Exhibit 10.21


 


LIMITED LIABILITY COMPANY AGREEMENT


 


OF


 


THE SHERIDAN GROUP HOLDINGS (JEFFERIES), LLC


 


 


THE UNITS REFERENCED
HEREIN HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS.  WITHOUT REGISTRATION, THESE SECURITIES MAY NOT
BE SOLD, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED AT ANY TIME
WHATSOEVER, EXCEPT ON DELIVERY TO THE COMPANY OF AN OPINION OF COUNSEL
SATISFACTORY TO THE BOARD OF THE COMPANY THAT REGISTRATION IS NOT REQUIRED FOR
THE TRANSFER, OR THE SUBMISSION TO THE BOARD OF THE COMPANY OF OTHER EVIDENCE
SATISFACTORY TO THE BOARD TO THE EFFECT THAT ANY TRANSFER WILL NOT BE IN
VIOLATION OF THE SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE STATE SECURITIES
LAWS OR ANY RULE OR REGULATIONS PROMULGATED THEREUNDER.  ADDITIONALLY, ANY SALE OR OTHER TRANSFER OF
ANY SUCH UNIT IS SUBJECT TO CERTAIN RESTRICTIONS THAT ARE SET FORTH IN THESE
REGULATIONS, THE FOLLOWING AGREEMENT AND THE MEMBERS AGREEMENT REFERRED TO
HEREIN.


 





















 


TABLE OF CONTENTS


 


	
  ARTICLE I

  	
  GENERAL
  PROVISIONS; DEFINITIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 1.1

  	
  Formation

  	
   

  
	
  Section 1.2

  	
  Name

  	
   

  
	
  Section 1.3

  	
  Purposes and
  Powers

  	
   

  
	
  Section 1.4

  	
  Place of
  Business

  	
   

  
	
  Section 1.5

  	
  Registered
  Office and Registered Agent

  	
   

  
	
  Section 1.6

  	
  Fiscal Year

  	
   

  
	
  Section 1.7

  	
  Term

  	
   

  
	
  Section 1.8

  	
  Definitions

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
  MEMBERS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 2.1

  	
  Members

  	
   

  
	
  Section 2.2

  	
  Meetings of
  Members

  	
   

  
	
  Section 2.3

  	
  Notice of
  Meetings of Members

  	
   

  
	
  Section 2.4

  	
  Quorum

  	
   

  
	
  Section 2.5

  	
  Voting
  Rights

  	
   

  
	
  Section 2.6

  	
  Registered
  Members

  	
   

  
	
  Section 2.7

  	
  Action
  Without a Meeting and Telephonic Meetings

  	
   

  
	
  Section 2.8

  	
  Limitation
  of Liability

  	
   

  
	
  Section 2.9

  	
  No Right to
  Withdraw

  	
   

  
	
  Section 2.10

  	
  Rights to
  Information

  	
   

  
	
  Section 2.11

  	
  Lack of
  Authority

  	
   

  
	
  Section 2.12

  	
  Nature of
  Interest in the Company

  	
   

  
	
  Section 2.13

  	
  Termination
  of Units

  	
   

  
	
  Section 2.14

  	
  Representations
  and Warranties of Members

  	
   

  
	
  Section 2.15

  	
  Business
  Opportunities of FS Private Investments III LLC and Jefferies

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
  CAPITAL
  CONTRIBUTIONS; CAPITAL ACCOUNTS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 3.1

  	
  Capital
  Contributions

  	
   

  
	
  Section 3.2

  	
  Capital
  Accounts

  	
   

  
	
  Section 3.3

  	
  Interest

  	
   

  
	
  Section 3.4

  	
  Negative
  Capital Accounts

  	
   

  
	
  Section 3.5

  	
  LLC Capital

  	
   

  
	
  Section 3.6

  	
  No
  Withdrawal

  	
   

  
	
  Section 3.7

  	
  Loans from
  Unitholders

  	
   

  
	
  Section 3.8

  	
  Transfer of
  Capital Accounts

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
  DISTRIBUTIONS
  AND ALLOCATIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 4.1

  	
  Distributions

  	
   

  
	
  Section 4.2

  	
  Allocations

  	
   

  
					



 


i





















 


	
  Section 4.3

  	
  Special
  Allocations

  	
   

  
	
  Section 4.4

  	
  Tax
  Allocations

  	
   

  
	
  Section 4.5

  	
  Curative
  Allocations

  	
   

  
	
  Section 4.6

  	
  Indemnification
  and Reimbursement for Payments on Behalf of a Unitholder or Former Unitholder

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
  MANAGEMENT

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 5.1

  	
  Management
  Authority

  	
   

  
	
  Section 5.2

  	
  Number,
  Election and Qualifications

  	
   

  
	
  Section 5.3

  	
  Designation
  of Advisors

  	
   

  
	
  Section 5.4

  	
  Meetings of
  the Board

  	
   

  
	
  Section 5.5

  	
  Quorum

  	
   

  
	
  Section 5.6

  	
  Attendance
  and Waiver of Notice

  	
   

  
	
  Section 5.7

  	
  Delegation
  by the Board

  	
   

  
	
  Section 5.8

  	
  Issuance of
  Units

  	
   

  
	
  Section 5.9

  	
  Actions
  Without a Meeting and Telephonic Meetings

  	
   

  
	
  Section 5.10

  	
  Indemnification
  of Each Unitholder, Member, Terminated Member and Advisor

  	
   

  
	
  Section 5.11

  	
  Heirs and
  Personal Representatives

  	
   

  
	
  Section 5.12

  	
  Non-Exclusivity

  	
   

  
	
  Section 5.13

  	
  Issuance
  or Transfer of Interests

  	
   

  
	
  Section 5.14

  	
  Admission
  of New Members

  	
   

  
	
  Section 5.15

  	
  Withdrawal,
  Expulsion or Other Termination of Members

  	
   

  
	
  Section 5.16

  	
  Share of a
  Terminated Member

  	
   

  
	
  Section 5.17

  	
  Effect of
  Termination of a Member

  	
   

  
	
  Section 5.18

  	
  Forfeiture
  of Class B Units upon Termination of Employment of Executive

  	
   

  
	
  Section 5.19

  	
  LLC Funds

  	
   

  
	
  Section 5.20

  	
  Devotion
  of Time

  	
   

  
	
  Section 5.21

  	
  Payments
  to Advisors; Reimbursements

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
  DURATION; TERMINATION

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 6.1

  	
  Duration

  	
   

  
	
  Section 6.2

  	
  Liquidation
  of LLC Interests

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
  VALUATION

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 7.1

  	
  Valuation

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  	
  BOOKS
  OF ACCOUNT

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 8.1

  	
  Books

  	
   

  
	
  Section 8.2

  	
  Tax
  Allocations and Reports

  	
   

  
					



 


ii





















 


	
  ARTICLE IX

  	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 9.1

  	
  Amendments

  	
   

  
	
  Section 9.2

  	
  Successors

  	
   

  
	
  Section 9.3

  	
  Governing
  Law; Severability

  	
   

  
	
  Section 9.4

  	
  Notices

  	
   

  
	
  Section 9.5

  	
  Singular;
  Plural; Gender

  	
   

  
	
  Section 9.6

  	
  Entire
  Agreement; Headings; Counterparts

  	
   

  
	
  Section 9.7

  	
  No Third
  Party Beneficiaries

  	
   

  
	
  Section 9.8

  	
  No Action
  for Partition

  	
   

  
	
  Section 9.9

  	
  Business
  Days

  	
   

  
	
  Section 9.10

  	
  No Strict
  Construction

  	
   

  
	
  Section 9.11

  	
  Manner of
  Distributions

  	
   

  
	
  Section 9.12

  	
  Compliance
  with the Act

  	
   

  
	
  Section 9.13

  	
  Further
  Assurances

  	
   

  
	
  Section 9.14

  	
  No Waiver
  of Remedies

  	
   

  
	
  Section 9.15

  	
  Remedies
  Cumulative

  	
   

  
	
  Section 9.16

  	
  Jurisdiction
  and Venue

  	
   

  
	
  Section 9.17

  	
  Waiver of
  Jury Trial

  	
   

  
				



 


iii





















 


LIMITED LIABILITY COMPANY AGREEMENT


OF


THE SHERIDAN GROUP HOLDINGS
(JEFFERIES), LLC


 


This LIMITED LIABILITY COMPANY AGREEMENT (this “Agreement”),
dated as of May 10, 2005, of The Sheridan Group Holdings (Jefferies), LLC,
a Delaware limited liability company (the “LLC” or “Company”), by
and among the Members listed on the attached Schedule I.  Certain terms used herein but not otherwise
defined have the meaning set forth in Section 1.8.


 


WHEREAS, the LLC was formed on February 22, 2005;


 


WHEREAS, the parties agree that their respective
rights, powers, duties and obligations with respect to the LLC and the
management, operations and activities of the LLC shall be governed by this Agreement.


 


WHEREAS, it is contemplated that the Members shall
make capital contributions to the LLC in such amounts and in such form as are
set forth opposite their names on Schedule I attached hereto.


 


NOW, THEREFORE, in consideration of the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Members hereby agree as
follows:


 


ARTICLE I

GENERAL PROVISIONS; DEFINITIONS


 


Section 1.1                                      Formation.  The LLC was formed upon the filing of the
Certificate of Formation of the LLC with the Secretary of State of the State of
Delaware on February 22, 2005 pursuant to the Act.  The Members shall continue the existence of
the LLC until dissolution and termination of the LLC in accordance with the
provisions of Article VI hereof. 
The Certificate of Formation may be restated by the LLC as provided in
the Act or amended by the LLC with respect to the address of the registered
office of the LLC in Delaware or the name and address of its registered agent
in Delaware.  Other additions to or
amendments of the Certificate of Formation shall be authorized as provided in Section 2.5.  The Certificate of Formation, as so amended
from time to time, is referred to herein as the “Certificate.”  Any Member who so requests shall have the
right to receive from the LLC a copy of the Certificate and any amendment
thereto.


 


Section 1.2                                      Name.  The name of the LLC shall be The Sheridan
Group Holdings (Jefferies), LLC, or such other name or names as the Board may
from time to time designate; provided, that the name shall always
contain the words “Limited Liability Company” or “LLC.”


 


Section 1.3                                      Purposes and
Powers.  The LLC is organized for any
lawful business, purpose or activity that may be conducted by a limited
liability company under the Act.  The
Company shall have any and all powers that are necessary or desirable to carry
out the


 





















 


purposes and business of
the Company, to the extent the same may be legally exercised by limited
liability companies under the Act.


 


Section 1.4                                      Place of
Business.  The principal office and
place of business of the LLC shall initially be c/o Jefferies Capital Partners,
520 Madison Avenue, 12th Floor, New York, NY 10022.  The Board may change the principal office or
place of business of the LLC from time to time and may cause the LLC to
establish other offices or places of business in various jurisdictions and
appoint agents for service of process in such jurisdictions.


 


Section 1.5                                      Registered
Office and Registered Agent.  The
Company’s initial registered agent and office shall be The Corporation Trust
Company, 1209 Orange Street, Wilmington, DE 19801.


 


Section 1.6                                      Fiscal Year.  The fiscal year of the LLC shall end on December 31
of each year (the “Fiscal Year”).


 


Section 1.7                                      Term.  The term of the LLC shall be perpetual from
the date of filing of the Certificate with the Secretary of State of the State
of Delaware, unless the LLC is earlier dissolved in accordance with either the
provisions of this Agreement or the Act.


 


Section 1.8                                      Definitions.  For purposes of this Agreement:


 


“Act” means the Delaware Limited Liability
Company Act, Delaware Code, Title 6, Sections 18-101, et  seq.,
as in effect from time to time.


 


“Advisor” has the meaning set forth in Section 5.1.


 


“Affiliate” means as to any Person, any other
Person that directly or indirectly controls, or is under common control with,
or is controlled by, such Person.  As
used in this definition, “control” (including, with its correlative meanings, “controlled
by” and “under common control with”) shall mean possession, directly or
indirectly, of power to direct or cause the direction of management or policies
(whether through ownership of securities or partnership or other ownership
interests, by contract or otherwise).


 


“Agreement” has the meaning set forth in the
introductory paragraph.


 


“Board of Advisors” or “Board” has the
meaning set forth in Section 5.1.


