Exhibit 4.8


 


EXECUTION
COPY




 








 


CREDIT AGREEMENT


 


dated as of


 


April 23,
2010


 


among


 


QUAD/GRAPHICS,
INC.

as U.S. Borrower


 


7345933 CANADA
INC.

as Canadian Borrower


 


The Lenders Party
Hereto


 


JPMORGAN CHASE
BANK, N.A.

as Administrative Agent


 


JPMORGAN CHASE
BANK, N.A., TORONTO BRANCH

as Canadian Administrative Agent


 


U.S. BANK NATIONAL
ASSOCIATION

as Syndication Agent


 


and


 


TD SECURITIES


ROYAL BANK OF
CANADA


SUNTRUST BANK


and


PNC BANK, NATIONAL
ASSOCIATION


 


as Documentation
Agents


 






 


J.P. MORGAN
SECURITIES INC.

as Co-Lead Arranger and Sole Bookrunner


 


U.S. BANK NATIONAL
ASSOCIATION

as Co-Lead Arranger


 




 




















 


TABLE OF
CONTENTS


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I Definitions

  	
  1

  
	
   

  	
   

  	
   

  
	
  SECTION 1.01

  	
  Defined
  Terms

  	
  1

  
	
  SECTION 1.02

  	
  Classification
  of Loans and Borrowings

  	
  46

  
	
  SECTION 1.03

  	
  Terms
  Generally

  	
  46

  
	
  SECTION 1.04

  	
  Accounting
  Terms; GAAP

  	
  46

  
	
  SECTION 1.05

  	
  Québec
  Matters

  	
  47

  
	
   

  	
   

  	
   

  
	
  ARTICLE II The Credits

  	
  48

  
	
   

  	
   

  	
   

  
	
  SECTION 2.01

  	
  Commitments

  	
  48

  
	
  SECTION 2.02

  	
  Loans
  and Borrowings

  	
  49

  
	
  SECTION 2.03

  	
  Requests
  for Revolving Borrowings

  	
  50

  
	
  SECTION 2.04

  	
  Determination
  of U.S. Dollar Amounts

  	
  51

  
	
  SECTION 2.05

  	
  Swingline
  Loans

  	
  52

  
	
  SECTION 2.06

  	
  Letters
  of Credit

  	
  53

  
	
  SECTION 2.07

  	
  Funding
  of Borrowings

  	
  61

  
	
  SECTION 2.08

  	
  Interest
  Elections

  	
  61

  
	
  SECTION 2.09

  	
  Termination
  and Reduction of Commitments

  	
  63

  
	
  SECTION 2.10

  	
  Repayment
  and Amortization of Loans; Evidence of Debt

  	
  64

  
	
  SECTION 2.11

  	
  Prepayment
  of Loans

  	
  65

  
	
  SECTION 2.12

  	
  Fees

  	
  67

  
	
  SECTION 2.13

  	
  Interest

  	
  68

  
	
  SECTION 2.14

  	
  Alternate
  Rate of Interest

  	
  69

  
	
  SECTION 2.15

  	
  Increased
  Costs

  	
  70

  
	
  SECTION 2.16

  	
  Break
  Funding Payments

  	
  71

  
	
  SECTION 2.17

  	
  Taxes

  	
  72

  
	
  SECTION 2.18

  	
  Payments
  Generally; Allocation of Proceeds; Sharing of Set-offs

  	
  73

  
	
  SECTION 2.19

  	
  Mitigation
  Obligations; Replacement of Lenders

  	
  76

  
	
  SECTION 2.20

  	
  Expansion
  Option

  	
  77

  
	
  SECTION 2.21

  	
  Restricted
  Payments; Market Disruption

  	
  78

  
	
  SECTION 2.22

  	
  Judgment
  Currency

  	
  78

  
	
  SECTION 2.23

  	
  Senior
  Debt

  	
  78

  
	
  SECTION 2.24

  	
  Loan
  Repurchases

  	
  79

  
	
  SECTION 2.25

  	
  Defaulting
  Lenders

  	
  80

  
	
   

  	
   

  	
   

  
	
  ARTICLE III Representations and Warranties

  	
  83

  
	
   

  	
   

  	
   

  
	
  SECTION 3.01

  	
  Organization;
  Powers; Subsidiaries

  	
  83

  
	
  SECTION 3.02

  	
  Authorization;
  Enforceability

  	
  83

  
	
  SECTION 3.03

  	
  Governmental
  Approvals; No Conflicts

  	
  84

  
	
  SECTION 3.04

  	
  Financial
  Condition; No Material Adverse Change

  	
  84

  
	
  SECTION 3.05

  	
  Properties

  	
  84

  



 


i

















 


	
  SECTION 3.06

  	
  Litigation,
  Environmental and Labor Matters

  	
  85

  
	
  SECTION 3.07

  	
  Compliance
  with Laws and Agreements

  	
  86

  
	
  SECTION 3.08

  	
  Investment
  Company Status

  	
  86

  
	
  SECTION 3.09

  	
  Taxes

  	
  86

  
	
  SECTION 3.10

  	
  ERISA;
  Canadian Benefit and Pension Plans

  	
  86

  
	
  SECTION 3.11

  	
  Disclosure

  	
  88

  
	
  SECTION 3.12

  	
  Federal
  Reserve Regulations

  	
  88

  
	
  SECTION 3.13

  	
  Solvency

  	
  88

  
	
  SECTION 3.14

  	
  No
  Default

  	
  88

  
	
  SECTION 3.15

  	
  Insurance

  	
  88

  
	
  SECTION 3.16

  	
  No
  Burdensome Restrictions

  	
  89

  
	
  SECTION 3.17

  	
  Liens;
  Security Interest in Collateral

  	
  89

  
	
  SECTION 3.18

  	
  Patriot
  Act, etc.

  	
  89

  
	
  SECTION 3.19

  	
  Employment
  Matters

  	
  89

  
	
  SECTION 3.20

  	
  Canadian
  Anti Money Laundering Legislation

  	
  90

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV Conditions

  	
  90

  
	
   

  	
   

  	
   

  
	
  SECTION 4.01

  	
  Effective
  Date

  	
  90

  
	
  SECTION 4.02

  	
  Funding
  Date Credit Events

  	
  91

  
	
  SECTION 4.03

  	
  Each
  Credit Event Subsequent to the Funding Date

  	
  93

  
	
   

  	
   

  	
   

  
	
  ARTICLE V Affirmative Covenants

  	
  93

  
	
   

  	
   

  	
   

  
	
  SECTION 5.01

  	
  Financial
  Statements and Other Information

  	
  93

  
	
  SECTION 5.02

  	
  Notices
  of Material Events

  	
  95

  
	
  SECTION 5.03

  	
  Existence;
  Conduct of Business

  	
  96

  
	
  SECTION 5.04

  	
  Payment
  of Obligations

  	
  96

  
	
  SECTION 5.05

  	
  Maintenance
  of Properties; Insurance

  	
  96

  
	
  SECTION 5.06

  	
  Books
  and Records

  	
  97

  
	
  SECTION 5.07

  	
  Compliance
  with Laws and Material Contractual Obligations

  	
  97

  
	
  SECTION 5.08

  	
  Use of
  Proceeds

  	
  97

  
	
  SECTION 5.09

  	
  Loan
  Party Guarantors; Pledges; Additional Collateral; Further Assurances;
  Amalgamation Date

  	
  98

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI Negative Covenants

  	
  100

  
	
   

  	
   

  	
   

  
	
  SECTION 6.01

  	
  Indebtedness

  	
  100

  
	
  SECTION 6.02

  	
  Liens

  	
  102

  
	
  SECTION 6.03

  	
  Fundamental
  Changes and Asset Sales

  	
  104

  
	
  SECTION 6.04

  	
  Investments,
  Loans, Advances, Guarantees and Acquisitions

  	
  107

  
	
  SECTION 6.05

  	
  Swap
  Agreements

  	
  109

  
	
  SECTION 6.06

  	
  Transactions
  with Affiliates

  	
  110

  
	
  SECTION 6.07

  	
  Restricted
  Payments

  	
  110

  
	
  SECTION 6.08

  	
  Restrictive
  Agreements

  	
  111

  
	
  SECTION 6.09

  	
  Subordinated
  Indebtedness/Unsecured Indebtedness

  	
  112

  



 


ii

















 


	
  SECTION 6.10

  	
  Sale
  and Leaseback Transactions. No Loan Party will, or permit any Subsidiary to,
  enter into any Sale and Leaseback Transaction, other than Sale and Leaseback
  Transactions (a) in respect of which the cash consideration received for
  the asset or property being sold or otherwise transferred therewith is an
  amount not less than the fair market value of such asset or property and
  (b) that are consummated within 180 days after such Loan Party or such
  Subsidiary acquires or completes the construction of the asset or property
  being sold or otherwise transferred therewith

  	
  113

  
	
  SECTION 6.11

  	
  Financial
  Covenants

  	
  113

  
	
  SECTION 6.12

  	
  Change
  in Fiscal Year

  	
  114

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII Events of Default

  	
  114

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII The Agents

  	
  117

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX Miscellaneous

  	
  122

  
	
   

  	
   

  	
   

  
	
  SECTION 9.01

  	
  Notices

  	
  122

  
	
  SECTION 9.02

  	
  Waivers;
  Amendments

  	
  123

  
	
  SECTION 9.03

  	
  Expenses;
  Indemnity; Damage Waiver

  	
  126

  
	
  SECTION 9.04

  	
  Successors
  and Assigns

  	
  127

  
	
  SECTION 9.05

  	
  Survival

  	
  131

  
	
  SECTION 9.06

  	
  Counterparts;
  Integration; Effectiveness

  	
  131

  
	
  SECTION 9.07

  	
  Severability

  	
  132

  
	
  SECTION 9.08

  	
  Right
  of Setoff

  	
  132

  
	
  SECTION 9.09

  	
  Governing
  Law; Jurisdiction; Consent to Service of Process

  	
  132

  
	
  SECTION 9.10

  	
  WAIVER
  OF JURY TRIAL

  	
  133

  
	
  SECTION 9.11

  	
  Headings

  	
  133

  
	
  SECTION 9.12

  	
  Confidentiality

  	
  133

  
	
  SECTION 9.13

  	
  Patriot
  Act; Proceeds of Crime (Money Laundering and Terrorist Financing Act (Canada)

  	
  134

  
	
  SECTION 9.14

  	
  Several
  Obligations; Nonreliance; Violation of Law

  	
  135

  
	
  SECTION 9.15

  	
  Disclosure

  	
  135

  
	
  SECTION 9.16

  	
  Appointment
  for Perfection

  	
  135

  
	
  SECTION 9.17

  	
  Interest
  Rate Limitation

  	
  135

  
	
  SECTION 9.18

  	
  Subordination
  of Intercompany Indebtedness

  	
  136

  
	
   

  	
   

  	
   

  
	
  ARTICLE X Collection Allocation Mechanism

  	
  137

  
	
   

  	
   

  	
   

  
	
  SECTION 10.01

  	
  Implementation
  of CAM

  	
  137

  
	
  SECTION 10.02

  	
  Letters
  of Credit

  	
  138

  
	
  SECTION 10.03

  	
  Conversion

  	
  139

  



 


iii

















 


TABLE OF
CONTENTS

(Continued)


 


	
  SCHEDULES:

  
	
   

  
	
  Schedule 1.01(a) —
  Effective Date and Funding Date Material Indebtedness

  
	
  Schedule 1.01(b) —
  Senior Secured Note Collateral

  
	
  Schedule 1.01(c) —
  Existing Leveraged Leases; Existing Leveraged Lease Collateral

  
	
  Schedule 1.01(d) —
  Funding Date Mortgage Properties

  
	
  Schedule 2.01 —
  Commitments

  
	
  Schedule 2.06 —
  Existing LCs

  
	
  Schedule 3.01 —
  Subsidiaries

  
	
  Schedule 3.03 —
  Governmental Consents

  
	
  Schedule 3.05 —
  Properties; Lease Disputes

  
	
  Schedule 3.06(a) —
  Litigation

  
	
  Schedule 3.06(b) —
  Environmental

  
	
  Schedule 3.10(a) —
  US Benefits

  
	
  Schedule 3.10(b) —
  Canadian Benefits

  
	
  Schedule 3.10(c) —
  ERISA Event

  
	
  Schedule 3.15 —
  Insurance

  
	
  Schedule 5.08 — Sources
  and Uses

  
	
  Schedule 6.01(b) —
  Existing Indebtedness

  
	
  Schedule 6.02 — Liens

  
	
  Schedule 6.04 —
  Investments

  
	
  Schedule 6.08 —
  Restrictive Agreements

  
	
   

  
	
  EXHIBITS:

  
	
   

  
	
  Exhibit A —
  Form of Assignment and Assumption

  
	
  Exhibit B-1 —
  Form of Opinion of Loan Parties’ Counsel (Foley & Lardner LLP)

  
	
  Exhibit B-2 —
  Form of Opinion of Loan Parties’ Canadian Counsel (Torys LLP)

  
	
  Exhibit C —
  Form of Increasing Lender Supplement

  
	
  Exhibit D —
  Form of Augmenting Lender Supplement

  
	
  Exhibit E — List
  of Closing Documents

  
	
  Exhibit F —
  Form of Compliance Certificate

  
	
  Exhibit G —
  Auction Procedures

  
	
  Exhibit H —
  Form(s) of Note(s)

  



 


iv














 


CREDIT AGREEMENT (this “Agreement”)
dated as of April 23, 2010 among QUAD/GRAPHICS, INC. as U.S. Borrower,
7345933 CANADA INC., as Canadian Borrower, the LENDERS from time to time party
hereto, JPMORGAN CHASE BANK, N.A., as Administrative Agent, and JPMORGAN CHASE
BANK, N.A., TORONTO BRANCH, as Canadian Administrative Agent.


 


The parties hereto agree
as follows:


 


ARTICLE I


 


Definitions


 


SECTION 1.01     Defined Terms.  As used in
this Agreement, the following terms have the meanings specified below:


 


“ABR”, when used in reference to any
Loan (including Swingline Loans) denominated in U.S. Dollars, refers to whether
such Loan, or the Loans comprising such Borrowing, are bearing interest at a
rate determined by reference to the Alternate Base Rate; provided, that
with respect to U.S. Tranche Swingline Loans, such interest rate shall be the
one-month Adjusted LIBO Rate, or, if such rate is then unavailable, the
Alternate Base Rate or such other interest rate as mutually agreed upon by the
U.S. Borrower and the U.S. Tranche Swingline Lender.


 


“Acceptable Funding
Date Schedules” means the schedules to this Agreement, the Collateral
Documents and the other Loan Documents delivered by the U.S. Borrower and its
Subsidiaries and made a part of this Agreement as of the Effective Date, as
such schedules may be updated, supplemented or modified by the U.S. Borrower
and its Subsidiaries on or prior to the Funding Date; provided, that (i) any
information added to schedules in order to reflect the consummation of the
World Color Press Acquisition (such as, for example, the identification of
World Color Press as a Subsidiary of the U.S. Borrower) shall be automatically
permitted under the Loan Documents so long as such information appears in the
Approved PA, and (ii) any information added to schedules as a result of
actions taken solely by third parties that are not Affiliates of the U.S.
Borrower or World Color Press without the consent of a Loan Party or a
Subsidiary thereof (such as the commencement of litigation against a Loan Party
or a Subsidiary thereof) shall be automatically permitted under the Loan
Documents so long as such actions were commenced prior to the Funding Date and
do not result in a Funding Date Material Adverse Effect).


 


“Adjusted LIBO Rate” means, with respect
to any Eurodollar Borrowing for any Interest Period, an interest rate per annum
(rounded upwards, if necessary, to the next 1/16 of 1%) equal to the LIBO Rate
for such Interest Period multiplied by the Statutory Reserve Rate.


 


“Administrative Agent” means JPMorgan
Chase Bank, N.A. (including its branches and affiliates), in its capacity as
administrative agent for the Lenders hereunder.


 


“Administrative Questionnaire” means an
Administrative Questionnaire in a form supplied by the Administrative Agent.


 


1

















 


“Affiliate” means, with respect to a
specified Person, another Person that directly, or indirectly through one or
more intermediaries, Controls or is Controlled by or is under common Control
with the Person specified.


 


“Agents” means,
collectively, the Administrative Agent and the Canadian Administration Agent,
and “Agent” means either one of them.


 


“Aggregate Commitment”
means the aggregate of the Commitments of all of the Lenders, as reduced or
increased from time to time pursuant to the terms and conditions hereof.  As of the Effective Date, the Aggregate
Commitment is U.S. $1,230,000,000.


 


“Aggregate Credit
Exposure” means, at any time, the aggregate of the Credit Exposures of all
of the Lenders.


 


“Alternate Base Rate” means, for any
day, a rate per annum equal to the greatest of (a) the Prime Rate in
effect on such day, (b) the Federal Funds Effective Rate in effect on such
day plus 1⁄2 of 1% and (c) the Adjusted LIBO Rate for a one month Interest
Period on such day (or if such day is not a Business Day, the immediately
preceding Business Day) plus 1%, provided that, for the avoidance of
doubt, the Adjusted LIBO Rate for any day shall be based on the rate appearing
on Reuters Screen LIBOR01 Page (or on any successor or substitute page of
such page) at approximately 11:00 a.m. London time on such day.  Any change in the Alternate Base Rate due to
a change in the Prime Rate, the Federal Funds Effective Rate or the Adjusted
LIBO Rate shall be effective from and including the effective date of such
change in the Prime Rate, the Federal Funds Effective Rate or the Adjusted LIBO
Rate, respectively.


 


“Amalgamation Date”
means the first date on which the Amalgamation Date Requirements have been
satisfied.


 


“Amalgamation Date
Requirements” means (i) the World Color Press Acquisition shall have
been consummated, (ii) 7345933 Canada Inc. shall have merged, consolidated
or otherwise amalgamated with World Color Press, and (iii) the
Administrative Agent shall have received all of the Funding Date closing
documentation required under Exhibit E.


 


“Applicable Agent”
means (a) the Administrative Agent with respect to a Loan, Letter of
Credit or other financial accommodation extended to the U.S. Borrower under the
U.S. Tranche, with respect to any payment hereunder that does not relate to a
particular Loan or Borrowing and is not covered by clause (b) hereof, and
with respect to the administration of the transactions evidenced hereby
generally, and (b) the Canadian Administrative Agent with respect to a
Loan or other financial accommodation extended to the Canadian Borrower or,
solely with respect to the Canadian Tranche, the U.S. Borrower, and with
respect to the administration of the Canadian portion of the transactions
evidenced hereby.


 


“Applicable Margin” means, for any day:


 


(i) with respect to
any Eurodollar Term Loan, 4.00% per annum, and any ABR Term Loan, 3.00% per
annum; and


 


2

















 


(ii) with respect to
any Eurodollar Revolving Loan, ABR Revolving Loan, BA Rate Revolving Loan, and
Canadian Prime Rate Revolving Loan, the applicable rate per annum set forth
below, based on the Total Leverage Ratio applicable on such date:


 


	
   

  	
   

  	
  Total Leverage Ratio:

  	
   

  	
  Eurodollar Margin

  and BA Rate Margin

  for Revolving Loans

  	
   

  	
  ABR Margin and

  Canadian Prime Rate

  Margin for Revolving

  Loans

  	
   

  
	
  Level 1

  	
   

  	
  Less than 2.00
  to 1.00

  	
   

  	
  3.00

  	
  %

  	
  2.00

  	
  %

  
	
  Level 2

  	
   

  	
  Greater than or
  equal to 2.00 to 1.00 but less than 2.50 to 1.00

  	
   

  	
  3.25

  	
  %

  	
  2.25

  	
  %

  
	
  Level 3

  	
   

  	
  Greater than or
  equal to 2.50 to 1.00 but less than 3.00 to 1.00

  	
   

  	
  3.50

  	
  %

  	
  2.50

  	
  %

  
	
  Level 4

  	
   

  	
  Greater than or
  equal to 3.00 to 1.00 but less than 3.5 to 1.00

  	
   

  	
  3.75

  	
  %

  	
  2.75

  	
  %

  
	
  Level 5

  	
   

  	
  Greater than or
  equal to 3.50 to 1.00

  	
   

  	
  4.00

  	
  %

  	
  3.00

  	
  %

  



 


For purposes of the
foregoing,


 


(i) if at any
time the Borrowers fail to deliver the Financials on or before the date the
Financials are due pursuant to Section 5.01, Level 5 shall be deemed
applicable for the period commencing five (5) Business Days after the
required date of delivery and ending on the date which is five (5) Business
Days after the Financials are actually delivered, after which the Level shall
be determined in accordance with the table above as applicable;


 


(ii) adjustments,
if any, to the Level then in effect shall be effective five (5) Business
Days after the Administrative Agent has received the applicable Financials (it
being understood and agreed that each change in Level shall apply during the
period commencing on the effective date of such change and ending on the date
immediately preceding the effective date of the next such change); and


 


(iii) notwithstanding
the foregoing, Level 3 shall be deemed to be applicable until the
Administrative Agent receives the Borrower’s Financials for the first complete
Fiscal Quarter to occur after the Funding Date (by way of example only, if the
Funding Date occurs on July 15, 2010, for the Fiscal Quarter ending December 31,
2010), and adjustments to the Level then in effect shall thereafter be effected
in accordance with the preceding paragraphs; provided, that if the
Financials delivered for the Fiscal Quarter including the Funding Date, and the
first complete Fiscal Quarter thereafter, demonstrate that a higher Level
should have been applicable as of the Funding Date, such higher Level shall
instead be deemed to be have been applicable during such period.


 


3

















 


“Applicable Percentage”
means, with respect to any Lender:


 


(a) with respect to
Canadian Tranche Revolving Loans, Canadian Tranche LC Exposure or Canadian
Tranche Swingline Loans, a percentage equal to a fraction the numerator of
which is such Lender’s Canadian Tranche Revolving Commitment and the
denominator of which is the aggregate Canadian Tranche Revolving Commitments of
all Canadian Tranche Lenders (if the Canadian Tranche Revolving Commitments
have terminated or expired, the Applicable Percentages shall be determined
based upon such Lender’s share of the aggregate Canadian Tranche Revolving
Credit Exposures at that time);


 


(b) with respect to
U.S. Tranche Revolving Loans, U.S. Tranche LC Exposure or U.S. Tranche
Swingline Loans, a percentage equal to a fraction the numerator of which is
such Lender’s U.S. Tranche Revolving Commitment and the denominator of which is
the aggregate U.S. Tranche Revolving Commitments of all U.S. Tranche Lenders
(if the U.S. Tranche Revolving Commitments have terminated or expired, the
Applicable Percentages shall be determined based upon such Lender’s share of
the aggregate U.S. Tranche Revolving Credit Exposures at that time);


 


(c) with respect to
Revolving Loans, LC Exposure or Swingline Loans, a percentage equal to a
fraction the numerator of which is such Lender’s Revolving Commitment and the
denominator of which is the aggregate Revolving Commitments of all Revolving
Lenders (if the Revolving Commitments have terminated or expired, the
Applicable Percentages shall be determined based upon such Lender’s share of
the aggregate Revolving Credit Exposures at that time);


 


(d) with respect to
the Term Loans, a percentage equal to a fraction the numerator of which is such
Lender’s outstanding principal amount of the Term Loans and the denominator of
which is the aggregate outstanding amount of the Term Loans of all Term Loan
Lenders; and


 


(e) with respect to
Credit Exposure, a percentage equal to a fraction, the numerator of which is
such Lender’s Credit Exposure and the denominator of which is the Aggregate
Credit Exposure.


 


Notwithstanding the
foregoing, when a Defaulting Lender exists (as contemplated under Section 2.25),
such Defaulting Lender’s Commitments and Credit Exposure shall be disregarded
in calculations of the Applicable Percentage.


 


“Applicable Pledge
Percentage” means 100%, but 65% in the case of a pledge by the U.S.
Borrower or a Domestic Subsidiary of the Equity Interests of a Foreign
Subsidiary.


 


“Approved Fund” has the meaning
assigned to such term in Section 9.04.


 


“Approved PA”
means the Purchase Agreement and the Plan of Arrangement attached thereto as Exhibit A,
together with all schedules and exhibits thereto, and together with all
amendments and modifications thereto or waivers of provisions thereof that
either have been approved by the Administrative Agent and the Syndication Agent
prior to the Funding Date or that are not materially adverse to the Lenders.


 


4

















 


“Approximate
Equivalent Amount” means on any date the Equivalent Amount of Canadian
Dollars with respect to such amount of U.S. Dollars on or as of such date,
rounded up to the nearest cent as determined by the Administrative Agent from
time to time.


 


“Assignment and Assumption” means an
assignment and assumption agreement entered into by a Lender and an assignee
(with the consent of any party whose consent is required by Section 9.04),
and accepted by the Administrative Agent, in the form of Exhibit A
or any other form approved by the Administrative Agent.


 


“Asset Sale Allowance”
means, with respect to all Prepayment Events described in clause (a) thereof
that occur during the term of this Agreement, an aggregate amount equal to the
U.S. Dollar Amount of U.S. $50,000,000 if the Total Leverage Ratio is greater
than 2.25 to 1.00 (giving effect to the applicable transaction, event or
occurrence on a Pro Forma Basis); provided, that if the Loans Parties
and their Subsidiaries retained amounts in excess of the U.S. Dollar Amount of
U.S. $50,000,000 when the Total Leverage Ratio was less than or equal to 2.25
to 1.00 (when no Prepayment Event is deemed to occur) for use in compliance
with this Agreement, and the Total Leverage Ratio subsequently is greater than
2.25 to 1.00, no such excess amount shall be required to be applied as a
mandatory prepayment under Section 2.11 if such excess was already spent
in compliance with this Agreement.


 


“Attributable
Receivables Indebtedness” at any time means the principal amount of
Indebtedness which (i) if a Permitted Receivables Facility is structured
as a secured lending agreement, constitutes the principal amount of such
Indebtedness or (ii) if a Permitted Receivables Facility is structured as
a purchase agreement, would be outstanding at such time under the Permitted
Receivables Facility if the same were structured as a secured lending agreement
rather than a purchase agreement.


 


“Auction Manager”
is defined in Section 2.24(a).


 


“Auction Notice”
means an auction notice given by the applicable Borrower in accordance with the
Auction Procedures with respect to a Purchase Offer.


 


“Auction Procedures”
means the auction procedures with respect to Purchase Offers set forth in Exhibit G
hereto.


 


“Augmenting Lender”
has the meaning assigned to such term in Section 2.20.


 


“Availability Period”
means with respect to Revolving Loans, the period from and including the
Funding Date to but excluding the earlier of the Revolving Loan Maturity Date
and the date of termination of the Revolving Commitments.


 


“BA Rate” means (a) for
a Canadian Tranche Lender that is a Schedule I Bank, CDOR and (b) for any
other Canadian Tranche Lender, the per annum discount rate quoted by such
Canadian Tranche Lender as the discount rate at which it is prepared to
purchase bankers’ acceptances with a term to maturity comparable to the
maturity of the applicable Interest Period (such rate not to exceed CDOR plus
10 basis points).


 


5

















 


“Banking Services”
means each and any of the following bank services provided to any Loan Party or
Subsidiary thereof by any Lender or any of its Affiliates: (a) commercial
credit cards and purchasing cards, (b) stored value cards and (c) treasury
management services (including, without limitation, controlled disbursement,
automated clearinghouse transactions, return items, overdrafts and interstate
depository network services).


 


“Banking Services
Agreement” means any agreement entered into by any Loan Party or Subsidiary
thereof in connection with Banking Services.


 


“Banking Services
Obligations” means any and all obligations of the Loan Parties or
Subsidiaries thereof, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor) in connection with Banking
Services.


 


“Benefit Plan”
means an employee benefit plan as defined in Section 3(3) of ERISA
(other than a Multiemployer Plan) which is subject to ERISA or the Code and in
respect of which a Loan Party or any ERISA Affiliate is an “employer” as
defined in Section 3(5) of ERISA.


 


“Board” means the
Board of Governors of the Federal Reserve System of the United States of
America.


 


“Borrowers” means
the U.S. Borrower and the Canadian Borrower.


 


“Borrowing” means (a) Revolving
Loans of the same Type and currency, made, converted or continued on the same
date and, in the case of Eurodollar Loans or BA Rate Loans, as to which a
single Interest Period is in effect, (b) a U.S. Tranche Swingline Loan or
a Canadian Tranche Swingline Loan, as applicable, and (c) Term Loans of
the same Type, made, converted or continued on the same date and, in the case
of Eurodollar Loans or BA Rate Loans, as applicable, as to which a single
Interest Period is in effect.


 


“Borrowing Request”
means a request by a Borrower for a Revolving Borrowing in accordance with Section 2.03.


 


“Burdensome
Restrictions” means any consensual encumbrance or restriction of the type
described in clause (a) or (b) of Section 6.08 (without giving
effect to any exceptions described in clauses (i) through (vi) of
such Section 6.08).


 


 


“Business Day”
means any day that is not a Saturday, Sunday or other day on which commercial
banks in New York City are authorized or required by law to remain closed; provided
that, (a) when used in connection with a Eurodollar Loan, the term “Business
Day” shall also exclude any day on which banks are not open for dealings in
U.S. Dollars in the London interbank market, and (b) when used in
connection with a Borrowing of Canadian Tranche Revolving Loans, Canadian
Tranche Swingline Loans or Canadian Tranche Letters of Credit, the term “Business
Day” shall also exclude any day on which banks are not open for business in
Toronto and Montreal.


 


6

















 


“CAM” means the
mechanism for the allocation and exchange of interests in all of the Credit
Exposures and collections in respect thereof established under Article X.


 


“CAM Exchange”
means the exchange of the Lenders’ interests provided for in Section 10.1.


 


“CAM Percentage”
means, as to each Lender, a fraction, expressed as a decimal, of which (a) the
numerator shall be the aggregate Obligations owed to such Lender, and (b) the
denominator shall be the aggregate Obligations owed to all the Lenders, in each
case immediately prior to the date on which a CAM Exchange occurs.  For purposes of computing each Lender’s CAM
Percentage, all Obligations which shall be denominated in Canadian Dollars
shall be translated into U.S. Dollars at the Exchange Rate in effect on the
date on which such CAM Exchange occurs.


 


“Canadian
Administrative Agent” means JPMorgan Chase Bank, N.A., Toronto Branch, in
its capacity as administrative agent for the Lenders hereunder with respect to
the administration and funding of Loans or other financial accommodations
extended to the Canadian Borrower or, solely with respect to the Canadian
Tranche, the U.S. Borrower, and the administration, possession, perfection and
monitoring of, and exercise of control over, Collateral of the Canadian Loan
Parties, and its successors in such capacity (or such of its affiliates as it
may designate from time to time).


 


“Canadian Benefit
Plans” means all employee benefit plans, including Canadian Retiree Benefit
Plans, of any nature or kind whatsoever (other than Canadian Pension Plans and
any statutory plans the Canadian Borrower, or any other Canadian Loan Party, or
any Subsidiary thereof is required to comply with, including the Canada/Quebec
Pension Plan and plans administered pursuant to applicable provincial health
tax, workers’ compensation and workers’ safety and employment insurance
legislation) that are maintained or contributed to by the Canadian Borrower,
any other Canadian Loan Party, and any Subsidiary thereof organized under the
laws of Canada.


 


“Canadian Borrower”
means (x) prior to the Amalgamation Date, 7345933 Canada Inc., a
corporation organized under the laws of Canada or a political subdivision
thereof, and (y) on and after the Amalgamation Date, the Person resulting
from the merger, consolidation or amalgamation of 7345933 Canada Inc. and World
Color Press, which Person shall be a corporation organized under the laws of
Canada or a political subdivision thereof, and which Person’s legal name shall
be World Color Press Inc.


 


“Canadian Dollar
Payment Office” means, for Canadian Dollars, the office in Toronto, Ontario
of the Canadian Administrative Agent as specified from time to time by the
Canadian Administrative Agent to the Borrowers and each Lender.


 


“Canadian Dollars”
or “C$” refers to lawful money of Canada.


 


“Canadian Guaranty”
means that certain Loan Party Guaranty, dated as of the Funding Date, executed
by each Canadian Loan Party (other than the Canadian Borrower) in favor of the
Canadian Administrative Agent, as amended, restated, supplemented or otherwise
modified from time to time.


 


7

















 


“Canadian Loan Parties”
means those Loan Parties organized under the laws of Canada or a Province
thereof.


 


“Canadian
Multiemployer Pension Plan” means any multiemployer pension plan, including
specified multiemployer pension plans, as defined under applicable Canadian
law.


 


“Canadian Pension
Plans” means all Canadian defined benefit or defined contribution pension
plans that are considered to be pension plans for the purposes of, and are
required to be registered under, the ITA or any applicable pension benefits
standards statute or regulation in Canada and that are established, maintained
or contributed to by the Canadian Borrower, any other Canadian Loan Party or
any Subsidiary thereof organized under the laws of Canada for its current or
former employees.


 


“Canadian Prime Rate”
means, on any day, the rate of interest per annum equal to the greater of (a) the
annual rate of interest announced from time to time by the Canadian
Administrative Agent as being its reference rate then in effect for determining
interest rates on Canadian Dollar-denominated commercial loans made by it in
Canada and (b) CDOR for a 30 day term in effect as of 10:00 a.m. on
such day plus 100 basis points per annum; provided, that with
respect to Canadian Tranche Swingline Loans in Canadian Dollars,  such interest rate shall be the BA Rate for a
30-day Interest Period or, if such rate is unavailable, the Canadian Prime Rate
or such other interest rate as mutually agreed upon by the Canadian Borrower
and the Canadian Tranche Swingline Lender.


 


“Canadian Retiree Benefit
Plans” means all plans or arrangements which provide health, dental, or any
other benefits to employees who have retired or terminated from employment with
the Canadian Borrower, the Canadian Loan Party or any Subsidiary thereof
organized under the laws of Canada for its current or former employees; the
term “Canadian Retiree Benefit Plan” shall not include any statutory plans with
which the Canadian Borrower, any other Canadian Loan Party, or any Subsidiary
thereof is required to comply, including the Canada/Quebec Pension Plan and
plans administered pursuant to applicable provincial health tax, workers’
compensation and workers’ safety and employment insurance legislation.


 


“Canadian Security
Agreement” means that certain Charge and Security Agreement, dated as of
the Funding Date, among the Canadian Loan Parties and the Canadian
Administrative Agent, for the benefit of such Agent and the Holders of Secured
Obligations, and any other pledge or security agreement entered into, after the
date of this Agreement, by any other Canadian Loan Parties (as required by this
Agreement or any other Loan Document), or any other Person, and the Canadian
Administrative Agent, for the benefit of such Agent and the Holders of Secured
Obligations, as the same may be amended, restated, supplemented or otherwise
modified from time to time.


 


“Canadian Tranche”
means the Canadian Tranche Revolving Commitments or the Canadian Tranche
Revolving Loans and the Canadian Tranche Swingline Loans.


 


“Canadian Tranche LC
Exposure” means, at any time, the sum of (a) the aggregate undrawn
U.S. Dollar Amount of all Letters of Credit outstanding under the Canadian
Tranche at such time plus (b) the aggregate U.S. Dollar Amount of
all LC Disbursements under 


 


8

















 


the Canadian Tranche that
have not yet been reimbursed by or on behalf of the Borrowers at such
time.  The Canadian Tranche LC Exposure
of any Canadian Tranche Lender at any time shall be its Applicable Percentage
of the total Canadian Tranche LC Exposure at such time.


 


“Canadian Tranche
Lender” means, as of any date of determination, each Lender that has a
Canadian Tranche Revolving Commitment or, if the Canadian Tranche Revolving
Commitments have terminated or expired, a Lender with Canadian Tranche
Revolving Credit Exposure.


 


“Canadian Tranche
Letter of Credit” means a letter of credit issued under the Canadian
Tranche pursuant to Section 2.06 hereof.


 


“Canadian Tranche
Revolving Commitment” means, with respect to each Canadian Tranche Lender,
the commitment, if any, to make Canadian Tranche Revolving Loans and to acquire
participations in Canadian Tranche Letters of Credit and Canadian Tranche
Swingline Loans hereunder in U.S. Dollars and Canadian Dollars, expressed as an
amount representing the maximum aggregate amount of such Canadian Tranche
Lender’s Canadian Tranche Revolving Credit Exposure hereunder, as such
commitment may be (a) reduced or terminated from time to time pursuant to Section 2.09,
(b) increased from time to time pursuant to Section 2.20, and (c) reduced
or increased from time to time pursuant to assignments by or to such Canadian
Tranche Lender pursuant to Section 9.04. 
The initial amount of each Canadian Tranche Lender’s Canadian Tranche
Revolving Commitment is set forth on Schedule 2.01 or in the Assignment and
Assumption pursuant to which such Canadian Tranche Lender shall have assumed
its Canadian Tranche Revolving Commitment, as applicable.  The initial aggregate amount of the Canadian
Tranche Lenders’ Canadian Tranche Revolving Commitments is U.S. $265,000,000.


 


“Canadian Tranche
Revolving Credit Exposure” means, with respect to any Canadian Tranche
Lender at any time, the sum of the outstanding principal amount of such
Canadian Tranche Lender’s Canadian Tranche Revolving Loans and its Canadian
Tranche LC Exposure and Canadian Tranche Swingline Exposure at such time.


 


“Canadian Tranche
Revolving Loan” means a Loan made pursuant to Section 2.01(b).


 


“Canadian Tranche
Swingline Exposure” means, at any time, the aggregate principal amount of
all Canadian Tranche Swingline Loans outstanding at such time.  The Canadian Tranche Swingline Exposure of
any Canadian Tranche Lender at any time shall be its Applicable Percentage of
the total Canadian Tranche Swingline Exposure at such time.


 


“Canadian Tranche
Swingline Lender” means JPMorgan Chase Bank, N.A., Toronto Branch in its
capacity as lender of Canadian Tranche Swingline Loans hereunder.


 


“Canadian Tranche
Swingline Loan” means a Loan made by the Canadian Tranche Swingline Lender
pursuant to Section 2.05(a).


 


“Capital Expenditures”
means, without duplication, any expenditure or commitment to expend money for
any purchase or other acquisition of any asset which would be 


 


9

















 


classified as a fixed or
capital asset on a consolidated balance sheet of the Consolidated Financial
Covenant Entities prepared in accordance with GAAP.


 


“Capital Lease
Obligations” of any Person means the obligations of such Person to pay rent
or other amounts under any lease of (or other arrangement conveying the right
to use) real or personal property, or a combination thereof, which obligations
are required to be classified and accounted for as capital leases on a balance
sheet of such Person under GAAP, and the amount of such obligations shall be
the capitalized amount thereof determined in accordance with GAAP.


 


“CDOR” means, on
any date, the average per annum discount rate of interest for Canadian Dollars
bankers’ acceptances having a maturity date comparable to the maturity of the
applicable Interest Period appearing on the “Reuters Screen CDOR Page” at or
about 10:00 a.m. on such date or, if no such screen is available, the rate
quoted by the Canadian Administrative Agent, or such Schedule I Bank as it
selects, as the discount rate at which it would purchase, on such date,
Canadian Dollars bankers’ acceptances having a maturity date comparable to the
maturity of the applicable Interest Period, rounded upwards if necessary to the
nearest 0.01% as calculated by the Canadian Administrative Agent in accordance
with normal market practice on such date.


 


“Change in Control”
means any event which results in the legal or beneficial ownership of shares of
Voting Stock (as defined below) of the U.S. Borrower granting the holder or
holders thereof a majority of the votes for the election of the majority of the
Board of Directors (or other supervisory board) of the U.S. Borrower being
owned by any person or entity (or group of persons or entities) acting in concert
other than any one or more of the following acting in concert:  (i) the respective spouses and
descendants of Harry V. Quadracci, Harry R. Quadracci or Thomas A. Quadracci
and/or the spouses of any such descendants, (ii) the respective executors,
administrators, guardians or conservators of the estates of any of Harry V.
Quadracci, Harry R. Quadracci, Thomas A. Quadracci or the Persons described in clause
(i) above, (iii) trustees holding shares of Voting Stock of the
U.S. Borrower for the benefit of any of the persons described in clause (i) or
(ii) above and (iv) any employee stock ownership plan of the
U.S. Borrower (together, the “Permitted Holders”).  Notwithstanding the foregoing, the transfer
of legal or beneficial ownership of all of the shares of Voting Stock of the
U.S. Borrower to a new entity shall not be a Change in Control if a majority of
the Voting Stock of such new entity is owned by Permitted Holders.  In the event such a transfer occurs, the
foregoing definition of “Change in Control” shall be construed with respect to
the new entity that owns all of the Voting Stock of the U.S. Borrower (as
opposed to the U.S. Borrower itself). 
For purposes of this definition, “Voting Stock” means Securities
of any class or classes, the holders of which are ordinarily, in the absence of
contingencies, entitled to elect a majority of the corporate directors (or
persons performing similar functions), and “Securities” shall have the
same meaning as in Section 2(1) of the Securities Act of 1933, as
amended.


 


“Change in Law”
means (a) the adoption or introduction of any law, rule or regulation
after the date of this Agreement, (b) any change in any law, rule or
regulation or in the interpretation or application thereof by any Governmental
Authority after the date of this Agreement or (c) compliance by any
Lender, any Issuing Bank or any Agent (or, for purposes of Section 2.15(b),
by any lending office of such Lender or by such Lender’s, such Issuing Bank’s 


 


10

















 


or such Agent’s holding
company, if any) with any guideline, requirement, directive or direction
(whether or not having the force of law) of any Governmental Authority made or
issued after the date of this Agreement.


 


“Claimant Notes”
has the meaning set forth in clause (c) of the definition of Specified
Existing Indebtedness.


 


“Class”, when used
in reference to any Loan or Borrowing, refers to whether such Loan, or the
Loans comprising such Borrowing, are Term Loans of the U.S. Borrower, Term
Loans of the Canadian Borrower, Canadian Tranche Revolving Loans, U.S. Tranche
Revolving Loans, Canadian Tranche Swingline Loans or U.S. Tranche Swingline
Loans.


 


“Code” means the
Internal Revenue Code of 1986, as amended from time to time.


 


“Collateral” means
any and all property owned, leased or operated by each Loan Party and each
other Person granting a Lien under the Collateral Documents, and any and all
other property of any Loan Party, now existing or hereafter acquired, that may
at any time be or become subject to a security interest or Lien in favor of the
Applicable Agent, on behalf of itself and the Holders of Secured Obligations,
to secure the Secured Obligations.


 


“Collateral Documents”
means, collectively, the Security Agreement, the Canadian Security Agreement,
the Mortgages, and all other agreements, instruments and documents executed in
connection with this Agreement that are intended to create, perfect or evidence
Liens to secure Secured Obligations, including, without limitation, all other
security agreements, pledge agreements, financing statements, mortgages,
hypothecs, debentures, assignments and deeds of trust whether heretofore, now,
or hereafter executed by the Loan Parties or any of their Subsidiaries and
delivered to the Applicable Agent.


 


“Commitment”
means, with respect to each Lender, the sum of such Lender’s Revolving
Commitment and Term Loan Commitment.  The
initial amount of each Lender’s Commitment is set forth on Schedule 2.01, or in
the Assignment and Assumption or other documentation contemplated hereby
pursuant to which such Lender shall have assumed its Commitment, as applicable.


 


“Commitment Fee”
has the meaning set forth in Section 2.12(a).


 


“Commitment Fee Rate”
means (x) 0.75% per annum for any Fiscal Quarter in which the average daily
aggregate Revolving Credit Exposure was less than the U.S. Dollar Amount of
U.S. $150,000,000 and (y) 0.50% per annum for any Fiscal Quarter in which
the average daily aggregate Revolving Credit Exposure was equal to or greater
than the U.S. Dollar Amount of U.S. $150,000,000; provided, that if a
Commitment Fee is required to be paid at any time other than at the end of a
Fiscal Quarter, the Commitment Fee Rate shall be determined based on the
average daily Revolving Credit Exposure beginning on the first day of the
Fiscal Quarter in which such Commitment Fee is paid and ending on the day on
which such Commitment Fee is paid; provided, further, that the
aggregate principal amount of Swingline Loans shall not be included in any
determination of Revolving Credit Exposure for purposes of calculating the
Commitment Fee Rate.


 


11














 


“Completed Aircraft
Substitution” means the purchase by the applicable Loan Party of the
Challenger 300 aircraft (including the engines affixed thereto and all other
accessions thereto) with the registration number N40QG for approximately U.S.
$20,000,000 (which purchase shall have occurred prior to the Effective Date),
and the sale by the applicable Loan Party of the Gulfstream IV aircraft
(including the engines affixed thereto and all other accessions thereto) with
the registration number N444QG for approximately U.S. $20,000,000, which sale
shall occur subsequent to the Effective Date.


 


“Computation Date”
is defined in Section 2.04.


 


“Consolidated EBITDA”
means, for the Consolidated Financial Covenant Entities, Consolidated Net
Income plus, to the extent deducted from
revenues in determining Consolidated Net Income, (i) Consolidated Interest
Expense, (ii) expense for taxes paid or accrued, (iii) depreciation, (iv) amortization,
(v) extraordinary or non-recurring non-cash expenses or losses incurred
other than in the ordinary course of business, including any writedown of
goodwill, long-lived asset, or intangible asset impairment, (vi) non-cash
expenses related to stock based compensation, (vii) Transaction and
Restructuring Charges, and (viii) amounts paid with respect to MEPP Exit
Expenses, minus,  to
the extent included in Consolidated Net Income, (ix) interest income, (x) income
tax credits and refunds (to the extent not netted from tax expense), and (xi)
extraordinary unusual or non-recurring income or gains realized other than in
the ordinary course of business, all calculated for the Consolidated Financial
Covenant Entities in accordance with GAAP on a consolidated basis (except as
otherwise provided in the definition of Transaction and Restructuring Charges).  For the purposes of calculating Consolidated
EBITDA for any period of four consecutive Fiscal Quarters (each, a “Reference
Period”), (i) if at any time during such Reference Period a
Consolidated Financial Covenant Entity shall have made any Material
Disposition, the Consolidated EBITDA for such Reference Period shall be reduced
by an amount equal to the Consolidated EBITDA (if positive) attributable to the
property that is the subject of such Material Disposition for such Reference
Period or increased by an amount equal to the Consolidated EBITDA (if negative)
attributable thereto for such Reference Period, and (ii) if during such
Reference Period a Consolidated Financial Covenant Entity shall have made a
Material Acquisition, Consolidated EBITDA for such Reference Period shall be
calculated on a Pro Forma Basis after giving effect thereto as if such Material
Acquisition occurred on the first day of such Reference Period.  As used in this definition, “Material
Acquisition” means any acquisition of property or series of related
acquisitions of property that (a) constitutes (i) assets comprising
all or substantially all or any significant portion of a business or operating
unit of a business, or (ii) all or substantially all of the common stock
or other Equity Interests of a Person, and (b) involves the payment of
consideration (including, without limitation, assumptions of Indebtedness and
issuances of seller notes) by a Consolidated Financial Covenant Entity in
excess of the U.S. Dollar Amount of U.S. $25,000,000; and “Material
Disposition” means any sale, transfer or disposition of a subsidiary, a
line of business, a division or an operating unit (with the understanding that
the sale of a manufacturing plant shall not constitute a Material Disposition
for purposes hereof) by a Consolidated Financial Covenant Entity to any
unrelated third party that yields gross proceeds in excess of the U.S. Dollar
Amount of U.S. $25,000,000.  Any cash
payment made with respect to any non-cash charge that is added back in
computing Consolidated EBITDA for any period shall be subtracted in computing
Consolidated EBITDA for the period in which such cash payment is made.  No non-cash gain shall be deducted from a
computation of Consolidated EBITDA to the


 


12

















 


extent it represents the
reversal of an accrual or reserve for a potential cash item that reduced
Consolidated EBITDA in any prior period.


 


“Consolidated
Financial Covenant Entities” means the U.S. Borrower and its Subsidiaries,
together with all Persons in which the U.S. Borrower and its Subsidiaries own
no more than 50% of the voting Equity Interests thereof and which are included
in the U.S. Borrower’s consolidated financials under either the equity or cost
method of accounting in accordance with GAAP.


 


“Consolidated Interest
Expense” means, with reference to any period, the interest expense
(including without limitation interest expense under Capital Lease Obligations
that is treated as interest in accordance with GAAP) of the Consolidated
Financial Covenant Entities calculated on a consolidated basis in accordance
with GAAP for such period with respect to (a) all outstanding Indebtedness
of the Consolidated Financial Covenant Entities allocable to such period in accordance
with GAAP (including, without limitation, all commissions, discounts and other
fees and charges owed with respect to letters of credit and bankers acceptance
financing and net costs under interest rate Swap Agreements to the extent such
net costs are allocable to such period in accordance with GAAP) and (b) the
interest component of all Attributable Receivables Indebtedness of the
Consolidated Financial Covenant Entities for such period.


 


“Consolidated Net
Income” means, for any period, the consolidated net income (or loss) of the
Consolidated Financial Covenant Entities, determined on a consolidated basis
(without duplication) in accordance with GAAP; provided that there shall
be excluded the income (or deficit) of any Person accrued prior to the date
such Person becomes a Consolidated Financial Covenant Entity, or prior to the
date it is merged into or consolidated with a Consolidated Financial Covenant
Entity.  Notwithstanding anything to the
contrary set forth herein, no gain received by a Borrower as a result of a
repurchase of Term Loans under Section 2.24 shall be included in any
determination of Consolidated Net Income.


 


“Consolidated Net
Worth” means, at any time, the consolidated shareholders’ equity of the
Borrowers and their Subsidiaries (including all redeemable common stock)
calculated on a consolidated basis in accordance with GAAP.


 


“Consolidated Total
Assets” means, as of the date of any determination thereof, the aggregate
book value of the total assets of the Consolidated Financial Covenant Entities
calculated in accordance with GAAP on a consolidated basis as of such date.


 


“Consolidated Total
Indebtedness” means, at any date and without duplication, the aggregate
principal amount of all Indebtedness of the Consolidated Financial Covenant
Entities at such date, determined on a consolidated basis in accordance with
GAAP plus the aggregate amount of Indebtedness of the Consolidated
Financial Covenant Entities relating to the maximum drawing amount of all
letters of credit outstanding and to all bankers’ acceptances plus all
Indebtedness described in the foregoing of another Person guaranteed by the
Consolidated Financial Covenant Entities; provided, however, that
no Pension and Post-Employment Benefit Amounts shall be included in any determination
hereof.  For the avoidance of doubt,
Consolidated Total Indebtedness includes all Attributable Receivables
Indebtedness.


 


13

















 


“Control” means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether through the
ability to exercise voting power, by contract or otherwise.  “Controlling” and “Controlled” have meanings
correlative thereto.


 


“Credit Event”
means a Borrowing, the issuance of a Letter of Credit, an LC Disbursement or
any of the foregoing.


 


“Credit Exposure”
means, as to any Lender at any time, the aggregate of (a) such Lender’s
Revolving Credit Exposure at such time plus (b) an amount equal to
the aggregate principal amount of its Term Loans outstanding at such time.


 


“Default” means
any event or condition which constitutes an Event of Default or which upon
notice, lapse of time or both would, unless cured or waived, become an Event of
Default.


 


“Defaulting Lender”
means any Lender, as determined by the Administrative Agent, that has (a) failed
to fund any portion of its Loans or participations in Letters of Credit or
Swingline Loans within three (3) Business Days after the date required to
be funded by it hereunder or has failed to comply generally with its funding
obligations under agreements in which it commits to extend credit, (b) notified
a Borrower, the Administrative Agent, any Issuing Bank, a Swingline Lender or
any Lender in writing that it does not intend to comply with any of its funding
obligations under this Agreement or has made a public statement to the effect
that it does not intend to comply with its funding obligations under this
Agreement or under other agreements in which it commits to extend credit, (c) failed,
within three (3) Business Days after request by the Administrative Agent,
to confirm that it will comply with the terms of this Agreement relating to its
obligations to fund prospective Loans and participations in then outstanding
Letters of Credit and Swingline Loans; provided, that such Lender, upon
delivery of such confirmation, even if after the expiry of such 3 Business Day
period, shall no longer constitute a Defaulting Lender under this clause (c), (d) otherwise
failed to pay over to the Administrative Agent or any other Lender any other
amount required to be paid by it hereunder within three (3) Business Days
of the date when due, unless the subject of a good faith dispute, or (e) (i) become
or is insolvent or has a parent company that has become or is insolvent or (ii) become
the subject of a bankruptcy or insolvency proceeding, or has had a receiver,
conservator, trustee, administrator, assignee for the benefit of creditors or
similar Person charged with reorganization or liquidation of its business or
custodian appointed for it, or has taken any action in furtherance of, or
indicating its consent to, approval of or acquiescence in any such proceeding
or appointment or has a parent company that has become the subject of a
bankruptcy or insolvency proceeding, or has had a receiver, conservator,
trustee, administrator, assignee for the benefit of creditors or similar Person
charged with reorganization or liquidation of its business or custodian
appointed for it, or has taken any action in furtherance of, or indicating its
consent to, approval of or acquiescence in any such proceeding or appointment; provided,
that the mere ownership by a Governmental Authority of a Lender’s or its parent
company’s Equity Interests shall not result in a Lender becoming a Defaulting
Lender under this clause (ii).


 


“Domestic Subsidiary”
means a Subsidiary organized under the laws of a jurisdiction located in the
United States of America.


 


14

















 


“Effective Date” means
the date on which the conditions specified in Section 4.01 are satisfied
(or waived in accordance with Section 9.02).


 


“Effective and Funding
Date Representations” means (a) the representations and warranties set
forth in Sections 3.01, 3.02, 3.03, 3.04(a), 3.06 (but solely with respect
to litigation-related items set forth therein, and only to the extent the
breach thereof would result in a Funding Date Material Adverse Effect), 3.08,
3.12, 3.13, 3.17 (with respect to the Funding Date only), and 3.18, (b) with
respect to the Funding Date only, each Borrower’s representation that no
Funding Date Material Adverse Effect has occurred or is continuing, and (c) with
respect to the Funding Date only, each Borrower’s representation that all of
its Material Indebtedness outstanding as of the Funding Date is set forth in
Schedule 1.01(a).


 


“Environmental Laws”
means all laws, statutes, rules, regulations, codes, by-laws, ordinances,
orders, decrees, judgments, injunctions, notices or binding agreements issued,
promulgated or entered into by any Governmental Authority, and any principle of
common law, in each case relating in any way to the environment, preservation
or reclamation of natural resources, the management, release or threatened
release of any Hazardous Material or to health and safety matters.


 


“Environmental
Liability” means any liability, contingent or otherwise (including any
liability for damages, costs of environmental remediation, fines, penalties or
indemnities), of a Loan Party or any Subsidiary directly or indirectly
resulting from or based upon (a) violation of any Environmental Law, (b) the
generation, use, handling, transportation, storage, treatment or disposal of
any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the
release or threatened release of any Hazardous Materials into the environment
or (e) any contract, agreement or other consensual arrangement pursuant to
which liability is assumed or imposed with respect to any of the foregoing.


 


“Equity Interests”
means shares of capital stock, partnership interests, membership interests in a
limited liability company, beneficial interests in a trust or other equity
ownership interests in a Person, and any warrants, options or other rights
entitling the holder thereof to purchase or acquire any such equity interest.


 


“Equivalent Amount”
of Canadian Dollars with respect to any amount of U.S. Dollars at any date
means the equivalent in Canadian Dollars of such amount of U.S. Dollars,
calculated at the Exchange Rate as of such date.


 


“ERISA” means the
Employee Retirement Income Security Act of 1974, as amended from time to time.


 


“ERISA Affiliate”
means any trade or business (whether or not incorporated) that, together with
the a Loan Party, is treated as a single employer under Section 414(b) or
(c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412
of the Code, is treated as a single employer under Section 414 of the
Code.


 


“ERISA Event”
means, except as set forth on Schedule 3.10(c), (a) any “reportable event”,
as defined in Section 4043 of ERISA or the regulations issued thereunder
with respect to a Pension Plan (other than an event for which the 30-day notice
period is 


 


15

















 


waived); (b) the
failure of any Pension Plan to satisfy the “minimum funding standard”, as
defined in Section 412(a) of the Code or Section 302(a) of
ERISA for a plan year, whether or not waived; (c) the filing pursuant to Section 412(c) of
the Code or Section 302(c) of ERISA of an application for a waiver of
the minimum funding standard with respect to any Pension Plan; (d) the
incurrence by a Loan Party or any of its ERISA Affiliates of any liability
under Title IV of ERISA with respect to the termination of any Pension Plan; (e) the
receipt by a Loan Party or any ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to an intention to terminate any Pension
Plan or Pension Plans or to appoint a trustee to administer any Pension Plan; (f) the
incurrence by a Loan Party or any of its ERISA Affiliates of any liability with
respect to the withdrawal or partial withdrawal of a Loan Party or any of its
ERISA Affiliates from any Pension Plan or Multiemployer Plan; or (g) the
receipt by a Loan Party or any ERISA Affiliate of any notice, or the receipt by
any Multiemployer Plan from a Loan Party or any ERISA Affiliate of any notice,
concerning the imposition upon a Loan Party or any of its ERISA Affiliates of
Withdrawal Liability or a determination that a Multiemployer Plan is, or is
expected to be, insolvent or in reorganization, within the meaning of Title IV
of ERISA.


 


“Eurodollar”, when
used in reference to any Loan or Borrowing, means that such Loan, or the Loans
comprising such Borrowing, bears interest at a rate determined by reference to
the Adjusted LIBO Rate.


 


“Event of Default”
has the meaning assigned to such term in Article VII.


 


“Exchange Rate”
means, on any day, for purposes of determining the U.S. Dollar Equivalent of
Canadian Dollars, the rate at which Canadian Dollars may be exchanged into U.S.
Dollars, as quoted by the Bank of Canada for Canadian Dollars (or, if not so
quoted, the spot rate of exchange quoted for wholesale transactions made by the
Administrative Agent in Toronto, Ontario, Canada) at 12:00 Noon, Local Time, on
such day; provided, that if at the time of any such determination, for
any reason, no such spot rate is being quoted, the Administrative Agent may use
any reasonable method it deems applicable to determine such rate, and such
determination shall be conclusive absent manifest error.


 


“Excluded Taxes”
means, with respect to the Administrative Agent, any Lender, any Issuing Bank
or any other recipient of any payment to be made by or on account of any
obligation of a Borrower hereunder, (a) income or franchise taxes imposed
on (or measured by) its net income or any capital tax imposed by the United
States of America, or by the jurisdiction (or any political subdivision
thereof) under the laws of which such recipient is organized or in which its principal
office is located or, in the case of any Lender, in which its applicable
lending office is located, (b) any branch profits taxes imposed by the
United States of America or any similar tax imposed by any other jurisdiction
in which such recipient is located, (c) any taxes imposed on a Foreign
Lender or the Administrative Agent as a result of such Lender’s or the
Administrative Agent’s (in the event the Lender acting as Administrative Agent
is a Foreign Lender) failure to satisfy the reporting requirements as set forth
in Section 1471(b) of the Code (or regulation or administrative
guidance promulgated thereunder), and (d) in the case of a Foreign Lender
(other than an assignee pursuant to a request by a Borrower under Section 2.19(b)),
any withholding tax that is imposed on amounts payable to such Foreign Lender
at the time such Foreign Lender becomes a party to this Agreement (or
designates a new lending office) or is attributable to such Foreign Lender’s
failure to comply with Section 2.17(e), 


 


16

















 


except to the extent that
such Foreign Lender (or its assignor, if any) was entitled, at the time of
designation of a new lending office (or assignment), to receive additional
amounts from the Borrowers with respect to such withholding tax pursuant to Section 2.17(a).


 


“Existing Leveraged
Lease Collateral” means those assets of the U.S. Borrower and its
Subsidiaries identified on Schedule 1.01(c).


 


“Existing Leveraged
Leases” means the leveraged leases identified in Schedule 1.01(c).


 


“Federal Funds
Effective Rate” means, for any day, the weighted average (rounded upwards,
if necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers, as published on the next succeeding Business Day by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day that
is a Business Day, the average (rounded upwards, if necessary, to the next 1/100
of 1%) of the quotations for such day for such transactions received by the
Administrative Agent from three Federal funds brokers of recognized standing
selected by it.


 


“Financial Officer”
means the chief financial officer, principal accounting officer, treasurer or
controller of the U.S. Borrower or any other Loan Party, as applicable.


 


“Financials” means
the annual or quarterly financial statements, and accompanying certificates and
other documents, of the Borrowers and their Subsidiaries, together with all
other Consolidated Financial Covenant Entities as calculated in accordance with
GAAP, as required to be delivered pursuant to Section 5.01(a) or
5.01(b).


 


“First Tier Foreign
Subsidiary” means each Foreign Subsidiary with respect to which any one or
more of the U.S. Borrower, any other U.S. Loan Party or their respective
Domestic Subsidiaries directly owns or controls more than 50% of such Foreign
Subsidiary’s issued and outstanding Equity Interests.


 


“Fiscal Quarter”
means, for the Loan Parties and their Subsidiaries, each calendar quarter
occurring during a Fiscal Year (i.e. the quarters ending March 31th, June 30th,
September 30th and December 31st of a Fiscal
Year).


 


“Fiscal Year”
means, for the Loan Parties and their Subsidiaries, each calendar year ending
on December 31st.


 


“Foreign Lender”
means, with respect to any Borrower, any Lender that is organized under the
laws of a jurisdiction other than that in which such Borrower is located.  For purposes of this definition, the United
States of America, each State thereof and the District of Columbia shall be
deemed to constitute a single jurisdiction, and Canada and each province
thereof shall be deemed to constitute a single jurisdiction.


 


“Foreign Subsidiary”
means any Subsidiary which is not a Domestic Subsidiary.


 


17

















 


“Free Cash Flow”
means, for each Fiscal Year, the excess, if any, of (a) the sum, without
duplication, of (i) Consolidated Net Income for such Fiscal Year (net of
taxes paid or accrued during such Fiscal Year), (ii) the amount of all
non-cash charges (including depreciation and amortization) deducted in
determining Consolidated Net Income for such Fiscal Year, (iii) decreases
in Working Capital during such Fiscal Year, and (iv) the aggregate net
amount of non-cash loss on the disposition of property permitted under this
Agreement by the U.S. Borrower and its Subsidiaries (other than sales of
inventory in the ordinary course of business), to the extent deducted in
arriving at such Consolidated Net Income for such Fiscal Year minus (b) the
sum, without duplication, of (i) the amount of all non-cash credits
included in arriving at such Consolidated Net Income, (ii) the aggregate
amount actually paid by the U.S. Borrower and its Subsidiaries in cash during
such Fiscal Year on account of Capital Expenditures permitted under this
Agreement (with the understanding that, for purposes of this clause (ii), (1) no
deduction shall be made for the principal amount of Indebtedness directly
incurred in connection with such Capital Expenditures, and (2) the
Consolidated Financial Covenant Entities shall be entitled to deduct amounts
paid in respect of Capital Expenditures permitted under this Agreement that are
financed with the Net Proceeds of asset sales or dispositions that are not
required to be applied as prepayments under Section 2.11, or that already
have been applied as prepayments under Section 2.11), (iii) the
aggregate amount of all prepayments of Revolving Loans and Swingline Loans
during such Fiscal Year to the extent accompanying permanent optional
reductions of the Revolving Commitments and all optional prepayments of the
Term Loans during such Fiscal Year, (iv) the aggregate amount of all
regularly scheduled principal payments of Long-Term Debt of the U.S. Borrower
and its Subsidiaries during such Fiscal Year that are permitted under this
Agreement (including certain bankruptcy-related obligations of World Color
Press due and payable after the Funding Date in an aggregate amount not to
exceed the U.S. Dollar Amount of U.S. $50,000,000 in the aggregate, the Term
Loans, the Senior Secured Notes, the Claimant Notes, the Existing Leveraged
Leases and the Polish Subsidiary Credit Facility, but excluding payments in
respect of any revolving credit facility to the extent there is not a
corresponding and equivalent permanent reduction in revolving loan commitments
thereunder), (v) increases in Working Capital for such Fiscal Year, (vi) the
aggregate amount of cash payments made during such Fiscal Year on account of
obligations in respect of pensions and other post-employment benefits in excess
of amounts expensed for such obligations during such Fiscal Year, and (vii) the
aggregate net amount of non-cash gains on dispositions of property permitted
under this Agreement by the U.S. Borrower and its Subsidiaries (other than
sales of inventory in the ordinary course of business), to the extent included
in arriving at such Consolidated Net Income. Notwithstanding the foregoing or
anything to the contrary set forth herein, (x) no portion of Consolidated
Net Income corresponding with a Consolidated Financial Covenant Entity that is
not a Loan Party or a Subsidiary thereof shall be included in a computation of
Free Cash Flow, other than any amount thereof that is distributed by such
non-Loan Party or non-Subsidiary thereof to a Loan Party or Subsidiary thereof,
which distributed amount shall be included in a computation of Free Cash Flow,
and (y) Net Proceeds resulting from a Prepayment Event described in clause
(a) or (b) of the definition thereof shall not constitute Free Cash
Flow for purposes hereof, and any prepayment of the Secured Obligations with
such Net Proceeds shall be governed by Section 2.11(b)(i).


 


“Free Cash Flow
Percentage” means: (i) 0% at any time the Total Leverage Ratio is less
than or equal to 2.25 to 1.00, (ii) 25% at any time the Total Leverage
Ratio exceeds 2.25 to 1.00 but is less than or equal to 2.50 to 1.00 and (iii) 50%
at any time the Total Leverage Ratio 


 


18

















 


exceeds 2.50 to 1.00, in
each case as the Total Leverage Ratio will be tested as and when required in
connection with a Free Cash Flow Prepayment Date.


 


“Free Cash Flow
Prepayment Date” means the earlier to occur of the date on which the
Borrowers are required to deliver to the Administrative Agent the annual
audited financials required by Section 5.01(a) for any Fiscal Year
and the date on which such annual audited financials are actually delivered for
such Fiscal Year, but not earlier than January 1, 2012.


 


“Funding Date”
means the date on which the conditions specified in Section 4.02 are
satisfied (or waived in accordance with Section 9.02).


 


“Funding Date Used
Equipment” means items of equipment or fixtures owned by a Loan Party as of
the Funding Date (after giving effect to the World Color Press Acquisition)
that were at some point used in the ordinary course in the day-to-day
operations of such Loan Party, including, without limitation, underutilized
equipment and equipment located at Plants Designated for Sale or Closure.


 


“Funding Date Material
Adverse Effect” means, on or prior to the Funding Date, any effect that (a) is
materially adverse to the business, results of operations, financial condition
or liabilities of the U.S. Borrower and its Subsidiaries, taken as a whole, or
World Color Press and its Subsidiaries, taken as a whole, as applicable,
assuming for purposes of such a determination that the U.S. Borrower or World
Color Press, as the case may be, as a business enterprise, is 50% larger than
its actual revenues, assets, liabilities and earnings, or (b) prevents or
materially delays the U.S. Borrower or World Color Press (as applicable) from
consummating the transactions contemplated by the Purchase Agreement.  Notwithstanding the foregoing, effects
arising out of or related to (i) General Developments and Transaction
Developments shall not be deemed, either alone or in combination, to constitute
a Funding Date Material Adverse Effect and (ii) no effect arising from any
General Developments or Transaction Developments shall be taken into account in
determining whether there has been a Funding Date Material Adverse Effect.  Notwithstanding anything to the contrary, any
change or effect on the business, results of operations, financial condition or
liabilities of the U.S. Borrower as a result of any loss of the U.S. Borrower’s
status as a Subchapter S corporation shall not constitute a Funding Date
Material Adverse Effect on the U.S. Borrower, except to the extent that such
loss of Subchapter S status results in any loss or liability for the U.S.
Borrower relating to or arising out of periods prior to the closing of the
Transactions.


 


“Funding Date
Perfection Requirements” means, with respect to each Person constituting a
Loan Party as of the Funding Date, the following (with the understanding that
only Persons that are Loan Parties as of the Funding Date shall be required to
satisfy the following on the Funding Date, and with the understanding that the
following shall not require a pledge of Equity Interests in excess of the
Applicable Pledge Percentage for any Pledge Subsidiary):


 


(i) the
authorization and filing of UCC financing statements against each such Loan
Party in its jurisdiction of organization (or such other jurisdiction as
reasonably required by the Administrative Agent, such as the District of
Columbia) naming such Loan Party as debtor, the Administrative Agent as secured
party, and all of such Loan Party’s assets, other than the 


 


19

















 


Senior Secured Note
Collateral and the Existing Leveraged Lease Collateral, as the collateral
subject thereto;


 


(ii) the
authorization and filing of PPSA financing statements and all other personal
property security filings in Canada or any Province therein against each
Canadian Loan Party and each U.S. Loan Party that owns assets in Canada beyond
Equity Interests of Subsidiaries organized under the laws of Canada or a
political subdivision thereof (in such offices as reasonably required by the
Applicable Agent) naming such Loan Party as debtor, the Canadian Administrative
Agent as secured party, and all of such Loan Party’s assets, other than the
Senior Secured Note Collateral and the Existing Leveraged Lease Collateral, as
the collateral subject thereto;


 


(iii) the
authorization and filing of registrations against Canadian Loan Parties and
other Loan Parties which own or have registered rights to intellectual property
with the Canadian intellectual property office;


 


(iv) the delivery to
the Administrative Agent by each Loan Party of all certificated Equity
Interests owned by such Loan Party, together with undated stock powers in
blank; provided, however, that no such delivery shall be required
to be made in contravention of Section 5.09;


 


(v) the delivery to
the Canadian Administrative Agent of fully executed and effective Canadian-law
governed pledge documentation pursuant to which the Canadian Administrative
Agent shall have received first-priority perfected Liens upon the Loan Party’s
Equity Interests in the Canadian Borrower, each other Canadian Loan Party, and
each Material Canadian Subsidiary thereof (with the understanding that such
pledges shall not contravene the requirements of Section 5.09); and


 


(vi) the delivery to
the Administrative Agent of fully executed and effective Mortgages (with each
Mortgage being in a form suitable for recordation or registration, as
applicable) and Mortgage Instruments (other than appraisals or any new
environmental site assessments and those other items referenced in clause (y) of
the definition of Mortgage Instruments) for the properties identified in
Schedule 1.01(d) hereto.


 


“GAAP” means
generally accepted accounting principles in the United States of America.


 


“General Developments”
means (a) any developments or occurrences relating to or affecting
domestic or foreign economic or political conditions in general or the
securities, commodities or financial markets in general, (b) any
commencement, continuation or escalation of any act of terrorism or war
(whether declared or undeclared), (c) any natural disasters, (d) any
national or international calamity, (e) any developments or occurrences
relating to or affecting the industries or the segments thereof or geographic
areas in which the U.S. Borrower or World Color Press (as applicable) or any of
its respective Subsidiaries or customers operates, (f) any change in the
market price of raw materials, including paper and ink, of the type and grade
customarily purchased by the U.S. Borrower or World Color Press or any of its
respective Subsidiaries, or (g) any changes or proposed changes in or
interpretations of any applicable law 


 


20

















 


or generally accepted
accounting practices occurring after the date of the Purchase Agreement, but
excluding, in each of the cases described in clauses (a)-(d) above,
any effect to the extent arising from any effect that has a materially
disproportionate impact on the business, results of operations, financial
condition or liabilities of the U.S. Borrower or World Color Press (as
applicable) relative to similarly situated companies to the extent engaged in
the industries in which the U.S. Borrower or World Color Press (as applicable)
or any of its respective Subsidiaries conducts its business.


 


“Governmental
Authority” means the government of the United States of America, Canada,
any other nation or any political subdivision thereof, whether state,
provincial or local, and any agency, authority, instrumentality, regulatory
body, court, central bank, department, commission, board, office or other
entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.


 


“Guarantee” of or
by any Person (the “guarantor”) means any obligation, contingent or otherwise,
of the guarantor guaranteeing or having the economic effect of guaranteeing any
Indebtedness or other obligation of any other Person (the “primary obligor”) in
any manner, whether directly or indirectly, and including any obligation of the
guarantor, direct or indirect, (a) to purchase or pay (or advance or
supply funds for the purchase or payment of) such Indebtedness or other
obligation or to purchase (or to advance or supply funds for the purchase of)
any security for the payment thereof, (b) to purchase or lease property,
securities or services for the purpose of assuring the owner of such
Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay
such Indebtedness or other obligation or (d) as an account party in
respect of any letter of credit or letter of guaranty issued to support such
Indebtedness or obligation; provided, that the term Guarantee shall not include
endorsements for collection or deposit in the ordinary course of business; provided,
however, that notwithstanding the foregoing, obligations in respect of
performance bonds and commercial letters of credit shall not constitute
obligations subject hereto (whether as direct obligations or Guarantees
thereof)  until such time as the
aggregate obligations thereunder (whether or not drawn) exceed the U.S. Dollar
Amount of U.S. $25,000,000.


 


“Hazardous Materials”
means all contaminants, vibrations, sound, odor, explosive or radioactive
substances or wastes and hazardous or toxic substances, wastes or other
pollutants, including petroleum or petroleum distillates, asbestos or asbestos
containing materials, polychlorinated biphenyls, radon gas, infectious or
medical wastes and all other substances or wastes of any nature regulated
pursuant to any Environmental Law.


 


“Holders of Secured
Obligations” means the holders of the Secured Obligations from time to time
and shall include (i) each Lender and each Issuing Bank in respect of its
Loans and LC Exposure, respectively, (ii) the Agents, the Issuing Banks
and the Lenders in respect of all other present and future obligations and
liabilities of the Borrowers, the other Loan Parties and each Subsidiary
thereof of every type and description arising under or in connection with this
Agreement or any other Loan Document, (iii) each Lender and Affiliate of
such Lender in respect of Swap Agreements and Banking Services Agreements
entered into with such Person by a Loan Party or any Subsidiary thereof, (iv) each
indemnified party under Section 9.03 in respect of the obligations and
liabilities of the Borrowers to such Person hereunder and under the other 


 


21

















 


Loan Documents, and (v) their
respective successors and (in the case of a Lender, permitted) transferees and
assigns.


 


“Hostile Acquisition”
means (a) the acquisition of the Equity Interests of a Person through a
tender offer or similar solicitation of the owners of such Equity Interests
which has not been approved (prior to such acquisition) by the board of
directors (or any other applicable governing body) of such Person or by similar
action if such Person is not a corporation and (b) any such acquisition as
to which such approval has been withdrawn.


 


“Increasing Lender”
has the meaning assigned to such term in Section 2.20.


 


“Indebtedness” of
any Person means, without duplication, (a) all obligations of such Person
for borrowed money or with respect to deposits or advances of any kind, (b) all
obligations of such Person evidenced by bonds, debentures, notes or similar
instruments, (c) all obligations of such Person upon which interest
charges are customarily paid, (d) all obligations of such Person under
conditional sale or other title retention agreements relating to property
acquired by such Person, (e) all obligations of such Person in respect of
the deferred purchase price of property or services (excluding (1) current
accounts payable incurred in the ordinary course of business, (2) obligations
to officers, directors and employees evidencing deferred compensation, and (3) guaranteed
salary continuation amounts resulting from and which are payable upon the death
of an officer, director or employee), (f) all Indebtedness of others
secured by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien on property owned or
acquired by such Person, whether or not the Indebtedness secured thereby has
been assumed, (g) all Guarantees by such Person of Indebtedness of others,
(h) all Off-Balance Sheet Liabilities of such Person and all Attributable
Receivables Indebtedness of such Person, (i) all Capital Lease Obligations
of such Person, (j) all obligations, contingent or otherwise, of such
Person as an account party in respect of letters of credit and letters of
guaranty, (k) all obligations, contingent or otherwise, of such Person in
respect of bankers’ acceptances, (l) the aggregate amount of all net Swap
Obligations of such Person (with net amount being the termination value
thereof), (m) earn-out payments to the extent fully and finally
determined, and (n) obligations of such Person under Sale and Leaseback
Transactions; provided, however, that obligations in respect of
performance bonds and commercial letters of credit shall not constitute
Indebtedness until such time as the aggregate obligations thereunder (whether
or not drawn) exceed the U.S. Dollar Amount of U.S. $25,000,000.  The Indebtedness of any Person shall include
the Indebtedness of any other entity (including any partnership in which such
Person is a general partner) to the extent such Person is liable therefor as a
result of such Person’s ownership interest in or other relationship with such
entity, except to the extent the terms of such Indebtedness provide that such
Person is not liable therefor.  The
Indebtedness of the U.S. Borrower and its Subsidiaries shall exclude Pension
and other Post-Employment Benefit Amounts and MEPP Exit Expenses.


