EX-10.32



 





EXHIBIT 10.32




THIRD AMENDMENT AND TEMPORARY WAIVER AGREEMENT




     THIS THIRD AMENDMENT AND TEMPORARY WAIVER AGREEMENT (this “Third Amendment”) is made
and entered into as of March 3, 2008 among AMERICAN COLOR GRAPHICS, INC., a New York corporation
(together with any permitted successors and assigns, “ACG”), AMERICAN COLOR GRAPHICS
FINANCE, LLC, a Delaware limited liability company (together with any permitted successors and
assigns, “ACG Finance” and, together with ACG, the “ACG Parties”), the financial
institutions identified on the signature pages hereof as Lenders (collectively, the
“Lenders”), and BANK OF AMERICA, N.A., as administrative agent (in such capacity, the
“Administrative Agent”) and as collateral agent (in such capacity, the “Collateral
Agent”).



RECITALS




     1. ACG Finance, the Administrative Agent, the Collateral Agent and the Lenders are
parties to that certain Credit Agreement, dated as of September 26, 2006, as amended by that
certain Omnibus Amendment of Loan Documents, dated as of June 13, 2007 (the “Omnibus
Amendment”), as further amended by that Amendment and Temporary Waiver Agreement, dated as of
November 14, 2007 (the “First Amendment”), and as further amended by that Second Amendment
and Temporary Waiver Agreement, dated as of February 12, 2008 (the “Second Amendment”) (as
amended, the “Existing Credit Agreement”); ACG Finance, ACG, in its capacity as servicer
(in such capacity, the “Servicer”) and the Administrative Agent are parties to that certain
Servicing Agreement, dated as of September 26, 2006, as amended by that certain First Amendment to
Servicing Agreement, dated as of March 30, 2007, as further amended by the Omnibus Amendment, as
further amended by that certain letter amendment dated July 3, 2007, as further amended by the
First Amendment, and as further amended by the Second Amendment (as amended prior to the date
hereof, the “Existing Servicing Agreement”); and ACG Finance and ACG are parties to that
certain Contribution and Sale Agreement, dated as of September 26, 2006 (the “Existing
Contribution Agreement”).



     2. The ACG Parties have been unable to satisfy the requirements of (i) Section 5.01(a) of the
Existing Credit Agreement, Section 3.2(a) of the Existing Servicing Agreement and Section 5.1(j)(i)
of the Existing Contribution Agreement, with respect to delivery of an opinion by its certified
public accountants not subject to a going concern qualification, for the fiscal year ending March
31, 2007, and (ii) Section 5.3 of the Existing Servicing Agreement, with respect to the fiscal
quarters ending September 30, 2007 and December 31, 2007 (collectively with any Default existing as
a result of the ACG Parties’ acknowledgements set forth in Section 2.1(c) of the First Amendment or
in Section 2.1(c) of the Second Amendment, the “Existing Defaults”). Subject to the terms
and conditions of the Second Amendment, the Lenders agreed to waive the Existing Defaults for the
period through and including March 13, 2008 (the “Original Waiver Period”).



     3. The ACG Parties have advised the Lenders that they will be unable to comply with the
requirements of (i) Section 5.01(a) of the Existing Credit Agreement, Section 3.2(a) of the
Existing Servicing Agreement and Section 5.1(j)(i) of the Existing Contribution Agreement, with
respect to delivery of an opinion by its certified public accounts not subject to a going concern
qualification for the fiscal year ending March 31, 2008 and (ii) Section 5.3 of the



 









 




Existing Servicing Agreement with respect to the fiscal quarter ending March 31, 2008
(collectively, the “Prospective Defaults”).




     3. The ACG Parties have requested that the Lenders (i) extend the Original Waiver Period with
respect to the Existing Defaults, (ii) provide a temporary waiver of the Prospective Defaults, and
(iii) continue to make available to ACG Finance the Loans.