 


“Book Value” means, with respect to any LLC
asset, the adjusted basis of the LLC asset for federal income tax purposes,
except as follows:


 


(a)                                  The
initial Book Value of any LLC asset contributed by a Unitholder to the LLC
shall be the gross fair market value of such LLC asset as of the date of such
contribution, as determined in good faith by the Board;


 


(b)                                 The
Book Value of each LLC asset shall be adjusted to equal its respective gross
fair market value, as determined in good faith by the Board, as of the
following times:


 


2





















 


(i)                                     the
acquisition of an additional interest in the LLC by any new or existing
Unitholder in exchange for more than a de  minimis Capital
Contribution unless the Board determines that such adjustment is not necessary
to reflect the relative economic interests of the Unitholders in the LLC;


 


(ii)                                  the
distribution by the LLC to a Unitholder of more than a de  minimis
amount of LLC assets (other than cash) as consideration for its Units unless
the Board determines that such adjustment is not necessary to reflect the
relative economic interests of the Unitholders in the LLC; and


 


(iii)                               the
liquidation of the LLC within the meaning of Treasury Regulations Section 1.704-1(b)(2)(ii)(g);


 


(c)                                  The
Book Value of an LLC asset distributed to any Unitholder shall be the fair
market value of such LLC asset as of the date of distribution thereof as
determined in good faith by the Board;


 


(d)                                 The
Book Value of each LLC asset shall be increased or decreased, as the case may
be, to reflect any adjustments to the adjusted basis of such LLC asset pursuant
to Sections 732(d), 734(b) or 743(b) of the Code, but only to the
extent that such adjustments are taken into account in determining Capital
Accounts pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m); provided,
that Book Values shall not be adjusted pursuant to this subparagraph (d) to
the extent that the Board determines that an adjustment pursuant to
subparagraph (b) above is necessary or appropriate in conjunction with a
transaction that would otherwise result in an adjustment pursuant to this
subparagraph; and


 


(e)                                  If
the Book Value of an LLC asset has been determined or adjusted pursuant to
subparagraphs (a), (b) or (d) above, such Book Value shall thereafter
be adjusted to reflect the depreciation or amortization taken into account with
respect to such LLC asset for purposes of computing Profits and Losses.


 


“Capital Account” has the meaning set forth in Section 3.2.


 


“Capital Contributions” means, for each
Unitholder, such Unitholder’s cash or property contributed pursuant to Section 3.1
(net of any liabilities of such Unitholder that the LLC is considered to assume
or take subject to under Section 752 of the Code).


 


“Certificate” has the meaning set forth in Section 1.1.


 


“Class A Member” means a Member holding Class A
Units.


 


“Class A Unit” means a Unit representing a
fractional part of the ownership of the Company and having the rights,
preferences and obligations specified with respect to Class A Units in
this Agreement.


 


“Code” means the Internal Revenue Code of 1986,
as amended, as in effect as of the date hereof. 
Such term shall be deemed to include any future amendment to the same
and


 


3





















 


any corresponding provision of any successor thereto
to the extent the Board determines that any such amendment or provision does
not adversely affect the economic interests of the Unitholders hereunder.


 


“Common Stock” means the common stock, par
value $.001 per share, of TSG Holdings.


 


“Common Units” means the Class A Units and
the Class B Units.


 


“Deficit Capital Account” shall mean with
respect to any Unitholder, the deficit balance, if any, in such Unitholder’s
Capital Account as of the end of the taxable year, after giving effect to the
following adjustments:


 


(a)                                  Credit
to such Capital Account any amount that such Unitholder is obligated to restore
under Treasury Regulations Section 1.704-1(b)(2)(ii)(c), as well as any addition thereto
pursuant to the next to last sentence of Treasury Regulations Sections 1.704-2(g)(1) and
(i)(5), after taking into account thereunder any changes during such year in
partnership minimum gain (as determined in accordance with Treasury Regulations
Sections 1.704-2(d)) and in the minimum gain attributable to any partner
nonrecourse debt (as determined under Treasury Regulations Section §1.704-2(i)(3));
and


 


(b)                                 Debit
to such Capital Account the items described in Treasury Regulations Sections
1.704-1(b)(2)(ii)(d)(4), (5) and
(6).


 


This definition of
Deficit Capital Account is intended to comply with the provisions of Treasury
Regulations Sections 1.704-1(b)(2)(ii)(d) and 1.704-2, and shall be
interpreted consistently with those provisions.


 


“Disability” means (a) the inability, due
to illness, accident, injury, physical or mental incapacity or other
disability, of the Executive to carry out effectively his duties and
obligations to the LLC or any of its Subsidiaries or to participate effectively
and actively in the management of the LLC or any of its Subsidiaries for a
period of at least 90 consecutive days or for shorter periods aggregating at
least 90 days (whether or not consecutive) during any six-month period, as
determined in the good faith judgment of the Board, or (b) as otherwise
defined in any employment agreement, letter or other agreement between the
Executive and, or in written policies or procedures of, the LLC or any of its
Subsidiaries; provided, that the LLC and its Subsidiaries shall comply
with the Americans with Disabilities Act.


 


“Distribution” means each distribution made by
the LLC to a Unitholder, whether in cash, property or securities of the LLC and
whether by liquidating distribution, redemption, repurchase or otherwise (net
of any liabilities of the LLC that such Unitholder is considered to assume or
take subject to under Section 752 of the Code); provided, that none
of the following shall be a Distribution:  (a) any recapitalization or exchange of
securities of the LLC, (b) any subdivision (by Unit split or otherwise) or
any combination (by reverse Unit split or otherwise) of any outstanding Units,
and (c) any redemption or repurchase of any outstanding Units by the LLC.


 


4





















 


“Entity” means any general partnership, limited
partnership, limited liability company, corporation, joint venture, trust,
business trust, cooperative, association, or any foreign trust or foreign
business organization, or any other entity that is not a natural person.


 


“Executive” means John A. Saxton and any other employee
of TSG Holdings or any of its Subsidiaries who hereafter becomes a party to
this Agreement.


 


“Fiscal Year” has the meaning set forth in Section 1.6.


 


“Indemnifying Person” has the meaning set forth
in Section 4.6.


 


“IRR” means the annual interest rate,
compounded annually, which, when used to calculate the net present value of all
Cash Inflows and all Cash Outflows (as defined below), causes such net amount
to equal zero.  “Cash Inflows” as
used herein shall include all cash Distributions made to the holders of
Preferred Units and Class A Units pursuant to Section 4.1(a)(i),
4.1(a)(ii), 4.1(a)(iii) and 4.1(a)(iv).  “Cash Outflows” as used herein shall
mean the sum of all cash payments made by the holders of Preferred Units and Class A
Units to acquire such Units; provided that with respect to the Units issued in
exchange for Capital Contributions made in the form of Preferred Stock and
Common Stock of TSG Holdings, (i) Cash Outflows shall mean the sum of all cash
payments made to acquire such shares of Preferred Stock and Common Stock and (ii) IRR
shall be calculated based on when such cash payments were made (i.e., August 21,
2003), not when such Capital Contributions were made.


 


“Investor Unitholder” means Jefferies.


 


“Jefferies” means ING Furman Selz Investors III
L.P., ING Barings U.S. Leveraged Equity Plan, LLC, ING Barings Global Leveraged
Equity Plan Ltd., ING Barings Global Leveraged Equity Plan Holdings LLC, and
any other fund managed by FS Private Investments III LLC or its Affiliates.


 


“Jefferies Units” means (i) any Common
Units issued or issuable to Jefferies pursuant hereto, (ii) any Common
Units subsequently acquired by Jefferies or any of its Affiliates, and (iii) any
common equity securities issued or issuable directly or indirectly with respect
to the securities referred to in clauses (i) or (ii) above by way of
recapitalization, merger, consolidation or other reorganization, including a
recapitalization or exchange.  As to any
particular Jefferies Units, such securities shall cease to be Jefferies Units
when they have been (x) distributed to the public pursuant to a offering
registered under the Securities Act, (y) sold to the public through a broker,
dealer or market maker in compliance with Rule 144 under the Securities
Act (or any similar rule then in force), or (z) acquired by any
Executive.


 


“Losses” means items of the LLC’s loss and
deduction determined according to Sections 3.2(b) and (c).


 


“Marketable Securities” means Securities that
are:


 


(a)                                  traded
on a national securities exchange;


 


5





















 


(b)                                 reported
through the National Association of Securities Dealers, Inc., Automated
Quotation System; or


 


(c)                                  otherwise
traded over-the-counter or saleable in transactions effected pursuant to Rule 144A
under the Securities Act,


 


as the case may be, and
that, in each case, are determined by the Board to be marketable at a price
approximating their Value within a reasonable period of time and are not
subject to restrictions on Transfer as a result of applicable contract
provisions or the provisions of the Securities Act (other than as contemplated
by Rule 144A of the regulations promulgated thereunder) or regulations
thereunder.


 


“Member” means each party listed on the
attached Schedule I and any other Person who is admitted to the LLC
as a Member pursuant to Section 5.14, in each case solely in such
Person’s capacity as a Member of the LLC and so long as such Person continues
to be a Member hereunder, and “Members” means all such Members.


 


“Minimum Gain” means, with respect to each
nonrecourse liability of the LLC, the amount of gain (of whatever character),
if any, that would be realized by the LLC if the LLC disposed of (in a taxable
transaction) its property subject to such liability in full satisfaction
thereof (and for no other consideration), and then aggregating the amounts so
computed.  A Unitholder’s share of
Minimum Gain shall, at the end of any LLC Taxable Year, be equal to the excess
of (x) the sum of the nonrecourse deductions allocated to such Unitholder (and
such Unitholder’s predecessors in interest) and the aggregate distributions to
such Unitholder (and such Unitholder’s predecessors in interest) up to that
time of proceeds of nonrecourse liabilities that are allocable to an increase
in Minimum Gain over (y) the sum of such Unitholder’s (and such Unitholder’s
predecessors in interest) aggregate share of the net decreases in Minimum Gain
up to that time and such Unitholder’s (and such Unitholder’s predecessors in
interest) aggregate share of the decreases up to that time in Minimum Gain
resulting from revaluations of LLC property subject to one or more nonrecourse
liabilities of the LLC, as computed in accordance with the provisions of
Treasury Regulations Section 1.704-2(g).


 


“New Members” has the meaning set forth in Section 5.14.


 


“Offered Units” has the meaning set forth in Section 5.18.


 


“Permitted Transferee” has the meaning ascribed
to such term in the Members Agreement.


 


“Person” means any natural person or Entity,
including a natural person’s heirs, executors, administrators when the context
so permits.


 


“Preferred Stock” means the Series A 10% Cumulative
Compounding Preferred Stock, par value $.001 per share, of TSG Holdings.


 


“Preferred Unit” means a Unit representing a
fractional part of the ownership of the Company and having the rights,
preferences and obligations specified with respect to Preferred Units in this
Agreement.


 


6





















 


“Preferred Yield” means, with respect to each
Preferred Unit, the amount accruing on such Preferred Unit on a daily basis, at
the rate of 10% per annum, compounded annually on the last day of each July, on
(a) the Unreturned Capital of such Preferred Unit plus (b) Unpaid
Preferred Yield thereon for all prior periods. 
Notwithstanding the foregoing, with respect to a Preferred Unit issued
in exchange for a share of Preferred Stock, for purposes of calculating the
Preferred Yield with respect to the period ending July 31, 2005 on such
Preferred Unit, the Unreturned Capital of such Preferred Unit shall be reduced
by an amount equal to the dividends which had accrued on such share of
Preferred Stock for the period from August 1, 2004 to the date prior to
the contribution of such share of Preferred Stock to the capital of the LLC, it
being understood that (i) for all other purposes the Unreturned Capital of
such Preferred Unit shall not be reduced by such amount and (ii) the
purpose of this sentence is to synchronize and equalize the compounding of
dividends on such share of Preferred Stock with the compounding of Preferred
Yield on such Preferred Unit, so that at July 31, 2005 the sum of the liquidation
preference and accrued dividends on such share of Preferred Stock will equal
the sum of the Unreturned Capital and Unpaid Preferred Yield on such Preferred
Unit.  In calculating the amount of any
Distribution to be made during a period, a Preferred Unit’s Preferred Yield for
such portion of such period elapsing before such Distribution is made shall be
included as part of such Unit’s Preferred Yield.


 


“Profits” means items of the LLC’s income and
gain determined according to Sections 3.2(b) and (c).


 


“Required Members” means,
as of any date, the approval, request or consent of the holders of a majority
of the Jefferies Units.