 


“Indemnified Taxes”
means Taxes other than Excluded Taxes and Other Taxes.


 


“Information
Memorandum” means the Confidential Information Memorandum dated March 2010
relating to the Borrowers and the Transactions.


 


22














 


“Interest Coverage
Ratio” means, for any period, the ratio of (a) Consolidated EBITDA for
such period to (b) cash Consolidated Interest Expense for such period; provided,
however, that for the first four Fiscal Quarters beginning with the
Fiscal Quarter ending September 30, 2010, cash Consolidated Interest
Expense shall be determined on an annualized basis, with each test period
beginning with the Fiscal Quarter ending September 30, 2010 and ending on
the last day of the applicable Fiscal Quarter.


 


“Interest Election
Request” means a request by a Borrower to convert or continue a Borrowing
in accordance with Section 2.08.


 


“Interest Payment Date”
means (a) with respect to any ABR Loan or a Canadian Prime Rate Loan
(other than a Swingline Loan), the last day of each Fiscal Quarter and the
Revolving Loan Maturity Date for Revolving Loans, and the Term Loan Maturity
Date for Term Loans, (b) with respect to any Eurodollar Loan or BA Rate
Loan, the last day of the Interest Period applicable to the Borrowing of which
such Loan is a part and, in the case of a Eurodollar Borrowing or a BA Rate
Borrowing with an Interest Period of more than three months’ duration, each day
prior to the last day of such Interest Period that occurs at intervals of three
months’ duration after the first day of such Interest Period and the Revolving
Loan Maturity Date or the Term Loan Maturity Date, as applicable, and (c) with
respect to any Swingline Loan, the day that such Loan is required to be repaid
and the Revolving Loan Maturity Date.


 


“Interest Period”
means with respect to any Eurodollar Borrowing or BA Rate Borrowing, the period
commencing on the date of such Borrowing and (a) in the case of a
Eurodollar Borrowing, ending on the numerically corresponding day in the
calendar month that is one, two, three or six months (or twelve months, if
consented to by each Lender subject to such Borrowing) thereafter or (b) in
the case of a BA Rate Borrowing, ending on the date 30, 60 or 90 days (or 180
days, if consented to by each Lender subject to such Borrowing) thereafter, as
a Borrower may elect; provided, that (i) if any Interest Period
would end on a day other than a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless, in the case of a Eurodollar
Borrowing only, such next succeeding Business Day would fall in the next
calendar month, in which case such Interest Period shall end on the next
preceding Business Day and (ii) any Interest Period pertaining to a
Eurodollar Borrowing or BA Rate Borrowing that commences on the last Business
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the last calendar month of such Interest Period) shall end
on the last Business Day of the last calendar month of such Interest
Period.  For purposes hereof, the date of
a Borrowing initially shall be the date on which such Borrowing is made and, in
the case of a Revolving Borrowing, thereafter shall be the effective date of
the most recent conversion or continuation of such Borrowing.


 


“Investment Grade
Lender” means a Revolving Lender that is not a Non-Investment Grade Lender.


 


 


“Issuing Bank”
means (i) JPMorgan Chase Bank, N.A., in its capacity as an issuer of
Letters of Credit hereunder and (ii) each other Lender that agrees to act
as an Issuing Bank hereunder and that is approved by the Borrowers and the
Administrative Agent, in each case together with its successors in such
capacity as provided in Section 2.06(i). 
Each Issuing Bank may, in its discretion, arrange for one or more
Letters of Credit to be issued by Affiliates of such 


 


23

















 


Issuing Bank including,
without limitation, with respect to JPMorgan Chase Bank, N.A., JPMorgan Chase
Bank, N.A., Toronto Branch, in which case the term “Issuing Bank” shall include
any such Affiliate with respect to Letters of Credit issued by such Affiliate.


 


“ITA” means the
Income Tax Act (Canada), as amended, and any regulations promulgated
thereunder.


 


“LC Collateral Account”
has the meaning assigned to such term in Section 2.06(j).


 


“LC Disbursement”
means a payment made by an Issuing Bank pursuant to a Letter of Credit.


 


“LC Exposure”
means the sum of the Canadian Tranche LC Exposure and the U.S. Tranche LC
Exposure.


 


“Lenders” means
the Persons listed on Schedule 2.01 and any other Person that shall have become
a Lender hereunder pursuant to Section 2.20 or pursuant to an Assignment
and Assumption, other than any such Person that ceases to be a party hereto
pursuant to an Assignment and Assumption. 
Unless the context otherwise requires, the term “Lenders” includes the
Canadian Tranche Swingline Lender and the U.S. Tranche Swingline Lender.


 


“Letter of Credit”
means any letter of credit issued pursuant to this Agreement, including Canadian
Tranche Letters of Credit and U.S. Tranche Letters of Credit.


 


“LIBO Rate” means,
with respect to any Eurodollar Borrowing for any Interest Period, the rate
appearing on, in the case of U.S. Dollars, Reuters Screen LIBOR01 Page (or
on any successor or substitute page of such service, or any successor to
or substitute for such service, providing rate quotations comparable to those
currently provided on such page of such service, as determined by the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to deposits in U.S. Dollars in the London interbank
market) at approximately 11:00 a.m., London time, two (2) Business
Days prior to the commencement of such Interest Period, as the rate for
deposits in U.S. Dollars with a maturity comparable to such Interest
Period.  In the event that such rate is
not available at such time for any reason, then the “LIBO Rate” with respect to
such Eurodollar Borrowing for such Interest Period shall be the rate at which
deposits in U.S. Dollars in an amount of U.S. $5,000,000 and for a maturity
comparable to such Interest Period are offered by the principal London office
of the Administrative Agent in immediately available funds in the London
interbank market at approximately 11:00 a.m., London time, two (2) Business
Days prior to the commencement of such Interest Period.  Notwithstanding the foregoing, the LIBO Rate
shall in no event be less than 1.50% per annum for any Term Loan.


 


“Lien” means, with
respect to any asset, (a) any mortgage, deed of trust, lien, pledge,
hypothecation, encumbrance, charge or security interest in, on or of such
asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement (or any financing lease
having substantially the same economic effect as any of the foregoing) relating
to such asset, but excluding the interest of a lessor under an operating lease
or a lease which is or would have been an operating lease on the date of this
Agreement, 


 


24

















 


but is subsequently
required to be included on a balance sheet as a result of a change in GAAP, and
(c) in the case of securities, any purchase option, call or similar right
of a third party with respect to such securities.


 


“Loan Documents”
means this Agreement, any promissory notes issued pursuant to Section 2.10(e) of
this Agreement, any Letter of Credit applications, the Collateral Documents,
the Canadian Guaranty, the U.S. Guaranty, and all other agreements,
instruments, documents and certificates identified in Sections 4.01 and
4.02 executed and delivered to, or in favor of, any Agent or any Lenders and
including all other pledges, powers of attorney, consents, assignments,
contracts, notices, letter of credit agreements and all other written matter
whether heretofore, now or hereafter executed by or on behalf of any Loan
Party, or any employee of any Loan Party, and delivered to any Agent or any
Lender in connection with the Agreement or the transactions contemplated
thereby.  Any reference in the Agreement
or any other Loan Document to a Loan Document shall include all appendices,
exhibits or schedules thereto, and all amendments, restatements, supplements or
other modifications thereto, and shall refer to the Agreement or such Loan
Document as the same may be in effect at any and all times such reference
becomes operative.


 


“Loan Parties”
means, collectively, the Borrowers and the Loan Party Guarantors.


 


“Loan Party Guarantor”
means (x) with respect to all of the Secured Obligations, each Material
Domestic Subsidiary that is required to become a party to a Loan Party Guaranty
or that is designated as a Loan Party Guarantor under such Loan Party Guaranty
by the U.S. Borrower (including pursuant to a joinder or supplement thereto),
and (y) with respect to the Secured Obligations owing by the Canadian
Borrower or a Loan Party organized under the laws of Canada, each Material
Canadian Subsidiary that is required to become a party to a Loan Party Guaranty
or that is designated as a Loan Party Guarantor under such Loan Party Guaranty
(including pursuant to a joinder or supplement thereto); provided, that
no Receivables Entity shall be required to be a Loan Party Guarantor so long as
it remains party to a Permitted Receivables Facility.  The Loan Party Guarantors as of the Funding
Date are identified as such in Schedule 3.01 hereto.


 


“Loan Party Guaranty”
means the Canadian Guaranty or the U.S. Guaranty, as applicable.


 


“Loans” means the
loans made by the Lenders to a Borrower pursuant to this Agreement (including,
without limitation, the Canadian Tranche Revolving Loans, the U.S. Tranche
Revolving Loans and the Term Loans).


 


“Local Time” means
Chicago, IL time.


 


“Long-Term Debt”
means any Indebtedness that, in accordance with GAAP, constitutes (or, when
incurred, constituted) a long-term liability.


 


“Material Adverse
Effect” means any event, development or circumstance that has had or could
reasonably be expected to have a material adverse effect on (a) the
business, assets, liabilities, results of operations, property or financial
condition of the U.S. Borrower and its Subsidiaries taken as a whole, (b) the
ability of the Loan Parties taken as a whole to perform 


 


25

















 


their obligations under
the Loan Documents as and when such obligations are required to be performed
thereunder, or (c) the validity or enforceability of any Loan Document or
the rights or remedies of the Agents or the Lenders under such Loan Document or
the perfection or priority of any material Lien granted by a Loan Party in
favor of any Agent or any Holder of Secured Obligations.


 


“Material Canadian
Subsidiary” means each Subsidiary organized under the laws of Canada (i) which,
as of the most recent Fiscal Quarter of the U.S. Borrower, for the period of
four consecutive Fiscal Quarters then ended, for which financial statements
have been delivered pursuant to Section 5.01, contributed greater than
five percent (5%) of Consolidated EBITDA for such period or (ii) which
contributed greater than five percent (5%) of Consolidated Total Assets as of
such date; provided that, if at any time the aggregate amount of that
portion of Consolidated EBITDA or Consolidated Total Assets of all Subsidiaries
organized under the laws of Canada that are not Material Canadian Subsidiaries
exceeds ten percent (10%) of Consolidated EBITDA for any such period or ten
percent (10%) of Consolidated Total Assets as of the end of any such Fiscal
Quarter, the U.S. Borrower (or, in the event the U.S. Borrower has failed to do
so within ten (10) days, the Administrative Agent, provided that the
Administrative Agent will consult with the U.S. Borrower as part of such
process) shall designate sufficient Subsidiaries organized under the laws of
Canada as “Material Canadian Subsidiaries” to cause that portion of
Consolidated EBITDA or Consolidated Total Assets held by such Subsidiaries that
are not Material Canadian Subsidiaries to equal or be less than ten percent
(10%) of Consolidated EBITDA or Consolidated Total Assets, as applicable, and
such designated Subsidiaries shall for all purposes of this Agreement
constitute Material Canadian Subsidiaries on and after the date of such
designation; provided, further, if a Subsidiary which does not
meet the aforementioned 5% requirement is designated by the U.S. Borrower as a
Material Canadian Subsidiary, becomes a Loan Party Guarantor, and delivers all
applicable Collateral Documents in accordance with Section 5.09, then such
Subsidiary shall be deemed to be a Material Canadian Subsidiary for purposes
hereof, and shall not be counted toward the 10% non-Material Canadian
Subsidiary basket described above.


 


“Material Domestic
Subsidiary” means each Domestic Subsidiary (i) which, as of the most
recent Fiscal Quarter of the U.S. Borrower, for the period of four consecutive
Fiscal Quarters then ended, for which financial statements have been delivered
pursuant to Section 5.01, contributed greater than five percent (5%) of
Consolidated EBITDA for such period or (ii) which contributed greater than
five percent (5%) of Consolidated Total Assets as of such date; provided
that, if at any time the aggregate amount of that portion of Consolidated
EBITDA or Consolidated Total Assets of all Domestic Subsidiaries that are not
Material Domestic Subsidiaries exceeds ten percent (10%) of Consolidated EBITDA
for any such period or ten percent (10%) of Consolidated Total Assets as of the
end of any such Fiscal Quarter, the U.S. Borrower (or, in the event the U.S. Borrower
has failed to do so within ten (10) days, the Administrative Agent,
provided that the Administrative Agent will consult with the U.S. Borrower as
part of such process) shall designate sufficient Domestic Subsidiaries as “Material
Domestic Subsidiaries” to cause that portion of Consolidated EBITDA or
Consolidated Total Assets held by Domestic Subsidiaries that are not Material
Domestic Subsidiaries to equal or be less than ten percent (10%) of
Consolidated EBITDA or Consolidated Total Assets, as applicable, and such
designated Subsidiaries shall for all purposes of this Agreement constitute
Material Domestic Subsidiaries on and after the date of such designation; provided,
further, if a 


 


26

















 


Subsidiary which does not
meet the aforementioned 5% requirement is designated by the U.S. Borrower as a
Material Domestic Subsidiary, becomes a Loan Party Guarantor, and delivers all
applicable Collateral Documents in accordance with Section 5.09, then such
Subsidiary shall be deemed to be a Material Domestic Subsidiary for purposes
hereof, and shall not be counted toward the 10% non-Material Domestic
Subsidiary basket described above.


 


“Material Foreign
Subsidiary” means each non-Canadian Foreign Subsidiary (i) which, as
of the most recent Fiscal Quarter of the U.S. Borrower, for the period of four
consecutive Fiscal Quarters then ended, for which financial statements have
been delivered pursuant to Section 5.01, contributed greater than five
percent (5%) of Consolidated EBITDA for such period or (ii) which
contributed greater than five percent (5%) of Consolidated Total Assets as of
such date; provided that, if at any time the aggregate amount of that
portion of Consolidated EBITDA or Consolidated Total Assets of all non-Canadian
Foreign Subsidiaries that are not Material Foreign Subsidiaries exceeds ten
percent (10%) of Consolidated EBITDA for any such period or ten percent (10%)
of Consolidated Total Assets as of the end of any such Fiscal Quarter, the U.S.
Borrower (or, in the event the U.S. Borrower has failed to do so within ten (10) days,
the Administrative Agent, provided that the Administrative Agent will consult
with the U.S. Borrower as part of such process) shall designate sufficient
non-Canadian Foreign Subsidiaries as “Material Foreign Subsidiaries” to cause
that portion of Consolidated EBITDA or Consolidated Total Assets held by
non-Canadian Foreign Subsidiaries that are not Material Foreign Subsidiaries to
equal or be less than ten percent (10%) of Consolidated EBITDA or Consolidated
Total Assets, as applicable, and such designated Subsidiaries shall for all
purposes of this Agreement constitute Material Foreign Subsidiaries on and
after the date of such designation; provided, further, if a
Subsidiary which does not meet the aforementioned 5% requirement is designated
by the U.S. Borrower as a Material Foreign Subsidiary, and such Subsidiary’s
Equity Interests are pledged to the Applicable Agent in accordance with this
Agreement (if such pledge is required at all), then such Subsidiary shall be
deemed to be a Material Foreign Subsidiary for purposes hereof, and shall not
be counted toward the 10% non-Material Foreign Subsidiary basket described
above.


 


“Material Indebtedness”
means Indebtedness (other than the Loans and Letters of Credit), or obligations
in respect of one or more Swap Agreements, of any one or more of the Loan
Parties and their Subsidiaries in an aggregate principal amount exceeding the
U.S. Dollar Amount of U.S. $25,000,000. 
For purposes of determining Material Indebtedness, the “principal amount”
of the obligations of any Loan Party or any Subsidiary in respect of any Swap
Agreement at any time shall be the maximum aggregate amount (giving effect to
any netting agreements) that such Person would be required to pay if such Swap
Agreement were terminated at such time.


 


“Material Subsidiary”
means a Material Canadian Subsidiary, a Material Domestic Subsidiary, or a
Material Foreign Subsidiary, as applicable.


 


“MEPP Exit Expense”
means expenses not in excess of the U.S. Dollar Amount of U.S. $115,000,000
which may be incurred by the U.S. Borrower and its Subsidiaries in connection
with the termination of or withdrawal from certain Multi-Employer Plans.


 


“Moody’s” means
Moody’s Investors Service, Inc.


 


27

















 


“Mortgage” means
each mortgage, charge, deed of trust, hypothec or other agreement (if any)
which conveys or evidences a Lien in favor of the Applicable Agent, for the
benefit of the Applicable Agent and the Holders of Secured Obligations, on real
property of a Loan Party, including any amendment, restatement, modification or
supplement thereto.


 


“Mortgage Instrument”
means (x) such title reports, title insurance, flood certifications, FEMA
forms (where applicable), flood insurance (where applicable), opinions of
counsel, surveys, appraisals, environmental reports (if any), and environmental
indemnity signed by each of the Loan Parties granting a Mortgage as are
requested by, and in form and substance reasonably acceptable to, the
Applicable Agent, in accordance with this Agreement and the other Loan
Documents, and (y) such other items reasonably required by Applicable
Agent with respect to each parcel of real property owned by any Loan Party as
of the Funding Date subject to a Mortgage, including, without limitation,
leasehold mortgage protection agreements; provided, however, that
with respect to those real properties identified by the U.S. Borrower to the
Applicable Agents on or prior to the Effective Date as those being owned or to
be owned by the Loan Parties on the Funding Date, the Applicable Agents confirm
they have received all environmental reports and appraisals required by them.


 


“Multiemployer Plan”
means a multiemployer plan as defined in Section 4001(a)(3) of ERISA
as to which a Loan Party or any ERISA Affiliate incurs or otherwise has any
obligation or liability, contingent or otherwise.


 


“Net Proceeds”
means, with respect to any event, (a) the cash proceeds received in
respect of such event including (i) any cash received in respect of any
non-cash proceeds (including any cash payments received by way of deferred
payment of principal pursuant to a note or installment receivable or purchase
price adjustment receivable or otherwise, but excluding any interest payments),
but only as and when received, (ii) in the case of a casualty, insurance
proceeds and (iii) in the case of a condemnation or similar event,
condemnation awards and similar payments, net of (b) the sum of (i) all
fees and out-of-pocket expenses paid to third parties (other than Affiliates)
in connection with such event, (ii) in the case of a sale, transfer or
other disposition of an asset (including pursuant to a sale and leaseback
transaction or a casualty or a condemnation or similar proceeding), the amount
of all payments required to be made as a result of such event to repay
Indebtedness (other than Loans) secured by such asset or otherwise subject to
mandatory prepayment as a result of such event and (iii) the amount of all
taxes paid (or reasonably estimated to be payable) and the amount of any
reserves established to fund contingent liabilities reasonably estimated to be
payable, and that are directly attributable to such event (as determined
reasonably and in good faith by a Financial Officer).


 


“Non-Investment Grade
Lender” means any Revolving Lender whose unsecured long-term Indebtedness
(without giving effect to any third-party credit enhancement) is rated BB+ or
lower by S&P or Ba1 or lower by Moody’s, or who does not have an unsecured
long-term Indebtedness (without giving effect to any third-party credit
enhancement) rating from both S&P and Moody’s.


 


“Nonqualified Deferred
Compensation Plan” means an unfunded plan, arrangement, program or
agreement maintained primarily for the purpose of providing deferred
compensation, including supplemental and excess benefits, for a select group of
management or 


 


28

















 


highly compensated
employees within the meaning of Section 201(2), 301(a)(3) and 401(a)(1) of
ERISA and Department of Labor Regulations Section 2520.104-23.


 


“Obligations”
means all unpaid principal of and accrued and unpaid interest on the Loans, all
LC Exposure, all accrued and unpaid fees and all expenses, reimbursements,
indemnities and other obligations and indebtedness (including interest accruing
during the pendency of any bankruptcy, insolvency, receivership or other
similar proceeding, regardless of whether allowed or allowable in such
proceeding), obligations and liabilities of the Loan Parties and their
Subsidiaries to any of the Lenders, the Agents, the Issuing Banks or any
indemnified party, individually or collectively, in their respective capacities
as Lenders, Agents, Issuing Banks or other indemnified parties, existing on the
Effective Date or arising thereafter, direct or indirect, joint or several,
absolute or contingent, matured or unmatured, liquidated or unliquidated,
secured or unsecured, arising by contract, operation of law or otherwise,
arising or incurred under this Agreement or any of the other Loan Documents.


 


“Off-Balance Sheet
Liability” of a Person means (a) any repurchase obligation or
liability of such Person with respect to accounts or notes receivable sold by
such Person, (b) any indebtedness, liability or obligation under any
so-called “synthetic lease” transaction entered into by such Person, or (c) any
indebtedness, liability or obligation arising with respect to any other
transaction to which such Person is a party which is the functional equivalent
of or takes the place of borrowing but which does not constitute a liability on
the balance sheets of such Person.


 


“Other Taxes”
means any and all present or future stamp or documentary taxes or any other
excise or property taxes, charges or similar levies arising from any payment
made hereunder or from the execution, delivery or enforcement of, or otherwise
with respect to, this Agreement or any other Loan Document.


 


“Participant” has
the meaning set forth in Section 9.04(c)(i).


 


“Patriot Act”
means the Uniting and Strengthening
America by Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism Act of 2001, P.L. 107-56, as amended.


 


“PBGC” means the
Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor
entity performing similar functions.


 


“Pension and
Post-Employment Benefit Amounts” means liabilities for pensions and other
post-employment benefits which are or would be properly reflected on a
consolidated balance sheet of the U.S. Borrower and its Subsidiaries in
accordance with GAAP.


 


“Pension Plan”
means any Benefit Plan subject to the provisions of Title IV of ERISA or Section 412
of the Code or Section 302 of ERISA, and in respect of which a Loan Party
or any ERISA Affiliate thereof is (or, if such plan were terminated, would
under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of
ERISA.


 


“Permitted Acquisition”
means any acquisition (whether by purchase, merger, amalgamation, consolidation
or otherwise but excluding in any event a Hostile Acquisition) or series of
related acquisitions by any Loan Party or any of its Subsidiaries of (i) all
or 


 


29

















 


substantially all the
assets of or (ii) all or substantially all of the Equity Interests in, a
Person or division or line of business of a Person, if, at the time of and
immediately after giving effect thereto, (a) no Default has occurred and
is continuing or would arise after giving effect thereto, (b) such Person
or division or line of business is engaged in the same or a similar line of
business as a Loan Party or Subsidiary thereof or business reasonably related
or complementary thereto, (c) all actions required to be taken with
respect to such acquired or newly formed Subsidiary under Section 5.09
shall have been taken, (d) the Loan Parties and their Subsidiaries are in
compliance, on a Pro Forma Basis after giving effect to such acquisition (but
without giving effect to any synergies or cost savings), with the covenants
contained in Section 6.11 recomputed as of the last day of the most
recently ended Fiscal Quarter of the U.S. Borrower for which financial
statements are available, as if such acquisition (and any related incurrence or
repayment of Indebtedness, with any new Indebtedness being deemed to be
amortized over the applicable testing period in accordance with its terms) had
occurred on the first day of each relevant period for testing such compliance
and, if the aggregate consideration paid in respect of such acquisition exceeds
the U.S. Dollar Amount of U.S. $50,000,000 (including, without limitation,
fully and finally determined deferred purchase price amounts, fully and finally
determined earn-out payments, assumptions of Indebtedness, and issuances of Seller
Notes), the U.S. Borrower shall have delivered to the Administrative Agent a
certificate of a Financial Officer of the U.S. Borrower to such effect,
together with all relevant financial information, statements and projections
requested by the Administrative Agent, (e) in the case of an acquisition,
merger or amalgamation involving a Loan Party or a Subsidiary thereof, a Loan
Party or a Subsidiary thereof is the surviving entity or successor entity of
such merger, amalgamation and/or consolidation, and (f) if the Total
Leverage Ratio is or will be greater than 2.75 to 1.00 at the time of, or after
giving effect on a Pro Forma Basis to, any acquisition, the aggregate
consideration paid in respect of such acquisition (including, without
limitation, fully and finally determined deferred purchase price amounts, fully
and finally determined earn-out payments, assumptions of Indebtedness, and
issuances of Seller Notes) shall not exceed the U.S. Dollar Amount of U.S.
$75,000,000 (with the understanding that such U.S. $75,000,000 limitation shall
not apply when the Total Leverage Ratio is or will be less than or equal to
2.75 to 1.00 at the time of, or after giving effect on a Pro Forma Basis, to
the applicable acquisition).


 


“Permitted Corporate
Restructuring Transactions” means transactions entered into to facilitate
corporate restructurings otherwise permitted by this Agreement or lawful tax
planning (and in any event unrelated to an insolvency, bankruptcy, workout or
similar event), which transactions are comprised of either (a) loans,
capital contributions, or other transfers (in each case consisting exclusively
of book entries, cash (by wire or otherwise) or intercompany obligations and
not any other type of asset) by Loan Parties to non-Loan Party Subsidiaries,
but only if the amount of such transfers is returned to a U.S. Loan Party (if
the initial Loan Party transferor was a U.S. Loan Party) or to any Loan Party
(if the initial Loan Party transferor was a Canadian Loan Party) in the same
form as made (i.e., a cash capital contribution shall be returned in cash)
promptly, but in no event later than the Business Day next following the date
of the initial transfer, or (b) loans, capital contributions, or other
transfers (in each case consisting exclusively of book entries, cash (by wire
or otherwise) or intercompany obligations and not any other type of asset) by
non-Loan Party Subsidiaries to Loan Parties, but only if the amount of such
transfers is returned to the initial non-Loan Party Subsidiary transferor in
the same form as made (i.e., a cash capital contribution shall be returned in
cash) promptly, but in no event later than the Business Day next following the
date of the initial transfer; provided, however, that (A) 


 


30

















 


if any of the foregoing
transactions shall involve transfers of funds from a Borrower or a Subsidiary
to a Borrower or any other Subsidiary, such transfers shall be accomplished by (i) book
entries on the accounts of the applicable Borrower or such Subsidiary
maintained with the Administrative Agent or (ii) wire transfers to
accounts of the applicable Borrower or such Subsidiary maintained with the
Administrative Agent or its Affiliates; (B) such transactions shall not be
detrimental to the interests of the Lenders and shall occur at a time when no
Default shall have occurred and be continuing; and (C) the applicable
Borrower has given the Administrative Agent at least 10 days (or such lesser
number of days as the Administrative Agent may agree) prior written notice of
its intent to engage in or cause such transactions, accompanied by a reasonably
detailed description of same.


 


“Permitted
Encumbrances” means:


 


(a)       Liens
imposed by law for taxes, assessments and other governmental charges that are
not yet due or have not been delinquent for in excess of ninety (90) days, or
are being contested in compliance with Section 5.04; provided, that
no more than the U.S. Dollar Amount of U.S. $25,000,000 of aggregate
obligations subject to Liens under this clause (a) may be delinquent for
more than 90 days and constitute Permitted Encumbrances;


 


(b)       carriers’,
warehousemen’s, mechanics’, materialmen’s, repairmen’s, landlords’ and other
like Liens imposed by law, arising in the ordinary course of business and
securing obligations that are not overdue by more than thirty (30) days or
obligations in an aggregate amount not in excess of the U.S. Dollar Amount of
U.S. $25,000,000, or which are being contested in compliance with Section 5.04;


 


(c)       pledges
and deposits made in the ordinary course of business in compliance with workers’
compensation, unemployment insurance and other social security laws or
regulations;


 


(d)       deposits
to secure the performance of bids, trade contracts, leases, statutory
obligations, surety and appeal bonds, performance bonds and other obligations
of a like nature, in each case in the ordinary course of business;


 


(e)       judgment
Liens in respect of judgments that do not constitute an Event of Default under
clause (k) of Article VII;


 


(f)        easements,
zoning restrictions, zoning by-laws, municipal by-laws and regulations,
development agreements, site plan agreements, municipal agreements,
encroachment agreements, restrictive covenants and other restrictions,
reservations, covenants, conditions, rights-of-way and similar encumbrances on
real property imposed by law or arising in the ordinary course of business that
do not secure any monetary obligations and do not materially detract from the
value of the affected property or materially interfere with the ordinary
conduct of business of the applicable Loan Party or Subsidiary thereof and
notwithstanding anything to the contrary herein, with respect to leasehold
interests under which a Loan Party or a Subsidiary thereof is the tenant,
mortgages, obligations, liens and other encumbrances affecting the landlord’s
interest in the real property;


 


31

















 


(g)       in the
case of the Canadian Loan Parties, Liens for governmental charges or levies or
for employment insurance, pension obligations or other social security
obligations, workers’ compensation or vacation pay, the payment of which is not
yet due, or for which installments have been paid based on reasonable estimates
pending final assessments, or if due, that are being contested in accordance
with Section 5.04;


 


(h)       in the
case of the Canadian Loan Parties, undetermined or inchoate Liens incidental to
current operations which have not at such time been filed or exercised, or
which relate to obligations not due or payable or if due, that are being
contested in accordance with Section 5.04;


 


(i)        in
respect of any real property of a Loan Party in Canada, the reservations,
limitations, provisos and conditions expressed in the original grant from the
Crown and similar statutory exceptions to title;


 


(j)        title
defects, encroachments or irregularities which are of a minor nature and which
in the aggregate do not materially impair the value of any real property or the
use of the affected property for the purpose for which it is used by that
Person;


 


(k)       in the
case of the Canadian Loan Parties, Liens given to a public utility to secure
payment for services, when required by such utility in connection with the
operations of that Person in the ordinary course of its business, which related
to obligations not due or payable, or if due that are being contested in
accordance with Section 5.04; and


 


(l)        in
respect of any leased real property located in Canada, Liens arising from the
right of distress enjoyed by landlords outside of the Province of Quebec to
secure the payment and performance of rental obligations in respect of such
leased properties in such provinces or an Lien granted by that Person to a
landlord to secure the payment and performance of rental obligations in respect
of property in the Province of Quebec leased from such landlord, provided that
such Liens are limited to the assets located at or about such leased property.


 


provided that the term “Permitted
Encumbrances” shall not include any Lien securing Indebtedness.


 


“Permitted Investments”
means:


 


(a)           direct
obligations of, or obligations the principal of and interest on which are
unconditionally guaranteed by, the United States of America (or by any agency
thereof to the extent such obligations are backed by the full faith and credit
of the United States of America), in each case maturing within one year from
the date of acquisition thereof;


 


(b)           investments
in commercial paper maturing within 270 days from the date of acquisition
thereof and having, at such date of acquisition, the highest credit rating
obtainable from S&P or from Moody’s or from Dominion Bond Rating Services
Limited;


 


(c)           investments
in certificates of deposit, banker’s acceptances and time deposits maturing
within 180 days from the date of acquisition thereof issued or guaranteed by or



 


32

















 


placed with, and
money market deposit accounts issued or offered by, any domestic office of any
commercial bank organized under the laws of the United States of America or any
State thereof which has a combined capital and surplus and undivided profits of
not less than U.S. $500,000,000;


 


(d)           fully
collateralized repurchase agreements with a term of not more than thirty (30)
days for securities described in clause (a) above and entered into with a
financial institution satisfying the criteria described in clause (c) above;
and


 


(e)           money
market funds that (i) comply with the criteria set forth in U.S.
Securities and Exchange Commission Rule 2a-7 under the Investment Company
Act of 1940, (ii) are rated AAA by S&P and Aaa by Moody’s and (iii) have
portfolio assets of at least U.S. $5,000,000,000;


 


(f)            direct
obligations of, or obligations the principal of and interest on which are
unconditionally guaranteed by, the Government of Canada or of any Canadian
province (or by any agency thereof to the extent such obligations are backed by
the full faith and credit of the Government of Canada or of such Canadian
province), in each case maturing within one year from the date of acquisition
thereof;


 


(g)           investments
in certificates of deposit, bankers’ acceptances, commercial paper and time
deposits maturing within 180 days from the date of acquisition thereof issued
or guaranteed by or placed with, and money market deposit accounts issued or
offered by, any domestic office of any commercial bank organized under the laws
of Canada or of any Canadian province having, at such date of acquisition, a
credit rating on its long-term unsecured indebtedness of at least “A-” by
S&P; and


 


(h)           fully
collateralized repurchase agreements with a term of not more than 180 days for
securities described in clause (f) above and entered into with a financial
institution satisfying the criteria described in clause (g) above.


 


“Permitted Receivables
Facility” means the receivables facility or facilities created under the
Permitted Receivables Facility Documents, providing for the sale or pledge by a
Borrower and/or one or more other Receivables Sellers of Permitted Receivables
Facility Assets (thereby providing financing to such Borrower and the
Receivables Sellers) either (i) to the Receivables Entity (either directly
or through another Receivables Seller), which in turn shall sell or pledge
interests in the respective Permitted Receivables Facility Assets to
third-party investors pursuant to the Permitted Receivables Facility Documents
(with the Receivables Entity permitted to issue investor certificates,
purchased interest certificates or other similar documentation evidencing
interests in the Permitted Receivables Facility Assets) in return for the cash
used by the Receivables Entity to purchase the Permitted Receivables Facility
Assets from such Borrower and/or the respective Receivables Sellers, or (ii) directly
to third-party investors on a true-sale basis and applying securitization
principles (both from a legal and an accounting perspective), in return for
cash, pursuant to the Permitted Receivables Facility Documents, in each case as
more fully set forth in the Permitted Receivables Facility Documents.


 


33














 


“Permitted Receivables
Facility Assets” means (i) Receivables (whether now existing or
arising in the future) of a Borrower and its Subsidiaries which are transferred
or pledged to the Receivables Entity pursuant to the Permitted Receivables
Facility and any related Permitted Receivables Related Assets which are also so
transferred or pledged to the Receivables Entity and all proceeds thereof and (ii) loans
to a Borrower and its Subsidiaries secured by Receivables (whether now existing
or arising in the future) and any Permitted Receivables Related Assets of such
Borrower and its Subsidiaries which are made pursuant to the Permitted
Receivables Facility.


 


“Permitted Receivables
Facility Documents” means each of the documents and agreements entered into
in connection with the Permitted Receivables Facility, including all documents
and agreements relating to the issuance, funding and/or purchase of
certificates and purchased interests, all of which documents and agreements
shall be in form and substance reasonably satisfactory to the Administrative
Agent, in each case as such documents and agreements may be amended, modified,
supplemented, refinanced or replaced from time to time so long as (i) any
such amendments, modifications, supplements, refinancings or replacements do
not impose any conditions or requirements on the applicable Borrower or any of
its Subsidiaries that are more restrictive in any material respect than those
in existence immediately prior to any such amendment, modification, supplement,
refinancing or replacement, (ii) any such amendments, modifications,
supplements, refinancings or replacements are not adverse in any way to the
interests of the Lenders and (iii) any such amendments, modifications,
supplements, refinancings or replacements are otherwise in form and substance
reasonably satisfactory to the Administrative Agent.


 


“Permitted Receivables
Related Assets” means any other assets that are customarily transferred or
in respect of which security interests are customarily granted in connection
with asset securitization transactions involving receivables similar to
Receivables and any collections or proceeds of any of the foregoing.


 


“Person” means any
natural person, corporation, limited liability company, trust, joint venture,
association, company, partnership, Governmental Authority or other entity.


 


“Personal Property
Security Act” means as it pertains to any Province in Canada, the
applicable personal property security legislation relevant among other things
for the perfection, priority ranking and enforcement of security interests in
personal property and without limitation means in Ontario, the Personal
Property Security Act (Revised Statutes of Ontario) as amended from time to
time.


 


“Plants Designated For
Closure or Sale” means manufacturing plants owned, leased or subleased by
Loan Parties or their Subsidiaries as of the Funding Date that are sold,
transferred, assigned, leased, subleased, earlier terminated or otherwise
disposed of to Persons that are not Affiliates, or that are closed or otherwise
cease operations in order to achieve synergies and cost savings, or because
such plants are underutilized or unprofitable.


 


“Pledge Subsidiary”
means, subject to the Applicable Pledge Percentage, (i) each Domestic
Subsidiary, (ii) each First Tier Foreign Subsidiary, and (iii) solely
with respect to 


 


34

















 


Secured Obligations owing
by the Canadian Loan Parties, each Subsidiary organized under the laws of
Canada or any province or territory thereof.


 


“Polish Subsidiary”
means Quad/Winkowski SP.ZO.O, an entity organized under the laws of Poland.


 


“Polish Subsidiary
Credit Facility” means that certain Facilities Agreement dated December 16,
2008 by and between Quad/Winkowski SP.ZO.O, as Borrower, and Bank Polska Kasa
Opieka S.A. as Lender, as it may be amended, supplemented, or otherwise
modified from time to time.


 


“Prepayment Event”
means, at any time the Total Leverage Ratio is greater than 2.25 to 1.00
(giving effect to the applicable transaction, event or occurrence on a Pro
Forma Basis), the following:


 


(a)           any
sale, transfer or other disposition (including pursuant to a Sale and Leaseback
Transaction) of any property or asset of any Loan Party or Subsidiary thereof,
other than (1) sales, transfers or dispositions described in
Sections 6.03(a)(iii), (a)(iv), (a)(v)(A) through (D), and (a)(vi) through
(a)(viii), (2) any sale, transfer or disposition by a non-Canadian Foreign
Subsidiary unless the Net Proceeds resulting therefrom are transferred (via
dividend, distribution or otherwise) to a Loan Party (with the understanding
that Net Proceeds resulting from a sale, transfer or disposition by a Canadian
Foreign Subsidiary shall only go to prepay Secured Obligations owing by
Canadian Loan Parties), (3) any sale, transfer or other disposition of any
Senior Secured Note Collateral or Existing Leveraged Lease Collateral, or other
assets permitted hereunder to secure the Senior Secured Notes or the Existing
Leveraged Leases, if the Net Proceeds resulting therefrom are required,
pursuant to the terms of the Senior Secured Notes as in effect on the Effective
Date, or the Existing Leveraged Leases as in effect on the Effective Date, as
applicable, to prepay Indebtedness owing thereunder as a mandatory prepayment
or in order to reduce the amount of such Indebtedness in order to remain in
compliance with overcollateralization or asset coverage covenants, or if such
Net Proceeds must continue to secure the Senior Secured Notes or the Existing
Leveraged Leases, as applicable, and are prohibited as of the Effective Date to
be used for any other purpose, and (4) amounts under Permitted Corporate
Restructuring Transactions and World Color Press Facilitating Transactions; or


 


(b)           any
casualty or other insured damage to, or any taking under power of eminent
domain or by condemnation or similar proceeding of, any property or asset of
any Loan Party or any Subsidiary thereof (subject to the reinvestment
provisions set forth in Section 2.11); or


 


(c)           the
occurrence of a Free Cash Flow Prepayment Date; provided, that (i) no
Free Cash Flow Prepayment Date shall be deemed to occur prior to January 1,
2012 and (ii) the Total Leverage Ratio will be tested by the Borrowers on
each Free Cash Flow Prepayment Date for the Fiscal Year corresponding with such
Free Cash Flow Prepayment Date to determine whether a Prepayment Event has
occurred under this clause (d)).


 


“Prime Rate” means
the rate of interest per annum publicly announced from time to time by JPMorgan
Chase Bank, N.A. as its prime rate in effect at its principal office in New 


 


35

















 


York City; each change in
the Prime Rate shall be effective from and including the date such change is
publicly announced as being effective.


 


“Pro Forma Basis”
means, with respect to any event and to the Administrative Agent’s reasonable
satisfaction, that the Borrowers are in compliance on a pro forma
basis with the applicable covenant, calculation or requirement herein
recomputed as if the event with respect to which compliance on a Pro Forma
Basis is being tested had occurred on the first day of the four fiscal quarter
period most recently ended on or prior to such date for which financial
statements have been delivered pursuant to Section 5.01.


 


“Purchase Agreement”
means (i) the Arrangement Agreement, dated as of January 25, 2010,
between the U.S. Borrower and World Color Press, (ii) the Plan of
Arrangement to be submitted to the Quebec Superior Court and (iii) all
exhibits, schedules and disclosure letters thereto, as the same may be amended
or modified.


 


“Purchase Offer”
means an offer by a Borrower to purchase Term Loans of one or more Classes
pursuant to modified Dutch auctions conducted in accordance with the Auction
Procedures and otherwise in accordance with Section 2.24.


 


“Receivables”
means all accounts receivable (including, without limitation, all rights to
payment created by or arising from sales of goods, leases of goods or the
rendition of services rendered no matter how evidenced whether or not earned by
performance).


 


“Receivables Entity”
means a wholly-owned Subsidiary of a Borrower which engages in no activities
other than in connection with the financing of accounts receivable of the
Receivables Sellers and which is designated (as provided below) as the “Receivables
Entity” (a) no portion of the Indebtedness or any other obligations
(contingent or otherwise) of which (i) is guaranteed by a Borrower or any
other Subsidiary of such Borrower (excluding guarantees of obligations (other
than the principal of, and interest on, Indebtedness)) pursuant to Standard
Securitization Undertakings, (ii) is recourse to or obligates such
Borrower or any other Subsidiary of such Borrower in any way (other than
pursuant to Standard Securitization Undertakings) or (iii) subjects any
property or asset of such Borrower or any other Subsidiary of such Borrower,
directly or indirectly, contingently or otherwise, to the satisfaction thereof,
other than pursuant to Standard Securitization Undertakings, (b) with
which neither such Borrower nor any of its Subsidiaries has any contract,
agreement, arrangement or understanding (other than pursuant to the Permitted
Receivables Facility Documents (including with respect to fees payable in the
ordinary course of business in connection with the servicing of accounts
receivable and related assets)) on terms less favorable to such Borrower or
such Subsidiary than those that might be obtained at the time from persons that
are not Affiliates of such Borrower, and (c) to which neither such
Borrower nor any other Subsidiary of such Borrower has any obligation to
maintain or preserve such entity’s financial condition or cause such entity to
achieve certain levels of operating results. 
Any such designation shall be evidenced to the Administrative Agent by
filing with the Administrative Agent an officer’s certificate of the applicable
Borrower certifying that, to the best of such officer’s knowledge and belief
after consultation with counsel, such designation complied with the foregoing
conditions.


 


36

















 


“Receivables Sellers”
means the Loan Parties that are from time to time party to the Permitted
Receivables Facility Documents.


 


“Register” has the
meaning set forth in Section 9.04.


 


“Reinvestment Period”
means, with respect to any Net Proceeds to be applied as a mandatory prepayment
under Section 2.11, 180 days after receipt by the applicable Loan Party or
Subsidiary of such Net Proceeds; provided, that such Person shall have
an additional 180 days after the end of such initial 180-day period if, as of
the last day of the initial 180-day period, no Default is then outstanding and
a Responsible Officer of the U.S. Borrower certifies to the Administrative
Agent (i) that the applicable Person is diligently pursuing the completion
of the applicable acquisition, replacement, or rebuilding for which such Net
Proceeds shall be used, (ii) such acquisition, replacement or rebuilding
is underway, and (iii) such Responsible Officer believes, in good faith,
that such acquisition, replacement or rebuilding shall be completed by the end
of such additional 180-day period.


 


“Related Parties”
means, with respect to any specified Person, such Person’s Affiliates and the
respective directors, officers, employees, agents and advisors of such Person
and such Person’s Affiliates.


 


“Required Lenders”
means, at any time, Lenders having Credit Exposures and unused Commitments
representing more than 50% of the Aggregate Credit Exposure and unused
Aggregate Commitment at such time.


 


“Requirement of Law”
means, as to any Person, the Certificate of Incorporation and By-Laws or other
organizational or governing documents of such Person, and any law, treaty, rule or
regulation or determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is subject.


 


“Responsible Officer”
means any Financial Officer, the Chief Executive Officer of the U.S. Borrower,
and the general counsel of the U.S. Borrower.


 


“Restricted
Intercompany Transactions” means each of the following to occur subsequent
to the Funding Date:  (i) all sales,
transfers, assignments and other dispositions of assets, other than Funding
Date Used Equipment, by Loan Parties to non-Loan Party Subsidiaries and
non-Loan Party Affiliates, by Loan Parties to Persons in which a Loan Party or
other Subsidiary owns no more than 50% of the voting Equity Interests thereof,
and by U.S. Loan Parties to Canadian Loan Parties (which, with respect to the
allowance for the U.S./Canadian transfers, shall be in addition to, and not in
limitation of, the allowance set forth in Section 6.03(a)(iii)(C)), (ii) Indebtedness
of non-Loan Party Subsidiaries and non-Loan Party Affiliates to Loan Parties,
and Indebtedness of Persons in which a Loan Party or other Subsidiary owns no
more than 50% of the voting Equity Interests thereof to Loan Parties or
Subsidiaries thereof, including, without limitation, all loans and advances
described in Section 6.04 (with all such Indebtedness being calculated on
an outstanding or drawn basis, and with Indebtedness directly owing between two
parties being netted against each other), (iii) all investments by Loan
Parties in non-Loan Party Subsidiaries and non-Loan Party Affiliates, all
investments by Loan Parties 


 


37

















 


and their Subsidiaries in
Persons in which a Loan Party or other Subsidiary owns no more than 50% of the
voting Equity Interests thereof, and all non-cash investments by U.S. Loan
Parties in Canadian Loan Parties, with such non-cash investments by U.S. Loan
Parties in Canadian Loan Parties receiving the benefit of this definition as
well as the allowance in Section 6.03(a)(iii)(C) (with the
understanding that the aggregate amount of outstanding investments shall be
reduced at any time and from time to time by all dividends, distributions and
similar amounts received by the holder of an investment, and by the amount of
Net Proceeds received by such holder upon the sale of such investment), (iv) guarantees
by Loan Parties of Indebtedness owing by Persons organized under the laws of
the United States of America (or political subdivisions thereof) and in which a
Loan Party or other Subsidiary owns no more than 50% of the voting Equity
Interests thereof, and guarantees by U.S. Loan Parties of Indebtedness owing by
Domestic Subsidiaries that are not Loan Parties and Affiliates thereof
organized under the laws of the United States of America (or political
subdivisions thereof) that are not Loan Parties, (v) a Loan Party’s
repurchase of its Equity Interests from a non-Loan Party Subsidiary, and (vi) a
merger or amalgamation of a U.S. Loan Party (other than the U.S. Borrower) with
a Canadian Loan Party (other than the Canadian Borrower), with the Canadian
Loan Party the survivor thereof.


 


“Restricted
Intercompany Transactions Amount” means, with respect to all Restricted
Intercompany Transactions, an aggregate amount not to at any time exceed the
U.S. Dollar Amount of (i) U.S. $250,000,000 at any time the Total Leverage
Ratio is less than 2.25 to 1.00, (ii) U.S. $150,000,000 at any time the
Total Leverage Ratio is greater than or equal to 2.25 to 1.00 but less than
2.75 to 1.00, and (iii) U.S. $75,000,000 at any time the Total Leverage
Ratio is equal to or greater than 2.75 to 1.00, in each case, as computed on a
Pro Forma Basis as and when needed.


 


“Restricted Payment”
means any dividend or other distribution (whether in cash, securities or other
property) with respect to any Equity Interests in any Loan Party or Subsidiary
thereof, or any payment (whether in cash, securities or other property),
including any sinking fund or similar deposit, on account of the purchase,
redemption, retirement, acquisition, cancellation or termination of any such
Equity Interests in such Loan Party or such Subsidiary or any option, warrant
or other right to acquire any such Equity Interests in such Loan Party or such
Subsidiary.


 


“Retiree Welfare Plan”
means any employee benefit welfare plan as defined in Section 3(1) of
ERISA in respect of which a Loan Party or an ERISA Affiliate is an “employer”
as defined in Section 3(5) of ERISA and which provides benefits to
employees after termination of employment other than as required by Part 6
of Title I of ERISA.


 


“Revolving Commitment”
means, with respect to each Lender, the sum of its Canadian Tranche Revolving
Commitment and its U.S. Tranche Revolving Commitment.


 


“Revolving Credit
Exposure” means, with respect to any Lender at any time, the sum of such
Lender’s Canadian Tranche Revolving Credit Exposure and its U.S. Tranche
Revolving Credit Exposure.


 


“Revolving Lender”
means, as of any date of determination, each Canadian Tranche Lender and each
U.S. Tranche Lender.


 


38

















 


“Revolving Loan”
means a Canadian Tranche Revolving Loan or a U.S. Tranche Revolving Loan.


 


“Revolving Loan
Maturity Date” means the date that is the fourth annual anniversary of the
Funding Date.


 


“S&P” means
Standard & Poor’s.


 


“Sale and Leaseback
Transaction” means any sale or other transfer of any property or asset by
any Person with the intent to lease such property or asset as lessee.


 


“Schedule I Bank”
means each bank listed in Schedule I of the Bank Act (Canada).


 


“Secured Obligations”
means all Obligations, together with all (i) Banking Services Obligations
and (ii) Swap Obligations owing to one or more Lenders or their respective
Affiliates.


 


“Security Agreement”
means that certain Pledge and Security Agreement, dated as of the Funding Date,
among the U.S. Loan Parties and the Administrative Agent, for the benefit of
the Administrative Agent and the Holders of Secured Obligations, and any other
pledge or security agreement entered into, after the date of this Agreement by
any other U.S. Loan Party (as required by this Agreement or any other Loan
Document), or any other Person, as the same may be amended, restated,
supplemented or otherwise modified from time to time.


 


“Senior Secured Note
Collateral” means those assets of the U.S. Borrower and its Subsidiaries
identified on Schedule 1.01(b).


 


“Senior Secured Notes”
means all notes issued from time to time pursuant to that certain Note
Agreement dated as of September 1, 1995 between the U.S. Borrower and
certain Subsidiaries thereof, as Obligors, and the Purchasers named therein, as
it may be amended, supplemented or otherwise modified from time to time,
including without limitation, the Senior Secured Notes outstanding as of March 31,
2010 in the aggregate principal amount of U.S. $724,400,000.


 


“Specified Existing
Indebtedness” means Indebtedness outstanding under or in connection with
the following:


 


(a)           Term Facility Credit Agreement (U.S.
$450,000,000), dated July 21, 2009, and as amended or modified, among
World Color Press and Novink (USA) Corp. (renamed World Color (USA) Corp.), as
borrowers, and the guarantors party thereto, and Credit Suisse, General
Electric Capital Corporation and GE Canada Finance Holding Company, and Wachovia
Bank, National Association, as Co-Administrative Agents and Co-Collateral
Agents, and Credit Suisse, as Syndication Agent, and General Electric Capital
Corporation and GE Canada Finance Holding Company, and Wachovia Bank, National
Association, as Co-Documentation Agents, and the lenders party thereto.


 


39

















 


(b)           Credit Agreement (U.S. $350,000,000),
dated July 21, 2009, and as amended or modified, among World Color Press
and Novink (USA) Corp. (renamed World Color (USA) Corp.), as borrowers, and the
guarantors party thereto, and General Electric Capital Corporation, Wells Fargo
Foothill, LLC and Credit Suisse, as Co-Administrative Agents, and GE Canada
Finance Holding Company, as Canadian Agent and Canadian Collateral Agent, and
General Electric Capital Corporation, Wells Fargo Foothill, LLC and Credit
Suisse, as Co-Collateral Agents, and GMAC Commercial Finance LLC, as
Syndication Agent, and the lenders party thereto.


 


(c)           Indenture (maximum commitment of U.S.
$75,000,000, provided that the aggregate amount outstanding may be increased as
a result of PIK interest, prepayment premiums not in excess of 5% of the
principal amount of such outstandings and amounts deposited in accordance with
the Indenture in order to defease and then ultimately redeem all outstanding
amounts thereunder, with any overage being returned to the issuers), dated July 21,
2009, and as amended or modified, among Novink (USA) Corp., as Issuer, World
Color Press, as Guarantor, and The Bank of New York Mellon, as Trustee, as
amended, and the unsecured 10% Senior Guaranteed Notes due July 15, 2013
issued thereunder (as amended or modified, the “Claimant Notes”).


 


(d)           Second Amended and Restated Revolving
Credit Agreement, dated December 7, 2005, and as amended or modified,
among the U.S. Borrower, the Subsidiaries of the U.S. Borrower party thereto,
U.S. Bank National Association, JPMorgan Chase Bank, N.A., Mizuho Corporate
Bank, Ltd., Wachovia Bank, National Association, M&I Marshall &
Ilsley Bank, SunTrust Bank and The Northern Trust Company.


 


(e)           Senior Unsecured Revolving Credit
Agreement, dated October 31, 2008, and as amended or modified, among the
U.S. Borrower, the Subsidiaries of the U.S. Borrower party thereto, U.S. Bank
National Association, M&I Marshall & Ilsley Bank and The Northern
Trust Company, as amended by that certain First Amendment dated October 29,
2009.


 


“Standard
Securitization Undertakings” means representations, warranties, covenants
and indemnities entered into by a Borrower or any Subsidiary thereof in
connection with the Permitted Receivables Facility which are reasonably
customary in an accounts receivable financing transaction.


 


“Statutory Reserve
Rate” means, with respect to any currency, a fraction (expressed as a decimal),
the numerator of which is the number one and the denominator of which is the
number one minus the aggregate of the maximum reserve, liquid asset, fees or
similar requirements (including any marginal, special, emergency or
supplemental reserves or other requirements) established by any central bank,
monetary authority, the Board or other Governmental Authority for any category
of deposits or liabilities customarily used to fund loans in such currency,
expressed in the case of each such requirement as a decimal (including those
imposed pursuant to Regulation D of the Board). 
Eurodollar Loans shall be deemed to be subject to such reserve, liquid
asset, fee or similar requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under any applicable law, rule or regulation, including Regulation D of
the Board.  The Statutory Reserve 


 


40

















 


Rate shall be adjusted
automatically on and as of the effective date of any change in any reserve,
liquid asset or similar requirement.


 


“Subchapter S Payment”
means a payment made by the U.S. Borrower to Persons who held Equity Interests
in the U.S. Borrower prior to the Funding Date, measured by the Taxes owing by
such Persons that accrued prior to the Funding Date and during the period when
the U.S. Borrower was a subchapter S corporation; provided, that no such
payment shall be permitted hereunder if an Event of Default would result
therefrom or is then outstanding.


 


“Subordinated
Indebtedness” means any Indebtedness for borrowed money of any Loan Party
or any Subsidiary thereof that is extended or offered by a Person that is not a
Consolidated Financial Covenant Entity or an Affiliate thereof, and the payment
of which is contractually subordinated to payment of the Secured Obligations.


 


“subsidiary”
means, with respect to any Person (the “parent”) at any date, any corporation,
limited liability company, partnership, association or other entity the accounts
of which would be consolidated with those of the U.S. Borrower in its
consolidated financial statements if such financial statements were prepared in
accordance with GAAP as of such date, as well as any other corporation, limited
liability company, partnership, association or other entity (a) of which
securities or other ownership interests representing more than 50% of the
equity or more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the general partnership interests are, as of such
date, owned, controlled or held, or (b) that is, as of such date,
otherwise Controlled, by any Loan Party or any subsidiary or subsidiaries
thereof.


 


“Subsidiary” means
any subsidiary of the U.S. Borrower or any other Loan Party (and includes
without limitation the Canadian Borrower). 
Persons in which Loan Parties and Subsidiaries thereof own no more than
50% of the voting Equity Interests thereof shall not constitute Subsidiaries.


 


“Swap Agreement”
means any agreement with respect to any swap, forward, future or derivative
transaction or option or similar agreement involving, or settled by reference
to, one or more rates, currencies, commodities, equity or debt instruments or
securities, or economic, financial or pricing indices or measures of economic,
financial or pricing risk or value or any similar transaction or any
combination of these transactions; provided that no phantom stock or similar
plan providing for payments only on account of services provided by current or
former directors, officers, employees or consultants of the Loan Parties or
their Subsidiaries shall be a Swap Agreement.


 


“Swap Obligations”
means any and all obligations of any Loan Party or any Subsidiary, whether
absolute or contingent and howsoever and whensoever created, arising, evidenced
or acquired (including all renewals, extensions and modifications thereof and
substitutions therefor), under (a) any and all Swap Agreements permitted
hereunder with a Lender or an Affiliate of a Lender, and (b) any and all
cancellations, buy backs, reversals, terminations or assignments of any such
Swap Agreement transaction.


 


41














 


“Swingline Exposure”
means, at any time, the aggregate of the Canadian Tranche Swingline Exposure
and the U.S. Tranche Swingline Exposure.


 


“Swingline Loan”
means, as the context requires, a Canadian Tranche Swingline Loan and/or a U.S.
Tranche Swingline Loan.


 


“Syndication Agent”
means U.S. Bank National Association in its capacity as syndication agent
hereunder.


 


“Taxes” means any
and all present or future taxes, levies, imposts, duties, deductions, charges
or withholdings imposed by any Governmental Authority.


 


“Term Loan Commitment”
means (a) as to any Term Loan Lender, the aggregate commitment of such
Term Loan Lender to make Term Loans to the U.S. Borrower and the Canadian
Borrower, as applicable, as set forth on Schedule 2.01 or in the most recent Assignment
and Assumption Agreement or other documentation contemplated hereby executed by
such Term Loan Lender and (b) as to all Term Loan Lenders, the aggregate
commitment of all Term Loan Lenders to make Term Loans, which aggregate
commitment shall be U.S. $700,000,000 on the date of this Agreement.  After advancing the Term Loans, each
reference to a Term Loan Lender’s Term Loan Commitment shall refer to that Term
Loan Lenders’ Applicable Percentage of the Term Loans.


 


“Term Loan Lender”
means, as of any date of determination, each Lender having a Term Loan
Commitment or that holds Term Loans.


 


“Term Loan Maturity
Date” means the date that is the sixth annual anniversary of the Funding
Date.


 


“Term Loan Payment
Percentage” means the following percentages for the following Fiscal
Quarters, beginning with the Fiscal Quarter ending September 30, 2010, and
with all Fiscal Quarters thereafter being treated sequentially (by way of
example only, the Fiscal Quarter ending September 30, 2010 would be the
first Fiscal Quarter for purposes hereof, and the Fiscal Quarter ending September 30,
2011 would be the fifth Fiscal Quarter for purposes hereof): (i) 0.25% for
each of the first four Fiscal Quarters to occur after the Funding Date, (ii) 1.25%
for each of the fifth through and including the twelfth Fiscal Quarters to
occur after the Funding Date, and (iii) 2.5% for each Fiscal Quarter
thereafter.


 


“Term Loans” means
the term loans made by the Term Loan Lenders to the Borrowers pursuant to Section 2.01(c).


 


“Total Leverage Ratio”
has the meaning assigned to such term in Section 6.11(a).


 


“Tranche” means
the Canadian Tranche or the U.S. Tranche, as applicable.


 


“Transaction and
Restructuring Charges” means, for any period: (i) one-time,
nonrecurring restructuring and other charges incurred for the purpose of
obtaining synergies and cost savings and certain other future restructuring
charges and non-recurring charges in respect of the consolidation of the
operations of the U.S. Borrower and its Subsidiaries and World Color 


 


42

















 


Press and its
Subsidiaries, which (x) shall only be included if arising subsequent to
the Funding Date, (y) shall not exceed, in the aggregate, the U.S. Dollar
Amount of U.S. $241,000,000, and (z) shall only be included in the period
when incurred; (ii) one-time, nonrecurring restructuring and other charges
incurred prior to the Funding Date by World Color Press and its Subsidiaries
for the purpose of obtaining synergies and cost savings; and (iii) cash
fees, costs, expenses, commissions, or other cash charges incurred during such
period in connection with the Transactions, including, without limitation,
professional, merger and acquisitions advisory, financing, and accounting fees,
costs and expenses (in each case under this clause (iii) to the extent
they are not capitalized).


 


“Transaction
Developments” means (a) any acts or omissions of World Color Press or
the U.S. Borrower (as applicable) or any of their respective Subsidiaries prior
to the Funding Date specifically contemplated by the Purchase Agreement, (b) the
execution, delivery and performance of the Purchase Agreement, (c) the
announcement by the U.S. Borrower or World Color Press of its execution and
delivery of the Purchase Agreement, (d) any acts or omissions taken at the
request, or with the approval, of the U.S. Borrower or World Color Press (as
applicable), (e) any loss of, or adverse change in, the relationship of
World Color Press with its customers, employees, suppliers, financing sources,
shareholders, joint venture partners or similar relationships proximately
caused by the negotiation, performance, pendency, potential consummation or the
announcement of the Purchase Agreement or the transactions contemplated by the
Purchase Agreement, (f) any failure by the U.S. Borrower or World Color
Press to meet any estimates or expectations of the U.S. Borrower’s or World
Color Press’s revenue, earnings or other financial performance or results of
operations for any period ending on or after the date of the Purchase
Agreement, provided that such estimates and expectations were prepared in good
faith, and/or (g) a decline in the price of the common shares of World
Color Press on the Toronto Stock Exchange; it being understood that the
underlying cause of any such failure or decline referred to in clause (f) or
clause (g) shall not, solely by virtue of clause (f) or
clause (g), constitute a “Transaction Development”.


 


“Transactions”
means the execution, delivery and performance by the Loan Parties of this
Agreement and the other Loan Documents, the borrowing of Loans and other credit
extensions, the use of the proceeds thereof and the issuance of Letters of
Credit hereunder, and the consummation of the World Color Press Acquisition.


 


“Type”, when used
in reference to any Loan or Borrowing, refers to whether the rate of interest
on such Loan, or on the Loans comprising such Borrowing, is determined by
reference to the Adjusted LIBO Rate, the Alternate Base Rate, the BA Rate or
the Canadian Prime Rate.


 


“UCC” means the
Uniform Commercial Code as in effect from time to time in the State of New York
or any other state the laws of which are required to be applied in connection
with the issue of perfection of security interests.


 


“Unliquidated
Obligations” means, at any time, any Secured Obligations (or portion
thereof) that are contingent in nature or unliquidated at such time, including
any Secured Obligation that is: (i) an obligation to reimburse a bank for
drawings not yet made under a letter of credit issued by it; (ii) any
other obligation (including any guarantee) that is contingent in 


 


43

















 


nature at such time; or (iii) an
obligation to provide collateral to secure any of the foregoing types of obligations.


 


“Unsecured
Indebtedness” means Indebtedness for borrowed money of a Loan Party or any
Subsidiary thereof that (1) is extended or offered by a Person that is not
a Consolidated Financial Covenant Entity or an Affiliate thereof, (2) is
not secured by a Lien and (3) is not Subordinated Indebtedness.


 


“U.S. Borrower”
means Quad/Graphics, Inc., a Wisconsin corporation.


 


“U.S. Dollar Amount”
means (i) the amount thereof if denominated in U.S. Dollars, or (ii) the
equivalent in U.S. Dollars if denominated in Canadian Dollars, calculated on
the basis of the Exchange Rate for Canadian Dollars, on or as of the most
recent Computation Date provided for in Section 2.04.


 


“U.S. Dollars” or “$”
or “U.S. $” refers to lawful money of the United States of America.


 


“U.S. Guaranty”
means that certain Loan Party Guaranty dated as of the Effective Date and
executed by each U.S. Loan Party in favor of the Administrative Agent, as
amended, restated, supplemented or otherwise modified from time to time.


 


“U.S. Loan Parties”
means those Loan Parties organized under the laws of the United States of
America.


 


“U.S. Tranche”
means the U.S. Tranche Revolving Commitments, the U.S. Tranche Revolving Loans,
and the U.S. Tranche Swingline Loans.


 


“U.S. Tranche Letter
of Credit” means a letter of credit issued under the U.S. Tranche pursuant
to Section 2.06 hereof.


 


“U.S. Tranche LC
Exposure” means, at any time, the sum of (a) the aggregate undrawn
amount in U.S. Dollars of all Letters of Credit outstanding under the U.S.
Tranche at such time plus (b) the aggregate amount in U.S. Dollars of all
LC Disbursements under the U.S. Tranche that have not yet been reimbursed by or
on behalf of the U.S. Borrower at such time. 
The U.S. Tranche LC Exposure of any U.S. Tranche Lender at any time shall
be its Applicable Percentage of the total U.S. Tranche LC Exposure at such
time.


 


“U.S. Tranche Lender”
means, as of any date of determination, each Lender that has a U.S. Tranche
Revolving Commitment or, if the U.S. Tranche Revolving Commitments have
terminated or expired, a Lender with U.S. Tranche Revolving Credit Exposure.


 


“U.S. Tranche
Revolving Commitment” means, with respect to each U.S. Tranche Lender, the
commitment, if any, to make U.S. Tranche Revolving Loans and to acquire
participations in U.S. Tranche Letters of Credit and U.S. Tranche Swingline
Loans hereunder, expressed as an amount representing the maximum aggregate
amount of such U.S. Tranche Lender’s U.S. Tranche Revolving Credit Exposure
hereunder, as such commitment may be (a) reduced or terminated from time
to time pursuant to Section 2.09, (b) increased from time to time 


 


44

















 


pursuant to Section 2.20,
and (c) reduced or increased from time to time pursuant to assignments by
or to such U.S. Tranche Lender pursuant to Section 9.04.  The initial amount of each U.S. Tranche
Lender’s U.S. Tranche Revolving Commitment is set forth on Schedule 2.01 or in
the Assignment and Assumption pursuant to which such U.S. Tranche Lender shall
have assumed its U.S. Tranche Revolving Commitment, as applicable.  The initial aggregate amount of the U.S.
Tranche Lenders’ U.S. Tranche Revolving Commitments is U.S.$265,000,000.


 


“U.S. Tranche
Revolving Credit Exposure” means, with respect to any U.S. Tranche Lender
at any time, the sum of the outstanding principal amount of such U.S. Tranche
Lender’s U.S. Tranche Revolving Loans and its U.S. Tranche LC Exposure and U.S.
Tranche Swingline Exposure at such time.


 


“U.S. Tranche
Revolving Loan” means a Loan made pursuant to Section 2.01(a).


 


“U.S. Tranche
Swingline Exposure” means, at any time, the aggregate principal amount of
all U.S. Tranche Swingline Loans outstanding at such time.  The U.S. Tranche Swingline Exposure of any
U.S. Tranche Lender at any time shall be its Applicable Percentage of the total
U.S. Tranche Swingline Exposure at such time.


 


“U.S. Tranche
Swingline Lender” means JPMorgan Chase Bank, N.A., in its capacity as
lender of U.S. Tranche Swingline Loans hereunder.


 


“U.S. Tranche
Swingline Loan” means a Loan made by the U.S. Tranche Swingline Lender
pursuant to Section 2.05(a).


 


“Withdrawal Liability”
means liability to a Multiemployer Plan as a result of a complete or partial
withdrawal from such Multiemployer Plan, as such terms are defined in Part I
of Subtitle E of Title IV of ERISA.


 


“World Color Press”
means World Color Press Inc., a corporation organized under the laws of Canada.


 


“World Color Press
Acquisition” means the U.S. Borrower’s acquisition, pursuant to the
Purchase Agreement, of all of the Equity Interests of World Color Press and its
Subsidiaries.


 


“World Color Press
Facilitating Transactions” means, as part of the World Color Press
Acquisition, each of the following: (i) the payment on the Funding Date by
the U.S. Borrower, whether directly or through any Subsidiary thereof, to those
Persons that hold the Equity Interests of World Color Press immediately prior
to the consummation of the World Color Press Acquisition, of the consideration
required to be paid to such Persons pursuant to the Approved PA, which
consideration will in part be paid with proceeds of Loans, (ii) the use of
proceeds of Loans, by the U.S. Borrower or a Subsidiary thereof, to repay
Specified Existing Indebtedness on the Funding Date, (iii) the transfer,
within 30 days after the Funding Date, of the Equity Interests of any Domestic
Subsidiary or Foreign Subsidiary owned by any Foreign Subsidiary (including any
Subsidiary organized under the laws of Canada (or a political subdivision
thereof)) to the U.S. Borrower or any other Domestic Subsidiary; provided,
that if such a transfer as described in this clause (iii) is paid for with
intercompany Indebtedness, such 


 


45

















 


intercompany Indebtedness
shall be fully repaid within 30 days after the incurrence thereof, and (iv) such
other events or transactions necessary to consummate the World Color Press
Acquisition and described in the Approved PA.


 


“Working Capital”
means, at any date, the excess of current assets of the Consolidated Financial
Covenant Entities on such date over current liabilities of the
Consolidated Financial Covenant Entities on such date, all determined on a
consolidated basis in accordance with GAAP.


 


SECTION 1.02     Classification of Loans and Borrowings.  For purposes of this Agreement, Loans may be
classified and referred to by Class (e.g., a “U.S. Tranche Revolving Loan”)
or by Type (e.g., a “Eurodollar Loan”) or by Class and Type (e.g., a “Eurodollar
U.S. Tranche Revolving Loan”). 
Borrowings also may be classified and referred to by Class (e.g., a
“U.S. Tranche Revolving Borrowing”) or by Type (e.g., a “Eurodollar Borrowing”)
or by Class and Type (e.g., a “Eurodollar U.S. Tranche Revolving Borrowing”).


 


SECTION 1.03     Terms Generally.  The
definitions of terms herein shall apply equally to the singular and plural
forms of the terms defined.  Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms.  The words “include”,
“includes” and “including” shall be deemed to be followed by the phrase “without
limitation”.  The word “will” shall be
construed to have the same meaning and effect as the word “shall”.  Unless the context requires otherwise (a) any
definition of or reference to any agreement, instrument or other document
herein shall be construed as referring to such agreement, instrument or other
document as from time to time amended, restated, supplemented or otherwise
modified (subject to any restrictions on such amendments, restatements, supplements
or modifications set forth herein), (b) any reference herein to any Person
shall be construed to include such Person’s successors and assigns, (c) the
words “herein”, “hereof” and “hereunder”, and words of similar import, shall be
construed to refer to this Agreement in its entirety and not to any particular
provision hereof, (d) all references herein to Articles, Sections,
Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the
words “asset” and “property” shall be construed to have the same meaning and
effect and to refer to any and all tangible and intangible assets and
properties, including cash, securities, accounts and contract rights.


 


SECTION 1.04     Accounting Terms; GAAP.  Except as
otherwise expressly provided herein, all terms of an accounting or financial
nature shall be construed in accordance with GAAP, as in effect from time to
time; provided that, notwithstanding the foregoing or any other
provision contained herein, all terms of an accounting or financial nature used
herein shall be construed, and all computations of amounts and ratios referred
to herein shall be made, without giving effect to any election under Accounting
Standards Codification 825-10-25 (previously referred to as Statement of
Financial Accounting Standards 159) (or any other Accounting Standards
Codification or Financial Accounting Standard having a similar result or
effect) to value any Indebtedness or other liabilities of the U.S. Borrower or
any of its Subsidiaries at “fair value”, as defined therein; provided further
that, if the U.S. Borrower notifies the Administrative Agent that the U.S.
Borrower requests an amendment to any provision hereof to eliminate the effect
of any change occurring after the date hereof in GAAP or in the application
thereof on the operation of such provision (or if the Administrative Agent 


 


46

















 


notifies the U.S.
Borrower that the Required Lenders request an amendment to any provision hereof
for such purpose), regardless of whether any such notice is given before or
after such change in GAAP or in the application thereof, then such provision
shall be interpreted on the basis of GAAP as in effect and applied immediately
before such change shall have become effective until such notice shall have
been withdrawn or such provision amended in accordance herewith.  Notwithstanding the foregoing or anything to
the contrary set forth herein, to the extent a change in GAAP occurs which
results in operating leases being treated or classified as capital leases, such
change shall not be given effect under the Loan Documents (including, without
limitation, in any computation of financial covenants), and the U.S. Borrower
and its Subsidiaries shall continue to provide financial reporting which
differentiates between operating leases and capital leases.


 


SECTION 1.05     Québec Matters.  For purposes
of any assets, liabilities or entities located in the Province of Québec and
for all other purposes pursuant to which the interpretation or construction of
this Agreement may be subject to the laws of the Province of Québec or a court
or tribunal exercising jurisdiction in the Province of Québec, (a) “personal
property” shall include “movable property”, (b) “real property” or “real
estate” shall include “immovable property”, (c) “tangible property” shall
include “corporeal property”, (d) “intangible property” shall include “incorporeal
property”, (e) “security interest”, “mortgage” and “lien” shall include a “hypothec”,
“right of retention”, “prior claim” and a resolutory clause, (f) all
references to filing, perfection, priority, registering or recording under the
UCC or a Personal Property Security Act shall include publication under the Civil Code of Québec, (g) all references to “perfection”
of or “perfected” liens or security interest shall include a reference to an “opposable”
or “set up” lien or security interest as against third parties, (h) any “right
of offset”, “right of setoff” or similar expression shall include a “right of
compensation”, (i) “goods” shall include “corporeal movable property”
other than chattel paper, documents of title, instruments, money and
securities, (j) an “agent” shall include a “mandatary”, (k) “construction
liens” shall include “legal hypothecs” contemplated under Article 2724(2) of
the Civil Code of Québec; (l) “joint
and several” shall include “solidary”; (m) “gross negligence or willful
misconduct” shall be deemed to be “intentional or gross fault”; (n) “beneficial
ownership” shall include “ownership on behalf of another as mandatary”; (o) “easement”
shall include “servitude”; (p) “priority” shall include “prior claim”; (q) “survey”
shall include “certificate of location and plan”; (r) “state” shall
include “province”; (s) “fee simple title” shall include “absolute
ownership”; (t) “accounts” shall include “claims”.  The parties hereto confirm that it is their
wish that this Agreement and any other document executed in connection with the
transactions contemplated herein be drawn up in the English language only and
that all other documents contemplated thereunder or relating thereto, including
notices, may also be drawn up in the English language only.  Les parties aux présentes
confirment que c’est leur volonté que cette convention et les autres documents
de crédit soient rédigés en langue anglaise seulement et que tous les
documents, y compris tous avis, envisagés par cette convention et les autres
documents peuvent être rédigés en langue anglaise seulement.


 


47

















 


ARTICLE II


 


The
Credits


 


SECTION 2.01     Commitments.  (a) 
Subject to the terms and conditions set forth herein, each U.S. Tranche Lender
agrees to make U.S. Revolving Loans to the U.S. Borrower in U.S. Dollars from
time to time during the Availability Period in an aggregate principal amount
that will not result in (i) such U.S. Tranche Lender’s U.S. Tranche
Revolving Credit Exposure exceeding such U.S. Tranche Lender’s U.S. Tranche
Revolving Commitment, or (ii) the aggregate of all of the U.S. Tranche
Revolving Credit Exposures exceeding the aggregate U.S. Tranche Revolving
Commitments.  Within the foregoing limits
and subject to the terms and conditions set forth herein, the U.S. Borrower may
borrow, prepay and reborrow U.S. Tranche Revolving Loans in U.S. Dollars.  The Canadian Borrower shall not be obligated
to repay the U.S. Borrower’s Obligations under the U.S. Tranche.


