Document:

EXHIBIT 10.14

 

 

$280,000,000

 

AMERICAN COLOR GRAPHICS,
INC.

 

10% SENIOR SECOND SECURED
NOTES DUE 2010

 

 

PURCHASE AGREEMENT

 

June 19, 2003

 

 

June 19, 2003

 

 

	
  Morgan Stanley & Co. Incorporated

  
	
  Banc of America Securities LLC

  
	
  Credit Suisse First Boston LLC

  
	
  c/o  Morgan
  Stanley & Co. Incorporated

  
	
  1585 Broadway

  
	
  New York, New
  York 10036

  

 

Dear Sirs and Mesdames:

 

American Color Graphics, Inc., a New York corporation
(the “Company”),
proposes to issue and sell to the several purchasers named in Schedule I hereto
(the “Initial
Purchasers”)
$280,000,000 principal amount of its 10% Senior Second Secured Notes due 2010
(the “Securities”)
to be issued pursuant to the provisions of an Indenture dated as of July, 2003
(the “Indenture”)
among the Company, ACG Holdings, Inc. (“Holdings”
or the “Guarantor”), and The Bank
of New York, as Trustee (the “Trustee”). 
The obligations of the Company under the Securities and the Indenture
will be unconditionally guaranteed on a senior basis by the Guarantor pursuant
to the terms of the Indenture (the “Guarantee”).

 

The Securities will be offered without being
registered under the Securities Act of 1933, as amended (the “Securities
Act”), to qualified institutional buyers in compliance with the
exemption from registration provided by Rule 144A under the Securities Act and
in offshore transactions in reliance on Regulation S under the Securities Act
(“Regulation S”).

 

The Initial Purchasers and their direct and indirect
transferees will be entitled to the benefits of a Registration Rights Agreement
dated the date hereof among the Company, the Guarantor and the Initial
Purchasers (the “Registration Rights Agreement”).

 

In connection with the sale of the Securities, the
Company has prepared a preliminary offering memorandum (the “Preliminary
Memorandum”) and will prepare a final offering memorandum (the “Final
Memorandum” and, with the Preliminary Memorandum, each a “Memorandum”)
including a description of the terms of the Securities, the terms of the
offering and a description of the Company and the Guarantor.  As used herein, the term “Memorandum” shall
include in each case any amendments or supplements thereto, unless otherwise
noted.

 

Pursuant to the Security Agreement (the “Security Agreement”), nine separate mortgages,
deeds of trust, leasehold mortgages or other similar instruments (collectively,
the “Mortgages”), and the Pledge Agreement (the “Pledge Agreement”), each to be dated on or about July 3, 2003,
among the Company, the Guarantor (but not as to the Mortgages and certain other
security documents to which the Guarantor is not a party), and The Bank of New
York, as collateral agent (the “Collateral
Agent”), and the other respective parties thereto, and such other
documents required to grant a perfected security interest in the property of
the Company and the Guarantor contemplated by the Indenture, the Security
Agreement and the Intercreditor Agreement (collectively, with the Security
Agreement, the Mortgages and the Pledge Agreement,

 

1

 

the “Security Documents”),
the Securities are secured by the property so described in the Security
Documents, subject to the limitations specified therein (the ”Collateral”).

 

1.        Representations
and Warranties. The Company represents and warrants to, and agrees
with, you that:

 

(a)           The Preliminary
Memorandum does not contain and the Final Memorandum, in the form used by the
Initial Purchasers to confirm sales and on the Closing Date (as defined in
Section 4), will not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, except that the representations and warranties set forth
in this paragraph do not apply to statements or omissions in either Memorandum
based upon information relating to any Initial Purchaser furnished to the
Company in writing by such Initial Purchaser through you expressly for use
therein.

 

(b)           The Company has been
duly incorporated, is validly existing as a corporation in good standing under
the laws of the jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as described in each
Memorandum and is duly qualified to transact business and is in good standing
in each jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent that the
failure to be so qualified or be in good standing would not reasonably be
expected to have a material adverse effect on the Company and its subsidiaries,
taken as a whole.

 

(c)           Each subsidiary of the
Company has been duly incorporated, is validly existing as a corporation in
good standing under the laws of the jurisdiction of its incorporation, has the
corporate power and authority to own its property and to conduct its business
as described in each Memorandum and is duly qualified to transact business and
is in good standing in each jurisdiction in which the conduct of its business
or its ownership or leasing of property requires such qualification, except to
the extent that the failure to be so qualified or be in good standing would not
reasonably be expected to have a material adverse effect on the Company and its
subsidiaries, taken as a whole; all of the issued shares of capital stock of
each subsidiary of the Company have been duly and validly authorized and
issued, are fully paid and non-assessable and are owned directly by the
Company, free and clear of all liens, encumbrances, equities or claims, except
as set forth in the Final Memorandum. 
The Company has no direct or indirect subsidiaries other than Sullivan
Marketing, Inc., American Images of North America, Inc. and Sullivan Media
Corporation, all of which are inactive.

 

(d)           Holdings has been duly
incorporated, is validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as described in each
Memorandum and is duly qualified to transact business and is in good standing
in each jurisdiction in which the conduct of its business or its ownership or
leasing of property

 

2

 

requires such qualification, except to the extent that
the failure to be so qualified or be in good standing would not reasonably be
expected to have a material adverse effect on it; all of the issued shares of
capital stock of the Company have been duly and validly authorized and issued,
are fully paid and non-assessable and are owned directly by Holdings, free and
clear of all liens, encumbrances, equities or claims, except as set forth in
the Final Memorandum.  Holdings has no
direct subsidiaries other than the Company.

 

(e)           This Agreement has been
duly authorized, executed and delivered by the Company and the Guarantor.

 

(f)            The Securities have
been duly authorized and, when executed and authenticated in accordance with
the provisions of the Indenture and delivered to and paid for by the Initial
Purchasers in accordance with the terms of this Agreement, will be valid and
binding obligations of the Company, enforceable in accordance with their terms,
subject to the effects of applicable bankruptcy, insolvency and similar laws
affecting creditors’ rights generally and equitable principles of general
applicability, and will be entitled to the benefits of the Indenture and the
Registration Rights Agreement.

 

(g)           Each of the Indenture
and the Registration Rights Agreement has been duly authorized, executed and
delivered by, and is a valid and binding agreement of, the Company and the
Guarantor, enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency or similar laws affecting creditors’ rights generally
and general principles of equity and except as rights to indemnification and
contribution under the Registration Rights Agreement may be limited by
principles of public policy or under applicable law.

 

(h)           Each of the Security
Documents has been duly authorized by the Company and (where applicable) the
Guarantor and, when executed and delivered in accordance with its terms by each
of the parties thereto, will be a valid and binding agreement of the Company
and (where applicable) the Guarantor, enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency or similar laws affecting
creditors’ rights generally and general principles of equity.

 

(i)            Each of the Security
Documents, when executed and delivered in accordance with its terms by each of
the parties thereto, will create a valid and, where applicable, upon due filing
and/or recording thereof in the proper public records and payment of all fees,
taxes and other charges payable in connection therewith, enforceable security
interest in the portion of the Collateral covered by such Security Document in
favor of the Collateral Agent for the benefit of the Trustee and the holders of
the Securities, among others, except to the extent that such enforceability may
be limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, receivership, moratorium and similar laws relating to or
affecting creditors’ rights and remedies generally and equitable principles of
general applicability (whether applied by a court of law or equity).

 

3

 

(j)            Upon the filing of all
necessary Uniform Commercial Code (“UCC”)
financing statements in the proper filing offices and all other actions
necessary to perfect a security interest in the portion of the Collateral that
is not real property, fixtures or leases and rentals (collectively, the “Real
Estate Collateral”) and in which a security interest can be perfected under
Article 9 of the UCC as in effect in the applicable jurisdictions (the “UCC Collateral”) and the obtaining of
control or possession by the Collateral Agent of that portion of the UCC
Collateral in which a security interest cannot be perfected in favor of the
Collateral Agent, for the benefit of the Trustee and the holders of the
Securities, among others, by the filing of UCC financing statements under
Article 9 of the UCC as in effect in the applicable jurisdictions but instead
can be perfected only by control or possession, the security interests in the
UCC Collateral granted to the Collateral Agent, for the benefit of the Trustee
and the holders of the Securities, among others, will constitute valid and
perfected second priority security interests securing the obligations of the
Company and (where applicable) the Guarantor under the Indenture, subject only
to Permitted Liens and other Liens expressly permitted under the
Indenture.  As of the Closing Date,
except for the filing of all necessary UCC financing statements in the proper
filing offices, all other filings and other actions necessary to perfect the
security interest in the UCC Collateral will have been duly made or taken and
will be in full force and effect.

 

(k)           Upon the recording of
the Mortgages, and the filing of all necessary UCC fixture financing
statements, in the proper recording and filing offices, the payment of all
fees, taxes and other charges payable in connection therewith, and all other
actions necessary to perfect a lien on the Real Estate Collateral in the
applicable jurisdictions, the liens on the Real Estate Collateral granted to
the Collateral Agent, for the benefit of the Trustee and the holders of the
Securities, among others, will constitute valid and perfected liens securing
the obligations of the Company under the Indenture.

 

(l)            The execution and
delivery by the Company and the Guarantor of, and the performance by the
Company and the Guarantor of its obligations under, this Agreement, the
Indenture, the Registration Rights Agreement, the Security Documents, the
Securities (in the case of the Company) and the Guarantee (in the case of the
Guarantor) will not contravene any provision of applicable law or the
certificate of incorporation or by–laws of the Company or the Guarantor
or any agreement or other instrument binding upon the Guarantor, the Company or
any of its subsidiaries that is material to the Company and its subsidiaries,
taken as a whole, or any judgment, order or decree of any governmental body,
agency or court having jurisdiction over the Guarantor, the Company or any of
its subsidiaries, and no consent, approval, authorization or order of, or
qualification with, any governmental body or agency is required for the
performance by the Company or the Guarantor of its obligations under this
Agreement, the Indenture, the Registration Rights Agreement, the Security
Documents, the Securities (in the case of the Company) or the Guarantee (in the
case of the Guarantor), except for such as may be required by the securities or
Blue Sky laws of the various states in connection with the offer and sale of
the Securities and by Federal and state securities laws with respect to the
Company’s and the Guarantor’s obligations under the Registration Rights
Agreement.

 

4

 

(m)          There has not occurred
any material adverse change, or any development involving a prospective
material adverse change, in the condition, financial or otherwise, or in the
earnings, business or operations of the Company and its subsidiaries, taken as
a whole, or of Holdings from that set forth in the Final Memorandum.

 

(n)           There are no legal or
governmental proceedings pending or, to the knowledge of the Company,
threatened to which Holdings, or any of its subsidiaries is a party or to which
any of the properties of Holdings, the Company or any of its subsidiaries is
subject other than proceedings accurately described in all material respects in
each Memorandum and proceedings that would not reasonably be expected to have a
material adverse effect on the Company and its subsidiaries, taken as a whole,
or on the power or ability of the Company and the Guarantor to perform its
obligations under this Agreement, the Indenture, the Registration Rights
Agreement, the Securities (in the case of the Company) or the Guarantee (in the
case of the Guarantor) or to consummate the transactions contemplated by the
Final Memorandum.

 

(o)           Holdings, the Company
and its subsidiaries (i) are in compliance with any and all applicable foreign,
federal, state and local laws and regulations relating to the protection of
human health and safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants (“Environmental Laws”), (ii) have received
all permits, licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (iii) are in
compliance with all terms and conditions of any such permit, license or
approval, except where such noncompliance with Environmental Laws, failure to
receive required permits, licenses or other approvals or failure to comply with
the terms and conditions of such permits, licenses or approvals would not,
singly or in the aggregate, reasonably be expected to have a material adverse
effect on the Company and its subsidiaries, taken as a whole.

 

(p)           Neither the Company nor
the Guarantor is responsible for any costs or liabilities associated with
Environmental Laws (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance with
Environmental Laws or any permit, license or approval, any related constraints
on operating activities and any potential liabilities to third parties) which
would, singly or in the aggregate, reasonably be expected to have a material
adverse effect on the Company and its subsidiaries, taken as a whole.

 

(q)           Neither the Company nor
the Guarantor is, or after giving effect to the offering and sale of the
Securities and the application of the proceeds thereof as described in the
Final Memorandum will be, required to register as an “investment company” as
such term is defined in the Investment Company Act of 1940, as amended.

 

(r)            None of the Company,
the Guarantor or any affiliate (as defined in Rule 501(b) of Regulation D under
the Securities Act, an “Affiliate”) of the Company or the Guarantor
has directly, or through any agent, (i) sold, offered for sale, solicited
offers to

 

5

 

buy or otherwise negotiated in respect of, any
security (as defined in the Securities Act) which is or will be integrated with
the sale of the Securities in a manner that would require the registration
under the Securities Act of the Securities or (ii) offered, solicited offers to
buy or sold the Securities by any form of general solicitation or general
advertising (as those terms are used in Regulation D under the Securities Act)
or in any manner involving a public offering within the meaning of Section 4(2)
of the Securities Act, except that the representations and warranties in this
paragraph do not apply to Morgan Stanley & Co. Incorporated, to the extent
that Morgan Stanley & Co. Incorporated might be deemed to be an Affiliate
of the Company.

 

(s)           None of the Company,
the Guarantor, any of their respective Affiliates or any person acting on its
or their behalf has engaged or will engage in any directed selling efforts
(within the meaning of Regulation S) with respect to the Securities and the
Company, the Guarantor and each of their respective Affiliates and any person acting
on its or their behalf have complied and will comply with the offering
restrictions requirement of Regulation S, except that the representations and
warranties in this paragraph do not apply to Morgan Stanley & Co.
Incorporated, to the extent that Morgan Stanley & Co. Incorporated might be
deemed to be an Affiliate of the Company.

 

(t)            It is not necessary in
connection with the offer, sale and delivery of the Securities to the Initial
Purchasers in the manner contemplated by this Agreement to register the
Securities under the Securities Act or to qualify the Indenture under the Trust
Indenture Act of 1939, as amended.

 

(u)           The Securities and the
Guarantee satisfy the requirements set forth in Rule 144A(d)(3) under the
Securities Act.

 

(v)           The Securities and the
Guarantee conform in all material respects to the description thereof contained
in the Final Memorandum under the heading “Description of the Notes”.

 

(w)          The Security Documents
will, as of the Closing Date, conform in all material respects to the
descriptions thereof contained in the Final Memorandum under the heading
“Description of the Notes — Collateral.”

 

(x)            Subsequent to the
respective dates as of which information is given in the Final Memorandum, (i)
none of Holdings, the Company or any of its subsidiaries has incurred any
liability or obligation, direct or contingent, that is material to Holdings and
its subsidiaries taken as a whole, nor entered into any transaction not in the
ordinary course of business that is material to Holdings and its subsidiaries
taken as a whole; –  (ii) none of
Holdings, the Company or any of its subsidiaries has purchased any of its
outstanding capital stock, nor declared, paid or otherwise made any dividend or
distribution of any kind on its capital stock other than ordinary and customary
dividends; and (iii) there has not been any material change in the capital
stock, short-term debt or

 

6

 

long-term debt of Holdings, the Company or any of its
subsidiaries, except in each case as described in the Final Memorandum.

 

(y)           Holdings, the Company
and its subsidiaries have good and marketable title to all eight real property
parcels owned by them in fee simple that are included in the Real Estate
Collateral and a valid leasehold interest in the leased plant included in the
Real Estate Collateral, in each case free and clear of all liens, encumbrances
and defects except such as are described in the Final Memorandum or such as do
not, singly or in the aggregate, have a material adverse effect on the use made
and proposed to be made of such property by Holdings and the Company or a
material adverse effect on the value of such property for the use made and
proposed to be made of such property by Holdings and the Company.  Holdings and the Company have good title to
all personal property owned by them which is material to the business of
Holdings and the Company, in each case free and clear of all liens,
encumbrances and defects except such as are described in the Final Memorandum
or that constitute Permitted Liens under the Indenture.

 

(z)            Holdings, the Company
and its subsidiaries own or possess, or can acquire on reasonable terms, all
patents, patent rights, licenses, inventions, copyrights, know–how
(including trade secrets and other unpatented and/or unpatentable proprietary
or confidential information, systems or procedures), trademarks, service marks
and trade names currently employed by them in connection with the business now
operated by them that are material to the Company and its subsidiaries taken as
a whole, and none of Holdings, the Company or any of its subsidiaries has
received any notice of infringement of or conflict with asserted rights of
others with respect to any of the foregoing which, singly or in the aggregate,
if the subject of an unfavorable decision, ruling or finding, would have a
material adverse effect on the Company and its subsidiaries, taken as a whole,
or on Holdings, in each case except as accurately described in all material
respects in the Final Memorandum.

 

(aa)         No material labor dispute
with the employees of Holdings, the Company or any of its subsidiaries exists,
or, to the knowledge of Holdings or the Company, is imminent except as
described in the Final Memorandum.

 

(bb)         Holdings, the Company and
its subsidiaries are insured by insurers of recognized financial responsibility
against such losses and risks and in such amounts as are prudent in the
businesses in which they are engaged, and neither the Company nor any of its
subsidiaries has any reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not have a material adverse effect on the Company
and its subsidiaries, taken as a whole, or on Holdings, except as described in
the Final Memorandum.

 

(cc)         Holdings, the Company and
its subsidiaries each maintain a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are executed
in accordance with management’s general or specific 

 

7

 

authorizations; (ii) transactions are recorded as
necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain asset accountability;
(iii) access to assets is permitted only in accordance with management’s
general or specific authorization; and (iv) the recorded accountability for
assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.

 

(dd)         The Company has received
a commitment letter and term sheet from Bank of America N.A. and Morgan Stanley
Senior Funding, Inc. (the “Lenders”),
in the form attached as Exhibit C hereto, to the effect that the Lenders have
committed to provide the Company with a new revolving credit facility (the “New Revolving Credit Facility”) and such
Commitment Letter is in full force and effect and is subject only to the
conditions set forth therein.  The
documentation evidencing the New Revolving Credit Facility (the “New Revolving Credit Facility Documentation”)
(A) has been duly authorized by the Company, the Guarantor and each subsidiary
of the Company party thereto and, when duly executed and delivered on or prior
to the Closing Date, will be a valid and binding agreement of the Company, the
Guarantor and each subsidiary of the Company party thereto enforceable in
accordance with its terms, subject to the effects of applicable bankruptcy,
insolvency, reorganization, receivership, moratorium and similar laws relating
to or affecting creditors’ rights and remedies generally and equitable
principles of general applicability (whether applied by a court of law or
equity) and (B) conforms in all material respects to the description thereof in
each Memorandum.

 

(ee)   There are no agreements between the Company
and any of its Affiliates other than those listed on Schedule II hereto.

 

2.        Agreements
to Sell and Purchase.  The
Company hereby agrees to sell to the several Initial Purchasers, and each
Initial Purchaser, upon the basis of the representations and warranties herein
contained, but subject to the conditions hereinafter stated, agrees, severally
and not jointly, to purchase from the Company the respective principal amount
of Securities set forth in Schedule I hereto opposite its name at a purchase
price of 97% of the principal amount thereof (the “Purchase Price”) plus accrued
interest, if any, to the Closing Date.

 

The Company and the Guarantor hereby agrees that,
without the prior written consent of Morgan Stanley & Co. Incorporated on
behalf of the Initial Purchasers, it will not, during the period beginning on
the date hereof and continuing to and including the Closing Date, offer, sell,
contract to sell or otherwise dispose of any debt of the Company or the
Guarantor or warrants to purchase debt of the Company or the Guarantor
substantially similar to the Securities (other than the sale of the Securities
under this Agreement).

 

3.        Terms of
Offering. You have advised the Company that the Initial Purchasers
will make an offering of the Securities purchased by the Initial Purchasers
hereunder on the terms to be set forth in the Final Memorandum, as soon as
practicable after this Agreement is entered into as in your judgment is
advisable.

 

8

 

4.        Payment and
Delivery. Payment for the Securities shall be made to the Company in
Federal or other funds immediately available in New York City against delivery
of such Securities for the respective accounts of the several Initial
Purchasers at 10:00 a.m., New York City time, on July 3, 2003, or at such other
time on the same or such other date, not later than July 17, 2003, as shall be
designated in writing by you.  The time
and date of such payment are hereinafter referred to as the “Closing Date.”

 

Certificates for the Securities shall be in definitive
form or global form, as specified by you, and registered in such names and in
such denominations as you shall request in writing not later than one full
business day prior to the Closing Date. 
The certificates for the Securities shall be delivered to you on the
Closing Date for the respective accounts of the several Initial Purchasers,
with any transfer taxes payable in connection with the transfer of the
Securities to the Initial Purchasers duly paid, against payment of the Purchase
Price therefor plus accrued interest, if any, to the date of payment and
delivery.

 

5.        Conditions
to the Initial Purchasers’ Obligations. The several obligations of
the Initial Purchasers to purchase and pay for the Securities on the Closing
Date are subject to the following conditions:

 

(a)       Subsequent to the execution
and delivery of this Agreement and prior to the Closing Date:

 

(i)   there
shall not have occurred any downgrading, nor shall any notice have been given
of any intended or potential downgrading or of any review for a possible change
that does not indicate the direction of the possible change, in the rating
accorded any of the Company’s or any Guarantor’s securities by any “nationally
recognized statistical rating organization,” as such term is defined for
purposes of Rule 436(g)(2) under the Securities Act; and

 

(ii)   there
shall not have occurred any change, or any development involving a prospective
change, in the condition, financial or otherwise, or in the earnings, business
or operations of the Company and its subsidiaries, taken as a whole, or of
Holdings from that set forth in the Final Memorandum that, in your judgment, is
material and adverse and that makes it, in your judgment, impracticable to
market the Securities on the terms and in the manner contemplated in the Final
Memorandum.

 

(b)       The Initial Purchasers
shall have received on the Closing Date a certificate, dated the Closing Date
and signed by an executive officer of the Company, to the effect set forth in
Section 5(a)(i) and to the effect that the
representations and warranties of the Company contained in this Agreement are
true and correct as of the Closing Date and that the Company has complied with
all of the agreements and satisfied all of the conditions on its part to be
performed or satisfied hereunder on or before the Closing Date.

 

9

 

The officer signing and
delivering such certificate may rely upon the best of his or her knowledge as
to proceedings threatened.

 

(c)       The Initial Purchasers
shall have received on the Closing Date an opinion of (i) Timothy M. Davis,
general counsel of Holdings and the Company, substantially to the effect set
forth in Exhibit A, and (ii) Gibson, Dunn & Crutcher LLP, special counsel
for the Company, dated the Closing Date, substantially to the effect set forth
in Exhibit B.

 

(d)       The Initial Purchasers
shall have received on the Closing Date an opinion of Shearman & Sterling
LLP, counsel for the Initial Purchasers, dated the Closing Date, to the effect
set forth in Exhibit C.

 

(e)       The Initial Purchasers
shall have received on each of the date hereof and the Closing Date a letter,
dated the date hereof or the Closing Date, as the case may be, in form and
substance satisfactory to the Initial Purchasers, from Ernst & Young LLP,
independent public accountants, containing statements and information of the
type ordinarily included in accountants’ “comfort letters” to underwriters with
respect to the financial statements and certain financial information contained
in each Memorandum; provided that the letter delivered on the
Closing Date shall use a “cut-off date” not earlier than the date hereof.

 

(f)        All conditions to the
effectiveness of the New Revolving Credit Facility Documentation and the
borrowings contemplated to occur thereunder on the Closing Date, including the
due authorization, execution and delivery of the New Revolving Credit Facility
Documentation (copies of which will be provided to you on or before the Closing
Date), have been satisfied.

 

(g)       On the Closing Date, all
amounts, fees and expenses outstanding under the existing credit facility shall
be repaid as set forth in the Final Memorandum, the existing credit facility
shall cease to be in effect (except those provisions regarding indemnity
reimbursement) and the New Revolving Credit Facility shall become effective
simultaneously with the payment for and delivery of the Securities pursuant to
this Agreement.

 

(h)       On the Closing Date, the
Company shall have issued an irrevocable notice to redeem the 12 3/4 % Senior
Subordinated Notes due 2005 and shall deposit the redemption price with the
Trustee.

 

(i)        On the Closing Date, the
Security Documents (and the instruments required to be delivered thereunder),
in form and substance reasonably satisfactory to the Initial Purchasers, shall
have been duly executed and delivered by the Company and (where applicable) the
Guarantor and shall be in full force and effect.

 

(j)        On the Closing Date, the
Collateral Agent shall have received all necessary UCC financing statements for
filing in the proper filing offices and, upon
the filing of all

 

10

 

necessary UCC financing
statements in the proper filing offices and all other actions necessary to
perfect a security interest in the UCC Collateral, the Collateral Agent
for the benefit of the Trustee and the holders of the Securities (the “Second Lien Creditors”), shall have a valid
and perfected security interest in the UCC Collateral securing the obligations
of the Company and the Guarantor under the Indenture, and such security
interest of the Second Lien Creditors will not be subject to or subordinated to
any Liens (as defined in the Indenture) other than the Liens granted for the
benefit of the First Lien Creditors (as defined in the Indenture) and the
Permitted Liens (as defined in the Indenture) and other Liens expressly
permitted under the Indenture.

 

(k)       On the Closing Date, the
Collateral Agent shall have received duly issued marked title insurance
commitments insuring the lien of the Collateral Agent under the Mortgages
relating to the Real Estate Collateral as a valid and perfected mortgage lien
on the Real Estate Collateral securing the obligations of the Company under the
Indenture, not subject to or subordinated to any liens other than the liens
granted under the Security Documents for the benefit of the First Lien
Creditors and Permitted Liens, and the agent for the title company issuing such
marked commitments shall have received fully executed copies of the Mortgages
for recording in the proper recording offices, together with funds in an amount
sufficient to pay all taxes, fees and other charges payable in connection with
such recording, such that upon such recording, and the filing of all necessary
UCC fixture financing statements and payment of such amounts to the proper
governmental officials in connection with such recording and filing in the
proper recording and filing offices, the Collateral Agent for the benefit of
the Second Lien Creditors shall have a valid and perfected lien on the Real
Estate Collateral securing the obligations of the Company under the Indenture,
not be subject to or subordinated to any liens other than the liens granted
under the Security Documents for the benefit of the First Lien Creditors and
Permitted Liens.

 

6.        Covenants of
the Company and the Guarantor. In further consideration of the
agreements of the Initial Purchasers contained in this Agreement, the Company
and the Guarantor, jointly and severally, covenants with each Initial Purchaser
as follows:

 

(a)       To furnish to you in New York
City, without charge, prior to 10:00 a.m. New York City time on the business
day next succeeding the date of this Agreement and during the period mentioned
in Section 6(c), as many copies of the Final
Memorandum and any supplements and amendments thereto as you may reasonably
request.

 

(b)       Before amending or
supplementing either Memorandum, to furnish to you a copy of each such proposed
amendment or supplement and not to use any such proposed amendment or
supplement to which you reasonably object.

 

(c)       If, during such period
after the date hereof and prior to the date on which all of the Securities
shall have been sold by the Initial Purchasers, any event shall occur or
condition exist as a result of which it is necessary to amend or supplement the
Final Memorandum in order to make the statements therein, in the light of the
circumstances

 

11

 

when the Final Memorandum is delivered to a purchaser,
not misleading, or if, in the opinion of counsel for the Initial Purchasers, it
is necessary to amend or supplement the Final Memorandum to comply with
applicable law, forthwith to prepare and furnish, at its own expense, to the
Initial Purchasers, either amendments or supplements to the Final Memorandum so
that the statements in the Final Memorandum as so amended or supplemented will
not, in the light of the circumstances when the Final Memorandum is delivered
to a purchaser, be misleading or so that the Final Memorandum, as amended or
supplemented, will comply with applicable law.

 

(d)       To endeavor to qualify the
Securities for offer and sale under the securities or Blue Sky laws of such
jurisdictions as you shall reasonably request.

 

(e)       Whether or not the
transactions contemplated in this Agreement are consummated or this Agreement
is terminated, to pay or cause to be paid all expenses incident to the
performance of its obligations under this Agreement, including: (i) the fees,
disbursements and expenses of counsel to the Company and the Guarantor and the
accountants of the Company and the Guarantor in connection with the issuance
and sale of the Securities and all other fees or expenses in connection with
the preparation of each Memorandum and all amendments and supplements thereto,
including all printing costs associated therewith, and the delivering of copies
thereof to the Initial Purchasers, in the quantities herein above specified, (ii)
all costs and expenses related to the transfer and delivery of the Securities
to the Initial Purchasers, including any transfer or other taxes payable
thereon, (iii) the cost of printing or producing any Blue Sky or legal
investment memorandum in connection with the offer and sale of the Securities
under state securities laws and all expenses in connection with the
qualification of the Securities for offer and sale under state securities laws
as provided in Section 6(d) hereof, including
filing fees and the reasonable fees and disbursements of counsel for the
Initial Purchasers in connection with such qualification and in connection with
the Blue Sky or legal investment memorandum, (iv) any fees charged by rating
agencies for the rating of the Securities, (v) the fees and expenses, if any,
incurred in connection with the admission of the Securities for trading in
PORTAL or any appropriate market system, (vi) the costs and charges of the
Trustee and any transfer agent, registrar or depositary, (vii) the cost of the
preparation, issuance and delivery of the Securities, (viii) the costs and
expenses of the Company and the Guarantor relating to investor presentations on
any “road show” undertaken in connection with the marketing of the offering of
the Securities, including, without limitation, expenses associated with the
production of road show slides and graphics, fees and expenses of any
consultants engaged in connection with the road show presentations with the
prior approval of the Company, travel and lodging expenses of the
representatives and officers of the Company and the Guarantor and any such
consultants, and the cost of any aircraft chartered in connection with the road
show, (but excluding the travel (other than chartered aircraft) and lodging
expenses of the representatives of the Initial Purchasers); (ix) the document
production charges and expenses associated with printing this Agreement; and (x)
all other cost and expenses incident to the performance of the obligations of
the Company and the Guarantor hereunder for which provision is not otherwise
made in this Section.  It is understood,
however, that except as provided in this

 

12

 

Section, Section 9, and the last paragraph of Section 11, the Initial Purchasers will pay all of their costs
and expenses, including fees and disbursements of their counsel, transfer taxes
payable on resale of any of the Securities by them and any advertising expenses
connected with any offers they may make.

 

(f)        Not to, and not to permit
any Affiliate to sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in the Securities Act) which
could be integrated with the sale of the Securities in a manner which would
require the registration under the Securities Act of the Securities, except
that the provisions of this paragraph do not apply to Morgan Stanley & Co.
Incorporated, to the extent that Morgan Stanley & Co. Incorporated might be
deemed to be an Affiliate of the Company.

 

(g)       Not to solicit any offer to
buy or offer or sell the Securities by means of any form of general
solicitation or general advertising (as those terms are used in Regulation D
under the Securities Act) or in any manner involving a public offering within
the meaning of Section 4(2) of the Securities Act.

 

(h)       While any of the Securities
remain “restricted securities” within the meaning of the Securities Act, to
make available, upon request, to any seller of such Securities the information
specified in Rule 144A(d)(4) under the Securities Act, unless the Company is
then subject to Section 13 or 15(d) of the Exchange Act.

 

(i)        If requested by you, to
use its best efforts to permit the Securities to be designated PORTAL
securities in accordance with the rules and regulations adopted by the National
Association of Securities Dealers, Inc. relating to trading in the PORTAL
Market.

 

(j)        Not to, and not to permit
any of its Affiliates or any person acting on its or their behalf (other than
the Initial Purchasers) to, engage in any directed selling efforts (as that
term is defined in Regulation S) with respect to the Securities, and to cause
its Affiliates and each person acting on its or their behalf (other than the
Initial Purchasers) to, comply with the offering restrictions requirement of
Regulation S, except that the provisions of this paragraph do not apply to
Morgan Stanley & Co. Incorporated, to the extent that Morgan Stanley &
Co. Incorporated might be deemed to be an Affiliate of the Company.

 

(k)       During the period of two
years after the Closing Date, not to, and not to permit any of its affiliates
(as defined in Rule 144 under the Securities Act) to, resell any of the
Securities which constitute “restricted securities” under Rule 144 that have
been reacquired by any of them, except that the provisions of this paragraph do
not apply to Morgan Stanley & Co. Incorporated, to the extent that Morgan
Stanley & Co. Incorporated might be deemed to be an Affiliate of the
Company.

 

(l)        Not to take any action
prohibited by Regulation M under the Exchange Act in connection with the
distribution of the Securities contemplated hereby.

 

13

 

7.        Offering of
Securities; Restrictions on Transfer.  (a) Each Initial Purchaser, severally and not jointly, represents
and warrants that such Initial Purchaser is a qualified institutional buyer as
defined in Rule 144A under the Securities Act (a “QIB”).  Each Initial Purchaser, severally and not
jointly, agrees with the Company that (i) it will not solicit offers for, or
offer or sell, such Securities by any form of general solicitation or general
advertising (as those terms are used in Regulation D under the Securities Act)
or in any manner involving a public offering within the meaning of Section 4(2)
of the Securities Act and (ii) it will solicit offers for such Securities only
from, and will offer such Securities only to, persons that it reasonably
believes to be (A) in the case of offers inside the United States, QIBs, and (B)
in the case of offers outside the United States, to persons other than U.S.
persons (“foreign
purchasers,” which
term shall include dealers or other professional fiduciaries in the United
States acting on a discretionary basis for foreign beneficial owners (other
than an estate or trust)) in reliance upon Regulation S under the Securities
Act that, in each case, in purchasing such Securities are deemed to have
represented and agreed as provided in the Final Memorandum under the caption
“Transfer Restrictions.”

 

(b)           Each
Initial Purchaser, severally and not jointly, represents, warrants, and agrees
with respect to offers and sales outside the United States that:

 

(i)        such Initial Purchaser
understands that no action has been or will be taken in any jurisdiction by the
Company that would permit a public offering of the Securities, or possession or
distribution of either Memorandum or any other offering or publicity material
relating to the Securities, in any country or jurisdiction where action for
that purpose is required;

 

(ii)       such Initial Purchaser will
comply with all applicable laws and regulations in each jurisdiction in which
it acquires, offers, sells or delivers Securities or has in its possession or
distributes either Memorandum or any such other material, in all cases at its
own expense;

 

(iii)          the Securities have not
been registered under the Securities Act and may not be offered or sold within
the United States or to, or for the account or benefit of, U.S. persons except
in accordance with Rule 144A or Regulation S under the Securities Act or
pursuant to another exemption from the registration requirements of the
Securities Act;

 

(iv)      such Initial Purchaser has
offered the Securities and will offer and sell the Securities (A) as part of
their distribution at any time and (B) otherwise until 40 days after the later
of the commencement of the offering and the Closing Date, only in accordance
with Rule 903 of Regulation S or as otherwise permitted in Section 7(a); accordingly, neither such Initial Purchaser, its
Affiliates nor any persons acting on its or their behalf have engaged or will
engage in any directed selling efforts (within the meaning of Regulation S)
with respect to the Securities, and any such Initial Purchaser, its Affiliates
and any such persons have complied and will comply with the offering
restrictions requirement of Regulation S;

 

14

 

(v)       such Initial Purchaser  (A) has not offered or sold and, prior to
the date six months after the Closing Date, will not offer or sell any
Securities to persons in the United Kingdom except to persons whose ordinary
activities involve them in acquiring, holding, managing or disposing of
investments (as principal or agent) for the purposes of their businesses or
otherwise in circumstances which have not resulted and will not result in an
offer to the public in the United Kingdom within the meaning of the Public
Offers of Securities Regulations 1995, (B) has complied and will comply with
all applicable provisions of the Financial Services and Markets Act 2000 (the “FSMA”)
with respect of anything done by it in relation to the Securities in, from or
otherwise involving the United Kingdom, and (C) will only communicate or cause
to be communicated any invitation or inducement to engage in investment
activity (within the meaning of section 21 of the FSMA) received by it in
connection with the issue or sale of the Securities in circumstances in which
section 21(1) of the FSMA does not apply to the Company;

 

(vi)      such Initial Purchaser
understands that the Securities have not been and will not be registered under
the Securities and Exchange Law of Japan, and represents that it has not
offered or sold, and agrees not to offer or sell, directly or indirectly, any
Securities in Japan or for the account of any resident thereof except pursuant
to any exemption from the registration requirements of the Securities and
Exchange Law of Japan and otherwise in compliance with applicable provisions of
Japanese law; and

 

(vii)     such Initial Purchaser agrees
that, at or prior to confirmation of sales of the Securities, it will have sent
to each distributor, dealer or person receiving a selling concession, fee or
other remuneration that purchases Securities from it during the restricted
period a confirmation or notice to substantially the following effect:

 

“The Securities covered hereby have not been
registered under the U.S. Securities Act of 1933 (the “Securities Act”) and may
not be offered and sold within the United States or to, or for the account or
benefit of, U.S. persons (i) as part of their distribution at any time or (ii)
otherwise until 40 days after the later of the commencement of the offering and
the closing date, except in either case in accordance with Regulation S
(or Rule 144A if available) under the Securities Act. Terms used above have the
meaning given to them by Regulation S.”

 

Terms used in this Section 7(b) have the
meanings given to them by Regulation S.

 

8.        Market-Making.  Each of the Company and the Guarantor, jointly and severally, for
the sole benefit of Morgan Stanley & Co. Incorporated (“Morgan Stanley”), agrees that:

 

(a)       prior to the consummation
of the Exchange Offer (as defined in the Registration Rights Agreement) or the
effectiveness of a Shelf Registration Statement (as defined in the Registration
Rights Agreement) if, in the reasonable judgment of Morgan Stanley, it or any
of its affiliates (as such term is defined in the rules and regulations under
the 1933 Act) is required to deliver an offering memorandum in connection with
sales of, or market-making activities with respect to, the Securities and the
Guarantee (i)

 

15

 

to periodically amend or supplement the Final
Memorandum so that the information contained in the Final Memorandum complies
with the requirements of Rule 144A of the 1933 Act, (ii) to amend or supplement
the Final Memorandum when necessary to reflect any material changes in the
information provided therein so that the Final Memorandum will not contain any
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in light of the
circumstances existing as of the date the Final Memorandum is so delivered, not
misleading and (iii) to provide Morgan Stanley with copies of each such amended
or supplemented Final Memorandum, as Morgan Stanley may reasonably request;

 

(b)       following the consummation
of the Exchange Offer or the effectiveness of a Shelf Registration Statement
and for so long as the Securities or the Exchange Securities are outstanding,
if, in the judgment of Morgan Stanley, it or any of its affiliates (as such
term is defined in the rules and regulations under the 1933 Act) is required to
deliver a prospectus in connection with sales of, or market-making activities
with respect to, such securities, (i) to periodically amend the applicable
registration statement so that the information contained therein complies with
the requirements of Section 10(a) of the 1933 Act, (ii) if reasonably requested
by Morgan Stanley, within 45 days following the end of the Company’s most
recent fiscal quarter (other than the Company’s final fiscal quarter in each
fiscal year), to file a supplement to the prospectus included in the applicable
registration statement which sets forth the financial results of the Company
and the Guarantor for the previous fiscal quarter, (iii) if reasonably
requested by Morgan Stanley, within 90 days following the end of the Company’s
most recent fiscal year, to amend the applicable registration statement to set
forth the financial results of the Company and the Guarantor for the previous
fiscal year, (iv) to amend the applicable registration statement or supplement
the related prospectus when necessary to reflect any material changes in the
information provided therein so that the registration statement and the
prospectus will not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
light of the circumstances existing as of the date the prospectus is so
delivered, not misleading and (v) to provide Morgan Stanley with copies of each
such amendment or supplement as Morgan Stanley may reasonably request;

 

(c)       it shall notify Morgan
Stanley and its counsel and (if requested by any such person) confirm such
advice in writing, (i) when any amendment to the Final Memorandum has been
issued, when any prospectus supplement or amendment or post–effective
amendment has been filed, and, with respect to any post-effective amendment,
when the same has become effective, (ii) of any request by the Securities and
Exchange Commission (the “SEC”)
for any post-effective amendment or supplement to a registration statement, any
supplement or amendment to a prospectus or for additional information, (iii)
the issuance by the SEC of any stop order suspending the effectiveness of a
registration statement or the initiation of any proceedings for that purpose,
(iv) of the receipt by it of any notification with respect to the suspension of
the qualification of the Securities or the Exchange Securities for sale in any
jurisdiction or the initiation or threatening of any proceedings for such
purpose and (v) that the Company has suspended

 

16

 

use of the Final Memorandum, a registration statement,
a prospectus or any amendment or supplement thereto as a result of the
happening of any event which makes any statement made in the Final Memorandum,
a registration statement, a prospectus or any amendment or supplement thereto
untrue or which requires the making of any change in the Final Memorandum, a
registration statement, a prospectus or any amendment or supplement thereto, in
order to make the statements therein not misleading;

 

(d)       the Company and the
Guarantor consent to the use of the Final Memorandum and any prospectus
referred to in this Section 8 or any amendment or supplement thereto by Morgan
Stanley and its affiliates in connection with the offering and sale of the
Securities and the Guarantee or the Exchange Securities, as the case may be;
provided that upon receipt of any notice from the Company of the kind described
in clause (c)(v) of this Section 8, Morgan Stanley and its affiliates will
forthwith discontinue disposition of such Securities or Exchange Securities
pursuant to any such Final Memorandum or prospectus until Morgan Stanley and
its affiliates receive copies of a supplemented or amended Final Memorandum or
prospectus referred to in this Section 8; any such suspensions may not exceed
60 days in any 365–day period; any notices to Morgan Stanley pursuant to
this clause (e) shall be sent to Morgan Stanley & Co. Incorporated,
1585 Broadway, New York, NY, 10036, Attention: 
High Yield New Issues Group, facsimile number:  (212) 761–0587, with a copy to the Control Group, Manager,
facsimile number (212) 761-9709, and shall be deemed to have been duly given or
made only upon receipt;

 

(e)       in connection with any
amendment or supplement to the Final Memorandum or the effectiveness of the
Shelf Registration Statement or any amendment thereto or supplemental
prospectus, in each case including any Form 10-K information that is
incorporated by reference or included in such Final Memorandum or Shelf
Registration Statement required by this Section 8, the Company and the
Guarantor will cause to be provided to Morgan Stanley an opinion of counsel of
the Company (which counsel may be the General Counsel of the Company) (covering
matters customarily covered in opinions delivered in underwritten offerings)
and a “cold comfort” letter from the Company’s independent public accountants
(covering matters customarily covered in “cold comfort” letters delivered in
underwritten offerings) and such documents and certificates as may be
reasonably requested by Morgan Stanley;

 

(f)        the Company and the
Guarantor will comply with the provisions of this Section 8 at their own expense;
and

 

(g)       the Company and the
Guarantor hereby expressly acknowledge that the indemnification and
contribution provisions of Section 9 of this Agreement shall be specifically
applicable and relate to each offering memorandum, registration statement,
prospectus, amendment or supplement referred to in this Section 8 except with
respect to losses, claims or liabilities resulting from the delivery of any
offering memorandum or prospectus to the extent that it is established that
such offering memorandum or

 

17

 

prospectus was delivered by Morgan Stanley after it
received notice to discontinue using it in accordance with clause (e) of
this Section 8.

 

9.        Indemnity
and Contribution.  (a)  Each of the Company and the Guarantor agree,
jointly and severally, to indemnify and hold harmless each Initial Purchaser,
each person, if any, who controls any Initial Purchaser within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange Act, and
each affiliate of any Initial Purchaser within the meaning of Rule 405 under
the Securities Act from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any such
action or claim) caused by any untrue statement or alleged untrue statement of
a material fact contained in either Memorandum (as amended or supplemented if
the Company or the Guarantor shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact necessary to make the statements therein in the light of the
circumstances under which they were made not misleading, except insofar as such
losses, claims, damages or liabilities are caused by any such untrue statement
or omission or alleged untrue statement or omission based upon information
relating to any Initial Purchaser furnished to the Company in writing by such
Initial Purchaser through you expressly for use therein.

 

(b)      Each Initial
Purchaser agrees, severally and not jointly, to indemnify and hold harmless the
Company, the Guarantor, their respective directors, their respective officers
and each person, if any, who controls the Company or the Guarantor within the
meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act to the same extent as the foregoing indemnity from the Company and
the Guarantor to such Initial Purchaser, but only with reference to information
relating to such Initial Purchaser furnished to the Company in writing by such
Initial Purchaser through you expressly for use in either Memorandum or any
amendments or supplements thereto.

 

(c)      In case any
proceeding (including any governmental investigation) shall be instituted
involving any person in respect of which indemnity may be sought pursuant to
Section 9(a) or 8(b),
such person (the “indemnified party”) shall promptly notify
the person against whom such indemnity may be sought (the “indemnifying party”) in
writing and the indemnifying party, upon request of the indemnified party,
shall retain counsel reasonably satisfactory to the indemnified party to
represent the indemnified party and any others the indemnifying party may
designate in such proceeding and shall pay the fees and disbursements of such
counsel related to such proceeding. In any such proceeding, any indemnified
party shall have the right to retain its own counsel, but the fees and expenses
of such counsel shall be at the expense of such indemnified party unless (i)
the indemnifying party and the indemnified party shall have mutually agreed to
the retention of such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them.
It is understood that the indemnifying party shall not, in respect of the legal
expenses of any indemnified party in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the fees and expenses of
more than one separate firm (in addition to any local counsel) for all such
indemnified parties

 

18

 

and that all such
fees and expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by Morgan Stanley & Co. Incorporated, in the case of
parties indemnified pursuant to Section 9(a), and
by the Company, in the case of parties indemnified pursuant to Section 9(b). The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the plaintiff,
the indemnifying party agrees to indemnify the indemnified party from and
against any loss or liability by reason of such settlement or judgment.  No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of any
pending or threatened proceeding in respect of which any indemnified party is
or could have been a party and indemnity could have been sought hereunder by
such indemnified party, unless such settlement includes an unconditional
release of such indemnified party from all liability on claims that are the
subject matter of such proceeding.

 

(d)      To the extent
the indemnification provided for in Section 9(a)
or 9(b) is unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages or liabilities referred
to therein, then each indemnifying party under such paragraph, in lieu of
indemnifying such indemnified party thereunder, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Guarantor on the one hand and
the Initial Purchasers on the other hand from the offering of the Securities or
(ii) if the allocation provided by clause 9(d)(i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause 9(d)(i) above but also the relative fault of the Company
and the Guarantor on the one hand and of the Initial Purchasers on the other
hand in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Guarantor
on the one hand and the Initial Purchasers on the other hand in connection with
the offering of the Securities shall be deemed to be in the same respective
proportions as the net proceeds from the offering of the Securities (before
deducting expenses) received by the Company and the Guarantor and the total
discounts and commissions received by the Initial Purchasers, as set forth in
the Final Memorandum, bear to the aggregate offering price of the Securities.
The relative fault of the Company and the Guarantor on the one hand and of the
Initial Purchasers on the other hand shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company and the Guarantor or by the Initial
Purchasers and the parties’ relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The Initial
Purchasers’ respective obligations to contribute pursuant to this Section 9 are several in proportion to the respective principal
amount of Securities they have purchased hereunder, and not joint.

 

(e)      The Company,
the Guarantor and the Initial Purchasers agree that it would not be just or
equitable if contribution pursuant to this Section 9
were determined by pro rata allocation (even if the Initial
Purchasers were treated as one entity for such purpose) or by any other method
of allocation that does not take account of the equitable considerations
referred to in Section 9(d). The amount paid or
payable by an indemnified party as a result of the losses, claims, damages

 

19

 

and liabilities
referred to in Section 9(d) shall be deemed to
include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 9, no Initial Purchaser
shall be required to contribute any amount in excess of the amount by which the
total price at which the Securities resold by it in the initial placement of
such Securities were offered to investors exceeds the amount of any damages
that such Initial Purchaser has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The remedies provided
for in this Section 9 are not exclusive and shall
not limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.

 

(f)       The indemnity
and contribution provisions contained in this Section 9
and the representations, warranties and other statements of the Company and the
Guarantor contained in this Agreement shall remain operative and in full force
and effect regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of any Initial Purchaser, any person
controlling any Initial Purchaser or any affiliate of any Initial Purchaser or
by or on behalf of the Company, the Guarantor, their respective officers or
directors or any person controlling the Company or the Guarantor (iii)
acceptance of and payment for any of the Securities.

 

10.      Termination.
The Initial Purchasers may terminate this Agreement by notice given by you to
the Company, if after the execution and delivery of this Agreement and prior to
the Closing Date (i) trading generally shall have been suspended or materially
limited on, or by, as the case may be, any of the New York Stock Exchange, the
American Stock Exchange, the Nasdaq National Market, the Chicago Board of
Options Exchange, the Chicago Mercantile Exchange or the Chicago Board of
Trade, (ii) trading of any securities of the Company or the Guarantor shall
have been suspended on any exchange or in any over–the–counter
market, (iii) a material disruption in securities settlement, payment or
clearance services in the United States shall have occurred, (iv) any
moratorium on commercial banking activities shall have been declared by Federal
or New York State authorities or (v) there shall have occurred any outbreak or
escalation of hostilities, or any change in financial markets or any calamity
or crisis that, in your judgment, is material and adverse and which, singly or
together with any other event specified in this clause (v), makes it, in your
judgment, impracticable or inadvisable to proceed with the offer, sale or
delivery of the Securities on the terms and in the manner contemplated in the
Final Memorandum.

 

11.      Effectiveness;
Defaulting Initial Purchasers. 
This Agreement shall become effective upon the execution and delivery
hereof by the parties hereto.

 

If, on the Closing Date, any one or more of the
Initial Purchasers shall fail or refuse to purchase Securities that it or they
have agreed to purchase hereunder on such date, and the aggregate principal
amount of Securities which such defaulting Initial Purchaser or Initial
Purchasers agreed but failed or refused to purchase is not more than one–tenth
of the aggregate

 

20

 

principal amount of Securities to be purchased on such date, the other
Initial Purchasers shall be obligated severally in the proportions that the
principal amount of Securities set forth opposite their respective names in
Schedule I bears to the aggregate principal amount of Securities set forth
opposite the names of all such non–defaulting Initial Purchasers, or in
such other proportions as you may specify, to purchase the Securities which
such defaulting Initial Purchaser or Initial Purchasers agreed but failed or
refused to purchase on such date; provided that in no event shall the
principal amount of Securities that any Initial Purchaser has agreed to
purchase pursuant to this Agreement be increased pursuant to this Section 11 by an amount in excess of one–ninth of such
principal amount of Securities without the written consent of such Initial
Purchaser. If, on the Closing Date any Initial Purchaser or Initial Purchasers
shall fail or refuse to purchase Securities which it or they have agreed to
purchase hereunder on such date and the aggregate principal amount of
Securities with respect to which such default occurs is more than one-tenth of
the aggregate principal amount of Securities to be purchased on such date, and
arrangements satisfactory to you and the Company for the purchase of such
Securities are not made within 36 hours after such default, this Agreement
shall terminate without liability on the part of any non–defaulting
Initial Purchaser or of the Company. In any such case either you or the Company
shall have the right to postpone the Closing Date, but in no event for longer
than seven days, in order that the required changes, if any, in the Final
Memorandum or in any other documents or arrangements may be effected.  Any action taken under this paragraph shall
not relieve any defaulting Initial Purchaser from liability in respect of any
default of such Initial Purchaser under this Agreement.

 

If this Agreement shall be terminated by the Initial
Purchasers, or any of them, because of any failure or refusal on the part of
the Company or the Guarantor to comply with the terms or to fulfill any of the
conditions of this Agreement, or if for any reason the Company or any of the
Guarantor shall be unable to perform its obligations under this Agreement, the
Company and the Guarantor will reimburse the Initial Purchasers or such Initial
Purchasers as have so terminated this Agreement with respect to themselves,
severally, for all out-of-pocket expenses (including the fees and disbursements
of their counsel) reasonably incurred by such Initial Purchasers in connection
with this Agreement or the offering contemplated hereunder.

 

12.      Counterparts.  This Agreement may be signed in
any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.

 

13.      Applicable
Law.  This Agreement shall be
governed by and construed in accordance with the internal laws of the State of
New York.

 

14.      Headings.  The headings of the sections of
this Agreement have been inserted for convenience of reference only and shall
not be deemed a part of this Agreement.

 

21

 

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  AMERICAN COLOR GRAPHICS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Timothy M. Davis

  	
   

  
	
   

  	
   

  	
  Name: Timothy M. Davis

  	
   

  
	
   

  	
   

  	
  Title: Senior Vice President

  	
   

  
	
   

  
	
   

  
	
   

  	
  ACG HOLDINGS, INC.

  	
   

  
	
   

  
	
   

  
	
   

  	
  By:

  	
  /s/ Timothy M. Davis

  	
   

  
	
   

  	
   

  	
  Name: Timothy M. Davis

  
	
   

  	
   

  	
  Title: Senior Vice President

  

 

22

 

	
  Accepted as of the date hereof

  	
   

  
	
   

  	
   

  
	
  Morgan Stanley & Co. Incorporated

  	
   

  
	
  Banc of America Securities LLC

  	
   

  
	
  Credit Suisse First Boston LLC

  	
   

  
	
   

  	
   

  
	
  Acting severally on
  behalf of themselves and the several Initial Purchasers named in Schedule I
  hereto.

  	
   

  
	
   

  
	
  By:

  	
  MORGAN STANLEY & CO. INCORPORATED

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   /s/ David
  Schwarzbach

  	
   

  
	
   

  	
  Name: David Schwarzbach

  
	
   

  	
  Title: Vice President

  
				

 

23EXHIBIT
10.15

 

REGISTRATION RIGHTS AGREEMENT

 

 

Dated June 19, 2003

 

 

among

 

 

AMERICAN COLOR GRAPHICS, INC.

THE GUARANTOR NAMED HEREIN

 

 

and

 

 

MORGAN STANLEY & CO. INCORPORATED

BANC OF AMERICA SECURITIES LLC

CREDIT SUISSE FIRST BOSTON LLC

 

 

REGISTRATION RIGHTS
AGREEMENT

 

THIS
REGISTRATION RIGHTS AGREEMENT (the “Agreement”) is made and entered into June
19, 2003, between AMERICAN COLOR GRAPHICS, INC., a New York corporation (the
“Company”), ACG HOLDINGS, INC. (“Holdings” or the “Guarantor”), and MORGAN STANLEY
& CO. INCORPORATED, BANC OF AMERICA SECURITIES LLC and CREDIT SUISSE FIRST
BOSTON LLC (the “Initial Purchasers”).

 

This
Agreement is made pursuant to the Purchase Agreement dated June 19, 2003, among
the Company, the Guarantor and the Initial Purchasers (the “Purchase
Agreement”), which provides for the sale by the Company to the Initial
Purchasers of an aggregate of $280,000,000 principal amount of the Company’s
10% Senior Second Secured Notes Due 2010 (the “Securities”).  The Securities will be fully and
unconditionally guaranteed on a senior basis by the Guarantor.  In order to induce the Initial Purchasers to
enter into the Purchase Agreement, the Company and the Guarantor have agreed to
provide to the Initial Purchasers and their direct and indirect transferees the
registration rights set forth in this Agreement.  The execution of this Agreement is a condition to the closing
under the Purchase Agreement.

 

In
consideration of the foregoing, the parties hereto agree as follows:

 

1.             Definitions.

 

As used
in this Agreement, the following capitalized defined terms shall have the
following meanings:

 

“1933
Act” shall mean the Securities Act of 1933, as amended from time to time.

 

“1934
Act” shall mean the Securities Exchange Act of 1934, as amended from time
to time.

 

“Closing
Date” shall mean the Closing Date as defined in the Purchase Agreement.

 

“Company”
shall have the meaning set forth in the preamble and shall also include the
Company s successors.

 

“Exchange
Offer” shall mean the exchange offer by the Company of Exchange Securities
for Registrable Securities pursuant to Section 2(a) hereof.

 

“Exchange
Offer Registration” shall mean a registration under the 1933 Act effected
pursuant to Section 2(a) hereof.

 

“Exchange
Offer Registration Statement” shall mean an exchange offer registration
statement on Form S-4 (or, if applicable, on another appropriate form) and all
amendments and supplements to such registration statement, in each case
including the

 

2

 

Prospectus contained therein, all exhibits thereto and all material
incorporated by reference therein.

 

“Exchange
Securities” shall mean securities issued by the Company and guaranteed by
the Guarantor under the Indenture containing terms identical to the Securities
(except that (i) interest thereon shall accrue from the last date on which
interest was paid on the Securities and (ii) the Exchange Securities will not
contain restrictions on transfer) and to be offered to Holders of Securities in
exchange for Securities pursuant to the Exchange Offer.

 

“Guarantor”
shall have the meaning set forth in the preamble and shall also include any of
the successors.

 

“Holder”
shall mean the Initial Purchasers, for so long as they own any Registrable
Securities, and each of their successors, assigns and direct and indirect
transferees who become registered owners of Registrable Securities under the
Indenture; provided that for purposes of Sections 4 and 5 of this
Agreement, the term “Holder” shall include Participating Broker-Dealers (as
defined in Section 4(a)).

 

“Indenture”
shall mean the Indenture relating to the Securities to be dated as of July 3,
2003 among the Company, the Guarantor and The Bank of New York as trustee, and
as the same may be amended from time to time in accordance with the terms
thereof.

 

“Initial
Purchasers” shall have the meaning set forth in the preamble.

 

“Majority
Holders” shall mean the Holders of a majority of the aggregate principal
amount of outstanding Registrable Securities; provided that whenever the
consent or approval of Holders of a specified percentage of Registrable
Securities is required hereunder, Registrable Securities held by the Company
shall not be counted in determining whether such consent or approval was given
by the Holders of such required percentage or amount.

 

“Person”
shall mean an individual, partnership, limited liability company, corporation,
trust or unincorporated organization, or a government or agency or political
subdivision thereof.

 

“Prospectus”
shall mean the prospectus included in a Registration Statement, including any
preliminary prospectus, and any such prospectus as amended or supplemented by
any prospectus supplement, including a prospectus supplement with respect to
the terms of the offering of any portion of the Registrable Securities covered
by a Shelf Registration Statement, and by all other amendments and supplements
to such prospectus, and in each case including all material incorporated by
reference therein.

 

“Purchase
Agreement” shall have the meaning set forth in the preamble.

 

 “Registrable Securities” shall mean
the Securities and the guarantee thereof by the Guarantor; provided, however,
that any Security and the guarantee shall cease to be a Registrable Security
(i) when a Registration Statement with respect to the Securities and the
guarantee shall have been declared effective under the 1933 Act and such
Security and the guarantee shall have been exchanged or disposed of pursuant to
such Registration Statement, (ii)

 

3

 

when such Security and the guarantee may be resold without restriction
pursuant to Rule 144 (or any similar provision then in force, but not Rule
144A) under the 1933 Act or (iii) when such Security and the guarantee shall
have ceased to be outstanding.

 

“Registration
Expenses” shall mean any and all expenses incident to performance of or
compliance by the Company and the Guarantor with this Agreement, including
without limitation:  (i) all SEC, stock
exchange or National Association of Securities Dealers, Inc. registration and
filing fees, (ii) all fees and expenses incurred in connection with compliance
with state securities or blue sky laws (including reasonable fees and
disbursements of counsel for any Underwriters or Holders in connection with
blue sky qualification of any of the Exchange Securities or Registrable
Securities), (iii) the costs of printing and distributing any Registration
Statement, any Prospectus and any amendments or supplements thereto,  (iv) all rating agency fees, (v) all fees
and disbursements relating to the qualification of the Indenture under
applicable securities laws, (vi) the fees and disbursements of the Trustee and
its counsel, (vii) the fees and disbursements of counsel for the Company and
the Guarantor and, in the case of a Shelf Registration Statement, the
reasonable fees and disbursements of one counsel for the Holders (which counsel
shall be selected by the Majority Holders and which counsel may also be counsel
for the Initial Purchasers) and (viii) the fees and disbursements of the
independent public accountants of the Company and the Guarantor, including the
expenses of any special audits or “cold comfort” letters required by or
incident to such performance and compliance. 
Notwithstanding the foregoing, Holders shall be responsible for fees and
expenses of counsel to the Underwriters or the Holders (other than fees and
expenses set forth in clauses (ii) and (vii) above) and underwriting discounts
and commissions and transfer taxes, if any, relating to the sale or disposition
of Registrable Securities by a Holder.