 


“Securities” shall mean shares of capital
stock, limited partner interests, warrants, options, bonds, notes, debentures
and other securities and equity interests of whatever kind of any Person,
whether readily marketable or not.


 


“Securities Act” shall mean the Securities Act
of 1933, as amended, and the rules and regulations of the Securities and
Exchange Commission promulgated thereunder.


 


“Subsidiaries” means, with respect to any
Person, any corporation, limited liability company, partnership, association or
other business entity of which (i) if a corporation, a majority of the
total voting power of shares of stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers
or trustees thereof is at the time owned or controlled, directly or indirectly,
by that Person or one or more of the other Subsidiaries of that Person or a
combination thereof, or (ii) if a limited liability company, partnership,
association or other business entity, a majority of the partnership or other
similar ownership interest thereof is at the time owned or controlled, directly
or indirectly, by any Person or one or more Subsidiaries of that Person or a
combination thereof.  Notwithstanding the
foregoing, TSG Holdings shall be considered a Subsidiary of the LLC.  For purposes hereof, a Person or Persons shall
be deemed to have a majority ownership interest in a limited liability company,
partnership, association or other business entity if such Person or Persons
shall be allocated a majority of limited liability company, partnership,
association or other business entity gains or losses or shall be or control the
managing director, general partner or similar controlling Person of such
limited liability company, partnership, association or other business entity.


 


7





















 


“Taxable Year” means the LLC’s Fiscal Year or
such other year as may be required by Code Section 706.


 


“Terminated Member” has the meaning set forth
in Section 5.15.


 


“Transfer” has the meaning set forth in Section 5.13(a).


 


“Treasury Regulations” means the income tax
regulations promulgated under the Code and effective as of the date
hereof.  Such term shall be deemed to
include any future amendments to such regulations and any corresponding
provisions of succeeding regulations to the extent the Board determines that
any such amendments and succeeding regulations do not adversely affect the
economic interests of the Unitholders hereunder.


 


“TSG Holdings” means TSG Holdings Corp., a
Delaware corporation.


 


“Unit” means an interest in the Profits, Losses
and Distributions of the LLC representing a fractional part of all of the
Profits, Losses and Distributions of the LLC; provided, that any class
or type of Units issued shall have the rights, preferences and obligations
specified in this Agreement.


 


“Unitholder” means any Person (whether or not a
Member) in its capacity as owner of one or more Units as reflected on the LLC’s
books and records.


 


“Unpaid Preferred Yield” of any Preferred Unit
means, as of any date, an amount equal to the excess, if any, of (a) the
aggregate Preferred Yield accrued on such Preferred Unit for all periods prior
to such date, over (b) the aggregate amount of prior Distributions made by
the Company that constitute payment of Preferred Yield on such Preferred Unit
pursuant to Section 4.1(a)(i).


 


“Unreturned Capital” means, with respect to a
Unit, the Capital Contribution made in exchange for or on account of such Unit
reduced by all Distributions made by the LLC that constitute a return of the
Capital Contribution therefor pursuant to Section 4.1(a)(ii) (in
the case of Preferred Units) or Section 4.1(a)(iii) (in the
case of Class A Units).


 


“Value” shall mean, with respect to any
Securities owned (directly or indirectly) by the LLC at any time, the fair
market value of such Securities, as determined in accordance with Article VII
hereof.


 


“Wholly-Owned Subsidiary” means, with respect
to any Person, a Subsidiary of which all of the outstanding capital stock or
other ownership interests are owned by such Person or another Wholly-Owned Subsidiary
of such Person.


 


ARTICLE II

MEMBERS


 


Section 2.1                                      Members.  The initial Members of the LLC and their
addresses are listed on Schedule I hereto, and such schedule shall
be amended from time to time by the Board,


 


8





















 


among other reasons, to
reflect the withdrawal or termination of Members or the admission of additional
Members pursuant to this Agreement.


 


Section 2.2                                      Meetings of
Members.  Meetings of the Members may
be called by (i) the Board, or (ii) the holders of a majority of the Class A
Units.  All meetings of the Members will
be held at the principal office of the LLC or at such other place within or
without the State of Delaware as may be determined by the Board and set forth
in the respective notice or waivers of notice of such meeting.


 


Section 2.3                                      Notice of
Meetings of Members.  Written or
printed notice stating the place, day and hour of the meeting will be
delivered, by or at the direction of the Board, to each Member entitled to vote
at such meeting not fewer than three (3) business days before the date of
the meeting; provided, that such notice requirement may be waived in
writing by the Required Members.  Such
notice may, but need not, specify the purpose or purposes of such meeting and
may, but need not, limit the business to be conducted at such meeting to such
purpose(s).  Attendance of a Member at a
meeting shall constitute a waiver of notice of such meeting, except when the
Member attends for the express purpose of objecting at the beginning of the
meeting to the transaction of any business because the meeting is not lawfully
called or convened.


 


Section 2.4                                      Quorum.  Except as otherwise provided by applicable
law, Members holding a majority of the Class A Units, represented in
person or by proxy, shall constitute a quorum at all meetings of the
Members.  Once a quorum is present at the
meeting of the Members, the subsequent withdrawal from the meeting of any
Member prior to adjournment or the refusal of any Member to vote will not
affect the presence of a quorum at the meeting. 
If, however, such quorum will not be present at any meeting of the
Members, the Members entitled to vote at such meeting will have the power to
adjourn the meeting from time to time, without notice other than announcement
at the meeting, until Members representing a quorum are present or represented.


 


Section 2.5                                      Voting Rights.  Except as specifically provided herein or
otherwise required by applicable law, (i) each Class A Member shall
be entitled to one vote per Class A Unit held by such Class A Member
on all matters to be voted on by the Members of the LLC and (ii) the Class B
Units, and the Preferred Units shall be non-voting Units and shall not entitle
the holders thereof to vote on any matters to be voted on by the Members of the
LLC.  When a quorum is present, the
affirmative vote of Members holding a majority of Class A Units (whether
present in person or represented by proxy) entitled to vote on the subject
matter shall be the act of the Members, unless the question is one upon which
by express provision of the Act or this Agreement requires the consent of a
specific Member or Members, in which case such express provision shall govern
and control the decision of such question.


 


Section 2.6                                      Registered
Members.  The LLC will be entitled to
treat the owner of record of any Units as the owner in fact of such Unit for
all purposes, and accordingly will not be bound to recognize any equitable or
other claim to or interest in such Unit on the part of any other person, whether
or not it will have express or other notice of such claim or interest, except
as expressly provided by this Agreement or the laws of the State of Delaware.


 


9





















 


Section 2.7                                      Action Without
a Meeting and Telephonic Meetings. 
Notwithstanding any provision contained in this Agreement, any action of
the Members may be taken by written consent without a meeting, or any meeting
of the Members may be held by means of a telephonic conference connection so
long as all parties can hear one another. 
Any such action taken by the Members by written consent without a
meeting will be effective only if the written consent or consents are in
writing, set forth the action so taken, and are signed by Members holding a
majority of the Class A Units. 
Prompt notice of the taking of any such action by the Members without a
meeting by less than unanimous written consent shall be given to those Members
who have not consented in writing.


 


Section 2.8                                      Limitation of
Liability.  Except as otherwise
provided in the Act, no Member or Unitholder shall be obligated personally for
any debt, obligation or liability of the LLC or of any other Member or
Unitholder solely by reason of being a Member or Unitholder.  Except as otherwise provided in the Act, by
law or expressly in this Agreement or any of the other Investment Documents, no
Member or Unitholder, each in its capacity as such, shall have any fiduciary or
other duty to another Member or Unitholder with respect to the business and affairs
of the LLC.  No Member or Unitholder
shall have any responsibility to restore any negative balance in his Capital
Account or to contribute to or in respect of the liabilities or obligations of
the LLC or return distributions made by the LLC except as provided in Section 4.6
or as otherwise required by the Act or other applicable law; provided,
that Unitholders shall be responsible for their failure to make capital
contributions required hereunder.


 


Section 2.9                                      No Right to
Withdraw.  No Unitholder shall have
any right to receive any distribution or the repayment of his Capital
Contributions, except distributions provided in Section 4.1 and
distributions provided in Article VI upon dissolution and liquidation of
the LLC.  A Member may withdraw from the
LLC only in accordance with Section 5.15.


 


Section 2.10                                Rights to
Information.  Members shall have the
right to receive from the LLC upon request a copy of the Certificate and of
this Agreement, as in effect from time to time, and such other information
regarding the LLC as is required by the Act, subject to reasonable conditions
and standards established by the Board (which may include, without limitation,
withholding or restrictions on the disclosure or use of confidential
information).  Terminated Members shall
have the right to receive such information from the LLC regarding the basis of
the allocations made pursuant to Section 4.2 and the distributions
made pursuant to Section 4.1 as such a Terminated Member may
reasonably request, subject to reasonable conditions and standards established
by the Board (which may include, without limitation, withholding or
restrictions on the disclosure or use of confidential information).


 


Section 2.11                                Lack of Authority.  The Members shall have no power to
participate in the management of the LLC except as expressly authorized by the
Act or this Agreement.  No Member, acting
solely in the capacity of a Member, is an agent of the LLC nor does any Member,
unless expressly and duly authorized in writing to do so by the Board, have any
power or authority to act for or on behalf of the LLC, to do any act that would
be binding on the LLC, to pledge its credit, to incur any expenditures on
behalf of the LLC, to execute any instrument on its behalf or to render it
liable for any purpose.


 


10





















 


Section 2.12                                Nature of Interest
in the Company.  A Member’s interests
in the LLC shall be personal property for all purposes.


 


Section 2.13                                Termination of Units.  A Member shall cease to be a Member or
Unitholder, as the case may be, at such time that such Member transfers all of
its Units in accordance with this Agreement.


 


Section 2.14                                Representations and
Warranties of Members.  In connection
with the acquisition by the Members of Units pursuant to the terms and
conditions of this Agreement (including each Member, if any, admitted after the
date hereof), each Member, severally and not jointly, represents and warrants
to the LLC that:


 


(a)                                  The
Units will be acquired for the Member’s own account and not with a view to, or
intention of, distribution thereof in violation of the Securities Act, or any
applicable state securities laws, and the Units will not be disposed of in
contravention of the Securities Act or any applicable state securities laws;


 


(b)                                 No
commission, fee or other remuneration is to be paid or given directly or
indirectly, to any Person for soliciting the Member to acquire the Membership
Units;


 


(c)                                  The
Member is sophisticated in financial matters and is able to evaluate the risks
and benefits of making the capital contribution contemplated hereunder with
respect to the Units and has determined that such investment is suitable for
the Member, based upon the Member’s financial situation and needs, as well as
the Member’s other securities holdings;


 


(d)                                 The
Member is not subject to any state’s administrative enforcement order or
judgment which prohibits, denies or revokes the use of any exemption from
registration in connection with the offer, purchase or sale of securities;


 


(e)                                  The
Member is able to bear the economic risk of such Member’s investment in the
Units for an indefinite period of time and the Member understands that the
Units have not been registered under the Securities Act and cannot be sold
unless subsequently registered under the Securities Act or unless an exemption
therefrom is available;


 


(f)                                    The
Member has had an opportunity to ask questions and receive answers concerning
the terms and conditions of such Member’s investment in the Units and has had
full access to such other information concerning the LLC as the Member has
requested; and


 


(g)                                 This
Agreement constitutes the legal, valid and binding obligation of the Member,
enforceable in accordance with its terms (subject to principles of equity, the
effect of bankruptcy, insolvency, reorganization, receivership, moratorium and
other similar laws), and the execution, delivery and performance of this
Agreement by the Member does not and will not, in any material respect,
conflict with, violate or cause a


 


11





















 


breach of any applicable law, material agreement,
contract or instrument to which the Member is a party or any judgment, order or
decree to which the Member is subject.


 


Section 2.15                                Business
Opportunities of FS Private Investments III LLC and Jefferies.  The Members hereby acknowledge that the
interests of FS Private Investments III LLC, a Delaware limited liability
company (“FS Private Investments III LLC”), and Jefferies in the LLC are
that of investors providing capital for the LLC in accordance with the terms
hereof, and the very nature of the businesses of FS Private Investments III LLC
and Jefferies and the Affiliates thereof is to provide capital and financing in
a wide variety of forms to, and to make investments with respect to, a vast and
expanding number of diverse Persons, businesses and enterprises.  Accordingly, the Members hereby agree that FS
Private Investments III LLC and Jefferies and their respective Affiliates may
engage, provide financing, invest or possess an interest in other businesses
and enterprises of any kind, nature or description, independently or with
others, whether (i) such ventures are competitive with the LLC and its
Affiliates or (ii) the operations or property of such businesses and
enterprises are transacted or located in the vicinity of or adjacent to the LLC
or any area in which the LLC or any of its Affiliates engages in business, and,
to the extent permitted by the Act, FS Private Investments III LLC and Jefferies
and their respective Affiliates shall not have any duties or responsibilities
to the LLC that they might otherwise have under the Act.  The fact that FS Private Investments III LLC,
Jefferies or any of their respective Affiliates (including any Jefferies
Advisor who may be deemed to be Affiliates of FS Private Investments III LLC or
Jefferies) may take advantage of such opportunities and not offer such
opportunities, or disclose information pertaining thereto, to the LLC or to the
other Members, shall not subject FS Private Investments III LLC, Jefferies or
any of their respective Affiliates (including any Jefferies Advisor) to any
liability to the LLC or to the other Members whatsoever.  Neither the LLC nor any other Member shall
have the right by virtue of this Agreement, or the relationship created hereby,
in or to such ventures, investments or other opportunities, or to the income or
profits derived therefrom by FS Private Investments III LLC ̧ Jefferies or any
of their respective Affiliates, and the pursuit of, and nondisclosure of
information to the LLC pertaining to, such ventures, investments or other
opportunities even though competitive with the business of the LLC, shall not
be deemed wrongful or improper or in violation of this Agreement or any rights
of the LLC or the Members under the Act or other applicable law.


 


ARTICLE III

CAPITAL CONTRIBUTIONS; CAPITAL ACCOUNTS


 


Section 3.1                                      Capital
Contributions.  Immediately upon the
execution and delivery of this Agreement, each initial Member shall make the Capital
Contribution set forth opposite the name of such member on Schedule I
hereto, and in exchange therefore shall be issued the number and type of Units
specified opposite the name of such Member on Schedule I hereto.  Except for the Executive, the initial Capital
Contributions shall be made in the form of Preferred Stock and Common Stock of TSG
Holdings.  The initial Capital Account of
each such initial Member shall equal the amount set opposite such Member’s name
on Schedule I hereto.  The
Board may amend Schedule I from time to time to reflect changes in
ownership, including, without limitation, by reason of the admission,
withdrawal or termination of any Member or the Transfer of any Unit.  Except for the Capital Contributions of the
Members required to be made


 


12





















 


pursuant to this Section 3.1,
the Members shall not be required to make any additional Capital Contributions.


 


Section 3.2                                      Capital
Accounts.


 


(a)                                  The
LLC shall maintain a separate “Capital Account” for each Unitholder according
to the rules of Treasury Regulations Section 1.704-1(b)(2)(iv).  For this purpose, the LLC may, upon the
occurrence of the events specified in Treasury Regulations Section 1.704-1(b)(2)(iv)(f), increase or decrease the Capital
Accounts in accordance with the rules of such regulation and Treasury
Regulations Section 1.704-1(b)(2)(iv)(g) to reflect a revaluation of
the LLC property.


 


(b)                                 For
purposes of computing the amount of any item of the LLC’s income, gain, loss or
deduction to be allocated pursuant to Article IV and to be reflected in
the Capital Accounts, the determination, recognition and classification of any
such item shall be the same as its determination, recognition and
classification for federal income tax purposes (including, without limitation,
any method of depreciation, cost recovery and amortization used for this
purpose); provided, that:


 


(i)                                     The
computation of all items of income, gain, loss and deduction shall include
those items described in Code Section 705(a)(2)(B) or Treasury
Regulations Section 1.704-1(b)(2)(iv)(i), without regard to the fact that
such items are not includable in gross income or are not deductible for federal
income tax purposes.


 


(ii)                                  If
the Book Value of any LLC property is adjusted pursuant to Treasury Regulations
Section 1.704-1(b)(2)(iv)(e) or (f), the amount of such adjustment shall be taken into account as
gain or loss from the disposition of such property.


 


(iii)                               Items
of income, gain, loss or deduction attributable to the disposition of the LLC
property having a Book Value that differs from its adjusted basis for tax
purposes shall be computed by reference to the Book Value of such property.


 


(iv)                              Items
of depreciation, amortization and other cost recovery deductions with respect
to the LLC property having a Book Value that differs from its adjusted basis
for tax purposes shall be computed by reference to the property’s Book Value in
accordance with Treasury Regulations Section 1.704-1(2)(iv)(g).


 


(v)                                 To
the extent an adjustment to the adjusted tax basis of any LLC asset pursuant to
Code Sections 732(d), 734(b) or 743(b) is required, pursuant to
Treasury Regulations Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts,
the amount of such adjustment to the Capital Accounts shall be treated as an
item of gain (if the adjustment increases the basis of the asset) or loss (if
the adjustment decreases such basis).


 


13





















 


(c)                                  The
Board shall be responsible for allocating items of income, gain, loss, and
deduction for purposes of determining Profits and Losses.


 


Section 3.3                                      Interest.  Except as otherwise expressly provided
herein, no interest shall be paid by the LLC on Capital Contributions or on
balances in Capital Accounts.


 


Section 3.4                                      Negative
Capital Accounts.  No Unitholder
shall be required to pay to the LLC or any other Unitholder any deficit or
negative balance which may exist from time to time in such Unitholder’s Capital
Account.


 


Section 3.5                                      LLC Capital.  No Unitholder shall have any right (a) to
demand the return of such Unitholder’s Capital Contribution or any other
distribution from the LLC (whether upon resignation, withdrawal, termination or
otherwise), except upon dissolution of the LLC pursuant to Article VI
hereof, or (b) to cause a partition of the LLC’s assets.


 


Section 3.6                                      No Withdrawal.  No Person shall be entitled to withdraw any
part of his Capital Contribution or Capital Account or to receive any
Distribution from the LLC, except as expressly provided herein.


 


Section 3.7                                      Loans from
Unitholders.  Loans by Unitholders to
the LLC shall not be considered Capital Contributions.  If any Unitholder shall advance funds to the
LLC in excess of the amounts required hereunder to be contributed by him to the
capital of the LLC, the making of such advance shall not result in any increase
in the amount of the Capital Account of such Unitholder.  The amount of any such advance shall be a
debt of the LLC to such Unitholder and shall be payable or collectible in
accordance with the terms and conditions upon which such advances are made, as
agreed upon by the LLC (with the approval of the Board) and such
Unitholder.  Notwithstanding the
foregoing provisions of this Section 3.7, the LLC shall use its
best efforts to refrain from any activity that would cause a Member (or any
holder of direct or indirect interests in a Member) to recognize “unrelated
business taxable income” under Sections 511-514 of the Code.


 


Section 3.8                                      Transfer of
Capital Accounts.  The original
Capital Account established for any substituted Unitholder shall be in the same
amount as the Capital Account of the Unitholder (or portion thereof) to which
such substituted Unitholder succeeds, at the time that the Transfer of Units to
such substituted Unitholder is permitted under Section 5.13.  The Capital Account of any Unitholder whose
interest in the LLC shall be increased or decreased by means of (i) the
Transfer to it of all or part of the Units of another Unitholder or (ii) the
forfeiture of Class B Units pursuant to Section 5.18 shall be
appropriately adjusted to reflect such Transfer or forfeiture.  Any reference in this Agreement to a Capital
Contribution of or Distribution to a Unitholder that has succeeded any other
Unitholder shall include any Capital Contributions or Distributions previously
made by or to the former Unitholder on account of the Units of such former
Unitholder transferred to such Unitholder.


 


14





















 


ARTICLE IV

DISTRIBUTIONS AND ALLOCATIONS


 


Section 4.1                                      Distributions.


 


(a)                                  Distributions
shall be made only when and if, and in the amounts, determined by the
Board.  Distributions of cash or other
property by the LLC shall be made to the Unitholders in the following order and
priority:


 


(i)                                     First,
to the holders of Preferred Units, an amount equal to the aggregate Unpaid
Preferred Yield on the Preferred Units held by such Unitholders (in the
proportion that each Unitholder’s share of Unpaid Preferred Yield on such Units
bears to the aggregate Unpaid Preferred Yield on all such Units as of the time
of such Distribution) until the Unpaid Preferred Yield in respect of the
outstanding Preferred Units is equal to zero;


 


(ii)                                  Second,
to the holders of Preferred Units, an amount equal to the aggregate Unreturned
Capital with respect to the Preferred Units held by such Unitholders (in the
proportion that each Unitholder’s share of Unreturned Capital with respect to
such Preferred Units bears to the aggregate Unreturned Capital with respect to
all such Units as of the time of such Distribution) until the holders of
Preferred Units have received Distributions in respect of such Units pursuant
to this Section 4.1(a)(ii) in an amount equal to the aggregate
Unreturned Capital with respect to such Units as of the time of such
Distribution;


 


(iii)                               Third,
to holders of Class A Units, an amount equal to the Unreturned Capital
with respect to such Units (in the proportion that each such Unitholder’s share
of Unreturned Capital with respect to such Class A Units bears to the
aggregate Unreturned Capital with respect to all such Units as of the time of
such Distribution) until the holders of Class A Units have received
Distributions in respect of such Units pursuant to this Section 4.1(a)(iii) in
an amount equal to the aggregate Unreturned Capital with respect to such Units
as of the time of such Distribution;


 


(iv)                              Fourth,
to the holders of Class A Units, pro rata in accordance with the number of
Class A Units held by each Unitholder, until such time as each Class A
Unitholder shall have achieved an IRR of 30% with respect to their Preferred
Units and Class A Units;


 


(v)                                 Fifth,
100% to the holders of Class B Units, pro rata in accordance with the
number of Class B Units, until holders of Class B Units have received
distributions pursuant to this Section 4.1(a)(v) equal to 5%
of the total distributions under Section 4.1(a)(iii), Section 4.1(a)(iv) and
this Section 4.1(a)(v);


 


(vi)                              Sixth,
95% to the holders of the Class A Units, pro rata in accordance with the
number of Class A Units held by such holders, and 5% to the


 


15





















 


holders of Class B Units, pro rata in accordance
with the number of Class B Units held by such holders.


 


(b)                                 A
Distribution pursuant to Section 4.1(a) shall be made to the
Persons shown on Schedule I as Unitholders as of the date of such
Distribution.  Without consent of the
Required Members, no distributions in kind of any of the LLC’s assets shall be
made pursuant to Section 4.1(a), except for distributions of Marketable
Securities.


 


Section 4.2                                      Allocations.  Except as otherwise provided in Section 4.3,
Profits and Losses for any Fiscal Year shall be allocated among the Unitholders
in such manner that, as of the end of such Fiscal Year, the respective Capital
Accounts of the Unitholders shall be equal to the respective net amounts,
positive or negative, that would be distributed to them, determined as if the
LLC were to (i) liquidate the assets of the LLC for an amount equal to
their Book Value and (ii) distribute the proceeds of liquidation pursuant
to Section 6.2.


 


Section 4.3                                      Special Allocations.


 


(a)                                  Losses
attributable to a partner nonrecourse debt (as defined in Treasury Regulations Section 1.704-2(b)(4))
shall be allocated in the manner required by Treasury Regulations Section 1.704-2(i).  If there is a net decrease during a Taxable
Year in partner nonrecourse debt minimum gain (as defined in Treasury
Regulations Section 1.704-2(i)(3)), Profits for such Taxable Year (and, if
necessary, for subsequent Taxable Years) shall be allocated to the Unitholders
in the amounts and of such character as determined according to Treasury
Regulations Section 1.704-2(i)(4).


 


(b)                                 Except
as otherwise provided in Section 4.3(a), if there is a net decrease
in the Minimum Gain during any Taxable Year, each Unitholder shall be allocated
Profits for such Taxable Year (and, if necessary, for subsequent Taxable Years)
in the amounts and of such character as determined according to Treasury
Regulations Section 1.704-2(f). 
This Section 4.3(b) is intended to be a minimum gain
chargeback provision that complies with the requirements of Treasury
Regulations Section 1.704-2(f), and shall be interpreted in a manner
consistent therewith.