 


(b)           Subject
to the terms and conditions set forth herein, each Canadian Tranche Lender agrees
to make Canadian Tranche Revolving Loans to each Borrower in U.S. Dollars and,
solely with respect to the Canadian Borrower, also in Canadian Dollars, from
time to time during the Availability Period in an aggregate principal amount
that, subject to Sections 2.04 and 2.11(d), will not result in (i) the
U.S. Dollar Amount of such Canadian Tranche Lender’s Canadian Tranche Revolving
Credit Exposure exceeding the U.S. Dollar Amount of such Canadian Tranche
Lender’s Canadian Tranche Revolving Commitment, or (ii) the aggregate of
the U.S. Dollar Amount of all of the Canadian Tranche Revolving Credit
Exposures exceeding the aggregate of the U.S. Dollar Amount of the aggregate
Canadian Tranche Revolving Commitments. 
Within the foregoing limits and subject to the terms and conditions set
forth herein, each Borrower may borrow, prepay and reborrow Canadian Tranche
Revolving Loans; provided, however, that amounts drawn by one
Borrower under the Canadian Tranche shall not be available to be drawn by the
other Borrower until such drawn amounts are repaid; provided, further,
that the Canadian Borrower shall not be obligated to repay the U.S. Borrower’s
Obligations under the Canadian Tranche. 
The U.S. Borrower shall guaranty all of the Canadian Borrower’s Secured
Obligations pursuant to the U.S. Guaranty.


 


(c)           Subject
to the terms and conditions set forth herein, each Term Loan Lender agrees to
make Term Loans in U.S. Dollars to each of the U.S. Borrower and the Canadian
Borrower on the Funding Date in an aggregate principal amount equal to its Term
Loan Commitment; provided, that the making of such Term Loans will not
result in (i) the outstanding principal amount of such Term Loan Lender’s
Term Loans to the U.S. Borrower exceeding the amount of such Term Loan Lender’s
Term Loan Commitment in respect of the U.S. Borrower, (ii) the outstanding
principal amount of such Term Loan Lender’s Term Loans to the Canadian Borrower
exceeding the amount of such Term Loan Lender’s Term Loan Commitment in respect
of the Canadian Borrower, (iii) the aggregate outstanding principal amount
of all Term Loans to the U.S. Borrower exceeding the aggregate of the Term Loan
Commitments corresponding with the U.S. Borrower, (iv) the aggregate
outstanding principal amount of all Term Loans to the Canadian Borrower
exceeding the aggregate of the Term Loan Commitments corresponding with the
Canadian Borrower, and (v) the aggregate outstanding principal amount of
all Term Loans exceeding the aggregate of the Term Loan Commitments.  No amount in respect of the Term Loans may be
reborrowed once it has been repaid.  Term
Loans shall be made available in immediately funds in U.S. Dollars in such
account and at such time on the Funding Date as designated by the Administrative
Agent to the Term Loan Lenders. The U.S. Borrower shall guaranty all of the
Canadian Borrower’s Secured Obligations pursuant to the U.S. Guaranty.  The Canadian Borrower shall not guaranty any
of 


 


48

















 


the U.S. Borrower’s
Secured Obligations pursuant to the Canadian Guaranty or any other Loan
Document.


 


SECTION 2.02     Loans and Borrowings.  (a) 
Each U.S. Tranche Revolving Loan (other than a U.S. Tranche Swingline Loan)
shall be made as part of a Borrowing consisting of U.S. Tranche Revolving Loans
of the same Class and Type made by the U.S. Tranche Lenders ratably in
accordance with their respective U.S. Tranche Revolving Commitments of the
applicable Class.  Each Canadian Tranche
Revolving Loan (other than a Canadian Tranche Swingline Loan) shall be made as
part of a Borrowing consisting of Canadian Tranche Revolving Loans of the same Class and
Type made by the Canadian Tranche Lenders ratably in accordance with their
respective Canadian Tranche Revolving Commitments of the applicable Class.  The failure of any Lender to make any Loan
required to be made by it shall not relieve any other Lender of its obligations
hereunder; provided that the Commitments of the Lenders are several and
no Lender shall be responsible for any other Lender’s failure to make Loans as
required.  Any U.S. Tranche Swingline
Loan or Canadian Tranche Swingline Loan shall be made in accordance with the
procedures set forth in Section 2.05. 
The Term Loans shall amortize as required under Section 2.10(a).


 


(b)           Subject
to Section 2.14:


 


(i)            each U.S. Tranche Revolving
Borrowing shall be comprised entirely of ABR Loans or Eurodollar Loans as the
U.S. Borrower may request in accordance herewith;


 


(ii)           each Canadian Tranche Revolving
Borrowing shall be comprised entirely of ABR Loans or Eurodollar Loans, as
either the U.S. Borrower or the Canadian Borrower may request in accordance
herewith, and, solely with respect to the Canadian Borrower, BA Rate Loans or
Canadian Prime Rate Loans, as the Canadian Borrower may request in accordance
herewith; and


 


(iii)          each Term Loan Borrowing shall be
comprised entirely of ABR Loans or Eurodollar Loans as the applicable Borrower
may request in accordance herewith;


 


provided that all Borrowings made on the Funding
Date must be made as ABR Borrowings or Canadian Prime Rate Borrowings (unless
the Borrowers and the Administrative Agent have entered into a funding
indemnity letter, in form and substance acceptable to the Administrative Agent,
with respect to Eurodollar Loans or BA Rate Loans on the Funding Date, in which
case such rates will be available on such date) but may be converted to
Eurodollar Borrowings or BA Rate Borrowings in accordance with Section 2.08.  Each U.S. Tranche Swingline Loan and Canadian
Tranche Swingline Loan requested in U.S. Dollars shall be an ABR Loan (subject
to the rate options set forth in the definition of ABR), and each Canadian
Tranche Swingline Loan requested in Canadian Dollars shall be a Canadian Prime
Rate Loan (subject to the rate options set forth in the definition of Canadian
Prime Rate).  Each Lender at its option
may make any Eurodollar Loan, ABR Loan, BA Rate Loan or Canadian Prime Rate
Loan by causing any domestic or foreign branch or Affiliate of such Lender to
make such Loan (and in the case of an Affiliate, the provisions of
Sections 2.14, 2.15, 2.16 and 2.17 shall apply to such Affiliate to the
same extent as to such Lender); provided that any exercise of such
option shall not affect the 


 


49

















 


obligation of the
applicable Borrower to repay such Loan in accordance with the terms of this
Agreement.


 


(c)           At
the commencement of each Interest Period for any Eurodollar Borrowing or BA
Rate Borrowing, such Borrowing shall be in an aggregate amount that is an
integral multiple of U.S. $1,000,000 and not less than U.S. $1,000,000 (or, if
in respect of the Canadian Tranche and a Canadian Dollar Borrowing, integral
multiple of CDN $1,000,000 and not less than CDN $1,000,000 in the case of BA
Rate Borrowings).  At the time that each
ABR Revolving Borrowing or Canadian Prime Rate Revolving Borrowing is made,
such Borrowing shall be in an aggregate amount that is an integral multiple of
U.S. $1,000,000 and not less than U.S. $1,000,000 (or, if in respect of the Canadian
Tranche and a Canadian Dollar Borrowing, integral multiple of CDN $1,000,000
and not less than CDN $1,000,000 in the case of Canadian Prime Rate
Borrowings); provided that an ABR Revolving Borrowing or a Canadian Prime Rate
Revolving Borrowing may be in an aggregate amount that is equal to the entire
unused balance of the total U.S. Tranche Revolving Commitments or Canadian
Tranche Revolving Commitments, as applicable, or that is required to finance
the reimbursement of a U.S. Tranche LC Disbursement or a Canadian Tranche LC
Disbursement as contemplated by Section 2.06(e).  Each Swingline Loan, whether a U.S. Tranche
Swingline Loan or a Canadian Tranche Swingline Loan, shall be in an amount that
is an integral multiple of U.S. $100,000 and not less than U.S. $1,000,000 (or
the Approximate Equivalent Amount of each such amount if such Swingline Loan is
denominated in Canadian Dollars). 
Borrowings of more than one Type and Class may be outstanding at
the same time; provided that there shall not at any time be more than a total
of fourteen (14) Eurodollar Borrowings and BA Rate Borrowings outstanding.


 


(d)           Notwithstanding
any other provision of this Agreement, no Borrower shall be entitled to
request, or to elect to convert or continue, any Borrowing if the Interest
Period requested with respect thereto would end after the (i) Revolving
Loan Maturity Date with respect to Revolving Loans and (ii) the Term Loan
Maturity Date with respect to Term Loans.


 


SECTION 2.03     Requests for Revolving Borrowings. 
To request a Borrowing, a Borrower shall notify the Applicable Agent
(and the Administrative Agent, if the Administrative Agent is not the
Applicable Agent) of such request by telephone (a) in the case of a
Eurodollar Borrowing or BA Rate Borrowing, not later than 12:00 noon, Local
Time, three (3) Business Days before the date of the proposed Borrowing or
(b) in the case of an ABR Borrowing or a Canadian Prime Rate Borrowing,
not later than 12:00 noon, Local Time, on the date of the proposed Borrowing
(so long as such day is a Business Day); provided that any such notice of an
ABR Revolving Borrowing or Canadian Prime Rate Revolving Borrowing to finance
the reimbursement of an LC Disbursement as contemplated by Section 2.06(e) may
be given not later than 10:00 a.m., Local Time, on the date of the
proposed Borrowing.  Each such telephonic
Borrowing Request shall be irrevocable and shall be confirmed promptly by hand
delivery, e-mail or telecopy to the Applicable Agent (and the Administrative
Agent, if the Administrative Agent is not the Applicable Agent) of a written
Borrowing Request in a form approved by the Applicable Agent and signed by the
applicable Borrower.  Each such
telephonic and written Borrowing Request shall specify the following
information in compliance with Section 2.02:


 


(i)            the Borrower requesting such
Borrowing;


 


50














 


(ii)           whether such Borrowing is in respect
of Revolving Loans or Term Loans;


 


(iii)          if related to Revolving Loans, whether
such Borrowing is to be made under the U.S. Tranche or the Canadian Tranche;


 


(iv)          the aggregate amount of the requested
Borrowing, and, if requested by the Canadian Borrower, whether such Borrowing
shall be denominated in U.S. Dollars or Canadian Dollars;


 


(v)           the date of such Borrowing, which
shall be a Business Day;


 


(vi)          whether such Borrowing is to be an ABR
Borrowing, a Canadian Prime Rate Borrowing, a Eurodollar Borrowing or a BA Rate
Borrowing;


 


(vii)         in the case of a Eurodollar Borrowing
or a BA Rate Borrowing, the initial Interest Period to be applicable thereto,
which shall be a period contemplated by the definition of the term “Interest
Period”; and


 


(viii)        the location and number of the
applicable Borrower’s account to which funds are to be disbursed, which shall
comply with the requirements of Section 2.07.


 


If no election as to the
Type of Borrowing is specified, then, in the case of a Borrowing denominated in
U.S. Dollars, the requested Borrowing shall be, if then available, a Eurodollar
Borrowing with a one-month Interest Period (with ABR otherwise being applied),
and in the case of a Borrowing denominated in Canadian Dollars, the requested
Borrowing shall be, if then available, a BA Rate Borrowing with an Interest
Period of 30 days (with Canadian Prime Rate otherwise being applied).  If no Interest Period is specified with
respect to any requested Eurodollar Borrowing or BA Rate Borrowing, then the
applicable Borrower shall be deemed to have selected an Interest Period of one
month’s duration.  Promptly following
receipt of a Borrowing Request in accordance with this Section, the Applicable
Agent shall advise each Lender of the details thereof and of the amount of such
Lender’s Loan to be made as part of the requested Borrowing.


 


SECTION 2.04     Determination of U.S. Dollar Amounts. 
The Administrative Agent will determine the U.S. Dollar Amount of:


 


(a)           each
BA Rate Borrowing or Canadian Prime Rate Borrowing as of the date three (3) Business
Days prior to the date of such Borrowing (or, if such borrowing is permitted to
be a same-day Borrowing, the date of such Borrowing) or, if applicable, the
date of conversion/continuation of any Borrowing as a BA Rate Borrowing or
Canadian Prime Rate Borrowing;


 


(b)           the
Canadian Tranche LC Exposure as of the date of each request for the issuance,
amendment, renewal or extension of any Canadian Tranche Letter of Credit; and


 


(c)           all
outstanding Credit Events on and as of the last Business Day of each Fiscal
Quarter, and, during the continuation of an Event of Default, on any other
Business Day 


 


51

















 


elected by the
Administrative Agent in its reasonable discretion or upon instruction by the
Required Lenders.


 


Each day upon or as of
which the Administrative Agent determines U.S. Dollar Amounts as described in
the preceding clauses (a), (b) and (c) is herein described as a “Computation
Date” with respect to each Credit Event for which a U.S. Dollar Amount is
determined on or as of such day.


 


SECTION 2.05     Swingline Loans.  (a) 
Subject to the terms and conditions set forth herein, the U.S. Tranche
Swingline Lender agrees to make U.S. Tranche Swingline Loans in U.S. Dollars to
the U.S. Borrower from time to time during the Availability Period, in an
aggregate principal amount at any time outstanding that will not result in (i) the
aggregate principal amount of outstanding U.S. Tranche Swingline Loans
exceeding U.S. $50,000,000 or (ii) the total U.S. Tranche Revolving Credit
Exposures exceeding the aggregate U.S. Tranche Revolving Commitments; provided
that the U.S. Tranche Swingline Lender shall not be required to make a U.S.
Tranche Swingline Loan to refinance an outstanding U.S. Tranche Swingline
Loan.  Within the foregoing limits and
subject to the terms and conditions set forth herein, the U.S. Borrower may
borrow, prepay and reborrow U.S. Tranche Swingline Loans.  Subject to the terms and conditions set forth
herein, the Canadian Tranche Swingline Lender agrees to make Canadian Tranche
Swingline Loans in U.S. Dollars or Canadian Dollars to the Canadian Borrower
from time to time during the Availability Period, in an aggregate principal
amount at any time outstanding that will not result in (i) the aggregate
principal amount of outstanding Canadian Tranche Swingline Loans exceeding the
U.S. Dollar Amount of U.S. $25,000,000 or (ii) the total Canadian Tranche
Revolving Credit Exposures exceeding the aggregate Canadian Tranche Revolving
Commitments; provided that the Canadian Tranche Swingline Lender shall not be
required to make a Canadian Tranche Swingline Loan to refinance an outstanding
Canadian Tranche Swingline Loan.  Within
the foregoing limits and subject to the terms and conditions set forth herein,
the Canadian Borrower may borrow, prepay and reborrow Canadian Tranche
Swingline Loans.


 


(b)           To
request a Swingline Loan, the applicable Borrower shall notify the Applicable
Agent (and the Administrative Agent, if the Administrative Agent is not the
Applicable Agent) of such request by telephone (confirmed by telecopy), not
later than 2:00 p.m., Local Time, on the day of a proposed Swingline
Loan.  Each such notice shall be
irrevocable and shall specify the requested date (which shall be a Business
Day) and amount of the requested Swingline Loan.  The Applicable Agent will promptly advise the
applicable Swingline Lender of any such notice received from the applicable
Borrower.  Each Swingline Lender shall
make its requested Swingline Loan available to the applicable Borrower by means
of a credit to the general deposit account of such Borrower with such Swingline
Lender (or, in the case of a Swingline Loan made to finance the reimbursement
of an LC Disbursement as provided in Section 2.06(e), by remittance to the
applicable Issuing Bank) by 4:00 p.m., Local Time, on the requested date
of such Swingline Loan.


 


(c)           Each
Swingline Lender may by written notice given to the Applicable Agent (and the
Administrative Agent, if the Administrative Agent is not the Applicable Agent)
not later than 10:00 a.m., Local Time, on any Business Day require the
U.S. Tranche Lenders or the Canadian Tranche Lenders, as applicable, to acquire
participations on such Business Day in 


 


52

















 


all or a portion
of the U.S. Tranche Swingline Loans or Canadian Tranche Swingline Loans (as
applicable) outstanding.  Such notice
shall specify the aggregate amount of Swingline Loans in which the applicable
Revolving Lenders will participate. 
Promptly upon receipt of such notice, the Applicable Agent will give
notice thereof to each U.S. Tranche Revolving Lender or Canadian Tranche
Revolving Lender, as applicable, specifying in such notice such Lender’s
Applicable Percentage of such Swingline Loan or Loans.  Each U.S. Tranche Lender and Canadian Tranche
Lender hereby absolutely and unconditionally agrees, upon receipt of notice as
provided above, to pay to the Applicable Agent, for the account of the
applicable Swingline Lender, such Lender’s Applicable Percentage of such
Swingline Loan or Loans.  No U.S. Tranche
Lender shall be required to participate in any Canadian Tranche Swingline Loan,
and no Canadian Tranche Lender shall be required to participate in any U.S.
Tranche Swingline Loan.  Each Revolving
Lender acknowledges and agrees that its obligation to acquire participations in
Swingline Loans pursuant to this paragraph is absolute and unconditional and shall
not be affected by any circumstance whatsoever, including the occurrence and
continuance of a Default or reduction or termination of the Commitments, and
that each such payment shall be made without any offset, abatement, withholding
or reduction whatsoever.  Each Revolving
Lender shall comply with its obligation under this paragraph by wire transfer
of immediately available funds, in the same manner as provided in Section 2.07
with respect to Loans made by such Lender (and Section 2.07 shall apply,
mutatis mutandis, to the payment obligations of the Lenders), and the
Applicable Agent shall promptly pay to the applicable Swingline Lender the
amounts so received by it from the applicable Revolving Lenders.  The Applicable Agent shall notify the
applicable Borrower of any participations in any Swingline Loan acquired
pursuant to this paragraph, and thereafter payments in respect of such
Swingline Loan shall be made to the Applicable Agent and not to the applicable
Swingline Lender.  Any amounts received
by a Swingline Lender from a Borrower (or other party on behalf of such
Borrower) in respect of a Swingline Loan after receipt by such Swingline Lender
of the proceeds of a sale of participations therein shall be promptly remitted
to the Applicable Agent; any such amounts received by the Applicable Agent
shall be promptly remitted by the Applicable Agent to the Revolving Lenders
that shall have made their payments pursuant to this paragraph and to the
Swingline Lender, as their interests may appear; provided that any such
payment so remitted shall be repaid to the applicable Swingline Lender or to
the Applicable Agent, as applicable, if and to the extent such payment is
required to be refunded to the applicable Borrower for any reason.  The purchase of participations in a Swingline
Loan pursuant to this paragraph shall not relieve a Borrower of any default in
the payment thereof.


 


SECTION 2.06     Letters of Credit.  (a)  General.  Subject to the terms and conditions set forth
herein, the U.S. Borrower may request the issuance of Letters of Credit under the
U.S. Tranche denominated in U.S. Dollars for its own account, in a form
reasonably acceptable to the Administrative Agent and the applicable Issuing
Bank, at any time and from time to time during the Availability Period.  Subject to the terms and conditions set forth
herein, each of the U.S. Borrower and the Canadian Borrower may request the
issuance of Letters of Credit under the Canadian Tranche denominated in U.S.
Dollars and, solely with respect to the Canadian Borrower, Canadian Dollars for
its own account, in a form reasonably acceptable to the Applicable Agent and
the applicable Issuing Bank, at any time and from time to time during the
Availability Period.  In the event of any
inconsistency between the terms and conditions of this Agreement and the terms
and conditions of any form of letter of credit application or other agreement
submitted by a Borrower to, or entered into by a Borrower with, the applicable 


 


53

















 


Issuing Bank relating to
any Letter of Credit, the terms and conditions of this Agreement shall
control.  Schedule 2.06 sets forth
certain letters of credit outstanding as of the Funding Date (which Schedule
may be amended in accordance with Section 4.02 by the U.S. Borrower before
the Funding Date) (the “Existing LCs”). 
Upon the Funding Date, the Existing LCs shall be deemed to be Letters of
Credit issued hereunder and shall be subject to the terms and conditions
hereof.  Such Schedule 2.06 indicates the
Borrower constituting the account party thereunder and whether such Existing LC
is deemed issued under the U.S. Tranche or the Canadian Tranche.


 


(b)           Notice
of Issuance, Amendment, Renewal, Extension; Certain Conditions.  To request the issuance of a Letter of Credit
(or the amendment, renewal or extension of an outstanding Letter of Credit),
the applicable Borrower shall hand deliver or telecopy (or transmit by
electronic communication, if arrangements for doing so have been approved by
the applicable Issuing Bank) to the applicable Issuing Bank and the Applicable
Agent (and the Administrative Agent, if the Administrative Agent is not the
Applicable Agent) (at least 3 Business Days in advance of the requested date of
issuance, amendment, renewal or extension) a notice requesting the issuance of
a Letter of Credit, or identifying the Letter of Credit to be amended, renewed
or extended, and specifying the date of issuance, amendment, renewal or
extension (which shall be a Business Day), the date on which such Letter of
Credit is to expire (which shall comply with paragraph (c) of this
Section), the amount of such Letter of Credit, the currency applicable thereto
(which may be Canadian Dollars only if related to the Canadian Borrower under
the Canadian Tranche), whether such Letter of Credit is to be issued under the
Canadian Tranche or the U.S. Tranche, the name and address of the beneficiary
thereof and such other information as shall be necessary to prepare, amend,
renew or extend such Letter of Credit. 
If requested by the applicable Issuing Bank, the applicable Borrower
also shall submit a letter of credit application on such Issuing Bank’s
standard form in connection with any request for a Letter of Credit.  A Letter of Credit shall be issued, amended,
renewed or extended only if (and upon issuance, amendment, renewal or extension
of each Letter of Credit the applicable Borrower shall be deemed to represent
and warrant that), after giving effect to such issuance, amendment, renewal or
extension (i) if issued under the U.S. Tranche, the U.S. Tranche LC
Exposure shall not exceed U.S. $75,000,000 minus the aggregate Canadian
Tranche LC Exposure, (ii) if issued under the Canadian Tranche, the
Canadian Tranche LC Exposure shall not exceed the U.S. Dollar Amount of U.S.
$75,000,000 minus the aggregate U.S. Tranche LC Exposure, (iii) the
aggregate of the U.S. Tranche Revolving Credit Exposures shall not exceed the
aggregate U.S. Tranche Revolving Commitments, or (iv) subject to
Sections 2.04 and 2.11(d), the aggregate of the U.S. Dollar Amount of all
of the Canadian Tranche Revolving Credit Exposures shall not exceed the
aggregate Canadian Tranche Revolving Commitments.  At no time may the aggregate face amount of
all Letters of Credit issued (or deemed issued) under this Agreement exceed the
U.S. Dollar Amount of U.S. $75,000,000.


 


(c)           Expiration
Date.  Each Letter of Credit shall
expire at or prior to the close of business on the earlier of (i) the date
one year after the date of the issuance of such Letter of Credit (or, in the
case of any renewal or extension thereof, one year after such renewal or
extension) and (ii) the date that is five (5) Business Days prior to
the Revolving Loan Maturity Date; provided, however, that a
Letter of Credit may expire subsequent to the Revolving Loan Maturity Date if, no
later than 90 days prior to the Revolving Loan Maturity Date, the applicable
Borrower deposits with the Applicable Agent such amounts (in such currencies
and 


 


54

















 


to cover such
obligations in connection with the applicable Letter of Credit) as required by Section 2.06(j).


 


(d)           Participations.  By the issuance of a Letter of Credit (or an
amendment to a Letter of Credit increasing the amount thereof) and without any
further action on the part of the applicable Issuing Bank or the applicable
Revolving Lenders, such Issuing Bank hereby grants to each Revolving Lender
under the U.S. Tranche or the Canadian Tranche, as applicable, and each such
Revolving Lender hereby acquires from such Issuing Bank, a participation in
such Letter of Credit issued under such Tranche equal to such Lender’s
Applicable Percentage of the aggregate U.S. Dollar Amount available to be drawn
under such Letter of Credit.  In
consideration and in furtherance of the foregoing, each Revolving Lender hereby
absolutely and unconditionally agrees to pay to the Applicable Agent, for the
account of the applicable Issuing Bank, such Lender’s Applicable Percentage of
each LC Disbursement made by such Issuing Bank and not reimbursed by the
applicable Borrower on the date due as provided in paragraph (e) of this
Section, or of any reimbursement payment required to be refunded to the
applicable Borrower for any reason; provided, that the foregoing shall
only apply with respect to Letters of Credit issued under the Tranche to which
such Lender is subject.  Each Revolving
Lender acknowledges and agrees that its obligation to acquire participations
pursuant to this paragraph in respect of Letters of Credit issued under its
Tranche is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including any amendment, renewal or extension of any
Letter of Credit or the occurrence and continuance of a Default or reduction or
termination of the Commitments under its Tranche, and that each such payment
shall be made without any offset, abatement, withholding or reduction
whatsoever.


 


(e)           Reimbursement.  If an Issuing Bank shall make any LC
Disbursement in respect of a Letter of Credit, the applicable Borrower shall
reimburse such LC Disbursement by paying to the Applicable Agent, in U.S.
Dollars or Canadian Dollars, as applicable, in the amount and currency equal to
such LC Disbursement, calculated as of the date such Issuing Bank made such LC
Disbursement in an amount equal to such LC Disbursement not later than 12:00
noon, Local Time, on the date that such LC Disbursement is made, if the
applicable Borrower shall have received notice of such LC Disbursement prior to
10:00 a.m., Local Time, on such date, or, if such notice has not been received
by the applicable Borrower prior to such time on such date, then not later than
12:00 noon, Local Time, on (i) the Business Day that the applicable
Borrower receives such notice, if such notice is received prior to 10:00 a.m.,
Local Time, on the day of receipt, or (ii) the Business Day immediately
following the day that the applicable Borrower receives such notice, if such
notice is not received prior to such time on the day of receipt; provided that,
if such LC Disbursement is not less than the U.S. Dollar Amount of U.S.
$500,000, the applicable Borrower may, subject to the conditions to borrowing
set forth herein, request in accordance with Section 2.03 or 2.05 that
such payment be financed with an ABR Revolving Borrowing or Swingline Loan (or,
if a Letter of Credit issued for the account of the Canadian Borrower in
Canadian Dollars under the Canadian Tranche, a Canadian Prime Rate Borrowing or
Canadian Tranche Swingline Loan denominated in Canadian Dollars) in the amount
and currency of such LC Disbursement and, to the extent so financed, the
applicable Borrower’s obligation to make such payment shall be discharged and
replaced by the resulting ABR Revolving Borrowing, Canadian Prime Rate
Borrowing, or Swingline Loan.  If the
applicable Borrower fails to make such payment when due, the Applicable Agent
shall notify each Revolving Lender under the applicable Tranche of the
applicable LC Disbursement of the 


 


55

















 


payment then due
from the applicable Borrower in respect thereof and such Revolving Lender’s
Applicable Percentage thereof.  Promptly
following receipt of such notice, each such Revolving Lender shall pay to the
Applicable Agent its Applicable Percentage of the payment then due from the
applicable Borrower, in the same manner as provided in Section 2.07 with
respect to Loans made by such Revolving Lender under such Tranche (and Section 2.07
shall apply, mutatis mutandis, to the payment obligations of such Revolving
Lenders), and the Applicable Agent shall promptly pay to such Issuing Bank the
amounts so received by it from such Revolving Lenders.  Promptly following receipt by the Applicable
Agent of any payment from the applicable Borrower pursuant to this paragraph,
the Applicable Agent shall distribute such payment to the applicable Issuing
Bank or, to the extent that Revolving Lenders have made payments pursuant to
this paragraph to reimburse such Issuing Bank, then to such Lenders and such
Issuing Bank as their interests may appear. 
Any payment made by a Revolving Lender pursuant to this paragraph to
reimburse an Issuing Bank for any LC Disbursement (other than the funding of
ABR Revolving Loans, Canadian Prime Rate Revolving Loans or Swingline Loans as
contemplated above) shall not constitute a Loan and shall not relieve the
applicable Borrower of its obligation to reimburse such LC Disbursement.  If the applicable Borrower’s reimbursement
of, or obligation to reimburse, any amounts in Canadian Dollars would subject
any Agent, any Issuing Bank or any Lender to any stamp duty, ad valorem charge
or similar tax that would not be payable if such reimbursement were made or
required to be made in U.S. Dollars, the applicable Borrower shall, at its
option, either (x) pay the amount of any such tax requested by the
relevant Agent, the relevant Issuing Bank or the relevant Lender or (y) reimburse
each LC Disbursement made in Canadian Dollars in U.S. Dollars, in an amount
equal to the Equivalent Amount, calculated using the applicable exchange rates,
on the date such LC Disbursement is made, of such LC Disbursement.


 


(f)            Obligations
Absolute.  Each Borrower’s obligation
to reimburse LC Disbursements as provided in paragraph (e) of this Section shall
be absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement under any and all circumstances
whatsoever and irrespective of (i) any lack of validity or enforceability
of any Letter of Credit or this Agreement, or any term or provision therein, (ii) any
draft or other document presented under a Letter of Credit proving to be
forged, fraudulent or invalid in any respect or any statement therein being
untrue or inaccurate in any respect, (iii) payment by an Issuing Bank
under a Letter of Credit against presentation of a draft or other document that
does not comply with the terms of such Letter of Credit, or (iv) any other
event or circumstance whatsoever, whether or not similar to any of the
foregoing, that might, but for the provisions of this Section, constitute a
legal or equitable discharge of, or provide a right of setoff against, such
Borrower’s obligations hereunder. 
Neither the Agents, the Revolving Lenders nor the Issuing Banks, nor any
of their Related Parties, shall have any liability or responsibility by reason
of or in connection with the issuance or transfer of any Letter of Credit or
any payment or failure to make any payment thereunder (irrespective of any of
the circumstances referred to in the preceding sentence), or any error,
omission, interruption, loss or delay in transmission or delivery of any draft,
notice or other communication under or relating to any Letter of Credit
(including any document required to make a drawing thereunder), any error in
interpretation of technical terms or any consequence arising from causes beyond
the control of the applicable Issuing Bank; provided that the foregoing shall
not be construed to excuse such Issuing Bank from liability to a Borrower to
the extent of any direct damages (as opposed to consequential damages, claims
in respect of 


 


56

















 


which are hereby
waived by the Borrowers to the extent permitted by applicable law) suffered by
such Borrower that are caused by such Issuing Bank’s failure to exercise care
when determining whether drafts and other documents presented under a Letter of
Credit comply with the terms thereof. 
The parties hereto expressly agree that, in the absence of gross
negligence or willful misconduct on the part of an Issuing Bank (as finally
determined by a court of competent jurisdiction), such Issuing Bank shall be
deemed to have exercised care in each such determination.  In furtherance of the foregoing and without
limiting the generality thereof, the parties agree that, with respect to
documents presented which appear on their face to be in substantial compliance
with the terms of a Letter of Credit, the applicable Issuing Bank may, in its
sole discretion, either accept and make payment upon such documents without
responsibility for further investigation, regardless of any notice or
information to the contrary, or refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the terms of such
Letter of Credit.


 


(g)           Disbursement
Procedures.  Each Issuing Bank shall,
promptly following its receipt thereof, examine all documents purporting to
represent a demand for payment under a Letter of Credit.  Such Issuing Bank shall promptly notify the
Applicable Agent and the applicable Borrower by telephone (confirmed by
telecopy) of such demand for payment and whether such Issuing Bank has made or
will make an LC Disbursement thereunder; provided that any failure to give or
delay in giving such notice shall not relieve such Borrower of its obligation
to reimburse such Issuing Bank and the Revolving Lenders with respect to any
such LC Disbursement.


 


(h)           Interim
Interest.  If an Issuing Bank shall
make any LC Disbursement, then, unless the applicable Borrower shall reimburse
such LC Disbursement in full on the date such LC Disbursement is made, the
unpaid amount thereof shall bear interest, for each day from and including the
date such LC Disbursement is made to but excluding the date that such Borrower
reimburses such LC Disbursement, at the rate per annum then applicable to ABR
Revolving Loans (or in case such LC Disbursement is denominated in Canadian
Dollars, at the rate per annum then applicable to Canadian Prime Rate Revolving
Loans); provided that, if such Borrower fails to reimburse such LC Disbursement
when due pursuant to paragraph (e) of this Section, then Section 2.13(c) shall
apply.  Interest accrued pursuant to this
paragraph shall be for the account of the applicable Issuing Bank, except that
interest accrued on and after the date of payment by any Lender pursuant to
paragraph (e) of this Section to reimburse such Issuing Bank shall be
for the account of such Lender to the extent of such payment.


 


(i)            Replacement
of Issuing Bank.  An Issuing Bank may
be replaced at any time by written agreement among the Borrowers, the
Administrative Agent, the replaced Issuing Bank and the successor Issuing
Bank.  The Administrative Agent shall
notify the Revolving Lenders of any such replacement of such Issuing Bank.  At the time any such replacement shall become
effective, the Borrowers shall pay all unpaid fees accrued for the account of
the replaced Issuing Bank pursuant to Section 2.12(b).  From and after the effective date of any such
replacement, (i) the successor Issuing Bank shall have all the rights and
obligations of an Issuing Bank under this Agreement with respect to Letters of
Credit to be issued thereafter and (ii) references herein to the term “Issuing
Bank” shall be deemed to refer to such successor or to any previous Issuing
Bank, or to such successor and all previous Issuing Banks, as the context shall
require.  After the replacement of an
Issuing Bank hereunder, the replaced Issuing 


 


57

















 


Bank shall remain
a party hereto and shall continue to have all the rights and obligations of an
Issuing Bank under this Agreement with respect to Letters of Credit then
outstanding and issued by it prior to such replacement, but shall not be
required to issue additional Letters of Credit.


 


(j)            Cash
Collateralization.  If any Event of
Default shall occur and be continuing, on the Business Day that the Borrowers
receive notice from the Administrative Agent or the Required Lenders (or, if
the maturity of the Loans has been accelerated, Revolving Lenders with LC
Exposure representing greater than 50% of the total LC Exposure) demanding the
deposit of cash collateral pursuant to this paragraph, the Borrowers shall
deposit in one or more accounts with the Agents, in the name of the Applicable
Agent and for the benefit of the Revolving Lenders (the “LC Collateral
Account”), an amount in cash equal to 105% of the U.S. Dollar Amount of the
LC Exposure as of such date plus any accrued and unpaid interest thereon; and (ii) the
obligation to deposit such cash collateral shall become effective immediately,
and such deposit shall become immediately due and payable, without demand or
other notice of any kind, upon the occurrence of any Event of Default with
respect to a Borrower described in clause (h) or (i) of Article VII.  For purposes of this paragraph, Canadian
Dollar LC Exposure shall be calculated using the Exchange Rate on the date
notice demanding cash collateralization is delivered to the Borrowers.  The Borrowers also shall deposit cash
collateral pursuant to this paragraph as and to the extent required by Section 2.11.  Such deposit shall be held by the
Administrative Agent as collateral for the payment and performance of the
Secured Obligations.  The Administrative
Agent shall have exclusive dominion and control, including the exclusive right
of withdrawal, over such account and each Borrower hereby grants the
Administrative Agent a security interest in the LC Collateral Account.  Such deposits shall be invested by the
Administrative Agent in short term treasuries, if available, which earn
interest, in any case at the Borrowers’ sole risk and expense.  Interest or profits, if any, on such
investments shall accumulate in such account. 
Moneys in such account shall be applied by the Administrative Agent to
reimburse the applicable Issuing Bank for LC Disbursements for which it has not
been reimbursed and, to the extent not so applied, shall be held for the
satisfaction of the reimbursement obligations of the Borrowers for the LC
Exposure at such time or, if the maturity of the Loans has been accelerated
(but subject to the consent of Revolving Lenders with LC Exposure representing
greater than 50% of the total LC Exposure), be applied to satisfy other Secured
Obligations.  If a Borrower is required
to provide an amount of cash collateral hereunder as a result of the occurrence
of an Event of Default, such amount (to the extent not applied as aforesaid)
shall be returned to such Borrower within three (3) Business Days after
all Events of Default have been cured or waived.  A Borrower that cash collateralizes a Letter
of Credit under Section 2.06(c) shall be required to satisfy the
foregoing collateralization requirements.


 


(k)           Conversion.  In the event that the Loans become
immediately due and payable on any date pursuant to Article VII, all
amounts (i) that a Borrower is at the time or thereafter becomes required
to reimburse or otherwise pay to the Administrative Agent in respect of LC
Disbursements made in Canadian Dollars (other than amounts in respect of which
the Borrowers have deposited cash collateral pursuant to paragraph (j) above,
if such cash collateral was deposited in Canadian Dollars to the extent so
deposited or applied), (ii) that the Lenders are at the time or thereafter
become required to pay to the Applicable Agent and the Applicable Agent is at
the time or thereafter becomes required to distribute to the applicable 


 


58

















 


Issuing Bank
pursuant to paragraph (e) of this Section in respect of unreimbursed
LC Disbursements made under any Canadian Dollar Letter of Credit and (iii) of
each Lender’s participation in any Canadian Dollar Letter of Credit under which
an LC Disbursement has been made shall, automatically and with no further
action required, be converted into U.S. Dollars, calculated using the Exchange
Rate on such date (or in the case of any LC Disbursement made after such date,
on the date such LC Disbursement is made). 
On and after such conversion, all amounts accruing and owed to any
Agent, any Issuing Bank or any Lender in respect of the obligations described
in this paragraph shall accrue and be payable in U.S. Dollars at the rates
otherwise applicable hereunder.


 


(l)            Non-Investment
Grade Lender.  A Revolving Lender
shall notify the Administrative Agent of its status as a Non-Investment Grade
Lender within 2 Business Days after such Lender becomes a Non-Investment Grade
Lender.  Whether or not such notice is
delivered, on the second Business Day to occur after a Revolving Lender becomes
a Non-Investment Grade Lender, the following provisions shall apply once a
Lender becomes a Non-Investment Grade Lender (and shall cease to apply as
contemplated by clause (vi) below):


 


(i)            Such Non-Investment Grade Lender
shall cease to receive participation fees and all other fees under Section 2.12(b) in
respect of Letters of Credit.


 


(ii)           If any LC Exposure exists at the time
a Lender becomes a Non-Investment Grade Lender, then all or any part of such LC
Exposure shall be automatically reallocated among the Lenders that are Investment
Grade Lenders (such Lenders, together with the Issuing Banks, the “Reallocation
Parties”) under the applicable Tranche in accordance with their respective
Applicable Percentages (the “Initially Reallocated Amount”), but only to
the extent (x) the sum of all Investment Grade Lenders’ Revolving Credit
Exposures under such Tranche plus such Non-Investment Grade Lender’s LC
Exposure under such Tranche does not exceed the total of all Investment Grade
Lenders’ Commitments under such Tranche and (y) the conditions set forth
in Section 4.03 are satisfied at such time.  No such reallocation shall affect the amount
of any Commitment hereunder, and each Lender shall continue to be required to
fund Revolving Loans and participate in Swingline Loans as and when required
hereunder.  During such period as a
Revolving Lender constitutes a Non-Investment Grade Lender, such Non-Investment
Grade Lender shall not participate in Letters of Credit and related LC
Exposure.


 


(iii)          If the LC Exposure of the Investment
Grade Lenders under a Tranche is reallocated pursuant to the foregoing, then
the fees payable to the Lenders pursuant to Section 2.12(b) shall be
adjusted in accordance with such Investment Grade Lenders’ Applicable
Percentages, such that they receive their allocable shares of Letter-of-Credit
related fees that otherwise would have gone to the Non-Investment Grade
Lender.  If any portion of a
Non-Investment Grade Lender’s LC Exposure under a Tranche is not reallocated
pursuant to this Section (the “Unallocated LC Amount”), then,
without prejudice to any rights or remedies of any Issuing Bank or any Lender
hereunder, all letter of credit fees payable under Section 2.12(b) with
respect to such Non-Investment Grade Lender’s unallocated LC Exposure under
such Tranche shall be payable to the applicable Issuing Bank until such LC
Exposure is reallocated, if at all.  So
long as any Lender is a Non-Investment Grade Lender, no Issuing Bank shall be
required to issue, amend or increase any Letter of Credit under the affected
Tranche, unless the related exposure will be 100% covered by the Revolving
Commitments of the Investment Grade 


 


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Lenders under such
Tranche in accordance with this Section (the “Subsequently Reallocated
Amount”, and together with the Initially Reallocated Amount, the “Aggregate
Reallocated Amount”), and participating interests in any such newly issued
or increased Letter of Credit shall be allocated among Investment Grade Lenders
under such Tranche in a manner consistent with this Section (and
Non-Investment Grade Lenders shall not participate therein).


 


(iv)          Other than letter of credit fees
covered elsewhere in this Section, any amount payable to a Revolving Lender in
respect of Letters of Credit that accrued prior to its becoming a
Non-Investment Grade Lender (such as its funded participations in LC
Disbursements) shall be paid to such Revolving Lender as and when
required.  No amounts that accrue and are
subsequently paid in respect of Letters of Credit while such Revolving Lender
is a Non-Investment Grade Lender shall be paid to such Non-Investment Grade
Lender because the Investment Grade Lenders or the applicable Issuing Bank(s) shall
be holders of the obligations being satisfied by such amounts, and the
Non-Investment Grade Lender shall not have participated in the exposure
corresponding with such amounts.


 


(v)           As of the second Business Day to
occur after a Revolving Lender becomes a Non-Investment Grade Lender, such
Non-Investment Grade Lender shall automatically acquire from each Reallocation
Party a participation in the Revolving Loans of such Reallocation Party (with
the Revolving Loans of an Issuing Bank being those held by such Issuing Bank in
its capacity as a Revolving Lender), with the amount of such participation
equaling the ratable share of the Aggregate Reallocated Amount held by such
Reallocation Party.  No further action
need be taken by a Non-Investment Grade Lender or a Reallocation Party in order
to give effect to such a participation. 
Each Revolving Lender agrees that if it becomes a Non-Investment Grade
Lender, it shall acquire the participations contemplated hereby on an absolute
and unconditional basis which shall not be affected by any circumstance
whatsoever, including the occurrence or continuance of a Default, and that each
payment required to be made in respect of its participation shall be made
without any offset, abatement, withholding or reduction whatsoever.  The Borrower shall continue to deal solely
and directly with each Lender, including each Non-Investment Grade Lender and
each Reallocation Party, in respect of its Revolving Commitment and Revolving
Loans without regard to the participations described in this Section 2.06(l)(v).
Each Reallocation Party shall be required to deal directly with the applicable
Non-Investment Grade Lender with respect to funding (or failing to fund) its
participation as and when required.  
Each such participation shall otherwise be subject to Section 9.04(c).   Each Non-Investment Grade Lender agrees and
acknowledges that its participation amount in Revolving Loans hereunder shall
increase or decrease, as applicable, as the Aggregate Reallocation Amount
increases or decreases.


 


(vi)          If a Non-Investment Grade Lender
becomes an Investment Grade Lender and remains an Investment Grade Lender for
at least 30 consecutive days, then the applicable LC Exposure and Revolving
Loans of the Lenders shall be readjusted promptly thereafter by the
Administrative Agent to reflect the inclusion of such Lender’s applicable
Revolving Commitment, and on such date such Lender shall purchase at par such
Obligations under the applicable Tranche in respect of Letters of Credit as the
Administrative Agent shall determine may be necessary in order for such Lender
to hold such Obligations in accordance with its Applicable Percentage.  In addition, such Lender’s participations in
the Revolving Loans held by Reallocation Parties shall terminate and the
Administrative Agent shall make such adjustments to 


 


60

















 


the amounts to be paid to
the Reallocation Parties and the Lender that no longer constitutes a
Non-Investment Grade Lender as necessary in order to give effect to such
termination.


 


SECTION 2.07     Funding of Borrowings.  (a) 
Each Lender shall make each Loan to be made by it hereunder on the proposed
date thereof by wire transfer of immediately available funds by (x) 2:00 p.m.,
Local Time, with respect to any ABR Revolving Loans or ABR Term Loans and (y) otherwise,
12:00 noon, Local Time, to the account of the Applicable Agent most recently
designated by it for such purpose by notice to the Lenders for purposes of the
Loans in such Class in an amount equal to such Lender’s Applicable
Percentage of such Loan; provided that (i) Term Loans shall be made as
provided in Section 2.01(c) and (ii) Swingline Loans shall be
made as provided in Section 2.05. 
The Applicable Agent will make such Loans available to the applicable
Borrower by promptly crediting the amounts so received, in like funds, to an
account of such Borrower maintained with the Administrative Agent in New York
City, NY, Chicago, IL or, with respect to the Canadian Borrower, Toronto,
Ontario, Canada and designated by such Borrower in the applicable Borrowing
Request; provided that ABR Revolving Loans or Canadian Prime Rate Loans made to
finance the reimbursement of an LC Disbursement as provided in Section 2.06(e) shall
be remitted by the Applicable Agent to the applicable Issuing Bank.


 


(b)           Unless
the Applicable Agent shall have received notice from a Lender prior to the
proposed date of any Borrowing that such Lender will not make available to the
Applicable Agent such Lender’s share of such Borrowing, the Administrative
Agent may assume that such Lender has made such share available on such date in
accordance with paragraph (a) of this Section and may, in reliance
upon such assumption, make available to the applicable Borrower a corresponding
amount.  In such event, if a Lender has
not in fact made its share of the applicable Borrowing available to the
Applicable Agent, then the applicable Lender and the applicable Borrower
severally agree to pay to the Applicable Agent forthwith on demand such
corresponding amount with interest thereon, for each day from and including the
date such amount is made available to such Borrower to but excluding the date
of payment to the Applicable Agent, at (i) in the case of such Lender, the
greater of the Federal Funds Effective Rate (or, if related to a Canadian
Dollar Revolving Loan, the Canadian Prime Rate) and a rate determined by the
Applicable Agent in accordance with banking industry rules on interbank
compensation or (ii) in the case of a Borrower, the interest rate
applicable to ABR Loans or Canadian Prime Rate Loans, as applicable.  If such Lender pays such amount to the
Applicable Agent, then such amount shall constitute such Lender’s Loan included
in such Borrowing.


 


SECTION 2.08     Interest Elections.  (a) 
Each Borrowing initially shall be of the Type specified in the applicable Borrowing
Request and, in the case of a Eurodollar Borrowing or a BA Rate Borrowing,
shall have an initial Interest Period as specified in such Borrowing
Request.  Thereafter, a Borrower may
elect to convert such Borrowing to a different Type or to continue such
Borrowing and, in the case of a Eurodollar Borrowing or a BA Rate Borrowing,
may elect Interest Periods therefor, all as provided in this Section.  A Borrower may elect different options with
respect to different portions of the affected Borrowing, in which case each
such portion shall be allocated ratably among the Lenders holding the Loans
comprising such Borrowing, and the Loans comprising each such portion shall be
considered a separate Borrowing.  This Section shall
not apply to Swingline Borrowings, which may not be converted or continued.


 


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(b)           To
make an election pursuant to this Section, the applicable Borrower shall notify
the Administrative Agent and, in the case of a Borrowing under the Canadian
Tranche, the Canadian Administrative Agent of such election (by telephone or by
irrevocable written notice (via an Interest Election Request in a form approved
by the Administrative Agent and signed by such Borrower or sent by e-mail)) by
the time that a Borrowing Request would be required under Section 2.03 if
such Borrower were requesting a Borrowing of the Type resulting from such
election to be made on the effective date of such election.  Each telephonic Interest Election Request
shall be irrevocable and shall be confirmed promptly by hand delivery or telecopy
to the Administrative Agent and, in the case of a Borrowing under the Canadian
Tranche, the Canadian Administrative Agent of a written Interest Election
Request in a form approved by the Administrative Agent and signed by the
applicable Borrower.  Notwithstanding any
contrary provision herein, this Section shall not be construed to permit a
Borrower to (i) change the currency of any Borrowing, (ii) elect an
Interest Period for Eurodollar Loans or BA Rate Loans that does not comply with
Section 2.02(d) or (iii) convert any Borrowing to a Borrowing of
a Type not available under the Class of commitments pursuant to which such
Borrowing was made.


 


(c)           Each
telephonic and written Interest Election Request shall specify the following
information in compliance with Section 2.02:


 


(i)            the Borrowing to which such Interest
Election Request applies and, if different options are being elected with
respect to different portions thereof, the portions thereof to be allocated to
each resulting Borrowing (in which case the information to be specified pursuant
to clauses (iii) and (iv) below shall be specified for each resulting
Borrowing);


 


(ii)           the effective date of the election
made pursuant to such Interest Election Request, which shall be a Business Day;


 


(iii)          whether the resulting Borrowing is to
be an ABR Borrowing, Canadian Prime Rate Borrowing, Eurodollar Borrowing or BA
Rate Borrowing; and


 


(iv)          if the resulting Borrowing is a
Eurodollar Borrowing or BA Rate Borrowing, the Interest Period and currency to
be applicable thereto after giving effect to such election, which Interest
Period shall be a period contemplated by the definition of the term “Interest
Period”.


 


If any such Interest
Election Request requests a Eurodollar Borrowing or a BA Rate Borrowing but
does not specify an Interest Period, then the applicable Borrower shall be
deemed to have selected an Interest Period of one month’s or 30 days duration,
as applicable.


 


(d)           Promptly
following receipt of an Interest Election Request, the Applicable Agent shall
advise each Lender under the applicable Tranche of the details thereof and of
such Lender’s portion of each resulting Borrowing.


 


(e)           If
a Borrower fails to deliver a timely Interest Election Request with respect to
a Eurodollar Borrowing or a BA Rate Borrowing prior to the end of the Interest
Period applicable thereto, then, unless such Borrowing is repaid as provided
herein, at the end of such Interest Period (i) in the case of a Borrowing
denominated in U.S. Dollars, such Borrowing 


 


62

















 


shall be continued
as a Eurodollar Borrowing with a one-month Interest Period, if Eurodollar
Borrowings are then available; otherwise it shall be converted to a ABR
Borrowing, and (ii) in the case of a Borrowing denominated in Canadian
Dollars, such Borrowing shall be continued as a BA Rate Borrowing with a 30-day
Interest Period, if BA Rate Borrowings are then available; otherwise it shall
be converted to a Canadian Prime Rate Borrowing.  Notwithstanding any contrary provision
hereof, if an Event of Default has occurred and is continuing and the
Administrative Agent, at the request of the Required Lenders, so notifies the
Borrowers, then, so long as an Event of Default is continuing (i) no
outstanding Borrowing may be converted to or continued as a Eurodollar
Borrowing or a BA Rate Borrowing and (ii) unless repaid, each Eurodollar
Borrowing shall be converted to an ABR Borrowing and each BA Rate Borrowing
shall be converted to a Canadian Prime Rate Borrowing at the end of the
Interest Period applicable thereto.


 


SECTION 2.09     Termination and Reduction of Commitments.  (a) 
Unless previously terminated, the Revolving Commitments shall terminate on the
earlier of the Revolving Loan Maturity Date and 3:00 p.m. (Local Time) on August 23,
2010, if the World Color Press Acquisition has not been consummated by August 23,
2010, and the Term Loan Commitments shall terminate at 3:00 p.m. (Local
Time) on the earlier of the Funding Date and August 23, 2010.


 


(b)           The
U.S. Borrower, on its behalf and on behalf of the Canadian Borrower, may at any
time terminate, or from time to time reduce, the Revolving Commitments;
provided that (i) each reduction of the Revolving Commitments shall be in
an amount that is an integral multiple of the U.S. Dollar Amount of U.S.
$1,000,000 and not less than the U.S. Dollar Amount of U.S. $5,000,000 and (ii) the
U.S. Borrower shall not terminate or reduce the Revolving Commitments if, after
giving effect to any concurrent prepayment of the Revolving Loans in accordance
with Section 2.11, (a) the Revolving Credit Exposures would exceed
the aggregate of the Revolving Commitments, (b) the Canadian Tranche
Revolving Credit Exposures would exceed the aggregate of the Canadian Tranche
Revolving Commitments, or (c) the U.S. Tranche Revolving Credit Exposures
would exceed the aggregate of the U.S. Tranche Revolving Commitments.  The U.S. Borrower, in connection with any
such reduction, shall specify the Tranche that is to be subject to such
reduction.


 


(c)           The
U.S. Borrower shall notify the Administrative Agent of any election to
terminate or reduce the Commitments under paragraph (b) of this Section at
least three (3) Business Days prior to the effective date of such
termination or reduction, specifying such election and the effective date
thereof.  Promptly following receipt of
any notice, the Administrative Agent shall advise the Lenders of the contents
thereof.  Each notice delivered by the
U.S. Borrower pursuant to this Section shall be irrevocable; provided that
a notice of termination of the Commitments delivered by the U.S. Borrower may
state that such notice is conditioned upon the effectiveness of other credit
facilities, in which case such notice may be revoked by the U.S. Borrower (by
notice to the Administrative Agent on or prior to the specified effective date)
if such condition is not satisfied.  Any
termination or reduction of the Commitments shall be permanent.  Each reduction of the Commitments shall be
made ratably among the Lenders in accordance with their respective Commitments;
provided, that if a reduction is specific to a single Tranche, then the
corresponding Commitments shall be ratably reduced only with respect to such
Tranche.


 


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SECTION 2.10     Repayment and Amortization of Loans; Evidence of Debt.  (a) 
Each Borrower hereby unconditionally promises to pay (i) to the Applicable
Agent for the account of the applicable Revolving Lenders the then unpaid
principal amount of each Revolving Loan extended to such Borrower on the
Revolving Loan Maturity Date in the currency of such Loan and (ii) to the
U.S. Swingline Lender and the Canadian Swingline Lender the then unpaid
principal amount of each U.S. Swingline Loan and Canadian Swingline Loan,
respectively, on the Revolving Loan Maturity Date and, to the extent the
aggregate outstanding principal amount of U.S. Swingline Loans and Canadian
Swingline Loans exceeds the U.S. Dollar Amount of U.S. $10,000,000, on the
first date after the applicable Swingline Loan is made that is the 15th or last
day of a calendar month and is at least two (2) Business Days after such
Swingline Loan is made; provided that on each date that a Revolving Borrowing
is made, the applicable Borrower shall repay all Swingline Loans then
outstanding under the Tranche under which such Revolving Loans are being
made.  Each Borrower shall repay its Term
Loans on the last day of each Fiscal Quarter in an amount equal to the then
applicable Term Loan Payment Percentage times the aggregate principal
amount of its Term Loans on the Funding Date (subject to adjustment pursuant to
Section 2.11 as a result of prepayments). 
To the extent not previously paid, all unpaid Term Loans shall be fully
repaid by the applicable Borrower on the Term Loan Maturity Date.


 


(b)           Each
Lender shall maintain in accordance with its usual practice an account or
accounts evidencing the indebtedness of each Borrower to such Lender resulting
from each Loan made by such Lender, including the amounts of principal and
interest payable and paid to such Lender from time to time hereunder.


 


(c)           The
Administrative Agent shall maintain accounts in which it shall record (i) the
amount of each Loan made hereunder, the Class, the currency and Type thereof
and the Interest Period applicable thereto, (ii) the amount of any principal
or interest due and payable or to become due and payable from each Borrower to
each Lender hereunder and (iii) the amount of any sum received by any
Agent hereunder for the account of the Lenders and each Lender’s share thereof.


 


(d)           The
entries made in the accounts maintained pursuant to paragraph (b) or (c) of
this Section shall be prima facie evidence of the existence and amounts of
the obligations recorded therein; provided that the failure of any Lender or
the Administrative Agent to maintain such accounts or any error therein shall
not in any manner affect the obligation of either Borrower to repay the Loans
in accordance with the terms of this Agreement.


 


(e)           Any
Lender may request that Loans made by it be evidenced by a promissory
note.  In such event, the applicable
Borrower shall prepare, execute and deliver to such Lender a promissory note
payable to the order of such Lender (or, if requested by such Lender, to such
Lender and its registered assigns) and in a form approved by the Borrower and
the Administrative Agent (with the form attached hereto as Exhibit H being
so approved).  Thereafter, the Loans
evidenced by such promissory note and interest thereon shall at all times
(including after assignment pursuant to Section 9.04) be represented by
one or more promissory notes in such form payable to the order of the payee
named therein (or, if such promissory note is a registered note, to such payee
and its registered assigns).


 


64

















 


SECTION 2.11     Prepayment of Loans.


 


(a)           Subject
to Section 2.11(d), in the event and on each occasion that (i) the
aggregate Revolving Credit Exposures of all Lenders exceeds the aggregate of
the Revolving Commitments, (ii) the aggregate Canadian Tranche Revolving
Credit Exposures of all Canadian Tranche Lenders exceeds the aggregate of the
Canadian Tranche Revolving Commitments, or (iii) the aggregate U.S.
Tranche Revolving Credit Exposures of all U.S. Tranche Lenders exceeds the
aggregate of the U.S. Tranche Revolving Commitments, then the applicable
Borrower(s) shall prepay the Revolving Loans, LC Exposure and/or Swingline
Loans in such amount equal to the excess under the applicable Tranche (or, if
applicable, cash collateralize LC Exposure in a manner acceptable to the
Administrative Agent).


 


(b)           In
the event and on each occasion that any Net Proceeds are received by or on
behalf of any Loan Party or, if applicable, any of its Subsidiaries in respect
of any Prepayment Event (or, in the case of Free Cash Flow, on the date on
which a prepayment in respect thereof is required to be made, if at all), the
Borrowers shall immediately after such Net Proceeds are received (or, in the
case of Free Cash Flow, when cash is required to be paid, if at all), prepay
the Term Loans (with Net Proceeds being applied first to all scheduled
Term Loan payments required to be made during the twelve-month period following
the applicable Prepayment Event (with such Net Proceeds being applied ratably
across all such scheduled Term Loan payments), and second to all
remaining outstanding Term Loans in the inverse order of maturity) in an
aggregate amount equal to:


 


(i)            100% of such Net Proceeds if arising
under clauses (a) or (b) of the definition of Prepayment Event; provided,
however, that the Asset Sale Allowance shall not be required to be paid
under this Section 2.11(b)(i); provided, further, that if
the Asset Sale Allowance is fully utilized in a Fiscal Year, an amount of
additional Net Proceeds resulting under clause (a) of the definition of
Prepayment Event not in excess of the U.S. Dollar Amount of U.S. $2,000,000 may
be retained by the Loan Parties and their Subsidiaries during such Fiscal Year
and not applied pursuant to this Section 2.11(b)(i); or


 


(ii)           the then applicable Free Cash Flow
Percentage of Free Cash Flow required to be paid on the applicable Free Cash
Flow Prepayment Date (with such prepayment, if any, being accompanied by a
certification signed by a Financial Officer of the U.S. Borrower certifying the
manner in which Free Cash Flow and the resulting prepayment were calculated,
which certification shall be in form and substance reasonably satisfactory to
Administrative Agent);


 


provided, that (x) in the case of any event
described in clause (a) or (b) of the definition of the term “Prepayment
Event”, if the U.S. Borrower shall deliver to the Administrative Agent a
certificate of a Financial Officer to the effect that the relevant Loan Party
or Subsidiary in respect thereof intends to apply the Net Proceeds from such
event (or a portion thereof specified in such certificate), within the
Reinvestment Period, to acquire (or replace or rebuild) real property,
equipment or other tangible assets (excluding inventory) to be used in the
business of the Loan Parties or their Subsidiaries, and certifying that no
Default has occurred and its continuing, then no prepayment shall be required
pursuant to this paragraph in respect of the Net Proceeds specified in such
certificate; and (y) to the extent any of such Net Proceeds have not been
so 


 


65

















 


applied by the end of the
Reinvestment Period, a prepayment shall be required to be made at the end of
such Reinvestment Period in an amount equal to those Net Proceeds that have not
been so applied; provided, further, that amounts paid under this Section 2.11
by the Canadian Borrower shall be applied solely to satisfy Obligations owing
by Canadian Loan Parties (in the same order of priority as for proceeds of
Collateral set forth in Section 2.18(b)), and amounts paid under this Section 2.11
by the U.S. Borrower shall be applied first to satisfy Obligations owing
by U.S. Loan Parties, and second to satisfy Obligations owing by
Canadian Loan Parties (in each case in the same order of priority as for proceeds
of Collateral as set forth in Section 2.18(b)).


 


(c)           Each
Borrower shall have the right at any time and from time to time to prepay any
Borrowing in whole or in part, subject to prior notice in accordance with the
provisions of this Section 2.11. 
The applicable Borrower shall notify the Applicable Agent (and, in the
case of prepayment of a Swingline Loan, the applicable Swingline Lender) by
telephone (confirmed by telecopy) of any prepayment hereunder (i) in the
case of prepayment of a Eurodollar Borrowing or a BA Rate Borrowing, not later
than 12:00 noon, Local Time, three (3) Business Days before the date of
prepayment, (ii) in the case of prepayment of an ABR Borrowing or a
Canadian Prime Rate Borrowing, not later than 12:00 noon, Local Time, on the date
of such prepayment (so long as such day is a Business Day) or (iii) in the
case of prepayment of a Swingline Loan, not later than 12:00 noon, Local Time,
on the date of prepayment.  Any optional
prepayment of a Term Loan shall be in an amount equal to at least U.S.
$1,000,000 (or, if the remaining principal balance of the Term Loans is less
then the Approximate Equivalent Amount of U.S. $1,000,000, the aggregate of
such remaining principal balance).  Each
such notice shall be irrevocable and shall specify the prepayment date and the
principal amount of each Borrowing or portion thereof to be prepaid; provided
that, if a notice of prepayment is given in connection with a conditional
notice of termination of the Commitments as contemplated by Section 2.09,
then such notice of prepayment may be revoked if such notice of termination is
revoked in accordance with Section 2.09. 
Promptly following receipt of any such notice relating to a Borrowing,
the Applicable Agent shall advise the Lenders of the contents thereof.  Each partial prepayment of any Borrowing
shall be in an amount that would be permitted in the case of an advance of a
Borrowing of the same Type as provided in Section 2.02.  Each prepayment of a Borrowing shall be
applied ratably to the Loans (and, if a prepayment of Revolving Loans, of the
corresponding Tranche) included in the prepaid Borrowing.  Prepayments shall be accompanied by (i) accrued
interest to the extent required by Section 2.13 and (ii) break
funding payments pursuant to Section 2.16. 
If, on or prior to the one-year anniversary of the Funding Date, either
Borrower at any time prepays all or any part of its Term Loans (whether
pursuant to a voluntary or mandatory prepayment) with Net Proceeds of
Indebtedness evidenced by one or more revolving credit facilities (excluding
the revolving credit facilities evidenced by this Agreement), tranche B term
loans, tranche C term loans, institutional term loans or other credit
facilities (but in any event excluding any high-yield bond or similar debt
securities offering), the applicable Borrower prepaying its Term Loans shall
pay to the Applicable Agent on the date of such prepayment, for the ratable
benefit of the Term Loan Lenders receiving such prepayment, a prepayment
premium equal to 1% times the aggregate amount of such prepayment.


 


(d)           If,
on any Computation Date, the sum of the aggregate principal U.S. Dollar Amount
of all of the Canadian Tranche Revolving Credit Exposures (calculated, with
respect to those Credit Events denominated in Canadian Dollars, as of the most
recent Computation 


 


66

















 


Date with respect
to each such Credit Event) exceeds the aggregate Canadian Tranche Revolving
Commitments (including, without limitation, as a result of fluctuations in
currency exchange rates), the Borrowers shall immediately repay Revolving Loans
or cash collateralize LC Disbursements in an account with the Administrative
Agent pursuant to Section 2.06(j), as applicable, in an aggregate
principal amount sufficient to cause the aggregate principal U.S. Dollar Amount
of all Canadian Tranche Revolving Credit Exposures to equal or be less than the
aggregate Canadian Tranche Revolving Commitments.


 


SECTION 2.12     Fees.  (a)  The
Borrowers agree to pay to the Administrative Agent for the account of each
Revolving Lender a commitment fee (the “Commitment Fee”), which shall
accrue at the Commitment Fee Rate on the average daily amount of the excess of
the aggregate of the Revolving Commitments over the aggregate Revolving Credit
Exposures during the period from and including the Funding Date to but
excluding the date on which such Revolving Commitments terminate (with such
determination made on a quarterly basis and at any other time Commitment Fees
are required to be paid); provided, that the aggregate principal amount of
Swingline Loans shall not be included in any determination of Revolving Credit
Exposure for purposes of calculating the Commitment Fee.  Accrued Commitment Fees shall be payable in
arrears on the last day of each Fiscal Quarter of each Fiscal Year and on the
date on which the applicable Revolving Commitments terminate, commencing on the
first such date to occur after the date hereof. 
All Commitment Fees shall be computed on the basis of a year of 360 days
and shall be payable for the actual number of days elapsed (including the first
day but excluding the last day).


 


(b)           Each
Borrower agrees to pay (i) to the Applicable Agent for the account of each
Lender under a Tranche a participation fee with respect to its participations
in Letters of Credit issued under such Tranche, which shall accrue at the same
Applicable Margin used to determine the interest rate applicable to Eurodollar
Revolving Loans or BA Rate Revolving Loans, as applicable, on the amount
available to be drawn under each outstanding Letter of Credit under such
Tranche during the period from and including the Funding Date to but excluding
the later of the date on which such Lender’s Revolving Commitment under the
applicable Tranche terminates and the date on which such Lender ceases to have
any LC Exposure under the applicable Tranche and (ii) to each Issuing Bank
a fronting fee, which shall accrue at the rate of 0.125% per annum on the
amount available to be drawn under each outstanding Letter of Credit hereunder
issued by such Issuing Bank during the period from and including the Funding
Date to but excluding the later of the date of termination of the Revolving
Commitments and the date on which there ceases to be any LC Exposure, as well as
such Issuing Bank’s standard fees and commissions with respect to the issuance,
amendment, cancellation, negotiation, transfer, presentment, renewal or
extension of any Letter of Credit or processing of drawings thereunder.  Unless otherwise specified above,
participation fees and fronting fees accrued through and including the last day
of each Fiscal Quarter of each Fiscal Year shall be payable on the third (3rd) Business Day following such last day, commencing on
the first such date to occur after the Funding Date; provided that all such
fees shall be payable on the date on which the Revolving Commitments terminate
and any such fees accruing after the date on which the Revolving Commitments
terminate shall be payable on demand. 
Any other fees payable to an Issuing Bank pursuant to this paragraph
shall be payable within ten (10) days after demand.  All participation fees and fronting fees
shall be computed on the basis 


 


67

















 


of a year of 360
days and shall be payable for the actual number of days elapsed (including the
first day but excluding the last day).


 


(c)           Each
Borrower agrees to pay to the Administrative Agent, for its own account, fees
payable in the amounts and at the times separately agreed upon between such
Borrower and the Administrative Agent.


 


(d)           All
fees payable hereunder shall be paid on the dates due, in U.S. Dollars (except
as otherwise expressly provided in this Section 2.12) and immediately
available funds, to the Applicable Agent (or to the applicable Issuing Bank, in
the case of fees payable to it) for distribution, in the case of Commitment
Fees and participation fees, to the applicable Lenders.  Fees paid shall not be refundable under any
circumstances.


 


SECTION 2.13     Interest.  (a)  The
Loans comprising each ABR Borrowing shall bear interest at the Alternate Base
Rate plus the Applicable Margin, and the Loans comprising each Canadian Prime
Rate Borrowing shall bear interest at the Canadian Prime Rate plus the
Applicable Margin.  Swingline Loans accruing interest at the Alternate
Base Rate, the Canadian Prime Rate or such other rate as may be mutually agreed
to by the applicable Borrower and the applicable Swingline Lender shall be
subject to this Section 2.13(a).


 


(b) The Loans
comprising each Eurodollar Borrowing shall bear interest at the Adjusted LIBO
Rate for the Interest Period in effect for such Borrowing plus the Applicable
Margin, and the Loans comprising each BA Rate Borrowing shall bear interest at
the BA Rate for the Interest Period in effect for such Borrowing plus the
Applicable Margin.  Swingline Loans shall bear interest as applicable at
the BA Rate or the Adjusted LIBO Rate in each case, applicable for a 30 day
Interest Period plus the Applicable Margin, regardless of the actual duration
of such Borrowing.


 


(c) Notwithstanding
the foregoing, but subject to Section 9.17(c), if any principal of or
interest on any Loan or any fee or other amount payable by a Borrower hereunder
is not paid when due, whether at stated maturity, upon acceleration or
otherwise, or an Event of Default occurs under clauses (h), (i) or (j) of
Article VII, all of the Obligations shall automatically bear interest at a
rate per annum equal to (i) in the case of the principal amount of the
Obligations, 2% plus the rate otherwise applicable thereto as provided in the
preceding paragraphs of this Section or (ii) in the case of any other
amount, 2% plus the rate applicable to ABR Loans (or, in the case of any amount
denominated in Canadian Dollars, 2% plus the rate applicable to Canadian Prime
Rate Loans) as provided in paragraph (a) of this Section.  If any other Event of Default occurs, upon
the election of the Required Lenders, the Obligations shall bear interest at a
rate per annum equal to (i) in the case of the principal amount of the
Obligations, 2% plus the rate otherwise applicable thereto as provided in the
preceding paragraphs of this Section or (ii) in the case of any other
amount, 2% plus the rate applicable to ABR Loans (or, in the case of any amount
denominated in Canadian Dollars, 2% plus the rate applicable to Canadian Prime
Rate Loans) as provided in paragraph (a) of this Section.  The Required Lenders may rescind such
election at any time in their sole discretion (notwithstanding any provision of
Section 9.02 requiring the consent of “each Lender directly affected
thereby” for reductions in interest rates).


 


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(d) Accrued interest
on each Loan shall be payable in arrears on each Interest Payment Date for such
Loan and, in the case of Revolving Loans, upon termination of the Revolving
Commitments; provided that (i) interest accrued pursuant to paragraph (c) of
this Section shall be payable on demand, (ii) in the event of any
repayment or prepayment of any Loan (other than a prepayment of an ABR
Revolving Loan or Canadian Prime Rate Revolving Loan prior to the end of the
Availability Period), accrued interest on the principal amount repaid or
prepaid shall be payable on the date of such repayment or prepayment and (iii) in
the event of any conversion of any Eurodollar Loan or BA Rate Loan prior to the
end of the current Interest Period therefor, accrued interest on such Loan
shall be payable on the effective date of such conversion.


 


(e) All interest hereunder
shall be computed on the basis of a year of 360 days, except that interest
computed by reference to the Alternate Base Rate at times when the Alternate
Base Rate is based on the Prime Rate, or the interest computed be reference to
the Canadian Prime Rate and the BA Rate, shall be computed on the basis of a
year of 365 days (or 366 days in a leap year), and in each case shall be
payable for the actual number of days elapsed (including the first day but
excluding the last day).  The applicable
Alternate Base Rate, Adjusted LIBO Rate, LIBO Rate, Canadian Prime Rate or BA
Rate shall be determined by the Applicable Agent, and such determination shall
be conclusive absent manifest error.


 


SECTION 2.14     Alternate Rate of Interest. 
If prior to the commencement of any Interest Period for a Eurodollar
Borrowing or a BA Rate Borrowing:


 


(a)           the
Applicable Agent determines (which determination shall be conclusive absent
manifest error) that adequate and reasonable means do not exist for
ascertaining the Adjusted LIBO Rate, the LIBO Rate or the BA Rate, as
applicable, for such Interest Period; or


 


(b)           the
Applicable Agent is advised by the majority in interest of the Lenders that
would participate in such Borrowing that the Adjusted LIBO Rate, the LIBO Rate
or the BA Rate, as applicable, for such Interest Period will not adequately and
fairly reflect the cost to such Lenders (or Lender) of making or maintaining
their Loans (or its Loan) included in such Borrowing for such Interest Period;


 


then the Applicable Agent
shall give notice thereof to the Borrowers and the applicable Lenders by
telephone or telecopy as promptly as practicable thereafter and, until the
Applicable Agent notifies the Borrowers and the applicable Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Revolving Borrowing to, or
continuation of any Revolving Borrowing as, a Eurodollar Borrowing or BA Rate
Borrowing, as applicable, shall be ineffective and shall be repaid on the last
day of the then current Interest Period applicable thereto or shall be
converted into an ABR or Canadian Prime Rate Borrowing, at the option of the
applicable Borrower, on the last day of the then current Interest Period
applicable thereto, and (ii) if any Borrowing Request requests a
Eurodollar Borrowing or BA Rate Borrowing, such Borrowing shall be made as an
ABR Borrowing or Canadian Prime Rate Borrowing, respectively; provided
that if the circumstances giving rise to such notice affect only one Type of
Borrowings, then the other Type of Borrowings shall be permitted.


 


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SECTION 2.15     Increased Costs.  (a)  If
any Change in Law shall:


 


(i)            impose, modify or deem applicable
any reserve, capital adequacy requirement, special deposit, liquidity
requirement, cash margin, capital or assessment or similar requirement against
assets of, deposits with or for the account of, or credit extended by, any
Lender (except any such reserve requirement which is actually reflected in the
Adjusted LIBO Rate or a particular BA Rate quoted by a Canadian Tranche Lender
that is not a Schedule I Bank) or any Issuing Bank; or


 


(ii)           impose on any Lender or any Issuing
Bank or the London interbank market any other condition, cost or expense
affecting this Agreement or Eurodollar Loans or BA Rate Loans made by such
Lender or any Letter of Credit or participation therein;


 


and the result of any of
the foregoing shall be to:  (A) increase
the cost to such Lender of making or maintaining any Eurodollar Loan or BA Rate
Loan or of maintaining its obligation to make any such Loan or to increase the
cost to such Lender or such Issuing Bank of participating in, issuing or
maintaining any Letter of Credit, (B) reduce the amount of any sum
received or receivable by such Lender or such Issuing Bank hereunder, whether
of principal, interest or otherwise, (C) directly or indirectly reduce the
effective return to such Lender or such Issuing Bank in respect of any such
Loan or any Borrowing (other than a reduction resulting from a higher rate of,
or from a change in the calculation of, income or capital tax relating to the
net income or capital of such Lender or such Issuing Bank) otherwise received
or receivable by such Lender or such Issuing Bank under this Agreement; or (D) subject
such Lender or such Issuing Bank to, or cause the withdrawal or termination of
a previously granted exemption with respect to, any Taxes or changes the basis
of taxation of payments due to such Lender or such Issuing Bank or increase any
existing Taxes on payments on account of the Obligations (other than, for
greater certainty, in each case, taxes imposed on the overall pre-tax net
income or capital of such Lender or such Issuing Bank), then the applicable
Borrower will pay to such Lender or such Issuing Bank, as the case may be, such
additional amount or amounts as will compensate such Lender or such Issuing
Bank, as the case may be, for such additional costs incurred or reduction
suffered.


 


(b)           If
any Lender or any Issuing Bank determines that any Change in Law regarding
capital requirements has or would have the effect of reducing the rate of
return on such Lender’s or such Issuing Bank’s capital or on the capital of
such Lender’s or such Issuing Bank’s holding company, if any, as a consequence
of this Agreement or the Loans made by, or participations in Letters of Credit
held by, such Lender, or the Letters of Credit issued by such Issuing Bank, to
a level below that which such Lender or such Issuing Bank or such Lender’s or
such Issuing Bank’s holding company could have achieved but for such Change in
Law (taking into consideration such Lender’s or such Issuing Bank’s policies
and the policies of such Lender’s or such Issuing Bank’s holding company with
respect to capital adequacy), then from time to time the applicable Borrower
will pay to such Lender or such Issuing Bank, as the case may be, such
additional amount or amounts as will compensate such Lender or such Issuing
Bank or such Lender’s or such Issuing Bank’s holding company for any such
reduction suffered.


 


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(c)           A
certificate of a Lender or an Issuing Bank setting forth the amount or amounts
necessary to compensate such Lender or such Issuing Bank or its holding
company, as the case may be, as specified in paragraph (a) or (b) of
this Section shall be delivered to the applicable Borrower (with such
certificate including reasonable detail as to the amounts so owing) and shall
be conclusive absent manifest error.  The
applicable Borrower shall pay such Lender or such Issuing Bank, as the case may
be, the amount shown as due on any such certificate within ten (10) days
after receipt thereof.


 


(d)           Failure
or delay on the part of any Lender or any Issuing Bank to demand compensation
pursuant to this Section shall not constitute a waiver of such Lender’s or
such Issuing Bank’s right to demand such compensation; provided that no
Borrower shall be required to compensate a Lender or an Issuing Bank pursuant
to this Section for any increased costs or reductions incurred more than
180 days prior to the date that such Lender or such Issuing Bank, as the case
may be, notifies the applicable Borrower of the Change in Law giving rise to
such increased costs or reductions and of such Lender’s or such Issuing Bank’s
intention to claim compensation therefor; provided further that, if the Change
in Law giving rise to such increased costs or reductions is retroactive, then
the 180-day period referred to above shall be extended to include the period of
retroactive effect thereof.


