,
the day after such communication is deposited in the mails with overnight first
class postage prepaid, return receipt requested, and (d) if given by any other
means (including by air courier), when delivered.


 


13.7                           No Implied Obligations.  The Lender and the Trustee shall not be
liable except for the performance of any such duties or obligations as are
specifically set forth herein, and no implied duties, covenants or obligations
shall be read into this Agreement against the Lender or the Trustee.


 


13.8                           Waivers.  The terms of this Agreement may be waived,
altered or amended only by an instrument in writing duly executed by the
Lender, the Trustee and the Company.


 


13.9                           Successors and Assigns.  This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the parties hereto and their
respective successors and assigns, provided, however, that Company and
the Guarantors shall not assign or transfer its rights or obligations hereunder
without the specific written approval of the Lender and the Trustee.


 


13.10                     Counterparts.  This Agreement may be executed in one or more counterparts, each
of which shall constitute an original, but all of which taken together shall
constitute one and the same instrument. 
Delivery of a photocopy or telecopy of an executed counterpart of a
signature page to this Agreement shall be as effective as delivery of a manually
executed counterpart of this Agreement.


 


13.11                     Governing Law.  THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE
PERFORMED IN THE STATE OF NEW YORK, INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE
NEW YORK GENERAL OBLIGATIONS LAW AND NEW YORK CIVIL PRACTICE LAWS AND RULES
327(b).


 


13.12                     Waiver of Jury Trial.  FOR THE PURPOSES OF THIS AGREEMENT, EACH PARTY HERETO HEREBY KNOWINGLY,
VOLUNTARILY AND 


 


19

















 


INTENTIONALLY WAIVES, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, ANY AND ALL RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
VERBAL OR WRITTEN), OR ACTIONS OR OMISSIONS OF ANY PARTY HERETO, OR ANY OTHER
PERSON, RELATING TO THIS AGREEMENT.


 


13.13                     Waiver of Certain Damages.  Each of
the parties hereto waives the right to, and agrees not to assert any claim to,
on any theory of liability, consequential, special, indirect, exemplary,
punitive or any other damages other than actual direct damages, arising out of
or otherwise relating to the transactions contemplated hereby.


 


13.14                     No Third-Party
Beneficiaries.  All undertakings, agreements,
representations and warranties contained in this Agreement are solely for the
benefit of the Lender, the Trustee, the Noteholders, and their respective
Agents, successors and permitted assigns. 
There are no other parties who are intended to be benefited in any way
by this Agreement and, without limiting the provisions of Section 13.13
nothing herein shall give the Company or the Guarantors or any third party any
benefit or any legal or equitable right or remedy under this Agreement.  Without limiting the generally of the
foregoing, the existence of this Agreement shall not (a) commit or obligate the
Lender or the Trustee to make loans or extend credit to any of the Company or
the Guarantors or (b) limit or effect any of rights or available remedies of
the Lender or the Trustee pursuant to any other agreement with the Company or
the Guarantors.


 


13.15                     Severability.  Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof in such jurisdiction, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.


 


13.16                     Headings. 
Section headings used herein are for convenience only and are not
to affect the construction of or be taken into consideration in interpreting
this Agreement.


 


[next page is start of signature pages]


 


20

















 


IN WITNESS WHEREOF, the undersigned have
executed this Agreement as of the day and year first above written.


 


 


	
  THE BANK OF NEW YORK,

  as Trustee

  	
   

  	
  FLEET NATIONAL BANK

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Marie E. Trimboli

  	
   

  	
   

  	
  By:

  	
  /s/  

  	
   

  
	
   

  	
  Name: Marie E. Trimboli

  	
   

  	
   

  	
  Name: 

  
	
   

  	
  Title: Assistant Vice
  President

  	
   

  	
   

  	
  Title: 

  
	
   

  	
   

  	
   

  
	
  SHERIDAN ACQUISITION
  CORP.

  	
   

  	
  THE SHERIDAN GROUP,
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ J. Rice Edmonds

  	
   

  	
   

  	
  By:

  	
  /s/ John A. Saxton

  	
   

  
	
   

  	
  Name: J. Rice Edmonds

  	
   

  	
   

  	
  Name: John A. Saxton

  
	
   

  	
  Title: Vice President

  	
   

  	
   

  	
  Title: Chief Executive
  Officer

  
	
   

  	
   

  	
   

  
	
  THE SHERIDAN GROUP
  HOLDING COMPANY

  	
   

  	
  THE SHERIDAN PRESS,
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ John A. Saxton

  	
   

  	
   

  	
  By:

  	
  /s/ John A. Saxton

  	
   

  
	
   

  	
  Name: John A. Saxton

  	
   

  	
   

  	
  Name: John A. Saxton

  
	
   

  	
  Title:

  	
   

  	
   

  	
  Title: Chief Executive
  Officer

  
	
   

  	
   

  	
   

  
	
  CAPITAL CITY PRESS,
  INC.

  	
   

  	
  SHERIDAN BOOKS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ John A. Saxton

  	
   

  	
   

  	
  By:

  	
  /s/ John A. Saxton

  	
   

  
	
   

  	
  Name: John A. Saxton

  	
   

  	
   

  	
  Name: John A. Saxton

  
	
   

  	
  Title: Chief Executive
  Officer

  	
   

  	
   

  	
  Title: Chief Executive
  Officer

  
	
   

  	
   

  	
   

  
	
  DARTMOUTH PRINTING
  COMPANY

  	
   

  	
  DARTMOUTH JOURNAL
  SERVICES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ John A. Saxton

  	
   

  	
   

  	
  By:

  	
  /s/ John A. Saxton

  	
   

  
	
   

  	
  Name: John A. Saxton

  	
   

  	
   

  	
  Name: John A. Saxton

  
	
   

  	
  Title: Chief Executive
  Officer

  	
   

  	
   

  	
  Title: Chief Executive
  Officer

  
	
   

  	
   

  	
   

  
	
  UNITED LITHO, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ John A. Saxton

  	
   

  	
   

  	
   

  
	
   

  	
  Name: John A. Saxton

  	
   

  	
   

  
	
   

  	
  Title: Chief Executive
  Officer

  	
   

  	
   

  



 


21