 


(c)                                  If
any Unitholder who unexpectedly receives an adjustment, allocation, or
distribution described in Treasury Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5), and (6) has
a Deficit Capital Account as of the end of any Taxable Year, computed after the
application of Sections 4.3(a) and 4.3(b) but before the application
of any other provision of this Article IV, then Profits for such Taxable
Year shall be allocated to such Unitholder in proportion to, and to the extent
of, such Deficit Capital Account.  This Section 4.3(c) is
intended to be a qualified income offset provision as described in Treasury
Regulations Section 1.704-1(b)(2)(ii)(d), and shall be interpreted in a manner consistent therewith.


 


(d)                                 Subject
to the other provisions of this Section 4.3, if Profits or Losses
are allocated for any Fiscal Year pursuant to Section 4.3(a), (b), or
(c), then subsequent allocations of Profits and Losses shall be made, to
the extent possible, to the


 


16





















 


Unitholders in such amounts so that the net Profits
and Losses allocated pursuant to this Section 4.3(d) and Sections
4.3(a), (b), and (c) are equal to the net Profits and Losses that
would have been allocated to the Unitholders if such allocations pursuant to Sections
4.3(a), (b), and (c) had not been made.


 


Section 4.4                                      Tax Allocations.


 


(a)                                  The
income, gains, losses, deductions and credits of the LLC will be allocated, for
federal, state and local income tax purposes, among the Unitholders in
accordance with the allocation of such income, gains, losses, deductions and credits
among the Unitholders for computing their Capital Accounts, except that
if any such allocation is not permitted by the Code or other applicable law,
the LLC’s subsequent income, gains, losses, deductions and credit will be
allocated among the Unitholders so as to reflect as nearly as possible the
allocation set forth herein in computing their Capital Accounts.


 


(b)                                 Items
of the LLC taxable income, gain, loss and deduction with respect to any
property contributed to the capital of the LLC shall be allocated among the
Unitholders in accordance with Code Section 704(c) so as to take
account of any variation between the adjusted basis of such property to the LLC
for federal income tax purposes and its Book Value.


 


(c)                                  If
the Book Value of any LLC asset is adjusted, subsequent allocations of items of
taxable income, gain, loss and deduction with respect to such asset shall take
account of any variation between the adjusted basis of such asset for federal
income tax purposes and its Book Value in the same manner as under Code Section 704(c).


 


(d)                                 Allocations
of tax credits, tax credit recapture and any items related thereto shall be
allocated to the Unitholders according to their interests in such items as
determined by the Board taking into account the principles of Treasury
Regulations Section 1.704-1(b)(4)(ii).


 


(e)                                  Allocations
pursuant to this Section 4.4 are solely for purposes of federal,
state and local taxes and shall not affect, or in any way be taken into account
in computing, any Unitholder’s Capital Account or share of Profits, Losses,
Distributions or other LLC items pursuant to any provision of this Agreement.


 


Section 4.5                                      Curative
Allocations.  If the Board
determines, after consultation with counsel experienced in income tax matters,
that the allocation of any item of LLC income, gain, loss, deduction or credit
is not specified in this Article IV (an “unallocated item”), or
that the allocation of any item of LLC income, gain, loss, deduction or credit
hereunder is clearly inconsistent with the Unitholders’ economic interests in
the LLC (determined by reference to the general principles of Treasury
Regulations Section 1.704-1(b) and the factors set forth in Treasury
Regulations Section 1.704-1(b)(3)(ii)) (a “misallocated item”),
then the Board may allocate such unallocated items, or reallocate such
misallocated items, to reflect such economic interests.


 


17





















 


Section 4.6                                      Indemnification
and Reimbursement for Payments on Behalf of a Unitholder or Former Unitholder.  If the LLC is obligated to pay any amount to
a governmental agency (or otherwise makes a payment) because of a present or
former Unitholder’s status or otherwise specifically attributable to a present
or former Unitholder (including, without limitation, federal withholding taxes
with respect to foreign Persons, state personal property taxes, state
unincorporated business taxes, etc.), then such present or former Unitholder
(the “Indemnifying Person”) shall indemnify the LLC in full for the
entire amount paid (including, without limitation, any interest, penalties and
expenses associated with such payments). 
In the case of a present Unitholder, the amount to be indemnified shall
be charged against the amount distributable to such Unitholder and against the Capital
Account of the Indemnifying Person. 
Whether the Indemnifying Person is a present or former Unitholder, at
the option of the Board, either:


 


(i)                                     promptly
upon notification of an obligation to indemnify the LLC, the Indemnifying
Person shall make a cash payment to the LLC equal to the full amount to be
indemnified (and the amount paid shall be added to the Indemnifying Person’s
Capital Account but shall not be treated as Capital Contributions), or


 


(ii)                                  the
LLC shall reduce subsequent distributions that would otherwise be made to the
Indemnifying Person, until the LLC has recovered the amount to be indemnified
(and the amount withheld shall not be treated as Capital Contributions but will
otherwise be treated as having been paid to the Indemnifying Person for
purposes of this Agreement).


 


ARTICLE V

MANAGEMENT


 


Section 5.1                                      Management
Authority.  There is hereby
established an advisory board (the “Board of Advisors” or “Board”)
to be comprised of natural persons who shall be elected as set forth in this Article V
(each, an “Advisor”, and collectively, the “Advisors”).  The powers of the LLC shall be exercised by
or under the authority of, and the business and affairs of the LLC shall be
managed under, the Board.  In addition to
the powers and authorities expressly conferred by this Agreement upon the
Board, except with respect to certain responsibilities assigned to the Tax
Matters Partner, all decisions and determinations relating to the LLC and its operations
shall be made by the Board.


 


Section 5.2                                      Number,
Election and Qualifications.  The
number of Advisors initially shall be two (2), which number may be increased or
decreased from time to time upon prior written consent of the Required
Members.  The Advisors shall be elected
or removed as provided in Section 5.3.  Advisors need not be residents of the State
of Delaware.


 


Section 5.3                                      Designation of Advisors.


 


(a)                                  Each
Member shall vote all of his Common Units and all other voting securities of
the LLC over which such Member has voting control, and shall take all other
necessary or desirable actions within such Member’s control (whether in such


 


18





















 


Member’s capacity as a holder of Units, stockholder,
Member, Advisor, director, member of a board committee or officer of the LLC or
otherwise, and including, without limitation, attendance in person or by proxy
for purposes of obtaining a quorum and execution of written consents in lieu of
meetings), and the LLC shall take all necessary or desirable actions within
their control (including, without limitation, calling special board and Member
or stockholder meetings), so that the Board shall consist of individuals
designated by the holders of a majority of the Jefferies Units, acting through
ING Furman Selz Investors III L.P. (the “Jefferies Advisors”).  The Jefferies Advisors shall initially be
James Luikart and Nicholas Daraviras.


 


(b)                                 Any
Advisor required to be elected as described in Section 5.3(a) shall
be removed from the Board or any committee thereof (with or without cause) at
the written request of the holder or other Person that has the right to
designate such Advisor under Section 5.3(a), but only upon such
written request and under no other circumstances.


 


(c)                                  In
the event that any Advisor required to be elected as described in Section 5.3(a) ceases
to serve as an Advisor or a member of any committee thereof during such
representative’s term of office, the resulting vacancy on the Board or such
committee shall be filled by a representative designated by the holder or other
Person that has the right to designate such Advisor under Section 5.3(a).


 


(d)                                 Once
designated pursuant to this Section 5.3, an Advisor shall continue
in office until the removal of such Advisor in accordance with the provisions
of this Agreement or until the earlier death or resignation of such
Advisor.  Any Advisor may resign at any
time by giving written notice of such Advisor’s resignation to the Board.  Any such resignation shall take effect at the
time the Board receives such notice or at any later effective time specified in
such notice.  Unless otherwise specified
in such notice, the acceptance by the Board of such Advisor’s resignation shall
not be necessary to make such resignation effective.


 


Section 5.4                                      Meetings of
the Board.  Meetings of the Board may
be held at such time and place either within or without the State of Delaware
as will from time to time be determined by the Board.  Meetings of the Board may be called by any
Advisor on not fewer than 24 hours written notice to each other Advisor.


 


Section 5.5                                      Quorum.  At all meetings of the Board, the presence of
a majority of the Advisors shall be necessary and sufficient to constitute a
quorum for the transaction of business unless a greater number is required by
law.  The act of a majority of the
Advisors will be the act of the Board, unless a greater number is required by
law.  If a quorum shall not be present at
any meeting of the Board, the Advisors present at the meeting may adjourn the
meeting from time to time, without notice other than announcement at the
meeting, until a quorum will be present. 
An Advisor may vote or be present at a meeting either in person or by
proxy.


 


Section 5.6                                      Attendance and
Waiver of Notice.  Attendance of an
Advisor at any meeting will constitute a waiver of notice of such meeting,
except where an Advisor attends


 


19





















 


a meeting for the express
purpose of objecting to the transaction of any business on the ground that the
meeting is not lawfully called or convened. 
Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the Board need be specified in the notice or
waiver of notice of such meeting.


 


Section 5.7                                      Delegation by
the Board.  The Board may authorize
any Person (including, without limitation, any Member or Advisor) to enter into
any document on behalf of the LLC and perform the obligations of the Company
thereunder.  In the absence of any such
authorization, no document or agreement shall be binding on the LLC unless
signed on behalf of the LLC by an Advisor.


 


Section 5.8                                      Issuance of
Units.  The Board will have sole and
complete discretion in determining whether to issue Units, the number of Units
to be issued at any particular time, the purchase price for any Units issued,
and all other terms and conditions governing the issuance of Units; provided,
that the Board will not issue Units to any Person unless the issuance of the
Units satisfies the conditions set forth in Section 5.13.  The purchase price for any Unit will be paid
to the LLC in cash or cash equivalents, or if approved by the Board, any other
form of consideration.


 


Section 5.9                                      Actions
Without a Meeting and Telephonic Meetings. 
Notwithstanding any provision contained in this Agreement, any action of
the Board may be taken by written consent without a meeting, or any meeting of
the Board may be held by means of a telephonic conference connection so long as
all parties can hear one another.  Any such
action taken by the Board by written consent without a meeting will be
effective only if the written consent or consents are in writing, set forth the
action so taken, and are signed by all Advisors of the Board.


 


Section 5.10                                Indemnification of
Each Unitholder, Member, Terminated Member and Advisor.  Except as limited by law and subject to the
provisions of this Article, each Unitholder, Member, Terminated Member and Advisor,
shall be entitled to be indemnified and held harmless on an as-incurred basis
by the LLC (but only after first making a claim for indemnification available
from any other source and only to the extent indemnification is not provided by
that source) to the full extent permitted under the Act, as in effect from time
to time, against all losses, liabilities and expenses (including, without
limitation, attorneys’ fees and expenses) arising from proceedings in which
such Unitholder, Member, Terminated Member or Advisor, as the case may be, may
be involved, as a party or otherwise, by reason of his being or having been a
Unitholder, Member, Terminated Member or Advisor of the LLC, or by reason of
his involvement in the management of the affairs of the LLC (including, without
limitation, by virtue of acting as an officer, director or employee of a
Subsidiary of the LLC), whether or not he continues to be such at the time any
such loss, liability or expense is paid or incurred but only to the extent that
he (i) acted in good faith and (ii) was neither grossly negligent nor
engaged in willful malfeasance.  The
rights of indemnification provided in this Article will be in addition to
any rights to which such Unitholder, Member, Terminated Member or Advisor may
otherwise be entitled by contract or as a matter of law and shall extend to his
successors and assigns.  The right of each
Unitholder, Member, Terminated Member or Advisor to indemnification hereunder
for reasonable expenses (as incurred) (including, without limitation, attorneys’
fees and expenses) incurred by such Unitholder, Member, Terminated Member or Advisor
may be


 


20





















 


conditioned upon the
delivery by such Unitholder, Member, Terminated Member or Advisor to the LLC of
a written undertaking (reasonably acceptable to the Board) to repay such amount
if such Unitholder, Member, Terminated Member or Advisor is determined pursuant
to this Article or adjudicated to be ineligible for indemnification, which
undertaking shall be an unlimited general obligation but need not be secured.


 


Section 5.11                                Heirs and Personal
Representatives.  The indemnification
provided by this Article shall inure to the benefit of the Affiliates,
heirs and personal representatives of each Unitholder, Member, Terminated
Member or Advisor of the LLC.


 


Section 5.12                                Non-Exclusivity.  The provisions of this Article shall not
be construed to limit the power of the LLC to indemnify its Unitholders,
Members, Terminated Members, Advisors, or agents to the full extent permitted
by law or to enter into specific agreements, commitments or arrangements for
indemnification permitted by law.  The
absence of any express provision for indemnification herein shall not limit any
right of indemnification existing independently of this Article.


 


Section 5.13                                Issuance or Transfer
of Interests.


 


(a)                                  Restrictions
on Transfer.  Other than a Permitted
Transfer permitted by Section 5.13(c), no Member nor any assignee
or successor in interest to any Member shall (voluntarily or involuntarily)
directly or indirectly, sell, transfer, assign, pledge or otherwise dispose of
(each, a “Transfer”) any Units (or other equity interests in the LLC) or
any economic benefit therein (including a transfer pursuant to a foreclosure
sale of any of the assets of a Member), or in any part thereof, or in any part
of the property of the LLC, without the prior approval of the Board; provided
that this provision shall not restrict Transfers by a Jefferies Member or its
Permitted Transferees or its or their subsequent transferees.


 


(b)                                 Void
Transfers.


 


(i)                                     Any
purported Transfer of Units or any economic interest therein not in compliance
with this Section 5.13 shall be null and void ab  initio,
regardless of any notice provided to the LLC, and shall not create any
obligation or liability of the LCC to the purported transferee, and any Person
purportedly acquiring any Units or any economic benefit therein purportedly
transferred not in compliance with this Section 5.13 shall not be
entitled to admission to the LLC as a substitute Member.


 


(ii)                                  In
the case of an attempted Transfer of any Units or any economic interest therein
that is not in compliance with this Section 5.13, the parties
engaging or attempting to engage in such Transfer shall indemnify and hold
harmless the LLC, the Board and the other Members from all cost, liability and
damage that any of such indemnified persons may incur (including, without
limitation, incremental tax liability and attorneys’ fees and expenses) as a
result of such Transfer or attempted Transfer and the enforcement of this
indemnity.


 


21





















 


(c)                                  Permitted
Transfers.  For purposes of this
Agreement, a Permitted Transfer shall mean a Transfer by any Member or
Permitted Transferee to any Permitted Transferee.  As used herein, “Permitted Transferee”
shall mean a Transferee who agrees in writing to be bound by the terms of this
Agreement and who is:


 


(A)                              in
the case of any Member or Permitted Transferee who is a natural person, such
Member’s or Permitted Transferee’s spouse, children or grandchildren (in each
case, natural or adopted), any trust for the exclusive benefit of such Member
or Permitted Transferee or such Member’s or Permitted Transferee’s spouse,
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 Member or
Permitted Transferee or such Member’s or Permitted Transferee’s spouse,
children or grandchildren (in each case, natural or adopted); or


 


(B)                                in
the case of any Member or Permitted Transferee who is, in each case, a natural
person, the heirs, executors, administrators or personal representatives upon
the death of such Member or Permitted Transferee or upon the incompetency or
disability of such Member or Permitted Transferee for purposes of the
protection and management of such Member’s or Permitted Transferee’s assets.


 


(d)                                 In
addition to the other restrictions contained herein on Transfer and issuance of
Units, issuances and Transfers of Units or other equity securities of the LLC
(including, without limitation, by operation of law) will not be effective
unless all of the following conditions are satisfied:


 


(i)                                     The
issuance or Transfer, as applicable, shall comply with all applicable laws,
including, without limitation, any applicable securities laws and any
applicable laws promulgated by any applicable state liquor authority.


 


(ii)                                  The
issuance or Transfer, as applicable, shall not affect the LLC’s existence or
qualification as a limited liability company under the Act.


 


(iii)                               The
issuance or Transfer, as applicable, shall not cause the LLC to be classified
as other than a partnership for United States federal income tax purposes.


 


(iv)                              The
issuance or Transfer, as applicable, shall not result in a termination of the
LLC under Code Section 708, unless the Board determines that any such
termination will not have a material adverse impact on the Members.


 


(v)                                 The
issuance or Transfer, as applicable, shall not cause the application of the tax-exempt
use property rules of Code Sections 168(g)(l)(B) and 168(h) to
the LLC or its Members.


 


(vi)                              The
issuance or Transfer, as applicable, shall not result in the LLC being treated
as a “publicly traded partnership” within the meaning of Section 7704 of
the Code.


 


22





















 


(vii)                           The
issuance or Transfer, as applicable, shall not result in the LLC having more
than 100 beneficial owners for purposes of the Investment Company Act of 1940,
as amended.


 


(viii)                        In the
case of a Transfer, the transferor and the transferee shall provide such legal
opinions and documentation as the Board shall reasonably request (if any).


 


(ix)                                The
acquiring person shall have agreed to be bound by this Agreement and shall have
executed a joinder substantially in the form attached hereto as Exhibit A.


 


(e)                                  Notwithstanding
anything to the contrary contained in this Section 5.13 or
elsewhere in this Agreement, no transferee of any LLC interest (but excluding
transferees that were Members immediately prior to such a Transfer, who automatically
shall become Members with respect to any additional Units they so acquire)
shall become a Member in respect of the interest so transferred unless such
transferee is admitted as a Member pursuant to Section 5.14.


 


(f)                                    Following
the Transfer of any LLC interest permitted under this Section 5.13,
the transferee of such interest (i) shall be treated as having made all of
the Capital Contributions made by, and received all of the Distributions
received by, the transferor in respect of such interest and (ii) shall
have the rights and obligations of a Unitholder so long as such transferee owns
any Units.  No transferee of a LLC
interest may further Transfer such interest without complying with the
provisions of this Section 5.13.


 


(g)                                 The
transferor and transferee of any LLC interest shall be jointly and severally
obligated to reimburse the LLC for all reasonable expenses (including, without
limitation, attorneys’ fees and expenses) incurred in connection with any
Transfer or proposed Transfer, whether or not consummated.


 


(h)                                 Any
Member who Transfers all of the Units or other equity securities of the LLC
owned by it in accordance with this Section 5.13 will thereupon
cease to be a Member and shall become a Terminated Member.


 


Section 5.14                                Admission of New Members.  Notwithstanding anything to the contrary in
this Agreement, additional Persons may be admitted to the LLC as Members (“New
Members”) only upon the approval of the Required Members and upon such
terms and conditions as are established by the Required Members, which may
include the establishment of classes or groups of Members having different
relative rights, powers and duties, including, without limitation, rights and
powers that are superior or inferior to those of existing Members, or the right
to vote as a separate class or group on matters specified by amendment of this
Agreement; provided, however, that any Permitted Transferee shall
be admitted as a New Member upon such Permitted Transferee’s agreement to be
bound by the terms and conditions of this Agreement and execution of a joinder
substantially in the form attached hereto as Exhibit A.  New Members shall be admitted at the time
when all conditions to their admission have been


 


23





















 


satisfied, as determined
by the Board, and Schedule I and this Agreement shall be amended or
restated accordingly.


 


Section 5.15                                Withdrawal,
Expulsion or Other Termination of Members. 
A Member may withdraw from the LLC but only if he has given the LLC at
least 30 days’ written notice in advance of the effective date of such
withdrawal and upon such withdrawal such Person shall cease to be a
Member.  A Member shall automatically
cease to be a Member as a result of his death or legal incapacity.  Any Member who is an employee or officer of
the LLC or any of its Subsidiaries and whose employment with the LLC or any of
its Subsidiaries is terminated for any reason shall cease to be a Member upon
such termination.  Any Person who has
ceased to be a Member (including, without limitation, by such withdrawal,
death, legal incapacity or termination) or the estate of or successor in
interest to such Person shall be a “Terminated Member”.


 


Section 5.16                                Share of a
Terminated Member.  In the event that
a Member becomes a Terminated Member, such Terminated Member or his or her
estate or other legal representative (as applicable) shall retain or succeed to
such Terminated Member’s Units and Capital Account (if any) as adjusted
pursuant to the terms hereof and shall have the rights of a Unitholder if and
for so long as such Person owns any such Units.


 


Section 5.17                                Effect of Termination of a Member.


 


(a)                                  The
death, withdrawal, incapacity, bankruptcy or other termination of a Member
shall not affect the existence of the LLC, and the remaining Members shall
continue the business of the LLC under the terms of this Agreement.  Thereafter, the Terminated Member shall no
longer be a Member for purposes of this Agreement and shall have only the
rights of a Unitholder so long as such Person owns any Units.


 


(b)                                 A
Terminated Member’s continuing share of the LLC’s income, expenses, gains,
losses, etc. shall not be regarded as an interest in the LLC but shall
represent only his continuing right to receive a portion of the Distributions,
if any, made by the LLC.  Such Terminated
Member shall not be entitled to participate in any LLC decision or
determination (including but not limited to voting or consent rights with
respect to amendments to this Agreement, calculation of a majority of Units, or
otherwise, except as provided herein), and his successors and assigns will
acquire only the rights of a Unitholder.


 


Section 5.18                                Forfeiture of Class B Units upon Termination of
Employment of Executive.  Upon
(i) the death or Disability of an Executive, (ii) termination by the
LLC or its subsidiaries of an Executive’s employment with the LLC or any of its
Subsidiaries with or without cause or (iii) the voluntary resignation by
an Executive, all Class B Units held by such Executive or his or her
Permitted Transferees shall immediately be forfeited to the LLC without further
act or deed by the LLC and without payment of any consideration therefor, and
upon such forfeiture such Executive and his or her Permitted Transferees shall
cease to be a Member and shall cease to be entitled to any Distributions or
other payments on account of such Class B Units and instead all such
Distributions or other payments shall inure to the benefit of the holders of
other Units; provided however that if Executive’s employment with the LLC or
its


 


24





















 


Subsidiaries is
terminated due to the death of Executive, then Executive shall not forfeit that
portion of his Class B Units equal to the number of his Class B Units
multiplied by a fraction, the numerator of which is the number of full years
between the date hereof and the date of his death (but no greater than 3) and
the denominator of which is equal to 3.


 


Section 5.19                                LLC Funds.  Except as specifically provided in this
Agreement or with the approval of the Board, the LLC shall not pay to or use
for the benefit of any Unitholder, funds, assets, credit, or other resources of
any kind or description of the LLC. 
Funds of the LLC shall (i) be deposited only in the accounts of the
LLC in the LLC’s name, (ii) not be commingled with funds of any
Unitholder, and (iii) be withdrawn only upon such signature or signatures
as may be designated in writing from time to time by the Board.


 


Section 5.20                                Devotion of Time.  The Advisors shall not be obligated and shall
not be expected to devote all of their time or business efforts to the affairs
of the LLC.


 


Section 5.21                                Payments to Advisors;
Reimbursements.  Except as otherwise
determined by the Board, no Advisor shall be entitled to remuneration by the
LLC for services rendered in its capacity as an Advisor (other than for
reimbursement of reasonable out-of-pocket expenses of such Advisor).  The LLC will cause its Subsidiaries to
reimburse the Advisors for their reasonable out-of-pocket expenses incurred in connection
with their attendance at Board meetings.


 


ARTICLE VI

DURATION; TERMINATION


 


Section 6.1                                      Duration.  The LLC shall terminate upon (i) the
sale or other disposition by the LLC of all of the assets (including, without
limitation, cash) it then owns, (ii) the dissolution of the LLC by action
of the Board and the Required Members or (iii) any other event that would
cause the dissolution of a limited liability company under the Act (each of the
foregoing events, a “Dissolution Event”).


 


Section 6.2                                      Liquidation of LLC Interests.


 


(a)                                  Upon
dissolution of the LLC, the Board shall appoint one Member (or any other
Person) to serve as the “Liquidator,” who shall act at the direction of the
Board, unless and until a successor Liquidator is appointed as provided
herein.  The Liquidator shall agree not
to resign at any time without 30 days’ prior written notice.  The Liquidator may be removed at any time,
with or without cause, by notice of removal and appointment of a successor
Liquidator approved by the Board.  Within
30 days following the occurrence of any such removal, a successor Liquidator
may be elected by the Board.  The
successor Liquidator shall succeed to all rights, powers and duties of the
former Liquidator.  The right to appoint
a successor or substitute Liquidator in the manner provided herein shall be
recurring and continuing for so long as the functions and services of the
Liquidator are authorized to continue under the provisions hereof, and every
reference herein to the Liquidator shall be deemed to refer also to any such
successor or substitute Liquidator appointed in the manner herein
provided.  Except as expressly provided
in this Article VI and subject to the Board’s right to remove the


 


25





















 


Liquidator, the Liquidator appointed in the manner
provided herein shall have and may exercise, without further authorization or
consent of any of the parties hereto, all of the powers conferred upon the
Board under the terms of this Agreement (for and during such period of time as
shall be reasonably required in the good faith judgment of the Liquidator to
complete the winding up and liquidation of the LLC as provided for
herein).  The Liquidator shall receive as
compensation for its services (i) no additional compensation, if the
Liquidator is an employee of the LLC or any of its Subsidiaries, or (ii) if
the Liquidator is not such an employee, a reasonable fee plus out-of-pocket
costs or such other compensation as the Board may approve.


