Exhibit
10.1


AMENDMENT NO. 4 TO
CREDIT AGREEMENT


This Amendment No.
4 to Credit Agreement, dated as of May 30, 2006 (this “Amendment”), is
entered into by and among Vertis, Inc., as a Borrower (“Borrower”), the
other Credit Parties signatory hereto, General Electric Capital Corporation, as
a Lender and as Agent for Lenders (“Agent”), and the other Lenders.


RECITALS


A.            Borrower, the other Credit Parties, Agent and Lenders are
parties to that certain Credit Agreement, dated as of December 22, 2004,
including all annexes, exhibits and schedule thereto (as amended by that
certain Limited Consent and Amendment No. 1 to Credit Agreement, dated as of
October 3, 2005, that certain Amendment No. 2 to Credit Agreement, dated as of
November 22, 2005, and that certain Limited Consent and Amendment No. 3 to
Credit Agreement, dated as of December 12, 2005, and as from time to time
further amended, restated, supplemented or otherwise modified, the “Credit
Agreement”).


B.            Borrower and the other Credit Parties have requested that
Agent and Lenders consent to certain amendments to the Credit Agreement as set
forth herein in Section 2 in order to increase: (i) the advance rate on
Fixed Assets with respect to the calculation of the Borrowing Base; and (ii)
the amount of each Lender’s Revolving Loan Commitment.


C.            Borrower, the other Credit Parties, Agent and Lenders are
willing to consent to the amendments set forth herein pursuant to, and subject
to, the terms and conditions set forth in this Amendment.


D.            This Amendment shall constitute a Loan Document and these
Recitals shall be construed as part of this Amendment.


NOW THEREFORE, in
consideration of the premises and the mutual covenants hereinafter contained,
and of the Loans and other extensions of credit heretofore, now or hereafter
made to, or for the benefit of, Borrower by Lenders, Borrower, the other Credit
Parties, Agent and Lenders hereby agree as follows:


1.             Definitions. 
Except to the extent otherwise specified herein, capitalized terms used
in this Amendment shall have the same meanings ascribed to them in the Credit
Agreement and Annex A thereto.











 


2.             Amendments.


2.1.          Section 6.2(g) of
the Credit Agreement is hereby deleted in its entirety and replaced with the
following paragraph:


 “(g)        Non-Real
Estate Fixed Asset Appraisal and Real Estate Appraisal.  Upon the election of Agent, which may be made
at any time while and so long as a Default or Event of Default shall be
continuing and not more than once per year so long as no Default or Event of
Default has occurred and is continuing, Agent may conduct appraisals and audits
and obtain appraisal reports in form and substance and from appraisers
reasonably satisfactory to Agent (which may be, or be affiliated with, a
Lender) with respect to the fixed assets (excluding real estate) of the
Borrower and the other Credit Parties (the “Non-Real Estate Fixed Asset
Appraisal”) which reports shall indicate whether or not the relevant
information set forth in the Borrowing Base Certificate most recently delivered
is accurate and complete in all material respects based upon a review by such
appraiser;  provided, that so long as no
Default or Event of Default has occurred and is continuing, Borrower’s
obligation to reimburse out-of-pocket expenses in respect of any such Non-Real
Estate Fixed Asset Appraisal shall not exceed $125,000.  At the request of the Borrower made at any
time in the reasonable discretion of Borrower, Agent may conduct appraisals and
obtain appraisal reports in form and substance and from appraisers reasonably satisfactory
to Agent (which may be, or be affiliated with, a Lender) with respect to the
owned real estate of the Borrower and the other Credit Parties (the “Real
Estate Appraisal”) which reports shall indicate whether or not the relevant
information set forth in the Borrowing Base Certificate most recently delivered
is accurate and complete in all material respects based upon a review by such
appraiser.  In addition, for periods
beginning on or after January 1, 2007, upon the election of Agent, which may be
made at any time while and so long as a Default or Event of Default shall be
continuing and not more than once per year so long as no Default or Event of
Default is continuing, Agent may conduct a Real Estate Appraisal which report
shall satisfy the requirements set forth in the immediately preceding sentence.”


