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.
  
  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]
  
  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. JakobeName:
                Robert
      M. JakobeTitle:
                Executive
      Vice President and Chief Financial OfficerTHE
      SHERIDAN GROUP HOLDINGS (BRS), LLCBy:
                /s/ Thomas J. BaldwinName:
                Thomas
      J. BaldwinTitle:
                Managing
      DirectorTHE
      SHERIDAN GROUP HOLDINGS (JEFFERIES), LLCBy:
                /s/ James L. LuikartName:
                James
      L. LuikartTitle:
                Managing
      Member of General Partner
  
  EXHIBIT
A








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















TABLE
OF CONTENTS







PageARTICLE
      I
                        
                        RESTRICTIONS
      ON TRANSFER OF SECURITIES
                        
                        21.1.
                        
                        Restrictions
      on Transfers of Securities
                        
                        21.2.
                        
                        Legend
                        
                        51.3.
                        
                        Notation
                        
                        6ARTICLE
      II
                        
                        OTHER
      COVENANTS AND REPRESENTATIONS
                        
                        62.1.
                        
                        Financial
      Statements and Other Information
                        
                        62.2.
                        
                        Sale
      of the Company
                        
                        72.3.
                        
                        Tag-Along
      Rights
                        
                        92.4.
                        
                        Preemptive
      Rights
                        
                        112.5.
                        
                        Corporate
      Opportunity
                        
                        122.6.
                        
                        Restrictive
      Covenants
                        
                        12ARTICLE
      III
                        
                        CORPORATE
      ACTIONS
                        
                        143.1.
                        
                        Third
      Amended and Restated Certificate of Incorporation and Amended and Restated
      Bylaws
                        
                        143.2.
                        
                        Directors
      and Voting Agreements
                        
                        143.3.
                        
                        Right
      to Remove Certain of the Company’s Directors
                        
                        153.4.
                        
                        Right
      to Fill Certain Vacancies in Company’s Board
                        
                        153.5.
                        
                        Directors
      of Subsidiaries
                        
                        153.6.
                        
                        Amendment
      of Certificate and Bylaws
                        
                        153.7.
                        
                        Termination
      of Voting Agreements
                        
                        163.8.
                        
                        Officers
                        
                        163.9.
                        
                        Committees
                        
                        16ARTICLE
      IV
                        
                        ADDITIONAL
      RESTRICTIONS ON TRANSFERS OF MANAGEMENT SECURITIES HELD BY MANAGEMENT
      INVESTORS
                        
                        164.1.
                        
                        Certain
      Definitions
                        
                        164.2.
                        
                        Restrictions
      on Transfer
                        
                        174.3.
                        
                        Purchase
      Option
                        
                        184.4.
                        
                        Involuntary
      Transfers
                        
                        214.5.
                        
                        Purchaser
      Representative
                        
                        22





i





TABLE
OF CONTENTS


(continued)





ARTICLE
      V
                
                MISCELLANEOUS
                
                225.1.
                
                Amendment
      and Modification
                
                225.2.
                
                Successors
      and Assigns
                
                235.3.
                
                Separability
                
                235.4.
                
                Notices
                
                235.5.
                
                Governing
      Law
                
                255.6.
                
                Headings
                
                255.7.
                
                Counterparts
                
                255.8.
                
                Further
      Assurances
                
                255.9.
                
                Termination
                
                255.10.
                
                Remedies
                
                255.11.
                
                Party
      No Longer Owning Securities
                
                255.12.
                
                No
      Effect on Employment
                
                255.13.
                
                Pronouns
                
                255.14.
                
                Future
      Individual Investors
                
                255.15.
                
                Entire
      Agreement
                
                26





ii





SCHEDULES




Schedule
      I
              
              Investors
      and Securities





iii








DEFINED
TERMS








iv




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





v




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





vi

















vii





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.










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.




2





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”);




3





(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.




4





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.




5





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;




6





(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.




7





(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)).




8





(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.




9





(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.




10





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.




11





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;




12





(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].




13





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.




14





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.




15





(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





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





(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





(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





(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





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





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





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





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), LLCBy:Name:Title:










THE
      SHERIDAN GROUP HOLDINGS (JEFFERIES), LLCBy:Name:Title:










MANAGEMENT
      INVESTORS:John
      A. SaxtonAddress:Telephone
      No.:G.
      Paul BozuwaAddress:Telephone
      No.:Robert
      M. JakobeAddress:Telephone
      No.:Joan
      B. DavidsonAddress:Telephone
      No.:John
      M. ElliotAddress:Telephone
      No.:










Chris
      M. AzbillAddress:Telephone
      No.:Douglas
      R. EhmannAddress:Telephone
      No.:J.
      Kenneth GarnerAddress:Telephone
      No.:Michael
      E. KlauerAddress:Telephone
      No.:Patricia
      A. StrickerAddress:Telephone
      No.:










Robert
      M. MooreAddress:Telephone
      No.:Gary
      J. KittredgeAddress:Telephone
      No.:Arthur
      R. MyersAddress:Telephone
      No.:Jennifer
      A. BedellAddress:Telephone
      No.:Michael
      J. SartorelliAddress:Telephone
      No.:










Jeffrey
      S. CohenAddress:Telephone
      No.:J.
      Dennis SmithAddress:Telephone
      No.:Catherine
      R. BuddAddress:Telephone
      No.:George
      A. WhalingAddress:Telephone
      No.:Gary
      T. DiCamilloAddress:Telephone
      No.:










Craig
      H. DeeryAddress:Telephone
      No.:Christopher
      A. PeirceAddress:Telephone
      No.:Eric
      D. LaneAddress:Telephone
      No.:Kenneth
      R. StickleyAddress:Telephone
      No.:William
      P. WaltersAddress:Telephone
      No.:










OTHER
      INVESTORS:J.M.
      Dryden Hall, Jr.Address:Telephone
      No.:David
      C. HewittAddress:Telephone
      No.:Edward
      H. HartmanAddress:Telephone
      No.:Cynthia
      L. BeauchampAddress:Telephone
      No.:Kenneth
      W. RakerAddress:Telephone
      No.:











Schedule
I



















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
 
 
  
  TABLE
OF CONTENTS
  
 Page1.
                                    