     4. The Lenders are willing to extend the Original Waiver Period, provide a temporary waiver of
the Prospective Defaults, and continue to make available the Loans to ACG Finance, based upon and
subject to the terms and conditions specified in this Third Amendment.



     NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereby agree as follows:



ARTICLE I

Definitions




     Section 1.1. Certain Definitions. Unless otherwise defined herein or the context
otherwise requires, the following terms used in this Third Amendment have the following meanings:




     “Amended Servicing Agreement” means the Existing Servicing Agreement
as amended hereby.




     “Continuing Defaults” means (A) the Existing Defaults, (B) the
Prospective Defaults, (C) any Default existing as a result of the ACG Parties’
acknowledgment set forth in Section 2.1(c) of this Third Amendment.




     “Finco Waiver Termination Date” means the earlier to occur (A) the
date of any Default, Event of Default or Servicer Default (other than the
Continuing Defaults) under any of the Loan Documents, and (B) the Waiver
Termination Date as defined in the Seventh Amendment.




     “Seventh Amendment” means that certain Seventh Amendment to Amended
and Restated Credit Agreement and Temporary Waiver Agreement, of even date
herewith, among American Color Graphics, Inc. as the borrower, ACG Holdings, Inc.,
as the guarantor, Bank of America, N.A. as the administrative agent, and the
lenders signatory thereto, amending the ACG Senior Facility.




     “Third Amendment Effective Date” shall mean, in accordance with
Article V of this Third Amendment, the date upon which the ACG Parties satisfied
in the determination of the Administrative Agent and the Lenders (or satisfaction
thereof has been waived by the Administrative Agent and the Lenders) each of the
conditions set forth in Article V of this Third Amendment.




     “Third Amendment Fee Letter” means the letter agreement, dated as of
the Third Amendment Effective Date, between the ACG Finance and the Administrative
Agent.



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     Section 1.2. Other Definitions. Unless otherwise defined herein or the context
otherwise requires, terms used in this Third Amendment have the meanings provided in the Existing
Credit Agreement.



ARTICLE II

Limited Waiver and Reaffirmation




     Section 2.1.
Limited Waiver. (a) The ACG Parties acknowledge that (A) the Existing
Defaults result from the ACG Parties’ failure to be able to comply with (i) the financial covenant
contained in Section 5.3 of the Existing Servicing Agreement for the fiscal quarters ending nearest
September 30, 2007 and December 31, 2007, respectively, and (ii) the requirement in Section 5.01(a)
of the Existing Credit Agreement, Section 3.2(a) of the Existing Servicing Agreement and Section
5.1(j)(i) of the Existing Contribution Agreement that ACG’s annual financial statements be
accompanied by the opinion of its certified public accountants not subject to a going concern
qualification, for the fiscal year ending March 31, 2007, and (B) the Prospective Defaults will
result from the ACG Parties inability to comply with (i) Section 5.01(a) of the Existing Credit
Agreement, Section 3.2(a) of the Existing Servicing Agreement and Section 5.1(j)(i) of the Existing
Contribution Agreement, with respect to delivery of an opinion by its certified public accountants
not subject to a going concern qualification for the fiscal year ending March 31, 2008 and (ii)
Section 5.3 of the Existing Servicing Agreement, with respect to the fiscal quarter ending March
31, 2008. Effective on (and subject to the occurrence of) the Third Amendment Effective Date, the
Lenders hereby waive the Continuing Defaults through and including the Finco Waiver Termination
Date (such period from the Third Amendment Effective Date through and including the Finco Waiver
Termination Date being referred to as the “Waiver Period”) for all purposes of the Existing
Credit Agreement (including, without limitation, Section 4.03(b) thereof), the Existing Servicing
Agreement and the other Loan Documents. This limited waiver shall not modify or affect (i) ACG’s
obligation to comply with the terms of Section 5.3 of the Existing Servicing Agreement as measured
for the fiscal quarters ending nearest September 30, 2007, December 31, 2007, and March 31, 2008,
respectively, (ii) ACG’s obligation to comply with the terms of Section 5.3 of the Existing
Servicing Agreement as measured at the end of any fiscal quarter other than the ones ending nearest
September 30, 2007, December 31, 2007, and March 31, 2008, (iii) the ACG Parties’ obligation to
comply with the terms of Section 5.01(a) of the Existing Credit Agreement, Section 3.2(a) of the
Existing Servicing Agreement and Section 5.1(j)(i) of the Existing Contribution Agreement for the
fiscal years ending nearest March 31, 2007 and March 31, 2008, respectively, (iv) the ACG Parties’
obligation to comply with the terms of Section 5.01(a) of the Existing Credit Agreement, Section
3.2(a) of the Existing Servicing Agreement and Section 5.1(j)(i) of the Existing Contribution
Agreement for any fiscal year other than the ones ending nearest March 31, 2007 and March 31, 2008,
or (iv) the ACG Parties’ obligation to comply fully with any other duty, term, condition,
obligation or covenant contained in the Existing Credit Agreement or the other Loan Documents.



     (b) Except for the limited waiver set forth above, nothing contained herein shall be deemed to
constitute or imply a waiver of any rights or remedies which the Administrative Agent or any Lender
may have under the Existing Credit Agreement, any other Loan Document, or under applicable law; it
being understood that the Administrative Agent and the Lenders may not exercise their rights and
remedies with respect to the Continuing Defaults during the Waiver Period as long as no other
Servicer Default, Default or Event of Default occurs or exists. The



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limited waiver set forth herein shall be effective only in this specific instance for the duration
of the Waiver Period and shall not obligate the Lenders or the Administrative Agent to waive any
other Servicer Default, Default or Event of Default, now existing or hereafter arising. This is a
one-time waiver, and the Administrative Agent and the Lenders shall have no obligation to extend
the limited waiver or otherwise amend, modify or waive any provision of the Existing Credit
Agreement, the Amended Servicing Agreement, the Existing Contribution Agreement or the other Loan
Documents at the end of the Waiver Period. The provisions and agreements set forth in this Third
Amendment shall not establish a custom or course of dealing or conduct between the Administrative
Agent, any Lender, ACG Finance, ACG or any other ACG Party.




     (c) The ACG Parties acknowledge and agree that unless the Agent and Required Lenders further
amend the Existing Credit Agreement, the Amended Servicing Agreement and the Existing Contribution
Agreement or otherwise agree in writing to continue this waiver beyond the Waiver Period, an Event
of Default and a Servicer Default will occur under the Existing Credit Agreement and the Amended
Servicing Agreement as of the Finco Waiver Termination Date, for which no grace period or cure
period shall apply, and the Administrative Agent and the Lenders may pursue all rights and remedies
available to them under the Existing Credit Agreement, the other Loan Documents and applicable law.
The ACG Parties further acknowledge and agree that, to the extent any Servicer Defaults, Defaults
or Events of Default (other than the Continuing Defaults) now exist or hereafter arise during the
Waiver Period, the Administrative Agent and the Lenders may immediately pursue all rights and
remedies available to them in respect thereof under the Existing Credit Agreement, the other Loan
Documents, and applicable law.



     (d) The ACG Parties acknowledge and agree that the making of any Credit Extension pursuant to
the Existing Credit Agreement following the occurrence of the Continuing Defaults does not now, and
will not in the future, constitute (i) an agreement or obligation, whether implied or express, on
the part of the Lenders to make any Credit Extension in the future, after the expiration of the
Waiver Period, to the extent that the Continuing Defaults exist upon the expiration of the Waiver
Period, or (ii) a waiver by the Agent or the Lenders of any of their respective rights or remedies
at any time, now or in the future, with respect to the Continuing Defaults or to any other Default
or Event of Default.



     Section 2.2. Reaffirmation of ACG Party Obligations. Each ACG Party hereby ratifies
the Existing Credit Agreement and the other Loan Documents and acknowledges and reaffirms (i) that
it is bound by all terms of the Existing Credit Agreement and the other Loan Documents and (ii)
that it is responsible for the observance and full performance of the Obligations, including
without limitation the repayment of the Loans, in accordance with the terms of the Existing Credit
Agreement. Without limiting the generality of the preceding sentence, each of the ACG Parties
agrees that all references in the Loan Documents to the term “Obligations” shall be deemed to
include all of the obligations of the ACG Parties to the Lenders, the Administrative Agent and the
Collateral Agent, whenever arising, under the Existing Credit Agreement or any of the other Loan
Documents (including, but not limited to, any interest, expenses and cost and charges that accrue
after the commencement by or against any ACG Party or any Affiliate thereof or any proceedings
under the Bankruptcy Code naming such Person as the debtor in such proceeding). Each ACG Party
further represents and warrants to the Administrative Agent and the Lenders that each is validly
and justly indebted to the Agent and the Lenders in accordance with the Loan Documents and that
none of the ACG Parties has any claims, counterclaims, offsets, credits or defenses to the Loan
Documents or the performance of



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their respective obligations thereunder, or if any ACG Party has any such claims,
counterclaims, offsets, credits or defenses to the Loan Documents or any transaction related to the
Loan Documents, the same are hereby fully and irrevocably waived, relinquished and released in
consideration of the execution and delivery of this Amendment by the Administrative Agent and the
Lenders.




ARTICLE III

Amendment to Existing Servicing Agreement




     Effective on (and subject to the occurrence of) the Third Amendment Effective Date, the
Existing Servicing Agreement is hereby amended in accordance with this Article III. Except as so
amended, the Existing Servicing Agreement shall continue in full force and effect as the Amended
Servicing Agreement.



     Section 3.1 Amendment of Section 5.4. Section 5.4 of the Existing Servicing Agreement
is hereby amended in its entirety to read as follows:



     5.4 Minimum Total Availability




     Permit the Total Availability at any time from and after February 15, 2008
to be less than the corresponding amounts indicated for each of the following
periods:



	 	 	 	 	 
	Period	 	Minimum Total Availability
	From February 15, 2008 through February 20, 2008
	 	$	2,500,000	 
	From February 21, 2008 through February 24, 2008
	 	$	3,500,000	 
	From February 25, 2008 through March 5, 2008
	 	$	1,500,000	 
	From March 6, 2008 through April 20, 2008
	 	$	4,000,000	 
	From April 21, 2008 through May 13, 2008
	 	$	3,000,000	 
	From and after May 14, 2008
	 	$	4,000,000	 






provided, however, that the amount of the minimum Total
Availability shall reduce from $4,000,000 to $3,000,000 as of April 21, 2008 only
if the aggregate principal balance outstanding under the Bridge Facility
Agreement (as defined in the ACG Senior Facility) as of April 21, 2008 is not
less than $8,000,000.



ARTICLE IV

Representations and Warranties




     The ACG Parties represent and warrant to the Administrative Agent, the Collateral Agent, the
Lenders and each other that, on and as of the Third Amendment Effective Date, and after giving
effect to this Third Amendment:



     Section 4.1 Authority. Each of the ACG Parties has all the necessary corporate or
limited liability company power to make, execute, deliver, and perform this Third Amendment, has
taken all necessary corporate or limited liability company action to authorize



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the execution, delivery and performance of this Third Amendment and has duly executed and delivered
this Third Amendment. This Third Amendment and the Loan Documents constitute the legal, valid and
binding obligations of each of the ACG Parties that is a party thereto, enforceable against each of
them in accordance with their terms except as such enforceability may be subject to (a) the
Bankruptcy Code and (b) general principles of equity.




     Section 4.2 No Legal Obstacle to Agreement. Neither the execution of this Third
Amendment, the making by the Borrower of any borrowings under the Existing Credit Agreement, nor
the performance of the Existing Credit Agreement or any other Loan Document has constituted or
resulted in or will constitute or result in a breach of the provisions of any contract to which an
ACG Party is a party, or the violation of any law, judgment, decree or governmental order, rule or
regulation applicable to an ACG Party, or result in the creation under any agreement or instrument
of any security interest, lien, charge, or encumbrance upon any of the assets of an ACG Party. No
approval or authorization of any governmental authority is required to permit the execution,
delivery or performance by an ACG Party of this Third Amendment, the Existing Credit Agreement or
the transactions contemplated hereby or thereby, or the making by the Borrower of any borrowings
under the Existing Credit Agreement.



     Section 4.3 Incorporation of Certain Representations. The representations and
warranties set forth in Article IV of the Existing Servicing Agreement and in Article III of the
Existing Credit Agreement are true and correct in all material respects on and as of the Third
Amendment Effective Date as though made on and as of the date hereof except for any representations
and warranties that expressly relate solely to an earlier date, which representations and
warranties were true and accurate in all material respects on and as of such earlier date.



     Section 4.4 Default. No Servicer Default, Default or Event of Default has occurred
and is continuing under the Existing Credit Agreement or the Existing Servicing Agreement (other
than the Continuing Defaults).



ARTICLE V

Conditions to Effectiveness




     This Third Amendment shall be and become effective as of the Third Amendment Effective Date
provided that each of the conditions set forth in this Article V shall have been satisfied in the
determination of the Administrative Agent and the Lenders (or satisfaction thereof has been waived
by the Administrative Agent and the Lenders) on or before March 5, 2008.



     Section 5.1 Counterparts of Third Amendment. The Administrative Agent shall have
received counterparts (or other evidence of execution, including telephonic message, satisfactory
to the Administrative Agent) of this Third Amendment, which collectively shall have been duly
executed on behalf of each of ACG Finance, ACG, the Lenders and the Administrative Agent.



     Section 5.2 Corporate Action. The ACG Parties shall have delivered to the
Administrative Agent certified copies of all necessary corporate action taken by each ACG Party
approving this Third Amendment, and each of the documents executed and delivered in connection
herewith or therewith (including, without limitation, a certificate setting forth the



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resolutions of the board of directors of each ACG Party authorizing the execution, delivery and
performance of this Third Amendment). The Administrative Agent shall have received a certificate,
signed by the Secretary or an Assistant Secretary of each ACG Party, dated as of the date hereof,
as to the incumbency of the person or persons authorized to execute and deliver this Third
Amendment and any instrument or agreement required hereunder on behalf of each ACG Party, as
applicable.




     Section 5.3 Amendment Fee. ACG Finance shall have executed and delivered to the
Administrative Agent the Third Amendment Fee Letter.



     Section 5.4 Out-of-Pocket Costs. ACG Finance shall have paid any and all reasonable
out-of-pocket costs (to the extent invoiced) incurred by the Administrative Agent (including the
reasonable fees and expenses of the Administrative Agent’s legal counsel), and all other fees and
amounts payable to the Administrative Agent in connection with this Third Amendment.



     Section 5.5 Legal Opinion. The Administrative Agent shall have received a favorable
legal opinion, addressed to the Administrative Agent, from ACG Finance’s and ACG’s legal counsel,
reasonably acceptable to the Administrative Agent in form and substance, opining, among other
matters, that (i) the ACG Parties’ entry into and performance of this Third Amendment, the Existing
Credit Agreement and the Amended Servicing Agreement does not contravene the obligations,
covenants, or restrictions applicable to the ACG Parties under the Second Lien Indenture or any
other material agreement of the ACG Parties, and (ii) the ACG Parties’ execution and delivery of
this Third Amendment has been duly authorized by all necessary corporate action.



     Section 5.6 Effectiveness of Seventh Amendment. Each of the conditions set forth in
Part 5 of the Seventh Amendment shall have been satisfied in the determination of the
Administrative Agent and the ACG Lenders (or satisfaction thereof has been waived by the
Administrative Agent and the ACG Lenders) in accordance with the terms thereof.



ARTICLE VI

Miscellaneous




     Section 6.1 Instrument Pursuant to Existing Credit Agreement. This Third Amendment is
a Loan Document executed pursuant to the Existing Credit Agreement and shall (unless otherwise
expressly indicated therein) be construed, administered and applied in accordance with the terms
and provisions of the Existing Credit Agreement.



     Section 6.2 Effect. Except as expressly herein amended, the terms and conditions of
the Existing Credit Agreement, the Existing Servicing Agreement and the other Loan Documents shall
remain in full force and effect without amendment or modification, express or implied. The entering
into this Third Amendment by the Lenders shall not be construed or interpreted as an agreement by
the Lenders to enter into any future amendment or modification of the Existing Credit Agreement or
any of the other Loan Documents.



     Section 6.3 References in Other Loan Documents. At such time as this Third Amendment
shall become effective pursuant to the terms of Article V hereof, all references in



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the Loan Documents to the “Servicing Agreement” shall be deemed to refer to the Amended
Servicing Agreement.




     Section 6.4 Counterparts. This Third Amendment may be executed by the parties hereto
in several counterparts, each of which shall be deemed to be an original and all of which shall
constitute together but one and the same agreement, and all of such counterparts taken together
shall be deemed to constitute one and the same instrument. Any signature delivered or transmitted
by a party by facsimile transmission shall be deemed to be an original signature hereto.



     Section 6.5 Integration; Jointly Drafted Document. This Third Amendment, together
with the Loan Documents, contains the entire and exclusive agreement of the parties hereto with
reference to the matters discussed herein and therein. This Third Amendment supersedes all prior
drafts and communications with respect thereto. This Third Amendment may not be amended except in
writing. This Third Amendment has been jointly drafted by the respective parties hereto, and no
legal doctrine providing for construction or interpretation against the drafter shall have any
applicability to this Third Amendment.



     Section 6.6 Further Assurances. ACG Finance and ACG agree to take such further
actions as the Administrative Agent shall reasonably request from time to time in connection
herewith to evidence or give effect to the amendments set forth herein or any of the transactions
contemplated hereby.



     Section 6.7 Governing Law. THIS THIRD AMENDMENT SHALL BE DEEMED TO BE A CONTRACT MADE
UNDER AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO CONFLICTS OF LAWS
PRINCIPLES.



     Section 6.8 Successors and Assigns. This Third Amendment shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and assigns.



     Section 6.9 Costs, Expenses. ACG agrees to pay on demand any and all reasonable costs
and expenses of the Administrative Agent and the Collateral Agent and all other fees and other
amounts payable to the Administrative Agent and the Collateral Agent, in each case incurred in
connection with the preparation, execution, delivery and administration of this Third Amendment
(including, without limitation, the reasonable fees and expenses of counsel to the Administrative
Agent) in accordance with the terms of Section 9.03 of the Existing Credit Agreement.



[Remainder of this page intentionally left blank.]





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     IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment to be duly executed
and delivered as of the date first written above.



	 	 	 	 	 
	 	AMERICAN COLOR GRAPHICS, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	Patrick W. Kellick 	 
	 	 	Title:  	Executive Vice President 	 
	 



	 	 	 	 	 
	 	AMERICAN COLOR GRAPHICS FINANCE, LLC

 	 
	 	By:  	 	 
	 	 	Name:  	Patrick W. Kellick 	 
	 	 	Title:  	Executive Vice President 	 
	 



[signatures continued]





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	 	BANK OF AMERICA, N.A.,

as Administrative Agent and as Collateral Agent

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



[signatures continued]





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LENDERS:




	 	 	 	 	 
	 	BANK OF AMERICA, N.A.

 	 
	 	By:  	



 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



[signatures continued]





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