 


SECTION 2.16     Break Funding Payments.  In the event
of (a) the payment of any principal of any Eurodollar Loan or BA Rate Loan
other than on the last day of an Interest Period applicable thereto (including
as a result of an Event of Default or as a result of any prepayment pursuant to
Section 2.11), (b) the conversion of any Eurodollar Loan or BA Rate
Loan other than on the last day of the Interest Period applicable thereto, (c) the
failure to borrow, convert, continue or prepay any Eurodollar Loan or BA Rate
Loan on the date required by the terms of this Agreement or specified in any
notice delivered pursuant hereto (regardless of whether such notice may be
revoked under Section 2.11(c) and is revoked in accordance therewith)
or (d) the assignment of any Eurodollar Loan or BA Rate Loan other than on
the last day of the Interest Period applicable thereto as a result of a request
by a Borrower pursuant to Section 2.19, then, in any such event, the
applicable Borrower shall compensate each Lender for the loss, cost and expense
attributable to such event.  Such loss,
cost or expense to any Lender shall be deemed to include an amount determined
by such Lender to be the excess, if any, of (i) the amount of interest
which would have accrued on the principal amount of such Loan had such event
not occurred, at the Adjusted LIBO Rate or BA Rate that would have been
applicable to such Loan, for the period from the date of such event to the last
day of the then current Interest Period therefor (or, in the case of a failure
to borrow, convert or continue, for the period that would have been the
Interest Period for such Loan), over (ii) the amount of interest which
would accrue on such principal amount for such period at the interest rate
which such Lender would bid were it to bid, at the commencement of such period,
for deposits in the relevant currency of a comparable amount and period from
other banks in the Eurodollar or BA Rate market.  A certificate of any Lender setting forth any
amount or amounts that such Lender is entitled to receive pursuant to this Section together
with a calculation of such amount in reasonable detail shall be delivered
to the applicable Borrower and shall be conclusive absent manifest error.  The applicable Borrower shall pay such Lender
the amount shown as due on any such certificate within ten (10) days after
receipt thereof.


 


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SECTION 2.17     Taxes.  (a)  Any
and all payments by or on account of any obligation of either Borrower
hereunder shall be made free and clear of and without deduction for any
Indemnified Taxes or Other Taxes; provided that if a Borrower shall be required
to deduct any Indemnified Taxes or Other Taxes from such payments, then (i) the
sum payable shall be increased as necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section) the Applicable Agent, the applicable Lender or Issuing Bank (as
the case may be) receives an amount equal to the sum it would have received had
no such deductions been made, (ii) such Borrower shall make such
deductions and (iii) such Borrower shall pay the full amount deducted to
the relevant Governmental Authority in accordance with applicable law.


 


(b)           In
addition, each Borrower shall pay any Other Taxes imposed on or incurred by an
Agent, a Lender or an Issuing Bank to the relevant Governmental Authority in
accordance with applicable law.


 


(c)           Each
Borrower shall indemnify each Agent, each Lender and each Issuing Bank, within
ten (10) days after written demand therefor, for the full amount of any
Indemnified Taxes or Other Taxes paid by such Agent, such Lender or such
Issuing Bank, as the case may be, on or with respect to any payment by or on
account of any obligation of such Borrower hereunder (including Indemnified
Taxes or Other Taxes imposed or asserted on or attributable to amounts payable
under this Section) and any penalties, interest and reasonable expenses arising
therefrom or with respect thereto, whether or not such Indemnified Taxes or
Other Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority.  A certificate as
to the amount of such payment or liability delivered to the applicable Borrower
by a Lender or an Issuing Bank, or by the Administrative Agent on its own
behalf or on behalf of a Lender or an Issuing Bank, in each case with a
calculation of such amount in reasonable detail, shall be conclusive absent
manifest error.


 


(d)           As
soon as practicable after any payment of Indemnified Taxes or Other Taxes by a
Borrower to a Governmental Authority, such Borrower shall deliver to the
Administrative Agent the original or a certified copy of a receipt issued by
such Governmental Authority evidencing such payment, a copy of the return
reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.


 


(e)           Any
Foreign Lender that is entitled to an exemption from or reduction of
withholding tax under the law of the jurisdiction in which such Borrower is
located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to the U.S. Borrower (with a copy
to the Administrative Agent), at the time or times prescribed by applicable
law, such properly completed and executed documentation prescribed by
applicable law or reasonably requested by the U.S. Borrower as will permit such
payments to be made without withholding or at a reduced rate.


 


(f)            If
an Agent, an Issuing Bank, or a Lender receives a refund of any Taxes or Other
Taxes as to which it has been indemnified by a Borrower or with respect to
which such Borrower has paid additional amounts pursuant to this Section 2.17,
or if an Agent, an Issuing Bank, or a Lender receives a credit (for purposes of
determining its Tax liability in any jurisdiction other than the jurisdiction
that imposed such Taxes or Other Taxes) with respect to 


 


72

















 


such Taxes or
Other Taxes and if such refund or credit can be traced and matched as being
applicable to such indemnification or additional payment, it shall pay over the
amount of such refund or credit to such Borrower (but only to the extent of
indemnity payments made, or additional amounts paid, by such Borrower under
this Section 2.17 with respect to the Taxes or Other Taxes giving rise to
such refund or credit), net of all out-of-pocket expenses of such Agent,
Issuing Bank or Lender and without interest (other than any interest paid by
the relevant Governmental Authority with respect to such refund or credit); provided,
that such Borrower, upon the request of such Agent, Issuing Bank or Lender,
agrees to repay the amount paid over to such Borrower (plus any penalties,
interest or other charges imposed by the relevant Governmental Authority) to
such Agent, Issuing Bank, or Lender in the event such Agent, Issuing Bank or
Lender is required to repay such refund to such Governmental Authority, or in
the event that any such credit is determined subsequently not to be available
to such Agent, Issuing Bank or Lender. This Section shall not be construed
to require any Agent, any Issuing Bank or any Lender to make available its Tax
returns (or any other information relating to its Taxes which it deems
confidential) to either Borrower or any other Person.


 


SECTION 2.18     Payments Generally; Allocation of Proceeds; Sharing of
Set-offs.


 


(a)           Each
Borrower shall make each payment required to be made by it hereunder (whether
of principal, interest, fees or reimbursement of LC Disbursements, or of
amounts payable under Section 2.15, 2.16 or 2.17, or otherwise) or under
any other Loan Document prior to 12:00 noon, Local Time on the date when due,
in immediately available funds, without set-off or counterclaim.  Any amounts received after such time on any
date may, in the discretion of the Applicable Agent, be deemed to have been received
on the next succeeding Business Day for purposes of calculating interest
thereon.  All such payments shall be made
(i) in the same currency in which the applicable Credit Event was made and
(ii) to the Administrative Agent at its offices at 10 South Dearborn
Street, Chicago, Illinois 60603 or, in the case of a Credit Event under the
Canadian Tranche, the Canadian Administrative Agent’s Canadian Dollar Payment
Office except payments to be made directly to the applicable Issuing Bank or
the applicable Swingline Lender as expressly provided herein and except that
payments pursuant to Sections 2.15, 2.16, 2.17 and 9.03 shall be made
directly to the Persons entitled thereto. 
The Applicable Agent shall distribute any such payments denominated in
the same currency received by it for the account of any other Person to the
appropriate recipient promptly following receipt thereof.  If any payment hereunder shall be due on a
day that is not a Business Day, the date for payment shall be extended to the
next succeeding Business Day, and, in the case of any payment accruing
interest, interest thereon shall be payable for the period of such
extension.  All payments hereunder shall
be made in U.S. Dollars, other than payments in respect of Canadian Tranche
Revolving Credit Exposure which shall be made in Canadian Dollars with respect
to Canadian Tranche Revolving Loans made in Canadian Dollars to the Canadian
Borrower, or shall be made in U.S. Dollars if advanced to either Borrower in
U.S. Dollars.


 


(b)           Any
proceeds of Collateral received by any Agent (i) not constituting either (A) a
specific payment of principal, interest, fees or other sum payable under the
Loan Documents (which shall be applied as specified by the applicable
Borrower), or (B) prior to the occurrence of an Event of Default, a
mandatory prepayment (which shall be applied in accordance with Section 2.11),
or (ii) after an Event of Default has occurred and is continuing and the 


 


73

















 


Administrative
Agent so elects or the Required Lenders so direct, such funds shall be applied
ratably first, to pay any fees, indemnities, or expense reimbursements
including amounts then due to the Agents and the Issuing Banks from the
Borrowers (other than in connection with Banking Services Obligations or Swap
Obligations), second, to pay any fees or expense reimbursements then due to the
Lenders from the Borrowers (other than in connection with Banking Services
Obligations or Swap Obligations), third, to pay interest then due and payable
on the Loans ratably, fourth, to prepay principal on the Loans and unreimbursed
LC Disbursements ratably (with amounts applied to the Term Loans in inverse
order of maturity), fifth, to pay an amount to the Agents equal to one hundred
five percent (105%) of the aggregate undrawn face amount of all outstanding
Letters of Credit and the aggregate amount of any unpaid LC Disbursements, to
be held as cash collateral for such Obligations, sixth, to payment of any
amounts owing with respect to Banking Services Obligations and Swap Obligations,
and seventh, to the payment of any other Secured Obligation due to any Agent or
any Lender by the Borrowers. 
Notwithstanding anything to the contrary contained in this Agreement,
unless so directed by a Borrower, or unless a Default is in existence, neither
any Agent nor any Lender shall apply any payment which it receives to any
Eurodollar Loan or BA Rate Loan of a Class, except (a) on the expiration
date of the Interest Period applicable to any such Eurodollar Loan or BA Rate
Loan or (b) in the event, and only to the extent, that there are no
outstanding ABR Loans or Canadian Prime Rate Loans of the same Class and,
in that event, the applicable Borrower shall pay the break funding payment
required in accordance with Section 2.16. 
The Agents and the Lenders shall have the continuing and exclusive right
to apply and reverse and reapply any and all such proceeds and payments to any
portion of the Secured Obligations.  If
proceeds of Collateral are applied pursuant to this Section 2.18(b), then (i) proceeds
of Collateral owned by U.S. Loan Parties shall first be applied to the Secured
Obligations of U.S. Loan Parties, and shall then be applied to the Secured
Obligations of Canadian Loan Parties, and (ii) proceeds of Collateral
owned by Canadian Loan Parties shall only be applied to the Secured Obligations
of the Canadian Loan Parties.


 


(c)           At
the election of the Applicable Agent, all payments of principal, interest, LC
Disbursements, fees, premiums, reimbursable expenses (including, without
limitation, all reimbursement for fees and expenses pursuant to Section 9.03),
and other sums payable under the Loan Documents by a Loan Party, may be paid
from the proceeds of Borrowings made hereunder whether made following a request
by a Borrower pursuant to Section 2.03 or a deemed request as provided in
this Section or may be deducted from any deposit account of such Borrower
maintained with the Applicable Agent. 
Each Borrower hereby irrevocably authorizes (i) the Applicable
Agent to make a Borrowing for the purpose of paying each payment of principal,
interest and fees as it becomes due hereunder or any other amount due under the
Loan Documents and agrees that all such amounts charged shall constitute Loans
(including Swingline Loans) and that all such Borrowings shall be deemed to
have been requested pursuant to Sections 2.03 or 2.05, as applicable and (ii) each
Agent, each Lender, and each Affiliate thereof to charge such account
maintained with JPMorgan Chase Bank, National Association as mutually agreed
upon between the U.S. Borrower and the Administrative Agent for each payment of
principal, interest and fees as it becomes due hereunder or any other amount
due under the Loan Documents; provided, however, that if amounts
on deposit in such account are insufficient to satisfy all amounts then due and
payable, each Agent, each Lender and each Affiliate thereof shall then be
entitled to charge any other deposit account of such Borrower maintained with
such Person for each such 


 


74

















 


payment of
principal, interest and fees as it becomes due hereunder or any other amount
due under the Loan Documents.


 


(d)           If
any Lender shall, by exercising any right of set-off or counterclaim or
otherwise, obtain payment in respect of any principal of or interest on any of
its Loans or participations in LC Disbursements or Swingline Loans resulting in
such Lender receiving payment of a greater proportion of the aggregate amount
of its Loans and participations in LC Disbursements and Swingline Loans and
accrued interest thereon than the proportion received by any other Lender, then
the Lender receiving such greater proportion shall purchase (for cash at face
value) participations in the Loans and participations in LC Disbursements and
Swingline Loans of other Lenders to the extent necessary so that the benefit of
all such payments shall be shared by the Lenders ratably in accordance with the
aggregate amount of principal of and accrued interest on their respective Loans
and participations in LC Disbursements and Swingline Loans; provided
that (i) if any such participations are purchased and all or any portion
of the payment giving rise thereto is recovered,  such participations shall be rescinded and
the purchase price restored to the extent of such recovery, without interest,
and (ii) the provisions of this paragraph shall not be construed to apply
to any payment made by a Borrower pursuant to and in accordance with the
express terms of this Agreement or any payment obtained by a Lender as consideration
for the assignment of or sale of a participation in any of its Loans or
participations in LC Disbursements and Swingline Loans to any assignee or
participant, other than to a Borrower or any Subsidiary or Affiliate thereof
(as to which the provisions of this paragraph shall apply).  Each Borrower consents to the foregoing and
agrees, to the extent it may effectively do so under applicable law, that,
subject to the terms of this Agreement, any Lender acquiring a participation
pursuant to the foregoing arrangements may exercise against such Borrower
rights of set-off and counterclaim with respect to such participation as fully
as if such Lender were a direct creditor of such Borrower in the amount of such
participation.


 


(e)           Unless
the Applicable Agent shall have received notice from a Borrower prior to the
date on which any payment is due to the Applicable Agent for the account of the
relevant Lenders or the relevant Issuing Banks hereunder that such Borrower
will not make such payment, the Applicable Agent may assume that such Borrower
has made such payment on such date in accordance herewith and may, in reliance
upon such assumption, distribute to the relevant Lenders or the relevant
Issuing Banks, as the case may be, the amount due.  In such event, if such Borrower has not in
fact made such payment, then each of the relevant Lenders or the relevant
Issuing Banks, as the case may be, severally agrees to repay to the Applicable
Agent forthwith on demand the amount so distributed to such Lender or such Issuing
Bank with interest thereon, for each day from and including the date such
amount is distributed to it to but excluding the date of payment to the
Applicable Agent, at the greater of the Federal Funds Effective Rate (or the
Canadian Prime Rate if related to Canadian Dollar Obligations) and a rate
determined by the Applicable Agent in accordance with banking industry rules on
interbank compensation.


 


(f)            If
any Lender shall fail to make any payment required to be made by it pursuant to
Section 2.05(c), 2.06(d) or (e), 2.07(b), 2.18(d) or 9.03(c),
then any Agent may, in its discretion (notwithstanding any contrary provision
hereof), (i) apply any amounts thereafter received by such Agent for the
account of such Lender and for the benefit of any Agent, the 


 


75

















 


applicable
Swingline Lender or the applicable Issuing Bank to satisfy such Lender’s
obligations under such Sections until all such unsatisfied obligations are
fully paid and/or (ii) hold any such amounts in a segregated account as
cash collateral for, and application to, any future funding obligations of such
Lender under such Sections; in the case of each of (i) and (ii) above,
in any order as determined by such Agent in its discretion.


 


SECTION 2.19     Mitigation Obligations; Replacement of Lenders.  (a) 
If (i) any Lender requests compensation under Section 2.15, or (ii) if
a Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.17,
(iii) any Lender becomes a Defaulting Lender or (iv) any Lender
becomes a Non-Investment Grade Lender, then such Lender shall use reasonable
efforts to designate a different lending office for funding or booking its
Loans hereunder or to assign its rights and obligations hereunder to another of
its offices, branches or affiliates, if, in the judgment of such Lender, such
designation or assignment (i) would eliminate or reduce amounts payable
pursuant to Section 2.15 or 2.17, as the case may be, in the future and (ii) would
not subject such Lender to any unreimbursed cost or expense and would not
otherwise be disadvantageous to such Lender. 
Each Borrower hereby agrees to pay all reasonable costs and expenses
incurred by any Lender in connection with any such designation or assignment; provided,
that neither Borrower shall be required to pay such costs or expenses if such
designation results in requests for compensation or additional amounts in
excess of those made prior to such designation, and neither Borrower shall be
required to pay such excess amount of compensation or excess additional amount.


 


(b)           If
any Lender requests compensation under Section 2.15, or if a Borrower is
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.17, or if
any Lender becomes a Defaulting Lender or a Non-Investment Grade Lender, then
such Borrower may, at its sole expense and effort, upon notice to such Lender
and the Administrative Agent, require such Lender to assign and delegate,
without recourse (in accordance with and subject to the restrictions contained
in Section 9.04), all its interests, rights and obligations under the Loan
Documents to an assignee that shall assume such obligations (which assignee may
be another Lender, if a Lender accepts such assignment); provided that (i) other
than with respect to assignments by Non-Investment Grade Lenders to Investment
Grade Lenders and Defaulting Lenders to non-Defaulting Lenders, such Borrower
shall have received the prior written consent of the Administrative Agent (and
if a Revolving Commitment is being assigned, each Issuing Bank), which consents
shall not unreasonably be withheld, (ii) such Lender shall have received
payment of an amount equal to the outstanding principal of its Loans and
participations in LC Disbursements and Swingline Loans, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder, from the
assignee (to the extent of such outstanding principal and accrued interest and
fees) or such Borrower (in the case of all other amounts) and (iii) in the
case of any such assignment resulting from a claim for compensation under Section 2.15
or payments required to be made pursuant to Section 2.17, such assignment
will result in a reduction in such compensation or payments.  A Lender shall not be required to make any
such assignment and delegation if, prior thereto, as a result of a waiver by
such Lender or otherwise, the circumstances entitling a Borrower to require
such assignment and delegation cease to apply.


 


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SECTION 2.20     Expansion Option.  The Borrowers
may from time to time elect to increase the Revolving Commitments, in each case
in minimum increments of U.S. $20,000,000, so long as, after giving effect
thereto, the aggregate amount of all such increases does not exceed U.S.
$70,000,000.  The Borrowers may arrange
for any such increase to be provided by one or more Lenders (each Lender so agreeing
to an increase in its Revolving Commitment, an “Increasing Lender”), or by one
or more new banks, financial institutions or other entities (each such new
bank, financial institution or other entity, an “Augmenting Lender”), to
increase their existing Revolving Commitments or extend Commitments, as the
case may be; provided that (i) each Augmenting Lender, shall be subject to
the approval of the Borrowers and the Administrative Agent, such consent not to
be unreasonably withheld, and (ii) (x) in the case of an Increasing
Lender, the Borrowers and such Increasing Lender execute an agreement
substantially in the form of Exhibit C hereto, and (y) in the case of
an Augmenting Lender, the Borrowers and such Augmenting Lender execute an
agreement substantially in the form of Exhibit D hereto.  No consent of any Lender (other than the
Lenders participating in the increase) shall be required for any increase in
Revolving Commitments pursuant to this Section 2.20.  Increases and new Revolving Commitments
created pursuant to this Section 2.20 shall become effective on the date
agreed by the Borrowers, the Administrative Agent and the relevant Increasing
Lenders or Augmenting Lenders and the Administrative Agent shall notify each
Lender thereof.  Notwithstanding the
foregoing, no increase in the Revolving Commitments (or in the Revolving
Commitment of any Lender) shall become effective under this paragraph unless, (i) on
the proposed date of the effectiveness of such increase, (A) the
conditions set forth in paragraphs (a) and (b) of Section 4.03
shall be satisfied or waived by the Required Lenders and the Administrative
Agent shall have received a certificate to that effect dated such date and
executed by a Financial Officer of each of the Borrowers and (B) the Borrowers
shall be in compliance (on a Pro Forma Basis) with the covenants contained in Section 6.11
and (ii) the Administrative Agent shall have received documents consistent
with those delivered on the Effective Date as to the corporate power and
authority of the applicable Borrower to borrow hereunder after giving effect to
such increase.  On the effective date of
any increase in the Revolving Commitments being made, (i) each relevant
Increasing Lender and Augmenting Lender shall make available to the Applicable
Agent such amounts in immediately available funds as the Applicable Agent shall
determine, for the benefit of the other Lenders, as being required in order to
cause, after giving effect to such increase and the use of such amounts to make
payments to such other Lenders, each Lender’s portion of the outstanding
Revolving Loans of all the Lenders to equal its Applicable Percentage of such
outstanding Revolving Loans, and (ii) the applicable Borrower shall be
deemed to have repaid and reborrowed all of its outstanding Revolving Loans as
of the date of any increase in the Revolving Commitments (with such reborrowing
to consist of the Types of Revolving Loans, with related Interest Periods if
applicable, specified in a notice delivered by the applicable Borrower, in
accordance with the requirements of Section 2.03).  The deemed payments made pursuant to clause (ii) of
the immediately preceding sentence shall be accompanied by payment of all
accrued interest on the amount prepaid and, in respect of each Eurodollar Loan
or BA Rate Loan, as applicable, shall be subject to indemnification by the
applicable Borrower pursuant to the provisions of Section 2.16 if the
deemed payment occurs other than on the last day of the related Interest
Periods.  The Revolving Commitments added
or increased hereby and Revolving Loans made in connection therewith shall be
subject to the same terms and conditions (including, without limitation,
payment terms, pricing, fees, maturity dates, and collateral requirements) as
all other Revolving Loans and Revolving Commitments 


 


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hereunder.  In no event shall the fees, interest rates
and other compensation offered or paid in respect of additional or increased
Revolving Commitments under this Section 2.20 have higher rates, fees or
compensation that amounts paid and payable to the then existing Revolving
Lenders in respect of their Revolving Commitments and Revolving Loans.  Any increase of addition under this Section 2.20
shall specify the Tranche under which Revolving Commitments shall be increased,
and the amount of such increase with respect to such Tranche.  The Revolving Commitment and Revolving Loans
of a Lender shall not be increased under this Section 2.20 without the
prior written consent of such Lender.


 


SECTION 2.21     Restricted Payments; Market Disruption. 
If after receipt of any payment which is applied to the payment of all
or any part of the Secured Obligations, any Agent or any Holder of Secured
Obligations is for any reason compelled to surrender such payment or proceeds
to any Person because such payment or application of proceeds is invalidated,
declared fraudulent, set aside, determined to be void or voidable as a
preference, impermissible setoff, or a diversion of trust funds, or for any
other reason, then the Secured Obligations or part thereof intended to be
satisfied shall be revived and continued and this Agreement shall continue in
full force as if such payment or proceeds had not been received by such Agent
or such Holder of Secured Obligations. 
The provisions of this Section 2.21 shall be and remain effective
notwithstanding any contrary action which may have been taken by any Agent or
any Holder of Secured Obligations in reliance upon such payment or application
of proceeds.  The provisions of this Section 2.21
shall survive the termination of this Agreement


 


SECTION 2.22     Judgment Currency.  If for the
purposes of obtaining judgment in any court it is necessary to convert a sum
due from a Borrower hereunder in the currency expressed to be payable herein
(the “specified currency”) into another currency, the parties hereto
agree, to the fullest extent that they may effectively do so, that the rate of
exchange used shall be that at which in accordance with normal banking procedures
the Applicable Agent could purchase the specified currency with such other
currency at the Applicable Agent’s main New York City office or Toronto,
Ontario office, as applicable, on the Business Day preceding that on which
final, non-appealable judgment is given. 
The obligations of each Borrower in respect of any sum due to any Lender
or any Agent hereunder shall, notwithstanding any judgment in a currency other
than the specified currency, be discharged only to the extent that on the
Business Day following receipt by such Lender or such Agent (as the case may
be) of any sum adjudged to be so due in such other currency such Lender or such
Agent (as the case may be) may in accordance with normal, reasonable banking
procedures purchase the specified currency with such other currency.  If the amount of the specified currency so
purchased is less than the sum originally due to such Lender or such Agent, as
the case may be, in the specified currency, each Borrower agrees, to the
fullest extent that it may effectively do so, as a separate obligation and
notwithstanding any such judgment, to indemnify such Lender or such Agent, as
the case may be, against such loss, and if the amount of the specified currency
so purchased exceeds (a) the sum originally due to any Lender or any
Agent, as the case may be, in the specified currency and (b) any amounts
shared with other Lenders as a result of allocations of such excess as a
disproportionate payment to such Lender under Section 2.18, such Lender or
such Agent, as the case may be, agrees to remit such excess to such Borrower.


 


SECTION 2.23     Senior Debt.  Each Borrower
hereby designates all Secured Obligations now or hereinafter incurred or
otherwise outstanding, and agrees that the Secured 


 


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Obligations shall at all
times constitute, senior indebtedness and designated senior indebtedness, or
terms of similar import, which are entitled to the benefits of the
subordination provisions of all Subordinated Indebtedness.


 


SECTION 2.24     Loan Repurchases.  (a) Subject
to the terms and conditions set forth or referred to below, either Borrower may
from time to time, at its discretion, conduct modified Dutch auctions in order
to purchase its Term Loans of one or more Classes (as determined by such
Borrower)  (each, a “Purchase Offer”),
each such Purchase Offer to be managed exclusively by JPMorgan Securities Inc.
(in such capacity, the “Auction Manager”), so long as the following
conditions are satisfied:


 


(i)            the Required Lenders shall have
consented in writing to the applicable Borrower’s delivery of such Purchase
Offer and the proposed repurchase of Term Loans, and each Purchase Offer shall
be conducted in accordance with the procedures, terms and conditions set forth
in this Section 2.24 and the Auction Procedures;


 


(ii)           no Default or Event of Default shall
have occurred and be continuing on the date of the delivery of each Auction
Notice and at the time of purchase of any Term Loans in connection with any
Purchase Offer;


 


(iii)          the principal amount (calculated on
the face amount thereof) of each and all Classes of Term Loans that a Borrower
offers to purchase in any such Purchase Offer shall be no less than U.S.
$25,000,000 (unless another amount is agreed to by the Administrative Agent)
(across all such Classes);


 


(iv)          after giving effect to any purchase of
Term Loans of the applicable Class or Classes pursuant to this Section 2.24,
there shall be no Revolving Credit Exposure other than undrawn amounts of
Letters of Credit;


 


(v)           the aggregate principal amount
(calculated on the face amount thereof) of all Term Loans of the applicable Class or
Classes so purchased by the applicable Borrower shall automatically be
cancelled and retired by such Borrower on the settlement date of the relevant
purchase (and may not be resold), and in no event shall such Borrower be
entitled to any vote hereunder in connection with such Term Loans;


 


(vi)          no more than one Purchase Offer with
respect to any Class may be ongoing at any one time;


 


(vii)         the applicable Borrower represents and
warrants that no Loan Party shall have any material non-public information with
respect to the Loan Parties or their Subsidiaries, or with respect to the
securities of any such Person, that (A) has not been previously disclosed
in writing to the Administrative Agent and the Lenders (other than because such
Lender does not wish to receive such material non-public information) prior to
such time and (B) could reasonably be expected to have a material effect
upon, or otherwise be material to, a Lender’s decision to participate in the
Purchase Offer; and


 


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(viii)        at the time of each purchase of Term
Loans through a Purchase Offer, the applicable Borrower shall have delivered to
the Auction Manager an officer’s certificate of a Responsible Officer
certifying as to compliance with preceding clauses (vii).


 


(b)       A
Borrower must terminate any Purchase Offer if it fails to satisfy one or more
of the conditions set forth above which are required to be met at the time
which otherwise would have been the time of purchase of Term Loans pursuant to
such Purchase Offer.  If a Borrower
commences any Purchase Offer (and all relevant requirements set forth above
which are required to be satisfied at the time of the commencement of such
Purchase Offer have in fact been satisfied), and if at such time of
commencement such Borrower reasonably believes that all required conditions set
forth above which are required to be satisfied at the time of the consummation
of such Purchase Offer shall be satisfied, then such Borrower shall have no
liability to any Term Loan Lender for any termination of such Purchase Offer as
a result of its failure to satisfy one or more of the conditions set forth above
which are required to be met at the time which otherwise would have been the
time of consummation of such Purchase Offer, and any such failure shall not
result in any Default or Event of Default hereunder. With respect to all
purchases of Term Loans of any Class or Classes made by a Borrower
pursuant to this Section 2.24, (x) the applicable Borrower shall pay
on the settlement date of each such purchase all accrued and unpaid interest
(except to the extent otherwise set forth in the relevant offering documents),
if any, on the purchased Term Loans of the applicable Class or Classes up
to the settlement date of such purchase and (y) such purchases (and the
payments made by such Borrower and the cancellation of the purchased Loans, in
each case in connection therewith) shall not constitute voluntary or mandatory
payments or prepayments for purposes of Section 2.11 hereof.


 


(c)       The
Administrative Agent and the Lenders hereby consent to the Purchase Offers and
the other transactions effected pursuant to and in accordance with the terms of
this Section 2.24 (provided that no Lender shall have an obligation
to participate in any such Purchase Offer). 
For the avoidance of doubt, it is understood and agreed that the
provisions of Section 2.16, Section 2.17 and Section 9.04 will
not apply to the purchases of Term Loans or Other Term Loans pursuant to
Purchase Offers made pursuant to and in accordance with the provisions of this Section 2.24.  The Auction Manager acting in its capacity as
such hereunder shall be entitled to the benefits of the provisions of Article VIII
and Section 9.03 to the same extent as if each reference therein to the “Administrative
Agent” were a reference to the Auction Manager, and the Administrative Agent
shall cooperate with the Auction Manager as reasonably requested by the Auction
Manager in order to enable it to perform its responsibilities and duties in
connection with each Purchase Offer.


 


SECTION 2.25     Defaulting Lenders. 
Notwithstanding any provision of this Agreement to the contrary, if any
Lender becomes a Defaulting Lender, then the following provisions shall apply
for so long as such Lender is a Defaulting Lender:


 


(a)           fees
shall cease to accrue on the unfunded portion of the Revolving Commitment of
such Defaulting Lender pursuant to Section 2.12;


 


(b)           the
Commitment and Credit Exposure of such Defaulting Lender shall not be included
in determining whether all Lenders or the Required Lenders have taken or may
take 


 


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any action hereunder
(including any consent to any amendment or waiver pursuant to Section 9.02);
provided that any waiver, amendment or modification requiring the
consent of all Lenders or each affected Lender which affects such Defaulting
Lender differently than other affected Lenders shall require the consent of
such Defaulting Lender;


 


(c)           if
any Swingline Exposure or LC Exposure exists at the time a Lender becomes a
Defaulting Lender then:


 


(i)            all or any part of such Swingline
Exposure and LC Exposure shall be reallocated among the non-Defaulting Lenders
under the applicable Tranche in accordance with their respective Applicable
Percentages  but only to the extent (x) the
sum of all non-Defaulting Lenders’ Revolving Credit Exposures under such
Tranche plus such Defaulting Lender’s Swingline Exposure and LC Exposure under
such Tranche does not exceed the total of all non-Defaulting Lenders’
Commitments under such Tranche and (y) the conditions set forth in Section 4.03
are satisfied at such time;


 


(ii)           if the reallocation described in
clause (i) above cannot, or can only partially, be effected, the Borrower(s) shall
within one (1) Business Day following notice by the Applicable Agent (x) first,
prepay such Swingline Exposure under the applicable Tranche and (y) second,
cash collateralize such Defaulting Lender’s LC Exposure (in each case after
giving effect to any partial reallocation pursuant to clause (i) above)
under the applicable Tranche in accordance with the procedures set forth in Section 2.06(j) for
so long as such LC Exposure is outstanding;


 


(iii)          if the Borrower(s) cash
collateralizes any portion of such Defaulting Lender’s LC Exposure under the
applicable Tranche pursuant to Section 2.25(c), neither Borrower shall be
required to pay any fees to such Defaulting Lender pursuant to Section 2.12(b) with
respect to such Defaulting Lender’s LC Exposure under such Tranche during the
period such Defaulting Lender’s LC Exposure is cash collateralized;


 


(iv)          if the LC Exposure of the
non-Defaulting Lenders under a Tranche is reallocated pursuant to Section 2.25(c),
then the fees payable to the Lenders pursuant to Sections 2.12(a) and
2.12(b) shall be adjusted in accordance with such non-Defaulting Lenders’
Applicable Percentages; or


 


(v)           if any Defaulting Lender’s LC Exposure
under a Tranche is neither cash collateralized nor reallocated pursuant to Section 2.25(c),
then, without prejudice to any rights or remedies of any Issuing Bank or any
Lender hereunder, all letter of credit fees payable under Section 2.12(b) with
respect to such Defaulting Lender’s LC Exposure under such Tranche shall be
payable to the applicable Issuing Bank until such LC Exposure is cash
collateralized and/or reallocated;


 


(d)           so
long as any Lender is a Defaulting Lender, no Swingline Lender shall be required
to fund any Swingline Loan under its Tranche and no Issuing Bank shall be
required to issue, amend or increase any Letter of Credit under the affected
Tranche, unless the related exposure will be 100% covered by the Revolving
Commitments of the non-Defaulting Lenders under such Tranche and/or cash
collateral will be provided by the Borrowers in accordance 


 


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with Section 2.25(c),
and participating interests in any such newly issued or increased Letter of
Credit or newly made Swingline Loan shall be allocated among non-Defaulting
Lenders under such Tranche in a manner consistent with Section 2.25(c)(i) (and
Defaulting Lenders shall not participate therein); and


 


(e)           any
amount payable to such Defaulting Lender hereunder (whether on account of
principal, interest, fees or otherwise and including any amount that would
otherwise be payable to such Defaulting Lender pursuant to Section 2.18
but excluding Section 2.19) shall, in lieu of being distributed to such
Defaulting Lender, be retained by the Administrative Agent in a segregated
account and, subject to any applicable requirements of law, be applied at such
time or times as may be determined by the Administrative Agent (i) first,
to the payment of any amounts owing by such Defaulting Lender to the
Administrative Agent hereunder, (ii) second, pro rata, to the
payment of any amounts owing by such Defaulting Lender to the applicable
Issuing Bank or Swingline Lender under the applicable Tranche hereunder, (iii) third,
to the funding of any Loan or the funding or cash collateralization of any
participating interest in any Swingline Loan or Letter of Credit under the
applicable Tranche in respect of which such Defaulting Lender has failed to
fund its portion thereof as required by this Agreement, as determined by the
Administrative Agent, (iv) fourth, if so determined by the
Administrative Agent and the U.S. Borrower, held in such account as cash
collateral for future funding obligations of the Defaulting Lender under this
Agreement, (v) fifth, pro rata, to the payment of any amounts owing
to the Borrowers or the Lenders as a result of any judgment of a court of
competent jurisdiction obtained by a Borrower or any Lender against such
Defaulting Lender as a result of such Defaulting Lender’s breach of its
obligations under this Agreement and (vi) sixth, to such Defaulting
Lender or as otherwise directed by a court of competent jurisdiction; provided
that if such payment is (x) a prepayment of the principal amount of any
Loans or reimbursement obligations in respect of LC Disbursements which a
Defaulting Lender has funded its participation obligations and (y) made at
a time when the conditions set forth in Section 4.03 are satisfied, such
payment shall be applied solely to prepay the Loans of, and reimbursement
obligations owed to, all non-Defaulting Lenders pro rata prior to being applied
to the prepayment of any Loans, or reimbursement obligations owed to, any
Defaulting Lender.


 


In the event that the
Administrative Agent, the Borrowers, the Issuing Banks and the Swingline
Lenders each agrees that a Defaulting Lender has adequately remedied all
matters that caused such Lender to be a Defaulting Lender, then the applicable
Swingline Exposure and LC Exposure of the Lenders shall be readjusted to
reflect the inclusion of such Lender’s applicable Revolving Commitment and on
such date such Lender shall purchase at par such of the Loans of the other
Lenders (other than Swingline Loans) under the applicable Tranche as the Administrative
Agent shall determine may be necessary in order for such Lender to hold such
Loans in accordance with its Applicable Percentage.


 


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ARTICLE III


 


Representations and Warranties


 


Each Borrower represents
and warrants to the Lenders that:


 


SECTION 3.01     Organization; Powers; Subsidiaries. 
Each Loan Party, each Material Canadian Subsidiary and each Material
Domestic Subsidiary is duly organized, validly existing and in good standing or
equivalent status under the laws of the jurisdiction of its organization, has
all requisite power and authority to carry on its business as now conducted
and, except where the failure to do so, individually or in the aggregate, could
not reasonably be expected to result in a Material Adverse Effect, is qualified
to do business in, and is in good standing or equivalent status in, every
jurisdiction where such qualification is required. Except as could not reasonably
be expected to result in a Material Adverse Effect or as otherwise permitted
pursuant to Section 6.03, each Subsidiary of the Borrowers that is not a
Material Canadian Subsidiary or a Material Domestic Subsidiary is duly
organized, validly existing and in good standing or equivalent status under the
laws of the jurisdiction of its organization, has all requisite power and
authority to carry on its business as now conducted and is qualified to do
business in, and is in good standing or equivalent status in, every
jurisdiction where such qualification is required. No Loan Party or Subsidiary
thereof organized under the laws of the State of Wisconsin is the subject of a
proceeding under Wisconsin Statutes section 180.1421 to cause its dissolution
except, with respect to all Loan Parties and other Subsidiaries other than the
U.S. Borrower, to the extent that such dissolution could not reasonably be
expected to have a Material Adverse Effect. 
Each applicable Loan Party and Subsidiary thereof has filed with the
Wisconsin Department of Financial Institutions any required annual report for
its most recently completed report year, except, with respect to all Loan
Parties and other Subsidiaries other than the U.S. Borrower, to the extent that
failure to file could not reasonably be expected to have a Material Adverse
Effect .  No filing has been made by any
Loan Party or any Subsidiary thereof with the Wisconsin Department of Financial
Institutions of a decree of dissolution except as otherwise permitted pursuant
to Section 6.03.  Schedule 3.01
hereto (as supplemented from time to time) identifies each Subsidiary, noting
whether such Subsidiary is a Material Domestic Subsidiary or a Material
Canadian Subsidiary, as applicable, the jurisdiction of its incorporation or
organization, as the case may be, the percentage of issued and outstanding
shares of each class of its capital stock or other equity interests owned by
the applicable Loan Party and the other Subsidiaries and, if such percentage is
not 100% (excluding directors’ qualifying shares as required by law), a
description of each class issued and outstanding.  All of the outstanding shares of capital
stock and other equity interests of each Subsidiary are validly issued and
outstanding and fully paid and nonassessable except as required by Wisconsin
Statutes section 180.0622 and all such shares and other equity interests
indicated on Schedule 3.01 as owned by the Loan Parties or other Subsidiaries
are owned, beneficially and of record, by such Loan Parties or Subsidiaries
free and clear of all Liens other than those created under the Loan
Documents.  Except as disclosed on
Schedule 3.01, there are no outstanding commitments or other obligations of any
Loan Party or any Subsidiary to issue, and no options, warrants or other rights
of any Person to acquire, any shares of any class of capital stock or other
equity interests of any Loan Party or any Subsidiary.


 


SECTION 3.02     Authorization; Enforceability. 
The Transactions are within each Loan Party’s corporate powers and have
been duly authorized by all necessary corporate and, if required, shareholder
action.  The Loan Documents to which each
Loan Party is a party have been duly executed and delivered by such Loan Party
and constitute a legal, valid and binding obligation of such Loan Party,
enforceable in accordance with its terms, subject to applicable 


 


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bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors’ rights generally
and subject to general principles of equity, regardless of whether considered
in a proceeding in equity or at law.


 


SECTION 3.03     Governmental Approvals; No Conflicts. 
The Transactions (a) do not require any material consent or
approval of, registration or filing with, or any other action by, any
Governmental Authority, (i) except such as have been obtained or made and
are in full force and effect, (ii) except for those, such as
Hart-Scott-Rodino approval and other similar approvals required in connection
with the World Color Press Acquisition, which will be obtained and will be in
full force and effect as of the Funding Date, and (iii) except for filings
necessary to perfect Liens created pursuant to the Loan Documents, (b) except
for those set forth in Schedule 3.03, will not violate any applicable law or
regulation or the charter, by-laws or other organizational documents of any
Loan Party or any Subsidiary thereof or any order of any Governmental
Authority, (c) after repayment or satisfaction of the Specified Existing
Indebtedness, will not violate or result in a default under any indenture,
agreement or other instrument in an aggregate principal amount of at least the
U.S. Dollar Amount of U.S. $25,000,000, or where payments due thereunder or
amounts received thereunder equal at least the U.S. Dollar Amount of U.S.
$25,000,000, that is binding upon any Loan Party or any Subsidiary thereof or
its assets, or give rise to a right thereunder to require any payment to be
made by any Loan Party or any Subsidiary thereof, and (d) will not result
in the creation or imposition of any Lien on any asset of any Loan Party or any
Subsidiary thereof, except Liens created pursuant to the Loan Documents.


 


SECTION 3.04     Financial Condition; No Material Adverse Change.  (a) The
U.S. Borrower has heretofore furnished to the Lenders its consolidated balance
sheet and statements of income, shareholders’ equity and cash flows as of and
for the Fiscal Year ended December 31, 2009 reported on by Deloitte &
Touche LLP, independent public accountants. 
The U.S. Borrower has also heretofore furnished to the Lenders World
Color Press’s consolidated balance sheet and statements of income, shareolders’
equity and cash flows as of and for the Fiscal Year ended December 31,
2009 reported on by KPMG LLP, independent public chartered accountants.  All such financial statements present fairly,
in all material respects, the financial position and results of operations and
cash flows of the U.S. Borrower and its consolidated Subsidiaries, and World
Color Press and its consolidated Subsidiaries, each as of such dates and for
such periods in accordance with (i) GAAP for the U.S. Borrower and its
Subsidiaries and (ii) generally accepted accounting principles in Canada
for World Color Press and its Subsidiaries. 
References to shareholders’ equity, for purposes of this Section 3.04,
shall include redeemable equity as referenced in note 19 to the financial
statements of the U.S. Borrower included in the U.S. Borrower’s Form S-4
Registration Statement filed with the U.S. Securities Exchange Commission on March 5,
2010.


 


(b)           Since December 31, 2009, there has
been no event, development or circumstance that has had or could reasonably be
expected to have a Material Adverse Effect.


 


SECTION 3.05     Properties.  (a)  As
of the date of this Agreement, Schedule 3.05 sets forth the address of each
parcel of real property that is owned by each Loan Party and has a net book
value in excess of the U.S. Dollar Amount of U.S. $1,000,000 or leased or
subleased by each Loan Party pursuant to a lease or sublease with annual net
rent in excess of the U.S. Dollar Amount of U.S. $1,000,000.  Except as set forth in Schedule 3.05, each of
such leases and 


 


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subleases with annual
rents and other payments equal to or in excess of the U.S. Dollar Amount of
U.S. $10,000,000 is valid and enforceable in accordance with its terms and is
in full force and effect, and no default by any Loan Party, and to the
knowledge of any Responsible Officer of either Loan Party, by any other party,
to any such lease or sublease exists. 
Each of the Loan Parties and its Subsidiaries has good and indefeasible
title to, or valid leasehold interests (except for any subleases or sublicenses
of such property which have been disclosed in writing to the Administrative
Agent and where the book value thereof or annual rents and other payments in
respect thereof are less than the U.S. Dollar Amount of U.S. $10,000,000) in,
all its real and personal property material to its business, except for minor
defects in title that do not interfere with its ability to conduct its business
as currently conducted or to utilize such properties for their intended
purposes, in each case, free of all Liens other than those permitted by Section 6.02.  With respect to owned, leased or subleased
properties where the book value, annual rents or other payments are less than
the U.S. Dollar Amount of U.S. $10,000,000, no more than the U.S. Dollar Amount
of U.S. $25,000,000 in the aggregate of such properties fail to comply with
this Section 3.05.


 


(b)           Each Loan Party and each Subsidiary
thereof owns, or is licensed to use, all trademarks, tradenames, copyrights,
patents and other intellectual property material to its business, and the use
thereof by such Loan Party and the Subsidiaries thereof does not infringe upon
the rights of any other Person, except for any such infringements that,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.


 


SECTION 3.06     Litigation, Environmental and Labor Matters.  (a) 
Other than those items identified in Schedule 3.06(a) hereto, there are no
actions, suits, proceedings or investigations by or before any arbitrator or
Governmental Authority pending against or, to the knowledge of a Responsible
Officer, threatened in writing against or affecting any Loan Party or any
Subsidiary thereof (i) as to which there is a reasonable possibility of an
adverse determination and that, if adversely determined, could reasonably be
expected, individually or in the aggregate, to result in a Material Adverse
Effect or (ii) that involve this Agreement or the Transactions.  There are no strikes, lockouts, slowdowns, or
other labor controversies pending against or, to the knowledge of any
Responsible Officer, threatened in writing against or affecting any Loan Party
or any Subsidiary thereof which has or threatens to have a material impact on
the Lenders.


 


(b)           Other than those items identified in
Schedule 3.06(b) hereto and any other matters that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect, none of the Loan Parties or any of their Subsidiaries (i) has
failed to comply with any Environmental Law or to obtain, maintain or comply
with any permit, license, certificate of approval or other approval required
under any Environmental Law, (ii) has become subject to any Environmental
Liability, (iii) has received, through a Responsible Officer thereof,
written notice of any claim with respect to any Environmental Liability or (iv) knows,
through a Responsible Officer thereof, of any basis for any Environmental
Liability.


 


(c)           None of the Loan Parties or their
Subsidiaries is in default under or not in compliance with any law, regulation,
rule or order, or any obligation under any agreement or instrument, where
the failure to comply therewith has a Material Adverse Effect.


 


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SECTION 3.07     Compliance with Laws and Agreements. 
Each of the Loan Parties and its Subsidiaries is in compliance with all
laws, regulations and orders of any Governmental Authority applicable to it or
its property and all indentures, agreements and other instruments binding upon
it or its property, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.


 


SECTION 3.08     Investment Company Status. 
None of the Loan Parties or their Subsidiaries is an “investment company”
as defined in, or subject to regulation under, the Investment Company Act of
1940.


 


SECTION 3.09     Taxes.  Each Loan
Party and its Subsidiaries has timely filed or caused to be filed all material
Tax returns and reports required to have been filed (including, without limitation,
all U.S. Federal and Canadian Federal tax returns), and has paid or caused to
be paid all Taxes required to have been paid by it, except (a) Taxes that
are being contested in good faith by appropriate proceedings and for which the
applicable Loan Party or Subsidiary, as applicable, has set aside on its books
adequate reserves or (b) to the extent that the failure to do so could not
reasonably be expected to result in a Material Adverse Effect.


 


SECTION 3.10     ERISA; Canadian Benefit and Pension Plans.


 


(a)           Schedule 3.10(a) is a complete and
correct list of, and separately identifies, all (a) Pension Plans, (b) Multiemployer
Plans and (c) Retiree Welfare Plans in effect on the Effective Date.  Except as described in Schedule 3.10(a), each
Benefit Plan which is intended to be qualified under Section 401(a) of
the Code as currently in effect has been determined to be so qualified, and
each trust related to such Benefit Plan has been determined to be exempt from
federal income tax under Section 501(a) of the Code as currently in
effect, and no event has taken place which could reasonably be expected to
cause the loss of such qualified and exempt status.  With respect to each Pension Plan, the Loan
Parties and all ERISA Affiliates have satisfied the minimum funding standard
under Section 412(a) of the Code and paid all minimum required
contributions and all required installments on or before the due dates provided
under Section 430(j) of the Code except to the extent that failure to
do so could not reasonably be expected to result in the imposition of a lien
corresponding with an obligation in excess of the U.S. Dollar Amount of U.S.
$10,000,000 or the institution of termination proceedings by the PBGC.  With respect to each Multiemployer Plan, the
Loan Parties and all ERISA Affiliates have satisfied all required contributions
and installments on or before the applicable due dates except to the extent
that failure to do so could not reasonably be expected to result in the
imposition of any withdrawal liability in excess of the U.S. Dollar Amount of
U.S. $25,000,000.  Except for events,
acts and failures to act that would not reasonably be expected to result in
liabilities in excess of the U.S. Dollar Amount of U.S. $25,000,000 in the
aggregate, (x) each Benefit Plan is in compliance with applicable
provisions of ERISA, the Code and other Requirements of Law, (y) there are
no existing, pending or threatened claims (other than routine claims for
benefits in the normal course), sanctions, actions, lawsuits or other proceedings
or investigation involving any Benefit Plan to which any Loan Party or ERISA
Affiliate incurs or otherwise has or could have an obligation or any liability
and (z) no ERISA Event is reasonably expected to occur.  Except as disclosed in the financial
statements delivered to the Lenders prior to the Effective Date, the aggregate
costs of benefits to be provided under all Retiree Welfare Plans and all
Nonqualified Deferred Compensation Plans 


 


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could not
reasonably be expected to result in a material liability to the Loan Parties
during the term of this Agreement.  As of
the Effective Date, the Loan Parties have provided the Lenders with copies of
the most recent Form 5500 and actuarial report for each Pension Plan, the
most recent actuarial report for each Retiree Welfare Plan and an estimate of
the December 31, 2009 aggregate liability of all Nonqualified Deferred
Compensation Plans.


 


(b)           Canadian Benefit and Pension Plans. 
Schedule 3.10(b) is a complete and correct list of, and separately
identifies all (a) Canadian Pension Plans, (b) Canadian Multiemployer
Pension Plans, and (c) Canadian Retiree Benefit Plans in which the
Canadian Borrower, the other Canadian Loan Parties or any Subsidiary thereof participate,
sponsor, or maintain as of the Effective Date. 
The Canadian Pension Plans are duly registered under the ITA and any
other applicable laws which require registration, have been administered in
accordance with the ITA and such other applicable laws and administrative
guidelines, and, all reports, returns and filings required to be made
thereunder have been made, and no event has occurred which could be expected to
cause the loss of such registered status, except to the extent that failure to
comply could not reasonably be expected to result in liabilities in excess of
U.S. $25,000,000 in the aggregate.  The
Canadian Benefit Plans and Canadian Pension Plans have been administered in
accordance with their terms, applicable collective bargaining agreements, and
administrative guidelines except to the extent that failure to comply could not
reasonably be expected to result in liabilities in excess of U.S. $25,000,000
in the aggregate.  All obligations of the
Canadian Borrower, the Canadian Loan Parties, or any Subsidiary thereof
required in connection with the Canadian Benefit Plans and the Canadian Pension
Plans have been performed on a timely basis except to the extent that failure
to comply could not reasonably be expected to result in liabilities in excess
of U.S. $25,000,000 in the aggregate.  As
of the Closing Date, there are no outstanding disputes, investigations,
examinations or other legal proceedings concerning the assets of the Canadian
Benefit Plans or the Canadian Pension Plans that could reasonably be expected
to result in liabilities in excess of U.S. $25,000,000 in the aggregate.  No promises of benefit improvements under the
Canadian Pension Plans have been made since the date of the most recent actuarial
report provided to the Lenders in respect of such Canadian Pension Plan which
makes such report misleading in any material respect and, since the date of
such report, there have been no benefit improvements to which members of the
Canadian Pension Plans are or may become entitled which are not reflected in
such actuarial report.  All contributions
or premiums required to be made or paid by the Canadian Borrower, the other
Canadian Loan Parties or any Subsidiary thereof to the Canadian Benefit Plans, the
Canadian Pensions, or the Canadian Multiemployer Pension Plans have been made
on a timely basis in accordance with the terms of such plans, collective
bargaining agreements and all applicable laws except to the extent that failure
to comply could not reasonably be expected to result in liabilities in excess
of U.S. $10,000,000 in the aggregate. 
There have been no improper withdrawals or applications of the assets of
the Canadian Benefit Plans or the Canadian Pension Plans.  Except for liabilities which cannot be
expected to exceed U.S. $10,000,000 in the aggregate, there are no liabilities
in connection with any former Canadian Pension Plan, Canadian Multiemployer
Pension Plan, or Canadian Benefit Plans relating to the employees, former
employees or their beneficiaries of the Canadian Borrower, the Canadian Loan
Parties, or any Subsidiary thereof that has terminated, and any such Canadian
Pension Plans, Canadian Multiemployer Pension Plans, or Canadian Benefit Plans
have been terminated in accordance with their terms and applicable law.


 


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SECTION 3.11     Disclosure.  The U.S.
Borrower has disclosed to the Lenders all agreements, instruments and corporate
or other restrictions to which it or any of its Subsidiaries is subject, and
all other matters known to it, that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect.  Neither the Information Memorandum nor any of
the other reports, financial statements, certificates or other information
furnished by or on behalf of the Loan Parties and their Subsidiaries to any
Agent or any Lender in connection with the negotiation of this Agreement or
delivered hereunder (as modified or supplemented by other information so
furnished) contains any material misstatement of fact or omits to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, when taken as a
whole; provided that, with respect to projected financial information, the
U.S. Borrower represents only that such information was prepared by Responsible
Officers thereof in good faith based upon assumptions believed by such
Responsible Officer to be reasonable at the time.


 


SECTION 3.12     Federal Reserve Regulations. 
No part of the proceeds of any Loan have been used or will be used,
whether directly or indirectly, for any purpose that entails a violation of any
of the Regulations of the Board, including Regulations T, U and X.


 


SECTION 3.13     Solvency.  (a) 
Immediately after the consummation of the Transactions to occur on the Funding
Date and on each date on which the Borrowers remake their representations and
warranties under Section 4.03, (i) the fair value of the assets of
the Loan Parties and their Subsidiaries, at a fair valuation, when taken as a
whole, will exceed their debts and liabilities (including without limitation
the Obligations), subordinated, contingent or otherwise; (ii) the present
fair saleable value of the property of the Loan Parties and their Subsidiaries,
when taken as a whole, will be greater than the amount that will be required to
pay the probable liability of their debts and other liabilities, subordinated,
contingent or otherwise, as such debts and other liabilities become absolute
and matured; (iii) the Loan Parties and their Subsidiaries, taken as a
whole, will be able to pay their debts and liabilities, subordinated,
contingent or otherwise, as such debts become due and liabilities become
absolute and matured; and (iv) the Loan Parties and their Subsidiaries,
taken as a whole, will not have unreasonably small capital with which to
conduct the business in which they are engaged as such business is now
conducted and is proposed to be conducted after the Funding Date.


 


(b)           No Loan Party intends to, or will permit
any of its Subsidiaries to, and no Loan Party believes that it or any of its
Subsidiaries will, incur debts beyond the ability of the Loan parties and their
Subsidiaries, taken as a whole, to pay such debts as they mature, taking into
account the timing of and amounts of cash to be received by the Loan Parties
and their Subsidiaries, taken as a whole, and the timing of the amounts of cash
to be payable on or in respect of its Indebtedness or the Indebtedness of the
Loan Parties and their Subsidiaries, taken as a whole.


 


SECTION 3.14     No Default.  Each Borrower
is in full compliance with this Agreement and no Default or Event of Default
has occurred and is continuing.


 


SECTION 3.15     Insurance. 
Schedule 3.15 sets forth a description of all insurance maintained
by or on behalf of the Loan Parties and the Subsidiaries as of the Effective
Date.  As of the Funding Date, no Loan
Party has received notice of nonpayment of any premiums due 


 


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with respect to, or
cancellation of, any insurance policies described on Schedule 3.15.  All such insurance is offered by financially
sound and reputable insurance companies and is in such amounts and covering
such properties and risks as are adequate and customary for companies of the
same or similar size engaged in the same or similar business and in the same or
similar location as the Loan Parties and their Subsidiaries.


 


SECTION 3.16     No Burdensome Restrictions. 
No Loan Party or Subsidiary thereof is subject to any Burdensome
Restrictions except Burdensome Restrictions permitted under Section 6.08.


 


SECTION 3.17     Liens; Security Interest in Collateral. 
There are no Liens on any of the real or personal properties of any Loan
Party or Subsidiary thereof other than those Liens permitted under Section 6.02.  Subject to the Security Agreement, the
Canadian Security Agreement, and the U.S. $50,000,000 allowance described in
clause (q) of Article VII, the provisions of this Agreement and the
other Loan Documents create legal, valid and perfected Liens on all the
Collateral in favor of the Applicable Agent, for the benefit of such Agent and
the Holders of Secured Obligations, and such Liens constitute perfected and
continuing Liens on the Collateral, securing the Secured Obligations,
enforceable against the applicable Loan Party and all third parties, and having
priority over all other Liens on the Collateral except (a) to the extent
permitted under Section 6.02 and (b) in the case of (a) Permitted
Encumbrances, to the extent any such Permitted Encumbrances would have priority
over the Liens in favor of the Applicable Agent pursuant to any applicable law
and (b) Liens perfected only by possession (including possession of any
certificate of title) to the extent the Applicable Agent has not obtained or
does not maintain possession of such Collateral.


 


SECTION 3.18     Patriot Act, etc.  The Loan
Parties and their Subsidiaries are in compliance with (a) the Trading with
the Enemy Act, and each of the foreign assets control regulations of the United
States Treasury Department (31 CFR, Subtitle B Chapter V, as amended) and any
other enabling legislation or executive order relating thereto, (b) the
Patriot Act, and (c) other federal or state laws relating to “know your customer” and anti-money laundering rules and
regulations.  No part of the proceeds of
any Loan or Letter of Credit will be used directly or indirectly for any
payments to any government official or employee, political party, official of a
political party, candidate for political office, or anyone else acting in an
official capacity, in order to obtain, retain or direct business or obtain any
improper advantage, in violation of the United States Foreign Corrupt Practices
Act of 1977 or the Corruption of Foreign Public Officials Act (Canada).


 


SECTION 3.19     Employment Matters.  The hours
worked by and any payments made to employees of the Loan Parties and the
Subsidiaries have not been in material violation of the Fair Labor Standards
Act, the Employee Standards Act (Ontario) or any other applicable Federal,
state, provincial, local or foreign law dealing with such matters, other than
such violations where the sole remedy thereof is the payment of damages which,
in the aggregate, do not exceed the U.S. Dollar Amount of U.S. $25,000,000.  All material payments due from any Loan Party
or any Subsidiary, or for which any claim may be made against any Loan Party or
any Subsidiary, on account of wages and employee health and welfare insurance
and other benefits have been paid or accrued as a liability on the books of the
Loan Party or such Subsidiary.


 


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SECTION 3.20     Canadian Anti Money Laundering Legislation. 
The Canadian Borrower is not a charity registered with the Canada
Revenue Agency and it does not solicit charitable financial donations from the
public and none of the Borrowings under this Agreement and none of the other
services and products, if any, to be provided by any of the Lenders or the
Applicable Agent under or in connection with this Agreement will be used by, on
behalf of or for the benefit, of any Person other than the Borrowers or any
other Loan Party.


 


ARTICLE IV


 


Conditions


 


SECTION 4.01     Effective Date.  This
Agreement and the rights and obligations of the parties hereunder will become
effective on the date on which each of the following conditions has been
satisfied (or waived in accordance with Section 9.02):


 


(a)           The Administrative Agent (or its counsel)
shall have received from each party hereto either (A) a counterpart of
this Agreement signed on behalf of such party or (B) written evidence
satisfactory to the Administrative Agent (which may include telecopy or
electronic transmission of a signed signature page of this Agreement) that
such party has signed a counterpart of this Agreement.


 


(b)           The Administrative Agent shall have
received favorable written opinions (addressed to the Administrative Agent and
the Lenders and dated the Effective Date) of Foley & Lardner LLP,
counsel for the Loan Parties, substantially in the form of Exhibit B-1,
and Torys LLP, Ontario, counsel for the Loan Parties, substantially in the form
of Exhibit B-2.  Each
Borrower hereby requests such counsel to deliver such opinions.


 


(c)           The Administrative Agent shall have
received those agreements, documents and certificates listed under the heading “Effective
Date Closing Documents” in the list of closing documents attached hereto as Exhibit E,
including without limitation, those relating to the organization, existence and
good standing of the initial Loan Parties, and the authorization and court
approval of the Transactions.


 


(d)           The Effective and Funding Date
Representations being true and correct in all material respects on and as of
such date (except where such representation or warranty is qualified by
materiality, then in all respects or where such representations apply solely to
the Funding Date); provided, however, that if any such
representation or warranty is qualified by Material Adverse Effect, material
adverse change, materially and adversely, or similar language, then, for
purposes of the Effective Date, such representation or warranty shall be deemed
to be qualified by Funding Date Material Adverse Effect.


 


(e)           No injunction or temporary restraining
order exists and no litigation has commenced or is otherwise pending which
would prohibit the effectiveness hereof or the extension of any Loan or
issuance of any Letter of Credit.


 


(f)            The Agents shall have received all fees
and other amounts due and payable on or prior to the Effective Date, including,
to the extent invoiced, reimbursement or payment of all out-of-pocket expenses
required to be reimbursed or paid by the Borrowers hereunder.


 


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(g)           No Default shall have occurred or shall
be continuing.


 


The Administrative Agent
shall notify the Borrowers and the Lenders of the Effective Date, and such
notice shall be conclusive and binding.


 


SECTION 4.02     Funding Date Credit Events. 
The obligations of the Lenders to make Loans and of the Issuing Banks to
issue Letters of Credit hereunder shall not become effective until the date on
which each of the following conditions is satisfied (or waived in accordance
with Section 9.02):


 


(a)           The conditions set forth in Section 4.01
shall have been satisfied (or waived in accordance with Section 9.02).


 


(b)           The Specified Existing Indebtedness shall
have been fully repaid or funds sufficient to fully repay such Specified
Existing Indebtedness shall have been placed in escrow for that purpose (on
terms reasonably acceptable to the Administrative Agent), all lending
commitments thereunder and the related documentation therefor shall have
terminated, and all Liens granted under or in connection therewith shall have
been released and discharges duly filed in connection therewith; provided,
however, that with respect to the Claimant Notes, the related indenture
either shall have been terminated or the covenants of World Color Press
thereunder shall have been terminated or made inapplicable to World Color Press
and its Affiliates.


 


(c)           The Administrative Agent (or its counsel)
shall have received (i) a copy of each Loan Party Guaranty fully executed
by the Loan Party Guarantors required to be subject thereto as of the Funding
Date, (ii) a copy of the Security Agreement fully executed by the Loan
Parties required to be subject thereto as of the Funding Date, and (iii) a
copy of the Canadian Security Agreement fully executed by the Loan Parties
required to be subject thereto as of the Funding Date.


 


(d)           The Administrative Agent shall have
received favorable written opinions (addressed to the Administrative Agent and
the Lenders and dated the Funding Date) of Foley & Lardner LLP,
counsel for the Loan Parties, Torys LLP, Ontario counsel for the Loan Parties,
and local real estate counsel and, if applicable, additional local Canadian
counsel for the Loan Parties, each in form and substance reasonably acceptable
to the Administrative Agent.  Each
Borrower hereby requests such counsel to deliver such opinions.


 


(e)           The Funding Date Perfection Requirements
shall have been satisfied, or waived or extended at the sole discretion of the
Applicable Agent.


 


(f)            (i) The Effective and Funding Date
Representations being true and correct in all material respects on and as of
such date (except where such representation or warranty is qualified by
materiality, then in all respects, or where such representations apply solely
to the Effective Date); provided, however, that if any such
representation or warranty is qualified by Material Adverse Effect, material
adverse change, materially and adversely, or similar language, then, for
purposes of the Funding Date, such representation or warranty shall be deemed
to be qualified by Funding Date Material Adverse Effect. (ii) There has
been no breach of any representation or warranty set forth in the Approved PA
which is material to the 


 


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interests of the
Lenders, and which breach gives the U.S. Borrower (or any Affiliate thereof)
the right to terminate its obligations under the Approved PA (determined
without regard to any notice that may be required or whether the U.S. Borrower
or such Affiliate exercises such right).


 


(g)           No Default shall have occurred or shall
be continuing, or shall result upon the funding of any Loan or issuance of any
Letter of Credit on the Funding Date.


 


(h)           No injunction or temporary restraining
order exists and no litigation has commenced or is otherwise pending which
would prohibit the effectiveness hereof or the extension of any Loan or
issuance of any Letter of Credit.  The
Administrative Agent shall have received evidence that all regulatory, legal
and other third-party approvals necessary for the World Color Press Acquisition
have been obtained and all waiting periods with respect thereto have expired
(except those with respect to which the failure to have obtained or failure to
have expired would not result in a Funding Date Material Adverse Effect).


 


(i)            The Agents shall have received all fees
and other amounts due and payable on or prior to the Funding Date, including,
to the extent invoiced, reimbursement or payment of all out-of-pocket expenses
required to be reimbursed or paid by the Borrowers hereunder.


 


(j)            The Administrative Agent shall have
received those agreements, documents and certificates listed under the heading “Funding
Date Closing Documents” in the list of closing documents attached hereto as Exhibit E,
including without limitation, those relating to the organization, existence and
good standing of the initial Loan Parties, and the authorization and court
approval of the Transactions.


 


(k)           The Lenders shall have received the
Acceptable Funding Date Schedules.


 


(l)            Beginning with the Fiscal Quarter ended March 31,
2010 and ending with the last complete Fiscal Quarter to occur prior to the
Funding Date (unless such Fiscal Quarter occurs within 60 days of the Funding
Date, in which case no reporting shall be required for such Fiscal Quarter),
the Lenders also shall have received, within 60 days after the end of each such
Fiscal Quarter occurring during such period, unaudited interim consolidated
financial statements of each of the U.S. Borrower and World Color Press, with
such unaudited financials being delivered in compliance with the requirements
of Section 5.01.


 


(m)          The World Color Press Acquisition shall
be consummated substantially in accordance with the Purchase Agreement and
applicable laws, the aggregate consideration paid for World Color Press and its
Subsidiaries shall be consistent with the Purchase Agreement, and all rights of
appeal or dissent in connection therewith have expired, other than rights of
appeal or dissent held by no more than 7.5% of the holders of the common Equity
Interests of World Color Press.  The
Purchase Agreement in effect on the Funding Date shall be in form and substance
identical to the Approved PA.  The
Administrative Agent shall have received evidence that World Color Press
Acquisition was approved by the U.S. Borrower’s and World Color Press’s
directors and shareholders and all other relevant parties including without
limitation applicable Government Authority, except as provided on Schedule
3.03.


 


(n)           No Funding Date Material Adverse Effect
shall have occurred.


 


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(o)           Solely with respect to the Canadian
Borrower and its Loans and Letters of Credit, the Amalgamation Date
Requirements shall have been satisfied.


 


The Administrative Agent
shall notify the Borrowers and the Lenders of the Funding Date, and such notice
shall be conclusive and binding.


 


SECTION 4.03     Each Credit Event Subsequent to the Funding Date. 
Subsequent to the Funding Date, the obligation of each Lender to make a
Loan on the occasion of any Borrowing, and of the Issuing Banks to issue,
amend, renew or extend any Letter of Credit, is subject to the satisfaction of
the following conditions:


 


(a)           The representations and warranties of the
Borrowers set forth in the Agreement shall be true and correct in all material
respects on and as of the date of such Borrowing or the date of issuance,
amendment, renewal or extension of such Letter of Credit, as applicable.


 


(b)           At the time of and immediately after
giving effect to such Borrowing or the issuance, amendment, renewal or
extension of such Letter of Credit, as applicable, no Default shall have
occurred and be continuing.


 


Each Borrowing and each
issuance, amendment, renewal or extension of a Letter of Credit shall be deemed
to constitute a representation and warranty by the Borrowers on the date
thereof as to the matters specified in this Section 4.03.


 


ARTICLE V


 


Affirmative
Covenants


 


Until the Commitments
have expired or been terminated and the principal of and interest on each Loan
and all fees payable hereunder shall have been paid in full and all Letters of
Credit shall have expired or terminated and all LC Disbursements shall have
been reimbursed, each of the Borrowers, for itself, the other Loan Parties and
their respective Subsidiaries, covenants and agrees with the Lenders that, on
and after the Funding Date:


 


SECTION 5.01     Financial Statements and Other Information. 
The Borrowers will furnish to the Administrative Agent and each Lender:


 


(a)           within ninety (90) days after the end of
each Fiscal Year of the U.S. Borrower (or, if earlier, by the date that the
Annual Report on Form 10-K of the U.S. Borrower for such Fiscal Year would
be required to be filed under the rules and regulations of the U.S.
Securities and Exchange Commission, giving effect to any automatic extension
available thereunder for the filing of such form), its audited consolidated
balance sheet and related statements of operations, shareholders’ equity and
cash flows as of the end of and for such year, setting forth in each case in
comparative form the figures for the previous Fiscal Year, all reported on by
Deloitte & Touche LLP or other independent public accountants of
recognized national standing (without a “going concern” or like qualification
or exception and without any qualification or exception as to the scope of such
audit) to the effect that such consolidated financial statements present fairly
in all material respects the financial condition and results of operations of
the U.S. Borrower and its consolidated Subsidiaries on a consolidated basis in


 


93

















 


accordance with
GAAP consistently applied; provided, that all financials provided under
this Section 5.01 shall include financial information for all Consolidated
Financial Covenant Entities;


 


(b)           within forty-five (45) days after the end
of each of the first three Fiscal Quarters of each Fiscal Year of the U.S.
Borrower (or, if earlier, by the date that the Quarterly Report on Form 10-Q
of the U.S. Borrower for such Fiscal Quarter would be required to be filed
under the rules and regulations of the U.S. Securities and Exchange
Commission, giving effect to any automatic extension available thereunder for
the filing of such form), its consolidated balance sheet and related statements
of operations, shareholders’ equity and cash flows as of the end of and for
such Fiscal Quarter and the then elapsed portion of the Fiscal Year, setting
forth in each case in comparative form the figures for the corresponding period
or periods of (or, in the case of the balance sheet, as of the end of) the
previous Fiscal Year, all certified by one of its Financial Officers as
presenting fairly in all material respects the financial condition and results
of operations of the U.S. Borrower and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied, subject to
normal year-end audit adjustments and the absence of footnotes; provided,
that all financials provided under this Section 5.01 shall include
financial information for all Consolidated Financial Covenant Entities;


 


(c)           concurrently with any delivery of
financial statements under clause (a) or (b) above, a certificate of
a Financial Officer of the U.S. Borrower in substantially the form of Exhibit F
(i) certifying as to whether a Default has occurred and, if a Default has
occurred, specifying the details thereof and any action taken or proposed to be
taken with respect thereto, (ii) setting forth reasonably detailed
calculations demonstrating compliance with Section 6.11, and (iii) stating
whether any change in GAAP or in the application thereof has occurred since the
date of the audited financial statements referred to in Section 3.04 which
has had a material effect on such financial statements and, if any such change
has occurred, specifying the effect of such change on the financial statements
accompanying such certificate;


 


(d)           concurrently with any delivery of
financial statements under clause (a) above, if such certificate is
available (with the Borrowers using commercially reasonably efforts to obtain
such certificates), a certificate of the accounting firm that reported on such
financial statements stating whether they obtained knowledge during the course
of their examination of such financial statements of any Default (which
certificate may be limited to the extent required by accounting rules or
guidelines);


 


(e)           promptly after the same become publicly
available, copies of all periodic and other reports, proxy statements and other
materials filed by any Loan Party or any Subsidiary thereof with the U.S. Securities
and Exchange Commission (if applicable), or any Governmental Authority
succeeding to any or all of the functions of said Commission (if applicable),
or with any national securities exchange (if applicable), provided that such
materials shall be deemed delivered on the date when they become publically
available at no cost on EDGAR;


 


(f)            on each Free Cash Flow Prepayment Date, a
certificate from a Financial Officer of the U.S. Borrower indicating whether a
Prepayment Event has occurred on such date and


 


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certifying the
manner in which the Total Leverage Ratio, and, if applicable, Free Cash Flow
and any resulting prepayment were calculated, which certifications shall be in
form and substance reasonably satisfactory to Administrative Agent; and


 


(g)           promptly following any request therefor,
such other information regarding the operations, business affairs and financial
condition of any Loan Party or Subsidiary thereof, or compliance with the terms
of this Agreement, as the Administrative Agent or any Lender may reasonably
request.


 


SECTION 5.02     Notices of Material Events. 
Each Borrower (without duplication) will furnish to the Administrative
Agent written notice of the following:


 


(a)           the occurrence of any Default (such
notice to be provided within two (2) Business Days after a Responsible
Officer becomes aware of such occurrence);


 


(b)           the filing of any pleading, notice of
appeal, communication of counsel or other document regarding any legal action
or potential legal action or the commencement of any action, suit or
proceeding, by or before any arbitrator or Governmental Authority against or
affecting any Loan Party or any Subsidiary thereof that if adversely
determined, could reasonably be expected to result in a Material Adverse
Effect.


 


(c)           promptly, and in any event within five (5) days
after (i) the failure to pay a minimum required contribution or
installment to a Pension Plan on or before the due date provided under Section 430
of the Code; (ii) the failure to pay a required contribution or
installment to a Multiemployer Plan on or before the applicable due date; (iii) the
occurrence of an ERISA Event with a notice describing such ERISA Event, and any
action that any Loan Party or ERISA Affiliate proposes to take with respect
thereto, together with a copy of any notices received from or filed with the
PBGC, IRS, Multiemployer Plan or other Pension Plan pertaining thereto; and (iv) any
officer of any Loan Party or any ERISA Affiliate knows or has reason to know, a
Pension Plan is in “at risk” status within the meaning of Section 430(j) of
the Code, except as disclosed in writing by the U.S. Borrower to the
Administrative Agent prior to the Effective Date.


 


(d)           promptly, and in any event within five (5) days
after the occurrence of any event which may give rise to the full termination
of, or provide any Governmental Authority, without the consent of any of the
Canadian Borrower, Canadian Loan Parties, or any Subsidiary thereof, with the
authority to fully terminate, any Canadian Pension Plan;


 


(e)           within five (5) days after the
failure of any of the Canadian Borrower, Canadian Loan Party, or any Subsidiary
thereof to make normal or special payments to any Canadian Pension Plan, a
notice of such failure, a copy of any notice filed under any applicable law,
and a statement by any officer of any of the Canadian Borrower, Canadian Loan
Party, or any Subsidiary thereof setting forth (A) sufficient information
necessary to determine the amount of any corresponding Lien, (B) the
reason for the failure to make the required payments and (C) the action,
if any, to be taken with respect thereto;


 


(f)            any other development that to the
knowledge of a Responsible Officer results in, or could reasonably be expected
to result in, a Material Adverse Effect; and


 


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(g)           the receipt by any of the Canadian
Borrower, Canadian Loan Party, or any Subsidiary thereof of any notice or
directive or order from any Canadian federal or provincial governmental or
regulatory authority having jurisdiction over any Canadian Pension Plan
regarding a Canadian Pension Plan shortfall, deficiency, insolvency or other
matter, together with a copy of any such notice, directive or order (including,
without limitation, any Form 7 (summary of contributions/revised summary
of contributions) received by any of the Canadian Borrower, Canadian Loan
Party, or any Subsidiary thereof in connection with the Pension Benefits Act
(Ontario)).


 


Each notice delivered under
this Section shall be accompanied by a statement of a Financial Officer or
other executive officer of the applicable Borrower setting forth the details of
the event or development requiring such notice and any action taken or proposed
to be taken with respect thereto.


 


SECTION 5.03     Existence; Conduct of Business. 
Except as otherwise permitted by Section 3.01, each Borrower will,
and will cause each other Loan Party and each of their respective Subsidiaries
to, do or cause to be done all things necessary to preserve, renew and keep in
full force and effect its legal existence and the rights, qualifications,
licenses, permits, privileges, franchises, governmental authorizations and
intellectual property rights material to the conduct of its business, and
maintain all requisite authority to conduct its business in each jurisdiction
in which its business is conducted; provided that the foregoing shall not
prohibit any merger, amalgamation, consolidation, liquidation or dissolution
permitted under Section 6.03.