                                    Definitions.
                                    
                                    12.
                                    
                                    Registrable
      Securities.
                                    
                                    33.
                                    
                                    Incidental
      Registration.
                                    
                                    34.
                                    
                                    Demand
      Registration.
                                    
                                    55.
                                    
                                    Registration
      Procedures.
                                    
                                    66.
                                    
                                    Indemnification.
                                    
                                    97.
                                    
                                    Hold-Back
      Agreements.
                                    
                                    118.
                                    
                                    Underwritten
      Registration.
                                    
                                    119.
                                    
                                    Miscellaneous.
                                    
                                    12
  - i
-
  
  1.
                                  
                                  Definitions
                                  
                                  12.
                                  
                                  Registrable
      Securities
                                  
                                  33.
                                  
                                  Incidental
      Registration.
                                  
                                  34.
                                  
                                  Demand
      Registration.
                                  
                                  55.
                                  
                                  Registration
      Procedures
                                  
                                  66.
                                  
                                  Indemnification
                                  
                                  97.
                                  
                                  Hold-Back
      Agreements
                                  
                                  118.
                                  
                                  Underwritten
      Registration
                                  
                                  119.
                                  
                                  Miscellaneous
                                  
                                  12
  - ii
-
  DEFINED
TERMS
 
 Additional
      Party
                  
                  13Affiliate
                  
                  1Agreement
                  
                  1BRS
                  
                  1Commission
                  
                  1Common
      Stock
                  
                  2Company
                  
                  1Damages
                  
                  9Demand
      Registration
                  
                  2Demand
      Registration Request
                  
                  2Exchange
      Act
                  
                  2Incidental
      Registration
                  
                  4Inspector
                  
                  8Inspectors
                  
                  8Investor
                  
                  1Investors
                  
                  1Jefferies
      Funds
                  
                  1Joining
      Investors
                  
                  1Management
      Investors
                  
                  1Notice
                  
                  4Original
      Agreement
                  
                  1Person
                  
                  2Prospectus
                  
                  2Public
      Offering
                  
                  2Records
                  
                  8Registrable
      Securities
                  
                  3Registration
      Expenses
                  
                  2Registration
      Statement
                  
                  2S-3
      Registration
                  
                  5S-3
      Registration Request
                  
                  5Securities
      Act
                  
                  3Securities
      Holders Agreement
                  
                  3Special
      Registration Statement
                  
                  3Underwritten
      Offering
                  
                  3Underwritten
      Registration
                  
                  3
  - iii
-
  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.
  
  “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.
  - 2
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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.
  - 3
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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.
  - 4
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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.
  - 5
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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;
  - 6
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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:
  - 7
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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.
  - 8
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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.
  - 9
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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.
  - 11
-
  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.
  - 12
-
  (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
  - 13
-
  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.
  - 14
-
  (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.
  - 15
-
  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), LLCBy:Name:Title:
  
  
 THE
      SHERIDAN GROUP HOLDINGS (JEFFERIES), LLCBy:Name:
  
  MANAGEMENT
      INVESTORS:John
      A. SaxtonAddress:Telephone
      No.:David
      C. HewittAddress:Telephone
      No.:G.
      Paul BozuwaAddress:Telephone
      No.:Robert
      M. JakobeAddress:Telephone
      No.:Joan
      B. DavidsonAddress:Telephone
      No.:
  
 
 John
      M. ElliotAddress:Telephone
      No.:Chris
      M. AzbillAddress:Telephone
      No.:Douglas
      R. EhmannAddress:Telephone
      No.:J.
      Kenneth GarnerAddress:Telephone
      No.:Michael
      E. KlauerAddress:Telephone
      No.:Patricia
      A. StrickerAddress:Telephone
      No.:
  
 
 Robert
      M. MooreAddress:Telephone
      No.:Gary
      J. KittredgeAddress:Telephone
      No.:Edward
      H. HartmanAddress:Telephone
      No.:Arthur
      R. MyersAddress:Telephone
      No.:Jennifer
      A. BedellAddress:Telephone
      No.:Cynthia
      L. BeauchampAddress:Telephone
      No.:
  
  Michael
      J. SartorelliAddress:Telephone
      No.:Kenneth
      W. RakerAddress:Telephone
      No.:Jeffrey
      S. CohenAddress:Telephone
      No.:J.
      Dennis SmithAddress:Telephone
      No.:Catherine
      R. BuddAddress:Telephone
      No.:George
      A. WhalingAddress:Telephone
      No.:
  
 
 J.M.
      Dryden Hall, Jr.Address:Telephone
      No.:Gary
      T. DiCamilloAddress:Telephone
      No.:Craig
      H. DeeryAddress:Telephone
      No.:Christopher
      A. PeirceAddress:Telephone
      No.:Eric
      D. LaneAddress:Telephone
      No.:Kenneth
      R. StickleyAddress:Telephone
      No.:
  
 
 William
      P. WaltersAddress:Telephone
      No.: