Document:

Exhibit 10.3

 

RETAINED SHARE AGREEMENT

 

 

RETAINED
SHARE AGREEMENT (this “Agreement”), dated as of November 24, 1999, by and among
Big Flower Holdings, Inc., a Delaware corporation (the “Company,” which term
shall, in the context of employment with the Company, also refer to any direct
or indirect subsidiaries thereof), Thomas H. Lee Equity Fund IV, L.P. (the “Sponsor”)
and Donald E. Roland (the “Purchaser”), who is presently an officer, member of
management or key employee of the Company.

 

WHEREAS,
the Company has previously issued options (the “BFH Options”) to purchase
common stock, par value $.01 per share, of the Company to certain officers,
members of management, key employees, consultants and advisors of the Company
and certain of its direct or indirect subsidiaries, and the Company hereby
offers to the Purchaser and may offer to certain other officers, members of
management and key employees of the Company and certain of its direct or
indirect subsidiaries, (the “Other Purchasers”) the opportunity to exercise
their respective BFH Options (or a portion thereof) and, upon payment of the
requisite exercise price therefor, will issue shares (the “Shares”) of common
stock, $.01 par value, of the Company (the “Common Stock”), which Shares, upon
execution of this Agreement, shall be deemed Retained Shares as defined in the
Merger Agreement (as defined below), on the terms and conditions set forth
herein; and

 

WHEREAS,
this Agreement is one of several Retained Share Agreements (such Retained Share
Agreements with the Other Purchasers, the “Other Purchasers’ Agreements”), that
have been and are being entered into by the Company with the Purchaser and the
Other Purchasers.

 

NOW,
THEREFORE, in consideration of the mutual representations, warranties,
covenants and agreements contained herein, the parties hereto agree as follows:

 

1.                             Certain Definitions.

 

As
used in this Agreement, the following terms shall have the meanings ascribed to
them below:

 

Agreement. The term “Agreement” shall have the meaning
ascribed to it in the preamble hereto.

 

Allotment. The term “Allotment” shall have the meaning
ascribed to it in Section 7.1.

 

BFH
Options. The term “BFH
Options” shall have the meaning ascribed to it in the first “Whereas” clause.

 

Common
Stock. The term “Common
Stock” shall have the meaning ascribed to it in the first “Whereas” clause. 

 

Company. The term “Company” shall have the meaning
ascribed to it in the preamble hereto.

 

Disability. The term “Disability” of the Purchaser
shall mean the inability of the Purchaser to perform substantially Purchaser’s
duties and responsibilities to the Company or any subsidiary of the Company by
reason of a physical or mental disability or infirmity for a continuous period
of three months. The date of such Disability shall be the earlier of (x) last
day of such three-month period or (y) the day on which the Purchaser submits to
the Company medical evidence of such Disability reasonably satisfactory to the
Company.

 

Exchange. The term “Exchange” shall mean the
principal stock exchange, including the Nasdaq Stock Market, on which the
Common Stock is listed or approved for listing.

 

Fair
Market Value. The
term “Fair Market Value” used in connection with the value of Shares shall mean
the fair market value thereof as determined by the Board of Directors of the
Company in its reasonable discretion after considering any valuations of the
Company or any subsidiary of the Company which have been received by the
Company or any subsidiary of the Company or the trustee of any benefit plan of
the Company or any diary of the Company during the preceding 12 months; provided,
however, that if there is a Minimum Public Float, the term “Fair Market
Value” shall mean (x) the average of the daily closing prices, or the average
of the daily 

 

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bid and asked prices (as the case may be), per share of Common Stock
for the 20 trading days immediately preceding the date of termination of the
Purchaser’s employment with the Company multiplied by (y) the number of shares
of Common Stock being purchased and sold.

 

Liquidation
Event. The term “Liquidation
Event” shall mean (1) a public offering of the Common Stock registered pursuant
to the Securities Act where there is a Minimum Public Float immediately
following such offering, (2) a merger or other business combination or
recapitalization whereby the Common Stock is exchanged for cash and/or publicly
traded equity or debt securities in another entity or a combination of cash and
other non-publicly traded equity or debt securities where cash constitutes at
least a majority of the consideration to be received in such merger, business
combination or recapitalization or (3) a sale or other disposition of all or
substantially all of the Company’s assets to another entity, for cash and/or
publicly traded equity or debt securities of another entity or a combination of
cash and other non-publicly traded equity or debt securities where cash
constitutes at least a majority of the proceeds of such sale or disposition, in
each case, other than to the Company, any subsidiary of the Company, or any
entity controlled by the ultimate control persons of the Company.

 

Merger. The term “Merger” shall mean the Merger of
BFH Merger Corp. with and into the Company as contemplated by the Merger
Agreement.

 

Merger
Agreement. The term “Merger
Agreement” shall mean that certain Amended and Restated Agreement and Plan of
Merger dated as of October 11, 1999, between BFH Merger Corp. and the Company,
as amended and supplemented from time to time.

 

Minimum
Public Float. The
term “Minimum Public Float” shall mean the circumstances existing when (i) the
consummation of one or more public offerings registered pursuant to the
Securities Act of shares of Common Stock if, upon such consummation, the
aggregate number of shares of Common Stock held by the public represents at
least 20% of the total number of outstanding shares of Common Stock at the time
of such public offering and (ii) the Common Stock is listed on an Exchange.

 

Option
Exercise Price. The
term “Option Exercise Price” shall have the meaning ascribed to it in action
2.1(a).

 

Other
Purchasers. The term “Other
Purchasers” shall have the meaning ascribed to it in the first “Whereas”
clause.

 

Other
Purchasers’ Agreements.
The term “Other Purchasers’ Agreements” shall have the meaning ascribed to it
in the second “Whereas” clause.

 

Participants. The term “Participants” shall have the
meaning ascribed to it in Section 7.1.

 

Permitted
Transferee. The term “Permitted
Transferee” shall have the meaning ascribed to it in Section 4.2.

 

Person. The term “person” shall mean any
individual, group, corporation, limited liability company, partnership, trust,
unincorporated organization or government or political department or agency
thereof or other entity.

 

Purchaser. The term “Purchaser” shall have the meaning
ascribed to it in the preamble hereto.

 

Purchaser’s
Donee’s Estate. The
term “Purchaser’s Donee’s Estate” shall have the meaning ascribed to it in
Section 4.2(d).

 

Purchaser’s
Donee. The term “Purchaser’s
Donee” shall have the meaning ascribed to it in Section 4.2(d).

 

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Purchaser’s
Estate. The term “Purchaser’s
Estate” shall have the meaning ascribed to it in Section 4.2(b).

 

Purchaser’s
Group. The term “Purchaser’s
Group” shall have the meaning ascribed to it in Section 5.1.

 

Purchaser’s
Trust. The term “Purchaser’s
Trust” shall have the meaning ascribed to it in Section 4.2(c).

 

Retirement. The term “Retirement” shall mean, with
respect to the Purchaser, the Purchaser’s retirement as an employee of the
Company as determined by the applicable policy of the Company or subsidiary of
the Company which employs the Purchaser or, if no such policy exists, then upon
the Purchaser reaching age 65, provided that the Purchaser has at least three
years of continuous service with the Company or such subsidiary following the
Closing Date.

 

SEC. The term “SEC” shall mean the Securities
and Exchange Commission or any successor thereto.

 

Securities
Act. The term “Securities
Act” shall mean the Securities Act of 1933, as amended, and all rules and
regulations promulgated thereunder.

 

Shares. The term “Shares” shall have the meaning
ascribed to it in the first “Whereas” clause.

 

Sponsor. The term “Sponsor” shall have the meaning
ascribed to it in the preamble hereto.

 

Tag-Along
Notice. The term “Tag-Along
Notice” shall have the meaning ascribed to it in Section 7.1.

 

Tag-Along
Transfer. The term “Tag-Along
Transfer” shall have the meaning ascribed to it in Section 7.1.

 

Third
Party. The term “Third
Party” shall mean any person or entity excluding each of the following: (a) the
Purchaser, the Other Purchasers and their respective Permitted Transferees; (b)
the Company, and its subsidiaries or affiliates; and (c) the principal beneficial
owners of the Company and their respective affiliates.

 

Transfer. The term “Transfer,” when used with respect
to the Shares, shall mean any sale, transfer, assignment, pledge,
hypothecation, encumbrance or other disposition thereof.

 

Transfer
Date. The term “Transfer
Date” shall have the meaning ascribed to it in Section 7.1.

 

Violation. The term “Violation” shall have the meaning
ascribed to it in Section 6.1.

 

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2.             Exercise
of BFH Options.

 

2.1           (a)           Exercise
of BFH Options. Upon the exercise of the Purchaser’s BFH Options in accordance
with its terms and payment of the exercise price set forth in such BFH Options
(the “Option Exercise Price”) and subject to the terms and conditions set forth
in this Agreement, the Company shall issue that number of Shares as set forth
in the BFH Options being exercised for which the Option Exercise Price is
properly tendered, which Shares received upon such exercise shall be deemed to
be Retained Shares (as defined in the Merger Agreement) upon consummation of
the Merger. In the event the Merger is not consummated, the Purchaser shall be deemed
to have exercised such BFH Options in accordance with its terms and this
Agreement shall be void and of no further force and effect.

 

(b)           Redemption
Upon Exchange Offer. At any time that the Company offers to the Purchaser
to exchange the Shares for securities in the subsidiary by which the Purchaser
is employed, the Purchaser shall have the right, on one occasion, during the
10-day period after commencement of such offer to exchange, to sell to the
Company any or all of the Shares then held by the Purchaser or the Purchaser’s
Group at a price per Share equal to $31.50. The Company shall be required to
purchase such Shares at such price, subject to Section 6 hereof.

 

2.2           The
Issuance of Shares. The issuance of Shares as set forth herein shall take
place as soon as practicable after the exercise of the BFH Options and payment
of the Option Exercise Price.