 


SECTION 5.04     Payment of Obligations.  Each Borrower
will, and will cause each other Loan Party and each of their respective
Subsidiaries to, pay its obligations, including Tax liabilities, that, if not
paid, could result in a Material Adverse Effect before the same shall become
delinquent or in default, except where (a) the validity or amount thereof
is being contested in good faith by appropriate proceedings, (b) the
applicable Loan Party or Subsidiary thereof has set aside on its books adequate
reserves with respect thereto in accordance with GAAP and (c) the failure
to make payment pending such contest could not reasonably be expected to result
in a Material Adverse Effect.


 


SECTION 5.05     Maintenance of Properties; Insurance. 
Each Borrower will, and will cause each other Loan Party and each of
their respective Subsidiaries to, except with respect to Plants Designated for
Closure or Sale, Funding Date Used Equipment and property described in Section 6.03(a)(v)(B),
(a) keep and maintain all property (including all Collateral) material to
the conduct of its business in good working order and condition, ordinary wear
and tear excepted, and (b) maintain with financially sound and reputable
carriers insurance in such amounts and covering such properties and risks as
are adequate and customary for companies of the same or similar size engaged in
the same or similar business and in the same or similar location as the Loan
Parties and their Subsidiaries.  The U.S.
Borrower will furnish to the Lenders, upon request of the Administrative Agent,
information in reasonable detail as to the insurance so maintained.  The U.S. Borrower shall deliver to the
Administrative Agent endorsements (x) to all “All Risk” physical damage
insurance policies on all of the Loan Parties’ tangible personal property and
assets (other than the assets securing the Senior Secured Notes, the Polish
Subsidiary Credit Facility, or the Existing Leveraged Leases) and business
interruption insurance policies naming the Administrative Agent as lender loss
payee, and (y) to


 


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all general liability and
other liability policies naming the Administrative Agent an additional
insured.  In the event any Loan Party or
any of its Subsidiaries at any time or times hereafter shall fail to obtain or
maintain any of the policies or insurance required herein or to pay any premium
in whole or in part relating thereto, then the Administrative Agent, without
waiving or releasing any obligations or resulting Default hereunder, may at any
time or times thereafter (but shall be under no obligation to do so) obtain and
maintain such policies of insurance and pay such premiums and take any other
action with respect thereto which the Administrative Agent deems advisable.  All sums so disbursed by the Administrative
Agent shall constitute part of the Obligations, payable as provided in this
Agreement.  The U.S. Borrower (x) will
furnish to the Administrative Agent and the Lenders prompt written notice of
any casualty or other insured damage to any material portion of the Collateral
or the commencement of any action or proceeding for the taking of any material
portion of the Collateral or interest therein under power of eminent domain or
by condemnation or similar proceeding, provided that notification requirement
shall not apply at any time when the Total Leverage Ratio is no greater than
2.25 to 1.00 and (y) will ensure that the net proceeds of any such event
(whether in the form of insurance proceeds, condemnation awards or otherwise)
are collected and applied in accordance with the applicable provisions of this
Agreement and the Collateral Documents.


 


SECTION 5.06     Books and Records.  Each Borrower
will, and will cause each other Loan Party and each of their respective Subsidiaries
to, keep proper books of record and account in which full, true and correct
entries are made of all dealings and transactions in relation to its business
and activities in all material respects. 
Each Borrower will, and will cause each other Loan Party and the
respective Subsidiaries thereof to, permit any representatives designated by
any Agent (including employees of any Agent or any consultants, accountants,
lawyers and appraisers retained by any Agent), upon reasonable prior notice, to
visit and inspect its properties, to examine and make extracts from its books
and records, including environmental assessment reports and Phase I and Phase
II studies, and to discuss its affairs, finances and condition with its
officers and independent accountants, all at such reasonable times and as often
as reasonably requested. Each Borrower acknowledges that the Agents, after
exercising its rights of inspection, may prepare and distribute to the Lenders
certain reports pertaining to the Loan Parties’ and their Subsidiaries’ assets
for internal use by the Borrowers, the Agents and the Lenders.


 


SECTION 5.07     Compliance with Laws and Material Contractual
Obligations.  Each Borrower will, and will cause each other
Loan Party and each of their respective Subsidiaries to, (i) comply with
all laws, rules, regulations and orders of any Governmental Authority
applicable to it or its property (including without limitation Environmental
Laws) and (ii) perform in all material respects its obligations under
material agreements to which it is a party, in each case with respect to each
of clause (i) and clause (ii) except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.


 


SECTION 5.08     Use of Proceeds.  The proceeds
of the Term Loans, Revolving Loans and Swingline Loans will be used to: (i) repay
the Specified Existing Indebtedness, pay a portion of the consideration for the
World Color Press Acquisition, pay certain costs, fees and expenses related to
the Transactions, and make certain Restricted Payments, all as more fully
described in Schedule 5.08 hereto; (ii) finance the working capital needs
and general corporate


 


97

















 


purposes of the Loan
Parties and their Subsidiaries in the ordinary course of business; and (iii) to
consummate Permitted Acquisitions and make Restricted Payments permitted under Section 6.07.  No part of the proceeds of any Loan will be
used, whether directly or indirectly, for any purpose that entails a violation
of any of the Regulations of the Board, including Regulations T, U and X.


 


SECTION 5.09     Loan Party Guarantors; Pledges; Additional Collateral;
Further Assurances; Amalgamation Date.


 


(a)           As promptly as possible but in any event
within forty-five (45) days (or such later date as may be agreed upon by the
Administrative Agent) after any Subsidiary qualifies independently as, or is
designated by the U.S. Borrower or the Administrative Agent as, a Loan Party
Guarantor pursuant to the definitions of “Material Domestic Subsidiary”, “Material
Canadian Subsidiary” and “Loan Party Guarantor”, the U.S. Borrower shall
provide the Administrative Agent with written notice thereof setting forth
information in reasonable detail describing the material assets of such Person
and shall cause each such Subsidiary which also qualifies as a Loan Party
Guarantor to deliver to the Administrative Agent a joinder to each of the
relevant Loan Party Guaranty and the relevant Security Agreement (in each case
in the form contemplated thereby) pursuant to which such Subsidiary agrees to
be bound by the terms and provisions of thereof, such Loan Party Guaranty and
Security Agreement to be accompanied by appropriate corporate resolutions,
other corporate documentation, other Collateral Documents to the extent
contemplated by this Section 5.09 or the Security Agreement, and legal
opinions in form and substance reasonably satisfactory to the Administrative
Agent and its counsel.  Such additional
documentation shall include Canadian collateral documentation for Canadian Loan
Parties, such as, but not limited to, Canadian law governed documentation
governing pledges of Equity Interests in Subsidiaries organized under the laws
of Canada or a political subdivision thereof. 
The U.S. Borrower shall cause each such Person to be designated as a
U.S. Loan Party or a Canadian Loan Party (based on its jurisdiction of
organization) at the time the aforementioned deliveries are made.  If any Loan Party Guarantor ceases to be a
Material Subsidiary at any time, the Borrowers may request that such Subsidiary
be released from its guaranty, and the Applicable Agent, upon receipt of
evidence in form and substance reasonably satisfactory to it that such Loan
Party Guarantor is no longer a Material Subsidiary, shall release such
Subsidiary from its guaranty and release the liens on and security interests in
the assets of such Subsidiary (in each case at the Borrowers’ expense).  The U.S. Borrower may designate in writing
Subsidiaries which do not qualify as Material Subsidiaries as Loan Party
Guarantors, and the U.S. Borrower shall cause such Persons to become subject to
all applicable Collateral Documents and other Loan Documents.  The Applicable Agent shall, upon written
request by the U.S. Borrower and at the U.S. Borrower’s cost and expense,
release from the Collateral Documents and other Loan Documents any Subsidiary
which is not a Material Subsidiary, including, without limitation, any
Subsidiary which no longer qualifies as a Material Subsidiary pursuant to the
definition thereof.  The Lenders hereby
authorize the Applicable Agent to release such a Subsidiary from its Loan Party
Guaranty and its Collateral Documents; provided, that if such Subsidiary
subsequently qualifies as a Material Subsidiary pursuant the definition
thereof, such Subsidiary shall be required to re-deliver its Loan Party
Guaranty and its Collateral Documents.


 


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(b)           Each Borrower will cause, and will cause
each other Loan Party to cause, all of its owned property (whether real
(subject to Section 5.09(c) below), personal, tangible, intangible,
or mixed), to be subject at all times to first priority, perfected Liens in
favor of the Applicable Agent for the benefit of the Holders of Secured
Obligations to secure the Secured Obligations in accordance with the terms and
conditions of the Collateral Documents, subject in any case to Liens permitted
by Section 6.02 and any exceptions thereto permitted in the Security Agreement
and the Canadian Security Agreement. 
Without limiting the generality of the foregoing, each Borrower will (i) subject
to Section 5.09(e) below, cause the Applicable Pledge Percentage of
the issued and outstanding Equity Interests of each Pledge Subsidiary directly
owned by a Loan Party to be subject at all times to a first priority, perfected
Lien in favor of the Applicable Agent to secure the Secured Obligations in
accordance with the terms and conditions of the Collateral Documents or such
other security documents as the Applicable Agent shall reasonably request and (ii) if
required pursuant to paragraph (c) of this Section, will, and will cause
each Loan Party to, promptly deliver Mortgages and Mortgage Instruments with
respect to any real property (including, for purposes hereof, the real
properties with the street addresses of 56 Duplainville Road, Saratoga Springs,
NY 12866, and 871 Baker Road, Martinsburg, WV 25401) owned by such Loan Party
to the extent, and within such time period as is, reasonably required by the
Applicable Agent.


 


(c)           Without limiting the foregoing, each
Borrower will, and will cause each Loan Party and each of the Subsidiaries
thereof to, execute and deliver, or cause to be executed and delivered, to the
Administrative Agent such documents, agreements and instruments, and will take
or cause to be taken such further actions (including the filing and recording
of financing statements, fixture filings, mortgages, deeds of trust, hypothecs
and other documents and such other actions or deliveries of the type required
by Section 4.01, as applicable), which may be required by law or which the
Applicable Agent may, from time to time, reasonably request to carry out the
terms and conditions of this Agreement and the other Loan Documents and to
ensure perfection and priority of the Liens created or intended to be created
by the Collateral Documents, all at the expense of the Borrowers; provided,
however, that no Mortgage or Mortgage Instruments shall be required with
respect to any leasehold property (with the understanding that, for purposes
hereof, the real properties with the street addresses of 56 Duplainville Road,
Saratoga Springs, NY 12866, and 871 Baker Road, Martinsburg, WV 25401 shall not
constitute leasehold properties) or any real property owned or acquired by any
Loan Party on or after the Funding Date if the book value therefor is less than
the U.S. Dollar Amount of U.S. $10,000,000 or if the cost of perfecting a Lien
in such property, in the Administrative Agent’s sole discretion, is excessive
in light of the value of such property.


 


(d)           If any assets (excluding any real
property or improvements thereto or any interest therein (unless required
pursuant to paragraph (c) of this Section) are acquired by a Loan Party
after the Funding Date (other than assets constituting Collateral under the
Security Agreement or the Canadian Security Agreement or both that become
subject to the Lien in favor of the Security Agreement upon acquisition
thereof), with respect to which additional action is required to perfect the
Lien or security interest of the Applicable Agent, the U.S. Borrower will
notify the Administrative Agent thereof, and, if requested by the
Administrative Agent, and if the cost of perfecting a Lien in such property, in
the Administrative Agent’s sole discretion, is not excessive in light of the
value of such property, each Borrower will cause such assets to be subjected to
a Lien securing the Secured Obligations and will take, and cause


 


99

















 


the other Loan
Parties to take, such actions as shall be necessary or reasonably requested by
the Administrative Agent to grant and perfect such Liens, including actions
described in paragraph (c) of this Section, all at the expense of the Borrowers.  Notwithstanding the foregoing, the
Administrative Agent shall not receive a Lien on any asset constituting an “Excluded
Asset” under and as defined in the Security Agreement.


 


(e)           Notwithstanding the foregoing or anything
to the contrary set forth herein, neither the Canadian Borrower nor any Loan
Party organized under the laws of Canada shall be required to guaranty those
Secured Obligations owing by the U.S. Borrower or any Loan Party that is a
Domestic Subsidiary, or grant the Applicable Agent a Lien on its assets to
secure those Secured Obligations owing by the U.S. Borrower or a Loan Party
that is a Domestic Subsidiary.  In
addition, only the Funding Date Perfection Requirements shall be required to be
satisfied in respect of Collateral as of the Funding Date.  No Liens in favor of the Applicable Agent
shall be required to be perfected prior to the Funding Date other than those
specified by the Funding Date Perfection Requirements which must be perfected
by the Funding Date. No Loan Party shall be required to deliver Collateral
Documents governed by the laws of the jurisdiction of organization of a First
Tier Foreign Subsidiary in respect of the pledge to the Applicable Agents of
Equity Interests in such First Tier Foreign Subsidiary unless such First Tier
Foreign Subsidiary is a Material Foreign Subsidiary.  No Loan Party shall otherwise be required to
take any actions to perfect the Applicable Agent’s Lien in such First Tier
Foreign Subsidiary’s Equity Interests other than such Loan Party’s entry into
the Security Agreement and the filing of a UCC-1 financing statement against
such Loan Party which includes such Equity Interests as part of the collateral
subject thereto.


 


(f)            The Borrowers shall cause the
Amalgamation Date to occur within five Business Days after the date on which
the World Color Press Acquisition is consummated.


 


ARTICLE VI


 


Negative
Covenants


 


Until the Commitments
have expired or terminated and the principal of and interest on each Loan and
all fees payable hereunder have been paid in full and all Letters of Credit
have expired or terminated and all LC Disbursements shall have been reimbursed,
each Borrower, for itself, the other Loan Parties and their respective
Subsidiaries, covenants and agrees with the Lenders that, on and after the
Funding Date:


 


SECTION 6.01     Indebtedness.  No Loan Party
will, or permit any Subsidiary to, create, incur, assume or permit to exist any
Indebtedness, except:


 


(a)           the Secured Obligations;


 


(b)           Indebtedness and guarantees thereof
existing on the date hereof and set forth in Schedule 6.01(b) and
extensions, renewals and replacements of any such Indebtedness with
Indebtedness of a similar type that does not increase the outstanding principal
amount thereof (without giving effect to accrued interest, fees or transaction
costs with respect to such Indebtedness;


 


100

















 


(c)           the Senior Secured Notes and the Existing
Leveraged Leases, in each case together with extensions, increases (including
subsequent issuances), renewals and replacements thereof; provided, that
no such extension, renewal, increase or replacement shall be consummated in
contravention of the agreements, documents and instruments evidencing the
Senior Secured Notes or the Existing Leveraged Leases, as applicable;


 


(d)           Indebtedness of any Loan Party to any
other Loan Party or any Subsidiary of any Loan Party, and Indebtedness of any
Subsidiary of a Loan Party to any Loan Party or any Subsidiary thereof, and
Indebtedness of any Person in which a Loan Party or other Subsidiary owns no
more than 50% of the voting Equity Interests thereof to any Loan Party or
Subsidiary thereof; provided that such Indebtedness is permitted under Section 6.04;


 


(e)           Guarantees by a Loan Party of
Indebtedness of any other Loan Party or Subsidiary of a Loan Party, by any
Subsidiary of any Loan Party of Indebtedness of a Loan Party or any Subsidiary
of a Loan Party, and by any Loan Party or Subsidiary thereof of Indebtedness of
any Person in which a Loan Party or other Subsidiary owns no more than 50% of
the voting Equity Interests thereof; provided that (i) the
Indebtedness so Guaranteed is permitted by this Section 6.01, (ii) such
Guarantees are permitted under Section 6.04, and (iii) Guarantees
permitted under this clause (e) shall be subordinated to the Secured
Obligations of the applicable Subsidiary on the same terms as the Indebtedness
so Guaranteed is subordinated to the Secured Obligations;


 


(f)            Indebtedness of any Loan Party or any
Subsidiary thereof incurred to finance the acquisition, construction or
improvement of any fixed or capital assets, including Capital Lease Obligations
and any Indebtedness assumed in connection with the acquisition of any such
assets or secured by a Lien on any such assets prior to the acquisition
thereof, and extensions, renewals and replacements of any such Indebtedness
that do not increase the outstanding principal amount thereof (without giving
effect to accrued interest, fees or transaction costs with respect to such
Indebtedness); provided that (i) such Indebtedness is incurred prior to or
within ninety (90) days after such acquisition or the completion of such
construction or improvement and (ii) the Borrowers are in compliance on a
Pro Forma Basis with Section 6.11 after the incurrence thereof;


 


(g)           Indebtedness of any Loan Party or any
Subsidiary thereof as an account party in respect of (i) trade letters of
credit or (ii) constituting obligations in respect of Swap Obligations and
hedging and swap arrangements permitted under Section 6.05;


 


(h)           Unsecured Indebtedness and Subordinated
Indebtedness so long as the Borrowers shall be in compliance with Section 6.09
and with Section 6.11 on a Pro Forma Basis;


 


(i)            Indebtedness owed to any Person providing
workers’ compensation, health, disability or other employee benefits or
property, casualty or liability insurance, pursuant to reimbursement or
indemnification obligations to such Person, in each case incurred in the
ordinary course of business;


 


101

















 


(j)            Indebtedness of any Loan Party or any
Subsidiary thereof as an account party in respect of performance bonds, bid
bonds, appeal bonds, surety bonds and similar obligations, in each case
provided in the ordinary course of business;


 


(k)           The Polish Subsidiary Credit Facility,
together with extensions, increases, renewals and replacements thereof (with
the Borrowers being in compliance on a Pro Forma Basis with Section 6.11
after any incurrence thereunder or increase in the aggregate principal amount
thereof);


 


(l)            Indebtedness of Foreign Subsidiaries
(other than the Canadian Borrower’s Indebtedness under this Agreement), so long
as the aggregate principal amount thereof does not at any time exceed the U.S.
Dollar Amount of (i) U.S. $200,000,000 at any time the Total Leverage
Ratio is less than 2.75 to 1.00 (both before and after giving effect thereto on
a Pro Forma Basis), and (ii) U.S. $100,000,000 at any time the Total
Leverage Ratio is equal to or greater than 2.75 to 1.00 (both before and after
giving effect thereto on a Pro Forma Basis), and so long as the Borrowers are
in compliance, on a Pro Forma Basis, with Section 6.11 after any
incurrence thereof or increase in the aggregate principal amount thereof;


 


(m)          Indebtedness incurred under industrial
revenue bonds so long as not in contravention with Section 6.02;


 


(n)           Indebtedness of a Borrower or any
Subsidiary incurred pursuant to Permitted Receivables Facilities; provided
that the Attributable Receivables Indebtedness thereunder shall not exceed an
aggregate amount equal to the U.S. Dollar Amount of (1) U.S$125,000,000
when the Total Leverage Ratio is less than 2.25 to 1.00 and (2) U.S.
$75,000,000 when the Total Leverage Ratio equals or exceeds 2.25 to 1.00 (with
the Total Leverage Ratio giving effect, on a Pro Forma Basis, to any fundings
or purchases to be made under such Permitted Receivables Facilities);


 


(o)           Operating leases classified as
Indebtedness under GAAP;


 


(p)           Indebtedness evidencing Sale and
Leaseback Transactions permitted under Sections 6.03 and 6.10;


 


(q)           Indebtedness permitted under Section 6.04;
and


 


(r)            Indebtedness arising under Permitted
Corporate Restructuring Transactions.


 


SECTION 6.02     Liens.  No Loan Party
will, or permit any Subsidiary to, create, incur, assume or permit to exist any
Lien on any property or asset now owned or hereafter acquired by it, or assign
or sell any income or revenues (including accounts receivable) or rights in
respect of any thereof, except:


 


(a)           Liens created pursuant to any Loan Document;


 


(b)           Permitted Encumbrances;


 


102














 


(c)           any Lien on any property or asset of any
Loan Party or any Subsidiary existing on the date hereof and set forth in
Schedule 6.02; provided that (i) such Lien shall not apply to any
other property or asset of such Loan Party or Subsidiary unless permitted
elsewhere under this Section 6.02, and (ii) such Lien shall secure
only those obligations which it secures on the date hereof and extensions,
renewals and replacements thereof that do not increase the outstanding
principal amount thereof (without giving effect to accrued interest, fees or
transaction costs with respect to such Indebtedness), except for such increases
as may be permitted under Section 6.01(k) or (l);


 


(d)           any Lien on Senior Secured Note
Collateral or Existing Leveraged Leases that secures Indebtedness evidenced by
the Senior Secured Notes or the Existing Leveraged Leases, as applicable, and
that is permitted under Section 6.01(c), together with any Lien on any
other property or asset of a Loan Party or Subsidiary thereof that is permitted
elsewhere under this Section 6.02 and that is used to secure such
Indebtedness in respect of the Senior Secured Notes or the Existing Leveraged
Leases, as applicable, that is permitted under Section 6.01(c);


 


(e)           Liens on property or assets acquired by a
Loan Party or a Subsidiary thereof after the Effective Date; provided,
that (i) the aggregate principal amount of Indebtedness secured thereby
does not exceed the U.S. Dollar Amount of U.S. $200,000,000 at any time, and (ii) with
respect to any such Liens securing Indebtedness owing by the U.S. Borrower or a
Domestic Subsidiary thereof, the aggregate principal amount of such
Indebtedness owing by the U.S. Borrower and all such Domestic Subsidiaries does
not exceed the U.S. Dollar Amount of U.S. $100,000,000 at any time, and the
aggregate net book value of the property or assets owned by the U.S. Borrower
and the Domestic Subsidiaries that is subject to such Liens does not exceed the
U.S. Dollar Amount of U.S. $100,000,000 at any time;


 


(f)            Liens on the assets or property of any
Loan Party or any Subsidiaries in connection with Sale and Leaseback
Transactions that comply with the requirements of Section 6.10;


 


(g)           Liens on fixed or capital assets
acquired, constructed or improved by any Loan Party or any Subsidiary; provided
that (i) such security interests secure Indebtedness permitted by clause (f) of
Section 6.01, (ii) such security interests and the Indebtedness
secured thereby are incurred prior to or within ninety (90) days after such
acquisition or the completion of such construction or improvement, (iii) the
Indebtedness secured thereby does not exceed the cost of acquiring,
constructing or improving such fixed or capital assets; and (iv) such
security interests shall not apply to any other property or assets of any Loan
Party or any Subsidiary;


 


(h)           Liens arising under Permitted Receivables
Facilities where the Attributable Receivable Indebtedness thereunder is
permitted under Section 6.01(n);


 


(i)            Liens securing the Polish Subsidiary
Credit Facility to the extent the Indebtedness in respect thereof is permitted
under Section 6.01(k); provided, that only assets owned by the
Polish Subsidiary shall secure the Polish Subsidiary Credit Facility;


 


(j)            Liens securing hedging obligations of
Loan Parties arising under non-speculative natural gas swaps; provided,
that (x) no more than the U.S. Dollar Amount of U.S.


 


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$25,000,000 in the
aggregate of such obligations (as determined based on the termination value
thereof) shall be owing to any Person that is not a Holder of Secured
Obligations and (y) such obligations owing to non-Holders of Secured
Obligations shall be secured solely with cash and cash equivalents;


 


(k)           Liens securing obligations owing under and
in connection with industrial revenue bonds; provided, that no more than
the U.S. Dollar Amount of U.S. $50,000,000 in aggregate principal amount of
such bonds may be secured pursuant to this clause; and


 


(l)            Liens on assets of the Loan Parties and
their Subsidiaries not otherwise permitted above so long as the aggregate
principal amount of the Indebtedness subject to such Liens does not exceed the
U.S. Dollar Amount of (x) U.S. $50,000,000 in the aggregate at any time
with respect to Loan Parties and their Subsidiaries organized under the laws of
the United States or Canada and (y) U.S. $125,000,000 in the aggregate at
any time with respect to Subsidiaries of Loan Parties organized under the laws
of jurisdictions other than the United States or Canada.


 


SECTION 6.03     Fundamental Changes and Asset Sales.


 


(a)  No Loan Party
will, or permit any Subsidiary to, merge into, or amalgamate or consolidate
with any other Person, or permit any other Person to merge into, or amalgamate
or consolidate with it, or sell, transfer, lease or otherwise dispose of (in
one transaction or in a series of transactions) any of its assets (including
pursuant to a Sale and Leaseback Transaction), or any of the Equity Interests
of any of its Subsidiaries (in each case, whether now owned or hereafter
acquired), or liquidate or dissolve, except that, if at the time thereof and
immediately after giving effect thereto no Default shall have occurred and be
continuing:


 


(i)            any Person may merge into the U.S. Borrower in a
transaction in which the U.S. Borrower is the surviving corporation; provided
that any such merger arising in connection with an Acquisition shall not be
permitted unless also permitted by Section 6.04;


 


(ii)           (a) any Subsidiary may merge into or amalgamate
with a Loan Party in a transaction in which the surviving entity or successor
entity is a Loan Party; provided, however, that (1) any such
merger involving the U.S. Borrower must result in the U.S. Borrower as the
survivor thereof, (2) any such merger involving the Canadian Borrower must
result in the Canadian Borrower as the survivor thereof, with the understanding
that this clause (2) permits the amalgamation of 7345933 Canada Inc. with
World Color Press on the Amalgamation Date, (3) any such merger involving
a U.S. Loan Party that is a Material Domestic Subsidiary and a Canadian Loan
Party must either result in such U.S. Loan Party that is a Material Domestic
Subsidiary as the surviving entity or, if a Canadian Loan Party is the survivor
thereof, there shall be availability therefor (based on the net book value of
the assets of the U.S. Loan Party subject to such merger) under the Restricted
Intercompany Transactions Amount (and such merger shall reduce the availability
of the Restricted Intercompany Transactions Amount), and (4) if arising in
connection with an Acquisition, shall not be permitted unless also permitted by
Section 6.04, and (b) any non-Loan Party Subsidiary may merge into or
amalgamate with another non-Loan Party Subsidiary; provided, that, if
arising in connection with an Acquisition, shall not be permitted unless also
permitted by Section 6.04;


 


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(iii)          any of the following sales, transfers, leases or other
disposition may occur:


 


(A)          any Subsidiary that is not a Loan Party may sell,
transfer, lease or otherwise dispose of its assets to a Loan Party;


 


(B)           any Loan Party may sell, transfer, lease or otherwise
dispose of its assets to any other Loan Party (other than sales, transfers,
leases or dispositions by U.S. Loan Parties to Canadian Loan Parties, which are
covered by clause (C) below);


 


(C)           any U.S. Loan Party may sell, transfer, lease or
otherwise dispose of its assets to a Canadian Loan Party; provided, that
the aggregate net book value of all such assets that are sold, transferred,
leased or otherwise disposed of shall not exceed the U.S. Dollar Amount of U.S.
$50,000,000 plus the unused portion of the Restricted Intercompany
Transactions Amount;


 


(D)          any Subsidiary that is not a Loan Party may sell, transfer,
lease or otherwise dispose of its assets to any other Subsidiary that is not a
Loan Party;


 


(E)           any Loan Party may sell, transfer, lease or otherwise
dispose of its assets to any Subsidiary or an Affiliate thereof that is not a
Loan Party, any U.S. Loan Party may sell, transfer, lease or otherwise dispose
of its assets to a Canadian Loan Party (which is in addition to, and not in
limitation of, the allowance provided in the foregoing clause (C)), and any
Loan Party or Subsidiary may sell, transfer lease or otherwise dispose of its
assets to any Person in which a Loan Party or other Subsidiary owns no more
than 50% of the voting Equity Interests thereof, so long as the aggregate net
book value of all such assets, when taken together with all other Restricted
Intercompany Transactions, does not exceed the Restricted Intercompany
Transactions Amount; and


 


(F)           any Loan Party may sell, transfer, lease or otherwise
dispose of Funding Date Used Equipment to a Subsidiary or an Affiliate thereof
that is not a Loan Party, or to any Person in which a Loan Party or other
Subsidiary owns no more than 50% of the voting Equity Interests thereof;  provided, that the aggregate net book
value of all sales, transfers, leases and dispositions made in reliance on this
clause (F) shall not exceed (i) the U.S. Dollar Amount of U.S.
$125,000,000 at any time the Total Leverage Ratio is less than 2.75 to 1.00
(both before and after giving effect thereto on a Pro Forma Basis), and (ii) the
U.S. Dollar Amount of U.S. $50,000,000 at any time the Total Leverage Ratio is
equal to or greater than 2.75 to 1.00 (both before and after giving effect
thereto on a Pro Forma Basis); provided, further, that if a sale,
transfer, lease or disposition was permitted because the Total Leverage Ratio
was less than 2.75 to 1.00 (both before and after giving effect thereto on a
Pro Forma Basis), but subsequent thereto, the Total Leverage Ratio equals or
exceeds 2.75 to 1.00, such sale, transfer, lease or disposition shall remain a
permitted transaction under this clause (F), but no further sales, transfers,
leases or dispositions shall be permitted hereunder until such time as the
Total Leverage Ratio is less than 2.75 to 1.00 and the Loan Parties have not
otherwise reached the above-mentioned U.S. $125,000,000 limitation;


 


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(iv)          a Borrower or any Subsidiary may sell Receivables
under Permitted Receivables Facilities (subject to the limitation on
Attributable Receivables Indebtedness under Section 6.01(n)) at any time;


 


(v)           the Loan Parties and their Subsidiaries may:


 


(A)          sell inventory in the ordinary course of business;


 


(B)           effect sales, trade-ins or dispositions of used,
obsolete, scrap, worn out or surplus equipment or property for value if such equipment
is located at Plants Designated for Closure or Sale or otherwise in the
ordinary course of business consistent with past practice;


 


(C)           enter into licenses of technology in the ordinary
course of business;


 


(D)          sell, transfer, assign, lease or otherwise dispose of
owned, or sublease, assign or earlier terminate leases or subleases in
connection with leaseholds or subleaseholds for, Plants Designated for Closure
or Sale; provided, that the aggregate net book value for all Plants
Designated for Closure or Sale that are sold, transferred, assigned, disposed
of, leased, subleased or early terminated shall not exceed the U.S. Dollar
Amount of U.S. $100,000,000; and


 


(E)           make any other sales, transfers, leases or
dispositions (including Sale and Leaseback Transactions that comply with Section 6.10)
that, together with all other property of the Loan Parties and their
Subsidiaries previously leased, sold or disposed of as permitted by this clause
(E) during the term of this Agreement, and as determined based net book
value for all property subject to such sales, transfers, leases or other
dispositions, does not exceed 7.5% of Consolidated Total Assets; provided,
that (i) the U.S. Borrower shall determine such 7.5% amount on the first
Business Day of each Fiscal Year based on the amount of Consolidated Total
Assets as of such first Business Day, (ii) if such 7.5% amount exceeds the
previous Fiscal Year’s 7.5% amount, such excess shall be available to the U.S.
Borrower and its Subsidiaries for additional asset sales under this clause (E),
and (iii) if such 7.5% amount is less than the previous Fiscal Year’s 7.5%
amount, and the existing 7.5% allowance has already been fully utilized, then
no further asset sales shall be permitted under this clause (E) until such
time as the U.S. Borrower and its Subsidiaries comply with this clause (E), but
asset sales previously made in compliance with a previous Fiscal Year’s
determination shall remain permitted sales hereunder and no Event of Default
shall result therefrom;


 


provided, further, all sales, transfers,
leases and other dispositions permitted under this Section 6.03(a)(v) shall
be for fair market value and, other than with respect to clauses (v)(B), (v)(C) (other
than cross-licensing of technology where the consideration for the issuance of
a license is (1) the receipt of a different license of comparable value, (2) the
receipt of Equity Interests in a Person (or the enhancement of the value of
existing Equity Interests in such Person), and (3) an interest in a joint development
arrangement (or the enhancement of value under an existing joint development
agreement), in which case no cash consideration is required) and (v)(D), at
least 75% of the consideration paid therefor shall be in cash;


 


(vi)          any Subsidiary may liquidate or dissolve if the U.S.
Borrower determines in good faith that such liquidation or dissolution is in
its best interests and is not materially


 


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disadvantageous to the
Lenders, and, if such Subsidiary is a Loan Party, such Loan Party’s assets and
property (including revenues) are transferred to another Loan Party; provided,
that a Canadian Loan Party’s assets and property (including revenues) shall
only be so transferred to another Canadian Loan Party, and a U.S. Loan Party’s
assets and property (including revenues) shall only be so transferred to
another U.S. Loan Party;


 


(vii)         a Loan Party or any Subsidiary thereof may engage in
Permitted Corporate Restructuring Transactions and the World Color Press
Facilitating Transactions; and


 


(viii)        the Loan Parties may consummate the Completed Aircraft
Substitution.


 


(b)           No Loan Party will, or permit any
Subsidiary to, engage to any material extent in any business other than
businesses of the type conducted by the Loan Parties and their Subsidiaries on
the date of execution of this Agreement and businesses reasonably related or
complementary thereto.


 


SECTION 6.04     Investments, Loans, Advances, Guarantees and
Acquisitions.  No Loan Party will, or permit any Subsidiary
to, purchase, hold or acquire (including pursuant to any merger with any Person
that was not a wholly owned Subsidiary prior to such merger) any capital stock,
evidences of indebtedness or other securities (including any option, warrant or
other right to acquire any of the foregoing) of, make or permit to exist any
loans or advances to, Guarantee any obligations of, or make or permit to exist
any investment or any other interest in, any other Person, or purchase or
otherwise acquire (in one transaction or a series of transactions) any Person
or any assets of any other Person constituting a business unit, except:


 


(a)           Permitted Investments;


 


(b)           Permitted Acquisitions (with the
understanding that a Loan Party or its Subsidiary may use proceeds of Indebtedness
to consummate a Permitted Acquisition so long as such Indebtedness is permitted
under the Loan Documents);


 


(c)           loans or advances by a U.S. Loan Party to
a Canadian Loan Party, guarantees by a U.S. Loan Party of Indebtedness owing by
a Canadian Loan Party (other than guarantees of the Secured Obligations), and
cash investments (whether by capital contribution or otherwise) by a U.S. Loan
Party in a Canadian Loan Party; provided, that the aggregate of all such
loan, advance and guaranty obligations and cash investments shall not at any
time exceed the U.S. Dollar Amount of (i) U.S. $250,000,000 at any time
the Total Leverage Ratio is less than 2.25 to 1.00, (ii) U.S. $150,000,000
at any time the Total Leverage Ratio is greater than or equal to 2.25 to 1.00
but less than 3.25 to 1.00, and (iii) U.S. $50,000,000 at any time the
Total Leverage Ratio is equal to or greater than 3.25 to 1.00, in each case, as
computed on a Pro Forma Basis as and when needed; provided, further,
a U.S. Loan Party may make additional guarantees of Canadian Loan Party’s
obligations if amounts remain available therefor under clause (e)(i) below;


 


(d)           loans or advances made by:


 


(i)            a Loan Party to another Loan Party (other than from a
U.S. Loan Party to a Canadian Loan Party, which is subject to the foregoing
clause (c));


 


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(ii)           a Loan Party to any non-Loan Party Subsidiary or
non-Loan party Affiliate thereof, subject to the proviso at the end of this Section 6.04(d);


 


(iii)          any non-Loan Party Subsidiary to a Loan Party;


 


(iv)          any non-Loan Party Subsidiary to any other Non-Loan
Party Subsidiary or to a non-Loan Party Affiliate thereof; and


 


(v)           any Loan Party or Subsidiary thereof to any Person in
which a Loan Party or other Subsidiary owns no more than 50% of the voting
Equity Interests thereof, subject to the proviso at the end of this Section 6.04(d);


 


provided, that all such loans and advances
covered by (d)(ii) and (d)(v), when aggregated with all other Restricted
Intercompany Transactions, shall not at any time exceed the Restricted
Intercompany Transactions Amount;


 


(e)           guarantees of Indebtedness by:


 


(i)            a U.S. Loan Party of any Foreign Subsidiary, Affiliate
of a U.S. Loan Party organized under the laws of a jurisdiction other than the
United States of America (or political subdivision thereof), or Person that is
organized under the laws of a jurisdiction other than the United States of
America (or political subdivision thereof) and in which a Loan Party or other
Subsidiary owns no more than 50% of the voting Equity Interests thereof; provided,
that Indebtedness so guaranteed is permitted under Section 6.01 or this Section 6.04
and the aggregate principal amount of such guaranty obligations at no time
exceeds the U.S. Dollar Amount of (i) U.S. $200,000,000 at any time the
Total Leverage Ratio is less than 2.25 to 1.00 (both before and after giving
effect thereto on a Pro Forma Basis), and (ii) U.S. $100,000,000 at any
time the Total Leverage Ratio is equal to or greater than 2.25 to 1.00 (both
before and after giving effect thereto on a Pro Forma Basis); provided, further,
that the U.S. Loan Parties also shall be permitted to guaranty, in excess of
the foregoing limitation, up to the U.S. Dollar Amount of U.S. $100,000,000 of
Indebtedness owing under the Polish Subsidiary Credit Facility so long as the
Indebtedness so guaranteed is permitted under Section 6.01(k) (with
such $100,000,000 allowance not being subject to the above-mentioned Total
Leverage Ratio test);


 


(ii)           a Loan Party in respect of Indebtedness owing by
another Loan Party; provided that guarantees by U.S. Loan Parties of
Canadian Loan Parties shall receive the benefit of the allowances set forth in
both of the foregoing clauses (c) and (e)(i);


 


(iii)          a Loan Party in respect of Indebtedness owing by a
Domestic Subsidiary that is not a Loan Party or an Affiliate thereof that is
not a Loan Party organized under the laws of the United States of America (or
political subdivision thereof); provided, that the aggregate principal
amount of such guaranty obligations, when taken together with all other
Restricted Intercompany Transactions, does not at any time exceed the
Restricted Intercompany Transactions Amount;


 


(iv)          a Subsidiary of a Loan Party in respect of
Indebtedness owing by a Loan Party;


 


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(v)           a Subsidiary that is not a Loan Party in respect of
Indebtedness owing by any other Subsidiary or Affiliate thereof that is not a
Loan Party; and


 


(vi)          a Loan Party or Subsidiary thereof in respect of
Indebtedness owing by any Person that is organized under the laws of the United
States of America and in which a Loan Party or other Subsidiary owns no more
than 50% of the voting Equity Interests thereof; provided, that the
aggregate principal amount of such guaranty obligations, when taken together
with all other Restricted Intercompany Transactions, does not at any time
exceed the Restricted Intercompany Transactions Amount;


 


(f)            investments by the Loan Parties and their
Subsidiaries in Equity Interests in their respective Subsidiaries, Affiliates
and Persons in which a Loan Party or other Subsidiary owns no more than 50% of
the voting Equity Interests thereof, and investments by U.S. Loan Parties in
Canadian Loan Parties (with the aggregate amount of outstanding investments
being reduced at any time and from time to time by all dividends, distributions
and similar amounts received by the holder of an investment, and by the amount
of Net Proceeds received by such holder upon the sale of such investment); provided,
that all such investments by Loan Parties in non-Loan Party Subsidiaries and
non-Loan Party Affiliates, by Loan Parties and their Subsidiaries in any Person
in which a Loan Party or other Subsidiary owns no more than 50% of the voting
Equity Interests thereof (in each case other than Receivables Entities), and by
U.S. Loan Parties in Canadian Loan Parties, when aggregated with all other
Restricted Intercompany Transactions, shall not at any time exceed the
Restricted Intercompany Transactions Amount; provided, further,
that U.S. Loan Parties may also make investments in Canadian Loan Parties in
excess of the foregoing limitation to the extent permitted under (1) Section 6.04(c) with
respect to cash investments and (2) Section 6.03(a)(iii)(C) with
respect to non-cash investments.


 


(g)           Guarantees constituting Indebtedness
permitted by Section 6.01;


 


(h)           Swap Agreements entered into by any Loan
Party or any of their Subsidiaries to the extent permitted by Section 6.05;


 


(i)            any investments, loans or advances
existing on the date hereof as set forth on Schedule 6.04;


 


(j)            investments resulting from World Color
Press Facilitating Transactions or Permitted Corporate Restructuring
Transactions; and


 


(k)           any other investment, loan or advance
(other than acquisitions) so long as the aggregate amount of all such
investments, loans and advances outstanding at any time does not exceed the
U.S. Dollar Amount of U.S. $50,000,000 during the term of this Agreement.


 


SECTION 6.05     Swap Agreements.  No Loan Party
will, or permit any Subsidiary to, enter into any Swap Agreement or hedging or
swap arrangement, except (a) Swap Agreements entered into to hedge or
mitigate risks to which any Loan Party or any Subsidiary has actual exposure
(other than those in respect of Equity Interests of any Loan Party or any of
its Subsidiaries), (b) Swap Agreements entered into in order to
effectively cap, collar or exchange interest rates (from fixed to floating
rates, from one floating rate to another floating


 


109

















 


rate or otherwise) with
respect to any interest-bearing liability or investment of any Loan Party or
any Subsidiary, and (c) non-speculative foreign currency exchange swaps or
hedges.  In addition, no Loan Party or
Subsidiary thereof will incur or otherwise be liable for hedging obligations in
an aggregate net amount (based on termination value) in excess of the U.S.
Dollar Amount of U.S. $25,000,000 where the counterparty thereto is not a
Holder of Secured Obligations and such hedging obligations arise under
non-speculative natural gas swaps.


 


SECTION 6.06     Transactions with Affiliates. 
No Loan Party will, or permit any Subsidiary to, sell, lease or
otherwise transfer any property or assets to, or purchase, lease or otherwise
acquire any property or assets from, or otherwise engage in any other
transactions with, any of its Affiliates, except (a) in the ordinary
course of business at prices and on terms and conditions not less favorable to
such Loan Party or such Subsidiary than could be obtained on an arm’s-length
basis from unrelated third parties, (b) transactions between or among the
Loan Parties and wholly owned Subsidiaries not involving any other Affiliate,
or transactions between two non-Loan Party Subsidiaries, (c) any
Indebtedness incurred in accordance with Section 6.01, (d) any
Restricted Payment permitted by Section 6.07, (e) any Permitted
Investment and (f) compensation of officers, directors and employees in
connection with their services to Loan Parties and their Subsidiaries,
including, without limitation, the provision of services to or for the direct
or indirect benefit of such officers, directors and employees so long as such
services are provided at prices and on terms and conditions not more favorable
than those that could be obtained on an arm’s-length basis from unrelated third
parties.


 


SECTION 6.07     Restricted Payments.  No Loan Party
will, or permit any Subsidiary to, declare or make, or agree to pay or make,
directly or indirectly, any Restricted Payment, except:


 


(a)           the Borrowers may declare and pay
dividends with respect to their respective Equity Interests payable solely in
additional shares of its common stock;


 


(b)           Subsidiaries may declare and pay
dividends ratably with respect to their Equity Interests;


 


(c)           the Borrowers and their Subsidiaries may
make Restricted Payments pursuant to and in accordance with stock option plans
or other benefit plans for management or employees of the Borrowers or such
Subsidiaries;


 


(d)           the following repurchases of Equity
Interests may occur so long as no Event of Default is then outstanding or would
result therefrom and reasonable consideration is given therefor: (1) a
non-Loan Party may repurchase its Equity Interests from a Loan Party, (2) a
Loan Party may repurchase its Equity Interests from another Loan Party, (3) a
non-Loan Party may repurchase its Equity Interests from another non-Loan Party,
and (4) a Loan Party may repurchase its Equity Interests from a non-Loan
Party Subsidiary so long as, solely for purposes of this clause (4), the
aggregate consideration therefor, when taken together with all other Restricted
Intercompany Transactions, does not exceed the Restricted Intercompany
Transactions Amount.


 


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(e)           Restricted Payments under Permitted
Corporate Restructuring Transactions and World Color Press Facilitating
Transactions;


 


(f)            the Loan Parties may make a one-time cash
payment on the Funding Date in an aggregate amount not in excess of the U.S.
Dollar Amount of U.S$140,000,000 in connection with the World Color Press
Acquisition (as such distribution appears in Schedule 5.08);


 


(g)           the Loan Parties may make payments
necessary to consummate the World Color Press Acquisition (as such payments
appear in Schedule 5.08), including without limitation, paying the cash
purchase price for World Color Press of up to the U.S. Dollar Amount of U.S.
$135,000,000;


 


(h)           Subchapter S Payments; and


 


(i)            in addition to the foregoing, so long as
no Default is then outstanding or would result therefrom, the U.S. Borrower may
make Restricted Payments in an annual aggregate amount not in excess of:


 


(A)          U.S. $10,000,000 during Fiscal Year 2010;


 


(B)           U.S. $60,000,000 during each of Fiscal Year 2011 and
Fiscal Year 2012; provided, that the aggregate amount of Restricted
Payments made during Fiscal Years 2010, 2011 and 2012 shall not exceed an
aggregate of U.S. $120,000,000, and


 


(C)           beginning with Fiscal Year 2013, up to 50% of Free
Cash Flow for the immediately preceding Fiscal Year if the Total Leverage
Ratio, on a Pro Forma Basis immediately before and after giving effect to such
Restricted Payment, is greater than or equal to 2.75 to 1.00; provided,
that such 50% of Free Cash Flow limitation shall not be in effect when the
Total Leverage Ratio, on a Pro Forma Basis immediately before and after giving
effect to such Restricted Payment, is less than 2.75 to 1.00, and the only
limitation at that time shall be that no Default is then outstanding or would
result therefrom.


 


Any amount permitted to
be distributed, paid or remitted as a Restricted Payment in a Fiscal Year that
is not so distributed, paid or remitted, may be distributed, paid or remitted
in the next immediately succeeding Fiscal Year, and such amount shall not be
counted toward the annual cap on Restricted Payments for the Fiscal Year in
which such amount is distributed, paid or remitted.  Any principal payment made in respect of
Subordinated Indebtedness or Unsecured Indebtedness shall reduce on a dollar-for-dollar
basis the amounts available for Restricted Payments under Section 6.07(i).


 


SECTION 6.08     Restrictive Agreements.  Except for
agreements set forth on Schedule 6.08, no Loan Party will, or permit any
Subsidiary to, directly or indirectly, enter into, incur or permit to exist any
agreement or other arrangement that prohibits, restricts or imposes any
condition upon (a) the ability of any Loan Party to create, incur or
permit to exist any Lien upon any of its property or assets, or (b) the
ability of any Loan Party to pay dividends or other distributions with respect
to holders of its Equity Interests or, with respect to any Loan Party, to make
or repay loans or advances to any Loan Party or any other Subsidiary or to
Guarantee Indebtedness of any Loan Party or any other Subsidiary; provided that
(i) the foregoing shall not 


 


111

















 


apply to restrictions and
conditions imposed by law or by any Loan Document, (ii) the foregoing
shall not prohibit any non-Canadian Foreign Subsidiary from entering into
agreements that contain financial covenants which require compliance with
financial tests without explicitly addressing the ability of such non-Canadian
Foreign Subsidiary to take any action described in clause (b) of this
section, (iii) the foregoing shall not apply to customary restrictions and
conditions contained in agreements relating to a Permitted Receivables Facility
or the sale of a Subsidiary pending such sale, provided such restrictions and
conditions apply only to the Subsidiary that is to be sold and such sale is
permitted hereunder, (iv) clause (a) of the foregoing shall not apply
to restrictions or conditions imposed by any agreement relating to secured
Indebtedness permitted by this Agreement if such restrictions or conditions
apply only to the property or assets securing such Indebtedness, (v) clause
(a) of the foregoing shall not apply to customary provisions in leases and
other contracts restricting the assignment thereof and (vi) the foregoing
shall not apply to restrictions or conditions imposed by an agreement
evidencing Indebtedness permitted under this Agreement so long as such
restrictions and conditions permit and do not limit or restrict the financings
evidenced by the Loan Documents (including all grants of Collateral in
connection herewith and all payments of principal, interest, fees, costs and
expenses required hereby), and so long as such restrictions and conditions are
not more restrictive or limiting than those set forth in the Loan Documents
(with the understanding that any change to any individual covenant or event of
default (including the definitions therefor) that is more restrictive or
limiting shall violate this provision, and that covenants and events of default
shall not be read in their entirety for purposes hereof.


 


SECTION 6.09     Subordinated Indebtedness/Unsecured Indebtedness. 
No Loan Party or Subsidiary shall incur, be liable for, guaranty or
otherwise be subject to Subordinated Indebtedness or Unsecured Indebtedness
unless: (i) such Subordinated Indebtedness or Unsecured Indebtedness has a
final maturity date that occurs at least 180 days after the Term Loan Maturity
Date; (ii) the representations, warranties, covenants and events of
default set forth in the agreements, documents and instruments evidencing such
Subordinated Indebtedness or Unsecured Indebtedness are not more onerous or
restrictive in any material respect than those set forth in the Loan Documents
(with the understanding that any financial covenant, negative covenant or event
of default that is more onerous or restrictive (or, with respect to events of
default, is triggered more quickly or is tied to a standard that is more
limited or more easily violated than one set forth in the Loan Documents) shall
be automatically deemed to be material for purposes hereof); (iii) with
respect to both the Unsecured Indebtedness and the Subordinated Indebtedness,
no principal prepayment thereof or defeasance, purchase, redemption, retirement
or acquisition thereof (whether voluntary or mandatory) shall be made unless a
Restricted Payment under Section 6.07(i) of this Agreement may be
made and would be permitted (as determined on a Pro Forma Basis) on the date of
such principal payment, and then only in an amount not in excess of the amount
of such Restricted Payment that would be permitted; (iv) with respect to
Unsecured Indebtedness, the agreements, documents and instruments evidencing
such Unsecured Indebtedness may only provide that up to 5% of the aggregate
outstanding principal amount thereof be scheduled to be paid in any Fiscal
Year, with the understanding that all such scheduled principal payments shall
also be subject to the restriction set forth in the foregoing clause (iii); (v) with
respect to the Subordinated Indebtedness, no scheduled principal payments shall
be permitted until at least 180 days after the Term Loan Maturity Date; and (vi) the
agreements, documents and instruments evidencing Unsecured Indebtedness and
Subordinated Indebtedness will reflect, to the Administrative Agent’s
reasonable satisfaction, the


 


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restrictions and
limitations set forth in this Section 6.09, such that the holders of such
Subordinated Indebtedness or Unsecured Indebtedness, as applicable, shall have
acknowledged in writing that the terms of such Subordinated Indebtedness or
Unsecured Indebtedness shall not contravene the requirements of this Section 6.09
(including all limitations on principal payments tied to Restricted Payment availability
under Section 6.07(i)), and such agreements, documents and instruments
shall not be amended, modified, or waived to eliminate such requirements and
acknowledgments without the Administrative Agent’s prior written consent (which
may be granted or withheld in the Administrative Agent’s sole and absolute
discretion); provided, that if the Administrative Agent or an Affiliate
thereof holds any Unsecured Indebtedness or Subordinated Indebtedness, then,
with respect to such Unsecured Indebtedness or Subordinated Indebtedness, such
prior written consent shall be required from the Required Lenders, which may
grant or withhold such consent in their sole and absolute discretion).  Any refinancing, replacement, extension,
increase, substitution, renewal, supplement or modification of Subordinated
Indebtedness or Unsecured Indebtedness shall be subject to the requirements of
this Section 6.09.


 


SECTION 6.10     Sale and Leaseback Transactions. 
No Loan Party will, or permit any Subsidiary to, enter into any Sale and
Leaseback Transaction, other than Sale and Leaseback Transactions (a) in
respect of which the cash consideration received for the asset or property
being sold or otherwise transferred therewith is an amount not less than the
fair market value of such asset or property and (b) that are consummated
within 180 days after such Loan Party or such Subsidiary acquires or completes
the construction of the asset or property being sold or otherwise transferred
therewith.


 


SECTION 6.11     Financial Covenants.


 


(a)           Maximum Total Leverage Ratio. 
The Borrowers will not permit the ratio (the “Total Leverage Ratio”),
determined as of the end of each of their Fiscal Quarters, of (i) Consolidated
Total Indebtedness to (ii) Consolidated EBITDA for the period of the then
most-recently ended four (4) consecutive Fiscal Quarters, all calculated
for the Consolidated Financial Covenant Entities on a consolidated basis, to be
greater than (x) 3.75 to 1.00 from the Funding Date through and including
the Fiscal Quarter ending September 30, 2012, (y) 3.50 to 1.00 for
the Fiscal Quarters ending December 31, 2012, March 31, 2013, June 30,
2013 and September 30, 2013, and (z) thereafter, 3.25 to 1.00.  This covenant shall be tested commencing with
the Fiscal Quarter ending September 30, 2010.


 


(b)           Minimum Interest Coverage Ratio. 
The Borrowers will not permit the Interest Coverage Ratio, determined as
of the end of each of their Fiscal Quarters for the period of the then
most-recently ended four (4) consecutive Fiscal Quarters, to be less than (x) 3.00
to 1.00 from the Funding Date through and including the Fiscal Quarter ending September 30,
2011, (y) 3.25 to 1.00 for the Fiscal Quarters ending December 31,
2011, March 31, 2012, June 30, 2012 and September 30, 2012, and (y) thereafter,
3.50 to 1.00.  This covenant shall be
tested commencing with the Fiscal Quarter ending September 30, 2010.


 


(c)           Minimum Consolidated Net Worth. 
The Borrowers will at all times maintain Consolidated Net Worth of not
less than U.S. $745,800,000 plus 40% of positive Consolidated Net Income
for each Fiscal Year (with no reductions being made for any negative amount in


 


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any Fiscal Year)
on a cumulative basis, beginning with the Fiscal Year ending December 31,
2010; provided, however, that no portion of Consolidated Net
Income corresponding with a Consolidated Financial Covenant Entity that is not
a Loan Party or a Subsidiary thereof shall be included in a computation of
Minimum Consolidated Net Worth under this Section 6.11(c), other than any
amount thereof that is distributed to a Loan Party or Subsidiary as a result of
its ownership of Equity Interests in such other Person, which distributed
amount shall be included herein.


 


SECTION 6.12     Change in Fiscal Year.  The
Consolidated Financial Covenant Entities will not change the end of each of
their Fiscal Years from December 31st without the Administrative Agent’s prior
written consent (such consent not to be unreasonably withheld, and with the
Borrowers agreeing to make such changes to the Loan Documents that are
reasonably requested by the Administrative Agent to give effect to such change
in Fiscal Years); provided, that if World Color Press or a Subsidiary
thereof does not end its Fiscal Year on December 31st, then World Color Press or any Subsidiary thereof, as
applicable, shall be permitted to change their Fiscal Year-ends to December 31st, with such change being made no later than December 31,
2010, but with the understanding that the U.S. Borrower and its Subsidiaries
will be required to provide financial reporting and determine financial
covenant compliance hereunder as though World Color Press and its Subsidiaries
used a December 31st Fiscal Year-end as of the Funding Date.


 


ARTICLE VII


 


Events of
Default


 


If any of the following
events (“Events of Default”)
shall occur:


 


(a)           either Borrower shall fail to pay any
principal of any Loan or any reimbursement obligation in respect of any LC
Disbursement when and as the same shall become due and payable, whether at the
due date thereof or at a date fixed for prepayment thereof or otherwise;


 


(b)           either Borrower shall fail to pay any
interest on any Loan or any fee or any other amount (other than an amount
referred to in clause (a) of this Article) payable under this Agreement,
when and as the same shall become due and payable, and such failure shall
continue unremedied for a period of three (3) Business Days;


 


 


(c)           any representation or warranty made or
deemed made by or on behalf of any Loan Party or any Subsidiary in or in
connection with this Agreement or any other Loan Document or any amendment or
modification hereof or thereof or waiver hereunder or thereunder, or in any
report, certificate, financial statement or other document furnished pursuant
to or in connection with this Agreement or any other Loan Document or any
amendment or modification thereof or waiver thereunder, shall prove to have
been materially inaccurate when made or deemed made;


 


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(d)                                 any Loan Party shall fail to observe or
perform any covenant, condition or agreement contained in Section 5.02,
5.03 (with respect to such Loan Party’s existence), 5.08, 5.09, or in Article VI;


 


(e)                                  any Loan Party or any Subsidiary thereof
shall fail to observe or perform any covenant, condition or agreement contained
in this Agreement (other than those specified in clause (a), (b) or (d) of
this Article) or any other Loan Document, and such failure shall continue
unremedied for a period of thirty (30) days after notice thereof from the
Administrative Agent to the U.S. Borrower (which notice will be given at the
request of any Lender);


 


(f)                                    any Loan Party or any Subsidiary shall
fail to make any payment (whether of principal or interest and regardless of
amount) in respect of any Material Indebtedness, when and as the same shall
become due and payable or within any applicable grace period;


 


(g)                                 any event or condition occurs that
results in any Material Indebtedness becoming due prior to its scheduled maturity
or that enables or permits (with or without the giving of notice, the lapse of
time or both) the holder or holders of any Material Indebtedness or any trustee
or agent on its or their behalf to cause any Material Indebtedness to become
due, or to require the prepayment, repurchase, redemption or defeasance
thereof, prior to its scheduled maturity; provided that this clause (g) shall
not apply to (i) secured Indebtedness that becomes due as a result of the
voluntary sale or transfer of the property or assets securing such Indebtedness
or other voluntary prepayment or (ii) Indebtedness that is not yet due, if
the applicable Loan Party or Subsidiary has not received written notice of
default from the holder or holders of such Indebtedness or any trustee or agent
on its or their behalf;


 


(h)                                 an involuntary proceeding shall be
commenced or an involuntary petition shall be filed seeking (i) liquidation,
reorganization, arrangement or other relief in respect of any Loan Party or any
Subsidiary or its debts, or of a substantial part of its assets, under any
Federal, state, provincial or foreign bankruptcy, insolvency, receivership or
similar law now or hereafter in effect or (ii) the appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar official for
any Loan Party or any Subsidiary or for a substantial part of its assets or (iii) possession,
foreclosure, seizure or retention, sale or other disposition of, or other
proceedings to enforce security over any substantial part of the assets of any
Loan Party or any Subsidiary, and, in any such case, such proceeding or
petition shall continue undismissed for sixty (60) days or an order or decree
approving or ordering any of the foregoing shall be entered;


 


(i)                                     any Loan Party or any Subsidiary shall (i) voluntarily
commence any proceeding or file any plan of arrangement, proposal or petition
or make an assignment or motion seeking liquidation, reorganization or other
relief under any Federal, state or foreign bankruptcy, insolvency, receivership
or similar law now or hereafter in effect, (ii) consent to the institution
of, or fail to contest in a timely and appropriate manner, any proceeding or
petition described in clause (h) of this Article, (iii) apply for or
consent to the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for any Loan Party or any Subsidiary or for a
substantial part of its assets, (iv) file an answer admitting the material
allegations of a petition filed against it in any such proceeding, (v) make
a general assignment 


 


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for
the benefit of creditors or (vi) take any action for the purpose of
effecting any of the foregoing;


 


(j)                                     any Loan Party or any Subsidiary shall
become unable, admit in writing its inability or fail generally to pay its
debts as they become due;


 


(k)                                  one or more judgments for the payment of
money in an aggregate amount in excess of the U.S. Dollar Amount of U.S.
$25,000,000 shall be rendered against any Loan Party or any Subsidiary or any
combination thereof and shall either not be fully covered by independent
third-party insurance or shall remain undischarged for a period of thirty (30)
consecutive days during which execution shall not be effectively stayed, and
any action shall be legally taken by a judgment creditor to attach or levy upon
any assets of any Loan Party or any Subsidiary to enforce any such judgment and
such action is not stayed within 30 days;


 


(l)                                     an ERISA Event shall have occurred that,
in the opinion of the Required Lenders, when taken together with all other
ERISA Events that have occurred, could reasonably be expected to result in a
liability in excess of the U.S. Dollar Amount of U.S. $25,000,000 or the
imposition of a Lien in excess of U.S. $10,000,000 under Title IV of ERISA, or
a Loan Party or an ERISA Affiliate thereof shall fail to make a contribution
payment to a Pension Plan on or before the applicable due date which could
reasonably be expected to result in the imposition of a Lien in excess of U.S.
$10,000,000 under Section 430(k) of the Code or Section 303(k) of
ERISA;


 


(m)                               any of the Canadian Borrower, Canadian
Loan Party, or any Subsidiary thereof shall have failed to make normal or
special payments to a Canadian Pension Plan, or the occurrence of any event
which may give rise to the full termination of any Canadian Pension Plan which,
when taken together with all ERISA Events that have occurred, could reasonably
be expected to result in liability in excess of the U.S. Dollar Amount of U.S.
$25,000,000;


 


(n)                                 a Change in Control shall occur;


 


(o)                                 the occurrence of any “default”, as
defined in any Loan Document (other than this Agreement) or the breach of any
of the terms or provisions of any Loan Document (other than this Agreement),
which default or breach continues beyond any period of grace therein provided;


 


 


(p)                                 either Loan Party Guaranty shall for any
reason cease to be valid, binding and enforceable in accordance with its terms
or any action shall be taken to discontinue or to assert the invalidity or
unenforceability of such Loan Party Guaranty, or any Loan Party Guarantor shall
fail to comply with any of the terms or provisions of the Loan Party Guaranty
to which it is a party and such failure has not been cured during any applicable
grace period therefor (including, without limitation, by the Borrowers’
removing the affected Subsidiary from its status as a Loan Party Guarantor
pursuant to Section 5.09(a) hereof, to the extent the Borrowers are
permitted to remove such Person and only so long as no other Event of Default
is then outstanding), or any Loan Party Guarantor shall deny that it has any
further liability under the Loan Party Guaranty to which it is a party, or
shall give notice to such effect;


 


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(q)                                 any Collateral Document shall for any
reason fail to create a valid and perfected first priority security interest
and Lien in any Collateral purported to be covered thereby, except as permitted
by the terms of such Collateral Document, or any Collateral Document shall for
any reason cease to be valid, binding and enforceable in accordance with its
terms, or any action shall be taken to discontinue or to assert the invalidity
or unenforceability of any Collateral Document, or any Loan Party shall fail to
comply with any of the terms or provisions of any Collateral Document; provided,
however, that no Event of Default shall occur under this clause (q) if
the aggregate book value of Collateral that is required to be, but is not
subject to, a first priority perfected security interest or Lien is at any time
less than or equal to the U.S. Dollar Amount of U.S. $50,000,000; or


 


(r)                                    with respect to any Loan Document not
covered by clauses (p) and (q) above, any material provision of any
Loan Document shall for any reason cease to be valid, binding and enforceable
in accordance with the terms of such Loan Document or any action shall be taken
to discontinue or to assert the invalidity or unenforceability of any material
provision of any of the Loan Documents or any Loan Party or any Subsidiary
shall fail to comply with any of the material terms or provisions of any of the
Loan Documents to which it is a party;


 


then, and in every such
event (other than an event with respect to any Loan Party described in clause (h) or
(i) of this Article), and at any time thereafter during the continuance of
such event, the Agents may, and at the request of the Required Lenders shall,
by notice to the Borrowers, take either or both of the following actions, at
the same or different times:  (i) terminate
the Commitments, and thereupon the Commitments shall terminate immediately, and
(ii) declare the Loans then outstanding to be due and payable in whole (or
in part, in which case any principal not so declared to be due and payable may
thereafter be declared to be due and payable), and thereupon the principal of
the Loans so declared to be due and payable, together with accrued interest
thereon and all fees and other obligations of the Borrowers accrued hereunder
and under the other Loan Documents, shall become due and payable immediately,
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by the Borrowers; and in case of any event with respect to
either Borrower described in clause (h) or (i) of this Article, the
Commitments shall automatically terminate and the principal of the Loans then
outstanding, together with accrued interest thereon and all fees and other
Secured Obligations accrued hereunder and under the other Loan Documents, shall
automatically become due and payable, without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Borrowers.  Upon the occurrence and during the
continuance of an Event of Default, the Agents may, and at the request of the
Required Lenders shall, exercise any rights and remedies provided to the
Applicable Agents under the Loan Documents or at law or equity, including all
remedies provided under the UCC.


 


ARTICLE VIII


 


The
Agents


 


Each of the Lenders and
each Issuing Bank hereby irrevocably appoints each Agent as its agent and
authorizes such Agent to take such actions on its behalf, including execution
of subordination agreements in respect of Subordinated Indebtedness and the
other 


 


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Loan Documents, and to
exercise such powers as are delegated to such Agent by the terms of the Loan
Documents, together with such actions and powers as are reasonably incidental
thereto.


 


Each bank serving as an
Agent hereunder shall have the same rights and powers in its capacity as a
Lender as any other Lender and may exercise the same as though it were not an
Agent, and such bank and its Affiliates may accept deposits from, lend money to
and generally engage in any kind of business with any Loan Party or any
Subsidiary or other Affiliate thereof as if it were not an Agent hereunder.


 


The Agents shall not have
any duties or obligations except those expressly set forth in the Loan
Documents.  Without limiting the
generality of the foregoing, (a) no Agent shall be subject to any
fiduciary or other implied duties, regardless of whether a Default has occurred
and is continuing, (b) no Agent shall have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary
rights and powers expressly contemplated by the Loan Documents that such Agent
is required to exercise in writing as directed by the Required Lenders (or such
other number or percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 9.02), and (c) except as
expressly set forth in the Loan Documents, no Agent shall have any duty to
disclose, and shall not be liable for the failure to disclose, any information
relating to any Loan Party or any of its Subsidiaries that is communicated to
or obtained by the bank serving as an Agent or any of its Affiliates in any
capacity.  No Agent shall be liable for
any action taken or not taken by it with the consent or at the request of the
Required Lenders (or such other number or percentage of the Lenders as shall be
necessary under the circumstances as provided in Section 9.02) or in the
absence of its own gross negligence or willful misconduct.  No Agent shall be deemed to have knowledge of
any Default unless and until written notice thereof is given to such Agent by a
Borrower or a Lender, and no Agent shall be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation
made in or in connection with any Loan Document, (ii) the contents of any
certificate, report or other document delivered hereunder or in connection with
any Loan Document, (iii) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth in any Loan
Document, (iv) the validity, enforceability, effectiveness or genuineness
of any Loan Document or any other agreement, instrument or document, (v) the
creation, perfection or priority of Liens on the Collateral or the existence of
the Collateral, or (vi) the satisfaction of any condition set forth in Article IV
or elsewhere in any Loan Document, other than to confirm receipt of items
expressly required to be delivered to such Agent.


 


Each Agent shall be
entitled to rely upon, and shall not incur any liability for relying upon, any
notice, request, certificate, consent, statement, instrument, document or other
writing believed by it to be genuine and to have been signed or sent by the
proper Person.  Each Agent also may rely
upon any statement made to it orally or by telephone and believed by it to be
made by the proper Person, and shall not incur any liability for relying
thereon.  Each Agent may consult with
legal counsel (who may be counsel for either Borrower), independent accountants
and other experts selected by it, and shall not be liable for any action taken
or not taken by it in accordance with the advice of any such counsel,
accountants or experts.


 


Each Agent may perform
any and all its duties and exercise its rights and powers by or through any one
or more sub-agents appointed by such Agent. 
Each Agent and any such 


 


118

















 


sub-agent may perform any
and all its duties and exercise its rights and powers through their respective
Related Parties.  The exculpatory
provisions of the preceding paragraphs shall apply to any such sub-agent and to
the Related Parties of each Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as the Agents.


 


Subject to the
appointment and acceptance of a successor Agent as provided in this paragraph,
any Agent may resign at any time by notifying the Lenders, the Issuing Banks
and the Borrowers.  An Agent shall not be
removed at any time or for any reason without its prior written consent.  Upon any such resignation, the Required
Lenders shall have the right, in consultation with the Borrowers, to appoint a
successor.  If no successor shall have
been so appointed by the Required Lenders and shall have accepted such
appointment within thirty (30) days after the retiring Agent gives notice of
its resignation, then the retiring Agent may, on behalf of the Lenders and the
Issuing Banks, appoint a successor Agent which, in the case of the
Administrative Agent shall be a bank with an office in New York, New York, or
an Affiliate of any such bank, and in the case of the Canadian Administration
Agent, shall be a bank with an office in Toronto, Ontario, Canada, or an
Affiliate of any such bank.  The
appointment of a successor Canadian Administrative Agent shall be subject to
the consent of the Administrative Agent (such consent not to be unreasonably
withheld).  Upon the acceptance of its
appointment as an Agent hereunder by a successor, such successor shall succeed
to and become vested with all the rights, powers, privileges and duties of the
retiring Agent, and the retiring Agent shall be discharged from its duties and
obligations hereunder.  The fees payable
by the Borrowers to a successor Agent shall be the same as those payable to its
predecessor unless otherwise agreed between the Borrowers and such
successor.  After an Agent’s resignation
hereunder, the provisions of this Article and Section 9.03 shall
continue in effect for the benefit of such retiring Agent, its sub-agents and
their respective Related Parties in respect of any actions taken or omitted to
be taken by any of them while it was acting as an Agent.


 


Each Lender acknowledges
that it has, independently and without reliance upon any Agent or any other
Lender and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement.  Each Lender also acknowledges
that it will, independently and without reliance upon any Agent or any other
Lender and based on such documents and information as it shall from time to
time deem appropriate, continue to make its own decisions in taking or not
taking action under or based upon this Agreement or any other Loan Document or
any related agreement or any document furnished hereunder or thereunder.


 


None of the Lenders, if
any, identified in this Agreement as a Syndication Agent or Documentation Agent
shall have any right, power, obligation, liability, responsibility or duty
under this Agreement other than those applicable to all Lenders as such.  Without limiting the foregoing, none of such
Lenders shall have or be deemed to have a fiduciary relationship with any
Lender.  Each Lender hereby makes the
same acknowledgments with respect to the relevant Lenders in their respective
capacities as Syndication Agent or Documentation Agent as it makes with respect
to the Agents in the preceding paragraph.


 


Except with respect to
the exercise of setoff rights of any Lender, in accordance with Section 9.08,
the proceeds of which are applied in accordance with this Agreement, each 


 


119

















 


Lender agrees that it
will not take any action, nor institute any actions or proceedings, against any
Loan Party or with respect to any Loan Document, without the prior written
consent of the Required Lenders or, as may be provided in this Agreement or the
other Loan Documents, with the consent of the Administrative Agent.


 


The Lenders are not
partners or co-venturers, and no Lender shall be liable for the acts or
omissions of, or (except as otherwise set forth herein in case of the
Administrative Agent) authorized to act for, any other Lender.  The Administrative Agent shall have the
exclusive right on behalf of the Lenders to enforce the payment of the
principal of and interest on any Loan after the date such principal or interest
has become due and payable pursuant to the terms of this Agreement.


 


Each Agent is a “representative”
of the Holders of Secured Obligations within the meaning of the term “secured
party” as defined in the New York Uniform Commercial Code.  Each Lender authorizes each Agent to enter
into each of the Collateral Documents to which it is a party and to take all
action contemplated by such documents. 
Each Lender agrees that no Holder of Secured Obligations (other than the
Applicable Agent) shall have the right individually to seek to realize upon the
security granted by any Collateral Document, it being understood and agreed
that such rights and remedies may be exercised solely by the Applicable Agent
for the benefit of the Holders of Secured Obligations upon the terms of the
Collateral Documents.  In the event that
any Collateral is hereafter pledged by any Person as collateral security for
the Secured Obligations, the Applicable Agent is hereby authorized, and hereby
granted a power of attorney, to execute and deliver on behalf of the Holders of
Secured Obligations any Loan Documents necessary or appropriate to grant and
perfect a Lien on such Collateral in favor of the Applicable Agent on behalf of
the Holders of Secured Obligations.  The
Lenders hereby authorize each Agent, at its option and in its discretion, to
release any Lien granted to or held by such Agent upon any Collateral (i) as
described in Section 9.02(c); (ii) as permitted by, but only in
accordance with, the terms of the applicable Loan Document; or (iii) if
approved, authorized or ratified in writing by the Required Lenders, unless such
release is required to be approved by all of the Lenders hereunder.  Upon request by the Applicable Agent at any
time, the Lenders will confirm in writing the Applicable Agent’s authority to
release particular types or items of Collateral pursuant hereto.  Upon any sale or transfer of assets
constituting Collateral which is permitted pursuant to the terms of any Loan
Document (including a permitted transfer to a Subsidiary other than a Loan
Party), or consented to in writing by the Required Lenders or all of the
Lenders, as applicable, and upon at least five Business Days’ prior written
request by the U.S. Borrower to the Administrative Agent, the Applicable Agent
shall (and is hereby irrevocably authorized by the Lenders to) execute such
documents as may be necessary to evidence the release of the Liens granted to
the Applicable Agent for the benefit of the Holders of Secured Obligations
herein or pursuant hereto upon the Collateral that was sold or transferred; provided,
however, that (i) the Applicable Agent shall not be required to
execute any such document on terms which, in the Applicable Agent’s opinion,
would expose the Applicable Agent to liability or create any obligation or
entail any consequence other than the release of such Liens without recourse or
warranty, and (ii) such release shall not in any manner discharge, affect
or impair the Secured Obligations or any Liens upon (or obligations of any Loan
Party or any Subsidiary thereof in respect of) all interests retained by any
Loan Party or any Subsidiary thereof, including (without limitation) the
proceeds of the sale, all of which shall continue to constitute part of the
Collateral.


 


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Each Borrower, on its
behalf and on behalf of its Subsidiaries, and each Lender, on its behalf and on
behalf of its affiliated Secured Parties, agrees that the Applicable Agent may
determine, in its sole discretion, to not perfect a Lien in an asset of any
Loan Party if the cost and expense associated with perfecting such Lien would
be excessive in light of the value of such asset, or if such asset would not
provide material credit support for the benefit of the Holders of Secured
Obligations.


 


For the purposes of
holding hypothecs and any other security granted by any Borrower or any other
Loan Party pursuant to the laws of the Province of Quebec to secure payment of
any bond, note or other title of indebtedness issued by, or any other
Obligation of, any Borrower or any other Loan Party in connection with this Agreement,
the Administrative Agent, each Lender (on its own behalf and on behalf of its
affiliated secured parties) and each Issuing Bank and each Borrower on behalf
of itself and on behalf of its Subsidiaries hereby irrevocably appoints,
constitutes and authorizes the Canadian Administrative Agent and, to the extent
necessary, ratifies the appointment and authorization of the Canadian
Administrative Agent, to act as the person holding irrevocable the power of
attorney (i.e. “fondé de pouvoir”) (in such
capacity, the “Attorney”) of the Agents, the Lenders (and affiliated
secured parties) and the Issuing Banks as contemplated under Article 2692
of the Civil Code of Québec, and to enter into, to take and to hold on its
behalf, and for its benefit, and for the benefit of each Agent, each Lender
(and affiliated secured parties) and the Issuing Banks, each such hypothec and
other security, and to exercise such powers and duties that are conferred upon
the Attorney under any hypothec or other security and agree that the Canadian
Administrative Agent may act as the bondholder and mandatary with respect to
any bond, debenture or similar title of indebtedness that may be issued by such
Borrower or any Subsidiary thereof and pledged in favor of the Secured Parties
in connection with this Agreement. 
Moreover, without prejudice to such appointment and authorization to act
as the person holding the power of attorney as aforesaid, the Administrative
Agent, each Lender (on its own behalf and on behalf of its affiliated secured parties)
and each Issuing Bank hereby irrevocably appoint and authorize the Canadian
Administrative Agent (in such capacity, the “Custodian”) to act as agent
and custodian for and on behalf of the Agents, the Lenders (and affiliated
secured parties) and the Issuing Banks to acquire, hold and be the sole
registered holder of any bond, note or title of indebtedness which may be
issued under any hypothec or other security issued by either Borrower or any
Subsidiary thereof in connection with this Agreement, the whole notwithstanding
Section 32 of An Act respecting the special powers of legal persons
(Quebec) or any other applicable law, and to execute all related
documents.  The Canadian Administrative
Agent as the Attorney and the Custodian shall: (a) have the sole and
exclusive right and authority to exercise, except as may be otherwise
specifically restricted by the terms hereof, all rights and remedies given to
the Attorney and the Custodian (as applicable) pursuant to any hypothec, bond,
note or title of indebtedness, pledge, applicable laws or otherwise, (b) benefit
from and be subject to all provisions hereof with respect to the Canadian
Administrative Agent mutatis mutandis, including, without limitation, all such
provisions with respect to the liability or responsibility to and
indemnification by the Lenders and the Issuing Banks, and (c) be entitled
to delegate from time to time any of its powers or duties under any hypothec,
bond, note or title of indebtedness or pledge on such terms and conditions as
it may determine from time to time.  Any
person who becomes a successor Administrative Agent, a Lender or an Issuing
Bank shall, by its execution of an Assignment and Assumption, be deemed to have
consented to and confirmed: (i) the Attorney as the person holding the
power of attorney as aforesaid and to have ratified, as of the 


 


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date it becomes a
successor Administrative Agent, a Lender or an Issuing Bank, as applicable, all
actions taken by the Attorney in such capacity, and (ii) the Custodian as
the agent and custodian as aforesaid and to have ratified, as of the date it
becomes a successor Administrative Agent, a Lender or an Issuing Bank, as
applicable, all actions taken by the Custodian in such capacity.  The substitution of the Canadian
Administrative Agent pursuant to the provisions of this Article VIII shall
also constitute the substitution of the Attorney and the Custodian.