 


(b)                                 The
Liquidator shall liquidate the assets of the LLC, and apply and distribute the
proceeds of such liquidation, in the following order of priority, unless
otherwise required by mandatory provisions of applicable law:


 


(i)                                     First,
to the payment of the LLC’s debts and obligations to its creditors, including,
without limitation, sales commissions and other expenses incident to any sale
of the assets of the LLC.


 


(ii)                                  Second,
to the establishment of and additions to such reserves as the Liquidator may
deem necessary or appropriate.


 


(iii)                               Third,
to the Unitholders, in accordance with Section 4.1.


 


The reserves established pursuant to
subparagraph (ii) shall be paid over by the Liquidator to a bank or
other financial institution, to be held in escrow for the purpose of paying any
such contingent or unforeseen liabilities or obligations and, at the expiration
of such period as the Liquidator deems advisable, such reserves shall be
distributed to the Unitholders in accordance with Section 4.1.  The allocations and distributions provided
for in this Agreement are intended to result in the Capital Account of each
Unitholder immediately prior to the distribution of the LLC’s assets pursuant
to this Section 6.2(b) being equal to the amount distributable
to such Unitholder pursuant to this Section 6.2(b).  The Board is authorized to make appropriate
adjustments in the allocation of Profits and Losses as necessary to cause the
amount of each Unitholder’s Capital Account immediately prior to the
distribution of the LLC’s assets pursuant to this Section 6.2(b) to
equal the amount distributable to such Unitholder pursuant to this Section 6.2(b).


 


(c)                                  The
provisions of Section 6.2(b) that require the liquidation of
the assets of the LLC notwithstanding, but subject to the order of priorities
set forth in Section 6.2(b), if upon dissolution of the LLC the
Board determines that an immediate sale of part or all of the LLC’s assets
would be impractical or could cause undue harm to the Unitholders, then the
Board may, in its sole discretion, defer the liquidation of any assets except
those necessary to satisfy LLC liabilities and reserves, and may, in its
absolute discretion, distribute to the Unitholders, such assets in kind or as
tenants in common.  For purposes of any
such distribution, the Board will determine the fair market value of any
property to be distributed in accordance with any valuation procedure that the
Board reasonably deems appropriate.


 


26





















 


(d)                                 A
reasonable time will be allowed for the orderly winding up of the business and
affairs of the LLC and the liquidation of its assets pursuant to Section 6.2(b) in
order to minimize any losses otherwise attendant upon such winding up.  Distributions upon liquidation of the LLC (or
any Unitholder’s interest in the LLC) and related adjustments will be made by
the end of the Fiscal Year of the liquidation (or, if later, within 90 days
after the date of such liquidation) or as otherwise permitted by Treasury
Regulations Section 1.704-1(b)(2)(ii)(b).


 


ARTICLE VII

VALUATION


 


Section 7.1                                      Valuation.  With respect to the valuation of any property
distributed to any Unitholder, such property shall be valued at the fair market
value thereof determined in good faith by the Board.  With respect to the valuation of any Units,
the fair market value of each Unit shall be the fair market value of such Unit
as determined by the Board in its good faith judgment.


 


ARTICLE VIII

BOOKS OF ACCOUNT


 


Section 8.1                                      Books.  The LLC shall maintain complete and accurate
books of account of the LLC’s affairs at the LLC’s principal office, which
books shall be open to inspection by any Member (or his or its authorized
representative) to the extent required by the Act in accordance with Section 2.10.


 


Section 8.2                                      Tax Allocations and Reports.


 


(a)                                  Within
120 days after the end of each Fiscal Year, or as soon as reasonably
practicable thereafter, the Board shall cause the LLC to furnish each
Unitholder or Member with a form K-1 for such Fiscal Year.  The LLC will use reasonable efforts to deliver
or cause to be delivered as soon as practicable during each Fiscal Year (and,
in any event, will deliver not later than May 31 of each Fiscal Year), to
each Unitholder or Member all information necessary for the preparation of such
Person’s United States federal income tax returns and, if applicable, any
state, local and foreign income tax returns, including a statement showing such
Person’s share of income, gains, losses, deductions and credits for such year
for United States federal income tax purposes (and, if applicable, state, local
or foreign income tax purposes) and the amount of any Distributions made to or
for the account of such Person.  Upon the
written request of any such Unitholder or Member made not later than 30 days
after the end of each Fiscal Year and at the sole expense of such Person, the
LLC will use reasonable efforts to deliver or cause to be delivered any
additional information necessary for the preparation of any state, local and
foreign income tax returns that must be filed by such Person.


 


(b)                                 The
Tax Matters Partner will determine whether to make or revoke any available
election pursuant to the Code; provided, that the Members intend that
the LLC be treated as a partnership for U.S. federal and any applicable state
income tax


 


27





















 


purposes, and no such election to the contrary shall
be permitted.  Each Unitholder will, upon
request, supply the information necessary to give proper effect to any such
election.


 


(c)                                  The
LLC hereby designates ING Furman Selz Investors III L.P. to act as the “Tax
Matters Partner” (as defined in Section 6231(a)(7) of the Code)
in accordance with Sections 6221 through 6233 of the Code.  The Tax Matters Partner is authorized and
required to represent the LLC (at the LLC’s expense) in connection with all
examinations of the LLC’s affairs by tax authorities, including resulting
administrative and judicial proceedings, and to expend LLC funds for
professional services and costs associated therewith; provided, that the
Tax Matters Partner may be removed and replaced by, and shall act in such
capacity at the direction of, the Board. 
Each Unitholder agrees to cooperate with the Tax Matters Partner and to
do or refrain from doing any or all things reasonably requested by the Tax
Matters Partner with respect to the conduct of such proceedings.  Subject to the foregoing proviso, the Tax
Matters Partner will have sole discretion to determine whether the LLC (either
on its own behalf or on behalf of the Unitholders) will contest or continue to
contest any tax deficiencies assessed or proposed to be assessed by any taxing
authority.  Any deficiency for taxes
imposed on any Unitholder (including penalties, additions to tax or interest
imposed with respect to such taxes) will be paid by such Unitholder, and if
paid by the LLC, will be recoverable from such Unitholder (including by offset
against distributions otherwise payable to such Unitholder).


 


ARTICLE IX

MISCELLANEOUS


 


Section 9.1                                      Amendments.  This Agreement and the Schedules hereto
may be amended only by the prior written consent of the Required Members; provided,
that any such amendment that adversely affects one Member and is prejudicial to
such Member relative to all other Members cannot be effected without the consent
of such Member; provided, further, that (a) any amendment
(other than pursuant to Section 5.14) that materially and adversely
affects a Unitholder’s or Member’s allocations or distributions under Article IV
(as compared with its effect on other, similarly situated Unitholders and
Members) shall not be effective with respect to such Unitholder or Member,
unless a majority in interest of all such Unitholders and Members whose
allocations or distributions would be materially and adversely affected by such
amendment (measured by the number of Units held by them) consent thereto in
writing, and (b) no amendment to any Member’s rights under Section 5.3
may be made without the prior written consent of such Member.


 


Section 9.2                                      Successors.  Except as otherwise provided herein, this
Agreement shall inure to the benefit of and be binding upon the Unitholders,
the Members, the Terminated Members and their legal representatives, heirs,
successors and permitted assigns.


 


Section 9.3                                      Governing Law;
Severability.  All issues and
questions concerning the application, construction, validity, interpretation
and enforcement of this Agreement and the Exhibits and Schedules to this
Agreement will be governed by, and construed in accordance with, the laws of
the State of Delaware, and specifically the Act, without giving effect to any
choice of law or conflict of law rules or provisions (whether of the State
of Delaware or any


 


28





















 


other jurisdiction) that
would cause the application of the laws of any jurisdiction other than the
State of Delaware.  If it is determined
by a court of competent jurisdiction that any provision of this Agreement is
invalid under applicable law, such provision shall be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
this Agreement.


 


Section 9.4                                      Notices.  All notices, demands and other communications
to be given or delivered under or by reason of provisions under this Agreement (a) shall
be in writing, (b) must be delivered personally, via a nationally
recognized overnight delivery service (delivery charges prepaid) or via
facsimile along with telephonic confirmation, and (c) shall be effective
only upon actual receipt by the recipient. 
All such notices, demands and other communications shall be sent (i) in
the case of any Member, Advisor or Unitholder, to the addresses or facsimile
numbers set forth in Schedule I hereto or to such other addresses
or facsimile numbers as have been supplied in writing to the LLC and (ii) in
the case of the LLC, to The Sheridan Group Holdings, LLC, c/o Jefferies.


 


Section 9.5                                      Singular;
Plural; Gender.  Wherever from the
context it appears appropriate, each term stated in either the singular or the
plural shall include the singular and the plural, and pronouns stated in either
the masculine, the feminine or the neuter gender shall include the masculine,
feminine and neuter.


 


Section 9.6                                      Entire
Agreement; Headings; Counterparts. 
Except as otherwise expressly set forth herein, this Agreement embodies
the complete agreement and understanding among the parties hereto with respect
to the subject matter hereof and supersede and preempt any prior
understandings, agreements or representations by or among the parties, written
or oral, that may have related to the subject matter hereof in any way.  Descriptive headings are for convenience only
and shall not control or affect the meaning or construction of any provision of
this Agreement.  This Agreement may be
executed in any number of counterparts, any one of which need not contain the
signatures of more than one party, but all such counterparts together shall
constitute one agreement.


 


Section 9.7                                      No Third Party
Beneficiaries.  Except for the
provisions of Section 5.10, nothing in this Agreement is intended,
nor shall anything herein be construed, to confer any rights, legal or
equitable, in any Person other than the Unitholders and, to the extent provided
herein, the Terminated Members, and their respective legal representatives, heirs,
successors and permitted assigns.


 


Section 9.8                                      No Action for
Partition.  No Unitholder or
Terminated Member will have any right to maintain any action for partition with
respect to the property of the LLC.


 


Section 9.9                                      Business Days.  If any time period for giving notice or
taking action under this Agreement expires on a day which is a Saturday, Sunday
or holiday in the State of New York, the time period will be automatically
extended to the business day immediately following such Saturday, Sunday or holiday.


 


Section 9.10                                No Strict
Construction.  The parties to this
Agreement have participated jointly in the negotiation and drafting of this
Agreement.  In the event an ambiguity or
question of intent or interpretation arises, this Agreement will be construed
as if drafted jointly


 


29





















 


by the parties to this
Agreement, and no presumption or burden of proof will arise favoring or
disfavoring any party by virtue of the authorship of any of the provisions of this
Agreement.


 


Section 9.11                                Manner of
Distributions.  Distributions by the
Company may be made in cash or in kind in the manner determined by the Board.


 


Section 9.12                                Compliance with the
Act.  Each Member agrees not to take
any action or fail to take any action which, considered alone or in the
aggregate with other actions or events, would result in the termination of the
Company under the Act.


 


Section 9.13                                Further Assurances.  Each of the Members hereby agrees to take or
cause to be taken such further actions, to execute, acknowledge, deliver and
file or cause to be executed, acknowledged, delivered and filed such further
documents and instruments, and to use best efforts to obtain such consents, as
may be necessary or as may be reasonably requested to fully effectuate the
purposes, terms and conditions of this Agreement.


 


Section 9.14                                No Waiver of
Remedies.  The failure of a Member to
insist on the strict performance of any covenant or duty required by this
Agreement, or to pursue any remedy under this Agreement, shall not constitute a
waiver of the breach or the remedy.


 


Section 9.15                                Remedies Cumulative.  The remedies of the Members under this
Agreement are cumulative and shall not exclude any other remedies to which the
Member may be lawfully entitled.  Each of
the parties confirms that damages at law may be an inadequate remedy for a
breach or threatened breach of any provision hereof.  The respective rights and obligations
hereunder shall be enforceable by specific performance, injunction or other
suitable remedy, but nothing herein contained is intended to or shall limit or
affect any rights at law or by statute or otherwise of any party aggrieved as
against the other parties for a breach or threatened breach of any provision
hereof, it being the intention by this Section to make clear the agreement
of the parties that the respective rights and obligations of the parties
hereunder shall be enforceable in equity as well as at law or otherwise.