 

2.3           Representations
and Warranties of the Company. The Company represents and warrants to the
Purchaser as follows:

 

(a)           the
Company has full corporate power and authority to execute and deliver this Agreement
and to perform its obligations hereunder and upon the Closing Date, this Agreement
will be, duly authorized, executed and delivered by the Company and when
executed and delivered by the Purchaser, this Agreement will be a valid and
binding obligation of the Company enforceable against the Company in accordance
with its terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, liquidation, reorganization, moratorium and other laws
affecting the rights of creditors generally and subject to the exercise of judicial
discretion in accordance with general principles of equity (whether applied by
a court of law or equity);

 

(b)           the
Shares to be issued to the Purchaser, when issued in accordance with this Agreement,
will be duly and validly issued and fully paid and nonassessable; and

 

(c)           the
execution, delivery and performance of this Agreement by the Company will not
conflict with the Company’s Certificate of Incorporation or Bylaws or result in
any material breach of any terms or provisions of, or constitute a material
default under, any material contract, agreement or instrument to which the
Company is a party or by which the Company is bound.

 

2.4           Representations
and Warranties of the Purchaser. The Purchaser represents and warrants to
the Company as follows:

 

(a)           the
Purchaser has all requisite power and authority to enter into this Agreement and
to perform the obligations required to be performed by the Purchaser hereunder,
and upon the Closing Date, this Agreement will be, duly executed and delivered
by the Purchaser, and, when executed and delivered by the Company, this
Agreement will be, a valid and binding obligation of the Purchaser enforceable
against the Purchaser in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
liquidation, reorganization, moratorium and other laws affecting the rights of
creditors generally and subject to the exercise of judicial discretion in
accordance with general principles of equity (whether applied by a court of law
or equity);

 

(b)           at
prior to the Closing, the Purchaser will have exercised the BFH Options in the state
indicated on Schedule I; the address set forth on Schedule I for the Purchaser
is the address where the Purchaser is a resident and domiciliary (not a
temporary or transient resident); and the Purchaser is a citizen of the

 

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United States or such other
jurisdiction as set forth on Schedule I and is not acquiring the Shares as an
agent or otherwise for any other person; and

 

(c)           the Purchaser has good and marketable title
to the BFH Options, which are free and clear of any and all liens, claims or
encumbrances of any nature whatsoever (whether absolute, accrued, contingent or
otherwise).

 

3.             Investment Representations of the Purchaser.

 

3.1           Investment Intent. The Purchaser hereby represents and
warrants that the Purchaser is acquiring the Shares for investment solely for
the Purchaser’s own account and not with a view to, or for resale in connection
with, the distribution or other disposition thereof,

 

3.2           Additional Investment Representations. The Purchaser further acknowledges and represents
and warrants that:

 

(a)           no Federal or state agency has passed upon
the Shares or made any finding or determination as to the fairness of this
investment;

 

(b)           the Purchaser understands that the Shares are
a speculative investment which involve a high degree of risk of loss of the
Purchaser’s investment therein, there are substantial restrictions on the
transferability of the Shares, and, on the Closing Date and for an indefinite
period following the Closing, there will be no public market for the Shares
and, accordingly, it may not be possible for the Purchaser to liquidate the
Purchaser’s investment in case of emergency, if at all;

 

(c)           the Purchaser has received and carefully
reviewed (i) this Agreement, and other information provided to the Purchaser
upon such Purchaser’s request, and the Purchaser understands and has taken
cognizance of the risks related to the purchase of the Shares, and no
representations or warranties have been made to the Purchaser concerning the
Shares or the Company and its prospects, subsidiaries or other matters except
as set forth in this Agreement;

 

(d)           the Purchaser has been given the opportunity
to examine all documents and to ask questions of, and to receive answers from,
the Company concerning the terms and conditions of the purchase of the Shares
and to obtain any additional information requested by the Purchaser;

 

(e)           the Purchaser is an officer, member of
management or key employee of the Company or one of its direct or indirect
subsidiaries and as such has a high level of familiarity with the business,
operations, financial condition and prospects of the Company and its
subsidiaries; and

 

(f)            the Purchaser has sufficient available
financial resources to provide adequately for the Purchaser’s needs currently
and in the future, including possible personal contingencies, and can bear the
economic risk of a complete loss of the Purchaser’s investment hereunder
without materially affecting the Purchaser’s financial condition.

 

4.             Restrictions on Transfer.

 

4.1           General Restrictions on Transfer, (a) The Purchaser agrees that until a
Liquidation Event occurs neither the Purchaser nor any of the Purchaser’s
Permitted Transferees will Transfer any Shares except as permitted by Sections
4.2 or 5 hereof. Prior to recognizing or permitting any proposed Transfer, the
Company may require the Purchaser or any of the Purchaser’s Permitted
Transferees to deliver such opinions of counsel and other documents as the
Company deems reasonably necessary in connection with such proposed Transfer.
No Transfer of Shares in violation of this Agreement shall be made or recorded
on the books of the Company and any such Transfer shall be void and of no
effect.

 

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(b)           The
provisions of this Sections 4.1 shall not apply to any Transfers of Common Stock
in a registered public offering, in an open market sale pursuant to Rule 144
under the Securities Act or after a Liquidation Event occurs.

 

4.2           Certain
Permitted Transfers of Shares. Notwithstanding Section 4.1 hereof, any of
the following Transfers of Shares shall be deemed to be in compliance with this
Agreement and no opinion of counsel as to the availability of an exemption
under the Securities Act will be required in connection therewith; provided,
however, that no Transfer of Shares pursuant to this Section 4.2 (other
than a Transfer to the Company) shall be given effect on the books of the
Company unless and until such Permitted Transferee agrees in writing with the
Company to become bound by all the terms of this Agreement:

 

(a)           Transfer
made to the Company, any direct or indirect subsidiary of the Company or any of
their respective affiliates;

 

(b)           a
Transfer upon the death of the Purchaser to the Purchaser’s executors, administrators,
testamentary trustees, legatees or beneficiaries (the “Purchaser’s Estate”);

 

(c)           a
Transfer made in compliance with federal and all applicable state securities laws
to a trust, the beneficiaries of which include only the Purchaser and the
Purchaser’s spouse, siblings, or direct lineal ancestors or descendants (a “Purchaser’s
Trust”);

 

(d)           a
Transfer made as a gift to the Purchaser’s spouse or lineal descendants (a “Purchaser’s
Donee”) and, upon the death of a Purchaser’s Donee, to his or her executors,
administrators, testamentary trustees, legatees or beneficiaries (a “Purchaser’s
Donee’s Estate”); and

 

(e)           a
Transfer made pursuant to a court order in connection with a divorce proceeding.

 

Each of the foregoing
persons described in subclauses (a) through (e) above are referred to herein a “Permitted
Transferee.” Any Permitted Transferee may further Transfer any Shares to any
other Permitted Transferee of the Purchaser (including Transfers back to the
Purchaser); provided that no such Transfer shall be made to a Permitted
Transferee (or the Purchaser) hereunder (whether by the Purchaser or another
Permitted Transferee) unless and until such Permitted Transferee (or, in the
event of Transfers back to the Purchaser, the Purchaser) shall agree in
writing, in form and substance satisfactory to the Company, to become bound by
all the terms of this Agreement.

 

4.3           Rule
144. If any Shares held by the Purchaser are disposed of in accordance with
Rule 144 under the Securities Act or otherwise, the Purchaser shall deliver to
the Company at or prior to the time of such disposition such documentation as
the Company may reasonably request in connection with such sale and, in the case
of a disposition in accordance with Rule 144, an executed copy of Form 144
required to be filed with the SEC (if required by Rule 144).

 

4.4           Legend.
(a) Each certificate representing the Shares shall bear substantially the following
legends:

 

THE
SECURITIES REPRESENTED BY THIS
CERTIFICATE MAY NOT BE TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR
OTHERWISE DISPOSED OF UNLESS SUCH TRANSFER, SALE, ASSIGNMENT, PLEDGE,
HYPOTHECATION OR OTHER DISPOSITION COMPLIES WITH THE PROVISIONS OF A RETAINED
SHARE AGREEMENT DATED AS OF NOVEMBER    , 1999 (A COPY OF
WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY AND WHICH WILL BE MAILED TO
A STOCKHOLDER WITHOUT CHARGE PROMPTLY AFTER RECEIPT BY THE COMPANY OF A WRITTEN
REQUEST THEREFOR FROM SUCH STOCKHOLDER).

 

6

 

THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND
RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE STATE SECURITIES LAWS,
PURSUANT TO REGISTRATION THEREUNDER OR EXEMPTION THEREFROM.

 

(b)           A notation shall be made in the appropriate
records of the Company indicating that the Shares are subject to restrictions
on transfer and, if the Company should at some time in the future engage the
services of a securities transfer agent, appropriate stop-transfer instructions
will be issued to such transfer agent with respect to the Shares.

 

5.             Certain Sales Upon Termination of Employment.

 

5.1           Put. (a) If the Purchaser’s employment with the Company is terminated by
either the Purchaser or the Company due to Retirement, Disability or death of
the Purchaser, and there is no Minimum Public Float at the time of such
Retirement, Disability or death, each of the Purchaser and the Purchaser’s
Permitted Transferees (hereinafter sometimes collectively referred to as the “Purchaser’s
Group”) shall have the right (subject to Section 6 hereof) for 90 days after
the date of termination of such employment, to sell to the Company, on one occasion
for the Purchaser’s Group, any or all of the Shares then held by the Purchaser’s
Group at the price set forth in Section 5.3 and the Company shall be required
to purchase (subject to Section 6 hereof) such Shares at such price.

 

(b)           Each member of the Purchaser’s Group who
desires to sell any or all of its Shares shall, not later than 90 days after
the date of termination of employment, send to the Company written notice of
the Purchaser’s Group’s intention to sell Shares pursuant to this Section 5.1,
specifying the number of Shares to be sold. The closing of the purchase shall
take place at the principal office of the Company within 10 days after the
giving of such notice as designated in writing by the Company.

 

(c)           If the Purchaser or the Purchaser’s Permitted
Transferees do not exercise the put right pursuant to this Section 5.1, then
upon expiration of such 90-day period, the Company shall have a call right with
respect to such Shares held by the Purchaser and the Purchaser’s Group for a
period of 30 days exercisable upon notice to the Purchaser or the Purchaser’s
Group that the Closing will take place at the principal office of the Company
within 10 days after the giving of such notice.

 

5.2          Call. (a) Subject to Section 5.3, if the Purchaser’s employment with the
Company is terminated by either the Purchaser or the Company for any reason
other than Retirement, Disability or death of the Purchaser, the Company shall
have the right and option to purchase, for 90 days after the date of
termination of such employment, any or all of the Shares then held by the
Purchaser and the Purchaser’s Group, at the price set forth in Section 5.3.

