Exhibit
10.17


ASSET
PURCHASE AGREEMENT


Dated
as of December 29, 2004


Between


R.R.
DONNELLEY & SONS COMPANY


and


PHOENIX
COLOR CORP.










ASSET
PURCHASE AGREEMENT


               ASSET
PURCHASE AGREEMENT (this “Agreement”), dated
as of December 29, 2004, between R.R. Donnelley & Sons Company, a Delaware
corporation (“Buyer”), and Phoenix Color Corp., a Delaware corporation (“Seller”).


               WHEREAS,
Seller’s Book Technology Park one and two color, hard and softcover book
division (the “Division”) is located at 18249 Phoenix Drive, Hagerstown,
Maryland 21742 (the “Premises”); and


               WHEREAS,
Seller desires to sell to Buyer, and Buyer desires to purchase from Seller, all
of Seller’s right, title and interest in the Equipment (as defined herein), all
on the terms and conditions set forth herein.


               NOW,
THEREFORE, in consideration of the mutual covenants
and agreements hereinafter set forth, the parties to this Agreement agree as
follows:


ARTICLE
I


DEFINITIONS
AND INTERPRETATIONS


               1.1.     Definitions.  In this Agreement, the following terms have
the meanings specified or referred to in this Section
1.1 and shall be equally applicable to both the singular and plural
forms.


               
“Affiliate”
means, with respect to any Person, any other Person which, at the time of
determination, directly or indirectly through one or more intermediaries
Controls, is Controlled by or is under Common Control with such Person.


               “Agreement”
has the meaning specified in the preamble of this Agreement.

               “Bill of Sale”
means the Bill of Sale in the form of Exhibit A.

               “Buyer”
has the meaning specified in the preamble of this Agreement.

               “Buyer Ancillary
Agreements” means all agreements, instruments and documents
being or to be executed and delivered by Buyer under this Agreement or in
connection herewith.

               “Closing”
means the closing of the transfer of the Equipment from Seller to Buyer.

               “Closing Date”
has the meaning specified in Section 4.1.

               “Closing Date Cash
Payment” has the meaning specified in Section
3.1.

               “Code”
means the Internal Revenue Code of 1986.









               “Control”
means, as to any Person, the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of voting
securities, by contract or otherwise. 
The terms “Controlled by,” “under Common Control with” and “Controlling”
shall have correlative meanings. 

               “Court Order”
means any judgment, order, award or decree of any United States federal, state
or local, or any supra-national or non-U.S., court or tribunal and any award in
any arbitration proceeding.

               “Division”
has the meaning specified in the first recital to this Agreement.

               “Encumbrance”
means any lien (statutory or other), claim, charge, security interest,
mortgage, deed of trust, pledge, hypothecation, assignment, conditional sale or
other title retention agreement, preference, priority or other security
agreement or preferential arrangement of any kind, and any covenant,
restriction, defect in title or other encumbrance of any kind.

               “EOI”
means the Expression of Interest dated December 8, 2004 between Buyer and
Seller.

               “EOI Date”
means December 8, 2004.

               “Equipment”
has the meaning specified in Section 2.1(ii).

               “Equipment Lease”
has the meaning specified in Section 2.1(ii).

               “Equipment Lease
Buy-Out Agreement” has the meaning specified in Section 5.5.


               “Equipment Lease
Buy-Out Agreement Schedule “ means Schedule 5.5. 

               “Equipment Lessor”
means the lessor under an Equipment Lease.

               “Governmental Body”
means any United States federal, state or local, or any supra-national or
non-U.S., government, political subdivision, governmental, regulatory or
administrative authority, instrumentality, agency body or commission,
self-regulatory organization, court, tribunal or judicial or arbitral body.

               “Leased
Equipment” has the meaning specified in Section 2.1(ii).

               “Outsourcing
Agreement” means the Outsourcing Agreement to be entered into
between Buyer and Seller following the Closing with the principal terms
contained in the Outsourcing Agreement Term Sheet.

               “Outsourcing
Agreement Term Sheet” means the Term Sheet containing the
principal terms for the Outsourcing Agreement attached hereto as Exhibit B.

               “Owned Equipment”
has the meaning specified in Section 2.1(i).

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               “Permitted
Encumbrances” means (i) liens for Taxes and other governmental
charges and assessments which are not yet due and payable; (ii) liens of
landlords and liens of carriers, warehousemen, mechanics and materialmen and
other similar liens imposed by law arising in the ordinary course of business
for sums not yet due and payable and (iii) other liens or imperfections on
property which do not adversely affect title to, detract from the value of, or
impair the existing use of, the property affected by such lien or imperfection.

               “Person”
means any individual, corporation, partnership, joint venture, limited
liability company, association, joint-stock company, trust, unincorporated
organization or Governmental Body.

               “Premises”
has the meaning specified in the first recital to this Agreement.

               “Requirements of
Laws” means any United States federal, state and local, and any
non-U.S., laws, statutes, regulations, rules, codes or ordinances enacted,
adopted, issued or promulgated by any Governmental Body or common law.

               “Seller”
has the meaning specified in the preamble of this Agreement.

               “Seller Ancillary
Agreements” means all agreements, instruments and documents
being or to be executed and delivered by Seller under this Agreement or in
connection herewith.

               “Seller
Credit Facility” means the Amended and Restated Loan and
Security Agreement dated as of September 30, 2003 among Seller, PCC Express,
Inc., Technigraphix, Inc., Phoenix (MD.) Realty, LLC and Phoenix Color
Fulfillment, Inc., as Borrowers, each of the financial institutions a party
thereto, as Lenders, and Wachovia Bank, National Association, as Agent.

               “Seller
Subordinated Indenture” means the Indenture dated as of February
2, 1999 among Seller, certain subsidiaries of Seller as guarantors thereto and
J.P. Morgan Trust Company, N.A., as Trustee, pursuant to which Seller’s 10 3/8%
Senior Subordinated Notes due 2009 were issued.

               “Tax”
means any United States federal, state or local, or non-U.S., net income, gross
income, gross receipts, windfall profit, severance, property, production,
sales, use, license, excise, franchise, employment, payroll, withholding,
alternative or add-on minimum, ad valorem, value-added, transfer, stamp, or
environmental (including taxes under Code Section 59A) tax, or any other tax,
custom, duty, governmental fee or other like assessment or charge of any kind
whatsoever, together with any interest or penalty, addition to tax or
additional amount imposed by any Governmental Body.

               “UCC”
means the Uniform Commercial Code as in effect on the date hereof in applicable
jurisdictions for the purposes of the provisions hereof.

               1.2.     Interpretation.  For purposes of this Agreement, (i) the
words “include,” “includes” and “including” shall be deemed to be followed by
the words “without limitation,” (ii) the word “or” is not exclusive and (iii)
the words “herein”, “hereof”, “hereby”, “hereto” and 

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“hereunder” refer to this
Agreement as a whole.  Unless the
context otherwise requires, references herein: 
(i) to Articles, Sections, Exhibits and Schedules mean the Articles and
Sections of, and the Exhibits and Schedules attached to, this Agreement; (ii)
to an agreement, instrument or other document means such agreement, instrument
or other document as amended, supplemented and modified from time to time to
the extent permitted by the provisions thereof and by this Agreement; and (iii)
to a statute means such statute as amended from time to time and includes any
successor legislation thereto and any regulations promulgated thereunder.  The Schedules and Exhibits referred to
herein shall be construed with and as an integral part of this Agreement to the
same extent as if they were set forth verbatim herein.  Titles to Articles and headings of Sections
are inserted for convenience of reference only and shall not be deemed a part
of or to affect the meaning or interpretation of this Agreement.  This Agreement, the Buyer Ancillary
Agreements and the Seller Ancillary Agreements shall be construed without
regard to any presumption or rule requiring construction or interpretation
against the party drafting an instrument or causing any instrument to be
drafted. 

ARTICLE
II

PURCHASE
AND SALE

               2.1.     Purchase of
Equipment. 
Upon the terms of this Agreement, concurrently with the execution and
delivery hereof, Seller is selling, transferring, assigning, conveying and
delivering to Buyer, and Buyer is purchasing from Seller, free and clear of all
Encumbrances (except for Permitted Encumbrances), all of Seller’s right, title
and interest in:

	
   
	
     (i)     all
  of the equipment and tangible personal property owned by Seller and located
  at the Premises, including the equipment and tangible personal property
  listed in Schedule A (collectively, the “Owned Equipment”); and
  

	
   
	
   

	
   
	
     (ii)     the
  equipment and tangible personal property (the “Leased Equipment” and,
  together with the Owned Equipment, the “Equipment”) that was
  previously subject to the equipment leases listed in Schedule B (the “Equipment
  Leases”) and is being purchased by Seller concurrently with the execution
  and delivery of this Agreement pursuant to the Equipment Lease Buy-Out
  Agreements.




               2.2.     No Assumed
Liabilities. 
Buyer shall not assume or be obligated to pay, perform or otherwise
discharge any liability or obligation of Seller, direct or indirect, known or
unknown, absolute or contingent.

ARTICLE
III


CONSIDERATION


               3.1.     Consideration.  In consideration for the sale, transfer,
assignment, conveyance and delivery to Buyer of the Equipment, concurrently
with the execution and delivery of this Agreement, Buyer is delivering (in the
manner contemplated by Section 4.2) cash in an amount equal to
$16,831,513.63 (the “Closing Date Cash Payment”).  For the avoidance of doubt, Buyer shall not
pay any additional consideration to Seller for any of the Equipment. 


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ARTICLE
IV

CLOSING

               4.1.     Closing Date.  The Closing is being consummated at 10:00
A.M., local time, on the date hereof, by facsimile and overnight delivery.  The Closing shall be deemed to have become
effective as of 12:01 A.M., central standard time, on the date hereof, and such
time and date are sometimes referred to herein as the “Closing
Date.”

               4.2.     Payment on the
Closing Date. 
Concurrently with the execution and delivery hereof, Buyer is paying
Seller an amount equal to the Closing Date Cash Payment by wire transfer of
immediately available funds to the bank accounts in the United States set forth
in Schedule 4.2.

               4.3.     Buyer’s
Deliveries.  
Concurrently with the execution and delivery hereof, Buyer shall deliver
to Seller all of the following:

               (a)     a
certificate of good standing of Buyer issued as of a recent date by the
Secretary of State of the State of Delaware; and

               (b)     the
Outsourcing Agreement Term Sheet, duly executed by Buyer.


               4.4.     Seller’s
Deliveries. 
Concurrently with the execution and delivery hereof, Seller shall
deliver to Buyer all of the following:

               (a)     certificates
of good standing of Seller issued as of a recent date by the Secretary of State
of the State of Delaware and the Secretary of State of the State of Maryland;

               (b)     a
certificate of the secretary or an assistant secretary of Seller, dated the
Closing Date, in form and substance reasonably satisfactory to Buyer, as to the
resolutions of the Board of Directors of Seller authorizing the execution,
delivery and performance of this Agreement and the Seller Ancillary Agreements
and the transactions contemplated hereby and thereby;

               
(c)     the Bill of Sale with respect to the
Equipment, duly executed by Seller;

               (d)     the
consents, waivers or approvals obtained by Seller with respect to the Equipment
or the consummation of the transactions contemplated by this Agreement,
including the consent required under the Seller Credit Facility;

               (e)     UCC-3
Termination Statements which evidence the termination of all outstanding UCC
financing statements filed against Seller and relating to the Equipment; and

               (f)     the
Outsourcing Agreement Term Sheet, duly executed by Seller.

In addition to the above
deliveries, Seller shall take all steps and actions as Buyer may reasonably
request or as may otherwise be necessary to put Buyer in actual possession or
control of the Equipment.


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ARTICLE
V

REPRESENTATIONS
AND WARRANTIES OF SELLER

               As
an inducement to Buyer to enter into this Agreement and to consummate the
transactions contemplated hereby, Seller represents and warrants to Buyer and
agrees as follows:

               5.1.     Organization of
Seller.  Seller is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware.  Seller
has full power and authority to own or lease and to operate and use the
Equipment and to carry on the operations of the Division as presently
conducted.

               5.2.     Authority of
Seller.

               (a)     Seller
has full power and authority to execute, deliver and perform this Agreement and
all of the Seller Ancillary Agreements. 
The execution, delivery and performance of this Agreement and the Seller
Ancillary Agreements by Seller have been duly authorized and approved by Seller’s
board of directors and do not require any further authorization or consent of
Seller or its stockholders.  This
Agreement has been duly authorized, executed and delivered by Seller and is the
legal, valid and binding obligation of Seller enforceable in accordance with
its terms, and each of the Seller Ancillary Agreements has been duly authorized
by Seller and upon execution and delivery by Seller will be a legal, valid and
binding obligation of Seller enforceable in accordance with its terms.

               (b)     Except
as set forth in Schedule 5.2, neither the
execution and delivery of this Agreement or any of the Seller Ancillary
Agreements or the consummation of any of the transactions contemplated hereby
or thereby nor compliance with or fulfillment of the terms, conditions and provisions
hereof or thereof will:




	
   
	
       (i)     conflict
  with, result in a breach of the terms, conditions or provisions of, or
  constitute a default, an event of default or an event creating rights of
  acceleration, termination or cancellation or a loss of rights under, or
  result in the creation or imposition of any Encumbrance upon any of the
  Equipment, under (A) the certificate of incorporation or by-laws of Seller,
  (B) any material note, instrument, agreement, mortgage, lease, license,
  franchise, permit or other authorization, right, restriction or obligation to
  which Seller is a party or any of the Equipment is subject or by which Seller
  is bound, (C) any Court Order to which Seller is a party or any of the
  Equipment is subject or by which Seller is bound, or (D) any Requirements of
  Laws affecting Seller, the Equipment or the conduct of the operations of the
  Division; or

	
   
	
   

	
   
	
       (ii)     require
  the approval, consent, authorization or act of, or the making by Seller of
  any declaration, filing or registration with, any Person.



               5.3.     Operations Since
EOI Date.

               (a)     Except
as set forth in Schedule 5.3(a), since the
EOI Date, there has been:

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       (i)     no
  material adverse change in the Equipment or the operations of the Division,
  and no fact or condition exists or is threatened which might reasonably be
  expected to cause such a change in the future; and

	
   
	
   

	
   
	
       (ii)     no
  damage (other than ordinary wear and tear), destruction, loss or claim,
  whether or not covered by insurance, or condemnation or other taking
  adversely affecting any of the Equipment.




               (b)     Except
as set forth in Schedule 5.3(b), since the
EOI Date, Seller has conducted the operations of the Division only in the
ordinary course and in conformity with past practice, and Seller has not sold,
leased (as lessor), transferred or otherwise disposed of (including any
transfers from the Division to Seller or any of its Affiliates), or mortgaged
or pledged, or imposed or suffered to be imposed any Encumbrance on, any of the
Equipment, except for Permitted Encumbrances.

               5.4.     Condition of and
Title to Assets.

               (a)     The
Equipment is in good condition (subject to normal wear and tear) and
serviceable condition and is suitable for the uses for which intended.

               (b)     Seller
has good and marketable title to all of the Equipment, free and clear of all
Encumbrances, except for Permitted Encumbrances.  Upon delivery to Buyer on the Closing Date of the instruments of
transfer contemplated by Section 4.4,
Seller will thereby transfer to Buyer good and marketable title to the
Equipment, subject to no Encumbrances, except for Permitted Encumbrances.

               5.5.     Equipment Lease
Buy-Out Agreements.  Complete and correct copies of each of the Equipment Leases have
heretofore been delivered to Buyer by Seller. 
Schedule 5.5 contains, with respect
to each Equipment Lease, a copy of an agreement between the Equipment Lessor
and Seller pursuant to which Seller purchased the Leased Equipment subject to
such Equipment Lease (each such agreement being referred to herein as an “Equipment
Lease Buy-Out Agreement”), and sets forth, with respect to each such
Equipment Lease Buy-Out Agreement, the amount paid by or on behalf of Seller to
purchase the Leased Equipment subject to the relevant Equipment Lease.  Each of the Equipment Lease Buy-Out
Agreements constitutes a valid and binding obligation of the parties thereto
and is in full force and effect.      


               5.6.     No Violation or
Litigation. 
Except as set forth in Schedule 5.6:


	
   
	
     (i)     neither
  Seller, with respect to the Division, nor the Equipment is subject to any
  Court Order;

  
	
   
	
   

	
   
	
     (ii)     the
  Equipment and its uses comply in all material respects with all applicable
  Requirements of Laws and Court Orders;

	
   
	
   

	
   
	
     (iii)     Seller
  has complied in all material respects with all Requirements of Laws and Court
  Orders which are applicable to the Equipment or the Division;




7








	
   
	
     (iv)     there
  are no lawsuits, claims, suits, proceedings or investigations pending or, to
  the knowledge of Seller, threatened against or affecting Seller in respect of
  the Equipment nor, to the knowledge of Seller, is there any basis for any of
  the same, and there are no lawsuits, suits or proceedings pending in which
  Seller is the plaintiff or claimant and which relate to the Equipment; and

	
   
	
   

	
   
	
     (v)     there
  is no action, suit or proceeding pending or, to the knowledge of Seller,
  threatened which questions the legality or propriety of the transactions
  contemplated by this Agreement.




               5.7.     No Finder.  Neither Seller nor any Person acting on its
behalf has paid or become obligated to pay any fee or commission to any broker,
finder or intermediary for or on account of the transactions contemplated by
this Agreement. 

ARTICLE
VI

REPRESENTATIONS
AND WARRANTIES OF BUYER

               As
an inducement to Seller to enter into this Agreement and to consummate the
transactions contemplated hereby, Buyer hereby represents and warrants to
Seller and agrees as follows:

               6.1.     Organization of
Buyer. 
Buyer is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has full power and
authority to own or lease and to operate and use its properties and assets and
to carry on its business as now conducted.

               6.2.     Authority of
Buyer.


               (a)     Buyer
has full power and authority to execute, deliver and perform this Agreement and
all of the Buyer Ancillary Agreements. 
The execution, delivery and performance of this Agreement and the Buyer
Ancillary Agreements by Buyer have been duly authorized and approved by all requisite
corporate action and do not require any further authorization or consent of
Buyer or its stockholders.  This
Agreement has been duly authorized, executed and delivered by Buyer and is the
legal, valid and binding agreement of Buyer enforceable in accordance with its
terms, and each of the Buyer Ancillary Agreements has been duly authorized by
Buyer and upon execution and delivery by Buyer will be a legal, valid and
binding obligation of Buyer enforceable in accordance with its terms.


               (b)     Neither
the execution and delivery of this Agreement or any of the Buyer Ancillary
Agreements or the consummation of any of the transactions contemplated hereby
or thereby nor compliance with or fulfillment of the terms, conditions and
provisions hereof or thereof will:

	
   
	
     (i)     conflict
  with, result in a breach of the terms, conditions or provisions of, or
  constitute a default, an event of default or an event creating rights of
  acceleration, termination or cancellation or a loss of rights under (A) the
  charter or by-laws of Buyer, (B) any material note, instrument, agreement,
  mortgage, lease, license, franchise, permit 




8








	
   
	
or other authorization, right,
  restriction or obligation to which Buyer is a party or any of its properties
  is subject or by which Buyer is bound, (C) any Court Order to which Buyer is
  a party or by which it is bound or (D) any Requirements of Laws affecting
  Buyer; or

     (ii)     require
  the approval, consent, authorization or act of, or the making by Buyer of any
  declaration, filing or registration with, any Person.




               6.3.     No Finder.  Neither Buyer nor any Person acting on its
behalf has paid or become obligated to pay any fee or commission to any broker,
finder or intermediary for or on account of the transactions contemplated by
this Agreement. 

ARTICLE
VII

ADDITIONAL
AGREEMENTS

               7.1.     Covenant Not to
Compete or Solicit Business.

               (a)     In
furtherance of the sale of the Equipment to Buyer hereunder by virtue of the
transactions contemplated hereby and more effectively to protect the value and
goodwill of the Equipment so sold, Seller covenants and agrees that, for a
period ending on the fifth (5th) anniversary of the Closing Date,
neither Seller nor any of its Affiliates will directly or indirectly (whether
as principal, agent, independent contractor, partner or otherwise) engage in
the business of printing one or two color, soft or hard cover books; provided, however,
that nothing set forth in this Section 7.1
shall prohibit Seller or its Affiliates from owning not in excess of 3% in the
aggregate of any class of capital stock of any corporation if such stock is
publicly traded and listed on any national or regional stock exchange or on the
Nasdaq national market.  

The geographic scope of
this covenant not to compete shall extend through the United States of
America.  Recognizing the specialized
nature of the operations of the Division, Seller acknowledges and agrees that
the duration, geographic scope and activity restrictions of this covenant not
to compete are reasonable.

               (b)     If
Seller or any Affiliate of Seller violates any of its obligations under this Section 7.1, Buyer may proceed against it in law
or in equity for such damages or other relief as a court may deem
appropriate.  Seller acknowledges that a
violation of this Section 7.1 may cause
Buyer irreparable harm which may not be adequately compensated for by money
damages.  Seller therefore agrees that
in the event of any actual or threatened violation of this Section 7.1, Buyer shall be entitled, in addition
to other remedies that it may have, to a temporary restraining order and to
preliminary and final injunctive relief against Seller or such Affiliate of
Seller to prevent any violations of this Section 7.1,
without the necessity of posting a bond. 
The prevailing party in any action commenced under this Section 7.1 shall also be entitled to receive
reasonable attorneys’ fees and court costs. 
It is the intent and understanding of each party hereto that if, in any
action before any court or agency legally empowered to enforce this Section 7.1, any term, restriction, covenant or
promise in this Section 7.1 is found to be
unreasonable and for that reason unenforceable, then such term, restriction,
covenant or promise shall be deemed modified to the extent necessary to make it
enforceable by such court or agency.


9









               7.2.     Taxes.  Seller shall be liable for and shall pay all
sales Tax, use Tax or similar Tax imposed by the State of Maryland or any local
authority within the State of Maryland attributable to the sale or transfer of
the Equipment.

               7.3.     Transitional
Use of Equipment. 
Buyer shall be permitted to keep the Equipment at the Premises from the
date hereof through May 31, 2005 (the “Transitional Period”).  During the Transitional Period, Seller shall
be entitled to use the Equipment in order to complete certain work-in-process
and shall hold Buyer harmless from all damages, costs and liabilities arising
from Seller’s use thereof (including any deductions or retentions under Buyer’s
insurance policies applicable to claims for damages, costs and liabilities
arising from Seller’s use, maintenance or negligent handling of the
Equipment).  Seller agrees that during
the Transitional Period, Seller shall maintain the Equipment in good and
serviceable condition (reasonable wear and tear excepted).  Seller agrees that it shall pay Buyer a
mutually agreed upon fee for actual use by Seller of the Equipment at the
Premises during the Transitional Period. 
Upon completion of the Transitional Period (or such earlier date as the
parties may mutually agree), Buyer shall arrange for the packing and shipment
of the Equipment at Buyer’s expense. 
During the Transitional Period, Buyer will maintain insurance on the
Equipment in accordance with its customary practice.  Buyer agrees that it will promptly file a UCC-3 Termination
Statement in the State of Delaware following Buyer’s removal of all of the
Equipment from the Premises in order to terminate Buyer’s precautionary UCC
filing, filed as of the date hereof.

               7.4.     Outsourcing
Agreement.  Buyer
and Seller shall negotiate in good faith and use commercially reasonable
efforts to enter into, as soon as reasonably practicable after the date hereof,
but in any event prior to January 15, 2005, a definitive Outsourcing Agreement
with terms substantially similar to those contained in the Outsourcing
Agreement Term Sheet attached hereto as Exhibit B; provided that if
Buyer and Seller have not entered into a definitive Outsourcing Agreement prior
to January 15, 2005, the Outsourcing Agreement Term Sheet shall govern the
supply relationship between Buyer and Seller until such time as a definitive
Outsourcing Agreement is mutually agreed upon and executed by Buyer and
Seller.   


ARTICLE
VIII


GENERAL
PROVISIONS


               8.1.     Survival of
Obligations. 
All representations, warranties, covenants and obligations contained in
this Agreement shall survive the consummation of the transactions contemplated
by this Agreement; provided, however, that the representations and warranties
contained in Articles V and VI shall terminate on the second anniversary of
the Closing Date (except with respect to the representations and warranties
contained in Section 5.4(b), as to which no time limitation shall
apply).  Except as otherwise provided
herein, no claim shall be made for the breach of any representation or warranty
contained in Article V or VI or under any certificate delivered with
respect thereto under this Agreement after the date on which such
representations and warranties terminate as set forth in this Section.


               8.2.     Confidential
Nature of Information.  Each party agrees that it will treat in
confidence all documents, materials and other information which it shall have
obtained regarding the other party during the course of the negotiations
leading to the consummation of 


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the transactions
contemplated hereby (whether obtained before or after the date of this
Agreement), the access to records after Closing provided for herein and the
preparation of this Agreement and other related documents.  Such documents, materials and information
shall not be communicated to any third Person (other than, in the case of Buyer,
to its counsel, accountants, financial advisors or lenders, and in the case of
Seller, to its counsel, accountants, lenders or financial advisors).  No other party shall use any confidential
information in any manner whatsoever; provided,
however, that after the Closing Buyer may
use or disclose any confidential information reasonably related to the
Equipment.  The obligation of each party
to treat such documents, materials and other information in confidence shall
not apply to any information which (i) is or becomes available to such party from
a source other than the other party, (ii) is or becomes available to the public
other than as a result of disclosure by such party or its agents, (iii) is
required to be disclosed under applicable law or judicial process, but only to
the extent it must be disclosed, or (iv) such party reasonably deems necessary
to disclose to obtain any of the consents or approvals contemplated hereby.

               8.3.     No Public
Announcement. 
Neither Buyer nor Seller shall, without the approval of the other, make
any press release or other public announcement concerning the transactions
contemplated by this Agreement, except as and to the extent that any such party
shall be so obligated by law or the rules of any stock exchange, or, in the
case of Seller, the Seller Subordinated Indenture, in which case such party
shall immediately notify the other party and provide the other party with the
text of such release or announcement and the parties shall use their best
efforts to cause a mutually agreeable release or announcement to be issued; provided,
that the foregoing shall not preclude communications or disclosures necessary
to implement the provisions of this Agreement or to comply with the accounting
and Securities and Exchange Commission disclosure obligations.

               8.4.     Notices.  All notices or other communications required
or permitted hereunder shall be in writing and shall be deemed given or
delivered when delivered personally or when sent by registered or certified
mail or by overnight courier service addressed as follows:


	
   
	
  If to Buyer, to:

  
	
   
	
   

	
   
	
  R.R. Donnelley & Sons Company

	
   
	
  77 West Wacker Drive

	
   
	
  Chicago, IL 60601-1696

	
   
	
  Attention: General Counsel

	
   
	
   

	
   
	
  with a copy to:

	
   
	
   

	
   
	
  Sidley Austin Brown & Wood LLP

	
   
	
  10 South Dearborn Street

	
   
	
  Chicago, IL 60603

	
   
	
  Attention: 
  Dennis V. Osimitz, Esq.




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  If to Seller, to:

	
   
	
   

	
   
	
  Phoenix Color Corp.

	
   
	
  540 Western Maryland Parkway

	
   
	
  Hagerstown, Maryland 21740

	
   
	
  Attention: 
  Edward Lieberman

	
   
	
   

	
   
	
  with a copy to:

	
   
	
   

	
   
	
  Piper Rudnick LLP

	
   
	
  6225 Smith Avenue

	
   
	
  Baltimore, Maryland 21209-3600

	
   
	
  Attention: 
  Earl S. Wellschlager, Esq.




or to such other address
as such party may indicate by a notice delivered to the other party hereto.

               8.5.     Successors and
Assigns. 



               (a)     Either
party may assign any of its rights hereunder, but no such assignment shall
relieve it of its obligations hereunder.


               (b)     This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their successors and permitted assigns. 
Nothing in this Agreement, expressed or implied, is intended or shall be
construed to confer upon any Person other than the parties and successors and
assigns permitted by this Section 8.5 any
right, remedy or claim under or by reason of this Agreement.

               8.6.     Access to Records
after Closing.  For a period of six years after the Closing Date, Buyer and its
representatives shall have reasonable access to all of the books and records
relating to the Equipment which Seller or any of its Affiliates may retain
after the Closing Date.  Such access
shall be afforded by Seller and its Affiliates upon receipt of reasonable
advance notice and during normal business hours.  Buyer shall be solely responsible for any costs and expenses
incurred by it or Seller pursuant to this Section 8.6.  If Seller or any of its Affiliates shall
desire to dispose of any of such books and records prior to the expiration of
such six-year period, Seller shall, prior to such disposition, give Buyer a
reasonable opportunity, at Buyer’s expense, to segregate and remove such books
and records as Buyer may select.

               8.7.     Entire Agreement;
Amendments. 
This Agreement and the Exhibits and Schedules referred to herein and the
documents delivered pursuant hereto contain the entire understanding of the
parties hereto with regard to the subject matter contained herein or therein,
and supersede all prior agreements, understandings or letters of intent between
or among any of the parties hereto, including the EOI and the Letter Agreement
dated January 7, 2003 between Buyer and Seller.  This Agreement shall not be amended, modified or supplemented
except by a written instrument signed by an authorized representative of each of
the parties hereto.