 

“Registration
Statement” shall mean any registration statement of the Company and the
Guarantor that covers any of the Exchange Securities or Registrable Securities
pursuant to the provisions of this Agreement and all amendments and supplements
to any such Registration Statement, including post-effective amendments, in
each case including the Prospectus contained therein, all exhibits thereto and
all material incorporated by reference therein.

 

“SEC”
shall mean the Securities and Exchange Commission.

 

“Shelf
Registration” shall mean a registration effected pursuant to Section 2(b)
hereof.

 

“Shelf
Registration Statement” shall mean a “shelf” registration statement of the
Company and the Guarantor pursuant to the provisions of Section 2(b) of this
Agreement which covers all of the Registrable Securities (but no other
securities unless approved by the Holders whose Registrable Securities are
covered by such Shelf Registration Statement) on an appropriate form under Rule
415 under the 1933 Act, or any similar rule that may be adopted by the SEC, and
all amendments and supplements to such registration statement, including
post-effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated by reference
therein.

 

“Trustee”
shall mean the trustee with respect to the Securities under the Indenture.

 

4

 

“Underwriter”
shall have the meaning set forth in Section 3 hereof.

 

“Underwritten
Registration” or “Underwritten Offering” shall mean a registration
in which Registrable Securities are sold to an Underwriter for reoffering to
the public.

 

2.             Registration
Under the 1933 Act.

 

(a)           To the extent not prohibited by any
applicable law or applicable interpretation of the Staff of the SEC, the
Company and the Guarantor shall use their best efforts to cause to be filed an
Exchange Offer Registration Statement covering the offer by the Company and the
Guarantor to the Holders to exchange all of the Registrable Securities for
Exchange Securities and to have such Registration Statement remain effective
until the closing of the Exchange Offer. 
The Company and the Guarantor shall commence the Exchange Offer promptly
after the Exchange Offer Registration Statement has been declared effective by
the SEC and use their best efforts to have the Exchange Offer consummated not
later than 60 days after such effective date. 
The Company and the Guarantor shall commence the Exchange Offer by
mailing the related exchange offer Prospectus and accompanying documents to
each Holder stating, in addition to such other disclosures as are required by
applicable law:

 

(i)            that
the Exchange Offer is being made pursuant to this Registration Rights Agreement
and that all Registrable Securities validly tendered will be accepted for
exchange;

 

(ii)           the
dates of acceptance for exchange (which shall be a period of at least 20
business days from the date such notice is mailed) (the “Exchange Dates”);

 

(iii)          that
any Registrable Security not tendered will remain outstanding and continue to
accrue interest, but will not retain any rights under this Registration Rights
Agreement;

 

(iv)          that
Holders electing to have a Registrable Security exchanged pursuant to the
Exchange Offer will be required to surrender such Registrable Security,
together with the enclosed letters of transmittal, to the institution and at
the address (located in the Borough of Manhattan, The City of New York) specified
in the notice prior to the close of business on the last Exchange Date; and

 

(v)           that
Holders will be entitled to withdraw their election, not later than the close
of business on the last Exchange Date, by sending to the institution and at the
address (located in the Borough of Manhattan, The City of New York) specified
in the notice a telegram, telex, facsimile transmission or letter setting forth
the name of such Holder, the principal amount of Registrable Securities
delivered for exchange and a statement that such Holder is withdrawing his
election to have such Securities exchanged.

 

As
soon as practicable after the last Exchange Date, the Company and the Guarantor
shall:

 

(i)            accept for exchange Registrable
Securities or portions thereof tendered and not validly withdrawn pursuant to
the Exchange Offer; and

 

5

 

(ii)           deliver, or cause to be delivered, to
the Trustee for cancellation all Registrable Securities or portions thereof so
accepted for exchange by the Company and issue, and cause the Trustee to
promptly authenticate and mail to each Holder, an Exchange Security equal in
principal amount to the principal amount of the Registrable Securities
surrendered by such Holder.

 

The Company and the Guarantor shall use their best
efforts to complete the Exchange Offer as provided above and shall comply with
the applicable requirements of the 1933 Act, the 1934 Act and other applicable
laws and regulations in connection with the Exchange Offer.  The Exchange Offer shall not be subject to
any conditions, other than that the Exchange Offer does not violate applicable
law or any applicable interpretation of the Staff of the SEC.  The Company shall inform the Initial Purchasers
of the names and addresses of the Holders to whom the Exchange Offer is made,
and the Initial Purchasers shall have the right, subject to applicable law, to
contact such Holders and otherwise facilitate the tender of Registrable
Securities in the Exchange Offer.

 

(b)           In the event that (i) the Company and
the Guarantor determine that the Exchange Offer Registration provided for in
Section 2(a) above is not available or may not be consummated as soon as
practicable after the last Exchange Date because it would violate applicable
law or the applicable interpretations of the Staff of the SEC, (ii) the
Exchange Offer is not for any other reason consummated by January 3, 2004 or
(iii) the Exchange Offer has been completed and in the opinion of counsel for
the Initial Purchasers, a Registration Statement must be filed and a Prospectus
must be delivered by the Initial Purchasers in connection with any offering or
sale of Registrable Securities, the Company and the Guarantor shall use their
best efforts to cause to be filed as soon as practicable after such
determination, date or notice of such opinion of counsel is given to the
Company and the Guarantor, as the case may be, a Shelf Registration Statement
providing for the sale by the Holders of all of the Registrable Securities and
to have such Shelf Registration Statement declared effective by the SEC.  In the event the Company and the Guarantor
are required to file a Shelf Registration Statement solely as a result of the
matters referred to in clause (iii) of the preceding sentence, the Company and
the Guarantor shall use their best efforts to file and have declared effective
by the SEC both an Exchange Offer Registration Statement pursuant to Section
2(a) with respect to all Registrable Securities and a Shelf Registration
Statement (which may be a combined Registration Statement with the Exchange
Offer Registration Statement) with respect to offers and sales of Registrable
Securities held by the Initial Purchasers after completion of the Exchange
Offer.  The Company and the Guarantor
agree to use their best efforts to keep the Shelf Registration Statement
continuously effective until the expiration of the period referred to in Rule
144(k) with respect to the Registrable Securities or such shorter period that
will terminate when all of the Registrable Securities covered by the Shelf
Registration Statement have been sold pursuant to the Shelf Registration
Statement.  The Company and the
Guarantor further agree to supplement or amend the Shelf Registration Statement
if required by the rules, regulations or instructions applicable to the
registration form used by the Company for such Shelf Registration Statement or
by the 1933 Act or by any other rules and regulations thereunder for shelf
registration or if reasonably requested by a Holder with respect to information
relating to such Holder, and to use their best efforts to cause any such
amendment to become effective and such Shelf Registration Statement to become
usable as soon as thereafter practicable. 
The Company and the Guarantor agree to furnish to the Holders of
Registrable Securities copies of any such supplement or amendment promptly
after its being used or filed with the SEC.

 

6

 

(c)           The Company and the Guarantor shall
pay all Registration Expenses in connection with the registration pursuant to
Section 2(a) or Section 2(b).  Each
Holder shall pay all underwriting discounts and commissions and transfer taxes,
if any, relating to the sale or disposition of such Holder’s Registrable
Securities pursuant to the Shelf Registration Statement.

 

(d)           An Exchange Offer Registration
Statement pursuant to Section 2(a) hereof or a Shelf Registration Statement
pursuant to Section 2(b) hereof will not be deemed to have become effective
unless it has been declared effective by the SEC; provided, however,
that, if, after it has been declared effective, the offering of Registrable
Securities pursuant to a Shelf Registration Statement is interfered with by any
stop order, injunction or other order or requirement of the SEC or any other
governmental agency or court, such Registration Statement will be deemed not to
have become effective during the period of such interference until the offering
of Registrable Securities pursuant to such Registration Statement may legally
resume.  In the event the Exchange Offer
is not consummated and the Shelf Registration Statement is not declared
effective on or prior to January 3, 2004, then commencing on the following day,
the interest rate on the Securities will be increased by 0.5% per annum
(“Additional Interest”) until the Exchange Offer is consummated or the Shelf
Registration Statement is declared effective by the SEC.

 

(e)           Without limiting the remedies
available to the Initial Purchasers and the Holders, the Company and the
Guarantor acknowledge that any failure by the Company or the Guarantor to
comply with its obligations under Section 2(a) and Section 2(b) hereof may
result in material irreparable injury to the Initial Purchasers or the Holders
for which there is no adequate remedy at law, that it will not be possible to
measure damages for such injuries precisely and that, in the event of any such
failure, the Initial Purchasers or any Holder may obtain such relief as may be
required to specifically enforce the Company’s or the Guarantor’s obligations
under Section 2(a) and Section 2(b) hereof.

 

3.             Registration
Procedures.

 

In
connection with the obligations of the Company and the Guarantor with respect
to the Registration Statements pursuant to Section 2(a) and Section 2(b)
hereof, the Company and the Guarantor shall as soon as practicable:

 

(a)           prepare and file with the SEC a
Registration Statement on the appropriate form under the 1933 Act, which form
(x) shall be selected by the Company and the Guarantor and (y) shall, in the
case of a Shelf Registration, be available for the sale of the Registrable
Securities by the selling Holders thereof and (z) shall comply as to form in
all material respects with the requirements of the applicable form and include
all financial statements required by the SEC to be filed therewith, and use
their best efforts to cause such Registration Statement to become effective and
remain effective in accordance with Section 2 hereof;

 

(b)           prepare and file with the SEC such
amendments and post-effective amendments to each Registration Statement as may
be necessary to keep such Registration Statement effective for the applicable
period and cause each Prospectus to be supplemented by any required prospectus
supplement and, as so supplemented, to be filed pursuant to Rule 424 under the
1933 Act; to keep each Prospectus current during the period described under
Section

 

7

 

4(3) and Rule 174 under the 1933 Act that is applicable to transactions
by brokers or dealers with respect to the Registrable Securities or Exchange
Securities;

 

(c)           in the case of a proposed sale under
a Shelf Registration, furnish to each Holder of Registrable Securities, to
counsel for the Initial Purchasers, to counsel for the Holders and to each
Underwriter of an Underwritten Offering of Registrable Securities, if any,
without charge, as many copies of each Prospectus, including each preliminary
Prospectus, and any amendment or supplement thereto and such other documents as
such Holder or Underwriter may reasonably request, in order to facilitate the
public sale or other disposition of the Registrable Securities; and the Company
and the Guarantor consent to the use of such Prospectus and any amendment or
supplement thereto in accordance with applicable law by each of the selling
Holders of Registrable Securities and any such Underwriters in connection with
the offering and sale of the Registrable Securities covered by and in the
manner described in such Prospectus or any amendment or supplement thereto in
accordance with applicable law;

 

(d)           use their reasonable efforts to
register or qualify the Registrable Securities under all applicable state
securities or “blue sky” laws of such jurisdictions as any Holder of
Registrable Securities covered by a Registration Statement shall reasonably
request in writing by the time the applicable Registration Statement is
declared effective by the SEC, to cooperate with such Holders in connection
with any filings required to be made with the National Association of
Securities Dealers, Inc. and do any and all other acts and things which may be
reasonably necessary or advisable to enable such Holder to consummate the
disposition in each such jurisdiction of such Registrable Securities owned by
such Holder; provided, however, that neither the Company nor the
Guarantor shall be required to (i) qualify as a foreign corporation or as a
dealer in securities in any jurisdiction where it would not otherwise be
required to qualify but for this Section 3(d), (ii) file any general consent to
service of process or (iii) subject itself to taxation in any such jurisdiction
if it is not so subject;

 

(e)           in the case of a Shelf Registration,
notify each Holder of Registrable Securities named in such Registration
Statement, counsel for such Holders and counsel for the Initial Purchasers
promptly and, if requested by any such Holder or counsel, confirm such advice
in writing (i) when a Registration Statement has become effective and when any
post-effective amendment thereto has been filed and becomes effective, (ii) of
any request by the SEC or any state securities authority for amendments and
supplements to a Registration Statement and Prospectus or for additional
information after the Registration Statement has become effective, (iii) of the
issuance by the SEC or any state securities authority of any stop order
suspending the effectiveness of a Registration Statement or the initiation of
any proceedings for that purpose, (iv) if, between the effective date of a
Registration Statement and the closing of any sale of Registrable Securities
covered thereby, the representations and warranties of the Company or the
Guarantor contained in any underwriting agreement, securities sales agreement
or other similar agreement, if any, relating to the offering cease to be true
and correct in all material respects or if the Company or the Guarantor
receives any notification with respect to the suspension of the qualification
of the Registrable Securities for sale in any jurisdiction or the initiation of
any proceeding for such purpose, (v) that the Company has suspended use of a
Shelf Registration Statement or the related Prospectus as a result of the
happening of any event during the period a Shelf Registration Statement is
effective which makes any statement made in such Registration Statement or the
related Prospectus untrue in any material respect or which requires the making

 

8

 

of any changes in such Registration Statement or Prospectus in order to
make the statements therein not misleading;
and (vi) of any determination by the Company or the Guarantor that a
post-effective amendment to a Registration Statement would be appropriate. Upon
receipt of a notice of the kind described in this Section 3(e)(v), each such
Holder of Registrable Securities and its
affiliates will forthwith discontinue disposition of such Registrable
Securities pursuant to any such Registration Statement until such Holder of
Registrable Securities and its affiliates receive copies of a supplemented or
amended Registration Statement or Prospectus referred to in this Section 3; any
such suspensions may not exceed 60 days in any 365–day period;

 

(f)            make every reasonable effort to
obtain the withdrawal of any order suspending the effectiveness of a
Registration Statement at the earliest possible moment and provide immediate
notice to each Holder included in the Registration Statement of the withdrawal
of any such order;

 

(g)           in the case of a Shelf Registration,
furnish to each Holder of Registrable Securities included in the Registration
Statement, upon request without charge, one conformed copy of each Registration
Statement and any post-effective amendment thereto (without documents
incorporated therein by reference or exhibits thereto, unless requested);

 

(h)           in the case of a sale under a Shelf
Registration, cooperate with the selling Holders of Registrable Securities to
facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be sold and not bearing any restrictive legends and
enable such Registrable Securities to be in such denominations (consistent with
the provisions of the Indenture) and registered in such names as the selling
Holders may reasonably request at least one business day prior to the closing
of any sale of Registrable Securities;

 

(i)            in the case of a Shelf Registration,
upon the occurrence of any event contemplated by Section 3(e)(v) hereof, use
their reasonable efforts to prepare and file with the SEC a supplement or
post-effective amendment to a Registration Statement or the related Prospectus
or any document incorporated therein by reference or file any other required
document so that, as thereafter delivered to the purchasers of the Registrable
Securities, such Prospectus will not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.  In any such case, the Company and the
Guarantor agree to notify the selling Holders to suspend use of the Prospectus
as promptly as practicable after the occurrence of such an event, and the
selling Holders hereby agree to suspend use of the Prospectus until the Company
and the Guarantor have amended or supplemented the Prospectus to correct such
misstatement or omission;

 

(j)            obtain a CUSIP number for all
Exchange Securities or Registrable Securities, as the case may be, not later
than the effective date of a Registration Statement;

 

(k)           cause the Indenture to be qualified
under the Trust Indenture Act of 1939, as amended (the “TIA”), in connection
with the registration of the Exchange Securities or Registrable Securities, as
the case may be, cooperate with the Trustee and the Holders to effect such changes
to the Indenture as may be required for the Indenture to be so qualified in
accordance with the terms of the TIA and execute, and use their best efforts to
cause the Trustee

 

9

 

to execute, all documents as may be required to effect such changes and
all other forms and documents required to be filed with the SEC to enable the
Indenture to be so qualified in a timely manner;

 

(l)            in the case of a proposed sale under
a Shelf Registration, make available for inspection by a representative of the
selling Holders of the Registrable Securities, any Underwriter participating in
any proposed sale pursuant to such Shelf Registration Statement, and attorneys
representing such selling Holders and such Underwriter, at reasonable times and
in a reasonable manner, all such financial and other records, pertinent
documents and properties of the Company and the Guarantor as shall be
reasonably necessary to enable them to exercise any applicable due diligence
responsibilities, and cause the respective officers, directors and employees of
the Company and the Guarantor to supply all information reasonably requested by
any such person in connection with such proposed sale under the Shelf
Registration Statement; each person to whom any information is made available
under this clause (l) will be required to agree in writing that it will keep
such information confidential and that it will not disclose any of such
information unless (i) the disclosure of such information is necessary to avoid
or correct a misstatement or omission in such Registration Statement or
Prospectus, (ii) the release of such information is ordered pursuant to a
subpoena or other order of a court of competent jurisdiction, (iii) disclosure
of such information is necessary or advisable, in the opinion of counsel for
any such person, in connection with any action, claim, suit or proceeding,
directly or indirectly, involving or potentially involving such person and
arising out of, based upon, relating to or involving this Agreement, the
Purchase Agreement, or any transactions contemplated hereby or thereby or
arising hereunder or thereunder, or (iv) such information has been made
generally available to the public; in addition, each selling Holder of such
Registrable Securities and each other person to whom information is made
available under this clause (l) will be required to agree that the information
obtained by it under this clause (l) shall be deemed confidential and shall not
be used by it as the basis for any market transactions in the securities of the
Company or the Guarantor unless and until such information is made generally
available to the public and that it will, upon learning that disclosure of such
information is sought in a court of competent jurisdiction, give notice to the
Company and allow the Company to undertake appropriate action to prevent
disclosure of the information deemed confidential at the Company’s expense.

 

(m)          in the case of a Shelf Registration,
use their best efforts to cause all Registrable Securities to be listed on any
securities exchange or any automated quotation system on which similar
securities issued by the Company or the Guarantor are then listed if requested
by the Majority Holders, to the extent such Registrable Securities satisfy
applicable listing requirements;

 

(n)           use their best efforts to cause the
Exchange Securities, or Registrable Securities, as the case may be, to be rated
by two nationally recognized statistical rating organizations (as such term is
defined in Rule 436(g)(2) under the 1933 Act) if the Registrable Securities
have been rated;

 

(o)           if reasonably requested by any Holder
of Registrable Securities covered by a Registration Statement, (i) promptly
incorporate in a Prospectus supplement or post-effective amendment such
information with respect to such Holder as such Holder reasonably requests to
be included therein and (ii) make all required filings of such Prospectus
supplement or such post-

 

10

 

effective amendment as soon as the Company has received notification of
the matters to be incorporated in such filing; and

 

(p)           in connection with any underwritten
offering of Registrable Securities pursuant to a Shelf Registration, enter into
such customary agreements and take all such other actions in connection
therewith (including those requested by the Holders of a majority of the
Registrable Securities being sold in such underwritten offering) in order to
expedite or facilitate the disposition of such Registrable Securities and in
such connection, (i) to the extent possible, make such representations and
warranties to the Underwriters of such Registrable Securities with respect to
the business of the Company and its subsidiaries, the Registration Statement,
Prospectus and documents incorporated by reference or deemed incorporated by
reference, if any, in each case, in form, substance and scope as are
customarily made by issuers to underwriters in similar underwritten offerings
and confirm the same if and when requested, (ii) obtain opinions of counsel to
the Company and the Guarantor (which counsel and opinions, in form, scope and
substance, shall be reasonably satisfactory to the Underwriters and their
counsel) addressed to each Underwriter of Registrable Securities, covering the
matters customarily covered in opinions requested in similar underwritten
offerings, (iii) obtain “cold comfort” letters from the independent certified
public accountants of the Company and the Guarantor (and, if necessary, any
other certified public accountant of any subsidiary of the Company or the
Guarantor, or of any business acquired by the Company or the Guarantor for
which financial statements and financial data are or are required to be
included in the Registration Statement) addressed to each Underwriter of
Registrable Securities, such letters to be in customary form and covering
matters of the type customarily covered in “cold comfort” letters in connection
with similar underwritten offerings, and (iv) deliver such documents and certificates
as may be reasonably requested by the Underwriters, and which are customarily
delivered in similar underwritten offerings, to evidence the continued validity
of the representations and warranties of the Company and the Guarantor made
pursuant to clause (i) above and to evidence compliance with any customary
conditions contained in an underwriting agreement.

 

In the
case of a Shelf Registration Statement, the Company and the Guarantor may
require each selling Holder of Registrable Securities to furnish to the Company
and the Guarantor such information regarding the selling Holder and the
proposed distribution by such Holder of such Registrable Securities as the
Company and the Guarantor may from time to time reasonably request in writing.

 

In the
case of a Shelf Registration Statement, each Holder agrees that, upon receipt
of any notice from the Company and the Guarantor described in Section 3(e)
hereof, such Holder will forthwith discontinue disposition of Registrable
Securities pursuant to a Registration Statement until such Holder’s receipt of
the copies of the supplemented or amended Prospectus contemplated by Section
3(i) hereof, and, if so directed by the Company and the Guarantor, such Holder
will deliver to the Company and the Guarantor (at its expense) all copies in
its possession, other than permanent file copies then in such Holder’s
possession, of the Prospectus covering such Registrable Securities current at
the time of receipt of such notice.  If
the Company and the Guarantor shall give any such notice to suspend the
disposition of Registrable Securities pursuant to a Registration Statement, the
Company and the Guarantor shall extend the period during which the Registration
Statement shall be maintained effective pursuant to this 

 

11

 

Agreement by the number of days during the period from and including
the date of the giving of such notice to and including the date when the
Holders shall have received copies of the supplemented or amended Prospectus
necessary to resume such dispositions. 
The Company and the Guarantor may give any such notice only twice during
any 365 day period and any such suspensions may not exceed 60 days for each
suspension and there may not be more than two suspensions in effect during any
365 day period.

 

The
Holders of Registrable Securities covered by a Shelf Registration Statement who
desire to do so may sell such Registrable Securities in an Underwritten
Offering.  In any such Underwritten
Offering, the investment banker or investment bankers and manager or managers
(the “Underwriters”) that will administer the offering will be selected by the
Majority Holders of the Registrable Securities included in such offering.

 

4.             Participation
of Broker-Dealers in Exchange Offer.

 

(a)           The Staff of the SEC has taken the
position that any broker-dealer that receives Exchange Securities for its own
account in the Exchange Offer in exchange for Securities that were acquired by
such broker-dealer as a result of market-making or other trading activities (a
“Participating Broker-Dealer”), may be deemed to be an “underwriter” within the
meaning of the 1933 Act and must deliver a prospectus meeting the requirements
of the 1933 Act in connection with any resale of such Exchange Securities.

 

The
Company and the Guarantor understand that it is the Staff’s position that if
the Prospectus contained in the Exchange Offer Registration Statement includes
a plan of distribution containing a statement to the above effect and the means
by which Participating Broker-Dealers may resell the Exchange Securities,
without naming the Participating Broker-Dealers or specifying the amount of
Exchange Securities owned by them, such Prospectus may be delivered by
Participating Broker-Dealers to satisfy their prospectus delivery obligation
under the 1933 Act in connection with resales of Exchange Securities for their
own accounts, so long as the Prospectus otherwise meets the requirements of the
1933 Act.

 

(b)           In light of the above,
notwithstanding the other provisions of this Agreement, the Company and the
Guarantor agree that the provisions of this Agreement as they relate to a Shelf
Registration shall also apply to an Exchange Offer Registration to the extent,
and with such reasonable modifications thereto as may be, reasonably requested
by the Initial Purchasers or by one or more Participating Broker-Dealers, in
each case as provided in clause (ii) below, in order to expedite or facilitate
the disposition of any Exchange Securities by Participating Broker-Dealers
consistent with the positions of the Staff recited in Section 4(a) above; provided
that:

 

(i)            the
Company and the Guarantor shall not be required to amend or supplement the
Prospectus contained in the Exchange Offer Registration Statement, as would
otherwise be contemplated by Section 3(i), for a period exceeding 180 days
after the last Exchange Date (as such period may be extended pursuant to the
penultimate paragraph of Section 3 of this Agreement) and Participating
Broker-Dealers shall not be authorized by the Company and the Guarantor to
deliver and shall not deliver such

 

12

 

Prospectus after such period in connection with the resales
contemplated by this Section 4; and

 

(ii)           the
application of the Shelf Registration procedures set forth in Section 3 of this
Agreement to an Exchange Offer Registration, to the extent not required by the
positions of the Staff of the SEC or the 1933 Act and the rules and regulations
thereunder, will be in conformity with the reasonable request to the Company
and the Guarantor by the Initial Purchasers or with the reasonable request in
writing to the Company and the Guarantor by one or more broker-dealers who
certify to the Initial Purchasers, the Company and the Guarantor in writing
that they anticipate that they will be Participating Broker-Dealers; and provided
further that, in connection with such application of the Shelf
Registration procedures set forth in Section 3 to an Exchange Offer
Registration, the Company and the Guarantor shall be obligated (x) to deal only
with one entity representing the Participating Broker-Dealers, which shall be
Morgan Stanley & Co. Incorporated unless it elects not to act as such
representative, (y) to pay the fees and expenses of only one counsel
representing the Participating Broker-Dealers, which shall be counsel to the
Initial Purchasers unless such counsel elects not to so act and (z) to cause to
be delivered only one, if any, “cold comfort” letter with respect to the
Prospectus in the form existing on the last Exchange Date and with respect to
each subsequent amendment or supplement, if any, effected during the period
specified in clause (i) above.