 

(b)           If the Company desires to exercise its option
to purchase any Shares pursuant to this Section 5.2, the Company shall, not
later than 90 days after the date of such termination of employment, send to
the Purchaser written notice of its intention to purchase Shares pursuant to
this Section 5.2, specifying the number of Shares to be purchased. The closing
of the purchase shall take place at the principal office of the Company within
10 days after the giving of such notice.

 

5.3           Purchase Price to Be Paid by Company. The purchase price to be paid by the
Company upon exercise of a put or call right as set forth in Section 5.1 or 5.2
shall be the Fair Market Value of such Shares determined as of the date the
notice of such exercise is first given; provided, however, that if the Employee
is terminated for cause (as defined in the Purchaser’s employment agreement
with the Company in effect at such time or as determined by the board of
directors of the entity by which the Purchaser is employed), then the purchase
price to be paid by the Company under Section 5.2 shall be the lesser of the
Fair Market Value and the original cost of such Shares paid by the Purchaser
hereunder (i.e., the Option Exercise Price).

 

5.4           Obligation to Sell. If there is more than one member of the
Purchaser’s Group, the failure of any one member thereof to perform its
obligations hereunder shall not excuse or affect the obligations of any

 

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other member thereof, and
the closing of the purchases from such other members by the Company shall not
excuse, or constitute a waiver of its rights against, the defaulting member.

 

6.             Certain Limitations on the Company’s Obligations
to Purchase Shares.

 

6.1           Limitation on Purchases. (a) The Company shall not be obligated to
purchase any Shares at any time pursuant to Section 2.1(b), 4 or 5 hereof,
regardless of whether it has delivered a notice of its election to purchase any
such Shares, to the extent that the purchase of such Shares (together with any
other purchases of Common Stock, rights or other securities of the Company
pursuant to Section 2.1(b), 4 or 5 hereof, or pursuant to the Other Purchasers’
Agreements, of which the Company has at such time been given or has given
notice) would conflict with or result in a violation of, any law, rule,
regulation, policy, guideline, order, writ, injunction, decree or judgment
promulgated or entered by any federal, state, local or foreign court or
governmental authority applicable to the Company or any of its subsidiaries or
any of its or their properties or assets or result in a default (or require the
consent of any Third Party in order to avoid a default) under any material
contract, deed, mortgage, trust, financing or credit agreement, arrangement or
agreement of the Company or any of its subsidiaries (any of such results
described in (i) or (ii) being sometimes hereinafter referred to as a “Violation”).
The Company shall purchase such Shares as promptly as practicable upon
determining that such purchase would not be a Violation.

 

(b)           If at any time consummation of all purchases
by the Company of Shares, rights and other securities of the Company pursuant
to Section 2.1(b), 4 or 5 hereof, or pursuant to the Other Purchasers’
Agreements, is prohibited pursuant to Section 6.1(a), then the Company shall
purchase from the members of the Purchaser’s Group desiring or obligated to
sell to the Company the Shares pursuant to this Agreement and from the other
persons having the right or obligation to sell the Shares, rights and other
securities of the Company pursuant to this Agreement, or pursuant to the Other
Purchasers’ Agreements, the maximum number of Shares, rights and other
securities which it is able to purchase without a Violation resulting. If any
Violation would result from the purchase of any Shares, rights or other
securities of the Company, the Board of Directors of the Company, in its sole
discretion, may determine priorities among members of the Purchaser’s Group and
the other persons having the right or obligation to sell Shares, rights or
other securities of the Company, as the case may be, taking into account
contractual obligations and relative hardship and such other factors as it
deems relevant, and, without limiting the generality of the foregoing, may
purchase from any such member or person less than all the Shares, rights or
other securities of the Company which such member or person has elected or is
obligated to sell to the Company or the Company is obligated to purchase.

(i)

 

(c)           Any Shares which the Company is obligated to
purchase pursuant to Section 2. l(b), 4 or 5, but which in accordance with
Section 6.1(a) or Section 6.2 hereof are not purchased at the applicable time
provided in Section 2. l(b), 4
or 5 hereof, shall be purchased by the Company on the tenth day after such date
or dates that the Company learns that (after taking into account any purchases
of Shares, rights or other securities of the Company, to be made at such time
pursuant to the Other Purchasers’ Agreements or otherwise) it is no longer
permitted to defer purchasing such securities under Section 6.1(a) hereof at
the relevant purchase price set forth in Section 2.1(b), 4 or 5 hereof, and the
Company shall give the Purchaser seven days prior notice of any such purchase.

 

6.2           Payment for Shares. The purchase price of Shares purchased by
the Company pursuant to Section 4 or 5 hereof will be paid to the extent such
payment would not result in a Violation, by the Company’s delivery of a bank
cashier’s check or certified check for the remainder of the purchase price, if
any.

 

7.             Tag-Along Rights.

 

7.1           Tag-Along Rights. After the occurrence of a Liquidation
Event, subject to Section 7.2, the Sponsor agrees that the Purchaser shall be
afforded the opportunity to participate in sales by the Sponsor to a Third
Party of all or substantially all of the shares of Common Stock of the Company
then held by the Sponsor and its affiliates (any such sale, a “Tag-Along
Transfer”). As soon as practicable after the time any Tag-Along Transfer is
proposed, but in any event at least 20 days prior to the Transfer Date (as
defined below), the Sponsor shall give written notice thereof to the Purchaser
identifying the proposed purchaser and stating the number of shares of

 

8

 

Common Stock proposed to be
sold, the proposed offering price, the proposed date of such Tag-Along Transfer
(the “Transfer Date”) and any written material terms or conditions of the
proposed Tag-Along Transfer. If the Purchaser desires to participate in the
Tag-Along Transfer, the Purchaser shall give written notice (the “Tag-Along
Notice”) to the Sponsor not less than 10 days prior to the Transfer Date
setting forth the number of Shares that the Purchaser desires to include in the
Tag-Along Transfer. Failure to give the Tag-Along Notice at least 10 days prior
to the Transfer Date shall constitute an irrevocable election by the Purchaser
not to participate in the Tag-Along Transfer. The total number of shares of
Common Stock which the Sponsor is to include in the Tag-Along Transfer (the “Allotment”)
shall be apportioned among the Sponsor, the Purchaser if he gives the Tag-Along
Notice at least 10 days prior to the Transfer Date, Other Purchasers giving
Tag-Along Notices during such 10-day period pursuant to Other Purchasers’
Agreements and any other persons entitled to give (and giving on a timely
basis) Tag-Along Notices pursuant to agreements substantially similar to this
Agreement (collectively, the “Participants”) in accordance with the number of
issued and outstanding shares of Common Stock each Participant holds at such
time (without regard to any shares of Common Stock issuable upon exercise of
options, warrants, or other rights of any kind); provided that in no
event will the Sponsor’s portion of the Allotment be less than the number of
shares of Common Stock constituting the Allotment less the number of issued and
outstanding shares which the Participants (other than the Sponsor) have
included in their Tag-Along Notices (without regard to any shares issuable upon
exercise of options, warrants, or other rights of any kind).

 

7.2           No Rights Following Termination of Employment. Notwithstanding any other provision of this
Agreement, the Purchaser shall have no rights under Section 7.1 following the
termination of the Purchaser’s employment with the Company or any of its direct
or indirect subsidiaries for any reason including (without limitation) death,
Disability or Retirement.

 

7.3           No Sponsor Liability. Neither the Sponsor nor any of its
affiliates shall have any personal liability to the Purchaser or any of the
Purchaser’s Permitted Transferees or the Company or any of its subsidiaries
under any provision of this Agreement, including (without limitation) Section
7.1.

 

7.4           Termination of Tag-Along Rights. In addition to the provisions of Section
7.2, the provisions of Section 7.1 shall not be applicable if (x) the
Common Stock becomes publicly traded and there exists a Minimum Public Float,
(y) the Purchaser ceases to own Shares or (z) the sale by the Sponsor involves
less than all or substantially all of the Common Stock owned by the Sponsor and
its affiliates at the time of sale.

 

8.             Miscellaneous.

 

8.1           State Securities Laws. The Company hereby agrees to use
commercially reasonable efforts to comply with all state securities or “blue
sky” laws which might be applicable to the sale of the Shares by the Company to
the Purchaser pursuant to this Agreement.

 

8.2           Binding Effect. The provisions of this Agreement shall be
binding upon the parties hereto and their respective heirs, legal
representatives, successors and assigns; provided, however, that
the Purchaser and the Purchaser’s Permitted Transferees shall not assign any
rights hereunder except as specifically permitted by the terms of this
Agreement. The Company may assign its rights under the put contained in Section
5.1 or the call contained in Section 5.2 to any of its subsidiaries or
affiliates, or to the principal beneficial owners of the Company or any of
their Permitted Transferees or affiliates, provided that no such assignment
shall release the Company from its obligations thereunder. Neither this
Agreement nor any issuance of Shares pursuant hereto shall create, or be
construed or deemed to create, any right to employment or continued employment
in favor of the Purchaser or any other person by the Company or any subsidiary
or affiliate of the Company.

 

8.3           Severability. The invalidity, illegality or
unenforceability of one or more of the provisions of this Agreement in any
jurisdiction shall not affect the validity, legality or enforceability of the remainder
of this Agreement in such jurisdiction or the validity, legality or
enforceability of this Agreement, including any such provision, in any other
jurisdiction, it being intended that all rights and obligations of the parties hereunder
shall be enforceable to the fullest extent permitted by law.

 

8.4           Recapitalizations, Exchanges, Etc. Affecting Common
Stock. The provisions of this Agreement shall apply, to the full extent set
forth herein with respect to the Shares, to any and all shares of capital

 

9

 

stock of the Company or any
successor or assign of the Company (whether by merger, consolidation, sale of
all or substantially all of the assets of the Company or otherwise) which may
be issued in respect of, in exchange for, or in substitution of the Shares, by
reason of any stock dividend, stock split, stock issuance, reverse stock split,
combination, recapitalization, reclassification, merger, consolidation,
conversion or otherwise. Upon the occurrence of any of such events, amounts
hereunder shall be appropriately adjusted.

 

8.5           Amendment. This Agreement may be amended only by a written instrument duly
signed by the Company and the Purchaser (except that any amendment affecting
Section 7 hereof shall also require the signature of the Sponsor).

 

8.6           Notices. All notices and other communications provided for herein shall be
dated and in writing and shall be deemed to have been duly given when
delivered, if delivered personally or sent by registered or certified mail,
return receipt requested, postage prepaid and when received if delivered
otherwise, to the party to whom it is directed:

 

(a)           If to the Company, to it at the following
address: 

 

3
East 54th
Street 

New York, New York 10022 

Attention: General Counsel 

Fax No.:    (212) 521-1640

 

(b)           If to the Purchaser or any of the Purchaser’s
Permitted Transferees, to the Purchaser at the address set forth on Schedule 1
hereto;

 

(c)           If to the Sponsor, to it at the following
address:

 

Thomas
H. Lee Equity Fund IV, L.P. 

c/o Thomas H. Lee Company 

75 State Street, Suite 2600 

Boston, MA 02109 

Attention: General Counsel 

Fax No.:    (617) 227-3514

 

or
at such other address as the parties hereto shall have specified by notice in
writing to the other parties (provided, that such notice of change of
address shall be deemed to have been duly given only when actually received).

 

8.7           Applicable Law. The laws of the State of Delaware shall
govern the interpretation, validity and performance of the terms of this
Agreement, regardless of the law that might be applied under Delaware’s
principles of conflicts of law.

 

8.8           Consent to Service of Process. The Purchaser hereby irrevocably submits to
the jurisdiction of any New York state court sitting in the City of New
York or any federal court sitting in the City of New York in respect of any
suit, action or proceeding arising out of or relating to this Agreement, and
irrevocably accepts for the Purchaser and in respect of the Purchaser’s
property, generally and unconditionally, jurisdiction of the aforesaid courts.
The Purchaser irrevocably waives, to the fullest extent the Purchaser may
effectively do so under applicable law, trial by jury and any objection that
the Purchaser may now or hereafter have to the laying of the venue of any such
suit, action or proceeding brought in any such court and any claim that any such
suit, action or proceeding brought in any such court has been brought in an
inconvenient forum. Nothing herein shall affect the right of the Company to
serve process in any manner permitted by law or to commence legal proceedings
or otherwise proceed against Purchaser in any other jurisdiction.

 

8.9           Integration. This Agreement and the documents referred to herein or delivered
pursuant hereto which form a part hereof contain the entire understanding of
the parties with respect to the subject matter hereof. There are no
restrictions, agreements, promises, representations, warranties, conditions,
covenants or

 

10

 

undertakings with respect to
the subject matter hereof other than those expressly set forth herein. This
Agreement supersedes all prior agreements and understandings between the
parties with respect to its subject matter.

 

8.10         Descriptive Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning of terms contained herein.

 

8.11         Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument, and it shall not be necessary in making
proof of this Agreement to produce or account for more than one such
counterpart.

 

8.12         Rights to Negotiate. Nothing in this Agreement shall be deemed
to restrict or prohibit the Company from purchasing Shares from the Purchaser
or the Purchaser’s Permitted Transferees at any time upon such terms and
conditions and at such price as may be mutually agreed upon between the Company
and the Purchaser or the Purchaser’s Permitted Transferees, whether or not at
the time of such purchase circumstances exist which specifically grant the
Company the right to purchase, or the Purchaser or his Permitted Transferees
the right to sell, Shares pursuant to the terms of this Agreement.

 

8.13         Rights Cumulative: Waiver. The rights and remedies of parties hereto
shall be cumulative and not exclusive of any rights or remedies which any party
would otherwise have hereunder or at law or in equity or by statute, and
(subject to the provisions of this Agreement regarding specific time periods
within which a right must be exercised or a notice must be given) no failure or
delay by any party in exercising any right or remedy shall impair any such
right or remedy or operate as a waiver of such right or remedy, nor shall any
single or partial exercise of any power or right preclude such party’s other or
further exercise or the exercise of any other power or right. The waiver by any
party hereto of a breach of any provision of this Agreement shall not operate
or be construed as a waiver of any preceding or succeeding breach and no
failure by any party to exercise any right or privilege hereunder shall be
deemed a waiver of such party’s other rights or privileges hereunder.

 

8.14         Specific Performance. Each of the parties hereto acknowledges and
agrees that in the event of any breach of this Agreement, the non-breaching
party would be irreparably harmed and could not be made whole by monetary
damages. It is accordingly agreed that the parties hereto will waive the
defense in any action for specific performance that a remedy at law would be
adequate and that the parties hereto, in addition to any other remedy to which
they may be entitled at law or in equity, shall be entitled to compel specific
performance of this Agreement. The parties hereto consent to personal
jurisdiction in any such action brought in any such court and to service of
process upon it or him in the manner set forth in Section 8.6 hereof.

 

11

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the
dates set forth herein.

 

	
   

  	
  THE PURCHASER

  
	
   

  	
   

  
	
   

  	
  /s/ Donald E. Roland

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Address:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Telephone No.

  	
   

  	
   

  
	
   

  	
  Social Security No.

  	
   

  	
   

  
	
  Accepted and Agreed to 

  	
  November 24, 1999

  
	
  as of November     , 1999

  	
   

  
	
   

  	
   

  
	
  THE COMPANY:

  	
   

  
	
   

  	
   

  
	
  Big Flower Holdings, Inc.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ [ILLEGIBLE]

  	
   

  	
   

  
	
   

  	
  Name: 

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
  For Purposes of Section 7 only 

  	
   

  
	
  Accepted and Agreed to as of 

  	
   

  
	
  November      , 1999

  	
   

  
	
   

  	
   

  
	
  THE SPONSOR:

  	
   

  
	
  Thomas H. Lee Equity Fund IV, L.P.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ [ILLEGIBLE]

  	
   

  	
   

  
	
   

  	
  Name: 

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
									

 

[Signature
page to Retained Share Agreement (ISO)]

 

12

 

SCHEDULE
I

 

	
   

  	
   

  	
  ISOs

  	
   

  	
  ISO

  	
   

  	
  Shares

  	
   

  
	
  Name and address

  	
   

  	
  BFH

  	
   

  	
  Option

  	
   

  	
  to be Retained

  	
   

  
	
  of Purchaser

  	
   

  	
  Options Exercised

  	
   

  	
  Exercise Price

  	
   

  	
  in the Merger

  	
   

  
	
  Donald E. Roland

  	
   

  	
  52,003 Options with a
  strike price of $2.33/share

  	
   

  	
  $2.33 per share times
  52.003 options = $126,167.00

  	
   

  	
  52,003 Shares at $31.50
  each = $1,638,094.50

  	
   

  

 

13Exhibit 10.4

 

AMENDED AND
RESTATED MANAGEMENT SUBSCRIPTION AGREEMENT

 

 

This AMENDED AND RESTATED
MANAGEMENT SUBSCRIPTION AGREEMENT (this “Agreement”), dated as of August 31, 2003, by and among
Vertis Holdings, Inc., formerly known as Big Flower Holdings Inc., a
Delaware corporation (the “Company”), Thomas H. Lee Equity Fund IV, L.P. (the “Sponsor”)
and Donald E. Roland (the “Executive”), who is presently an officer, member of
management or key employee of the Company.

 

WHEREAS, the Company, the Sponsor and the Executive
desire to enter into this Agreement to amend and restate the Management
Subscription Agreement dated as of November 24, 1999, (the “Original
Agreement”), and to otherwise govern certain of their rights, duties and
obligations with respect to certain Rights (as hereinafter defined) and Shares
(as hereinafter defined);

 

WHEREAS, pursuant to the Original Agreement, the
Executive was issued shares (the “Shares”) of common stock, $.01 par value, of
the Company (the “Common Stock”) and/or rights to receive Common Stock of the
Company (the “Rights”), subject to the terms and conditions of the Original
Agreement;

 

WHEREAS, the Company previously issued Shares and
Rights to certain other officers, members of management and key employees of
the Company and certain of its subsidiaries (the “Other Executives”);

 

WHEREAS, this Agreement does not alter in any way the
original purchase of Shares, if any, and grant of Rights, if any, pursuant to
the Original Agreement, but does alter certain rights, duties and obligations
with respect thereto;

 

WHEREAS, this Agreement is one of several Amended and
Restated Management Subscription Agreements (such Amended and Restated
Management Subscription Agreements with the Other Executives, the “Other
Executives’ Agreements”), that have been and are being entered into by the
Company with the Executive and the Other Executives.

 

NOW,
THEREFORE, in
consideration of the mutual representations, warranties, covenants and
agreements contained herein, the parties hereto agree as follows:

 

ARTICLE I

 

CERTAIN
DEFINITIONS

 

As used in this Agreement,
the following terms shall have the meanings ascribed to them below:

 

 

Affiliate. The term “Affiliate” shall mean a Person
that directly, or indirectly through one or more intermediaries, controls, or
is controlled by, or is under common control with, the Person specified.

 

Agreement. The term “Agreement” shall have the meaning
ascribed to it in the preamble hereto.

 

Beneficial Ownership. The terms “beneficial ownership,” “beneficially owns” “beneficial
owner” and the like shall have the meaning ascribed to it in Rule 13d-3
promulgated under the Securities Exchange Act of 1934, as amended.

 

Business Day. The term “Business Day” shall mean any day
except a Saturday, Sunday or other day on which commercial banks in New York
City are authorized or required by law to close.

 

Call Closing. The term “Call Closing” shall have the
meaning ascribed to it in Section 5.1(b).

 

Common Stock. The term “Common Stock” shall have the
meaning ascribed to it in the second “Whereas” clause.

 

Company. The term “Company” shall have the meaning
ascribed to it in the preamble hereto.

 

Disability. The term “Disability” of the Executive
shall have the meaning ascribed to it in the Employment Agreement, or if no
such agreement is then in effect, as determined by the Board of Directors of
the Company.

 

Drag-Along Notice. The term “Drag-Along Notice” shall have the
meaning ascribed to it in Section 7.4(b).

 

Drag-Along Notice Period. The term “Drag-Along Notice Period” shall
have the meaning ascribed to it in Section 7.4(b).

 

Drag-Along Portion. The term “Drag-Along Portion” shall have
the meaning ascribed to it in Section 7.4(a).

 

Drag-Along Rights. The term “Drag-Along Rights” shall have the
meaning ascribed to it in Section 7.4(a).

 

Drag-Along Sale. The term “Drag-Along Sale” shall have the
meaning ascribed to it in Section 7.4(a).

 

Drag Shares. The term “Drag Shares” shall have the
meaning ascribed to it in Section 7.4(a).

 

2

 

Employment Agreement. The term “Employment Agreement” shall mean
the employment agreement by and among Vertis, the Company, and the Executive,
dated as of August 31, 2003.