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               8.8.     Partial
Invalidity. 
Wherever possible, each provision hereof shall be interpreted in such
manner as to be effective and valid under applicable law, but in case any one
or more of the provisions contained herein shall, for any reason, be held to be
invalid, illegal or unenforceable in any respect, such provision shall be
ineffective to the extent, but only to the extent, of such invalidity,
illegality or unenforceability without invalidating the remainder of such
invalid, illegal or unenforceable provision or provisions or any other
provisions hereof, unless such a construction would be unreasonable.

               8.9.     Waivers.  Any term or provision of this Agreement may
be waived, or the time for its performance may be extended, by the party or
parties entitled to the benefit thereof. 
Any such waiver shall be validly and sufficiently authorized for the
purposes of this Agreement if, as to any party, it is authorized in writing by
an authorized representative of such party. 
The failure of any party hereto to enforce at any time any provision of
this Agreement shall not be construed to be a waiver of such provision, nor in
any way to affect the validity of this Agreement or any part hereof or the
right of any party thereafter to enforce each and every such provision.  No waiver of any breach of this Agreement
shall be held to constitute a waiver of any other or subsequent breach.

               8.10.     Expenses.  Each party hereto will pay all costs and
expenses incident to its negotiation and preparation of this Agreement and to
its performance and compliance with all agreements contained herein on its part
to be performed, including the fees, expenses and disbursements of its counsel
and accountants.

               8.11.     Execution in Counterparts.  This Agreement may be executed in one or
more counterparts, each of which shall be considered an original instrument,
but all of which shall be considered one and the same agreement, and shall
become binding when one or more counterparts have been signed by each of the
parties hereto and delivered to each of Seller and Buyer.  Delivery of an executed counterpart of a
signature page to this Agreement shall be as effective as delivery of a
manually executed counterpart of this Agreement.

               8.12.     Enforcement of
Agreement. 
In the event of an action at law or in equity between the parties hereto
to enforce any of the provisions hereof, the unsuccessful party to such
litigation or proceeding shall pay to the successful party all costs and
expenses, including reasonable attorneys’ fees, incurred therein by such
successful party on trial and appeal as adjudged by the court, and if such
successful party or parties shall recover judgment in any such action or
proceeding, such costs, expenses and attorneys’ fees may be included as part of
such judgment.


               8.13.     Further
Assurances. 
From time to time following the Closing, Seller shall execute and
deliver, or cause to be executed and delivered, to Buyer such other instruments
of conveyance and transfer as Buyer may reasonably request or as may be
otherwise necessary to more effectively convey and transfer to, and vest in,
Buyer and put Buyer in possession of, any part of the Equipment.   


               8.14.     Governing Law.  This Agreement shall be governed by and
construed in accordance with the internal laws (as opposed to the conflicts of
law provisions) of the State of Illinois.


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               8.15.     Submission to
Jurisdiction. 
The parties hereby irrevocably submit to the jurisdiction of the courts
of the State of Illinois located in Cook County and the Federal courts of the
United States of America located in the Northern District of Illinois solely in
respect of the interpretation and enforcement of the provisions of this
Agreement and of the documents referred to in this Agreement, and in respect of
the transactions contemplated hereby, and hereby waive, and agree not to
assert, as a defense in any action, suit or proceeding for the interpretation
or enforcement hereof or of any such document, that it is not subject thereto
or that such action, suit or proceeding may not be brought or is not
maintainable in said courts or that the venue thereof may not be appropriate or
that this Agreement or any such document may not be enforced in or by such
courts, and the parties hereto irrevocably agree that all claims with respect
to such action or proceeding shall be heard and determined in such an Illinois
State or Federal court.

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               IN
WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed the day and year first above written.

	
   
	
R.R. DONNELLEY & SONS COMPANY

	
   
	
 

	
   
	
   

	
   
	
  By:
	
       /s/ Edward
  E. Lane
	
   

	
   
	
   
	
  



  	
   

	
   
	
Name:  Edward
  E. Lane

	
   
	
Title:    President, Book Publishing Services

	
   
	
   

	
   
	
PHOENIX
  COLOR CORP.

	
   
	
   

	
   
	
   

	
   
	
By: 
	
    /s/ Louis LaSorsa
	
   

	
   
	
   
	
  



  	
   

	
   
	
Name: Louis LaSorsa

	
   
	
Title:   Chief Executive Officer

					



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