 


ARTICLE IX


 


Miscellaneous


 


SECTION 9.01                                      Notices.  (a) 
Except in the case of notices and other communications expressly permitted to
be given by telephone (and subject to paragraph (b) below), all notices
and other communications provided for herein shall be in writing and shall be
delivered by e-mail, by hand or overnight courier service, mailed by certified
or registered mail or sent by telecopy, as follows:


 


(i)                                     if to either Borrower or any Subsidiary
thereof, c/o Quad Graphics, Inc., N63 W23075 State Hwy. 74, Sussex, WI
53089-2827, Attention of Kelly Vanderboom, Vice President-Treasurer, with a
copy to Andrew Schiesl, Vice President, General Counsel and Secretary; Telecopy
No. 414-566-9533; Telephone No. (414) 566-2464; email:
Kelly.Vanderboom@qg.com for Kelly Vanderboom, and Andrew.Schiesl@qg.com for
Andrew Schiesl);


 


(ii)                                  if to the Administrative Agent, to
JPMorgan Chase Bank, N.A., 10 S. Dearborn Street, Floor 7, Chicago, IL
60603-2003, Attention of Hiral Patel; Telecopy No. (888) 208-7168;
Telephone No. (312) 732-6221); email address: servicing.6@jpmchase.com;


 


(iii)                               if to the Canadian Administrative Agent,
to JPMorgan Chase Bank, Toronto Branch, 200 Bay Street, 18th floor, Toronto,
M5J 2J2, Canada, Attention of Indrani Lazarus; Telecopy No. (416)
981-9174; Telephone No. (416) 981-9218; email address: indrani.lazarus@jpmorgan.com;


 


(iv)                              if to JPMorgan Chase Bank, N.A., as an
Issuing Bank, to JPMorgan Chase Bank, N.A., 10 S. Dearborn Street, Floor 7,
Chicago, IL 60603-2003, Attention of Hiral Patel; Telecopy No. (888)
208-7168; Telephone No. (312) 732-6221); email address: servicing.6@jpmchase.com;  with respect to any other Issuing Bank, to
such address as provided by such Issuing Bank to the Borrowers and the
Applicable Agent;


 


(v)                                 if (A) to the U.S. Tranche Swingline
Lender, to JPMorgan Chase Bank, N.A., 10 S. Dearborn Street, Floor 7, Chicago,
IL 60603-2003, Attention of Hiral Patel; Telecopy No. (888) 208-7168;
Telephone No. (312) 732-6221); email address: servicing.6@jpmchase.com;
and (B) to the Canadian Tranche Swingline Lender, to JPMorgan Chase Bank,
Toronto Branch, 200 Bay Street, 18th floor, Toronto, M5J 2J2, Canada, Attention of
Indrani Lazarus; Telecopy No. (416) 981-9174; Telephone No. (416)
981-9218; email address: indrani.lazarus@jpmorgan.com; and


 


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(vi)                              if to any other Lender, to its address
(or telecopy number) set forth in its Administrative Questionnaire.


 


(b)                                 Notices and other communications to the
Lenders hereunder may be delivered or furnished by electronic communications
pursuant to procedures approved by the Administrative Agent; provided
that the foregoing shall not apply to notices pursuant to Article II
unless otherwise agreed by the Administrative Agent and the applicable Lender; provided,
further, that the Borrower may provide notices to the Applicable Agents
pursuant to Article II by e-mail. 
The Administrative Agent, or either Borrower may, in its discretion,
agree to accept notices and other communications to it hereunder by electronic
communications pursuant to procedures approved by it; provided that
approval of such procedures may be limited to particular notices or
communications.  Notices under Section 5.02(a) and
(f), if sent by e-mail, shall also be sent by another method of communication
approved under this Section 9.01.


 


(c)                                  Any party hereto may change its address,
e-mail address or telecopy number for notices and other communications
hereunder by notice to the other parties hereto.  All notices and other communications given to
any party hereto in accordance with the provisions of this Agreement shall be
deemed to have been given on the date of receipt during regular business hours.


 


SECTION 9.02                                      Waivers; Amendments.  (a) 
No failure or delay by any Agent, any Issuing Bank or any Lender in exercising
any right or power hereunder or under any other Loan Document shall operate as
a waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of any
other right or power.  The rights and
remedies of the Agents, the Issuing Banks and the Lenders hereunder and under
the other Loan Documents are cumulative and are not exclusive of any rights or
remedies that they would otherwise have. 
No waiver of any provision of any Loan Document or consent to any
departure by any Loan Party or Subsidiary thereof therefrom shall in any event
be effective unless the same shall be permitted by paragraph (b) of this
Section, and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given.  Without limiting the generality of the
foregoing, the making of a Loan or issuance of a Letter of Credit shall not be
construed as a waiver of any Default, regardless of whether any Agent, any
Lender or any Issuing Bank may have had notice or knowledge of such Default at
the time.


 


(b)                                 Except as provided in Section 2.20,
neither this Agreement nor any provision hereof may be waived, amended or
modified except pursuant to an agreement or agreements in writing entered into
by the Borrowers and the Required Lenders or by the Borrowers and the
Administrative Agent with the consent of the Required Lenders; provided that no
such agreement shall:


 


(i)                                     increase the Commitment of any Lender
without the written consent of such Lender,


 


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(ii)                                  reduce the principal amount of any Loan
or LC Disbursement or reduce the rate of interest thereon, or reduce any fees
payable hereunder, without the written consent of each Lender directly affected
thereby,


 


(iii)                               amend, modify or waive the requirements
of Section 2.11(b), including, without limitation, solely for purposes
thereof, each definition used therein or otherwise directly related thereto
(such as, but not limited to, the definitions of Asset Sale Allowance, Free
Cash Flow, Free Cash Flow Percentage, and Prepayment Event), without (1) the
written consent of Term Loan Lenders holding more than 50% of the aggregate
principal amount of the Term Loans at such time and (2) Revolving Lenders
holding more than 50% of the aggregate of the Revolving Credit Exposures and
unused Revolving Commitments at such time.


 


(iv)                              postpone the scheduled date of payment of
the principal amount of any Loan or LC Disbursement, or any interest thereon
(other than the waiver of default interest), or any fees payable hereunder, or
reduce the amount of, waive or excuse any such payment, or postpone the
scheduled date of expiration of any Commitment (other than with respect to the
foregoing, any reduction of the amount of, or any extension of the payment date
for, the mandatory prepayments required under Section 2.11 in each case
which shall require the approval of the Lenders identified in the foregoing Section 9.02(b)(iii)),
without the written consent of each Lender directly affected thereby; provided,
that no extension of the Revolving Loan Maturity Date shall be deemed to
directly affect any Term Loan Lender, and subject to the following proviso, the
only Lenders entitled to vote to extend the Revolving Loan Maturity Date shall
be those Revolving Lenders directly affected thereby (with the understanding
that an extension of the Revolving Loan Maturity Date shall not apply to any
Revolving Lender that does not approve such extension); provided, further,
that (x) no change in the Applicable Margin for such approving Revolving
Lenders shall require the approval of any Lenders other than all such approving
Revolving Lenders (which all would be subject to the same change) so long as
such change does not result in the Applicable Margin for Revolving Loans and
related Letter of Credit obligations held by the approving Revolving Lenders
exceeding the Applicable Margin for Term Loan Lenders, and (y) no other
amendment or modification shall be made in connection with an extension of the
Revolving Loan Maturity Date (including, without limitation, amendments to or
modifications of covenants or Events of Default) without the approval of the
Lenders otherwise required under this Section 9.02.


 


(v)                                 change Section 2.18(b) or (d) in
a manner that would alter the pro rata sharing of payments required thereby,
without the written consent of each Lender,


 


(vi)                              change any of the provisions of this Section or
the definition of “Required Lenders” or any other provision hereof specifying
the number or percentage of Lenders required to waive, amend or modify any
rights hereunder or make any determination or grant any consent hereunder,
without the written consent of each Lender,


 


(vii)                           release any Loan Party Guarantor that is
a Borrower or a Material Subsidiary from its obligations under its Loan Party
Guaranty without the written consent of each Lender; provided, that no
release provided for in Section 5.09 shall require the vote of any Lender under
this clause (vii), or


 


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(viii)                        except as provided in clauses (c) and
(d) of this Section, except in conjunction with a release of a Borrower or
a Loan Party Guarantor from its Loan Party Guaranty as permitted by this Section 9.02(b),
or except as provided in any Collateral Document, release the Collateral of any
Borrower or any Loan Party Guarantor that is a Material Subsidiary, without the
written consent of each Lender; provided, that no release provided for
in Section 5.09 shall require the vote of any Lender under this clause
(viii);


 


provided further that no
such agreement shall amend, modify or otherwise affect the rights or duties of
any Agent, an Issuing Bank or a Swingline Lender hereunder without the prior
written consent of such Agent, such Issuing Bank or such Swingline Lender, as
the case may be.  The Administrative
Agent may also amend Schedule 2.01 to reflect assignments entered into pursuant
to Section 9.04.


 


(c)                                  The Lenders hereby irrevocably authorize
each Agent, at its option and in its sole discretion, to (1) release any
Liens granted to such Agent by the Loan Parties on any Collateral (i) upon
the termination of all Commitments, payment and satisfaction in full in cash of
all Secured Obligations (other than Unliquidated Obligations), and the cash
collateralization of all Unliquidated Obligations in a manner satisfactory to
the Administrative Agent (with a corresponding release of the Loan Party
Guarantors from their Loan Party Guarantees), (ii) constituting property
being sold or disposed of if the U.S. Borrower certifies to the Administrative
Agent that the sale or disposition is made in compliance with the terms of this
Agreement (and the Administrative Agent may rely conclusively on any such
certificate, without further inquiry); provided, that there also shall
be a corresponding release of a Loan Party Guarantor from its Loan Party
Guaranty if such Loan Party Guarantor’s Equity Interests are the subject of
such permitted sale or disposition, (iii) constituting property leased to
a Loan Party under a lease which has expired or been terminated in a
transaction permitted under this Agreement, or (iv) as required to effect
any sale or other disposition of such Collateral in connection with any
exercise of remedies of such Agent and the Lenders pursuant to Article VII
(including, if applicable, a corresponding release of a Loan Party Guarantor
from its Loan Party Guaranty), and (2) take any actions deemed appropriate
by it in connection with the grant by any Loan Party or any Subsidiary of Liens
of the type described in clauses (c) through (l) of Section 6.02
(including without limitation, by executing appropriate lien releases or lien
subordination agreements in favor of the holder or holders of such Liens, in
either case solely with respect to the item or items of equipment or other
assets subject to such Liens).  Any such
release shall not in any manner discharge, affect, or impair the Obligations or
any Liens (other than those expressly being released) upon (or obligations of the
Loan Parties in respect of) all interests retained by the Loan Parties,
including the proceeds of any sale, all of which shall continue to constitute
part of the Collateral.


 


(d)                                 If, in connection with any proposed
amendment, waiver or consent requiring the consent of “each Lender” or “each Lender
directly affected thereby,” the consent of the Required Lenders is obtained,
but the consent of other necessary Lenders is not obtained (any such Lender
whose consent is necessary but not obtained being referred to herein as a “Non
Consenting Lender”), then the U.S. Borrower may elect to replace a Non
Consenting Lender as a Lender party to this Agreement, provided that,
concurrently with such replacement, (i) another bank or other entity which
is reasonably satisfactory to the U.S. Borrower and the Administrative Agent
shall agree, as of such date, to purchase for cash the Loans and other 


 


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Obligations
due to the Non Consenting Lender pursuant to an Assignment and Assumption and
to become a Lender for all purposes under this Agreement and to assume all
obligations of the Non Consenting Lender to be terminated as of such date and
to comply with the requirements of clause (b) of Section 9.04, and (ii) the
Borrowers shall pay to such Non Consenting Lender in same day funds on the day
of such replacement (1) all interest, fees and other amounts then accrued
but unpaid to such Non Consenting Lender by the Borrowers hereunder to and
including the date of termination, including, without limitation payments due
to such Non Consenting Lender under Sections 2.15 and 2.17, and (2) an
amount, if any, equal to the payment which would have been due to such Lender
on the day of such replacement under Section 2.16 had the Loans of such
Non Consenting Lender been prepaid on such date rather than sold to the
replacement Lender. If a Non Consenting Lender is replaced pursuant to this Section 9.02(d) on
or before the first anniversary of the Funding Date, then such Non Consenting
Lender shall receive a replacement premium from the Borrowers on the date on
which it is replaced equal to 1.0% times the aggregate principal amount
of Term Loans held by such Non Consenting Lender at the time of its
replacement.


 


SECTION 9.03                                      Expenses; Indemnity; Damage Waiver.  (a) 
The Borrowers shall jointly and severally pay (i) all reasonable
out-of-pocket expenses incurred by each Agent and its Affiliates, including the
reasonable fees, charges and disbursements of counsel for any Agent (including
Canadian counsel and local counsel), in connection with the syndication and
distribution (including, without limitation, via the internet or through a
service such as Intralinks) of the credit facilities provided for herein, the
preparation and administration of this Agreement and the other Loan Documents
or any amendments, modifications or waivers of the provisions hereof or thereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated), (ii) all reasonable out-of-pocket expenses incurred by the
Issuing Banks in connection with the issuance, amendment, renewal or extension
of any Letter of Credit or any demand for payment thereunder and (iii) all
out-of-pocket expenses incurred by any Agent, any Issuing Bank or any Lender,
including the fees, charges and disbursements of any counsel for any Agent, any
Issuing Bank or any Lender (including Canadian counsel and local counsel), in
connection with the enforcement or protection of its rights in connection with
this Agreement and any other Loan Document, including its rights under this
Section, or in connection with the Loans made or Letters of Credit issued
hereunder, including all such out-of-pocket expenses incurred during any
workout, restructuring or negotiations in respect of such Loans or Letters of
Credit.


 


(b)                                 Each Borrower shall jointly and severally
indemnify each Agent, each Issuing Bank and each Lender, and each Related Party
of any of the foregoing Persons (each such Person being called an “Indemnitee”)
against, and hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses, including the fees, charges and
disbursements of any counsel for any Indemnitee, incurred by or asserted
against any Indemnitee arising out of, in connection with, or as a result of (i) the
execution or delivery of any Loan Document or any agreement or instrument
contemplated thereby, the performance by the parties hereto of their respective
obligations thereunder or the consummation of the Transactions or any other
transactions contemplated hereby, (ii) any Loan or Letter of Credit or the
use of the proceeds therefrom (including any refusal by an Issuing Bank to
honor a demand for payment under a Letter of Credit if the documents presented
in connection with such demand do not strictly comply with the terms of such
Letter of Credit), (iii) any actual or 


 


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alleged
presence or release of Hazardous Materials on or from any property owned or
operated by any Loan Party or any of their Subsidiaries, or any Environmental
Liability related in any way to any Loan Party or any of their Subsidiaries, or
(iv) any actual or prospective claim, litigation, investigation or
proceeding relating to any of the foregoing, whether based on contract, tort or
any other theory and regardless of whether any Indemnitee is a party thereto;
provided that such indemnity shall not, as to any Indemnitee, be available (i) to
the extent that such losses, claims, damages, liabilities or related expenses
result from the gross negligence or willful misconduct, or breach of an
enforceable contractual obligation by such Indemnitee (or any affiliate thereof
or their respective officers, directors, employees, employers, advisors and
agents) or (ii) if the applicable loss, claim, damage, liability or
expense arises solely as a result of a dispute between two or more of the
Indemnitees and none of the Loan Parties or their Subsidiaries are involved in
such dispute.


 


(c)                                  To the extent that either Borrower fails
to pay any amount required to be paid by it to any Agent, an Issuing Bank or a
Swingline Lender under paragraph (a) or (b) of this Section, each
Lender severally agrees to pay to such Agent, and each Revolving Lender under
the applicable Tranche severally agrees to pay to such Issuing Bank or such
Swingline Lender, as the case may be, such Lender’s Applicable Percentage
(determined as of the time that the applicable unreimbursed expense or
indemnity payment is sought) of such unpaid amount (it being understood that
such Borrower’s failure to pay any such amount shall not relieve either
Borrower of any default in the payment thereof); provided that the unreimbursed
expense or indemnified loss, claim, damage, liability or related expense, as
the case may be, was incurred by or asserted against such Agent, such Issuing
Bank or such Swingline Lender in its capacity as such.


 


(d)                                 To the extent permitted by applicable
law, each Borrower shall not assert, and hereby waives, any claim against any
Indemnitee (i) for any damages arising from the use by others of
information or other materials obtained through telecommunications, electronic
or other information transmission systems (including the Internet), or (ii) on
any theory of liability, for special, indirect, consequential or punitive
damages (as opposed to direct or actual damages) arising out of, in connection
with, or as a result of, this Agreement, any other Loan Document or any
agreement or instrument contemplated hereby or thereby, the Transactions, any
Loan or Letter of Credit or the use of the proceeds thereof, provided, however,
that the term “consequential damages” for this purpose shall not include any
damages which U.S. Borrower may suffer as a result of a claim made by World
Color Press based on U.S. Borrower’s failure to consummate the Transactions, if
U.S. Borrower’s failure to consummate the Transactions resulted from failure or
refusal by an Indemnitee to honor its commitment hereunder.


 


(e)                                  All amounts due under this Section shall
be payable not later than fifteen (15) days after written demand therefor.


 


SECTION 9.04                                      Successors and Assigns.  (a) 
The provisions of this Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns permitted
hereby (including any Affiliate of an Issuing Bank that issues any Letter of
Credit), except that (i) neither Borrower may assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent of
each Lender (and any attempted 


 


127

















 


assignment or transfer by
such Borrower without such consent shall be null and void) and (ii) no
Lender may assign or otherwise transfer its rights or obligations hereunder
except in accordance with this Section. 
Nothing in this Agreement, express or implied, shall be construed to
confer upon any Person (other than the parties hereto, their respective
successors and assigns permitted hereby (including any Affiliate of an Issuing
Bank that issues any Letter of Credit), 
Participants (to the extent provided in paragraph (c) of this
Section) and, to the extent expressly contemplated hereby, the Related Parties
of each of the Agents, the Issuing Banks and the Lenders) any legal or
equitable right, remedy or claim under or by reason of this Agreement.


 


(b)                                 (i)  Subject to the conditions set
forth in paragraph (b)(ii) below, any Lender may assign to one or
more assignees all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Commitment and the Loans at the
time owing to it) with the prior written consent (such consent not to be
unreasonably withheld) of:


 


(A)                              the U.S. Borrower; provided that
no consent of the U.S. Borrower shall be required for an assignment to a
Lender, an Affiliate of a Lender, an Approved Fund or, if an Event of Default
has occurred and is continuing, any other assignee; provided, further,
that the otherwise required prior written consent of the U.S. Borrower to an
assignment will be deemed to have been given if the U.S. Borrower has not
objected to such assignment within five days after a request for such consent;


 


(B)                                the Administrative Agent; provided
that no consent of the Administrative Agent shall be required for an assignment
of all or any portion of a Term Loan to a Lender, an Affiliate of a Lender or
an Approved Fund; and


 


(C)                                each Issuing Bank (such consent not to be
unreasonably withheld); provided that no consent therefrom shall be
required for an assignment of all or any portion of a Term Loan to a Lender, an
Affiliate of a Lender or an Approved Fund.


 


(ii)                                  Assignments shall be subject to the
following additional conditions:


 


(A)                              except in the case of an assignment to a
Lender or an Affiliate of a Lender or an Approved Fund or an assignment of the
entire remaining amount of the assigning Lender’s Commitment or Loans of any
Class, the amount of the Commitment or Loans of the assigning Lender subject to
each such assignment (determined as of the date the Assignment and Assumption
with respect to such assignment is delivered to the Administrative Agent) shall
not be less than U.S$1,000,000 in respect of Term Loans and the U.S. Dollar
Amount of U.S. $5,000,000 in respect of Revolving Loans unless each of the U.S.
Borrower and the Administrative Agent otherwise consent, provided that no such
consent of the U.S. Borrower shall be required if an Event of Default has
occurred and is continuing;


 


(B)                                each partial assignment shall be made as
an assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this 


 


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Agreement,
provided that this clause shall not be construed to prohibit the assignment of
a proportionate part of all the assigning Lender’s rights and obligations in
respect of one Class of Commitments or Loans;


 


(C)                                the parties to each assignment shall
execute and deliver to the Administrative Agent an Assignment and Assumption,
together with a processing and recordation fee of U.S. $3,500, such fee to be
paid by either the assigning Lender or the assignee Lender or shared between
such Lenders; provided, that no such U.S. $3,500 fee shall be required
to be paid in conjunction with assignments between a Lender and an Approved
Fund or Affiliate thereof;


 


(D)                               each Lender with Commitments under the
Canadian Tranche shall be required to fund in Canadian Dollars as and when
required hereunder (and no Person shall become such a Lender under the Canadian
Tranche if it is unable to so fund in Canadian Dollars); and


 


(E)                                 the assignee, if it shall not be a
Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire in which the assignee designates one or more credit contacts to
whom all syndicate-level information (which may contain material non-public
information about the Loan Parties, their affiliates and their related parties
or their respective securities) will be made available and who may receive such
information in accordance with the assignee’s compliance procedures and
applicable laws, including Federal and state securities laws.


 


For the purposes of this Section 9.04(b),
the term “Approved Fund” has the following meaning:


 


“Approved Fund” means any
Person (other than a natural person) that is engaged in making, purchasing,
holding or investing in bank loans and similar extensions of credit in the
ordinary course of its business and that is administered or managed by (a) a
Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate
of an entity that administers or manages a Lender.


 


(iii)                               Subject to acceptance and recording
thereof pursuant to paragraph (b)(iv) of this Section, from and after the
effective date specified in each Assignment and Assumption the assignee
thereunder shall be a party hereto and, to the extent of the interest assigned
by such Assignment and Assumption, have the rights and obligations of a Lender
under this Agreement, and the assigning Lender thereunder shall, to the extent
of the interest assigned by such Assignment and Assumption, be released from
its obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender’s rights and obligations under
this Agreement, such Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of Sections 2.15, 2.16, 2.17 and
9.03).  Any assignment or transfer by a
Lender of rights or obligations under this Agreement that does not comply with
this Section 9.04 shall be treated for purposes of this Agreement as a
sale by such Lender of a participation in such rights and obligations in
accordance with paragraph (c) of this Section.


 


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(iv)                              The Administrative Agent, acting for this
purpose as an agent of the Borrowers, shall maintain at one of its offices a
copy of each Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment of,
and principal amount of the Loans and LC Disbursements owing to, each Lender
pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall be
conclusive absent manifest error, and the Borrowers, the Agents, the Issuing
Banks and the Lenders may treat each Person whose name is recorded in the
Register pursuant to the terms hereof as a Lender hereunder for all purposes of
this Agreement, notwithstanding notice to the contrary.  The Register shall be available for
inspection by the Borrowers, the Issuing Banks and any Lender, at any
reasonable time and from time to time upon reasonable prior notice.


 


(v)                                 Upon its receipt of a duly completed
Assignment and Assumption executed by an assigning Lender and an assignee, the
assignee’s completed Administrative Questionnaire (unless the assignee shall
already be a Lender hereunder), the processing and recordation fee referred to
in paragraph (b) of this Section and any written consent to such
assignment required by paragraph (b) of this Section, the Administrative
Agent shall accept such Assignment and Assumption and record the information
contained therein in the Register; provided that if either the assigning Lender
or the assignee shall have failed to make any payment required to be made by it
pursuant to Section 2.05(c), 2.06(d) or (e), 2.07(b), 2.18(d) or
9.03(c), the Administrative Agent shall have no obligation to accept such
Assignment and Assumption and record the information therein in the Register
unless and until such payment shall have been made in full, together with all
accrued interest thereon.  No assignment
shall be effective for purposes of this Agreement unless it has been recorded
in the Register as provided in this paragraph.


 


(c)                                  (i)  Any Lender may, without the
consent of either Borrower, any Agent, any Issuing Bank or either Swingline
Lender, sell participations to one or more banks or other entities (a “Participant”) in all or a portion of such
Lender’s rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans owing to it); provided that (A) such
Lender’s obligations under this Agreement shall remain unchanged, (B) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (C) the Borrowers, the Agents, the
Issuing Banks and the other Lenders shall continue to deal solely and directly
with such Lender in connection with such Lender’s rights and obligations under
this Agreement.  Any agreement or
instrument pursuant to which a Lender sells such a participation shall provide
that such Lender shall retain the sole right to enforce this Agreement and to
approve any amendment, modification or waiver of any provision of this
Agreement; provided that such
agreement or instrument may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, modification or waiver
described in the first proviso to Section 9.02(b) that affects such
Participant.  Subject to paragraph (c)(ii) of
this Section, each Borrower agrees that each Participant shall be entitled to
the benefits of Sections 2.15, 2.16 and 2.17 to the same extent as if it
were a Lender and had acquired its interest by assignment pursuant to paragraph
(b) of this Section.  To the extent
permitted by law, each Participant also shall be entitled to the benefits of Section 9.08
as though it were a Lender, provided such Participant agrees to be subject to Section 2.18(c) as
though it were a Lender.


 


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(ii)                                  A Participant shall not be entitled to
receive any greater payment under Section 2.15 or 2.17 than the applicable
Lender would have been entitled to receive with respect to the participation
sold to such Participant, unless the sale of the participation to such
Participant is made with the U.S. Borrower’s prior written consent.  A Participant that would be a Foreign Lender
if it were a Lender shall not be entitled to the benefits of Section 2.17
unless the U.S. Borrower is notified of the participation sold to such
Participant and such Participant agrees, for the benefit of the Borrowers, to
comply with Section 2.17(e) as though it were a Lender.


 


(d)                                 Any Lender may at any time pledge or
assign a security interest in all or any portion of its rights under this
Agreement to secure obligations of such Lender, including without limitation
any pledge or assignment to secure obligations to a Federal Reserve Bank, and
this Section shall not apply to any such pledge or assignment of a
security interest; provided that no such pledge or assignment of a
security interest shall release a Lender from any of its obligations hereunder
or substitute any such pledgee or assignee for such Lender as a party hereto.


 


SECTION 9.05                                      Survival.  All
covenants, agreements, representations and warranties made by the Loan Parties
in the Loan Documents and in the certificates or other instruments delivered in
connection with or pursuant to this Agreement or any other Loan Document shall
be considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of the Loan Documents and the making of any
Loans and issuance of any Letters of Credit, regardless of any investigation
made by any such other party or on its behalf and notwithstanding that any
Agent, any Issuing Bank or any Lender may have had notice or knowledge of any
Default or incorrect representation or warranty at the time any credit is
extended hereunder, and shall continue in full force and effect as long as the
principal of or any accrued interest on any Loan or any fee or any other amount
payable under this Agreement or any other Loan Document is outstanding and
unpaid or any Letter of Credit is outstanding and so long as the Commitments
have not expired or terminated.  The
provisions of Sections 2.15, 2.16, 2.17 and 9.03 and Article VIII
shall survive and remain in full force and effect regardless of the
consummation of the transactions contemplated hereby, the repayment of the
Loans, the expiration or termination of the Letters of Credit and the
Commitments or the termination of this Agreement or any other Loan Document or
any provision hereof or thereof.


 


SECTION 9.06                                      Counterparts; Integration; Effectiveness. 
This Agreement may be executed in counterparts (and by different parties
hereto on different counterparts), each of which shall constitute an original,
but all of which when taken together shall constitute a single contract.  This Agreement, the other Loan Documents and
any separate letter agreements with respect to fees payable to the Agents
constitute the entire contract among the parties relating to the subject matter
hereof and supersede any and all previous agreements and understandings, oral
or written, relating to the subject matter hereof.  Except as provided in Section 4.01, this
Agreement shall become effective when it shall have been executed by the
Administrative Agent and when the Administrative Agent shall have received
counterparts hereof which, when taken together, bear the signatures of each of
the other parties hereto, and thereafter shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.  Delivery of an executed counterpart of a
signature page of this Agreement by telecopy shall be effective as
delivery of a manually executed counterpart of this Agreement.


 


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SECTION 9.07                                      Severability. 
Any provision of any Loan Document held to be invalid, illegal or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability without
affecting the validity, legality and enforceability of the remaining provisions
thereof; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction.


 


SECTION 9.08                                      Right of Setoff. 
If an Event of Default shall have occurred and be continuing, subsequent
to an election by the Applicable Agent or the Required Lenders, each Lender and
each of its Affiliates is hereby authorized at any time and from time to time,
to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final and in
whatever currency denominated), except payroll and trust accounts, at any time
held and other obligations at any time owing by such Lender or Affiliate to or
for the credit or the account of any Loan Party against any of and all the
Secured Obligations held by such Lender, irrespective of whether or not such
Lender shall have made any demand under the Loan Documents and although such
obligations may be unmatured.  The rights
of each Lender under this Section are in addition to other rights and
remedies (including other rights of setoff) which such Lender may have.


 


SECTION 9.09                                      Governing Law; Jurisdiction; Consent to
Service of Process.  (a)  This Agreement shall be construed
in accordance with and governed by the law of the State of New York.


 


(b)                                 To the maximum extent permitted by
applicable law, each Borrower hereby irrevocably and unconditionally submits,
for itself and its property, to the exclusive jurisdiction of the Supreme Court
of the State of New York sitting in New York County and of the United States
District Court of the Southern District of New York, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to any
Loan Document, or for recognition or enforcement of any judgment, and each of
the parties hereto hereby irrevocably and unconditionally agrees that all
claims in respect of any such action or proceeding may be heard and determined
in such New York State or, to the extent permitted by law, in such Federal
court.  Each of the parties hereto agrees
that a final judgment in any such action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law.  Nothing in this
Agreement or any other Loan Document shall affect any right that any Agent, any
Issuing Bank or any Lender may otherwise have to bring any action or proceeding
relating to this Agreement or any other Loan Document against any Loan Party or
its properties in the courts of any jurisdiction.


 


(c)                                  Each Borrower hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection which it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement or
any other Loan Document in any court referred to in paragraph (b) of this
Section.  Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any
such court.


 


(d)                                 Each party to this Agreement irrevocably
consents to service of process by recognized overnight courier service,
addressed as provided for notices in Section 9.01.  


 


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Nothing
in this Agreement or any other Loan Document will affect the right of any party
to this Agreement to serve process in any other manner permitted by law.


 


SECTION 9.10                                      WAIVER OF JURY TRIAL. 
EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL
PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT,
ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY
(WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.


 


SECTION 9.11                                      Headings.  Article and
Section headings and the Table of Contents used herein are for convenience
of reference only, are not part of this Agreement and shall not affect the
construction of, or be taken into consideration in interpreting, this
Agreement.


 


SECTION 9.12                                      Confidentiality. 
Each of the Agents, the Issuing Banks and the Lenders agrees to maintain
the confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its and its Affiliates’ directors, officers,
employees and agents, including accountants, legal counsel and other advisors
(it being understood that the Persons to whom such disclosure is made will be
informed of the confidential nature of such Information and instructed to keep
such Information confidential), (b) to the extent requested by any
regulatory authority, (c) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process, (d) to any other
party to this Agreement, (e) in connection with the exercise of any
remedies hereunder or under any other Loan Document or any suit, action or
proceeding relating to this Agreement or any other Loan Document or the
enforcement of rights hereunder or thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section, to (i) any
assignee of or Participant in, or any prospective assignee of or Participant
in, any of its rights or obligations under this Agreement or (ii) any
actual or prospective counterparty (or its advisors) to any swap or derivative
transaction relating to either Borrower and each of its obligations, (g) with
the consent of the U.S. Borrower or (h) to the extent such Information (i) becomes
publicly available other than as a result of a breach of this Section or (ii) becomes
available to any Agent, any Issuing Bank or any Lender on a nonconfidential
basis from a source other than a Borrower. 
For the purposes of this Section, “Information” means all information
received from a Borrower relating to either Borrower or its business, other
than any such information that is available to any Agent, any Issuing Bank or
any Lender on a nonconfidential basis prior to disclosure by a Borrower;
provided that, in the case of information received from a Borrower after the
date hereof, such information is clearly identified at the time of delivery as
confidential.  Any Person required to
maintain the confidentiality of Information as provided in this Section shall
be considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.


 


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EACH LENDER ACKNOWLEDGES
THAT INFORMATION AS DEFINED IN SECTION 9.12 FURNISHED TO IT PURSUANT TO
THIS AGREEMENT MAY INCLUDE MATERIAL NON-PUBLIC INFORMATION CONCERNING THE
BORROWERS AND THEIR RESPECTIVE RELATED PARTIES OR THEIR RESPECTIVE SECURITIES,
AND CONFIRMS THAT IT HAS DEVELOPED COMPLIANCE PROCEDURES REGARDING THE USE OF
MATERIAL NON-PUBLIC INFORMATION AND THAT IT WILL HANDLE SUCH MATERIAL
NON-PUBLIC INFORMATION IN ACCORDANCE WITH THOSE PROCEDURES AND APPLICABLE LAW,
INCLUDING FEDERAL AND STATE SECURITIES LAWS.


 


ALL INFORMATION,
INCLUDING REQUESTS FOR WAIVERS AND AMENDMENTS, FURNISHED BY EITHER BORROWER OR
THE ADMINISTRATIVE AGENT PURSUANT TO, OR IN THE COURSE OF ADMINISTERING, THIS
AGREEMENT WILL BE SYNDICATE-LEVEL INFORMATION, WHICH MAY CONTAIN MATERIAL
NON-PUBLIC INFORMATION ABOUT A BORROWER AND ITS AFFILIATES, THE LOAN PARTIES
AND THEIR RELATED PARTIES OR THEIR RESPECTIVE SECURITIES) AND ITS SECURITIES,
ACCORDINGLY, EACH LENDER REPRESENTS TO THE BORROWERS, AND THE ADMINISTRATIVE
AGENT THAT IT HAS IDENTIFIED IN ITS ADMINISTRATIVE QUESTIONNAIRE A CREDIT
CONTACT WHO MAY RECEIVE INFORMATION THAT MAY CONTAIN MATERIAL
NON-PUBLIC INFORMATION IN ACCORDANCE WITH ITS COMPLIANCE PROCEDURES AND
APPLICABLE LAW.


 


SECTION 9.13                                      Patriot Act; Proceeds of Crime (Money Laundering
and Terrorist Financing Act (Canada).  Each Lender
that is subject to the requirements of the Patriot Act hereby notifies each
Loan Party that pursuant to the requirements of the Patriot Act, it is required
to obtain, verify and record information that identifies such Loan Party, which
information includes the name and address of such Loan Party and other
information that will allow such Lender to identify such Loan Party in
accordance with the Patriot Act.  Each
Lender may also request such information in respect of a Loan Party’s
Subsidiaries.  Each Canadian Loan Party
acknowledges that, pursuant to the Proceeds of Crime (Money
Laundering) and Terrorist Financing Act (Canada)  and
other applicable anti-money laundering, anti-terrorist financing, government
sanction and “know your client” laws, whether within Canada or elsewhere
(collectively, including any guidelines or orders thereunder, “AML Legislation”), the Agents, the Lenders and the Issuing
Banks may be required to obtain, verify and record information regarding such
Canadian Loan Party, its directors, authorized signing officers, direct or
indirect shareholders or other Persons in control of such Canadian Loan Party,
and the transactions contemplated hereby. Each Canadian Loan Party shall promptly
provide all such information, including supporting documentation and other
evidence, as may be reasonably requested by any Lender, any Issuing Bank or any
Agent, or any prospective assign or participant of a Lender, an Issuing Bank or
an Agent, in order to comply with any applicable AML Legislation, whether now
or hereafter in existence.  If an Agent
has ascertained the identity of any Canadian Loan Party or any authorized
signatories of such Canadian Loan Party for the purposes of applicable AML Legislation,
then such Agent shall be deemed to have done so as an agent for each Lender,
and this Agreement shall constitute a “written agreement” in such regard
between each Lender, each Issuing Bank and such Agent within the meaning of
applicable AML Legislation, and shall provide to each Lender and each Issuing
Bank copies of all information obtained in such regard 


 


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without any
representation or warranty as to its accuracy or completeness.  Notwithstanding the preceding sentence and
except as may otherwise be agreed in writing, each of the Lenders and Issuing
Banks agrees that the Agents have no obligation to ascertain the identity
of any Canadian Loan Party or any authorized signatories of such Canadian Loan
Party on behalf of any Lender, or to confirm the completeness or accuracy of
any information it obtains from such Canadian Loan Party or any such authorized
signatory in doing so.


 


SECTION 9.14                                      Several Obligations; Nonreliance;
Violation of Law.  The respective obligations of the Lenders
hereunder are several and not joint and the failure of any Lender to make any
Loan or perform any of its obligations hereunder shall not relieve any other
Lender from any of its obligations hereunder. 
Each Lender hereby represents that it is not relying on or looking to
any margin stock for the repayment of the Borrowings provided for herein.  Anything contained in this Agreement to the
contrary notwithstanding, neither any Issuing Bank nor any Lender shall be obligated
to extend credit to a Borrower in violation of any Requirement of Law.


 


SECTION 9.15                                      Disclosure.  Each Borrower
and each Lender hereby acknowledges and agrees that the Agents and/or their
Affiliates from time to time may hold investments in, make other loans to or
have other relationships with any Loan Party, their respective Subsidiaries or
their respective Affiliates.


 


SECTION 9.16                                      Appointment for Perfection. 
Each Lender hereby appoints each other Lender as its agent for the
purpose of perfecting Liens, for the benefit of the Applicable Agent and the
Holders of Secured Obligations, in assets which, in accordance with Article 9
of the UCC or any other applicable law, can be perfected only by
possession.  Should any Lender (other
than the Applicable Agent) lawfully obtain possession of any such Collateral,
such Lender shall notify the Applicable Agent thereof, and, promptly upon the
Applicable Agent’s request therefor shall deliver such Collateral to the
Applicable Agent or otherwise deal with such Collateral in accordance with the
Applicable Agent’s instructions.


 


SECTION 9.17                                      Interest Rate Limitation.


 


(a)                                  Notwithstanding anything herein to the
contrary, if at any time the interest rate applicable to any Loan, together
with all fees, charges and other amounts which are treated as interest on such
Loan under applicable law (collectively, the “Charges”), shall exceed the
maximum lawful rate (the “Maximum Rate”) which may be contracted for,
charged, taken, received or reserved by the Lender holding such Loan in
accordance with applicable law, the rate of interest payable in respect of such
Loan hereunder, together with all Charges payable in respect thereof, shall be
limited to the Maximum Rate and to the extent lawful, the interest and Charges
that would have been payable in respect of such Loan but were not payable as a
result of the operation of this Section shall be cumulated and the
interest and Charges payable to such Lender in respect of other Loans or
periods shall be increased (but not above the Maximum Rate therefor) until such
cumulated amount, together with interest hereon at the Federal Funds Effective
Rate to the date of repayment, shall have been received by such Lender


 


(b)                                 For the purposes of the Interest Act (Canada) and disclosure thereunder, whenever
any interest or any fee to be paid hereunder or in connection herewith is to be



 


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calculated
on the basis of a 360-day or 365-day year, the yearly rate of interest to which
the rate used in such calculation is equivalent is the rate so used multiplied
by the actual number of days in the calendar year in which the same is to be
ascertained and divided by 360 or 365, as applicable.  The rates of interest under this Agreement
are nominal rates, and not effective rates or yields.  The principle of deemed reinvestment of
interest does not apply to any interest calculation under this Agreement.


 


(c)                                  Any provision of this Agreement that
would oblige a Canadian Loan Party or Subsidiary thereof organized under the
laws of Canada to pay any fine, penalty or rate of interest on any arrears of
principal or interest secured by a mortgage on real property or hypothec on
immovables that has the effect of increasing the charge on arrears beyond the
rate of interest payable on principal money not in arrears shall not apply to
such Canadian Loan Party or Subsidiary, which shall be required to pay interest
on money in arrears at the same rate of interest payable on principal money not
in arrears.


 


(d)                                 If any provision of this Agreement would
oblige a Canadian Loan Party or a Subsidiary thereof organized under the laws
of Canada to make any payment of interest or other amount payable to any Holder
of Secured Obligations in an amount or calculated at a rate which would be
prohibited by law or would result in a receipt by that Holder of Secured
Obligations of “interest” at a “criminal rate” (as such terms are construed
under the Criminal Code (Canada)), then,
notwithstanding such provision, such amount or rate shall be deemed to have
been adjusted with retroactive effect to the maximum amount or rate of
interest, as the case may be, as would not be so prohibited by applicable law
or so result in a receipt by that Holder of Secured Obligations of “interest”
at a “criminal rate”, such adjustment to be effected, to the extent necessary
(but only to the extent necessary), as follows: first, by reducing the
amount or rate of interest; and thereafter, by reducing any fees,
commissions, costs, expenses, premiums and other amounts required to be paid
which would constitute interest for purposes of section 347 of the Criminal Code (Canada).


 


SECTION 9.18                                      Subordination of Intercompany
Indebtedness.  Each Borrower agrees that any and all claims
of such Borrower against any Loan Party with respect to any “Intercompany
Indebtedness” (as hereinafter defined), any endorser, obligor or any other
guarantor of all or any part of the Secured Obligations, or against any of its
property shall be subordinate and subject in right of payment to the prior
payment, in full and in cash, of all Secured Obligations; provided that,
and not in contravention of the foregoing, so long as no Event of Default has
occurred and is continuing, each Borrower may make loans to and receive
payments in the ordinary course with respect to such Intercompany Indebtedness
from each such guarantor, including, the Loan Parties, to the extent permitted
by the terms of this Agreement and the other Loan Documents.  Notwithstanding any right of a Borrower to
ask, demand, sue for, take or receive any payment from any guarantor, including
the Loan Parties, all rights, liens and security interests of a Borrower,
whether now or hereafter arising and howsoever existing, in any assets of any
such guarantor shall be and are subordinated to the rights of the Holders of
Secured Obligations in those assets. 
Each Borrower shall not have any right to foreclose upon any such asset,
whether by judicial action or otherwise, unless and until all of the Secured
Obligations (other than Unliquidated Obligations) shall have been fully paid
and satisfied (in cash) and all financing arrangements pursuant to any Loan
Document among the Borrowers and the Holders of Secured Obligations (or any
Affiliate thereof) have been terminated. 
If, at any time after the 


 


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occurrence and during the
continuance of an Event of Default, all or any part of the assets of any such
guarantor, or the proceeds thereof, are subject to any distribution, division
or application to the creditors of such guarantor, whether partial or complete,
voluntary or involuntary, and whether by reason of liquidation, bankruptcy,
arrangement, receivership, assignment for the benefit of creditors or any other
action or proceeding, or if the business of any such guarantor is dissolved or
if substantially all of the assets of any such guarantor are sold, then, and in
any such event (such events being herein referred to as an “Insolvency Event”),
any payment or distribution of any kind or character, either in cash,
securities or other property, which shall be payable or deliverable upon or
with respect to any Indebtedness of any guarantor, including the Loan Parties,
to either Borrower (“Intercompany Indebtedness”) shall be paid or
delivered directly to the Administrative Agent for application on any of the
Secured Obligations, due or to become due, until such Secured Obligations
(other than Unliquidated Obligations) shall have first been fully paid and
satisfied (in cash).  Should any payment,
distribution, security or instrument or proceeds thereof be received by a
Borrower at any time after the occurrence and during the continuation of an
Event of Default upon or with respect to the Intercompany Indebtedness after an
Insolvency Event prior to the satisfaction of all of the Secured Obligations
(other than Unliquidated Obligations) and the termination of all financing
arrangements pursuant to any Loan Document among either Borrower and the
Holders of Secured Obligations (and their Affiliates), the applicable Borrower
shall receive and hold the same in trust, as trustee, for the benefit of the
Holders of Secured Obligations and shall forthwith deliver the same to the
Administrative Agent, for the benefit of the Holders of Secured Obligations, in
precisely the form received (except for the endorsement or assignment of the
applicable Borrower where necessary), for application to any of the Secured
Obligations, due or not due, and, until so delivered, the same shall be held in
trust by the applicable Borrower as the property of the Holder of Secured
Obligations.  If a Borrower fails to make
any such endorsement or assignment to the Administrative Agent, the
Administrative Agent or any of its officers or employees are irrevocably
authorized to make the same.  Each
Borrower agrees that until the Secured Obligations (other than Unliquidated
Obligations) have been paid in full (in cash) and satisfied and all financing
arrangements pursuant to any Loan Document among the Borrowers and the Holders
of Secured Obligations (and their Affiliates) have been terminated, each
Borrower will not assign or transfer to any Person (other than the
Administrative Agent) any claim such Borrower has or may have against any
guarantor, including the Loan Parties.


 


ARTICLE X


 


Collection
Allocation Mechanism


 


SECTION 10.01                               Implementation of CAM.


 


(a)                                  Upon the acceleration of the Loans and
the termination of the Revolving Commitments in accordance with the terms
hereof (including, without limitation, as a result of an event under clause (h) or
(i) of Article VII), the Lenders shall automatically and without
further act (and without regard to the provisions of Section 9.04) be
deemed to have exchanged interests in the Term Loans, the Revolving Loans and
the other Obligations (including, without limitation, exchanges between
Revolving Loans under the U.S. Tranche and the Canadian Tranche) such that in
lieu of the interest of each Lender in each Revolving Loan or Term Loan in
which it shall participate as of such date (including such Lender’s interest in
the other 


 


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Obligations of each Loan
Party), such Lender shall hold an interest in every one of the Revolving Loans,
Term Loans and other Obligations of each Borrower, whether or not such Lender
shall previously have participated therein, equal to such Lender’s CAM
Percentage thereof.  Each Lender and each
Borrower hereby consents and agrees to the CAM Exchange, and each Lender agrees
that the CAM Exchange shall be binding upon its successors and assigns and any
Person that acquires a participation in its interests in any Revolving Loan,
Term Loan or other Obligations.  Each
Loan Party agrees from time to time to execute and deliver to the Administrative
Agent all instruments and documents as the Administrative Agent shall
reasonably request to evidence and confirm the respective interests of the
Lenders after giving effect to the CAM Exchange.


 


(b)                                 As a result of the CAM Exchange, upon and
after the date on which the CAM Exchange occurs, each payment received by the
Administrative Agent pursuant to any Loan Document in respect of the
Obligations, and each distribution made by the Administrative Agent in respect
of the Obligations, shall be distributed to the Lenders pro rata in accordance
with their respective CAM Percentages. 
Any direct payment received by a Lender upon or after the Termination
Date, including by way of setoff, in respect of the Obligations shall be paid
over to the Administrative Agent for distribution to the Lenders in accordance
herewith.


 


SECTION 10.02                               Letters of Credit.


 


(a)                                  In the event that on the date on which a
CAM Exchange occurs any Letter of Credit shall be outstanding and undrawn in
whole or in part, or any amount drawn under any such Letter of Credit shall not
have been reimbursed by the applicable Borrower or with the proceeds of a
Revolving Loan, each Lender having, on such date and prior to giving effect to
the CAM Exchange, LC Exposure with respect to such Letter of Credit shall
promptly pay over to the Administrative Agent, in immediately available funds,
in the case of any undrawn amount, and in U.S. Dollars, in the case of any
unreimbursed amount, an amount equal to such Lender’s Applicable Percentage of
such undrawn face amount or (to the extent it has not already done so) such
unreimbursed drawing, as the case may be, together with interest thereon from
the date on which such CAM Exchange occurs to the date on which such amount
shall be paid to the Administrative Agent at the rate that would be applicable
at the time to an ABR Loan in a principal amount equal to such amount.  The Administrative Agent shall establish a
separate account or accounts for each Lender (each, an “LC
Reserve Account”) for the amounts received with respect to each
such Letter of Credit pursuant to the preceding sentence.  The Administrative Agent shall deposit in
each Lender’s LC Reserve Account such Lender’s CAM Percentage of the amounts
received from the Lenders as provided above. 
The Administrative Agent shall have sole dominion and control over each
LC Reserve Account, and the amounts deposited in each LC Reserve Account shall
be held in such LC Reserve Account until withdrawn as provided in paragraph
(b),  (c),  (d)  or (e)  below.  The Administrative Agent shall maintain records
enabling it to determine the amounts paid over to it and deposited in the LC
Reserve Accounts in respect of each Letter of Credit and the amounts on deposit
in respect of each Letter of Credit attributable to each Lender’s CAM
Percentage.  The amounts held in each
Lender’s LC Reserve Account shall be held as a reserve against the outstanding
LC Exposure, shall be the property of such Lender, shall not constitute Loans
to or give rise to any claim of or against any Loan Party and shall not give
rise to any obligation on the part of either Borrower to pay interest to such
Lender, it being agreed that the reimbursement obligations in respect of 


 


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Letters of Credit shall
arise only at such times as drawings are made thereunder, as provided in Article II.


 


(b)                                 In the event that on or after the date on
which a CAM Exchange occurs any drawing shall be made in respect of a Letter of
Credit, the Administrative Agent shall, at the request of the applicable Issuing
Bank, withdraw from the LC Reserve Account of each Lender any amounts, up to
the amount of such Lender’s CAM Percentage of such drawing, deposited in
respect of such Letter of Credit and remaining on deposit and deliver such
amounts to such Issuing Bank in satisfaction of the reimbursement obligations
of the Lenders under Section 2.06(e) (but not of either Borrower
under Section 2.06(e)).  In the
event any Lender shall default on its obligation to pay over any amount to the
Administrative Agent in respect of any Letter of Credit as provided in this Section 10.02,
the applicable Issuing Bank shall, in the event of a drawing thereunder, have a
claim against such Lender to the same extent as if such Lender had defaulted on
its obligations under Section 2.06(e), but shall have no claim against any
other Lender in respect of such defaulted amount, notwithstanding the exchange
of interests in the applicable Borrower’s reimbursement obligations pursuant Section 10.01.  Each other Lender shall have a claim against
such defaulting Lender for any damages sustained by it as a result of such
default, including, in the event such Letter of Credit shall expire undrawn,
its CAM Percentage of the defaulted amount.


 


(c)                                  In the event that after the date on which
a CAM Exchange occurs any Letter of Credit shall expire undrawn, the
Administrative Agent shall withdraw from the LC Reserve Account of each Lender
the amount remaining on deposit therein in respect of such Letter of Credit and
distribute such amount to such Lender.


 


(d)                                 With the prior written approval of the
Administrative Agent and the applicable Issuing Bank (not to be unreasonably
withheld), any Lender may withdraw the amount held in its LC Reserve Account in
respect of the undrawn amount of any Letter of Credit.  Any Lender making such a withdrawal shall be
unconditionally obligated, in the event there shall subsequently be a drawing
under such Letter of Credit, to pay over to the Administrative Agent, for the
account of the applicable Issuing Bank, on demand, its CAM Percentage of such
drawing.


 


(e)                                  Pending the withdrawal by any Lender of
any amounts from its LC Reserve Account as contemplated by the above
paragraphs, the Administrative Agent will, at the direction of such Lender and
subject to such rules as the Administrative Agent may prescribe for the
avoidance of inconvenience, invest such amounts in Permitted Investments.  Each Lender which has not withdrawn its CAM
Percentage of amounts in its LC Reserve Account as provided in paragraph (d) above
shall have the right, at intervals reasonably specified by the Administrative
Agent, to withdraw the earnings on investments so made by the Administrative
Agent with amounts in its LC Reserve Account and to retain such earnings for
its own account.


 


SECTION 10.03                               Conversion.  In the event
a CAM Exchange shall occur, Obligations owed by the Borrowers denominated in
Canadian Dollars shall, automatically and with no further act required, be
converted to obligations of the same Borrowers denominated in U.S.
Dollars.  Such conversion shall be
effected based upon the Exchange Rate in effect with respect to Canadian
Dollars on the date on which the CAM Exchange occurs.  On and after any such conversion, all amounts
accruing and owed to any Lender in respect of its Obligations shall 


 


139

















 


accrue and be payable in
U.S. Dollars at the rates otherwise applicable hereunder (and, in the case of
interest on Loans, at the default rate applicable to ABR Loans hereunder).  Notwithstanding the foregoing provisions of
this Section 10.03, any Lender may, by notice to the Borrowers and the
Administrative Agent prior to the date on which a CAM Exchange occurs, elect
not to have the provisions of this Section 10.03  apply with respect to all Obligations owed to
such Lender immediately following such date, and, if such notice is given, all
Obligations owed to such Lender immediately following the date on which such
CAM Exchange occurs shall remain designated in their original currencies.


 


[Signature Pages Follow]


 


140

















 


IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be duly executed by their
respective authorized officers as of the day and year first above written.


 


	
   

  	
  QUAD/GRAPHICS, INC.,

  
	
   

  	
  as U.S. Borrower

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ John C. Fowler

  
	
   

  	
   

  	
  Name: John C. Fowler

  
	
   

  	
   

  	
  Title:  Senior Vice President & CFO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  7345933 CANADA INC.,

  
	
   

  	
  as Canadian Borrower

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ John C. Fowler

  
	
   

  	
  Name: John C. Fowler

  
	
   

  	
  Title:  Senior Vice President & CFO

  



 


Signature Page to Credit Agreement


Quad/Graphics, Inc.


 














 


	
   

  	
  JPMORGAN CHASE BANK,
  N.A., individually as a Lender, as the Swingline Lenders, as an Issuing Bank
  and as Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Sabur A. Hashmy

  
	
   

  	
   

  	
  Name: Sabur A. Hashmy

  
	
   

  	
   

  	
  Title: Sr. Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  JPMORGAN CHASE BANK,
  N.A., TORONTO BRANCH, as Canadian Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Sabur A. Hashmy

  
	
   

  	
   

  	
  Name: Sabur A. Hashmy

  
	
   

  	
   

  	
  Title: Sr. Vice
  President

  



 


Signature Page to Credit Agreement


Quad/Graphics, Inc.


 

















 


	
   

  	
  U.S. BANK NATIONAL
  ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Peter I. Bystol

  
	
   

  	
   

  	
  Name: Peter I. Bystol

  
	
   

  	
   

  	
  Title: Vice President

  



 


Signature Page to Credit Agreement


Quad/Graphics, Inc.


 

















 


	
   

  	
  M&I MARSHALL AND
  ILSLEY BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/Donald J.
  Robinson-Gay

  
	
   

  	
   

  	
  Name: Donald J.
  Robinson Gay

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ James R. Miller

  
	
   

  	
   

  	
  Name: James R. Miller

  
	
   

  	
   

  	
  Title: SVP

  



 


Signature Page to Credit Agreement


Quad/Graphics, Inc.


 

















 


	
   

  	
  PNC BANK, NATIONAL
  ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Michael Leong

  
	
   

  	
  Name: Michael Leong

  
	
   

  	
  Title: Senior Vice
  President

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Caroline Stade

  	
   

  	
  /s/ Bill Hines

  
	
   

  	
  Name: Caroline Stade

  	
  Bill Hines

  
	
   

  	
  Title: Senior Vice
  President

  	
  Senior Vice
  President & Principal Officer

  



 


Signature Page to Credit Agreement


Quad/Graphics, Inc.


 

















 


	
   

  	
  ROYAL BANK OF CANADA

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Gordon C. MacArthur

  
	
   

  	
  Name: Gordon C.
  MacArthur

  
	
   

  	
  Title:  Authorized
  Signatory

  



 


Signature Page to Credit Agreement


Quad/Graphics, Inc.


 

















 


	
   

  	
  SUNTRUST BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/David Fournier

  
	
   

  	
  Name: David
  Fournier

  
	
   

  	
  Title:  Vice
  President

  



 


Signature Page to Credit Agreement


Quad/Graphics, Inc.


 

















 


	
   

  	
  THE TORONTO DOMINION
  BANK NEW YORK BRANCH

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Robyn Zeller

  
	
   

  	
  Name: Robyn Zeller

  
	
   

  	
  Title: Vice President

  



 


Signature Page to Credit Agreement


Quad/Graphics, Inc.


 

















 


	
   

  	
  ASSOCIATED BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Brian Cota

  
	
   

  	
  Name: Brian Cota

  
	
   

  	
  Title: Assistant Vice
  President

  



 


Signature Page to Credit Agreement


Quad/Graphics, Inc.


 

















 


	
   

  	
  MORGAN STANLEY BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Sherrese Clarke

  
	
   

  	
  Name: Sherrese Clarke

  
	
   

  	
  Title: Authorized
  Signatory

  



 


Signature Page to Credit Agreement


Quad/Graphics, Inc.


 

















 


	
   

  	
  THE NORTHERN TRUST COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Patrick Cowan

  
	
   

  	
  Name: Patrick Cowan

  
	
   

  	
  Title: Vice President

  



 


Signature Page to Credit Agreement


Quad/Graphics, Inc.


 














 


	
   

  	
  FIFTH THIRD BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Garland F. Robeson
  IV

  
	
   

  	
  Name: Garland F.
  Robeson IV

  
	
   

  	
  Title: Assistant Vice
  President

  



 


Signature Page to Credit Agreement


Quad/Graphics, Inc.


 

















 


	
   

  	
  UBS
  AG CANADA BRANCH

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Mary E. Evans

  	
   

  	
  /s/ Irja R. Otsa

  
	
   

  	
  Name: Mary E. Evans

  	
  Irja R. Otsa

  
	
   

  	
  Title:
  Associate Director

  	
  Associate
  Director

  



 


Signature Page to Credit Agreement


Quad/Graphics, Inc.


 

















 


	
   

  	
  UBS
  LOAN FINANCE LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Mary E. Evans

  	
   

  	
  /s/ Irja R. Otsa

  
	
   

  	
  Name: Mary E. Evans

  	
  Irja R. Otsa

  
	
   

  	
  Title:
  Associate Director

  	
  Associate
  Director

  



 


Signature Page to Credit Agreement


Quad/Graphics, Inc.


 

















 


	
   

  	
  HSBC BANK USA NATIONAL
  ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ John S. Sneed

  
	
   

  	
  Name: John S. Sneed

  
	
   

  	
  Title: Relationship
  Manager

  



 


Signature Page to Credit Agreement


Quad/Graphics, Inc.


 














 


SCHEDULE 1.01(a)


 


EFFECTIVE DATE AND FUNDING DATE MATERIAL INDEBTEDNESS


 


Note:  All information appearing under the heading “INFORMATION RECEIVED TO DATE FROM WORLD COLOR
PRESS INC. AND ITS SUBSIDIARIES:” is provided for informational purposes only because
neither World Color Press Inc. nor its subsidiaries will be subsidiaries of the
U.S. Borrower until the Funding Date.


 


Unless
otherwise indicated below, each item described on this Schedule 1.01(a) represents
fully funded Indebtedness and, accordingly, the outstanding principal amount
will not be increased.


 


INFORMATION RELATING TO U.S. BORROWER AND ITS
SUBSIDIARIES:


 


1.             Senior Unsecured Revolving Credit Agreement dated October 31,
2008 among Quad/Graphics, Inc. and its Restricted Subsidiaries named therein,
U.S. Bank National Association, as a Bank and as Administrative Agent, M&I
Marshall & Ilsley Bank as a Bank, and The Northern Trust Company, as a
Bank, as amended by the First Amendment to Senior Unsecured Revolving Credit
Agreement dated as of October 29, 2009.*


 


2.             Second Amended and Restated Revolving Credit Agreement
dated as of December 7, 2005 by and among Quad/Graphics, Inc. and its
Restricted Subsidiaries named therein, the Banks named therein from time to
time, U.S. Bank National Association, as Lead Arranger and Administrative
Agent, JPMorgan Chase Bank, as Documentation Agent, Wachovia Bank, National
Association as Syndication Agent and M&I Marshall & Ilsley Bank as
Syndication Agent.*


 


3.             The
Senior Secured Notes


 


4.             The
Polish Subsidiary Credit Facility, together with a Guarantee of the obligations
of the Polish Subsidiary thereunder, dated as of December 16, 2008, given
by Quad/Graphics, Inc. in favor of the Lenders (as defined in the Polish
Subsidiary Credit Facility).


 


5.             Lease
Agreement dated as of November 1, 1995 between Thomaston-Upson County
Industrial Development Authority (the “Issuer”) and Quad/Graphics, Inc.,
as supplemented and amended from time to time, securing payment of: (i) the
Issuer’s Industrial Development Revenue Bonds (Quad/Graphics, Inc.
Project) Series 1995, in the aggregate outstanding principal amount on the
Effective Date of $30,800,000, (ii) the Issuer’s Industrial Development
Revenue Bonds (Quad/Graphics, Inc. Project) Series 1999A, in the
aggregate outstanding principal amount on the Effective Date of $5,020,000, and
(iii) the Issuer’s Industrial Development Revenue Bonds (Quad/Graphics, Inc.
Project), Series 1999B, in the aggregate outstanding principal amount on
the Effective Date of $10,496,000.†


 


1

















 


6.             Lease
Agreement dated as of May 1, 1996 between the West Virginia Economic
Development Authority (the “Authority”) and Quad/Graphics, Inc., as
supplemented and amended from time to time, securing payment of (i) the Authority’s
Industrial Development Revenue Bond (Quad/Graphics, Inc. Project), Series 1996A,
in the aggregate outstanding principal amount on the Effective Date of
$26,901,874, (ii) the Authority’s Industrial Development Revenue Bond
(Quad/Graphics, Inc. Project), Series 1996B, in the aggregate
outstanding principal amount on the Effective Date of $49,679,385, (iii) the
Authority’s Industrial Development Revenue Bond (Quad/Graphics, Inc.
Project), Series 1998A, in the aggregate outstanding principal amount on
the Effective Date of $19,328,203, (iv) the Authority’s Industrial
Development Revenue Bond (Quad/Graphics, Inc. Project), Series 1998B,
in the aggregate outstanding principal amount on the Effective Date of
$77,480,760, (v) the Authority’s Industrial Development Revenue Bond
(Quad/Graphics, Inc. Project), Series 1998C, in the aggregate
outstanding principal amount on the Effective Date of $19,328,203 and (vi) the
Authority’s Industrial Development Revenue Bond (Quad/Graphics, Inc.
Project), Series 1998D, in the aggregate outstanding principal amount on
the Effective Date of $24,160,253.†


 


7.             Indebtedness
of a Loan Party to any other Loan Party or any Subsidiary of any Loan Party,
and Indebtedness of any Subsidiary of a Loan Party to any Loan Party or any Subsidiary
thereof, which Indebtedness is in excess of $25,000,000.


 


8.             Item
number 17 listed on Schedule 6.04 under the heading “INFORMATION
RELATING TO U.S. BORROWER AND ITS SUBSIDIARIES:”.


 






*These items constitute Specified Existing Indebtedness and, as such,
will be paid off on the Funding Date.


†Quad/Graphics, Inc. is the sole bondholder of each series of
Bonds.


 


INFORMATION RECEIVED TO DATE FROM WORLD COLOR
PRESS INC. AND ITS SUBSIDIARIES:


 


1.          Term Facility Credit Agreement
($450,000,000), dated July 21, 2009, among World Color Press Inc. and
Novink (USA) Corp. (renamed World Color (USA) Corp.), as Borrowers, and the
Guarantors Party hereto, and Credit Suisse, General Electric Capital
Corporation and GE Canada Finance Holding Company, and Wachovia Bank, National
Association, as Co-Administrative Agents as Co-Collateral Agents, and Credit
Suisse, as Syndication Agent, and General Electric Capital Corporation and GE
Canada Finance Holding Company, and Wachovia Bank, National Association, as
Co-Documentation Agents and the Initial Lenders and the Other Lenders Party
hereto.*


 


2.             Credit Agreement ($350,000,000), dated July 21,
2009, among World Color Press Inc. and Novink (USA) Corp. (renamed World Color
(USA) Corp.), as Borrowers, and the Guarantors Party hereto, and General
Electric Capital Corporation, Wells Fargo Foothill, LLC and Credit Suisse, as
Co-Administrative Agents, and GE Canada Finance Holding Company, as Canadian
Agent and Canadian Collateral Agent, and General Electric Capital Corporation,
Wells Fargo Foothill, LLC and Credit Suisse, as Co-Collateral Agents, and GMAC
Commercial Finance LLC, as Syndication Agent, and the Initial Lenders and the
Other Lenders Party hereto.*


 


2

















 


3.             Indenture
(maximum commitment of $75,000,000, provided that the aggregate amount outstanding may be
increased as a result of PIK interest, prepayment premiums not in excess of 5%
of the principal amount of such outstandings and amounts deposited in
accordance with the Indenture in order to defease and then ultimately redeem
all outstanding amounts thereunder, with any overage being returned to the
issuers), dated July 21, 2009, and as amended or modified, among Novink
(USA) Corp., as Issuer, World Color Press, as Guarantor, and The Bank of New
York Mellon, as Trustee, as amended, and the unsecured 10% Senior Guaranteed
Notes due July 15, 2013 issued thereunder (as amended or modified).†


 


4.             Amended
and Restated Master Credit Agreement (maximum amount of $337,000,000), dated July 21,
2009, by and among Quebecor World A Islandi EHF (renamed World Color Iceland
EHF), as Lender, the entities named as Borrowers and Guarantors on the
signature pages thereto, as Initial Borrowers and Initial Guarantors, and
Novink (USA) Holding Company (renamed World Color (USA) Holding Company), as
Additional Obligor, currently outstanding, as of April 15, 2010 in the
amount of $296,3000,000.+


 


5.             Master
Lease Agreement (approximately $49,000,000), dated as of November 30,
2006, between GE Business Financial Services, Inc. (successor to Banc of
America Leasing & Capital, LLC) and Quebecor World Lease GP (merged
into Novink (USA) Corp, renamed World Color (USA) Corp.).


 


6.             Master
Lease Guaranty (maximum amount of $25,000,000), dated November 30, 2006,
executed and delivered by  Quebecor World Inc. (renamed World Color Press Inc)
and Quebecor World (USA) Inc. (renamed World Color (USA) Corp), together as
Guarantors, in favor of GE Business Financial Services, Inc. (successor to
Banc of America Leasing & Capital, LLC), as Lessor, guaranteeing the
obligations described in Item 5 above.


 


7.             Industrial
Development Lease Agreement (approximately $56,000,000), dated May 31,
1989, between World Color Press, Inc. (with QW Memphis Corp as
successor-in-interest) and The Industrial Development Board of Dyer County,
Tennessee, as amended, restated and consolidated.


 






*These items constitute Specified Existing Indebtedness and, as such,
will be paid off on the Funding Date.


 


†The Notes issued under this Indenture will be subject to a covenant
defeasance on the Funding Date, in connection with which the Issuer will
deposit with the trustee an amount sufficient to satisfy in full its
obligations under the Indenture. 
Thereafter, the Notes will continue to be deemed outstanding under the
Indenture but the Issuer will be released from all material covenants and
obligations under the Indenture.


 


+ This Agreement will be terminated and the obligations thereunder
eliminated in connection with the World Color Press Facilitating Transactions.


 


3














 


SCHEDULE 2.01


 


COMMITMENTS


 


REVOLVING
COMMITMENTS


 


	
  LENDER

  	
   

  	
  U.S. TRANCHE

  REVOLVING

  COMMITMENT

  	
   

  	
  CANADIAN TRANCHE

  REVOLVING

  COMMITMENT

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  JPMORGAN
  CHASE BANK, N.A.

  	
   

  	
  U.S. $

  	
  37,500,000

  	
   

  	
  U.S. $

  	
  37,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  U.S.
  BANK NATIONAL ASSOCIATION

  	
   

  	
  U.S. $

  	
  37,500,000

  	
   

  	
  U.S. $

  	
  37,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  M&I
  MARSHALL & ILSLEY BANK

  	
   

  	
  U.S. $

  	
  25,000,000

  	
   

  	
  U.S. $

  	
  25,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  PNC
  BANK, NATIONAL ASSOCIATION

  	
   

  	
  U.S. $

  	
  25,000,000

  	
   

  	
  U.S. $

  	
  0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  PNC
  BANK CANADA BRANCH

  	
   

  	
  U.S. $

  	
  0

  	
   

  	
  U.S. $

  	
  25,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ROYAL
  BANK OF CANADA

  	
   

  	
  U.S. $

  	
  25,000,000

  	
   

  	
  U.S. $

  	
  25,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SUNTRUST
  BANK

  	
   

  	
  U.S. $

  	
  25,000,000

  	
   

  	
  U.S. $

  	
  25,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  THE
  TORONTO DOMINION BANK NEW YORK BRANCH

  	
   

  	
  U.S. $

  	
  25,000,000

  	
   

  	
  U.S. $

  	
  25,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ASSOCIATED
  BANK

  	
   

  	
  U.S. $

  	
  12,500,000

  	
   

  	
  U.S. $

  	
  12,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  MORGAN
  STANLEY BANK

  	
   

  	
  U.S. $

  	
  12,500,000

  	
   

  	
  U.S. $

  	
  12,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  THE
  NORTHERN TRUST COMPANY

  	
   

  	
  U.S. $

  	
  12,500,000

  	
   

  	
  U.S. $

  	
  12,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  FIFTH
  THIRD BANK

  	
   

  	
  U.S. $

  	
  10,000,000

  	
   

  	
  U.S. $

  	
  10,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  UBS
  LOAN FINANCE LLC

  	
   

  	
  U.S. $

  	
  10,000,000

  	
   

  	
  U.S. $

  	
  0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  UBS
  AG CANADA BRANCH

  	
   

  	
  U.S. $

  	
  0

  	
   

  	
  U.S. $

  	
  10,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  HSBC
  BANK USA NATIONAL ASSOCIATION

  	
   

  	
  U.S. $

  	
  7,500,000

  	
   

  	
  U.S. $

  	
  7,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AGGREGATE REVOLVING COMMITMENTS

  	
   

  	
  U.S. $

  	
  265,000,000

  	
   

  	
  U.S. $

  	
  265,000,000

  	
   

  



 


4

















 


TERM LOAN
COMMITMENTS


 


	
  LENDER

  	
   

  	
  TERM LOAN

  COMMITMENT FOR

  U.S. BORROWER

  	
   

  	
  TERM LOAN

  COMMITMENT FOR

  CANADIAN

  BORROWER

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  JPMORGAN
  CHASE BANK, N.A.

  	
   

  	
  U.S. $

  	
  700,000,000

  	
   

  	
  U.S. $

  	
  0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AGGREGATE
  TERM LOAN COMMITMENTS

  	
   

  	
  U.S. $

  	
  700,000,000

  	
   

  	
  U.S. $

  	
  0

  	
   

  



 


5

















 


SCHEDULE 2.06


 


EXISTING LETTERS OF CREDIT


 


INFORMATION RELATING TO U.S. BORROWER AND ITS
SUBSIDIARIES:


 


	
  ISSUING
  BANK

  	
   

  	
  LC #

  	
   

  	
  AMOUNT

  	
   

  	
  BENEFICIARY

  	
   

  	
  EXPIRY

  DATE

  	
   

  	
  TRANCHE

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  JP MORGAN CHASE
  BANK

  	
   

  	
  S-632968

  	
   

  	
  $

  	
  100,000

  	
   

  	
  THE HOME
  INSURANCE COMPANY

  	
   

  	
  6/30/10

  	
   

  	
  U.S.

  
	
  JP MORGAN CHASE
  BANK

  	
   

  	
  S-347050

  	
   

  	
  $

  	
  5,000,000

  	
   

  	
  SENTRY INSURANCE
  A MUTUAL COMPANY

  	
   

  	
  7/31/10

  	
   

  	
  U.S.

  
	
  US BANK

  	
   

  	
  SLCMMSP02757

  	
   

  	
  $

  	
  255,750

  	
   

  	
  INSTINET GLOBAL
  HOLDINGS INC

  	
   

  	
  8/23/10

  	
   

  	
  U.S.

  
	
  M&I
  MARSHALL & ILSLEY BANK

  	
   

  	
  SB 8932

  	
   

  	
  $

  	
  16,667

  	
   

  	
  HUDSON RETAIL
  JOINT VENTURE C/O SAATCHI & SAATCHI HOLDINGS INC.

  	
   

  	
  9/22/10

  	
   

  	
  U.S.

  



 


6














 


SCHEDULE 3.03


 


GOVERNMENTAL CONSENTS


 


1.          The
expiration or early termination of any applicable waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”);
the applicable waiting period under the HSR Act expired on March 29, 2010.


 


2.          Approval
by the Minister under the Investment Canada Act in Canada.*


 


3.          Approval
of the Quebec Superior Court.*


 


4.          Approval
of the Mexican Federal Competition Commission.


 


5.          Approval
under the Argentine Antitrust Act.


 


6.          Making
a notice based filing with the Columbian Superintendence of Industry and
Commerce or, if required, receiving the approval of the Columbian
Superintendence of Industry and Commerce.


 






*This item will not
appear on the Acceptable Funding Date Schedules, as it is a condition precedent
to the Funding Date.


 


7

















 


SCHEDULE 3.05


 


PROPERTIES; LEASE DISPUTES


 


Note:  All information appearing under the heading “INFORMATION RECEIVED TO DATE FROM WORLD COLOR
PRESS INC. AND ITS SUBSIDIARIES:” is provided for informational purposes only because
neither World Color Press Inc. nor its subsidiaries will be subsidiaries of the
U.S. Borrower until the Funding Date.


 


INFORMATION RELATING TO U.S. BORROWER AND ITS
MATERIAL DOMESTIC SUBSIDIARIES:


 


Part A:  The following sets forth the address of each
parcel of real property owned by each Loan Party which has a net book value in
excess of US $1,000,000 or is leased or subleased by each Loan Party pursuant
to lease or sublease with annual net rent in excess of US $1,000,000:


 


	
  Owner/Lessee

  	
   

  	
  Address

  	
   

  	
  Owned/Leased

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Quad/Graphics, Inc.

  	
   

  	
  3
  Times Square, 14th Floor,  New York, NY 10154

  	
   

  	
  Leased

  
	
  Quad/Graphics, Inc.

  	
   

  	
  N58
  W15350 Shawn Circle, Menomonee Falls, WI

  	
   

  	
  Leased

  
	
  Quad/Graphics, Inc.

  	
   

  	
  100
  Duplainville Road, The Rock, GA 30285

  	
   

  	
  Owned

  
	
  Quad/Graphics, Inc.

  	
   

  	
  124
  Mill Race Road, Thomaston, GA 30286

  	
   

  	
  Owned

  
	
  Quad/Graphics, Inc.

  	
   

  	
  119 &
  121 Daisy Lane, Thomaston, GA 30286

  	
   

  	
  Owned

  
	
  Quad/Graphics, Inc.

  	
   

  	
  401
  North Townline Road, Greenfield, IA 50849

  	
   

  	
  Owned

  
	
  Quad/Graphics, Inc.