 

Exchange. The term “Exchange” shall mean the
principal stock exchange, including the NASDAQ Stock Market, on which the
Common Stock is listed or approved for listing, if any.

 

Executive. The term “Executive” shall have the meaning
ascribed to it in the preamble hereto.

 

Executive’s Group. The term “Executive’s Group” shall have the
meaning ascribed to it in Section 5.1(a).

 

Fair Market Value. The term “Fair Market Value” used in
connection with the value of the Securities shall mean, with respect to such
Securities, the fair market value thereof as determined by the Board of
Directors of the Company in its reasonable discretion after considering any
valuations of the Company or any subsidiary of the Company which have been
received by the Company or any subsidiary of the Company or the trustee of any
benefit plan of the Company or any subsidiary of the Company; provided,
however, that if there is a Minimum Public Float, the term “Fair Market
Value” shall mean the average of the daily closing prices, or the average of
the daily bid and asked prices (as the case may be), per share of Common
Stock for the 20 trading days immediately preceding the date upon which Fair
Market Value is determined.

 

Liquidation Event. The term “Liquidation Event” shall mean (1) a
public offering of the Common Stock registered pursuant to the Securities Act
where there is a Minimum Public Float immediately following such offering, (2) a
merger or other business combination or recapitalization whereby the Common
Stock is exchanged for cash and/or publicly traded equity or debt securities in
another entity or a combination of cash and other non-publicly traded equity or
debt securities where cash constitutes at least a majority of the consideration
to be received in such merger, business combination or recapitalization or (3) a
sale or other disposition of all or substantially all of the Company’s assets
to another entity, for cash and/or publicly traded equity or debt securities of
another entity or a combination of cash and other non-publicly traded equity or
debt securities where cash constitutes at least a majority of the proceeds of
such sale or disposition, in each case, other than to the Company, any
subsidiary of the Company, or any entity controlled by the ultimate control
Persons of the Company,

 

Minimum Public Float. The term “Minimum Public Float” shall mean
the circumstances existing when (i) the consummation of one or more public
offerings registered pursuant to the Securities Act of shares of Common Stock
if, upon such consummation, the aggregate number of shares of Common Stock held
by the public, not including Affiliates of the Company, represents at least 20%
of the total number of outstanding shares of Common Stock at the time of such
public offering and (ii) the Common Stock is listed on an Exchange.

 

3

 

Original Agreement. The term “Original Agreement” shall have
the meaning ascribed to it in the first “Whereas” clause.

 

Other Executives. The term “Other Executives” shall have the
meaning ascribed to it in the third “Whereas” clause.

 

Other Executives’ Agreements. The term “Other Executives’ Agreements”
shall have the meaning ascribed to it in the fifth “Whereas” clause.

 

Other Key People.
The term “Other Key People” shall mean the officers, members of management, key
employees of the Company and certain of its subsidiaries.

 

Participants. The term “Participants” shall have the
meaning ascribed to it Section 7.1(c).

 

Permitted Transferee. The term “Permitted Transferee” shall have
the meaning ascribed to it in Section 4.2.

 

Person. The term “Person” shall mean any
individual, group, corporation, limited liability company, partnership, trust,
unincorporated organization or government or political department or agent
thereof or other entity.

 

Principal Beneficial Owners. The term “Principal Beneficial Owners”
shall mean the Sponsor, CLI/THLEF TV Vertis LLC, Evercore Capital Partners
L.P., CLI Associates LLC, J.P. Morgan Partners (BHCA), L.P., Wachovia Capital
Partners, LLC (formerly First Union Capital Partners, LLC), and Cadogan
Capital, LLC and their respective Affiliates and successors.

 

Pro-Rata Portion. The term “Pro-Rata Portion” shall have the
meaning ascribed to it in Section 7.1.

 

Rights. The term “Rights” shall have the meaning
ascribed to it in the second “Whereas” clause.

 

SEC. The term “SEC” shall mean the Securities
and Exchange Commission or any successor thereto.

 

Securities Act. The term “Securities Act” shall mean the
Securities Act of 1933, as amended, and all rules and regulations
promulgated hereunder.

 

Securities. The term “Securities” shall mean the Rights
(and any shares of Common Stock issued upon exercise of the Rights) and the
Shares.

 

Shares. The term “Shares” shall have the meaning
ascribed to it in the second “Whereas” clause.

 

Small Transfer. The term “Small Transfer” shall have the
meaning ascribed to it in Section 7.l(a).

 

4

 

Sponsor. The term “Sponsor” shall have the meaning
ascribed to it in the preamble hereto.

 

Tag-Along Notice. The term “Tag-Along Notice” shall have the
meaning ascribed to it in Section 7.1(b)(i).

 

Tag-Along Portion. The term “Tag-Along Portion” shall have the
meaning ascribed to it in Section 7.1(c).

 

Tag-Along Response Notice. The term “Tag-Along Response Notice” shall
have the meaning ascribed to it in Section 7.1 (c).

 

Tag-Along Response Notice
Period. The term “Tag-Along
Response Notice Period” shall have the meaning ascribed to it in Section 7.1(c).

 

Tag-Along Right. The term “Tag-Along Right” shall have the
meaning ascribed to it in Section 7.1(c).

 

Tag-Along Sale. The term “Tag-Along Sale” shall have the
meaning ascribed to it in Section 7.1 (a).

 

Tag Shares.
The term “Tag Shares” shall have the meaning ascribed to it in Section 7.l(b)(ii).

 

Third Party. The term “Third Party” shall mean any Person or entity excluding each
of the following: (a) the Executive, the Other Executives and their
respective Permitted Transferees; (b) the Company, and its subsidiaries or
Affiliates; and (c) the Principal Beneficial Owners.

 

Transfer. The term “Transfer” shall mean any sale,
transfer, assignment, pledge, hypothecation, encumbrance or other disposition.

 

Trust. The term “Trust” shall have the meaning
ascribed to it in Section 7.5.

 

Vertis. The
term “Vertis” shall mean Vertis Inc., a Delaware corporation.

 

ARTICLE II

 

PURCHASE OF
SHARES AND GRANT OF RIGHTS IN

ORIGINAL AGREEMENT

 

Section 2.1           No Alteration of Original
Purchase or Grant. Nothing
in this Agreement shall be deemed to alter, change or nullify any purchase of
Shares or any grant of Rights under Section 2 of the Original Agreement,
which purchase and/or grant has already occurred. Each Right shall entitle the
Executive to one share of Common Stock upon the occurrence of a Liquidation
Event, or as otherwise provided herein. The Executive acknowledges and agrees that
the Trust is an irrevocable trust, the assets of

 

5

 

which
are subject to the claims of the Company’s creditors. The Executive shall have
no security interest in the Trust or its assets and shall have the status of an
unsecured creditor of the Company with respect to the Company’s obligation to
issue the shares of Common Stock upon the occurrence of a Liquidation Event.
The shares of Common Stock deposited in the Trust are issued and outstanding as
of the date hereof and are beneficially owned by the Trust. Until the
occurrence of a Liquidation Event, or as otherwise provided herein, all actions
with respect to the shares of Common Stock deposited in the Trust, including,
without limitation, the voting thereof, will continue to be performed solely by
the Trust, without any communication with, notice to, or approval of the holder
of the Rights.

 

Section 2.2           No Redemption
Upon Exchange Offer. Section 2.1(d) of the Original
Agreement is hereby revoked, and no rights granted thereby shall survive the
date of this Agreement.

 

Section 2.3           Representations and
Warranties in Original Agreement. Nothing in this Agreement shall be deemed to alter, change or nullify
the representations and warranties of the Executive made in Sections 2.4, 3.1
and 3.2 of the Original Agreement with respect to the purchase of Shares, if
any, and the grant of Rights, if any, under the Original Agreement. Nothing in
this Agreement shall be deemed to alter, change or nullify the representations
and warranties of the Company made in Section 2.3 of the Original
Agreement with respect to the purchase of Shares, if any, and the grant of
Rights, if any, under the Original Agreement.

 

ARTICLE III

 

REPRESENTATIONS
AND WARRANTIES

 

Section 3.1           Representations and
Warranties of the Company. The Company
represents and warrants to the Executive that the Company has full corporate
power and authority to execute and deliver this Agreement and to perform its
obligations hereunder, and this Agreement is a valid and binding obligation of
the Company enforceable against the Company in accordance with its terms,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, liquidation, reorganization, moratorium and other laws affecting
the rights of creditors generally and subject to the exercise of judicial
discretion in accordance with general principles of equity (whether applied by
a court of law or equity).

 

Section 3.2           Representations and
Warranties of the Executive. The Executive represents and warrants to the
Company that the Executive has all requisite power and authority to enter into
this Agreement, and to perform the obligations required to be performed by
the Executive hereunder, and this Agreement is a valid and binding obligation of
the Executive enforceable against the Executive in accordance with its terms,
except as such enforceability may be limited by applicable law and subject
to the exercise of judicial discretion in accordance with general principles of
equity (whether applied by a court of law or equity).

 

6

 

ARTICLE IV

 

RESTRICTIONS
ON TRANSFER

 

Section 4.1           General Restrictions on
Transfer. Except as
permitted by Section 4.2 or Articles V and VII hereof, the Executive
agrees that until a Liquidation Event occurs, neither the Executive nor any of
the Executive’s Permitted Transferees will Transfer all or any portion of the
Securities. Prior to recognizing or permitting any Transfer permitted by the
provisions of this Agreement, the Company may (in its sole discretion)
require the Executive or the Executive’s Permitted Transferee, as the case may be,
to deliver such opinions of counsel and other documents as the Company deems
necessary or appropriate in connection with such proposed Transfer. No Transfer
of Securities in violation of this Agreement shall be made or recorded on the
books of the Company and any such Transfer shall be void and of no effect.

 

Section 4.2           Certain Permitted Transfers
of Securities.

 

(a)                                  The provisions of Section 4.1 shall not
apply to any Transfers of Securities made (i) pursuant to or in connection
with a registered public offering with respect to which there is in effect a
registration statement under the Securities Act covering such proposed Transfer
and such Transfer is made in accordance with such registration statement, (ii) in
accordance with Rule 144 promulgated under the Securities Act or (iii) after
the occurrence of a Liquidation Event.

 

(b)                                 The provisions of Section 4.1 shall not
apply to the following Transfers by an Executive; provided, however,
that no Transfer of Securities pursuant to this Section 4.2 (other than a
Transfer to the Company) shall be given effect on the books of the Company
unless and until such Permitted Transferee executes an agreement in writing with
the parties hereto pursuant to which he, she, or it agrees to be bound by all
of the terms and conditions of this Agreement to the same extent as the parties
hereto; provided, further, that no Transfer will be permitted if
the Company determines that, in its sole discretion, such Transfer is, or is
reasonably likely to be, in violation of applicable federal or state securities
laws:

 

(i)                                     a Transfer made to an Affiliate of the
Company or an Affiliate of any subsidiary of the Company;

 

(ii)                                  a Transfer upon the death of the Executive to
the Executive’s executors, administrators, testamentary trustees, legatees or
beneficiaries;

 

(iii)                               a Transfer to a trust, the beneficiaries of which include only the
Executive and the Executive’s spouse, siblings, or direct lineal ancestors or
descendants;

 

(iv)                              a Transfer made as a gift to the Executive’s spouse or lineal
descendants; or

 

7

 

(v)                                 a Transfer made pursuant to a court order in
connection with a divorce proceeding.

 

The transferee in each of the subclauses (i) through
(v) above is referred to herein as a “Permitted Transferee.”
Notwithstanding anything to the contrary in this Agreement, no Transfer made to
the Company, any subsidiary of the Company or the Sponsor shall be subject to
any restriction on transfer contained herein, so long as any such Transfer is
made in accordance with all applicable federal and state securities laws and
does not violate any contractual agreement in effect at the time of such
Transfer.

 

Section 4.3           Rule 144. If any Securities held by the Executive are
disposed of in accordance with Rule 144 under the Securities Act or
otherwise, the Executive shall deliver to the Company at or prior to the time
of such disposition such documentation as the Company may reasonably
request in connection with such sale and, in the case of a disposition in
accordance with Rule 144, an executed copy of Form 144 required to be
filed with the SEC (if required by Rule 144).

 

Section 4.4           Discharge of Indebtedness
Upon Transfer of Securities. Any
Transfer of Securities by the Executive or the Executive’s Permitted
Transferees, if any, shall be void and of no effect unless and until all
outstanding indebtedness of the Executive and the Executive’s Permitted
Transferees to, or guaranteed by, the Company or any of its subsidiaries or
Affiliates (including interest accrued but unpaid thereon and all other fees,
expenses and penalties payable in connection therewith) shall have been paid
and discharged in full and evidence of same, reasonably acceptable to the
Company, is presented by the Executive to the Company.

 

Section 4.5           Legend.

 

(a)                                  Each certificate representing the Shares and
the shares of Common Stock issued upon exercise of the Rights, if any, and any
certificates representing the Rights shall bear substantially the following
legends:

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT
BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, HYPOTHECATED, ENCUMBERED OR OTHERWISE
DISPOSED OF UNLESS SUCH SALE,
TRANSFER, ASSIGNMENT, PLEDGE, HYPOTHECATION, ENCUMBRANCE OR OTHER DISPOSITION
COMPLIES WITH THE PROVISIONS OF THAT CERTAIN AMENDED AND RESTATED MANAGEMENT  SUBSCRIPTION
AGREEMENT DATED AS OF AUGUST 31, 2003, AS SUCH AGREEMENT MAY BE
AMENDED FROM TIME TO TIME (A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE
COMPANY AND WHICH WILL BE MAILED TO A STOCKHOLDER WITHOUT CHARGE PROMPTLY AFTER
RECEIPT BY THE COMPANY OR ANY SUCCESSOR THERETO OF A WRITTEN REQUEST THEREFOR
FROM SUCH STOCKHOLDER).

 

THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON
TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR

 

8

 

RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE
STATE SECURITIES LAWS, PURSUANT TO REGISTRATION THEREUNDER OR EXEMPTION
THEREFROM.

 

(b)                                 A notation shall be made in the appropriate
records of the Company indicating that the Securities are subject to
restrictions on transfer and, if the Company should at some time in the future
engage the service of a securities transfer agent, appropriate stop-transfer
instructions will be issued to such transfer agent with respect to the
Securities.

 

ARTICLE V

 

CERTAIN
SALES UPON TERMINATION OF EMPLOYMENT

 

Section 5.1           Call. (a) Subject to Section 5.1(b), if
the Executive’s employment with the Company or an Affiliate of the Company is
terminated by either the Executive or the Company for any reason other than
Disability or death of the Executive, the Company may elect, subject to
the terms and conditions contained herein, to purchase any or all of the
Securities then held by the Executive and the Executive’s Permitted
Transferees, if any, (hereinafter sometimes collectively referred to as the “Executive’s
Group”), in accordance with the provisions of Section 5.2.

 

(b)                                 If the Company determines to purchase any
Securities pursuant to this Section 5.1, the Company shall, not later than
180 days after the date of such termination of employment, deliver to the
Executive and the Executive’s Permitted Transferees, if any, written notice of
its intention to purchase some or all of the Securities pursuant to this Section 5.1,
specifying the number of Securities to be so purchased and the purchase price
to be paid therefor (as described in Section 5.2). The closing of the
purchase (the “Call Closing”) shall take place at the principal office of the
Company within 10 days after the delivery of such notice. At the Call Closing (i) the
Executive and the Executive’s Permitted Transferees, as the case may be, shall
deliver the certificates evidencing the Securities, duly endorsed and assigned
to the Company or in blank, in each case with the signature guaranteed, and
take all other actions and deliver any other documents the Company, in its
reasonable judgment, shall deem necessary, and (ii) the Company shall
deliver to the Executive and the Executive’s Permitted Transferee, as the case may be,
the purchase price as determined pursuant to Section 5.2 in accordance
with the methods described in Section 6.1 hereof.

 

Section 5.2           Purchase Price to Be Paid by Company. The purchase price to be paid by the Company
upon exercise of a call right shall be the Fair Market Value of such Securities
determined as of the date the notice of such exercise is delivered; provided,
however, that if the Executive is terminated for Cause (as such term is
defined in the Executive’s employment agreement with the Company in effect at
such time or, if no such agreement is in effect or if such term is undefined in
such agreement, as determined by the Board of Directors of the Company), then
the purchase price to be paid by the Company shall be the lesser of the Fair
Market Value and the original cost of such Securities paid by the Executive.

 

9

 

Section 5.3           Obligation to Sell. If there is more than one member of the
Executive’s Group, the failure of any member thereof to perform its
obligations under this Article V shall not excuse or affect the
obligations of any other member thereof, and the closing of the purchases from
such other members by the Company shall not excuse, or constitute a waiver of
its rights against, the defaulting members. The Company reserves its rights to
take all action necessary to cause the defaulting members to perform its
obligations under this Article V and the Executive hereby acknowledges the
Company’s right to have the provisions of this Agreement specifically
performed. If the defaulting member fails to timely perform its
obligations under this Article V, the Company shall cause the books and
records of the Company to show that such Securities are subject to the
provisions of this Article V and that such Securities shall be Transferred
to the Company immediately upon surrender for Transfer by the holder thereof.

 

ARTICLE VI

 

PAYMENT FOR
SECURITIES

 

Section 6.1           Payment for Securities. The purchase price in respect of Securities
purchased by the Company pursuant to Section 5.1 shall be paid (i) first
by the cancellation of any indebtedness (including, without limitation, accrued
but unpaid interest thereon) owing from the Executive and/or his Permitted
Transferees to the Company or any of its subsidiaries or Affiliates and (ii) then
by the Company’s delivery of a bank cashier’s check or certified check for the
remainder of the purchase price, if any. The Company shall have the right set
forth in clause (i) in the preceding sentence whether or not the member of
the Executive’s Group selling such Securities is an obligor under any of the
indebtedness referred to therein.

 

ARTICLE VII

 

TAG-ALONG
RIGHTS AND DRAG-ALONG RIGHTS

 

Section 7.1           Tag-Along Rights. (a) If the Sponsor proposes to Transfer
all or a portion of the shares of Common Stock beneficially owned by it to a
Third Party which would not be an Affiliate of the Sponsor immediately upon
consummation of such Transfer, and the Sponsor does not exercise its Drag-Along
Rights in accordance with Section 7.4 (a “Tag-Along Sale”), the Sponsor
shall cause the Executive and the Executive’s Permitted Transferees to have the
option to exercise its rights under this Section 7.1, provided,
however, that the Executive and the Executive’s Permitted Transferees, if
any, shall have no rights under this Section 7.1 if the shares of Common
Stock to be Transferred in such transaction and any shares of Common Stock
which have been Transferred to any Third Party within a 90-day period preceding
the date of such Transfer have, in the aggregate, a Fair Market Value less than
ten million dollars ($10,000,000) (a “Small Transfer”), and provided, further,
that when the cumulative Fair Market Value of all such Small Transfers, the
value to be calculated at the time of each such Transfer, exceeds fifty million
dollars ($50,000,000), the restrictions provided for in the first proviso of
this Section 7.1(a) shall no longer be in effect. Moreover, the
Executive and the Executive’s Permitted Transferees, if any, shall have no
rights under

 

10

 

this Section 7.1 with respect to any Transfer by the Sponsor of
any shares of Common Stock beneficially owned by it to any limited partner of
the Sponsor.

 

(b)                                 In the event of a proposed Tag-Along Sale:

 

(i)             the
Sponsor shall provide the Executive written notice of the terms and conditions
of such proposed Tag-Along Sale, as described in Section 7.1(c) (“Tag-Along
Notice”), at least 10 Business Days prior to the consummation of such proposed
Tag-Along Sale and offer the Executive and the Executive’s Permitted
Transferees the opportunity to participate in such Tag-Along Sale on the terms
and conditions set forth in this Section 7.1; and

 

(ii)          subject
to Section 7.1(c), the Executive and the Executive’s Permitted Transferees
shall be entitled to sell up to a Pro Rata Portion (as defined below) of its
Shares and Common Stock issued upon an exercise of the Rights, if any,
(collectively, the “Tag Shares”) at the same price and on the same terms as the
shares of Common Stock proposed to be sold by the Sponsor in such Tag-Along
Sale in accordance with the terms set forth in this Section 7.1.