 

(c)           The Initial Purchasers shall have no
liability to the Company, the Guarantor or any Holder with respect to any
request that it may make pursuant to Section 4(b) above.

 

5.             Indemnification
and Contribution.

 

(a)           Each of the Company and the Guarantor
agrees jointly and severally to indemnify and hold harmless the Initial
Purchasers, each Holder and each Person, if any, who controls any Initial
Purchaser or any Holder within the meaning of either Section 15 of the 1933 Act
or Section 20 of the 1934 Act, or is under common control with, or is
controlled by, any Initial Purchaser or any Holder, from and against all
losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred by the Initial Purchaser, any
Holder or any such controlling or affiliated Person in connection with
defending or investigating any such action or claim) caused by any untrue
statement or alleged untrue statement of a material fact contained in any
Registration Statement (or any amendment thereto) pursuant to which Exchange
Securities or Registrable Securities were registered under the 1933 Act,
including all documents incorporated therein by reference, or caused by any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
caused by any untrue statement or alleged untrue statement of a material fact
contained in any Prospectus (as amended or supplemented if the Company and the
Guarantor shall have furnished any amendments or supplements thereto), or
caused by any omission or alleged omission to state therein a material fact
necessary to make the statements therein in light of the circumstances under
which they were made not misleading, except insofar as such losses, claims,
damages or liabilities are caused by any such untrue statement or omission or
alleged untrue statement or omission based upon information relating to

 

13

 

the Initial Purchasers or any Holder furnished to the Company or the
Guarantor in writing through Morgan Stanley & Co. Incorporated or any
selling Holder expressly for use therein. 
In connection with any Underwritten Offering permitted by Section 3, the
Company and the Guarantor will also indemnify the Underwriters, if any, selling
brokers, dealers and similar securities industry professionals participating in
the distribution, their officers and directors and each Person who controls
such Persons (within the meaning of the 1933 Act and the 1934 Act) to the same
extent as provided above with respect to the indemnification of the Holders, if
requested in connection with any Registration Statement.

 

(b)           Each Holder agrees, severally and not
jointly, to indemnify and hold harmless the Company, the Guarantor, the Initial
Purchasers and the other selling Holders, and each of their respective
directors, officers who sign the Registration Statement and each Person, if
any, who controls the Company, the Guarantor, any Initial Purchaser and any
other selling Holder within the meaning of either Section 15 of the 1933 Act or
Section 20 of the 1934 Act to the same extent as the foregoing indemnity from
the Company and the Guarantor to the Initial Purchasers and the Holders, but
only with reference to information relating to such Holder furnished to the
Company and the Guarantor in writing by such Holder expressly for use in any
Registration Statement (or any amendment thereto) or any Prospectus (or any
amendment or supplement thereto).

 

(c)           In case any proceeding (including any
governmental investigation) shall be instituted involving any Person in respect
of which indemnity may be sought pursuant to either paragraph (a) or paragraph
(b) above, such Person (the “indemnified party”) shall promptly notify the
Person against whom such indemnity may be sought (the “indemnifying party”) in
writing and the indemnifying party, upon request of the indemnified party,
shall retain counsel reasonably satisfactory to the indemnified party to
represent the indemnified party and any others the indemnifying party may
designate in such proceeding and shall pay the fees and disbursements of such
counsel related to such proceeding.  In
any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of
both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. 
It is understood that the indemnifying party shall not, in connection
with any proceeding or related proceedings in the same jurisdiction, be liable
for (a) the fees and expenses of more than one separate firm (in addition to
any local counsel) for the Initial Purchasers and all Persons, if any, who
control any Initial Purchaser within the meaning of either Section 15 of the
1933 Act or Section 20 of the 1934 Act, (b) the fees and expenses of more than
one separate firm (in addition to any local counsel) for the Company, the
Guarantor and their directors and officers who sign the Registration Statement
and each Person, if any, who controls the Company or the Guarantor within the
meaning of either such Section and (c) the fees and expenses of more than one
separate firm (in addition to any local counsel) for all Holders and all
Persons, if any, who control any Holders within the meaning of either such
Section, and that all such fees and expenses shall be reimbursed as they are
incurred.  In such case involving the
Initial Purchasers and Persons who control the Initial Purchasers, such firm
shall be designated in writing by Morgan Stanley & Co. Incorporated.  In such case involving the Holders and such
Persons who

 

14

 

control Holders, such firm shall be designated in writing by the
Majority Holders.  In all other cases,
such firm shall be designated by the Company. 
The indemnifying party shall not be liable for any settlement of any
proceeding effected without its written consent but, if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment.  No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which such indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.

 

(d)           If the indemnification provided for
in paragraph (a) or paragraph (b) of this Section 5 is unavailable to an
indemnified party or insufficient in respect of any losses, claims, damages or
liabilities, then each indemnifying party under such paragraph, in lieu of
indemnifying such indemnified party thereunder, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities in such proportion as is appropriate to reflect the
relative fault of the indemnifying party or parties on the one hand and of the
indemnified party or parties on the other hand in connection with the statements
or omissions that resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations.  The relative fault of the Company or the Guarantor and the
Holders shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
the Company or the Guarantor or by the Holders’ and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.  The
Holders’ respective obligations to contribute pursuant to this Section 5(d) are
several in proportion to the respective principal amount of Registrable Securities
of such Holder that were registered pursuant to a Registration Statement.

 

(e)           The Company, the Guarantor and each
Holder agree that it would not be just or equitable if contribution pursuant to
this Section 5 were determined by pro  rata allocation or by any
other method of allocation that does not take account of the equitable
considerations referred to in paragraph (d) above.  The amount paid or payable by an indemnified party as a result of
the losses, claims, damages and liabilities referred to in paragraph (d) above
shall be deemed to include, subject to the limitations set forth above, any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.  Notwithstanding the provisions of this
Section 5, no Holder shall be required to indemnify or contribute any amount in
excess of the amount by which the total price at which Registrable Securities
were sold by such Holder exceeds the amount of any damages that such Holder has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. 
No Person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any
Person who was not guilty of such fraudulent misrepresentation.  The remedies provided for in this Section 5
are not exclusive and shall not limit any rights or remedies which may
otherwise be available to any indemnified party at law or in equity.

 

15

 

The
indemnity and contribution provisions contained in this Section 5 shall remain
operative and in full force and effect regardless of (i) any termination of
this Agreement, (ii) any investigation made by or on behalf of the Initial
Purchasers, any Holder or any Person controlling any Initial Purchaser or any
Holder, or by or on behalf of the Company, the Guarantor, and their officers or
directors, or any Person controlling the Company or any of the Guarantor, (iii)
acceptance of any of the Exchange Securities and (iv) any sale of Registrable
Securities pursuant to a Shelf Registration Statement.

 

6.             Miscellaneous.

 

(a)           No Inconsistent Agreements.  Neither the Company nor the Guarantor has
entered into, nor on or after the date of this Agreement will enter into, any
agreement which is inconsistent with the rights granted to the Holders of
Registrable Securities in this Agreement or otherwise conflicts with the
provisions hereof.  The rights granted to
the Holders hereunder do not in any way conflict with and are not inconsistent
with the rights granted to the holders of the Company’s or the other issued and
outstanding securities under any such agreements.

 

(b)           Amendments and Waivers.  The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given unless the Company and the Guarantor have obtained the written consent of
Holders of at least a majority in aggregate principal amount of the outstanding
Registrable Securities affected by such amendment, modification, supplement,
waiver or consent; provided, however, that no amendment,
modification, supplement, waiver or consent to any departure from the
provisions of Section 5 hereof shall be effective as against any Holder of
Registrable Securities unless consented to in writing by such Holder.

 

(c)           Notices.  All notices and other communications
provided for or permitted hereunder shall be made in writing by hand-delivery,
registered first-class mail, telex, telecopier, or any courier guaranteeing
overnight delivery (i) if to a Holder, at the most current address given by
such Holder to the Company by means of a notice given in accordance with the
provisions of this Section 6(c), which address initially is, with respect to
the Initial Purchasers, the address set forth in the Purchase Agreement; and
(ii) if to the Company or the Guarantor, initially at the Company’s address set
forth in the Purchase Agreement and thereafter at such other address, notice of
which is given in accordance with the provisions of this Section 6(c).

 

All
such notices and communications shall be deemed to have been duly given:  at the time delivered by hand, if personally
delivered; five business days after being deposited in the mail, postage
prepaid, if mailed; when answered back, if telexed; when receipt is
acknowledged, if telecopied; and on the next business day if timely delivered
to an air courier guaranteeing overnight delivery.

 

Copies
of all such notices, demands, or other communications shall be concurrently
delivered by the Person giving the same to the Trustee, at the address
specified in the Indenture.

 

16

 

(d)           Successors and Assigns.  This Agreement shall inure to the benefit of
and be binding upon the successors, assigns and transferees of each of the
parties, including, without limitation and without the need for an express
assignment, subsequent Holders; provided that nothing herein shall be
deemed to permit any assignment, transfer or other disposition of Registrable
Securities in violation of the terms of the Purchase Agreement.  If any transferee of any Holder shall acquire
Registrable Securities, in any manner, whether by operation of law or
otherwise, such Registrable Securities shall be held subject to all of the
terms of this Agreement, and by taking and holding such Registrable Securities
such Person shall be conclusively deemed to have agreed to be bound by and to
perform all of the terms and provisions of this Agreement and such Person shall
be entitled to receive the benefits hereof. 
The Initial Purchasers (in their capacity as Initial Purchasers) shall
have no liability or obligation to the Company or the Guarantor with respect to
any failure by a Holder to comply with, or any breach by any Holder of, any of
the obligations of such Holder under this Agreement.

 

(e)           Third Party Beneficiary.  The Holders shall be third party beneficiaries
to the agreements made hereunder between the Company and the Guarantor, on the
one hand, and the Initial Purchasers, on the other hand, and shall have the
right to enforce such agreements directly to the extent it deems such
enforcement necessary or advisable to protect its rights or the rights of
Holders hereunder.

 

(f)            Counterparts.  This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

 

(g)           Headings.  The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.

 

(h)           Governing Law.  This Agreement shall be governed by the laws
of the State of New York.

 

(i)            Severability.  In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the
remaining provisions contained herein shall not be affected or impaired
thereby.

 

17

 

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

 

	
   

  	
  AMERICAN
  COLOR GRAPHICS, INC.

  
	
   

  	
   

  
	
   

  	
  By 

  	
   /s/ Timothy M. Davis

  	
   

  
	
   

  	
   

  	
  Name:
  Timothy M. Davis

  
	
   

  	
   

  	
  Title:
  Senior Vice President

  
	
   

  	
   

  
	
   

  	
  ACG
  HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
  By 

  	
   /s/ Timothy M. Davis

  	
   

  
	
   

  	
   

  	
  Name:
  Timothy M. Davis

  
	
   

  	
   

  	
  Title:
  Senior Vice President

  

 

18

 

Confirmed
and accepted as of

   the date first above written:

 

MORGAN STANLEY & CO. INCORPORATED

BANC OF AMERICA SECURITIES LLC

CREDIT
SUISSE FIRST BOSTON LLC

 

By:  MORGAN
STANLEY & CO. INCORPORATED

 

In its individual capacity and as representative of
the other Initial Purchasers

 

 

	
  By

  	
   /s/ David
  Schwarzbach

  	
   

  
	
  Name:
  David Schwarzbach

  	
   

  
	
  Title:
  Vice President

  	
   

  

 

 

19

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