  	
   

  	
  150
  West 51st Street, New York, NY 10019

  	
   

  	
  Owned

  
	
  Quad/Graphics, Inc.

  	
   

  	
  117
  East 57th Street, New York, NY 10022

  	
   

  	
  Owned

  
	
  Quad/Graphics, Inc.

  	
   

  	
  56
  Duplainville Road, Saratoga Springs, NY 12866

  	
   

  	
  Owned

  
	
  Quad/Graphics, Inc.

  	
   

  	
  605
  North Broadway, Saratoga Springs, NY 12866

  	
   

  	
  Owned

  
	
  Quad/Graphics, Inc.

  	
   

  	
  6801
  Sunnyland Road, Oklahoma City, OK 73135

  	
   

  	
  Owned

  
	
  Quad/Graphics, Inc.

  	
   

  	
  110
  Morningside Drive, Falling Waters, WV 25419

  	
   

  	
  Owned

  
	
  Quad/Graphics, Inc.

  	
   

  	
  855
  Caperton Boulevard, Martinsburg, WV 25403

  	
   

  	
  Owned

  



 


8

















 


	
  Quad/Graphics, Inc.

  	
   

  	
  N11784
  State Hwy. 175, Brownsville, WI 53006

  	
   

  	
  Owned

  
	
  Quad/Graphics, Inc.

  	
   

  	
  5999
  North Hwy. 83, Chenequa, Wisconsin 53029

  	
   

  	
  Owned

  
	
  Quad/Graphics, Inc.

  	
   

  	
  6885
  County Trunk Q, Erin, WI 54017

  	
   

  	
  Owned

  
	
  Quad/Graphics, Inc.

  	
   

  	
  1900
  West Sumner St., Hartford, WI 53027

  	
   

  	
  Owned

  
	
  Quad/Graphics, Inc.

  	
   

  	
  1951
  Constitution Ave. , Hartford, WI 53027

  	
   

  	
  Owned

  
	
  Quad/Graphics, Inc.

  	
   

  	
  N11896
  State Hwy 175, Lomira, WI 53048

  	
   

  	
  Owned

  
	
  Quad/Graphics, Inc.

  	
   

  	
  Lithostone
  Drive - Office Apt 4107, Lomira, WI 53048

  	
   

  	
  Owned

  
	
  Quad/Graphics, Inc.

  	
   

  	
  N11896
  State Hwy 175, Lomira, WI 53048

  	
   

  	
  Owned

  
	
  Quad/Graphics, Inc.

  	
   

  	
  W224
  N3322 Duplainville Road, Pewaukee, WI 53072

  	
   

  	
  Owned

  
	
  Quad/Graphics, Inc.

  	
   

  	
  N63 W23075 Hwy 74, Sussex, WI 53089

  	
   

  	
  Owned

  
	
  Quad/Graphics, Inc.

  	
   

  	
  N64 W23110 Hwy 74, Sussex, WI 53089

  	
   

  	
  Owned

  
	
  Quad/Graphics, Inc.

  	
   

  	
  N63 W22777 Hwy 74, Sussex, WI 53089

  	
   

  	
  Owned

  
	
  Quad/Graphics, Inc.

  	
   

  	
  N61
  W23024 Silver Spring Drive, Sussex, WI 53089

  	
   

  	
  Owned

  
	
  Quad/Graphics, Inc.

  	
   

  	
  N61
  W23042 Silver Spring Drive, Sussex, WI 53089

  	
   

  	
  Owned

  
	
  Quad/Graphics, Inc.

  	
   

  	
  N61
  W23058 Silver Spring Drive, Sussex, WI 53089

  	
   

  	
  Owned

  
	
  Quad/Graphics, Inc.

  	
   

  	
  555
  South 108th Street, West Allis, WI 53214

  	
   

  	
  Owned

  
	
  QGR
  Real Estate Investment Company, LLC

  	
   

  	
  11005
  Stead Boulevard, Reno, NV 89506

  	
   

  	
  Owned

  



 


Part B:  Existing Lease Defaults:


 


1.             Item
Number 1 (Anthony Gagliano & Co. Inc. v. Openfirst, LLC et al.)
described on Schedule 3.06(a) under the heading “INFORMATION
RELATING TO U.S. BORROWER AND ITS SUBSIDIARIES:”.


 


9

















 


INFORMATION RECEIVED TO DATE FROM WORLD COLOR
PRESS INC. AND ITS SUBSIDIARIES:


 


Part A:  The following sets forth the address of each
parcel of real property owned by each Loan Party which has a net book value in
excess of US $1,000,000 or is leased or subleased by each Loan Party pursuant
to lease or sublease with annual net rent in excess of US $1,000,000:


 


	
  Owner/Lessee

  	
   

  	
  Address

  	
   

  	
  Owned/Leased

  
	
  World Color Press Inc.

  	
   

  	
  275 Wellington Street,
  Aurora, ON, Canada

  	
   

  	
  Leased

  
	
  World Color Press Inc.

  	
   

  	
  2250 Islington Ave.,
  Etobicoke, ON, Canada

  	
   

  	
  Leased

  
	
  World Color Press Inc.

  	
   

  	
  800 boul. Industriel, St.-Jean sur Richelieu, QC, Canada

  	
   

  	
  Leased

  
	
  World Color Printing
  (USA) Corp.

  	
   

  	
  3101 McCall Dr.,
  Atlanta, GA, USA

  	
   

  	
  Leased

  
	
  World Color (USA), LLC

  	
   

  	
  2460 Kerper Blvd., Dubuque, IA, USA

  	
   

  	
  Leased

  
	
  World Color (USA), LLC

  	
   

  	
  380 W. 37th St.,
  Loveland, CO, USA

  	
   

  	
  Leased

  
	
  World Color Printing
  (USA) ll, Corp.

  	
   

  	
  871 Baker Rd.,
  Martinsburg, WV, USA

  	
   

  	
  Leased

  
	
  World
  Color (USA) Corp.

  	
   

  	
  150 42nd Ave., New
  York, NY, USA

  	
   

  	
  Leased

  
	
  World Color Press Inc.

  	
   

  	
  18130-114th Ave.,
  Edmonton, AB, Canada

  	
   

  	
  Owned

  
	
  World Color Press Inc.

  	
   

  	
  10481 Yonge St.,
  Richmond Hill, ON, Canada

  	
   

  	
  Owned

  
	
  World Color Press Inc.

  	
   

  	
  445-470, 3e Ave., St.
  Romuald, QC, Canada

  	
   

  	
  Owned

  
	
  World Color (USA), LLC

  	
   

  	
  4581 Lower Valley Road,
  Atglen, PA, USA

  	
   

  	
  Owned

  
	
  World Color Printing
  (USA) II Corp

  	
   

  	
  12821 W. Bluemound
  Road, Brookfield, WI, USA

  	
   

  	
  Owned

  
	
  World Color (USA), LLC
  and World Color Printing (USA) Corp

  	
   

  	
  217 Griffith Road,
  Carroll, IA and 400 Deming Ave., Waukee, IA, USA

  	
   

  	
  Owned

  
	
  World Color (USA), LLC

  	
   

  	
  451 International
  Blvd., Clarksville, TN

  	
   

  	
  Owned

  
	
  World Color Printing
  (USA) II Corp

  	
   

  	
  2787 South Harper Rd.,
  Corinth, MS, USA

  	
   

  	
  Owned

  
	
  World Color (USA), LLC

  	
   

  	
  4000 Hwy 51 North,
  Covington, TN, USA

  	
   

  	
  Owned

  
	
  World Color Printing
  (USA) Corp

  	
   

  	
  2475 George Urban
  Blvd., Depew, NY, USA

  	
   

  	
  Owned

  
	
  World Color (USA), LLC

  	
   

  	
  1665 Old Columbia Hwy,
  Dickson, TN, USA

  	
   

  	
  Owned

  
	
  World Color (USA), LLC

  	
   

  	
  2030 Sylvan Road,
  Dyersburg, TN, USA

  	
   

  	
  Leased/IDB

  
	
  World Color (USA), LLC
  and World Color Mt. Morris II, LLC

  	
   

  	
  1200 Niccum Ave. and
  420 West Industrial Ave., Effingham, IL, USA

  	
   

  	
  Owned

  
	
  World Color Printing
  (USA) II Corp

  	
   

  	
  96 Phoenix Ave.,
  Enfield, CT, USA

  	
   

  	
  Owned

  
	
  World Color Printing
  (USA) II Corp

  	
   

  	
  4301 Evans Lock Rd.,
  Evans, GA, USA

  	
   

  	
  Owned

  
	
  World Color Printing
  (USA) II Corp

  	
   

  	
  100 North Miller St.,
  Fairfield, PA, USA

  	
   

  	
  Owned

  
	
  World Color Printing
  (USA) Corp

  	
   

  	
  2200 E. Newlands Dr.,
  Fernley, NV, USA

  	
   

  	
  Owned

  
	
  World Color (USA), LLC

  	
   

  	
  300 Brown Road,
  Franklin, KY, USA

  	
   

  	
  Owned

  
	
  World Color (USA), LLC

  	
   

  	
  594 Can-Do Expwy.
  (RR#1), Hazleton, PA, USA

  	
   

  	
  Owned

  
	
  World Color Printing
  (USA) II Corp

  	
   

  	
  4708 Krueger Dr., Jonesboro, AR, USA

  	
   

  	
  Owned

  
	
  World Color (USA), LLC

  	
   

  	
  760 Fujitec Dr.,
  Cincinnati, OH, USA

  	
   

  	
  Owned

  
	
  World Color (USA) Corp.

  	
   

  	
  3700 N.W. 12th St. and 1000
  W. Commerce Way, Lincoln, NE, USA

  	
   

  	
  Owned

  
	
  World Color (USA), LLC

  	
   

  	
  828 East Holmes Road,
  Memphis, TN, USA

  	
   

  	
  Owned

  
	
  World Color (USA) Corp.

  	
   

  	
  2201 Cooper Ave.,
  Merced, CA, USA

  	
   

  	
  Owned

  
	
  World Color (USA), LLC

  	
   

  	
  1700 James Savage Road,
  Midland, MI, USA

  	
   

  	
  Owned

  
	
  World Color (USA), LLC

  	
   

  	
  235 Artino St.,
  Oberlin, OH, USA

  	
   

  	
  Owned

  



 


10

















 


	
  Owner/Lessee

  	
   

  	
  Address

  	
   

  	
  Owned/Leased

  
	
  World Color (USA) Corp.

  	
   

  	
  8649 Hacks Cross Road,
  Olive Branch, MS, USA

  	
   

  	
  Owned

  
	
  World Color (USA), LLC

  	
   

  	
  7400 Impala Dr.,
  Richmond, VA

  	
   

  	
  Owned

  
	
  World Color (USA), LLC

  	
   

  	
  660 Mayhew Lake Rd. NE,
  St. Cloud, MN, USA

  	
   

  	
  Owned

  
	
  World Color (USA), LLC

  	
   

  	
  100 West Airport Rd.,
  Stillwater, OK, USA

  	
   

  	
  Owned

  
	
  World Color (USA), LLC

  	
   

  	
  1133 County St.,
  Taunton, MA, USA

  	
   

  	
  Owned

  
	
  World Color (USA), LLC

  	
   

  	
  100 US Bypass 60,
  Versailles, KY, USA

  	
   

  	
  Owned

  
	
  World Color Printing
  (USA) Corp

  	
   

  	
  90 Pleasant St., West
  Bridgewater, MA, USA

  	
   

  	
  Owned

  
	
  World Color (USA), LLC

  	
   

  	
  160 Century Lane,
  Winchester, VA, USA

  	
   

  	
  Owned

  
	
  World Color Mt. Morris
  II, LLC

  	
   

  	
  404 N. Wesly Ave., Mt.
  Morris, IL, USA

  	
   

  	
  Owned

  



 


11














 


SCHEDULE 3.10(a)


 


U.S. BENEFITS


 


Note:  All information appearing under the heading “INFORMATION RECEIVED TO DATE FROM WORLD COLOR
PRESS INC. AND ITS SUBSIDIARIES:” is provided for informational purposes only because
neither World Color Press Inc. nor its subsidiaries will be subsidiaries of the
U.S. Borrower until the Funding Date.


 


INFORMATION RELATING TO U.S. BORROWER AND ITS
SUBSIDIARIES:


 


The Pension Plans are as
follows:  None


 


The Multiemployer Plans
are as follows:  None


 


The Retiree Welfare Plans
are as follows:


 


1.          Quad/Graphics, Inc.
Health and Welfare Plan (including Quad/Gold and Quad/Platinum)


 


2.             Executive
Salary Continuation Plan


 


3.             Executive
Health Reimbursement Plan


 


The most recent letter
for the Quad/Graphics Personal Enrichment Plan was dated September 16,
2003.  On January 20, 2009, an
updated letter was requested under cycle C of Revenue Procedure 2007-44.  By letter dated February 3, 2009, the
Internal Revenue Service acknowledged receipt of such request but no further
communication has been received from the Internal Revenue Service.


 


INFORMATION RECEIVED TO DATE FROM WORLD COLOR
PRESS INC. AND ITS SUBSIDIARIES:


 


The Pension Plans are as follows:


 


1.             World
Color Baird-Ward Retirement Plan


 


2.             World
Color Buffalo Retirement Plan for Hourly Employees


 


3.             World
Color Kingsport, LLC Pension Plan for Hourly Bargaining Unit Employees of
Kingsport, Hawkins, Sherwood and Distribution


 


4.             World
Color Mt. Morris II, LLC Employees’ Pension Plan


 


5.             World
Color Pension Plan


 


12

















 


6.             The
Pension Plan for Hourly Employees of the Salem Gravure Division of World Color
(USA) Corp.


 


7.             Restated
Defined Benefit Retirement Income Plan for Employees of Interstate Book
Manufacturers, Inc.


 


The Multiemployer Plans
are as follows:


 


1.          GCIU-Employer
Retirement Fund


 


2.          Graphic
Communication Conference of the International Brotherhood of Teamsters National
Pension Fund


 


3.          International
Association of Machinists and Aerospace Workers National Pension Plan


 


The Retiree Welfare Plans
are as follows:


 


1.          World
Color (USA) Corp. Employee Group Health Plan


 


·                  New Arcata Supplementary Plan


 


·                  Old World Color Postretirement Benefit
Plan


 


·                  Ringier Postretirement Benefit Plan


 


·                  Dittler Postretirement Benefit Plan


 


·                  Johnson & Hardin Postretirement
Benefit Plan


 


·                  Rand McNally & Company Health
Plan, including the Rand Postretirement Benefit Plan


 


·                  Postretirement Benefit Plans for Former
Quebecor Divisions


 


·                  CIGNA HealthCare Comprehensive Indemnity
Plan


 


·                  Quebecor World Network POS Copay Plan


 


·                  W.A. Krueger Co. Family Protection Plan
for Retired Employees


 


·                  World Color Press Inc. Group Health Plan
Salem Division


 


2.             World
Color (USA) Corp. Life, Dependent Life & AD&D


 


3.             World
Color (USA) Corp. Disability Plan


 


4.             Supplemental
unemployment benefits for certain unionized employees pursuant to collective
bargaining agreements


 


13

















 


5.             Supplemental
Unemployment Benefit Plan Quebecor World Printing, Inc.


 


6.             Graphic
Communications Union Local 8-M and 96B Health and Welfare Fund


 


7.             Graphic
Communications National Health and Welfare Fund


 


8.             GCC/IBT
Local 518 Alliance Select


 


Five of the Pension Plans
have received recent favorable determination letters from the Internal Revenue Service
dated between August 29, 2008 and January 7, 2010.  The Quebecor World (USA) Inc. 401(k) Plan
has received a letter dated August 18, 2009.


 


The Restated Defined
Benefit Retirement Income Plan for Employees of Interstate Book Manufacturers, Inc.
apparently does not have a recent letter. 
The most recent letter that has been provided to the U.S. Borrower is
dated August 1986.  According to the
actuarial valuation report for the year beginning July 1, 2009, the plan
has assets of $727,519 and 16 participants.


 


A favorable determination
letter has been requested for the World Color Pension Plan by submission dated January 31,
2008 under cycle B of Revenue Procedure 2007-44.  A previous determination letter request was
submitted on February 27, 2002 but that was subject to the moratorium on
hybrid plan determination letter applications.


 


14














 


SCHEDULE 3.10(b)


 


CANADIAN BENEFITS


 


Note:  All information appearing under the heading “INFORMATION RECEIVED TO DATE FROM WORLD COLOR
PRESS INC. AND ITS SUBSIDIARIES:” is provided for informational purposes only because
neither World Color Press Inc. nor its subsidiaries will be subsidiaries of the
U.S. Borrower until the Funding Date.


 


INFORMATION RELATING TO U.S. BORROWER AND ITS
SUBSIDIARIES:


 


None.


 


INFORMATION RECEIVED TO DATE FROM WORLD COLOR
PRESS INC. AND ITS SUBSIDIARIES:


 


The Canadian Pension Plans
are as follows:


 


1.             Pension Plan for the Unionized Employees
of World Color Press Inc.


 


2.             Pension Plan for the Non-Unionized
Employees of World Color Press Inc.


 


3.             Régime complémentaire de retraite pour
les employés assujettis de World Color Press Inc.


 


4.             Web Press Graphic Pension Plan


 


5.             Group Registered Retirement Savings Plan


 


6.             All plans noted under the heading
Canadian Multiemployer Pension Plans


 


The Canadian
Multiemployer Pension Plans are as follows:


 


1.             Graphic Communications Pension Plan of
Canada


 


2.             CEP of Canada, Local 100G Joint Pension
Plan


 


The Canadian Retiree
Benefit Plans are as follows:


 


1.             All plans noted under the heading
Canadian Pension Plans


 


2.             Great-West Life Assurance Company
Policies 51530, 153000, 153000HCSA, 153000 GMRP, 153000GHWP, 153001,
153001-5GHWP, and 153002


 


3.             Manulife Financial Policy No. 26735


 


15

















 


4.             Graphic Communications Supplemental
Retirement and Disability Fund of Canada


 


5.             G.C.I.U. Supplemental Retirement
Disability Plan


 


6.             Quebecor Studios Supplemental
Unemployment Benefit Plan


 


7.             Supplemental Unemployment Benefit Plan
for members of the Communication, Energy and Paperworkers Union, Local 100G


 


8.             Caisse
fiduciaire de retraite et d’invalidité du T.C.C.G.


 


9.             Local No. 525-M, Graphic
Communications International Union, Educational Training and Retraining Trust
Fund


 


10.           Graphic Communications Benefit Plan of
Ontario


 


11.           Régime de retraite simplifié for members
of the Conférence des communications graphiques, Section local 555M
employed at the St. Jean plant


 


12.           Régime de retraite simplifié for members
of the Conférence des communications graphiques, Section local 555M
employed at the St. Romuald plant


 


13.           Programme de prévoyance collective for
members of the Syndicat Des Communications Graphiques, Local 41M employed at
the LaSalle plant


 


14.           A collective Régime enregistré d’épargne-retraite
program for members of the Syndicat Des Communications Graphiques, Local 41M
employed at the LaSalle plant


 


15.           Restoration Pension Plan for the
Designated Employees of Quebecor World Inc.


 


16.           Supplementary Executive Retirement Plans:


 


·      Hans Nielsen, dated December 21,
2009


 


·      Christopher Rudge, dated December 22,
1998


 


·      Claude Hélie, dated February 14,
2003


 


·      Jacques Mallette


 


·      Mrs. Jocelyne Lefebvre-Ross, spouse
of Lazlo Ross (deceased)


 


·      Louis Saint-Arnaud, dated July 9,
2001


 


·      Pierre Karl Péladeau


 


·      Richard Tremblay


 


·      David Blair


 


·      Érik Péladeau


 


16

















 


·      David Duncan, dated February 21,
1997


 


·      Gaétan Lussier, dated December 22,
1998


 


·      Gilbert Martinet, dated December 22,
1998


 


·      Guy Trahan, dated December 22, 1998


 


·      Gordon Griffiths, dated June 30,
1994


 


·      Francois R. Roy, Louis Saint-Arnaud,
Jacques Girard, Jean Lamontagne, Ronald Renaud and Jean-Claude L’Abbé dated March 30,
1995 and amendment dated May 7, 1999


 


17.           Supplemental unemployment benefits for
certain unionized employees pursuant to collective agreements


 


17

















 


SCHEDULE 5.08


 


SOURCES AND USES


 


Note:  The amounts listed on this Schedule are
subject to change between the Effective Date and Funding Date, pending delivery
of Acceptable Funding Date Schedules.


 


In addition to the other
purposes described in Section 5.08, the proceeds of the Term Loans,
Revolving Loans and Swingline Loans will be used to repay the Specified
Existing Indebtedness, pay a portion of the consideration for the World Color
Press Acquisition, pay certain costs, fees and expenses related to the
Transactions, and make certain Restricted Payments, estimates of which are
shown below:


 


	
  Refinance Specified Existing Indebtedness

  	
   

  	
  $

  	
  601,600,000

  	
  *

  
	
  Dividend to Quad/Graphics, Inc. shareholders

  	
   

  	
  $

  	
  140,000,000

  	
   

  
	
  Max Cash consideration to World Color Press Inc.
  shareholders

  	
   

  	
  $

  	
  135,000,000

  	
   

  
	
  Payment of bankruptcy liabilities

  	
   

  	
  $

  	
  33,500,000

  	
   

  
	
  M&A and financing fees

  	
   

  	
  $

  	
  114,000,000

  	
   

  
	
  Total

  	
   

  	
  $

  	
  1,024,100,000

  	
   

  



 






*Plus additional
temporary amounts necessary to defease the Notes issued under Item 3 listed on
Schedule 1.01(a) under the heading “INFORMATION RECEIVED TO DATE FROM
WORLD COLOR PRESS INC. AND ITS SUBSIDIARIES:”.


 


18














 


SCHEDULE 6.01(b)


 


EXISTING INDEBTEDNESS


 


Note:  All information appearing under the heading “INFORMATION RECEIVED TO DATE FROM WORLD COLOR
PRESS INC. AND ITS SUBSIDIARIES:” is provided for informational purposes only because
neither World Color Press Inc. nor its subsidiaries will be subsidiaries of the
U.S. Borrower until the Funding Date.


 


Unless
a maximum commitment amount is expressly stated below, each item described on
this Schedule 6.01(b) represents fully funded Indebtedness and,
accordingly, the outstanding principal amount will not be increased.


 


INFORMATION RELATING TO U.S.
BORROWER AND ITS SUBSIDIARIES:


 


1.             Items 5-6 listed on Schedule 1.01(a) under
the heading “INFORMATION RELATING TO U.S. BORROWER AND ITS
SUBSIDIARIES:”.


 


2.             Items 14-17 listed on Schedule 6.04 under
the heading “INFORMATION RELATING TO U.S. BORROWER AND ITS
SUBSIDIARIES:”.


 


3.             Vehicle leases between Quad/Winkowski Sp.
Zo.o. and Bankowy Fundu SZ Leasing in the outstanding principal amount of PLN
153,711.95 on the Effective Date.


 


4.             Vehicle leases between Quad/Winkowski Sp.
Zo.o. and Raiffeisen Leasing in the outstanding principal amount of PLN
47,039.73 on the Effective Date.


 


5.             Equipment leases between Quad/Winkowski
Sp. Zo.o. and ING Lease in the outstanding principal amount of PLN 897,108.82
on the Effective Date.


 


6.             Equipment leases between Quad/Winkowski
Sp. Zo.o. and BEL (Millenium) Leasing in the outstanding principal amount of
PLN 1,075,880.00 on the Effective Date.


 


7.             Vehicle leases between Quad/Winkowski Sp.
Zo.o. and Volkswagen Leasing in the outstanding principal amount of PLN
226,424.02 on the Effective Date.


 


8.             PLN 22,991,391 EU Grant to
Quad/Winkowski, subject to repayment in 2012 if Quad/Winkowksi fails to satisfy
requirements of the grant.


 


9.             Loan from
Muller Martini Corp. to Anselmo L. Morvillo S.A. in the outstanding principal
amount of approximately CHF 925,764 on the Effective Date, due July 2012, the
proceeds of which loan were used the finance the purchase of certain equipment.


 


10.           Loan from Banco
Credicoop Cooperativo Limitado to Anselmo L. Morvillo S.A. for working capital
purposes in the outstanding principal amount of approximately AR 1,000,000 on the Effective Date, due July 2010.


 


19

















 


INFORMATION RECEIVED TO DATE FROM WORLD COLOR
PRESS INC. AND ITS SUBSIDIARIES:


 


1.             Items 4-7 listed on Schedule 1.01(a) under
the heading “INFORMATION RECEIVED TO DATE FROM WORLD COLOR
PRESS INC. AND ITS SUBSIDIARIES:”.


 


2.             Items 5-21 on Schedule 6.04 under the heading “INFORMATION RECEIVED TO DATE FROM WORLD COLOR
PRESS INC. AND ITS SUBSIDIARIES:”.


 


3.             Business Development Agreement
(approximately $5,847,000), effective November 30, 1988, by and among the
West Virginia Economic Development Authority (statutory successor to the West
Virginia Industrial and Trade Jobs Development Corporation), Quebecor World
Fairfield Inc (successor-in-interest to Arcata Graphics Fairfield Inc, merged
into Novink Printing (USA) II Corp, renamed World Color Printing (USA) II Corp,
and doing business in the State of West Virginia as World Color Martinsburg)
and Quebecor World Inc (successor to Arcata Graphics Company, renamed World
Color Press Inc), as guarantor, as amended and restated.


 


4.             Amended and Restated Lease Agreement
(approximately $4,583,000), dated July 21, 2009 among Novink (USA) Corp.
(renamed World Color (USA) Corp.) and General Electric Capital Corporation,
amending and restating, among other things, the Lease Agreement, dated July 1,
1998, between Quebecor World (USA) Inc. (renamed World Color (USA) Corp) and
U.S. Bank National Association (as successor to State Street Bank and Trust
Company of Connecticut, National Association and State Street Bank and Trust
Company of California, N.A.).


 


5.             Guaranty, dated July 21, 2009, by
World Color Press Inc. to and in favor of General Electric Capital Corporation
and each other Indemnitee, guaranteeing the obligations described in Item 4
above.


 


6.             Lease Agreement (approximately $770,000),
dated December 21, 2009, between Xerox Corporation and World Color (USA)
LLC (doing business as World Color Dubuque).


 


7.             Master Lease Agreement (approximately
$11,000,000), dated as of April 30, 2008, between Banco de Chile and
Quebecor World Chile S.A., as amended.


 


8.             Credit Agreement (maximum commitment of
$6,000,000), dated September 3, 2008, between HSBC Colombia S.A and
Quebecor World Bogota S.A (renamed World Color Colombia S.A), currently
outstanding in the approximate principal amount of $4,400,000.


 


9.             Credit
Agreement (maximum commitment of $8,000,000), dated January 9, 2009,
between Banco de Credito Del Peru and Quebecor World Peru S.A (renamed World
Color Peru S.A), currently outstanding in the approximate principal amount of
$2,000,000.


 


10.           Credit
Agreement (maximum commitment of $2,000,000), dated March 3, 2009, between
Banco de Chile and Quebecor World Chile S.A (renamed World Color Chile S.A);
there is currently no outstanding principal balance under this Credit
Agreement.


 


20

















 


11.           Credit
Agreement (maximum commitment of $1,325,000), dated March 20, 2009,
between Banco Security and Quebecor World Chile S.A (renamed World Color Chile
S.A); there is currently no outstanding principal balance under this Credit
Agreement.


 


12.           Credit
Agreement (maximum commitment of $2,400,000), dated December 1, 2008,
between HSBC Peru and Quebecor World Peru S.A (renamed World Color Peru S.A);
there is currently no outstanding principal balance under this Credit
Agreement.


 


13.           Credit
Agreement (maximum commitment of $1,000,000), dated December 20, 2007,
between Itau Unibanco
Banco Multiplo S.A. (successor of Unibanco — União de Bancos Brasileiros S.A.)
and Quebecor World Recife Ltda; there is currently no
outstanding principal balance under this Credit Agreement.


 


14.           Credit Agreement (maximum commitment of
$1,500,000), dated December 27, 2007, between Itau Unibanco Banco Multiplo
S.A. (successor of Banco Itau Holding Financeira S.A.) and Quebecor World
Recife Ltda; there is currently no outstanding principal balance
under this Credit Agreement.


 


15.           Credit Agreement (maximum commitment of
$2,000,000), dated July 8, 2009, between Banco de Galicia and Quebecor
World Pilar S.A; there is currently no outstanding principal
balance under this Credit Agreement.


 


16.           Credit Agreement (maximum commitment of
$3,500,000), dated April 15, 2008, between Expocredit Colombia S.A and
Quebecor World Bogota S.A (renamed World Color Colombia S.A);
there is currently no outstanding principal balance under this Credit
Agreement.


 


17.           Credit and Security Agreement (maximum
commitment of $5,000,000), dated July 21, 2009, between Quebecor World
Litigation Trust u/a dated July 21, 2009, Eugene Davis, Trustee and World
Color Press Inc.


 


18.           Guaranty of Lease, dated May 3,
2002, by Quebecor World Inc. to Space Center Sycamore Canyon LLC.


 


19.           Guaranty, dated December 28, 2006,
between Quebecor World (USA) Inc. and Bolingbrook Investors, LLC (with respect
to Office Lease, dated December 28, 2006, as amended).


 


20.           Guaranty, dated April 10, 2008,
between Quebecor World (USA) Inc. and Headlands Realty Corp. (with respect to
Lease Agreement, dated April 8, 2008).


 


21.           Guaranty, dated January 2, 2007,
between Quebecor World Inc. and Pfizer Inc. (with respect to Sublease date January 2,
2007, as amended).


 


22.           Guaranty, dated October 15, 2001,
between Quebecor World (USA) Inc. and The McGraw-Hill Companies, Inc.
(with respect to Lease dated October 15, 1996, as amended).


 


21

















 


23.           Guaranty and Suretyship Agreement, dated July 20,
2009, between World Color Press Inc. and Corporate Property Associated 9, L.P.
(with respect to Lease Agreement dated May 1, 1996, as amended).


 


24.           Guaranty, between World Color Press Inc.
and One Directory Place, LLC (with respect to Lease dated July 21, 1995,
as amended).


 


25.           Guaranty, between World Color (USA) Corp.
and Selig Enterprises, Inc. (with respect to Commercial Lease Agreement
dated July 7, 2002, as amended).


 


26.           Guaranty of Lease dated February 3,
2005, by Quebecor World Inc. to and for the benefit of CF Capital, LLC, as
successor in interest to MLRP Kupperud Phase 1, LLC (with respect to Industrial
Building Lease of even date, as amended).


 


27.           Guaranty of Payment and Performance dated
November 13, 2000, by Quebecor World Inc. for the benefit of CR-Wiley,
LLC, successor in interest to Plumwood I-1, Limited Partnership (with respect
to Lease dated November 15, 1996, as amended).


 


28.           Guaranty by Quebecor World (USA) Inc. in
favor of Twenty-Seven Nashua Street Realty Trust (only with respect to tenant’s
obligation under Section 4.1.5 of the Lease dated January 1, 2002, as
amended).


 


29.           Irrevocable Standby Letter of Credit No
TS-07004701 ($2,500,000) dated June 20, 2008 issued by Credit Suisse for
the account of Quebecor World Insurance S.A., with The Travelers Indemnity
Company as the beneficiary, which letter of credit is secured by cash
collateral.


 


30.           Irrevocable Standby Letter of Credit
($10,000,000) issued by Citibank for the account of Quebecor World Insurance
S.A. with The Travelers Indemnity Company as the beneficiary, which letter of
credit is secured by cash collateral.


 


31.           Irrevocable Standby Letter of Credit No
NZS646580 (US$1,250,000) dated September 1,
2009 issued by WellsFargo for the account of World Color (USA) Corp., with
Atmos Energy Marketing LLC as the beneficiary.


 


32.           Irrevocable Standby Letter of Credit No
NZS644994 (US$5,500,000) dated August 4,
2009 issued by WellsFargo for the account of World Color (USA) Corp., with
Cellmark Paper Inc. as the beneficiary.


 


33.           Irrevocable Standby Letter of Credit No
NZS645524 (US$3,094,447.37)
dated August 13, 2009 issued by WellsFargo for the account of World Color
(USA) LLC, with One Directory Place LLC c/o DPC Development Company as the
beneficiary.


 


34.           Irrevocable Standby Letter of Credit No
NZS648025 (US$1,558,333) dated September 28
, 2009 issued by WellsFargo for the account of World Color Logistics LLC., with
Headlands Realty Corp. c/o AMB Property Corporation as the beneficiary.


 


22

















 


35.           Irrevocable Standby Letter of Credit No
G196993 (CA$2,000,000) dated August 28,
2009 issued by Toronto Dominion for the account of World Color Press Inc., with
Optrust Office Inc. as the beneficiary.


 


36.           Irrevocable Standby Letter of Credit No
NZS650695 (US$5,000,000) dated November 16,
2009 issued by WellsFargo for the account of World Color (USA) Corp., with
Scholastic Inc as the beneficiary.


 


37.           Irrevocable Standby Letter of Credit No
NZS656865 (US$4,825,000) dated March 8,
2010 issued by WellsFargo for the account of World Color (USA) Corp., with The
Travelers Indemnity Company as the beneficiary.


 


38.           S.W.I.F.T Message for Documentary Letter
of Credit No I574973 (EUR4,071,560) dated
March 12, 2010 issued by Toronto Dominion for the account of World Color
Press Inc., with Manroland AG. as the beneficiary.


 


39.           S.W.I.F.T Message for Documentary Letter
of Credit No I572877 (US$3,220,655) dated
August 19, 2009 issued by Toronto Dominion for the account of World Color
Press Inc., with Manroland Inc. as the beneficiary.


 


40.           S.W.I.F.T Message for Documentary Letter
of Credit No I573442 (US$2,488,280) dated
October 26, 2009 issued by Toronto Dominion for the account of World Color
Press Inc., with Manroland Inc. as the beneficiary.


 


41.           S.W.I.F.T Message for Documentary Letter
of Credit No I573441 (US$4,157,916) dated
October 19, 2009 issued by Toronto Dominion for the account of World Color
Press Inc., with Manroland Inc. as the beneficiary.


 


23

















 


SCHEDULE 6.02


 


LIENS


 


Note:  All information appearing under the heading “INFORMATION RECEIVED TO DATE FROM WORLD COLOR
PRESS INC. AND ITS SUBSIDIARIES:” is provided for informational purposes only because
neither World Color Press Inc. nor its subsidiaries will be subsidiaries of the
U.S. Borrower until the Funding Date.


 


INFORMATION RELATING TO U.S. BORROWER AND ITS
SUBSIDIARIES:


 


Part A:


 


1.             Each item listed in Part B of
Schedule 3.01 under the heading “INFORMATION RELATING TO
U.S. BORROWER:”, with respect to subsection (c) in the
definition of Liens.


 


2.             Security interest of Muller Martini
Corp. in the equipment purchased with the proceeds of the Loan from Muller Martini Corp to
Anselmo L. Morvillo S.A. in the outstanding principal amount of approximately
CHF 925,764 on the
Effective Date, due July 2012, the proceeds of which loan
were used the finance the purchase of certain equipment.


 


3.             Liens securing Specified Existing
Indebtedness, to be terminated on or prior to the Funding Date.


 


4.             Cash collateral in an amount not to
exceed $55,125,000 deposited on or around the Funding Date to secure the
letters of credit listed as Items 31-41 on Schedule 6.01(b) under the
heading “INFORMATION RECEIVED TO DATE FROM WORLD COLOR
PRESS INC. AND ITS SUBSIDIARIES:” and other outstanding letters
of credit issued for the account of World Color Press Inc. and/or its
subsidiaries.


 


Part B: 
See attached additional liens


 


24














 


	
  Jurisdiction

  	
   

  	
  Debtor

  	
   

  	
  Secured Party

  	
   

  	
  File Number

  	
   

  	
  Date Filed

  	
   

  	
  Summary Collateral Description

  and Subsequent Filings

  
	
  Wisconsin DFI (UCCs)

  	
   

  	
  Quad/Graphics, Inc.

  	
   

  	
  Muller Martini Corp.

  	
   

  	
  080015594226

  	
   

  	
  11/11/2008

  	
   

  	
  3675 Orbit Three Knife
  Trimmer, s/n FE1508055

  3520/1055-1255 MM Telescope Conveyor, s/n FE1508055

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Wisconsin DFI (UCCs)

  	
   

  	
  Quad/Graphics, Inc.

  	
   

  	
  Wisconsin Lift Truck
  Corp.

  	
   

  	
  060004475929

  	
   

  	
  03/27/2006

  	
   

  	
  One used Power Boss
  PB32 walk behind automatic scrubber s/n: XPB32036QP08

  Purchaser hereby grants seller a security interest in the above listed
  equipment until the full purchase price has been paid.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Wisconsin DFI (UCCs)

  	
   

  	
  Quad/Graphics, Inc.

  	
   

  	
  Wisconsin Lift Truck
  Corp.

  	
   

  	
  060002618623

  	
   

  	
  02/19/2006

  	
   

  	
  One used Power Boss
  PB32 walk behind scrubber s/n: XPB32036QP08

  Purchaser hereby grants seller a security interest in the above listed
  equipment until the full purchase price has been paid.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Wisconsin DFI (UCCs)

  	
   

  	
  Quad/Graphics, Inc.

  	
   

  	
  PrimeSource Corp.

  	
   

  	
  07501834734

  040001619320

   

   

  090001935927

  	
   

  	
  03/29/1999

  Continuation:
  01/29/2004

   

  Continuation:
  02/13/2009

  	
   

  	
  All debtors rights,
  title and interest now owned or hereafter acquired in lithographic plates,
  film, prepress materials and miscellaneous lithographic supplies provided by
  PrimeSource or ordered from PrimeSource, regardless of the deliveror.  But does not constitute any security
  interest in any of the assets of the debtor names.

   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Wisconsin DFI (UCCs)

  	
   

  	
  Quad/Graphics, Inc.

  	
   

  	
  Goss International
  Americas, Inc.

  	
   

  	
  100000994830

  	
   

  	
  01/26/2010

  	
   

  	
  One (1) new Goss
  model S200 Six Unit One Web, Web Offset Printing Press engineered and
  manufactured per the Purchase and Security Agreement dated January 19,
  2010 between Goss International Americas, Inc and Quad/Graphics, Inc.
  now referred to as CSO# C301413.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Wisconsin DFI (UCCs)

  	
   

  	
  Quad/Graphics, Inc.

  	
   

  	
  The Boelter Companies, Inc.

  	
   

  	
  090013841320

  	
   

  	
  11/24/2009

  	
   

  	
  All of the following
  wherever located, whether presently owned, existing, or hereafter created or
  acquired:

   

  All inventory and equipment
  acquired by the Debtor from the Secured Party on credit or for which the
  Secured Party provided the Debtor with value to enable the Debtor to acquire
  rights in such inventory

  



 


25

















 


	
  Jurisdiction

  	
   

  	
  Debtor

  	
   

  	
  Secured Party

  	
   

  	
  File Number

  	
   

  	
  Date Filed

  	
   

  	
  Summary Collateral Description

  and Subsequent Filings

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  and/or equipment; and
  all accessories, additions, and accessions thereto, and substitutions
  therefor; insurance proceeds; all books of account and other records
  pertaining to said inventory and/or equipment; and any and all proceeds of
  any of the foregoing.

   

  The collateral
  includes, but is not limited to, the following equipment:

   

  1 IEI FRONT COUNTER
  “Front Counter with 14ga stainless steel top, backsplash at walls, standard
  turn down edges, (1) drip trough, 14ga ribbed trayslide, 18ga cabinet
  base with middle/bottom shelving, plate shelf and 1⁄2”” thick white poly
  cutting board at dropins, lift-off plam panels at front, (8)  plam doors
  at front, (11) 18ga stainless steel doors, (1) cash drawer, and
  14ga galvanized curb base.  Approx 48””
  wide x 7’-6 3/4”” long, 48”” wide x 12’-8 3/4”” long, 48”” wide x
  8’-11 3/8”” long, 48”” wide x 9’-3 5/16”” long, 48”” wide x
  7’-1 13/16”” long, and 48”” wide x 4’-0 13/16”” long.  Faucets, drains, drop-ins, sneezeguards,
  u/c equipment, plumbing and electrical by others.”

  1 IEI CONDIMENT COUNTR
  “Condiment Counter with 14ga stainless steel top, backsplash at wall,
  standard turn down edges, 18ga cabinet base with middle/bottom shelving, plam
  doors at front, and 14ga galvanized curb base.  Approx 28”” wide x 6’ long.  Plumbing and electrical by others.”

  1 Vollrath 3640670
  4-WELL HOT MOD DROP-IN W/THERMOSTATIC CONTROL & MANIFOLD DRAINS,
  drip-free flange, ind drain shutoff, 6-3/8” deep wells operate moist or dry,
  dial controls, 625W per well, 120V, 20.8A, 5-30P plug, OA 54-3/4”x26”,
  cutout 54”x25-1/4”, 7/8” corner radius

  2 Vollrath 3646210 SOUP
  WELL, MODULAR DROP-IN W/THERMOSTATIC CONTROL, holds one 7-1/4 qt inset, sis.
  well, 3/4” drain, power cord, 

  



 


26

















 


	
  Jurisdiction

  	
   

  	
  Debtor

  	
   

  	
  Secured Party

  	
   

  	
  File Number

  	
   

  	
  Date Filed

  	
   

  	
  Summary Collateral Description

  and Subsequent Filings

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  control cord for remote
  installation, dia. over flange 11-3/16”, cutout dia. 10-9/16”, well outer
  dia. 10-5/16”, 120V, 720W, 6.0A, 5-15P, UL, CUL, NSF4, USA made

  1 Hatco GRSDS-36D
  Glo-Ray® Merchandising Warmer, counter model, 14 rods, pass thru design, with
  2-tier, forward-slanted shelves, stainless/aluminum construction, 36” long,
  1810 watts, w/4” legs

  1 ADM A-475 As per
  plans & specs

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Wisconsin DFI (UCCs)

  	
   

  	
  Quad/Graphics, Inc.

  	
   

  	
  Goss International
  Americas, Inc.

  	
   

  	
  090013185927

  	
   

  	
  11/05/2009

  	
   

  	
  New Echochill system
  for existing eight unit M3000 57’ press (M-104) manufactured and engineered
  in accordance with the Purchase and Security Agreement dated 9/1/2009 between
  Quad/Graphics, Inc. and Goss International Americas, Inc. now
  referred to as CSO#C301344.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Wisconsin DFI (UCCs)

  	
   

  	
  Quad/Graphics, Inc.

  	
   

  	
  Goss International
  Americas, Inc.

  	
   

  	
  090013184825

  	
   

  	
  11/05/2009

  	
   

  	
  New Echochill system
  for existing eight unit 40’ press (MR-5) manufactured and engineered in
  accordance with the Purchase and Security Agreement dated 9/1/2009 between
  Quad/Graphics, Inc. and Goss International Americas, Inc. now
  referred to as CSO#C301343.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Wisconsin DFI (UCCs)

  	
   

  	
  Quad/Graphics, Inc.

  	
   

  	
  Air Liquide Industrial
  U.S. LP

  	
   

  	
  090001093417

  	
   

  	
  01/26/2009

  	
   

  	
  3000 Gal Lin Vessel
  (serial #2096)

  Vaporizer

  Final Line

  Equipment located-Lomira, WI



  6000 Gal Lin Vessel
  (serial #C-053684)

  Vaporizer

  Telemetry

  Equipment located-Hartford, WI

  



 


27

















 


	
  Jurisdiction

  	
   

  	
  Debtor

  	
   

  	
  Secured Party

  	
   

  	
  File Number

  	
   

  	
  Date Filed

  	
   

  	
  Summary Collateral Description

  and Subsequent Filings

  
	
  Wisconsin DFI (UCCs)

  	
   

  	
  QuadSystems, LLC

  	
   

  	
  Toyota Material
  Handling, U.S.A., Inc.

  	
   

  	
  090001158823

  	
   

  	
  1/27/2009

  	
   

  	
  Inventory of all new
  Toyota, manufactured industrial, construction and agricultural equipment and
  all similar used equipment, whether now owned or hereafter acquired and
  wherever located, including all transit trucks that have been delivered by or
  on behalf of Toyota Material Handling, USA, Inc. and that have not yet
  been paid for in whole.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Delaware Department of
  State (UCCs)

  	
   

  	
  OpenFirst

  	
   

  	
  Quad/Graphics, Inc.

  	
   

  	
  62353167

  	
   

  	
  07/10/2006

  	
   

  	
  “Collateral” shall mean
  and include all equipment, fixtures, inventory, documents, general
  intangibles, account, deposit accounts, contract rights, chattel paper,
  patents, trademarks and copyrights (and the good will associated with and
  registrations and licenses of any of them), instruments, letter of credit
  rights and investment property, now owned or hereafter acquired by Debtor and
  all additions and accessions to, all spare and repair parts, special tools,
  equipment and replacements for, software used in, all returned or repossessed
  goods, the sale of which gave rise to and all proceeds, supporting
  obligations and products of the foregoing, wherever located.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Delaware Department of State
  (UCCs)

  	
   

  	
  New Diversified Mailing
  Services

  	
   

  	
  Quad/Graphics, Inc.

  	
   

  	
  62353449

  	
   

  	
  07/10/2006

  	
   

  	
  “Collateral” shall mean
  and include all equipment, fixtures, inventory, documents, general
  intangibles, account, deposit accounts, contract rights, chattel paper, patents,
  trademarks and copyrights (and the good will associated with and
  registrations and licenses of any of them), instruments, letter of credit
  rights and investment property, now owned or hereafter acquired by Debtor and
  all additions and accessions to, all spare and repair parts, special tools,
  equipment and replacements for, software used in, all returned or repossessed
  goods, the sale of which gave rise to and all proceeds, supporting
  obligations and products of the foregoing, wherever located.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Delaware Department of
  State (UCCs)

  	
   

  	
  New Electronic Printing
  Systems

  	
   

  	
  Quad/Graphics, Inc.

  	
   

  	
  62353258

  	
   

  	
  07/10/2006

  	
   

  	
  “Collateral” shall mean
  and include all equipment, fixtures, inventory, documents, general
  intangibles, account, deposit accounts, contract rights, chattel 

  



 


28

















 


	
  Jurisdiction

  	
   

  	
  Debtor

  	
   

  	
  Secured Party

  	
   

  	
  File Number

  	
   

  	
  Date Filed

  	
   

  	
  Summary Collateral Description

  and Subsequent Filings

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  paper, patents,
  trademarks and copyrights (and the good will associated with and
  registrations and licenses of any of them), instruments, letter of credit
  rights and investment property, now owned or hereafter acquired by Debtor and
  all additions and accessions to, all spare and repair parts, special tools, equipment
  and replacements for, software used in, all returned or repossessed goods,
  the sale of which gave rise to and all proceeds, supporting obligations and
  products of the foregoing, wherever located.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Delaware Department of
  State (UCCs)

  	
   

  	
  New Electronic Printing
  Systems, LLC

  	
   

  	
  Hewlett-Packard
  Financial Services Company

  	
   

  	
  61314715

  	
   

  	
  04/06/2006

  	
   

  	
  All equipment and
  software now or hereafter acquired, which Secured Party has leased to or
  financed for Debtor, including, but not limited to, computers, printing,
  imaging, copying, scanning, projection and storage equipment, any and all
  related peripherals, attachments, accessions, additions, general intangibles,
  substitutions, supplies, replacements, and any right, title or interest in
  any license for any software used to operate or otherwise installed in any of
  the foregoing, and products and proceeds of all of the foregoing (including
  insurance proceeds).

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Delaware Department of
  State (UCCs)

  	
   

  	
  New Electronic Printing
  Systems, LLC

  	
   

  	
  Recycle America
  Alliance, L.L.C.

  	
   

  	
  51230011

  	
   

  	
  04/21/2005

  	
   

  	
  One (1) new PTR
  2300HD baler together with all substitutions and replacements for and
  products of the foregoing and all additions and accessions thereto, all spare
  and repair parts and proceeds and products thereof as defined in Article 9
  of the UCC as it may be amended, reenacted or otherwise in effect from time
  to time and all Debtor’s wastepaper. 
  This is a purchase money security interest.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Delaware Department of
  State (UCCs)

  	
   

  	
  New Electronic Printing
  Systems, LLC

  	
   

  	
  Wells Fargo Equipment
  Finance, Inc.

  	
   

  	
  51359778

  	
   

  	
  05/03/2005

  	
   

  	
  (2) MCS Perfect
  Match Systems (4) Additional Cameras (2) MCS 4600 Array Imaging
  Systems includes Inkjet s/n: A-20593, A-20595 and 715 Bases s/n: A-20492 and
  A-20493 Contract # 139749-401.

  



 


29

















 


INFORMATION RECEIVED TO DATE FROM WORLD COLOR
PRESS INC. AND ITS SUBSIDIARIES:


 


Part A:


 


1.          Equipment Purchase Agreement, dated [August 11,
2009], between World Color (USA), LLC, as Purchaser, and Press Tech Company, Inc.,
as Seller.


 


2.             Equipment Purchase Agreement, dated August 19,
2009, between Quebecor World Merced Inc. (n/k/a World Color (USA) Corp.), as
Purchaser, and Press Tech Company, Inc., as Seller.


 


3.             Sublease
Agreement (Press #2), dated January 15, 2008, between
Quebecor World Lease GP, as Lessee, and Quebecor World (USA) Inc., as
Sublessee.


 


4.             Liens
securing Specified Existing Indebtedness, as well as other Liens of record to
be terminated on or prior to the Funding Date.


 


5.             Liens
in favor of Merrill Lynch Capital, AIG Commercial Equipment Finance, Inc.,
GATX Financial Corporation, General Electric Capital Corporation and
Hewlett-Packard Financial Services Company, as the secured parties and in their
capacity as leasing intermediaries pursuant to the Master Lease Agreement
listed as Item 5 on Schedule 1.01(a).


 


6.             Lien
in favor of General Electric Capital Corporation as secured party and as lessor
pursuant to the Amended and Restated Lease Agreement listed as Item 4 on
Schedule 6.01(b).


 


Part B: 
See attached additional liens


 


30














 


	
  JURISDICTION

  	
   

  	
  DEBTOR

  	
   

  	
  SECURED PARTY

  	
   

  	
  DATE FILED

  	
   

  	
  Description

  
	
  California-Secretary of
  State

  	
   

  	
  Quebecor World (USA)
  Inc.

  	
   

  	
  Man Roland Inc.

  	
   

  	
  3/21/05

  	
   

  	
  Lien on purchased
  equipment

  
	
  Delaware-Secretary of
  State

  	
   

  	
  Quebecor World (USA)
  Inc.

  	
   

  	
  Man Roland Inc.

  	
   

  	
  3/21/05

  	
   

  	
  Lien on purchased
  equipment

  
	
  Delaware-Secretary of
  State

  	
   

  	
  Quebecor World Book
  Services LLC

  	
   

  	
  Man Roland Inc.

  	
   

  	
  3/11/05

  	
   

  	
  Lien on purchased
  equipment

  
	
  Delaware-Secretary of
  State

  	
   

  	
  Quebecor World Book
  Services LLC

  	
   

  	
  Man Roland Inc.

  	
   

  	
  3/21/05

  	
   

  	
  Lien on purchased equipment.

  
	
  Delaware-Secretary of
  State

  	
   

  	
  Quebecor World Book
  Services LLC

  	
   

  	
  U.S. Bank National
  Association

  	
   

  	
  9/13/07

  	
   

  	
  Lien on purchased
  equipment

  
	
  Kentucky-Secretary of
  State

  	
   

  	
  Quebecor World Book
  Services LLC

  	
   

  	
  Man Roland Inc.

  	
   

  	
  3/14/05

  	
   

  	
  Lien on purchased equipment

  
	
  Massachusetts-Secretary
  of State

  	
   

  	
  Quebecor World Book
  Services LLC

  	
   

  	
  Man Roland Inc.

  	
   

  	
  3/21/05

  	
   

  	
  Lien on purchased
  equipment

  
	
  Delaware-Secretary of
  State

  	
   

  	
  Quebecor World Atglen
  Inc.

  	
   

  	
  Hell Gravoure,
  GMBH & Co. KG

  	
   

  	
  1/21/08

  	
   

  	
  Lien on purchased
  equipment

  
	
  Delaware-Secretary of
  State

  	
   

  	
  Quebecor World Atglen
  Inc.

  	
   

  	
  Maschinenfabrik K.
  Walter GMBH & Co. KG

  	
   

  	
  2/1/08

  	
   

  	
  Lien on purchased
  equipment

  
	
  Delaware-Secretary of
  State

  	
   

  	
  Quebecor World Book
  Services LLC

  	
   

  	
  Man Roland Inc.

  	
   

  	
  3/11/05

  	
   

  	
  Lien on purchased
  equipment

  
	
  Delaware-Secretary of
  State

  	
   

  	
  Quebecor World Book
  Services LLC

  	
   

  	
  Man Roland Inc.

  	
   

  	
  3/21/05

  	
   

  	
  Lien on purchased
  equipment

  
	
  Kentucky-Secretary of
  State

  	
   

  	
  Quebecor World Book
  Services LLC

  	
   

  	
  Man Roland Inc.

  	
   

  	
  3/14/05

  	
   

  	
  Lien on purchased
  equipment

  
	
  Massachusetts-Secretary
  of the Commonwealth

  	
   

  	
  Quebecor World Book
  Services LLC

  	
   

  	
  Man Roland Inc.

  	
   

  	
  3/21/05

  	
   

  	
  Lien on purchased
  equipment

  
	
  Delaware-Secretary of
  State

  	
   

  	
  QW Memphis Corp.

  	
   

  	
  Man Roland Inc.

  	
   

  	
  3/3/05

  	
   

  	
  Lien on purchased
  equipment

  
	
  Delaware-Secretary of
  State

  	
   

  	
  QW Memphis Corp.

  	
   

  	
  Man Roland Inc.

  	
   

  	
  3/11/05

  	
   

  	
  Lien on purchased
  equipment

  
	
  Delaware-Secretary of
  State

  	
   

  	
  QW Memphis Corp.

  	
   

  	
  Man Roland Inc.

  	
   

  	
  7/14/05

  	
   

  	
  Lien on purchased
  equipment

  
	
  Delaware-Secretary of
  State

  	
   

  	
  QW Memphis Corp.

  	
   

  	
  Man Roland Inc.

  	
   

  	
  7/14/05

  	
   

  	
  Lien on purchased
  equipment

  
	
  Delaware-Secretary of
  State

  	
   

  	
  QW Memphis Corp.

  	
   

  	
  Man Roland Inc.

  	
   

  	
  7/14/05

  	
   

  	
  Lien on purchased
  equipment

  



 


31

















 


	
  JURISDICTION

  	
   

  	
  DEBTOR

  	
   

  	
  SECURED PARTY

  	
   

  	
  DATE FILED

  	
   

  	
  Description

  
	
  Minnesota-Secretary of
  State

  	
   

  	
  QW Memphis Corp.

  	
   

  	
  Man Roland Inc.

  	
   

  	
  7/18/05

  	
   

  	
  Lien on purchased
  equipment

  
	
  Delaware-Secretary of
  State

  	
   

  	
  Quebecor World Dallas,
  L.P.

  	
   

  	
  Man Roland Inc.

  	
   

  	
  3/21/05

  	
   

  	
  Lien on purchased
  equipment

  
	
  Texas-Secretary of
  State, Statutory Filings Division

  	
   

  	
  Quebecor World Dallas,
  L.P.

  	
   

  	
  Man Roland Inc.

  	
   

  	
  3/21/05

  	
   

  	
  Lien on purchased
  equipment

  
	
  Delaware-Secretary of
  State

  	
   

  	
  Quebecor World Mount
  Morris II LLC

  	
   

  	
  Hell Gravoure Systems,
  GMBH & Co. KG

  	
   

  	
  1/21/08

  	
   

  	
  Lien on purchased
  equipment

  
	
  Delaware-Secretary of
  State

  	
   

  	
  Quebecor World Mount
  Morris II LLC

  	
   

  	
  Hell Gravoure Systems,
  GMBH & Co. KG

  	
   

  	
  1/21/08

  	
   

  	
  Lien on purchased
  equipment

  
	
  Delaware-Secretary of
  State

  	
   

  	
  Quebecor World Nevada
  II LLC

  	
   

  	
  Maschinenfabrik K.
  Walter GMBH & Co. KG

  	
   

  	
  2/1/08

  	
   

  	
  Lien on purchased
  equipment

  
	
  Delaware-Secretary of
  State

  	
   

  	
  Quebecor World
  Fairfield Inc.

  	
   

  	
  Man Roland Inc.

  	
   

  	
  3/21/05

  	
   

  	
  Lien on purchased
  equipment

  
	
  Delaware-Secretary of
  State

  	
   

  	
  Quebecor World
  Fairfield Inc.

  	
   

  	
  Man Roland Inc.

  	
   

  	
  7/14/05

  	
   

  	
  Lien on purchased
  equipment

  
	
  Pennsylvania-Department
  of State Uniform Commercial Code Section

  	
   

  	
  Quebecor World
  Fairfield Inc.

  	
   

  	
  Man Roland Inc.

  	
   

  	
  3/21/05

  	
   

  	
  Lien on purchased
  equipment

  
	
  Pennsylvania-Department
  of State Uniform Commercial Code Section

  	
   

  	
  Quebecor World
  Fairfield Inc.

  	
   

  	
  Muller Martini
  Corporation

  	
   

  	
  8/22/07

  	
   

  	
  Lien on purchased equipment

  
	
  Pennsylvania-Department
  of State Uniform Commercial Code Section

  	
   

  	
  Quebecor World
  Fairfield Inc.

  	
   

  	
  Muller Martini
  Corporation

  	
   

  	
  9/28/07

  	
   

  	
  Lien on purchased
  equipment

  
	
  West Virginia-Secretary
  of State

  	
   

  	
  Quebecor World
  Fairfield Inc.

  	
   

  	
  Man Roland Inc.

  	
   

  	
  6/23/09

  	
   

  	
  Lien on purchased
  equipment

  
	
  Arkansas-Secretary 

  	
   

  	
  Quebecor World RAI Inc.

  	
   

  	
  Man Roland Inc.

  	
   

  	
  3/23/05

  	
   

  	
  Lien on purchased
  equipment

  



 


32

















 


	
  JURISDICTION

  	
   

  	
  DEBTOR

  	
   

  	
  SECURED PARTY

  	
   

  	
  DATE FILED

  	
   

  	
  Description

  
	
  of State

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Arkansas-Secretary of
  State

  	
   

  	
  Quebecor World RAI Inc.

  	
   

  	
  Man Roland Inc.

  	
   

  	
  7/18/05

  	
   

  	
  Lien on purchased
  equipment

  
	
  Wisconsin-Secretary of
  State

  	
   

  	
  Quebecor World RAI Inc.

  	
   

  	
  Man Roland Inc.

  	
   

  	
  3/21/05

  	
   

  	
  Lien on purchased
  equipment

  
	
  Wisconsin-Secretary of
  State

  	
   

  	
  Quebecor World RAI Inc.

  	
   

  	
  Man Roland Inc.

  	
   

  	
  7/15/05

  	
   

  	
  Lien on purchased
  equipment

  
	
  Tennessee-Dyer County
  Register of Deeds

  	
   

  	
  The Industrial
  Development Board of Dyer County, Tennessee

  	
   

  	
  QW Memphis Corp.

  	
   

  	
  3/8/07

  	
   

  	
  Lien on equipment

  
	
  Tennessee-Dyer County
  Register of Deeds

  	
   

  	
  Novink (USA) LLC

  	
   

  	
  U.S. Bank National
  Association, as Owner Trustee

  	
   

  	
  9/25/07

  	
   

  	
  Lien on equipment

  
	
  Tennessee-Dyer County
  Register of Deeds

  	
   

  	
  Novink (USA) LLC

  	
   

  	
  U.S. Bank National
  Association, as Owner Trustee

  	
   

  	
  9/28/07

  	
   

  	
  Lien on equipment

  
	
  Tennessee-Dyer County
  Register of Deeds

  	
   

  	
  The Industrial
  Development Board of Dyer County, Tennessee

  	
   

  	
  QW Memphis Corp.

  	
   

  	
  1/30/09

  	
   

  	
  Lien on equipment

  
	
  Tennessee-Davidson
  County Register of Deeds

  	
   

  	
  Quebecor World
  Mid-South Press Corporation

  	
   

  	
  People’s Capital
  Corporation

  	
   

  	
  4/28/01

  	
   

  	
  Lien on equipment

  
	
  Tennessee- -Secretary
  of State and Davidson County Register of Deeds

  	
   

  	
  Quebecor World
  Mid-South Press Corporation

  	
   

  	
  People’s Capital
  Corporation

  	
   

  	
  4/20/01

  	
   

  	
  Lien on equipment

  
	
  Massachusetts-Bristol
  Northern District County Registry

  	
   

  	
  Quebecor World Retail
  Printing Corporation

  	
   

  	
  Wells Fargo Equipment
  Finance, Inc. People’s Capital and Leasing Corp.

  	
   

  	
  3/27/01

  	
   

  	
  Lien on equipment

  



 


33

















 


SCHEDULE 6.08


 


RESTRICTIVE AGREEMENTS


 


Note:  All information appearing under the heading “INFORMATION RECEIVED TO DATE FROM WORLD COLOR
PRESS INC. AND ITS SUBSIDIARIES:” is provided for informational purposes only because
neither World Color Press Inc. nor its subsidiaries will be subsidiaries of the
U.S. Borrower until the Funding Date.


 


INFORMATION RELATING TO U.S. BORROWER AND ITS
SUBSIDIARIES:


 


1.                                       All items listed on Schedule 1.01(a) under
the heading “INFORMATION RELATING TO U.S. BORROWER AND ITS
SUBSIDIARIES:”.


 


2.                                       Items 1-8 listed on Part B of
Schedule 3.01 under the heading “INFORMATION RELATING TO
U.S. BORROWER:”, with respect to Section 6.08(a) and
subsection (c) in the definition of Liens.


 


3.                                       Arrangement Agreement, dated as of January 25,
2010, between Quad/Graphics, Inc. and World Color Press, Inc.,
together with the Plan of Arrangement to be submitted to the Quebec Superior
Court and all exhibits, schedules and disclosure letters thereto, as the same
may be amended or modified.*


 


INFORMATION RECEIVED TO DATE FROM WORLD COLOR
PRESS INC. AND ITS SUBSIDIARIES:


 


1.                                       All items listed on Schedule 1.01(a) under
the heading “INFORMATION RECEIVED TO DATE FROM WORLD COLOR
PRESS INC. AND ITS SUBSIDIARIES:”.


 


2.                                       Arrangement Agreement, dated as of January 25,
2010, between Quad/Graphics, Inc. and World Color Press, Inc.,
together with the Plan of Arrangement to be submitted to the Quebec Superior
Court and all exhibits, schedules and disclosure letters thereto, as the same
may be amended or modified.*


 






*This
item will not appear on the Acceptable Funding Date Schedules.


 


34














 


EXHIBIT A


ASSIGNMENT AND ASSUMPTION


 


This Assignment and Assumption (the “Assignment and Assumption”)
is dated as of the Effective Date set forth below and is entered into by and
between [Insert name of Assignor] (the “Assignor”)
and [Insert name of Assignee] (the “Assignee”).  Capitalized terms used but not defined herein
shall have the meanings given to them in the Credit Agreement identified below
(as amended, the “Credit Agreement”), receipt of a copy of which is
hereby acknowledged by the Assignee.  The
Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby
agreed to and incorporated herein by reference and made a part of this
Assignment and Assumption as if set forth herein in full.


 


For an agreed consideration,
the Assignor hereby irrevocably sells and assigns to the Assignee, and the
Assignee hereby irrevocably purchases and assumes from the Assignor, subject to
and in accordance with the Standard Terms and Conditions and the Credit
Agreement, as of the Effective Date inserted by the Administrative Agent as
contemplated below (i) all of the Assignor’s rights and obligations in its
capacity as a Lender under the Credit Agreement and any other documents or
instruments delivered pursuant thereto to the extent related to the amount and
percentage interest identified below of all of such outstanding rights and
obligations of the Assignor under the respective facilities identified below
(including any letters of credit, guarantees, and swingline loans included in such
facilities) and (ii) to the extent permitted to be assigned under
applicable law, all claims, suits, causes of action and any other right of the
Assignor (in its capacity as a Lender) against any Person, whether known or
unknown, arising under or in connection with the Credit Agreement, any other
documents or instruments delivered pursuant thereto or the loan transactions
governed thereby or in any way based on or related to any of the foregoing,
including contract claims, tort claims, malpractice claims, statutory claims
and all other claims at law or in equity related to the rights and obligations
sold and assigned pursuant to clause (i) above (the rights and obligations
sold and assigned pursuant to clauses (i) and (ii) above being
referred to herein collectively as the “Assigned Interest”).  Such sale and assignment is without recourse
to the Assignor and, except as expressly provided in this Assignment and
Assumption, without representation or warranty by the Assignor.


 


	
  1.

  	
   

  	
  Assignor:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  Assignee:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  [and
  is an Affiliate/Approved Fund of [identify Lender](1)]

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  Borrowers:

  	
   

  	
  Quad/Graphics, Inc.
  and [7345933 Canada Inc.][World Color Press Inc.]

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  Administrative
  Agent:

  	
   

  	
  JPMorgan
  Chase Bank, N.A., as the administrative agent under the Credit Agreement

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  Credit
  Agreement:

  	
   

  	
  The
  Credit Agreement dated as of April 23, 2010 among
  Quad/Graphics, Inc. and [7345933 Canada Inc.][World Color Press Inc.],
  the Lenders parties thereto, JPMorgan Chase Bank, N.A., as Administrative Agent,
  JPMorgan Chase Bank, N.A., Toronto Branch, as Canadian Administrative Agent
  and the other agents parties thereto

  



 






(1) Select as
applicable.


 

















 


6.                                        Assigned
Interest:


 


	
  Facility
  Assigned

  	
   

  	
  Aggregate Amount of

  Commitment/Loans for

  all Lenders

  	
   

  	
  Amount of

  Commitment/Loans

  Assigned

  	
   

  	
  Percentage Assigned of

  Commitment/Loans(2)

  	
   

  
	
  Canadian Tranche Revolving Commitment

  	
   

  	
  $

  	
    

  	
   

  	
  $

  	
    

  	
   

  	
   

  	
  %

  
	
  U.S. Tranche Revolving Commitment

  	
   

  	
  $

  	
    

  	
   

  	
  $

  	
    

  	
   

  	
   

  	
  %

  
	
  Term Loan (U.S. Borrower)

  	
   

  	
  $

  	
    

  	
   

  	
  $

  	
    

  	
   

  	
   

  	
  %

  
	
  Term Loan (Canadian Borrower)

  	
   

  	
  $

  	
    

  	
   

  	
  $

  	
    

  	
   

  	
   

  	
  %

  



 


Effective
Date:                           ,
20      [TO BE INSERTED BY ADMINISTRATIVE AGENT AND
WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER
THEREFOR.]


 


The Assignee agrees to
deliver to the Administrative Agent a completed Administrative Questionnaire in
which the Assignee designates on or more Credit Contacts to whom all
syndicate-level information (which may contain material non-public information
about the Loan Parties, their affiliates and their related parties or their
respective securities) will be made available and who may receive such
information in accordance with the Assignee’s compliance procedures and
applicable laws, including Federal and state securities laws.


 


The terms set forth in this
Assignment and Assumption are hereby agreed to:


 


	
   

  	
  ASSIGNOR

  
	
   

  	
   

  
	
   

  	
  [NAME
  OF ASSIGNOR]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
    Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ASSIGNEE

  
	
   

  	
   

  
	
   

  	
  [NAME
  OF ASSIGNEE]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
    Title:

  



 






(2) Set forth, to at least 9 decimals, as a percentage of the
Commitment/Loans of all Lenders thereunder.


 

















 


[Consented to and](3) Accepted:


 


JPMORGAN
CHASE BANK, N.A.,  as


Administrative
Agent


 


 


	
  By

  	
   

  	
   

  
	
    Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  [Consented
  to:

  	
   

  
	
   

  	
   

  
	
  QUAD/GRAPHICS,
  INC.

  

  

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By

  	
   

  	
   

  
	
    Title:
  ]  (4)

  	
   

  
	
   

  	
   

  
	
  [Consented
  to:

  	
   

  
	
   

  	
   

  
	
  JPMORGAN
  CHASE BANK, N.A.,  as

  	
   

  
	
  an
  Issuing Bank

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By

  	
   

  	
   

  
	
    Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Consented
  to:

  	
   

  
	
   

  	
   

  
	
  [                        ],  as

  	
   

  
	
  an
  Issuing Bank

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By

  	
   

  	
   

  
	
    Title:]  (5)

  	
   

  



 






(3) To be added only if the consent of the Administrative Agent is
required by the terms of the Credit Agreement.


(4) To be added only if the consent of the U.S. Borrower is
required by the terms of the Credit Agreement.


(5) To be added only if the consent of each Issuing Bank is
required by the terms of the Credit Agreement.


 

















 


ANNEX 1


 


STANDARD TERMS AND CONDITIONS FOR


ASSIGNMENT AND ASSUMPTION


 


1.  Representations and
Warranties.


 


1.1   Assignor.  The Assignor (a) represents and warrants
that (i) it is the legal and beneficial owner of the Assigned Interest, (ii) the
Assigned Interest is free and clear of any lien, encumbrance or other adverse
claim and (iii) it has full power and authority, and has taken all action
necessary, to execute and deliver this Assignment and Assumption and to
consummate the transactions contemplated hereby; and (b) assumes no
responsibility with respect to (i) any statements, warranties or
representations made in or in connection with the Credit Agreement or any other
Loan Document, (ii) the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Loan Documents or any collateral
thereunder, (iii) the financial condition of any Borrower, any of their
Subsidiaries or Affiliates or any other Person obligated in respect of any Loan
Document or (iv) the performance or observance by any Borrower, any of its
Subsidiaries or Affiliates or any other Person of any of their respective
obligations under any Loan Document.


 


1.2.  Assignee.  The Assignee (a) represents and warrants
that (i) it has full power and authority, and has taken all action
necessary, to execute and deliver this Assignment and Assumption and to
consummate the transactions contemplated hereby and to become a Lender under
the Credit Agreement, (ii) it satisfies the requirements, if any,
specified in the Credit Agreement that are required to be satisfied by it in
order to acquire the Assigned Interest and become a Lender (including, in the
case of any assignment of any Canadian Tranche Revolving Commitment, that the
Assignee is able to fund in Canadian Dollars as and when required under the Credit
Agreement), (iii) from and after the Effective Date, it shall be bound by
the provisions of the Credit Agreement as a Lender thereunder and, to the
extent of the Assigned Interest, shall have the obligations of a Lender
thereunder, (iv) it has received a copy of the Credit Agreement, together
with copies of the most recent financial statements delivered pursuant to Section 5.01
thereof, as applicable, and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this Assignment and Assumption and to purchase the Assigned Interest on the
basis of which it has made such analysis and decision independently and without
reliance on the Administrative Agent or any other Lender, and (v) if it is
a Foreign Lender that is entitled to an exemption from or reduction of
withholding tax under the law of the jurisdiction in which the Borrowers are
located, or any treaty to which such jurisdiction is a party, attached to the
Assignment and Assumption is any documentation required to be delivered by it
pursuant to the terms of the Credit Agreement, duly completed and executed by
the Assignee; and (b) agrees that (i) it will, independently and
without reliance on the Administrative Agent, the Assignor or any other Lender,
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Loan Documents, and (ii) it will perform in accordance with
their terms all of the obligations which by the terms of the Loan Documents are
required to be performed by it as a Lender.


 


2.   Payments.    From and after the Effective Date, the
Administrative Agent shall make all payments in respect of the Assigned
Interest (including payments of principal, interest, fees and other amounts) to
the Assignor for amounts which have accrued to but excluding the Effective Date
and to the Assignee for amounts which have accrued from and after the Effective
Date.


 


3.  General Provisions.
This Assignment and Assumption shall be binding upon, and inure to the benefit
of, the parties hereto and their respective successors and assigns.  This Assignment and Assumption may be
executed in any number of counterparts, which together shall constitute one
instrument.  Delivery of an executed
counterpart of a signature page of this Assignment and Assumption by
facsimile


 

















 


shall
be effective as delivery of a manually executed counterpart of this Assignment
and Assumption.  This Assignment and Assumption
shall be governed by, and construed in accordance with, the laws of the State
of New York.


 














 


EXHIBIT C


 


FORM OF INCREASING LENDER SUPPLEMENT


 


INCREASING
LENDER SUPPLEMENT, dated               ,
20        (this “Supplement”), by and
among each of the signatories hereto, to the Credit Agreement, dated as of April 23,
2010 (as amended, restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”), among
Quad/Graphics, Inc., a Wisconsin corporation (the “U.S. Borrower”),
[7345933 Canada Inc.][World Color Press Inc.], a Canadian corporation (the “Canadian
Borrower” and, together with the U.S. Borrower, the “Borrowers”),
the Lenders party thereto, JPMorgan Chase Bank, N.A., as administrative agent
(in such capacity, the “Administrative Agent”),
and JPMorgan Chase Bank, N.A., Toronto Branch, as Canadian Administrative
Agent.


 


W I T N E S S E T H


 


WHEREAS, pursuant to Section 2.20
of the Credit Agreement, the Borrowers have the right, subject to the terms and
conditions thereof, to effectuate from time to time an increase in the
aggregate Revolving Commitments
under the Credit Agreement by requesting one or more Lenders to increase the
amount of its Revolving Commitment;


 


WHEREAS, the Borrowers have
given notice to the Administrative Agent of its intention to request an
increase the aggregate Revolving Commitments pursuant to such Section 2.20;
and


 


WHEREAS, pursuant to Section 2.20
of the Credit Agreement, the undersigned Increasing Lender now desires to
increase the amount of its [U.S.] [Canadian] Tranche Revolving Commitment under
the Credit Agreement by executing and delivering to the Borrowers and the
Administrative Agent this Supplement;


 


NOW, THEREFORE, each of the
parties hereto hereby agrees as follows:


 


1.  The undersigned Increasing Lender agrees,
subject to the terms and conditions of the Credit Agreement, that on the date
of this Supplement it shall have its [U.S.] [Canadian] Tranche Revolving
Commitment increased by $[             ],
thereby making the aggregate amount of its total [U.S.] [Canadian] Tranche
Revolving Commitment equal to $[              ].


 


2.  The Borrowers hereby represent and warrant (a) the
representations and warranties of the Borrowers set forth in the Credit
Agreement are true and correct in all material respects as of the date hereof
and (b) that no Default or Event of Default has occurred and is continuing
on and as of the date hereof.


 


3.  Terms defined in the Credit Agreement shall
have their defined meanings when used herein.


 


4.  This Supplement shall be governed by, and
construed in accordance with, the laws of the State of New York.


 

















 


5.  This Supplement may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same document.


 


[remainder of this page intentionally
left blank]


 

















 


IN WITNESS WHEREOF, each of
the undersigned has caused this Supplement to be executed and delivered by a
duly authorized officer on the date first above written.