 

The “Pro-Rata Portion” of the Executive’s Tag Shares
shall mean an amount of such Tag Shares equal to the product of:

 

(A)                              (x) a fraction, the numerator of which is the
number of shares of Common Stock proposed to be Transferred by the Sponsor and
its Affiliates in such Tag-Along Sale and the denominator of which is the total
number of shares of Common Stock beneficially owned by the Sponsor and its Affiliates
collectively, immediately prior to Transferring such shares of Common Stock;
or, (y) for the first Transfer after the restrictions set forth in the first
proviso of Section 7.1(a) are no longer in effect, a fraction, the
numerator of which is the number of shares of Common Stock proposed to be
Transferred by the Sponsor and its Affiliates in such Tag-Along Sale plus the
cumulative number of shares of Common Stock Transferred by the Sponsor and its Affiliates
in all Small Transfers, and the denominator of which is the total number of
shares of Common Stock beneficially owned by the Sponsor and its Affiliates collectively,
immediately prior to Transferring such shares of Common Stock plus the
cumulative number of shares of Common Stock Transferred by the Sponsor and its Affiliates
in all Small Transfers; and

 

(B)                                the total amount of Tag Shares beneficially
owned by such Executive at the time of the Tag-Along Sale.

 

11

 

(c)                                  The Tag-Along Notice shall identify the
proposed transferee, the number of shares of Common Stock to be sold by the
Sponsor in the Tag-Along Sale, the Pro Rata Portion of the Executive’s Tag
Shares which the Executive shall be entitled to Transfer in such Tag-Along
Sale, the price at which the Transfer of shares of Common Stock is proposed to
be made, and all other material terms and conditions of the proposed Tag-Along
Sale. From the date of the Tag-Along Notice, the Executive and the Executive’s
Permitted Transferees shall have the right (a “Tag-Along Right”), exercisable
by written notice (“Tag-Along Response Notice”) given by the Executive to the
Sponsor within seven Business Days from the date of the Tag-Along Notice (the “Tag-Along
Response Notice Period”), to request that the Sponsor includes in the proposed
Transfer the number of Tag Shares held by the Executive and the Executive’s
Permitted Transferees (up to their Pro Rata Portion) as is specified in such
Tag-Along Response Notice at the same price and on the same terms and
conditions set forth in the Tag Along Notice; provided, however,
that if the aggregate number of shares of Common Stock proposed to be sold by (i) the
Sponsor, (ii) the Executive and the Executive’s Permitted Transferees, (iii) Other
Executives and their permitted transferees giving tag-along notices similar to
the Tag-Along Notice during such period prescribed in Other Executives’
Agreements and (iv) any other Persons entitled to give (and giving on a
timely basis) tag-along notices similar to the Tag-Along Notice pursuant to
agreements substantially similar to this Agreement, including those certain
Option Transfer Agreements between the Company, the Sponsor, and the Executive
or Other Key People, as amended, and those certain Retained Share Agreements
between the Company, the Sponsor and the Executive or Other Key People, as
amended, (the persons identified in subclauses (i). (ii), (iii) and (iv) of
this subsection, collectively, the “Participants”), in such Tag-Along Sale
exceeds the number of shares of Common Stock which can be sold on the terms and
conditions set forth in the Tag-Along Notice, then only the Tag-Along Portion
of shares of Common Stock beneficially owned by the Executive shall be sold
pursuant to the Tag-Along Sale. “Tag-Along Portion” means, with respect to the
Executive and the Executive’s Permitted Transferees, the number of shares of Common
Stock beneficially owned by the Executive and the Executive’s Permitted
Transferees on the date of the Tag-Along Notice multiplied by a fraction, the
numerator of which is the maximum number of shares of Common Stock which can be
sold in the Tag-Along Sale and the denominator of which is the aggregate number
of shares of Common Stock beneficially owned by the Participants, collectively.

 

(d)                                Delivery of a Tag-Along Response Notice by the Executive to the Sponsor
pursuant to Section 7.1(c) shall constitute an irrevocable election
by the Executive and the Executive’s Permitted Transferees, if any, to sell the
number of Tag Shares beneficially owned by it or them as is specified in such
Tag-Along Response Notice in such Tag-Along Sale. If, at the end of a 90 day
period after such delivery, the Tag-Along Sale has not been consummated on
substantially the same terms and conditions set forth in the Tag-Along Notice,
all restrictions on Transfers of Tag Shares contained in this Agreement or
otherwise applicable at such time with respect to Tag Shares owned by the Executive
and the Executive’s Permitted Transferees shall again be in effect,

 

(e)                                  If at the termination of the Tag-Along
Response Notice Period the Executive and the Executive’s Permitted Transferees,
if any, shall not have exercised its

 

12

 

or
their Tag-Along Right by providing the Sponsor with a Tag-Along Response
Notice, such Executive and such Executive’s Permitted Transferees shall be
deemed to have waived its or their Tag-Along Right with respect to Transferring
its or their Tag Shares pursuant to such Tag-Along Sale.

 

(f)     The Sponsor may sell, on behalf of the
Executive and the Executive’s Permitted Transferees, if the Executive and the
Executive’s Permitted Transferees, if any, exercises its or their Tag-Along
Right pursuant to this Section 7.1, the shares of Common Stock entitled to
be Transferred in the Tag-Along Sale on the terms and conditions set forth in
the Tag-Along Notice within 90 days of the date on which Tag-Along Rights shall
have been waived or exercised.

 

Section 7.2           Limitation of Rights
Following Termination of Employment. Notwithstanding any other provision of this Agreement, upon the
termination of the Executive’s employment with the Company or any of its
subsidiaries for Cause (as such term is defined in the Employment Agreement),
or if the Executive terminates employment with the Company or any of its
subsidiaries without Good Reason (as such term is defined in the Employment
Agreement), the Executive and the Executive’s Permitted Transferees shall have
no rights under Section 7.1. In the case of any other termination of the
Executive’s employment, the Executive and the Executive’s Permitted Transferees
shall continue to have the rights specified in Section 7.1.

 

Section 7.3           Termination of Tag-Along
Rights Notwithstanding
anything to the contrary, the provisions of Section 7.1 shall not be
applicable if the Common Stock is publicly traded on an Exchange and there
exists a Minimum Public Float.

 

Section 7.4           Drag-Along Rights. (a) If the Sponsor and its Affiliates
propose to Transfer all or any portion of the shares of Common Stock
beneficially owned by them to a Third Party (a “Drag-Along Sale”),

 

(i)             the
Executive and the Executive’s Permitted Transferees shall, at the Sponsor’s
option and in the Sponsor’s sole discretion, upon the Executive’s receipt of
written notice from the Sponsor, sell the Drag-Along Portion of such Executive’s
Shares to such Third Party; and

 

(ii)          (subject
to, and at the closing of the Drag-Along Sale) the Executive shall, at the
Sponsor’s option and in the Sponsor’s sole discretion, upon the Executive’s
receipt of written notice from the Sponsor, exercise that portion of his Rights
which constitute the Drag-Along Portion and sell all of the Common Stock
received upon such exercise to such Third Party;

 

(the
Shares and Common Stock referred to in subclauses (i) and (ii) of
this subsection, collectively, the “Drag Shares”) for the same consideration
and otherwise on the same terms and conditions on which the Sponsor and its
Affiliates sell their shares of Common Stock in such Drag-Along Sale (the “Drag-Along
Rights”).

 

13

 

The
“Drag-Along Portion” of an Executive’s Drag Shares means, at any time, the
number of Drag Shares beneficially owned by such Executive and the Executive’s
Permitted Transferees after any compelled exercise of Rights, multiplied by a
fraction, the numerator of which is the number of shares of Common Stock
proposed to be sold on behalf of the Sponsor in such Drag-Along Sale and the
denominator of which is the total number of shares of Common Stock then
beneficially owned by the Sponsor. In the event the Drag-Along Sale is not
consummated with respect to any shares acquired upon exercise of Rights, such
Rights shall be deemed not to have been exercised or cancelled, as applicable.

 

(b)                                 The Sponsor shall provide written notice of
such Drag-Along Sale to the Executive (a “Drag-Along Notice”) not less than 20
days prior to the consummation of such proposed Drag-Along Sale which notice
shall state that the Sponsor proposes to effect a Transfer of a certain number
of shares of Common Stock, the number of shares of Common Stock proposed to be
Transferred, the purchase price, the proposed transferee, the number of Drag
Shares which the Executive is required to Transfer in such Drag-Along Sale
(based on the methodology set forth in Section 7.4(a)), and all other material
terms and conditions of the Drag-Along Sale. Subject to Section 7.4(c),
the Executive shall be required to participate in the Drag-Along Sale on the
terms and conditions set forth in the Drag-Along Notice. Not later than the
tenth day following the date of the Drag-Along Notice (the “Drag-Along Notice
Period”), the Executive shall deliver to a representative of the Sponsor
designated in the Drag-Along Notice certificates representing all the Drag
Shares beneficially owned and held by the Executive, duly endorsed, together
with all other documents required to be executed in connection with such
Drag-Along Sale, or, if such delivery is not permitted by applicable law, an
unconditional agreement to deliver such Drag Shares pursuant to this Section 7.4
at the closing for such Drag-Along Sale against delivery to the Executive of
the consideration therefor. If the Executive should fail to deliver such
certificates to the Sponsor in a Drag-Along Sale pursuant to this Section 7.4,
the Company shall cause the books and records of the Company to show that such
shares of Common Stock are bound by the provisions of this Section 7.4 and
that such shares of Common Stock shall be Transferred to the purchaser of the
shares of the Common Stock immediately upon surrender for Transfer by the
holder thereof.

 

(c)                                 The Sponsor shall have a period of 90 days
from the date of the Drag-Along Notice to consummate the Drag-Along Sale on the
terms and conditions set forth in such Drag-Along Sale Notice. If the
Drag-Along Sale shall not have been consummated during such period, the Sponsor
shall return to the Executive all certificates representing Drag Shares that
such Executive delivered for Transfer pursuant hereto, together with any documents
in the possession of the Sponsor executed by the Executive in connection with such
proposed Transfer, and the Drag-Along Notice shall be deemed to be cancelled
and this Agreement will remain in full force and effect in accordance with its
terms.