 


Section 9.16                                Jurisdiction and
Venue.  ALL JUDICIAL PROCEEDINGS
BROUGHT BY OR AGAINST THE LLC OR THE MEMBERS WITH RESPECT TO THIS AGREEMENT,
ANY OTHER AGREEMENT CONTEMPLATED HEREBY OR ANY TRANSACTIONS CONTEMPLATED HEREBY
OR THEREBY SHALL BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATE OF DELAWARE.  BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, THE LLC AND EACH MEMBER ACCEPT FOR
ITSELF AND HIMSELF AND IN CONNECTION WITH ITS OR HIS RESPECTIVE PROPERTIES,
GENERALLY AND UNCONDITIONALLY, THE EXCLUSIVE JURISDICTION OF THE AFORESAID
COURTS, AND IRREVOCABLY AGREE TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN
CONNECTION WITH THIS AGREEMENT.  THE LLC
AND EACH MEMBER HEREBY WAIVE ANY CLAIM THAT SUCH JURISDICTION IS AN
INCONVENIENT FORUM OR AN IMPROPER FORUM BASED ON LACK OF VENUE.


 


Section 9.17                                Waiver of Jury Trial.  EACH PARTY TO THIS AGREEMENT HEREBY WAIVES,
TO THE EXTENT PERMITTED BY APPLICABLE LAW, TRIAL BY


 


30





















 


JURY IN ANY LITIGATION IN
ANY COURT WITH RESPECT TO, IN CONNECTION WITH, OR ARISING OUT OF THIS AGREEMENT
OR THE VALIDITY, PROTECTION, INTERPRETATION, COLLECTION OR ENFORCEMENT THEREOF.


 


* * * * *


 


31





















 


IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be signed as of the date first above written.


 


	
   

  	
  THE SHERIDAN GROUP HOLDINGS

  (JEFFERIES), LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Nicholas Daraviras

  	
   

  
	
   

  	
   

  	
  Nicholas Daraviras, a Jefferies Advisor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ING FURMAN SELZ INVESTORS III L.P.

  
	
   

  	
   

  
	
   

  	
  ING BARINGS U.S. LEVERAGED EQUITY PLAN

  LLC

  
	
   

  	
   

  
	
   

  	
  ING BARINGS GLOBAL LEVERAGED EQUITY

  PLAN LTD.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  FS Private Investments III LLC, Manager

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James Luikart

  	
   

  
	
   

  	
  Its:

  	
  Managing Member

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ John A. Saxton

  	
   

  
	
   

  	
  John A. Saxton

  
							



 


32





















 


Schedule I


 


LIST OF MEMBERS

DATED AS OF MAY 10, 2005


 


	
  Name and Address of

  Member

  	
   

  	
  Initial Capital

  Contribution

  	
   

  	
  Number of

  Preferred Units

  	
   

  	
  Number of

  Class A

  Common Units

  	
   

  	
  Number of

  Class B Units

  	
   

  	
  Initial Capital

  Account

  Balance

  	
   

  
	
  ING Furman Selz
  Investors III L.P.

  c/o FS Private Investments III LLC

  520 Madison Avenue

  12th Floor

  New York, New York 10022

  Attn: Mr. Brian Friedman

  Telephone: (212) 284-1701

  Facsimile: (212) 284-1717

   

  with a copy to:

   

  Dechert LLP

  4000 Bell Atlantic Tower

  1717 Arch Street

  Philadelphia, Pennsylvania 19103

  Attention: Carmen J.
  Romano, Esq.

  Telephone: (215) 994-4000

  Facsimile: (215) 994-2222

  	
   

  	
  13,385.22554
  shares of Preferred Stock of TSG Holdings and 159,347.922 shares of Common
  Stock of TSG Holdings, which shares of Preferred Stock and Common Stock were
  acquired on August 21, 2003 for an aggregate cash purchase price of
  $14,978,704.76. The shares of Preferred Stock are being contributed to the
  LLC in exchange for the Preferred Units and are valued at the date of
  contribution to the LLC at $1,179.105 per share of Preferred Stock, and the
  shares of Common Stock are being contributed to the LLC in exchange for the
  Common Units and are valued at the date of contribution to the LLC at $19.80
  per share of Common Stock.

  	
   

  	
  13,385.22554

  	
   

  	
  159,347.922

  	
   

  	
  0

  	
   

  	
  $

  	
  18,937,675.22

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
													



 


1





















 


	
  Name and Address of

  Member

  	
   

  	
  Initial Capital

  Contribution

  	
   

  	
  Number of

  Preferred Units

  	
   

  	
  Number of

  Class A

  Common Units

  	
   

  	
  Number of

  Class B Units

  	
   

  	
  Initial Capital

  Account

  Balance

  	
   

  
	
  ING Barings U.S. Leveraged 

  Equity Plan LLC

  c/o FS Private
  Investments III LLC

  520 Madison Avenue

  12th Floor

  New York, New York 10022

  Attn: Mr. Brian Friedman

  Telephone: (212) 284-1701

  Facsimile: (212) 284-1717

   

   

  with a copy to:

   

  Dechert LLP

  4000 Bell Atlantic Tower

  1717 Arch Street

  Philadelphia, Pennsylvania 19103

  Attention: Carmen J.
  Romano, Esq.

  Telephone: (215) 994-4000

  Facsimile: (215) 994-2222

  	
   

  	
  4,729.47709
  shares of Preferred Stock of TSG Holdings and 56,303.299 shares of Common
  Stock of TSG Holdings, which shares of Preferred Stock and Common Stock were
  acquired on August 21, 2003 for an aggregate cash purchase price of
  $5,292,510.08. The shares of Preferred Stock are being contributed to the LLC
  in exchange for the Preferred Units and are valued at the date of
  contribution to the LLC at $1,179.105 per share of Preferred Stock, and the
  shares of Common Stock are being contributed to the LLC in exchange for the
  Common Units and are valued at the date of contribution to the LLC at $19.80
  per share of Common Stock.

  	
   

  	
  4,729.47709

  	
   

  	
  56,303.299

  	
   

  	
  0

  	
   

  	
  6,691,355.40

  	
   

  



 


2





















 


	
  Name and Address of

  Member

  	
   

  	
  Initial Capital

  Contribution

  	
   

  	
  Number of

  Preferred Units

  	
   

  	
  Number of

  Class A

  Common Units

  	
   

  	
  Number of

  Class B Units

  	
   

  	
  Initial Capital

  Account

  Balance

  	
   

  
	
  ING Barings
  Global Leveraged

    Equity Plan Ltd.

  c/o FS Private Investments III LLC

  520 Madison Avenue

  12th Floor

  New York, New York 10022

  Attn: Mr. Brian Friedman

  Telephone: (212) 284-1701

  Facsimile: (212) 284-1717

   

  with a copy to:

   

  Dechert LLP

  4000 Bell Atlantic Tower

  1717 Arch Street

  Philadelphia, Pennsylvania 19103

  Attention: Carmen J. Romano, Esq.

  Telephone: (215) 994-4000

  Facsimile: (215) 994-2222

   

  	
   

  	
  1,095.00113
  shares of Preferred Stock of TSG Holdings and 13,035.728 shares of Common
  Stock of TSG Holdings, which shares of Preferred Stock and Common Stock were
  acquired on August 21, 2003 for an aggregate cash purchase price of
  $1,225,358.41. The shares of Preferred Stock are being contributed to the LLC
  in exchange for the Preferred Units and are valued at the date of
  contribution to the LLC at $1,179.105 per share of Preferred Stock, and the
  shares of Common Stock are being contributed to the LLC in exchange for the
  Common Units and are valued at the date of contribution to the LLC at $19.80
  per share of Common Stock.

  	
   

  	
  1,095.00113

  	
   

  	
  13,035.728

  	
   

  	
  0

  	
   

  	
  1,549,228.72

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  John A. Saxton

  	
   

  	
  $

  	
  100.00

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  100

  	
   

  	
  100.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TOTAL:

  	
   

  	
   

  	
   

  	
  19,209.70376

  	
   

  	
  228,686.949

  	
   

  	
  100

  	
   

  	
  $

  	
  27,178,359.34

  	
   

  
														



 


3





















 


EXHIBIT A


 


FORM OF
JOINDER TO


LIMITED
LIABILITY COMPANY AGREEMENT


 


THIS JOINDER to the Limited Liability Company
Agreement, dated as of                             ,
2005, by and among The Sheridan Group Holdings (Jefferies), LLC, a Delaware
limited liability company (the “LLC”), and certain Members of the LLC
(the “Agreement”), is made and entered into as of                   
by and between the LLC and                                   
(“Holder”).  Capitalized terms used
herein but not otherwise defined shall have the meanings set forth in the
Agreement.


 


WHEREAS, Holder has acquired certain Units and the
Agreement and the LLC requires Holder, as a Unitholder, to become a party to
the Agreement, and Holder agrees to do so in accordance with the terms hereof.


 


NOW, THEREFORE, in consideration of the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties to this
Joinder hereby agree as follows:


 


1.                                       Agreement
to be Bound.  Holder hereby agrees
that upon execution of this Joinder, it shall become a party to the Agreement
and shall be fully bound by, and subject to, all of the covenants, terms and
conditions of the Agreement as though an original party thereto and shall be
deemed a Unitholder for all purposes thereof. 
In addition, Holder hereby agrees that all Units held by Holder shall be
deemed Units for all purposes of the Agreement.


 


2.                                       Successors
and Assigns.  Except as otherwise
provided herein, this Joinder shall bind and inure to the benefit of and be
enforceable by the LLC and its successors and assigns and Holder and any
subsequent holders of Units and the respective successors and assigns of each
of them, so long as they hold any Units.


 


3.                                       Counterparts.  This Joinder may be executed in separate
counterparts each of which shall be an original and all of which taken together
shall constitute one and the same agreement.


 


4.                                       Notices.  For purposes of Section 10.4 of the
Agreement, all notices, demands or other communications to the Holder shall be
directed to:


 


[Name]


[Address]


[Facsimile Number]


 


5.                                       Governing Law.  All issues and questions concerning the
application, construction, validity, interpretation and enforcement of this
Agreement shall be governed by and construed in accordance with the laws of the
State of Delaware and the Act, without


 


1





















 


giving effect to any
choice of law or conflict of law provision or rule (whether of the State
of Delaware or any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of Delaware.


 


6.                                       Jurisdiction
and Venue.  ALL JUDICIAL PROCEEDINGS
BROUGHT BY OR AGAINST THE LLC OR THE MEMBERS WITH RESPECT TO THIS AGREEMENT,
ANY OTHER AGREEMENT CONTEMPLATED HEREBY OR ANY TRANSACTIONS CONTEMPLATED HEREBY
OR THEREBY SHALL BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATE OF DELAWARE. 
BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE LLC AND EACH MEMBER
ACCEPT FOR ITSELF AND HIMSELF AND IN CONNECTION WITH ITS OR HIS RESPECTIVE
PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE EXCLUSIVE JURISDICTION OF THE
AFORESAID COURTS, AND IRREVOCABLY AGREE TO BE BOUND BY ANY JUDGMENT RENDERED
THEREBY IN CONNECTION WITH THIS AGREEMENT. 
THE LLC AND EACH MEMBER HEREBY WAIVE ANY CLAIM THAT SUCH JURISDICTION IS
AN INCONVENIENT FORUM OR AN IMPROPER FORUM BASED ON LACK OF VENUE.


 


6.                     Waiver of Jury Trial.  EACH
PARTY TO THIS AGREEMENT HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE
LAW, TRIAL BY JURY IN ANY LITIGATION IN ANY COURT WITH RESPECT TO, IN
CONNECTION WITH, OR ARISING OUT OF THIS AGREEMENT OR THE VALIDITY, PROTECTION,
INTERPRETATION, COLLECTION OR ENFORCEMENT THEREOF.


 


7.                                       Descriptive
Headings.  The descriptive headings
of this Joinder are inserted for convenience only and do not constitute a part
of this Joinder.


 


*  * 
*  *  *


 


2





















 


IN WITNESS WHEREOF, the parties hereto have executed this
Joinder as of the date first above written.


 


	
   

  	
  THE SHERIDAN GROUP HOLDINGS (JEFFERIES),

  LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [HOLDER]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  



 


3