 


	
   

  	
  INCREASING
  LENDER:

  
	
   

  	
   

  
	
   

  	
  [INSERT
  NAME OF INCREASING LENDER]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  



 


 


Accepted
and agreed to as of the date first written above:


 


	
  QUAD/GRAPHICS,
  INC., as the U.S. Borrower

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  
	
  Title:

  	
   

  
	
   

  	
   

  
	
  AND

  	
   

  
	
   

  	
   

  
	
  [7345933 CANADA INC.][WORLD COLOR PRESS INC.], as
  the Canadian Borrower

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  
	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Acknowledged
  as of the date first written above:

  	
   

  
	
   

  	
   

  
	
  JPMORGAN
  CHASE BANK, N.A.,

  	
   

  
	
  as
  Administrative Agent

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  
	
  Title:

  	
   

  



 

















 


EXHIBIT D


FORM OF AUGMENTING LENDER SUPPLEMENT


 


AUGMENTING
LENDER SUPPLEMENT, dated             ,
20      (this “Supplement”), by and among each
of the signatories hereto, to the Credit Agreement, dated as of April 23,
2010 (as amended, restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”), among
Quad/Graphics, Inc., a Wisconsin corporation (the “U.S. Borrower”),
[7345933 Canada Inc.][World Color Press Inc.], a Canadian corporation (the “Canadian
Borrower” and, together with the U.S. Borrower, the “Borrowers”),
the Lenders party thereto, JPMorgan Chase Bank, N.A., as administrative agent
(in such capacity, the “Administrative Agent”),
and JPMorgan Chase Bank, N.A., Toronto Branch, as Canadian Administrative
Agent.


 


W I T N E S S E T H


 


WHEREAS, the Credit
Agreement provides in Section 2.20 thereof that any bank, financial
institution or other entity may extend Revolving Commitments
under the Credit Agreement subject to the approval of the Borrowers and the
Administrative Agent, by executing and delivering to the Company and the
Administrative Agent a supplement to the Credit Agreement in substantially the
form of this Supplement; and


 


WHEREAS, the undersigned
Augmenting Lender was not an original party to the Credit Agreement but now
desires to become a party thereto;


 


NOW, THEREFORE, each of the
parties hereto hereby agrees as follows:


 


1.  The undersigned Augmenting Lender agrees to
be bound by the provisions of the Credit Agreement and agrees that it shall, on
the date of this Supplement, become a Lender for all purposes of the Credit Agreement
to the same extent as if originally a party thereto, with a [U.S.] [Canadian]
Tranche Revolving Commitment of $[                  
].


 


2.  The undersigned Augmenting Lender (a) represents
and warrants that it is legally authorized to enter into this Supplement; (b) confirms
that it has received a copy of the Credit Agreement, together with copies of
the most recent financial statements delivered pursuant to Section 5.01
thereof, as applicable, and has reviewed such other documents and information as
it has deemed appropriate to make its own credit analysis and decision to enter
into this Supplement; (c) agrees that it will, independently and without
reliance upon the Administrative Agent or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Credit
Agreement or any other instrument or document furnished pursuant hereto or
thereto; (d) appoints and authorizes the Administrative Agent to take such
action as agent on its behalf and to exercise such powers and discretion under
the Credit Agreement or any other instrument or document furnished pursuant
hereto or thereto as are delegated to the Administrative Agent by the terms
thereof, together with such powers as are incidental thereto; (e) agrees
that it will be bound by the provisions of the Credit Agreement and will
perform in accordance with its terms all the obligations which by the terms of
the Credit Agreement are required to be performed by it as a Lender, [and] (f) represents
and warrants that if it is a Foreign Lender that is entitled to an exemption
from or reduction of withholding tax under the law of the jurisdiction in which
the Borrowers are located, or any treaty to which such jurisdiction is a party,
attached to this Supplement is any documentation required to 


 

















 


be
delivered by it pursuant to the terms of the Credit Agreement, duly completed
and executed by the Augmenting Lender [, and (g) confirms that it is able
to fund in Canadian Dollars as and when required under the Credit Agreement.]  (1)


 


3.  The undersigned’s address for notices for the
purposes of the Credit Agreement is as follows:


 


[                  ]


 


4.
The Augmenting Lender agrees to deliver to the Administrative Agent a completed
Administrative Questionnaire in which the Augmenting Lender designates one or
more Credit Contacts to whom all syndicate-level information (which may contain
material non-public information about the Loan Parties, their affiliates and
their related parties or their respective securities) will be made available
and who may receive such information in accordance with the Augmenting Lender’s
compliance procedures and applicable laws, including Federal and state
securities laws.


 


5.  The Borrowers hereby represent and warrant (a) the
representations and warranties of the Borrowers set forth in the Credit
Agreement are true and correct in all material respects as of the date hereof
and (b) that no Default or Event of Default has occurred and is continuing
on and as of the date hereof.


 


6.  Terms defined in the Credit Agreement shall
have their defined meanings when used herein.


 


7.  This Supplement shall be governed by, and
construed in accordance with, the laws of the State of New York.


 


8. This Supplement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
document.


 


[remainder of this page intentionally
left blank]


 






(1) To
be added only if the Augmenting Lender will hold a Canadian Tranche Revolving
Commitment.


 

















 


IN WITNESS WHEREOF, each of
the undersigned has caused this Supplement to be executed and delivered by a
duly authorized officer on the date first above written.


 


	
   

  	
   

  	
  AUGMENTING
  LENDER:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [INSERT
  NAME OF AUGMENTING LENDER]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Accepted
  and agreed to as of the date first written above:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  QUAD/GRAPHICS,
  INC., as the U.S. Borrower

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  AND

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  [7345933 CANADA INC.][WORLD COLOR PRESS INC.], as
  the Canadian Borrower

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Acknowledged and agreed to as of the date first
  written above:

  
	
   

  	
   

  	
   

  
	
  JPMORGAN
  CHASE BANK, N.A.,

  	
   

  	
   

  
	
  as
  Administrative Agent

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  



 

















 


EXHIBIT E


 


LIST OF CLOSING DOCUMENTS


 


See attached.


 














 


LIST
OF CLOSING DOCUMENTS


 


QUAD/GRAPHICS, INC.


 


U.S.$1,230,000,000


 


SENIOR SECURED CREDIT FACILITIES


 


APRIL 23, 2010


 


LIST OF CLOSING DOCUMENTS(1)


 


I. Effective Date Closing Documents(2)


 


A.                                   LOAN
DOCUMENTS


 


1.                   Credit Agreement (the “Credit
Agreement”) by and among Quad/Graphics, Inc. (the “U.S. Borrower”),
7345933 Canada Inc. (the “Canadian Borrower” and collectively with U.S.
Borrower, the “Borrowers”), the institutions from time to time parties
thereto as Lenders (the “Lenders”), JPMorgan Chase Bank, N.A. (“JPMCB”),
in its capacity as Administrative Agent for itself and the other Lenders (in
such capacity, the “Administrative Agent”) and JPMorgan Chase Bank,
N.A., Toronto Branch, as Canadian Administrative Agent (in such capacity, the “Canadian
Administrative Agent”), evidencing senior secured credit facilities in an
initial aggregate principal amount of U.S.$1,230,000,000.


 


SCHEDULES:


 


Schedule
1.01(a) — Effective Date and Funding Date Material Indebtedness


Schedule
1.01(b) — Senior Secured Note Collateral


Schedule
1.01(c) — Existing Leveraged Leases; Existing Leveraged Lease Collateral


Schedule
1.01(d) — Funding Date Mortgage Properties


Schedule
2.01 — Commitments


Schedule 2.06 — Existing LCs


Schedule 3.01 — Subsidiaries


Schedule 3.03 — Governmental Consents


Schedule 3.05 — Properties


Schedule 3.06(a) — Litigation


 






(1) Each capitalized term used herein and not
defined herein shall have the meaning assigned to such term in the
above-defined Credit Agreement.  Items
appearing in bold and italics shall be prepared and/or provided by the
Borrowers and/or Borrowers’ counsel.


 


(2) The documents listed in this Part I
are those contemplated by the condition precedent set forth in
Section 4.01(c) of the Credit Agreement.


 

















 


Schedule 3.06(b) — Environmental


Schedule 3.10(a) — US Benefits


Schedule 3.10(b) — Canadian Benefits


Schedule 3.10(c) — ERISA Event


Schedule 3.15 — Insurance


Schedule 5.08 — Sources and Uses


Schedule 6.01(b) — Existing Indebtedness


Schedule 6.02 — Liens


Schedule 6.04 — Investments


Schedule 6.08 — Restrictive Agreements


 


EXHIBITS:


 


Exhibit A
— Form of Assignment and Assumption


Exhibit B-1
— Form of Opinion of Loan Parties’ Counsel (Foley & Lardner LLP)


Exhibit B-2
— Form of Opinion of Loan Parties’ Canadian Counsel (Torys LLP)


Exhibit C
— Form of Increasing Lender Supplement


Exhibit D
— Form of Augmenting Lender Supplement


Exhibit E
— List of Closing Documents


Exhibit F
— Form of Compliance Certificate


Exhibit G
— Auction Procedures


Exhibit H
— Form(s) of Note(s)


 


B.                                     CORPORATE
DOCUMENTS


 


2.                   Certificate
of a Director, Secretary, Assistant Secretary or other duly appointed and
authorized officer of each of the Borrowers certifying (a) that there have
been no changes in (i) the Certificate of Incorporation or Amalgamation or
other charter document of such Borrower, as attached thereto and, with respect
to the U.S. Borrower, as certified as of a recent date by the Secretary of
State (or analogous governmental entity) of the jurisdiction of its
incorporation or organization, since the date of the certification thereof and,
(ii) the By-Laws or other applicable organizational or constitutional
document, as attached thereto, of such Borrower as in effect on the date of
such certification, (b) confirming no restrictions on the power to borrow,
grant liens or guaranty, (c) resolutions of the Board of Directors or
other governing body of such Borrower authorizing the execution, delivery and
performance of each Loan Document to which it is a party, and (d) the
names and true signatures of the incumbent officers of each Borrower authorized
to sign the Loan Documents to which it is a party and authorized to request a
Borrowing under the Credit Agreement.


 


3.                   Good Standing Certificate
(or equivalent certificate) for each Borrower from the Secretary of State,
principal Ministry or analogous governmental entity of the jurisdiction of its
organization.


 


2

















 


C.                                     LEGAL
OPINIONS


 


4.                   Opinion
letter of Foley & Lardner LLP, counsel to the Loan Parties, addressed
to the Administrative Agent, the Canadian Administrative Agent and the Lenders.


 


5.                   Opinion
letter of Torys LLP, Canadian counsel to the Loan Parties, addressed to the
Administrative Agent, the Canadian Administrative Agent and the Lenders.


 


D.                                    CLOSING
CERTIFICATES AND MISCELLANEOUS


 


6.                   Fully
executed and effective Purchase Agreement, together with all exhibits and
schedules thereto.


 


7.                   Certificate
of a Financial Officer of the Borrowers in form and substance satisfactory to
the Administrative Agent that (a) the Effective and Funding Date
Representations of the Borrowers are true and correct in all material respects
on and as of the date of the certificate (except where such representation or
warranty is qualified by materiality or where such representations apply solely
to the Funding Date); provided, however, that if any such representation or
warranty is qualified by Material Adverse Effect, material adverse change,
materially and adversely, or similar language, then, such representation or
warranty shall be deemed to be qualified by Funding Date Material Adverse
Effect and (b) no Default has occurred and is continuing.


 


II. Funding Date Closing Documents(3)


 


A.                                   LOAN
DOCUMENTS


 


8.                   Acceptable
Funding Date Schedules to the Credit Agreement.


 


9.                   Notes executed by each
Borrower in favor of each of the Lenders, if any, which has requested a note
pursuant to Section 2.10(e) of the Credit Agreement.


 


10.             Loan Party Guaranty (the “U.S.
Guaranty”) executed by the U.S. Borrower and the Material Domestic
Subsidiaries of the U.S. Borrower (collectively, the “Initial U.S. Loan
Parties”) in favor of the Administrative Agent.


 


11.             Loan Party Guaranty (the “Canadian
Guaranty”) executed by the Material Canadian Subsidiaries of the U.S.
Borrower (the “Initial Canadian Loan Parties” and, collectively with the
Initial U.S. Loan Parties, the “Initial Loan Parties”) (other than the
Canadian Borrower) in favor of the Canadian Administrative Agent.


 


12.             Pledge and Security
Agreement (the “Security Agreement”) executed by the Initial U.S. Loan
Parties in favor of the Administrative Agent, together with pledged instruments and 


 






(3) The documents listed in this Part II
are those contemplated by the condition precedent set forth in
Section 4.02(j) of the Credit Agreement.  Pursuant to Section 4.02(e) of the
Credit Agreement, the Funding Date Perfection Requirements may be satisfied,
waived or extended at the sole discretion of the Applicable Agent.


 


3

















 


allonges, stock
certificates, stock powers executed in blank, pledge instructions and
acknowledgments, as appropriate.


 


	
  Exhibit A

  	
  —

  	
  Legal Name and Principal Place of Business; Properties Leased by the
  Grantors; Properties Owned by the Grantors; Public Warehouses or Other
  Locations

  
	
  Exhibit B

  	
  —

  	
  Equipment Covered by Certificates of Title; Patents, Copyrights,
  Trademarks Protected under Federal Law and Industrial Designs

  
	
  Exhibit C

  	
  —

  	
  List of Properties where Fixtures are located

  
	
  Exhibit D

  	
  —

  	
  Instruments, Pledged Securities and other Investment Property

  
	
  Exhibit E

  	
  —

  	
  UCC
  Financing Statement Filing Locations

  
	
  Exhibit F

  	
  —

  	
  Commercial Tort Claims

  
	
  Exhibit G

  	
  —

  	
  Deposit Accounts

  



 


13.             Charge and Security
Agreements (the “Canadian Security Agreement”) executed by the Initial
Canadian Loan Parties in favor of the Canadian Administrative Agent.


 


	
  Schedule A

  	
   

  	
  —

  	
  Description of Lands

  
	
  Schedule B

  	
   

  	
  —

  	
  Permitted Encumbrances

  
	
  Schedule C

  	
   

  	
  —

  	
  Equipment

  
	
  Schedule D

  	
   

  	
  —

  	
  Offices in which PPSA Filings have been Filed

  
	
  Schedule E

  	
   

  	
  —

  	
  Loan Parties’ Places of Business and Asset Locations

  
	
  Schedule F(A)

  	
   

  	
  —

  	
  Equipment Covered by Certificates of Title

  
	
  Schedule F(B)

  	
   

  	
  —

  	
  Patents, Copyrights, Trademarks, Industrial Designs

  
	
  Schedule G

  	
   

  	
  —

  	
  Deposit Accounts

  
	
  Schedule H

  	
   

  	
  —

  	
  Litigation Claims

  



 


14.             Pledges of
Investment Collateral executed by certain Initial Loan Parties, together with
share certificates, stock transfer powers and resolutions of issuers consenting
to pledge.(4)


 


15.             Confirmatory
Grant of Security Interest in United States Copyrights made by certain of the
Initial Loan Parties in favor of the Administrative Agent.


 


	
  Schedule A

  	
  —

  	
  Registered Copyrights; Copyright Applications; Other Copyrights

  



 


16.             Confirmatory
Grant of Security Interest in United States Patents made by certain Initial
Loan Parties in favor of the Administrative Agent.


 


	
  Schedule A

  	
  —

  	
  Registered Patents; Patent Applications; Other Patents

  



 






(4) Separate agreement
required for each Canadian Subsidiary the Equity Interests of which are
required to be pledged.  Each pledge
agreement, governed by Ontario law, will assume delivery of the share
certificates  in Toronto for time of
closing.  To include pledge by U.S. Loan
Parties of first-tier Canadian Subsidiaries in accordance with the Funding Date
Perfection Requirements.


 


4

















 


17.             Confirmatory
Grant of Security Interest in United States Trademarks made by certain Initial
Loan Parties in favor of the Administrative Agent.


 


	
  Schedule A

  	
  —

  	
  Registered Trademarks; Trademark and Service Mark Applications; Other
  Trademarks

  



 


18.             Confirmatory
Grant of Security Interest in Canadian Intellectual Property made by certain
Initial Loan Parties in favor of the Applicable Agent.


 


	
  Schedule A

  	
  —

  	
  Registered Copyrights; Copyright Applications; Other Copyrights

  
	
  Schedule B

  	
  —

  	
  Registered Patents; Patent Applications; Other Patents

  
	
  Schedule C

  	
  —

  	
  Registered Trademarks; Trademark and Service Mark Applications; Other
  Trademarks

  



 


19.             Certificates of Insurance
listing (a) the Administrative Agent as lender loss payee for the property
and casualty insurance policies and business interruption insurance policies of
the Initial  Loan Parties, together with
a long-form lender loss payable endorsement, and (b) the Administrative
Agent as an additional insured with respect to the liability insurance of the
Initial Loan Parties, together with additional insured endorsements, in each
case to the extent required by Section 5.05 of the Credit Agreement.


 


B.                                     UCC,
PPSA, AND OTHER COLLATERAL-RELATED DELIVERIES


 


20.             UCC, tax lien, judgment and
name variation search reports naming each Initial Loan Party from the
appropriate offices in relevant jurisdictions.


 


21.             Personal Property Security
Act (“PPSA”), litigation, bankruptcy and Bank Act searches for each
applicable Initial Loan Party from the appropriate offices in relevant
jurisdictions.


 


22.             UCC-1 financing statements
naming each Initial Loan Party as debtor and the Applicable Agent as secured
party as filed with the appropriate offices in each applicable jurisdiction.


 


23.             PPSA filings and, if
relevant, Quebec hypothec registration naming certain Initial Loan Parties as
debtors and the Applicable Agent as secured party as filed with the appropriate
offices in each applicable jurisdiction.


 


24.             Search reports naming each
Initial Loan Party from the United States Patent and Trademark Office, U.S.
Copyright Office and the Canadian Intellectual Property Office.


 


C.                                     CORPORATE
DOCUMENTS


 


25.             Certificate of a Director,
Secretary, Assistant Secretary or other duly appointed and authorized officer
of each Initial Loan Party certifying (a) that there have been no changes
in (i) the Certificate of Incorporation or Amalgamation or other charter
document of such Initial Loan Party, as attached thereto and, with respect to
the Initial U.S. Loan Parties, as certified as of a recent date by the
Secretary of State (or analogous governmental entity) of the jurisdiction of
its incorporation or organization, since the date 


 


5

















 


of the certification thereof and (ii) the
By-Laws or other applicable organizational or constitutional document, as
attached thereto, of such Initial Loan Party as in effect on the date of such
certification, (b) confirming no restrictions on the power to borrow,
grant liens or guaranty, (c) resolutions of the Board of Directors or
other governing body of such Initial Loan Party authorizing the execution,
delivery and performance of each Loan Document to which it is a party, and in
case of the Initial Canadian Loan Parties that are private company issuers of
pledged shares, consents to such pledges and to future transfers upon
enforcement, and (d) the names and true signatures of the incumbent
officers of each Initial Loan Party authorized to sign the Loan Documents to
which it is a party, and (in the case of the Borrowers) authorized to request a
Borrowing under the Credit Agreement.


 


26.             Good Standing Certificate
(or equivalent certificate) for each Initial Loan Party from the Secretary of
State, principal Ministry or analogous governmental entity of the jurisdiction
of its organization.


 


D.                                    LEGAL
OPINIONS


 


27.             Opinion letter of Foley &
Lardner LLP, counsel to the Loan Parties, addressed to the Administrative
Agent, the  Canadian Administrative Agent
and the Lenders.


 


28.             Opinion letter of Torys
LLP, Canadian counsel to the Loan Parties, addressed to the Administrative
Agent, the Canadian Administrative Agent and the Lenders.


 


E.                                      MORTGAGE DOCUMENTS


 


29.             Mortgage, Security
Agreement, Financing Statement, Fixture Filing and Assignment of Rents and
Leases executed by the applicable Initial U.S. Loan Party in favor of the
Administrative Agent with respect to the properties of the Initial U.S. Loan
Parties specified on Schedule 1.01(d) to the Credit Agreement.


 


30.             Title Commitments (with
Policies or “marked-up” title commitments at recording), the required
endorsements thereto (to the extent available in the applicable jurisdiction),
including gap coverage, and copies of all of the title exceptions.


 


31.             ALTA Surveys.


 


32.             Environmental Indemnity
Agreement by and among the Borrowers, each of the mortgagors, and the
Administrative Agent.


 


33.             Flood Certifications and
Insurance, as applicable.


 


34.             Mortgage tax forms, if
applicable.


 


35.             Local counsel opinions.


 


36.             Documents required to issue
the title Policies and required endorsements.


 


6

















 


F.                                      CLOSING
CERTIFICATES AND MISCELLANEOUS


 


37.             Funding
Indemnity Letter, in form and substance acceptable to the Administrative Agent,
with respect to Eurodollar Loans or BA Rate Loans on the Funding Date, entered
into by the Borrowers and the Administrative Agent no less than three (3) Business
Days before the Funding Date.


 


38.             Payoff Letter(s) evidencing
the repayment, cancellation and termination of the Specified Existing
Indebtedness or the placing of sufficient funds in escrow for that purpose (or, in the case of the Claimant Notes, the
termination of the related indenture or the termination or inapplicability of
the covenants of World Color Press Inc. and its Affiliates), accompanied by
appropriate releases and terminations requested by the Administrative Agent.


 


(a)                                 UCC-3
termination statements with respect to the Specified Existing Indebtedness.


 


(b)                                 PPSA
terminations and Quebec discharges with respect to the Specified Existing
Indebtedness.


 


(c)                                  Real
property releases with respect to the Specified Existing Indebtedness.


 


39.             Certificate of a Financial
Officer of the Borrowers in form and substance satisfactory to the
Administrative Agent that (a) the Effective and Funding Date
Representations are true and correct in all material respects on and as of the
date of the certificate (except where such representation or warranty is
qualified by materiality then in all respects or where such representations
apply solely to the Effective Date); provided, however, that if any such
representation or warranty is qualified by Material Adverse Effect, material
adverse change, materially and adversely or similar language, then such
representation or warranty shall be deemed to be qualified by Funding Date
Material Adverse Effect, (b) no Default has occurred and is continuing or
shall result from the funding of any Loan or the issuance of any Letter of
Credit on the Funding Date, (c) no Funding Date Material Adverse Effect
has occurred, and (d) no injunction or temporary restraining order exists
and no litigation has commenced or is otherwise pending which would prohibit
the effectiveness of the Credit Agreement or the extension of any Loan or
issuance of any Letter of Credit.


 


40.             Solvency Certificate of
the Chief Financial Officer for the Loan Parties.


 


7

















 


III. Amalgamation Date Documents(5)


 


A.                                   LOAN
DOCUMENTS


 


41.             Reaffirmation of Loan
Documents executed by the Canadian Borrower (successor by amalgamation to
7345933 Canada Inc. and World Color Press Inc.).


 


42.             Joinder to U.S. Guaranty
executed by the Material Domestic Subsidiaries of Canadian Borrower (successor
by amalgamation to 7345933 Canada Inc. and World Color Press Inc.) (the “WCP
U.S. Loan Parties”) in favor of the Administrative Agent.


 


43.             Joinder to Canadian Guaranty
executed by the Material Canadian Subsidiaries of Canadian Borrower (successor
by amalgamation to 7345933 Canada Inc. and World Color Press Inc.) (the “WCP
Canadian Subsidiaries” and, collectively with the Canadian Borrower, the “WCP
Canadian Loan Parties”; the WCP U.S. Loan Parties and the WCP Canadian Loan
Parties, collectively, the “WCP Loan Parties”) in favor of the Canadian
Administrative Agent.


 


44.             Joinder to Security
Agreement executed by the WCP U.S. Loan Parties, together with pledged instruments and allonges, stock
certificates, stock powers executed in blank, pledge instructions and
acknowledgments, as appropriate.


 


	
  Exhibit A

  	
  —

  	
  Legal Name and Principal Place of Business; Properties Leased by the
  Grantors; Properties Owned by the Grantors; Public Warehouses or Other
  Locations

  
	
  Exhibit B

  	
  —

  	
  Equipment Covered by Certificates of Title; Patents, Copyrights,
  Trademarks Protected under Federal Law and Industrial Designs

  
	
  Exhibit C

  	
  —

  	
  List of Properties where Fixtures are located

  
	
  Exhibit D

  	
  —

  	
  Instruments, Pledged Securities and other Investment Property

  
	
  Exhibit E

  	
  —

  	
  UCC
  Financing Statement Filing Locations

  
	
  Exhibit F

  	
  —

  	
  Commercial Tort Claims

  
	
  Exhibit G

  	
  —

  	
  Deposit Accounts

  



 


45.               Joinder to Canadian Security
Agreement executed by the WCP Canadian Subsidiaries.


 


	
  Schedule A

  	
   

  	
  —

  	
  Description of Lands

  
	
  Schedule B

  	
   

  	
  —

  	
  Permitted Encumbrances

  
	
  Schedule C

  	
   

  	
  —

  	
  Equipment

  
	
  Schedule D

  	
   

  	
  —

  	
  Offices in which PPSA Filings have been Filed

  
	
  Schedule E

  	
   

  	
  —

  	
  Loan Parties’ Places of Business and Asset Locations

  
	
  Schedule F(A)

  	
   

  	
  —

  	
  Equipment Covered by Certificates of Title

  
	
  Schedule F(B)

  	
   

  	
  —

  	
  Patents, Copyrights, Trademarks, Industrial Designs

  
	
  Schedule G

  	
   

  	
  —

  	
  Deposit Accounts

  



 






(5) The
documents listed in this Part III are those contemplated by clause
(iii) of the definition of “Amalgamation Date Requirements” in the Credit
Agreement.


 


8

















 


	
  Schedule H

  	
   

  	
  —

  	
  Litigation Claims

  



 


46.             Pledges of
Investment Collateral executed by certain WCP Loan Parties, together with share
certificates, stock transfer powers and resolutions of issuers consenting to
pledge.(6)


 


47.             Confirmatory
Grant of Security Interest in United States Copyrights made by certain of the
WCP Loan Parties in favor of the Administrative Agent.


 


	
  Schedule A

  	
  —

  	
  Registered Copyrights; Copyright Applications; Other Copyrights

  



 


48.             Confirmatory
Grant of Security Interest in United States Patents made by certain of the WCP
Loan Parties in favor of the Administrative Agent.


 


	
  Schedule A

  	
  —

  	
  Registered Patents; Patent Applications; Other Patents

  



 


49.             Confirmatory
Grant of Security Interest in United States Trademarks made by certain of the
WCP Loan Parties in favor of the Administrative Agent.


 


	
  Schedule A

  	
  —

  	
  Registered Trademarks; Trademark and Service Mark Applications; Other
  Trademarks

  



 


50.             Confirmatory
Grant of Security Interest in Canadian Intellectual Property made by certain of
the WCP Loan Parties in favor of the Canadian Administrative Agent.


 


	
  Schedule A

  	
  —

  	
  Registered Copyrights; Copyright Applications; Other Copyrights

  
	
  Schedule B

  	
  —

  	
  Registered Patents; Patent Applications; Other Patents

  
	
  Schedule C

  	
  —

  	
  Registered Trademarks; Trademark and Service Mark Applications; Other
  Trademarks

  



 


51.             Deed of
Hypothec and Issue of Bonds naming JPMorgan Chase Bank, N.A., Toronto Branch,
as “fondé de pouvoir”  in the
Province of Québec, made by certain of the WCP Loan Parties.


 


52.             Delivery Order
made in connection with the Deed of Hypothec and Issue of Bonds made by certain
of the WCP Loan Parties.


 


53.             Pledge of Bond
Agreement made in connection with the Deed of Hypothec and Issue of Bonds,
pledging the Bond to JPMorgan Chase Bank, N.A., Toronto Branch, made by certain
of the WCP Loan Parties.


 






(6) Separate agreement required for each
Canadian Subsidiary the Equity Interests of which are required to be
pledged.  Each pledge agreement, governed
by Ontario law, will assume delivery of the share certificates in Toronto for
time of closing.


 


9

















 


B.                                     UCC,
PPSA, AND OTHER COLLATERAL-RELATED DELIVERIES


 


54.             UCC, tax lien and name
variation search reports naming each WCP Loan Party from the appropriate
offices in relevant jurisdictions.


 


55.             PPSA, litigation, bankruptcy
and Bank Act searches for each applicable WCP Loan Party from the appropriate
offices in relevant jurisdictions.


 


56.             UCC-1 financing statements
naming each WCP Loan Party as debtor and the Applicable Agent as secured party
as filed with the appropriate offices in each applicable jurisdiction.


 


57.             PPSA filings and, to the
extent available, Quebec hypothec registration naming certain WCP Loan Parties
as debtors and the Applicable Agent as secured party as filed with the
appropriate offices in each applicable jurisdiction.


 


58.             Search reports naming each
WCP Loan Party from the United States Patent and Trademark Office, U.S.
Copyright Office and the Canadian Intellectual Property Office.


 


C.                                     CORPORATE
DOCUMENTS


 


59.             Certificate of a Director,
Secretary, Assistant Secretary or other duly appointed and authorized officer of
each WCP Loan Party certifying (a) that there have been no changes in (i) the
Certificate of Incorporation or Amalgamation or other charter document of such
WCP Loan Party, as attached thereto and, with respect to the WCP U.S. Loan
Parties, as certified as of a recent date by the Secretary of State (or
analogous governmental entity) of the jurisdiction of its incorporation or
organization, since the date of the certification thereof and (ii) the
By-Laws or other applicable organizational or constitutional document, as
attached thereto, of such WCP Loan Party as in effect on the date of such
certification, (b) confirming no restrictions on the power to borrow,
grant liens or guaranty, (c) resolutions of the Board of Directors or
other governing body of such WCP Loan Party authorizing the execution, delivery
and performance of each Loan Document to which it is a party, and in case of
WCP Canadian Loan Parties that are private company issuers of pledged shares,
consents to such pledges and to future transfers upon enforcement, and (d) the
names and true signatures of the incumbent officers of each WCP Loan Party
authorized to sign the Loan Documents to which it is a party, and (in the case
of the Canadian Borrower) authorized to request a Borrowing under the Credit
Agreement.


 


60.             Certificate of a Director,
Secretary, Assistant Secretary or other duly appointed and authorized officer
of the U.S. Borrower certifying (a) a true, correct and complete copy of
the final Order of Superior Court of Quebec (Commercial Division) approving the
Plan of Arrangement, as attached thereto, (b) a true, correct and complete
copy of the March 25, 2010 letter confirming “no action” and waiver of
filing requirement under Canada’s Competition Act, as attached thereto, and (c) a
true, correct and complete copy of the approval of the acquisition of World
Color Press, Inc. by the U.S. Borrower by the Minister under the
Investment Canada Act, as attached thereto.


 


10

















 


61.             The Certificate of Arrangement
issued by the Director under the Canada Business Corporations Act with respect
to the amalgamation of 7345933 Canada Inc. and World Color Press Inc.(7)


 


62.             Good Standing Certificate
(or equivalent certificate) for each WCP Loan Party from the Secretary of
State, principal Ministry or analogous governmental entity of the jurisdiction
of its organization.


 


D.                                    LEGAL
OPINIONS


 


63.             Opinion letter of Foley &
Lardner LLP, counsel to the Loan Parties, addressed to the Administrative
Agent, the Canadian Administrative Agent and the Lenders.


 


64.             Opinion letter of Torys
LLP, Canadian counsel to the Loan Parties, addressed to the Administrative
Agent, the Canadian Administrative Agent and the Lenders.


 


65.             Opinion letter of Lavery,
de Billy, L.L.P., Quebec counsel to the Loan Parties, addressed to the
Administrative Agent, the Canadian Administrative Agent and the Lenders.


 


E.                                      MORTGAGE DOCUMENTS


 


66.             Mortgage, Security
Agreement, Financing Statement, Fixture Filing and Assignment of Rents and
Leases executed by the applicable WCP U.S. Loan Party in favor of the
Administrative Agent with respect to the U.S. properties of the WCP U.S. Loan
Parties specified on Schedule 1.01(d) to the Credit Agreement.


 


67.             Charge and Security
Agreement executed by the applicable WCP Canadian Loan Parties with respect to
the Canadian properties of the WCP Canadian Loan Parties specified on Schedule
1.01(d) to the Credit Agreement.


 






(7) The
U.S. Borrower shall take or cause to be taken all action necessary to obtain
the Certificate of Arrangement immediately following the opening of business at
Industry Canada on the date of funding. If the Certificate of Arrangement is
not available immediately following the opening of business at Industry Canada
on such date despite the U. S. Borrower and the parties to the arrangement
having taken all action necessary to obtain the Certificate of Arrangement on
the date of funding, the U.S. Borrower may, in the alternative, deliver to the
Agents a certificate of a duly appointed and authorized officer of the U.S.
Borrower certifying that  (i) attached thereto are copies of the
articles of arrangement and all documents required to be submitted to the
Director appointed under the CBCA together with the articles of arrangement and
that such documents have been pre-cleared with the Director, (ii) attached
thereto are the final signed versions of all such documents in the same form as
such pre-cleared documents and that such final signed versions have been filed
with the Director with a request for the Certificate of Arrangement to be
issued dated as of the date of funding, and (iii) attached thereto is a
time-stamped receipt of the Director confirming receipt of all such required
documents (if such a receipt is provided by the Director as part of its
procedure for receipt of arrangement documents).  If such an officer’s
certificate is delivered, the U.S. Borrower shall provide its undertaking to
forthwith take or to cause to be taken all such further action as may be
necessary to obtain the Certificate of Arrangement on the date of funding and
dated as of the date of funding and shall immediately deliver a copy of the
Certificate of Arrangement to the Agents upon receipt.


 


11

















 


68.             Title Commitments (with Policies
or “marked-up” title commitments at recording), the required endorsements
thereto (to the extent available in the applicable jurisdiction), including gap
coverage, and copies of all of the title exceptions.


 


69.             ALTA Surveys, or the
Canadian equivalent, as applicable.


 


70.             Environmental Indemnity
Agreement (U.S.) by and among the Borrowers, each of the mortgagors and the
Administrative Agent.


 


71.             Environmental Indemnity
Agreement (Canadian) by and among the Borrowers, each of the mortgagors and the
Canadian Administrative Agent.


 


72.             Flood Certifications and
Insurance, as applicable.


 


73.             Mortgage tax forms, if
applicable.


 


74.             Local counsel opinions.


 


75.             Documents required to issue
the title Policies and required endorsements.


 


IV.                                Post
Closing Items


 


76.             Post-filing UCC search
reports confirming that each of the UCC financing statements referenced in
items 22 and 56 have been filed and are of record in the applicable
jurisdictions.


 


77.             Post-filing PPSA/Quebec
search reports confirming that each of the PPSA filings referenced in items 23
and 57 have been filed and are of record in the applicable jurisdictions.


 


12














 


EXHIBIT
F


 


FORM OF COMPLIANCE
CERTIFICATE


 


To:                             The Lenders
parties to the


Credit Agreement Described Below


 


This Compliance Certificate is furnished pursuant to that certain
Credit Agreement dated as of


April 23,
2010, (as amended, restated, supplemented or otherwise modified, from time to
time, the “Credit Agreement”) among Quad/Graphics, Inc., a
Wisconsin corporation (the “U.S. Borrower”), [7345933 Canada Inc.][World
Color Press Inc.], a Canadian corporation (the “Canadian Borrower” and,
together with the U.S. Borrower, the “Borrowers”), the Lenders party
thereto, JPMorgan Chase Bank, N.A., as administrative agent (in such capacity,
the “Administrative Agent”), and JPMorgan
Chase Bank, N.A., Toronto Branch, as Canadian Administrative Agent.  Unless otherwise defined herein, capitalized
terms used in this Compliance Certificate have the meanings ascribed thereto in
the Credit Agreement.


 


THE UNDERSIGNED HEREBY CERTIFIES THAT:


 


1.              I am the duly
elected                       ,
a Financial Officer of Quad/Graphics, Inc.;


 


2.              I have reviewed
the terms of the Credit Agreement and I have made, or have caused to be made
under my supervision, a detailed review of the transactions and conditions of
the U.S. Borrower and its consolidated Subsidiaries during the accounting
period covered by the attached consolidated financial statements and such
consolidated financial statements present fairly in all material respects the
financial condition and results of operations of the (i) U.S. Borrower and
its consolidated Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied, subject to normal year-end audit adjustments and the
absence of footnotes, and (ii) include financial information for all
Consolidated Financial Covenant Entities.


 


3.              The examinations
described in paragraph 2 did not disclose, except as set forth below in detail
(along with any action taken or proposed to be taken with respect thereto), and
I have no knowledge of (i) the existence of any condition or event which
constitutes a Default during or at the end of the accounting period covered by
the attached financial statements or as of the date of this Certificate or (ii) any
change in GAAP or in the application thereof that has occurred since the date
of the audited financial statements referred to in Section 3.04 of the
Credit Agreement which has had a material effect on such financial statements;


 


4.              I hereby certify that no
Loan Party has changed (i) its name, (ii) its place of business (if
it has only one) or its chief executive office (if it has more than one place
of business), (iii) the type of entity it is or (iv) its state of
incorporation or organization without having given the Administrative Agent the
notice required by Section 4.1.7 of the Pledge and Security Agreement;


 


5.              Schedules I(A) and I(B) attached
hereto set forth financial data and computations evidencing the Borrowers’
compliance with certain covenants of the Credit Agreement, all of which data
and computations are true, complete and correct; and


 

















 


6.              Schedule II(A) attached
hereto sets forth the Material Domestic Subsidiaries (including those
Subsidiaries designated
by the U.S. Borrower as Material Domestic Subsidiaries, and constituting Loan
Party Guarantors), as of             ,
     .  During
the four Fiscal Quarter period ended as of such date, the aggregate amount of
that portion of Consolidated EBITDA of all Domestic Subsidiaries that are not
Material Domestic Subsidiaries was equal to or less than 10% of Consolidated
EBITDA. As of such date, the aggregate amount of that portion of Consolidated
Total Assets of all Domestic Subsidiaries that are not Material Domestic
Subsidiaries was equal to or less than 10% of Consolidated Total Assets.  The following Subsidiaries set forth on Schedule
II(A) have not been specified as Material Domestic Subsidiaries on a
previous Compliance Certificate:


 


 


 


 


7.              Schedule II(B) attached
hereto sets forth the Material Canadian Subsidiaries (including those
Subsidiaries designated
by the U.S. Borrower as Material Canadian Subsidiaries, and constituting Loan Party
Guarantors), as of             ,
     .  During
the four Fiscal Quarter period ended as of such date, the aggregate amount of
that portion of Consolidated EBITDA of all Canadian Subsidiaries that are not
Material Canadian Subsidiaries was equal to or less than 10% of Consolidated
EBITDA. As of such date, the aggregate amount of that portion of Consolidated
Total Assets of all Canadian Subsidiaries that are not Material Canadian
Subsidiaries was equal to or less than 10% of Consolidated Total Assets.  The following Subsidiaries set forth on Schedule
II(B) have not been specified as Material Canadian Subsidiaries on a
previous Compliance Certificate:


 


 


 


 


8.              Schedule II(C) attached
hereto sets forth the Material Foreign Subsidiaries (including those
Subsidiaries designated by the U.S. Borrower as Material Foreign Subsidiaries,
and which Subsidiaries’ Equity Interests are pledged to the Applicable Agent to
the extent required by the Credit Agreement), as of             ,
     .  During
the four Fiscal Quarter period ended as of such date,  the aggregate amount of that portion of
Consolidated EBITDA of all non-Canadian Foreign Subsidiaries that are not
Material Foreign Subsidiaries was equal to or less than 10% of Consolidated
EBITDA. As of such date, the aggregate amount of that portion of Consolidated
Total Assets of all non-Canadian Foreign Subsidiaries that are not Material
Foreign Subsidiaries was equal to or less than 10% of Consolidated Total
Assets.  The following Subsidiaries set
forth on Schedule II(C) are First Tier Foreign Subsidiaries that
have not been specified as Material Foreign Subsidiaries on a previous
Compliance Certificate:


 


 


 


 


 

















 


Described below are the exceptions, if any, to paragraph 3 by listing,
in detail, the (i) nature of the condition or event, the period during
which it has existed and the action which the Borrowers have taken, are taking,
or propose to take with respect to each such condition or event or (ii) the
change in GAAP or the application thereof and the effect of such change on the
attached financial statements:


 


 


 


 


 


The foregoing certifications, together with the computations set forth
in Schedule I hereto and the financial statements delivered with this
Certificate in support hereof, are made and delivered this      day of               ,        .


 


	
   

  	
  QUAD/GRAPHICS,
  INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 

















 


SCHEDULE I TO COMPLIANCE
CERTIFICATE


 


Compliance as of           ,
     


with certain provisions of the Credit Agreement


 


The
computations set forth in this Schedule I are designed to facilitate the
calculation of financial covenants and certain other provisions in the Credit
Agreement relating to the information set forth in the Company’s consolidated
financial statements delivered with this Certificate.  The use of abbreviated terminology and/or
descriptions in the computations below are not in any way intended to override
or eliminate the more detailed descriptions for such computations set forth in
the relevant provisions of the Credit Agreement, all of which shall be deemed
to control.  In addition, the failure to
identify any specific provisions or terms of the Credit Agreement in this Schedule
I does not in any way affect their applicability during the periods covered
by such financial statements or otherwise, which shall in all cases be governed
by the Credit Agreement.  For purposes of
this Schedule I, the “Measurement Quarter” shall be the fiscal
quarter of the Company ending on the date set forth above.  As set forth in the Credit Agreement,
calculations pursuant to Section I of this Certificate shall be based on
the Consolidated Financial Covenant Entities.


 


	
  I.

  	
   

  	
  FINANCIAL
  COVENANTS

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A.

  	
   

  	
  CONSOLIDATED
  EBITDA (for the four consecutive Fiscal Quarters ending
  as of the end of the Measurement Quarter (the “Reference Period”) (See
  Schedule I(B))

  	
   

  	
   

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  B.

  	
   

  	
  MAXIMUM
  TOTAL LEVERAGE RATIO (Section 6.11(a))

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.

  	
  Consolidated
  Total Indebtedness (as of the end of the Measurement Quarter)

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  a.

  	
  outstanding
  Indebtedness of the Consolidated Financial Covenant Entities (including all
  Attributable Receivables Indebtedness but excluding Pension and Post-Employment
  Benefits Amounts)

  	
   

  	
   

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  b.

  	
  plus aggregate
  amount of Indebtedness of the Consolidated Financial Covenant Entities
  relating to the maximum drawing amount of all letters of credit outstanding
  and to all bankers’ acceptances

  	
   

  	
  +

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  c.

  	
  plus all
  Indebtedness described in 1(a) and 1(b) of another Person
  guaranteed by the Consolidated Financial Covenant Entities

  	
   

  	
  +

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  d.

  	
  Consolidated
  Total Indebtedness

  	
   

  	
  =

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.

  	
  Consolidated
  EBITDA (for the Reference Period) (from Item I.A)

  	
   

  	
   

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.

  	
  Total
  Leverage Ratio (Ratio of Item I.B.1.d. to Item I.B.2)

  	
   

  	
   

  	
   

  	
  to 1.00

  	
   

  



 

















 


	
   

  	
   

  	
  4.

  	
  Maximum
  Total Leverage Ratio(1)

  	
   

  	
   

  	
   

  	
  to 1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  The
  Total Leverage Ratio in Item I.B.3. shall not exceed the Maximum Total
  Leverage Ratio in Item I.B.4.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  5.

  	
  In
  compliance?

  	
   

  	
   

  	
   

  	
  Yes/No

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  C.

  	
   

  	
  MINIMUM
  INTEREST COVERAGE RATIO (Section 6.11(b))

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.

  	
  Consolidated
  EBITDA (From Item I.A above)

  	
   

  	
  =

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.

  	
  Cash
  Consolidated Interest Expense (for the four consecutive
  fiscal quarters ending as of the end of the Measurement Quarter)  (2)

  	
   

  	
  =

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.

  	
  Interest
  Coverage Ratio (Ratio of Item I.C.1 to Item I.C.2)

  	
   

  	
   

  	
   

  	
  to 1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  4.

  	
  Minimum
  Interest Coverage Ratio(3)

  	
   

  	
   

  	
   

  	
  to 1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  The
  Interest Coverage Ratio in Item I.C.3. shall not be less than the Minimum
  Interest Coverage Ratio in Item I.C.4.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  5.

  	
  In
  compliance?

  	
   

  	
   

  	
   

  	
  Yes/No

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  D.

  	
   

  	
  MINIMUM
  CONSOLIDATED NET WORTH (Section 6.11(c))(4)

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.

  	
  Consolidated
  Net Worth (as of the end of the Measurement Quarter)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.

  	
  Minimum
  Consolidated Net Worth (as of the end of the Measurement Quarter)

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  a.

  	
  Base

  	
   

  	
   

  	
   

  	
  $

  	
  745,800,000

  	
   

  
											



 






	
  (1)

  	
  Period

  	
   

  	
  Maximum
  Total Leverage Ratio

  	
   

  
	
   

  	
  September 30,2010
  through September 30, 2012

  	
   

  	
  3.75 to 1.00

  	
   

  
	
   

  	
  December 31,
  2012 through September 30, 2013

  	
   

  	
  3.50 to 1.00

  	
   

  
	
   

  	
  December 31,
  2013 and thereafter

  	
   

  	
  3.25 to 1.00

  	
   

  



 


(2) For
the first four Fiscal Quarters beginning with the Fiscal Quarter ending September 30,
2010, cash Consolidated Interest Expense shall be determined on an annualized
basis, with each test period beginning with the Fiscal Quarter ending September 30,
2010 and ending on the last day of the applicable Fiscal Quarter.


 


	
  (3)

  	
  Period

  	
   

  	
  Maximum
  Total Leverage Ratio

  	
   

  
	
   

  	
  September 30,
  2010 through September 30, 2011

  	
   

  	
  3.00 to 1.00

  	
   

  
	
   

  	
  December 31,
  2011 through September 30, 2012

  	
   

  	
  3.25 to 1.00

  	
   

  
	
   

  	
  December 31,
  2012 and thereafter

  	
   

  	
  3.50 to 1.00

  	
   

  



 


(4) No portion of Consolidated Net Income
corresponding with a Consolidated Financial Covenant Entity that is not a Loan
Party or a Subsidiary thereof shall be included in a computation of minimum
Consolidated Net Worth in either Item D.1 or Item D.2.b, other than any amount
thereof that is distributed to a Loan Party or Subsidiary as a result of its
ownership of Equity Interests in such other Person, which distributed amount
shall be included therein.


 

















 


	
   

  	
   

  	
   

  	
  b.

  	
  plus 40% of
  positive Consolidated Net Income for each Fiscal Year on a cumulative basis,
  commencing with the Fiscal Year ending December, 31, 2010

  	
   

  	
  +

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  c.

  	
  Minimum
  Consolidated Net Worth

  	
   

  	
  =

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.

  	
  The
  Consolidated Net Worth in Item I.D.1.b shall not be less than Minimum
  Consolidated Net Worth in Item I.D.2.c.

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  4.

  	
  In
  compliance?

  	
   

  	
  Yes/No

  	
   

  



 

















 


SCHEDULE I(B)


 


Consolidated
EBITDA Worksheet


 


See attached.


 














 


CONSOLIDATED EBITDA WORKSHEET


 


	
  For
  Reference Period ended

  	
   

  	
  Quarter ended

  	
   

  	
  Quarter ended

  	
   

  	
  Quarter ended

  	
   

  	
  Quarter ended

  	
   

  	
  Reference

  Period Total

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Consolidated
  Net Income

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  plus to the extent
  deducted from revenues in determining Consolidated Net Income: 

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  a.
  Consolidated Interest Expense

  	
  +

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  b.
  expense for taxes paid or accrued

  	
  +

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  c.
  depreciation

  	
  +

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  d.
  amortization

  	
  +

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  e.
  extraordinary or non-recurring non-cash expenses or losses incurred other
  than in the ordinary course of business, including any writedown of goodwill,
  long-lived asset or intangible asset impairment 

  	
  +

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  f.
  non-cash expenses related to stock based compensation 

  	
  +

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  g.
  Transaction and Restructuring Charges

  	
  +

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  h.
  amounts paid with respect to MEPP Exit Expenses

  	
  +

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  minus to the extent
  included in Consolidated Net Income:*

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  i.
  interest income

  	
  -

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  j.
  income tax credits and refunds (to the extent not netted from tax expense) 

  	
  -

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 






* No non-cash gain shall be deducted to the
extent it represents reversal of or accrual or reserve for a potential cash
item that reduced Consolidated EBITDA for a prior period.


 

















 


	
   

  	
   

  	
  Quarter ended

  	
   

  	
  Quarter ended

  	
   

  	
  Quarter ended

  	
   

  	
  Quarter ended

  	
   

  	
  Reference

  Period Total

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  k.
  extraordinary, unusual or non-recurring income or gains realized other than
  in the ordinary course of business (except as otherwise provided in the definition
  of Transaction and Restructuring Charges) 

  	
  -

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  l.
  Cash payments made with respect to non-cash charges added back to
  Consolidated EBITDA 

  	
  -

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Consolidated
  EBITDA

  	
  =

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  NOTE: If a Material
  Disposition has occurred during the applicable Reference Period, the
  following amount should be subtracted from Consolidated EBITDA: 

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  NOTE: If a Material
  Acquisition has occurred during the applicable Reference Period, the
  following amount should be given effect to Consolidated EBITDA on a pro forma
  basis: 

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 














 


SCHEDULE II(A) TO COMPLIANCE
CERTIFICATE


 


Material Domestic
Subsidiaries


 

















 


SCHEDULE II(B) TO COMPLIANCE
CERTIFICATE


 


Material Canadian
Subsidiaries


 

















 


SCHEDULE II(C) TO COMPLIANCE
CERTIFICATE


 


Material Foreign
Subsidiaries


 

















 


EXHIBIT G


 


LOAN AUCTION PROCEDURES


 


This Exhibit G
is intended to summarize certain basic terms of the modified Dutch auction
procedures pursuant to and in accordance with the terms and conditions of Section 2.24
of the Credit Agreement, of which this Exhibit G is a part.  It is not intended to be a definitive
statement of all of the terms and conditions of a modified Dutch auction, the
definitive terms and conditions for which shall be set forth in the applicable
offering document.  None of the
Administrative Agent, the Auction Manager, or any of its Affiliates makes any
recommendation pursuant to any offering document as to whether or not any
Lender should sell its Term Loans to the Borrowers pursuant to any offering
documents, nor shall the decision by the Administrative Agent or the Auction
Manager (or any of their Affiliates) in its capacity as a Lender to sell its
Term Loans to the Borrowers be deemed to constitute such a recommendation.  Each Lender should make its own decision as
to whether to sell any of its Term Loans and as to the price to be sought for
such Term Loans.  In addition, each
Lender should consult its own attorney, business advisor or tax advisor as to
legal, business, tax and related matters concerning each Purchase Offer and the
relevant offering documents.  Capitalized
terms not otherwise defined in this Exhibit G have the meanings
assigned to them in the Credit Agreement.


 


I.             Notice Procedures.  In connection with each Purchase Offer, a
Borrower (the “Purchasing Borrower”) will provide notification to the Auction
Manager (for distribution to the Lenders of the Term Loans of the Purchasing
Borrower (as determined by the Purchasing Borrower in its sole discretion) that
will be the subject of such Purchase Offer (each, an “Auction Notice”).  Each Auction Notice shall contain (i) the
maximum principal amount (calculated on the face amount thereof) of its Term
Loans that the Purchasing Borrower offers to purchase in such Purchase Offer
(the “Auction Amount”), which shall be no less than $25,000,000 (unless
another amount is agreed to by the Administrative Agent); (ii) the range
of discounts to par (the “Discount Range”), expressed as a range of
prices (in increments of $5) per $1,000, at which the Purchasing Borrower would
be willing to purchase its Term Loans in such Purchase Offer; and (iii) the
date on which such Purchase Offer will conclude, on which date Return Bids (as
defined below) will be due by 1:00 p.m., New York time (as such date and
time may be extended by the Auction Manager, the “Expiration Time”).  Such Expiration Time may be extended for a
period not exceeding three Business Days upon notice by the Purchasing Borrower
to the Auction Manager received not less than 24 hours before the original
Expiration Time; provided, that only two extensions per offer shall be
permitted.  A Purchase Offer shall be
regarded as a “failed purchase offer” in the event that either (x) the
Purchasing Borrower withdraws such Purchase Offer in accordance with the terms
hereof or as set forth in Section 2.24(b) of the Credit Agreement or (y) the
Expiration Time occurs with no Qualifying Bids (as defined below) having been
received.  In the event of a failed
purchase offer, no Borrower shall be permitted to deliver a new Auction Notice
prior to the date occurring three Business Days after such withdrawal or
Expiration Time, as the case may be. 
Notwithstanding anything to the contrary contained herein, no Borrower
shall initiate any Purchase Offer by delivering an Auction Notice to the Auction
Manager until after the conclusion (whether successful or failed) of the
previous Purchase Offer (if any), whether such conclusion occurs by withdrawal
of such previous Purchase Offer or the occurrence of the Expiration Time of
such previous Purchase Offer.


 


II.            Reply Procedures.  In connection with any Purchase Offer, each
Lender wishing to participate in such Purchase Offer shall, prior to the
Expiration Time, provide the Auction Manager with a notice of participation, in
the form included in the applicable offering document (each, a “Return Bid”)
which shall specify (i) a discount to par that must be expressed as a
price (in increments of $5) per $1,000 in principal amount of Term Loans (the “Reply
Price”) within the Discount Range and (ii) the principal 


 

















 


amount
of Term Loans, in an amount not less than $1,000,000 or an integral multiple of
$1,000 in excess thereof, that such Lender offers for sale at its Reply Price
(the “Reply Amount”).  A Lender
may submit a Reply Amount that is less than the minimum amount and incremental
amount requirements described above only if the Reply Amount comprises the
entire amount of the Term Loans of the Purchasing Borrower held by such
Lender.  Lenders may only submit one
Return Bid per Purchase Offer, but each Return Bid may contain up to three
component bids, each of which may result in a separate Qualifying Bid and each
of which will not be contingent on any other component bid submitted by such
Lender resulting in a Qualifying Bid.  In
addition to the Return Bid, the participating Lender must execute and deliver,
to be held in escrow by the Auction Manager, an assignment and acceptance in
the form included in the offering document (each, an “Auction Assignment and
Assumption”).  The Purchasing
Borrower will not purchase any of its Term Loans at a price that is outside of
the applicable Discount Range, nor will any Return Bids (including any
component bids specified therein) submitted at a price that is outside such
applicable Discount Range be considered in any calculation of the Applicable
Threshold Price (as defined below).


 


III.          Acceptance Procedures.  Based on the Reply Prices and Reply Amounts
received by the Auction Manager, the Auction Manager, in consultation with the
Purchasing Borrower, will calculate the lowest purchase price (the “Applicable
Threshold Price”) for such Purchase Offer within the Discount Range for
such Purchase Offer that will allow the Purchasing Borrower to complete the
Purchase Offer by purchasing the full Auction Amount (or such lesser amount of
its Term Loans for which the Purchasing Borrower has received Qualifying
Bids).  The Purchasing Borrower shall
purchase its Term Loans from each Lender whose Return Bid is within the
Discount Range and contains a Reply Price that is equal to or less than the
Applicable Threshold Price (each, a “Qualifying Bid”).  All Term Loans included in Qualifying Bids
(including multiple component Qualifying Bids contained in a single Return Bid)
received at a Reply Price lower than the Applicable Threshold Price will be
purchased at such applicable Reply Prices and shall not be subject to
proration.  Each participating Lender
will receive notice of a Qualifying Bid as soon as reasonably practicable but
in no case later than five business days from the date of the Expiration Time.


 


IV.          Proration Procedures.  All Term Loans offered in Return Bids (or, if
applicable, any component thereof) constituting Qualifying Bids at the
Applicable Threshold Price will be purchased at the Applicable Threshold Price;
provided that if the aggregate principal amount of all Term Loans for
which Qualifying Bids have been submitted in any given Purchase Offer at the
Applicable Threshold Price would exceed the remaining portion of the Auction
Amount (after deducting all Term Loans to be purchased at prices below the Applicable
Threshold Price), the Purchasing Borrower shall purchase such Loans ratably
based on the relative principal amounts offered by each Lender in an aggregate
amount equal to the amount necessary to complete the purchase of the Auction
Amount.  No Return Bids or any component
thereof will be accepted above the Applicable Threshold Price.


 


V.            Notification Procedures.  The Auction Manager will calculate the
Applicable Threshold Price and post the Applicable Threshold Price and
proration factor onto an internet or intranet site (including an IntraLinks,
SyndTrak or other electronic workspace) in accordance with the Auction Manager’s
standard dissemination practices by 4:00 p.m. New York time on the
Business Day during which the Expiration Time occurs.  The Auction Manager will insert the principal
amount of Term Loans to be assigned and the applicable settlement date into
each applicable Auction Assignment and Assumption received in connection with a
Qualifying Bid.  Upon the request of the
submitting Lender, the Auction Manager will promptly return any Auction
Assignment and Assumption received in connection with a Return Bid that is not
a Qualifying Bid.


 

















 


VI.          Auction
Assignment and Assumption.  Each
Auction Notice and Auction Assignment and Assumption shall contain the
following representations and warranties by the Borrowers:


 


“No Default or Event of Default has occurred and is continuing, or
would result from this Purchase Offer.


 


The representations and warranties of the Borrowers and each other Loan
Party contained in Article III of the Credit Agreement or any other
Loan Document, or which are contained in any document furnished at any time
under or in connection herewith, are true and correct in all material respects.


 


As of the date hereof, the Borrowers represent and warrant that no Loan
Party has any material non-public information that (a) has not been
previously disclosed in writing to the Administrative Agent and the Lenders
(other than because such Lender does not wish to receive such material non-public
information) prior to such time and (b) could reasonably be expected to
have a material effect upon, or otherwise be material to, such Lender’s
decision to participate in the Purchase Offer.”


 


VII.         Additional Procedures.  Once initiated by an Auction Notice, the
Purchasing Borrower may withdraw a Purchase Offer only if no Qualifying Bid has
been received by the Auction Manager at the time of withdrawal.  Any Return Bid (including any component bid
thereof) delivered to the Auction Manager may not be withdrawn, modified,
revoked, terminated or cancelled by a Lender. 
However, a Purchase Offer may become void if the conditions to the
purchase set forth in Section 2.24 of the Credit Agreement are not
met.  The purchase price in respect of
each Qualifying Bid for which purchase by the Purchasing Borrower is required
in accordance with the foregoing provisions shall be paid directly by the
Purchasing Borrower to the respective assigning Lender on a settlement date as
determined jointly by the Purchasing Borrower and the Auction Manager (which
shall be not later than ten Business Days after the date Return Bids are
due).  The Purchasing Borrower shall
execute each applicable Auction Assignment and Assumption received in
connection with a Qualifying Bid.  All
questions as to the form of documents and eligibility of Term Loans that are
the subject of a Purchase Offer will be determined by the Auction Manager, in
consultation with the Purchasing Borrower, and their determination will be
final and binding so long as such determination is not inconsistent with the
terms of Section 2.24 of the Credit Agreement or this Exhibit G.  The Auction Manager’s interpretation of the
terms and conditions of the offering document, in consultation with the
Purchasing Borrower, will be final and binding so long as such interpretation
is not inconsistent with the terms of Section 2.24 of the Credit
Agreement or this Exhibit G. 
None of the Administrative Agent, the Auction Manager or any of its
Affiliates assumes any responsibility for the accuracy or completeness of the
information concerning the Borrowers, the Loan Parties, or any of their
Affiliates (whether contained in an offering document or otherwise) or for any
failure to disclose events that may have occurred and may affect the
significance or accuracy of such information. 
This Exhibit G shall not require the Borrowers to initiate
any Purchase Offer.


 

















 


EXHIBIT H


 


FORM OF REVOLVING LOAN NOTE


 


	
   

  	
   

  	
  [          ] [
       ], [     ]

  



 


FOR
VALUE RECEIVED, the undersigned, QUAD/GRAPHICS, INC., a Wisconsin corporation
(the “U.S. Borrower”), HEREBY UNCONDITIONALLY PROMISES TO PAY to the
order of [LENDER] (the “Lender”) the aggregate unpaid principal amount
of all [U.S.] [Canadian] Tranche Revolving Loans made by the Lender to the U.S.
Borrower pursuant to the Credit Agreement (as defined below) on the Revolving
Loan Maturity Date or on such earlier date as may be required by the terms of
the Credit Agreement.  Capitalized terms
used herein and not otherwise defined herein are as defined in the Credit
Agreement.


 


The
undersigned U.S. Borrower promises to pay interest on the unpaid principal
amount of each [U.S.] [Canadian] Tranche Revolving Loan made to it from the
date of such [U.S.] [Canadian] Tranche Revolving Loan until such principal
amount is paid in full at a rate or rates per annum determined in accordance
with the terms of the Credit Agreement. 
Interest hereunder is due and payable at such times and on such dates as
set forth in the Credit Agreement.


 


At
the time of each [U.S.] [Canadian] Tranche Revolving Loan, and upon each
payment or prepayment of principal of each [U.S.] [Canadian] Tranche Revolving
Loan, the Lender shall make a notation either on the schedule attached hereto
and made a part hereof, or in such Lender’s own books and records, in each case
specifying the amount of such Revolving Loan, the respective Interest Period
thereof (in the case of Eurodollar Borrowing) or the amount of principal paid
or prepaid with respect to such [U.S.] [Canadian] Tranche Revolving Loan, as
applicable; provided that the failure of the Lender to make any such
recordation or notation shall not affect the Secured Obligations of the
undersigned U.S. Borrower hereunder or under the Credit Agreement.


 


This
Note is one of the promissory notes referred to in, and is entitled to the
benefits of, that certain Credit Agreement dated as of April 23, 2010 by
and among the U.S. Borrower, [7345933 Canada Inc.][World Color Press Inc.], the
financial institutions from time to time parties thereto as Lenders, JPMorgan
Chase Bank, N.A., as Administrative Agent, and JPMorgan Chase Bank, N.A.,
Toronto Branch, as Canadian Administrative Agent (as the same may be amended,
restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”). The Credit Agreement, among other things, (i) provides
for the making of [U.S.] [Canadian] Tranche Revolving Loans by the Lender to
the undersigned U.S. Borrower from time to time not to exceed an amount at any
time outstanding of such Lender’s [U.S.][Canadian] Tranche
Revolving Commitment, the indebtedness of the undersigned U.S. Borrower
resulting from each such Revolving Loan to it being evidenced by this Note, and
(ii) contains provisions for acceleration of the maturity hereof upon the
happening of certain stated events and also for prepayments of the principal
hereof prior to the maturity hereof upon the terms and conditions therein
specified.


 


This
Note is secured by the Collateral Documents. Reference is hereby made to the
Collateral Documents for a description of the collateral thereby mortgaged,
warranted, bargained, sold, released, conveyed, assigned, transferred, pledged
and hypothecated, the nature and extent of the security for this Note, the
rights of the holder of this Note, the rights of the Agents in respect of such
security and otherwise.


 


Demand,
presentment, protest and notice of nonpayment and protest is hereby waived by
the U.S. Borrower.


 

















 


Whenever
in this Note reference is made to Agents, the Lender or the U.S. Borrower, such
reference shall be deemed to include, as applicable, a reference to their
respective successors and assigns.  The
provisions of this Note shall be binding upon and shall inure to the benefit of
said successors and assigns.  The U.S.
Borrower’s successors and assigns shall include, without limitation, a
receiver, trustee or debtor in possession of or for the U.S. Borrower.


 


This
Note shall be construed in accordance with and governed by the laws of the
State of New York.


 


 


	
   

  	
  QUAD/GRAPHICS,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  



 














 


SCHEDULE OF LOANS AND PAYMENTS OR PREPAYMENTS


 


	
  Date

  	
   

  	
  Amount of

  Loan

  	
   

  	
  Interest

  Period/Rate

  	
   

  	
  Amount of

  Principal

  Paid or

  Prepaid

  	
   

  	
  Unpaid

  Principal

  Balance

  	
   

  	
  Notation Made By

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 

















 


FORM OF REVOLVING LOAN NOTE


 


	
   

  	
   

  	
  [          ] [
       ], [     ]

  



 


FOR
VALUE RECEIVED, the undersigned, [7345933 CANADA INC.][WORLD COLOR PRESS INC.],
a Canadian corporation (the “Canadian Borrower”), HEREBY UNCONDITIONALLY
PROMISES TO PAY to the order of [LENDER] (the “Lender”) the aggregate
unpaid principal amount of all Canadian Tranche Revolving Loans made by the
Lender to the Canadian Borrower pursuant to the Credit Agreement (as defined
below) on the Revolving Loan Maturity Date or on such earlier date as may be
required by the terms of the Credit Agreement. 
Capitalized terms used herein and not otherwise defined herein are as
defined in the Credit Agreement.


 


The
undersigned Canadian Borrower promise to pay interest on the unpaid principal
amount of each Canadian Tranche Revolving Loan made to it from the date of such
Canadian Tranche Revolving Loan until such principal amount is paid in full at
a rate or rates per annum determined in accordance with the terms of the Credit
Agreement.  Interest hereunder is due and
payable at such times and on such dates as set forth in the Credit Agreement.


 


At
the time of each Canadian Tranche Revolving Loan, and upon each payment or
prepayment of principal of each Canadian Tranche Revolving Loan, the Lender
shall make a notation either on the schedule attached hereto and made a part
hereof, or in such Lender’s own books and records, in each case specifying the
amount of such Canadian Tranche Revolving Loan, the respective Interest Period
thereof (in the case of Eurodollar Borrowing or BA Rate Borrowing) or the
amount of principal paid or prepaid with respect to such Canadian Tranche
Revolving Loan, as applicable; provided that the failure of the Lender
to make any such recordation or notation shall not affect the Secured
Obligations of the undersigned Canadian Borrower hereunder or under the Credit
Agreement.


 


This
Note is one of the promissory notes referred to in, and is entitled to the
benefits of, that certain Credit Agreement dated as of April 23, 2010 by
and among Quad/Graphics, Inc., the Canadian Borrower, the financial
institutions from time to time parties thereto as Lenders, JPMorgan Chase Bank,
N.A., as Administrative Agent and JPMorgan Chase Bank, N.A., Toronto Branch, as
Canadian Administrative Agent. (as the same may be amended, restated, supplemented
or otherwise modified from time to time, the “Credit Agreement”). The
Credit Agreement, among other things, (i) provides for the making of
Canadian Tranche Revolving Loans by the Lender to the undersigned Canadian
Borrower from time to time not to exceed an amount at any time outstanding of
such Lender’s Canadian Tranche Revolving Commitment, the
indebtedness of the undersigned Canadian Borrower resulting from each such
Revolving Loan to it being evidenced by this Note, and (ii) contains
provisions for acceleration of the maturity hereof upon the happening of
certain stated events and also for prepayments of the principal hereof prior to
the maturity hereof upon the terms and conditions therein specified.


 


This
Note is secured by the Collateral Documents. Reference is hereby made to the
Collateral Documents for a description of the collateral thereby mortgaged,
warranted, bargained, sold, released, conveyed, assigned, transferred, pledged
and hypothecated, the nature and extent of the security for this Note, the
rights of the holder of this Note, the rights of the Agents in respect of such
security and otherwise.


 


Demand,
presentment, protest and notice of nonpayment and protest is hereby waived by
the Canadian Borrower.


 


Whenever
in this Note reference is made to Agents, the Lender or the Canadian Borrower,
such reference shall be deemed to include, as applicable, a reference to their
respective successors and assigns.  The
provisions of this Note shall be binding upon and shall inure to the benefit of
said successors and 


 

















 


assigns.  The Canadian Borrower’s
successors and assigns shall include, without limitation, a receiver, trustee
or debtor in possession of or for the Canadian Borrower.


 


This
Note shall be construed in accordance with and governed by the laws of the
State of New York.


 


 


	
   

  	
  [7345933
  CANADA INC.][WORLD COLOR PRESS INC.]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  



 

















 


SCHEDULE OF LOANS AND PAYMENTS OR PREPAYMENTS


 


	
  Date

  	
   

  	
  Amount of

  Loan

  	
   

  	
  Interest

  Period/Rate

  	
   

  	
  Amount of

  Principal

  Paid or

  Prepaid

  	
   

  	
  Unpaid

  Principal

  Balance

  	
   

  	
  Notation Made By

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 

















 


FORM OF TERM LOAN NOTE


 


	
   

  	
   

  	
  [          ] [
       ], [     ]

  



 


FOR
VALUE RECEIVED the undersigned, QUAD/GRAPHICS, INC., a Wisconsin corporation
(the “U.S. Borrower”), HEREBY UNCONDITIONALLY PROMISES TO PAY to the
order of [LENDER] (the “Lender”) 
the aggregate unpaid principal amount of all Term Loans made by the
Lender to the U.S. Borrower pursuant to the Credit Agreement (as defined below)
on the Term Loan Maturity Date or on such earlier date as may be required by
the terms of the Credit Agreement. 
Capitalized terms used herein and not otherwise defined herein are as
defined in the Credit Agreement.


 


The
undersigned U.S. Borrower promises to pay interest on the unpaid principal amount
of each Term Loan made to it from the date of such Term Loan until such
principal amount is paid in full at a rate or rates per annum determined in
accordance with the terms of the Credit Agreement.  Interest hereunder is due and payable at such
times and on such dates as set forth in the Credit Agreement.


 


At
the time of each Term Loan, and upon each payment or prepayment of principal of
each Term Loan, the Lender shall make a notation either on the schedule
attached hereto and made a part hereof, or in such Lender’s own books and
records, in each case specifying the amount of such Term Loan, the respective
Interest Period thereof (in the case of Eurodollar Borrowing) or the amount of
principal paid or prepaid with respect to such Term Loan, as applicable; provided
that the failure of the Lender to make any such recordation or notation shall
not affect the Secured Obligations of the undersigned U.S. Borrower hereunder
or under the Credit Agreement.


 


This
Note is one of the promissory notes referred to in, and is entitled to the
benefits of, that certain Credit Agreement dated as of April 23, 2010 by
and among the U.S. Borrower, [7345933 Canada Inc.][World Color Press Inc.], the
financial institutions from time to time parties thereto as Lenders, JPMorgan Chase
Bank, N.A., as Administrative Agent and JPMorgan Chase Bank, N.A., Toronto
Branch, as Canadian Administrative Agent. (as the same may be amended,
restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”).  The Credit Agreement,
among other things, (i) provides for the making of Term Loans by the
Lender to the undersigned U.S. Borrower on the Funding Date in an aggregate
amount equal to such Lender’s Term Loan Commitment in respect of the U.S.
Borrower, the indebtedness of the undersigned U.S. Borrower resulting from each
such Term Loan to it being evidenced by this Note, and (ii) contains
provisions for acceleration of the maturity hereof upon the happening of
certain stated events and also for prepayments of the principal hereof prior to
the maturity hereof upon the terms and conditions therein specified.


 


This
Note is secured by the Collateral Documents. Reference is hereby made to the
Collateral Documents for a description of the collateral thereby mortgaged,
warranted, bargained, sold, released, conveyed, assigned, transferred, pledged
and hypothecated, the nature and extent of the security for this Note, the
rights of the holder of this Note, the rights of the Agents in respect of such
security and otherwise.


 


Demand,
presentment, protest and notice of nonpayment and protest are hereby waived by
the U.S. Borrower.


 


Whenever
in this Note reference is made to Agents, the Lender or the U.S. Borrower, such
reference shall be deemed to include, as applicable, a reference to their
respective successors and assigns.  The
provisions of this Note shall be binding upon and shall inure to the benefit of
said successors and assigns.  The U.S.
Borrower’s successors and assigns shall include, without limitation, a
receiver, trustee or debtor in possession of or for the U.S. Borrower.


 

















 


This
Note shall be construed in accordance with and governed by the laws of the
State of New York.


 


 


	
   

  	
  QUAD/GRAPHICS,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  



 

















 


SCHEDULE OF LOANS AND PAYMENTS OR PREPAYMENTS


 


	
  Date

  	
   

  	
  Amount of

  Loan

  	
   

  	
  Interest

  Period/Rate

  	
   

  	
  Amount of

  Principal

  Paid or

  Prepaid

  	
   

  	
  Unpaid

  Principal

  Balance

  	
   

  	
  Notation Made By

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 

















 


FORM OF TERM LOAN NOTE


 


	
   

  	
   

  	
  [
           ] [     
  ], [     ]

  



 


FOR
VALUE RECEIVED the undersigned, [7345933 CANADA INC.][WORLD COLOR PRESS INC.], a
Canadian corporation (the “Canadian  Borrower”), HEREBY
UNCONDITIONALLY PROMISES TO PAY to the order of [LENDER] (the “Lender”)  the aggregate unpaid principal amount of all
Term Loans made by the Lender to the Canadian Borrower pursuant to the Credit
Agreement (as defined below) on the Term Loan Maturity Date or on such earlier
date as may be required by the terms of the Credit Agreement.  Capitalized terms used herein and not
otherwise defined herein are as defined in the Credit Agreement.


 


The
undersigned Canadian Borrower promises to pay interest on the unpaid principal
amount of each Term Loan made to it from the date of such Term Loan until such
principal amount is paid in full at a rate or rates per annum determined in
accordance with the terms of the Credit Agreement.  Interest hereunder is due and payable at such
times and on such dates as set forth in the Credit Agreement.


 


At
the time of each Term Loan, and upon each payment or prepayment of principal of
each Term Loan, the Lender shall make a notation either on the schedule
attached hereto and made a part hereof, or in such Lender’s own books and
records, in each case specifying the amount of such Term Loan, the respective
Interest Period thereof (in the case of Eurodollar Borrowing) or the amount of
principal paid or prepaid with respect to such Term Loan, as applicable; provided
that the failure of the Lender to make any such recordation or notation shall
not affect the Secured Obligations of the undersigned Canadian Borrower
hereunder or under the Credit Agreement.


 


This
Note is one of the promissory notes referred to in, and is entitled to the
benefits of, that certain Credit Agreement dated as of April 23, 2010 by
and among Quad/Graphics, Inc., the Canadian Borrower, the financial
institutions from time to time parties thereto as Lenders, JPMorgan Chase Bank,
N.A., as Administrative Agent and JPMorgan Chase Bank, N.A., Toronto Branch, as
Canadian Administrative Agent. (as the same may be amended, restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”).  The Credit Agreement, among other things, (i) provides
for the making of Term Loans by the Lender to the undersigned Canadian Borrower
on the Funding Date in an aggregate amount equal to such Lender’s Term Loan
Commitment in respect of the Borrower, the indebtedness of the undersigned
Canadian Borrower resulting from each such Term Loan to it being evidenced by
this Note, and (ii) contains provisions for acceleration of the maturity
hereof upon the happening of certain stated events and also for prepayments of
the principal hereof prior to the maturity hereof upon the terms and conditions
therein specified.


 


This
Note is secured by the Collateral Documents. Reference is hereby made to the
Collateral Documents for a description of the collateral thereby mortgaged,
warranted, bargained, sold, released, conveyed, assigned, transferred, pledged
and hypothecated, the nature and extent of the security for this Note, the
rights of the holder of this Note, the rights of the Agents in respect of such
security and otherwise.


 


Demand,
presentment, protest and notice of nonpayment and protest is hereby waived by
the Canadian Borrower.


 


Whenever
in this Note reference is made to Agents, the Lender or the Canadian Borrower,
such reference shall be deemed to include, as applicable, a reference to their
respective successors and assigns.  The
provisions of this Note shall be binding upon and shall inure to the benefit of
said successors and assigns.  The
Canadian Borrower’s successors and assigns shall include, without limitation, a
receiver, trustee or debtor in possession of or for the Canadian Borrower.


 

















 


This
Note shall be construed in accordance with and governed by the laws of the
State of New York.


 


 


	
   

  	
  [7345933
  CANADA INC.][WORLD COLOR PRESS INC.]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  



 

















 


SCHEDULE OF LOANS AND PAYMENTS OR PREPAYMENTS


 


	
  Date

  	
   

  	
  Amount of

  Loan

  	
   

  	
  Interest

  Period/Rate

  	
   

  	
  Amount of

  Principal

  Paid or

  Prepaid

  	
   

  	
  Unpaid

  Principal

  Balance

  	
   

  	
  Notation Made By