 

Section 7.5           Responsibilities of Executive. The delivery of any notices to, and the
obtaining of any consents from, any Permitted Transferee with respect to any
provision of this Agreement, including, but not limited to, Sections 7.1 and
7.4, shall be the sole responsibility of the Executive, unless otherwise agreed
to in writing between

 

14

 

such
Permitted Transferee and the Sponsor. Neither the Company nor the Sponsor shall
be liable to any Permitted Transferee for the Executive’s failure to deliver a
notice to, or obtain a consent from, any Permitted Transferee with respect to
any provision of this Agreement, including, but not limited to, Sections 7.1
and 7.4. In the event that the terms of this Agreement require the delivery of
Rights which are held in trust (the “Trust”) pursuant to the Big Flower
Holdings, Inc. Rights Trust Agreement, dated as of December 7, 1999,
by and between Big Flower Holding, Inc. and The Chase Manhattan Bank, the
Executive shall cooperate with the Company to effect the release of the shares
of Common Stock issuable upon exercise of such Rights from the Trust in order
that they may delivered in accordance with the terms hereof.

 

Section 7.6           Sales to Principal
Beneficial Owners. The
Sponsor and its Affiliates shall not Transfer all or any portion of the shares
of Common Stock beneficially owned by them to a Principal Beneficial Owner,
other than an Affiliate of the Sponsor, unless such Principal Beneficial Owner
agrees to be bound by this Article VII as if it were the Sponsor. To the
extent that the Sponsor and its Affiliates Transfer any shares of Common Stock
to a Principal Beneficial Owner other than an Affiliate of the Sponsor, the
Executive and the Executive’s Permitted Transferees agree that such Principal
Beneficial Owner shall receive the benefits set forth in Sections 7.4 and 7.5
hereof as if such Principal Beneficial Owner were the Sponsor.

 

ARTICLE VIII

 

MISCELLANEOUS

 

Section 8.1           State Securities Laws. The Company hereby agrees to use commercially
reasonable efforts to comply with all state securities or “blue sky” laws which
might be applicable to the sale of the Securities by the Company to the
Executive pursuant to this Agreement.

 

Section 8.2           Binding Effect. The provisions of this Agreement shall be
binding upon the parties hereto and their respective heirs, legal
representatives, successors and assigns; provided, however, that the Executive
and the Executive’s Permitted Transferees shall not assign any rights hereunder
except as specifically permitted by the terms of this Agreement. The Company may assign
its rights under the call contained in Section 8.1 to any of its
subsidiaries or Affiliates, or to the Principal Beneficial Owners of the
Company or any of their Permitted Transferees, provided that no such assignment
shall release the Company from its obligations hereunder. Neither this
Agreement nor any purchase or sale of Securities pursuant hereto shall create,
or be construed or deemed to create, any right to employment or continued
employment in favor of the Executive or any other Person by the Company or any
subsidiary or Affiliate of the Company.

 

Section 8.3           Severability. The invalidity, illegality or
unenforceability of one or more of the provisions of this Agreement in any
jurisdiction shall not affect the validity, legality or enforceability of the
remainder of this Agreement in such jurisdiction or the validity, legality or
enforceability of this Agreement, including any such provision,

 

15

 

in
any other jurisdiction, it being intended that all rights and obligations of
the parties hereunder shall be enforceable to the fullest extent permitted by
law.

 

Section 8.4           Recapitalizations,
Exchanges, Etc., Affecting Common Stock. The provisions of this Agreement shall apply, to the full extent set
forth herein with respect to the Securities, to any and all shares of capital
stock of the Company or any successor or assign of the Company (whether by
merger, consolidation, sale of all or substantially all of the assets of the
Company or otherwise) which may be issued in respect of, in exchange for,
or in substitution of the Securities, by reason of any stock dividend, stock
split, stock issuance, reverse stock split, combination, recapitalization,
reclassification, merger, consolidation, conversion or otherwise.

 

Section 8.5           Amendment. This Agreement may be amended only by a
written instrument duly signed by the Company, the Sponsor, and the Executive.

 

Section 8.6           Notices. All notices and other communications provided
for herein shall be dated and in writing and shall be deemed to have been duly
given when delivered, if delivered personally or sent by registered or
certified mail, return receipt requested, postage prepaid and when received if
delivered otherwise, to the party to whom it is directed:

 

(a)                    If to the Company, to it at the following address:

 

250 W. Pratt Street, 18th Floor

Baltimore, Maryland 21201

Attention: General Counsel

Fax No.: (410)528-9287

 

with a copy to Sponsor, at the address set forth in Section 8.6(c).

 

(b)                   If to the Executive or any of the Executive’s Permitted Transferees, to
the Executive at the address set forth on the signature page hereof;

 

(c)                    If to the Sponsor, to it at the following address:

 

Thomas H. Lee Equity Fund IV, L.P.

c/o Thomas H. Lee Company

75 State Street, Suite 2600

Boston, MA 02109

Fax No.: (617)227-3514

 

or at such other address as the parties hereto shall
have specified by notice in writing to the other parties (provided, that
such notice of change of address shall be deemed to have been duly given only
when actually received).

 

Section 8.7           Applicable Law. The laws of the State of Delaware shall
govern the interpretation, validity and performance of the terms of this
Agreement, regardless of the law that might be applied under Delaware’s
principles of conflicts of law.

 

16

 

Section 8.8           Consent to Jurisdiction. The Executive hereby irrevocably submits to
the jurisdiction of any New York state court sitting in the City of New York or
any federal court sitting in the City of New York in respect of any suit,
action or proceeding arising out of or relating to this Agreement, and
irrevocably accepts for the Executive and in respect of the Executive’s
property, generally and unconditionally, jurisdiction of the aforesaid courts.
The Executive irrevocably waives, to the fullest extent the Executive may effectively
do so under applicable law, trial by jury and any objection that the Executive may now
or hereafter have to the laying of the venue of any such suit, action or
proceeding brought in any such court and any claim that any such suit, action
or proceeding brought in any such court has been brought in an inconvenient
forum. Nothing herein shall affect the right of the Company to serve process in
any manner permitted by law or to commence legal proceedings or otherwise
proceed against Executive in any other jurisdiction.

 

Section 8.9           Integration. This Agreement, and the documents referred to
herein or delivered pursuant hereto which form a part hereof contain
the entire understanding of the parties with respect to the subject matter
hereof. There are no restrictions, agreements, promises, representations,
warranties, conditions, covenants or undertakings with respect to the subject
matter hereof other than those expressly set forth herein. Except as provided
in Article II hereof, this Agreement supersedes all prior agreements and
understanding between the parties with respect to its subject matter.

 

Section 8.10    Descriptive Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning of terms contained herein.

 

Section 8.11    Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed an original, but all of which shall constitute one and the same
instrument, and it shall not be necessary in making proof of this Agreement to
produce or account for more than one such counterpart.

 

Section 8.12    Rights to Negotiate. Nothing in this Agreement shall be deemed to
restrict or prohibit the Company from purchasing Securities from the Executive
or the Executive’s Permitted Transferees at any time upon such terms and
conditions and at such price as may be mutually agreed upon between the
Company and the Executive or the Executive’s Permitted Transferees, whether or
not at the time of such purchase circumstances exist which specifically grant
the Company the right to purchase shares of Securities pursuant to the terms of
this Agreement,

 

Section 8.13    Rights Cumulative; Waiver. The rights and remedies of the parties hereto
shall be cumulative and not exclusive of any rights or remedies which any party
would otherwise have hereunder or at law or in equity or by statute, and
(subject to the provisions of this Agreement regarding specific time periods within
which a right must be exercised or a notice must be given) no failure or delay
by any party in exercising any right or remedy shall impair any such right or
remedy or operate as a waiver of such right or remedy, nor shall any single or
partial exercise of any power or right preclude such party’s other or further
exercise or the exercise of any other power or

 

17

 

right.
The waiver by any party hereto of a breach of any provision of this Agreement
shall not operate or be construed as a waiver of any preceding or succeeding
breach and no failure by any party to exercise any right or privilege hereunder
shall be deemed a waiver of such party’s other rights or privileges hereunder.

 

Section 8.14    Limitation of Liability. None of the Affiliates of the Sponsor shall
have any liability to the Executive or any of the Executive’s Permitted
Transferees or the Company or any of its subsidiaries under any provision of
this Agreement. In the event of an alleged breach of this Agreement by the
Sponsor, the parties hereto acknowledge and agree that the sole remedy which may be
sought against the Sponsor shall be specific performance, provided,
however, that if the remedy of specific performance is not available, the
Executive, the Executive’s Permitted Transferees, if any, and the Company will
only seek to recover direct damages for any breach of this Agreement. The
Executive, the Executive’s Permitted Transferees, if any, and the Company agree
to waive any other remedy against the Sponsor to which they might be entitled
at law, including, but not limited to, compensatory damages, consequential
damages, continuing damages, future damages, incidental damages, punitive
damages and nominal damages. The Company shall indemnify, defend, save and hold
harmless Sponsor from and against any and all liabilities arising under,
pursuant to or in connection with this Agreement.

 

Section 8.15    Specific Performance. Each of the parties hereto acknowledges and
agrees that in the event of any breach of this Agreement, the non-breaching
party would be irreparably harmed and could not be made whole by monetary
damages. It is accordingly agreed that the parties hereto will waive the
defense in any action for specific performance that a remedy at law would be
adequate and that the parties hereto, in addition to any other remedy to which
they may be entitled at law or in equity, shall be entitled to compel
specific performance of this Agreement. The parties hereto consent to personal
jurisdiction in any such action brought in any such court in the manner set
forth in Section 8.8 hereof.

 

Section 8.16    No Other Rights. There shall be no other rights, including put rights, with respect to
the Securities, other than those described in this Agreement.

 

 

[Signature
Pages Follow]

 

18

 

IN WITNESS WHEREOF, the parties have executed this Agreement as
of the day and year first above written.

 

	
   

  	
  THE EXECUTIVE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/Donald E. Roland

  	
   

  
	
   

  	
  Donald
  E. Roland

  	
   

  
	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Telephone
  No.

  	
   

  	
   

  
	
   

  	
  Social
  Security No.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  THE COMPANY

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Vertis
  Holdings, Inc.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John V. Howard Jr.

  	
   

  
	
   

  	
  Name:

  	
  John V. Howard Jr.

  	
   

  
	
   

  	
  Title:

  	
  Jr.
  President & Secretary

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  THE SPONSOR:

  	
   

  
	
   

  	
  For
  Purposes of Articles VII and VIII only

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Thomas
  H. Lee Equity Fund IV, L.P.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Anthony J. DiNovi

  	
   

  
	
   

  	
  Name:

  	
  Anthony
  J. DiNovi

  	
   

  
	
   

  	
  Title:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00104-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00104-of-00352.parquet"}]]