2.2.          Annex A to the
Credit Agreement is hereby amended by inserting the following definition in
appropriate alphabetical order:


“Fixed Asset Appraisal
shall mean a Non-Real Estate Fixed Asset Appraisal or a Real Estate Appraisal
as the case may be and as each of such terms is defined in Section 6.2(g).”


2.3.          Section 1.3(e) of
the Credit Agreement is hereby amended by deleting clause (ii) of the proviso
at the end of the first sentence of such Section 1.3(e) and replacing it with
the following:


“(ii) any Non-Real Estate
Fixed Asset Appraisal (as defined in Section 6.2(g) hereof) shall not exceed
$125,000.”



 2
 








 


2.4.          Section 4.3 of the
Credit Agreement is hereby amended by deleting the third sentence of such
Section 4.3 and replacing it with the following:


“In addition to the
foregoing, each Credit Party shall permit any authorized representatives of
Agent to conduct a Fixed Asset Appraisal subject to and upon the terms and
conditions set forth in Section 6.2(g) hereof; provided, however,
that, so long as no Default or Event of Default has occurred and is continuing,
(i) Agent shall be limited to one (1) Non-Real Estate Fixed Asset Appraisal
during each calendar year and, for periods beginning on or after January 1,
2007, one (1) Real Estate Appraisal during each calendar year, and (ii)
Borrower’s obligation to reimburse out-of-pocket expenses in respect of any
such Non-Real Estate Fixed Asset Appraisal shall not exceed $125,000.”


2.5.          Schedule 1 to
Exhibit 6.2(e) to the Credit Agreement is hereby amended by deleting the figure
“45%” in the “Advance Rate” line with respect to Fixed Assets appearing on the
second page of such Schedule 1 and replacing such figure with “55%”.  Schedule 1 to Exhibit 6.2(e) to the Credit
Agreement is hereby further amended by applying the following adjustments to
the figure “55%” (as herein amended) in the “Advance Rate” line with respect to
Fixed Assets appearing on the second page of such Schedule 1.  Each adjustment will be referred to as a “Step
Down” and will occur on the dates detailed in the following table.  The Advance Rate associated with each Step
Down will remain in place until the next Step Down.


 


	
  Step Down

  	
   

  	
  Date

  	
   

  	
  Advance Rate on Fixed Assets

  
	
  1

  	
   

  	
  March 31, 2007

  	
   

  	
  53%

  
	
  2

  	
   

  	
  June 30, 2007

  	
   

  	
  50%

  
	
  3

  	
   

  	
  September 30, 2007

  	
   

  	
  48%

  
	
  4

  	
   

  	
  December 31, 2007

  	
   

  	
  45%

  



 


provided,
however, that, if, prior to December 31, 2007, Agent receives a
Real Estate Appraisal evidencing an amount of at least $45,000,000 in excess of
the Net Book Value (as reported in the most recently delivered Borrowing Base
Certificate) of owned real estate of the Borrower and the other Credit Parties,
then the Advance Rate on Fixed Assets will immediately revert to 45%; and, provided,
further, that, if at any time prior to December 31, 2007 the
Maximum Amount is permanently reduced pursuant to the terms of the Credit
Agreement (whether in connection with a voluntary reduction, a mandatory
reduction or otherwise) to $200,000,000 or less, then the Advance Rate on Fixed
Assets will immediately revert to 45%.


2.6.          Schedule 1 to
Exhibit 6.2(e) to the Credit Agreement is hereby further amended by:


(a)           deleting the line “Real Estate (Net
Book Value)” with respect to Fixed Assets appearing on the second page of such
Schedule 1 and replacing such line with the line “Real Estate (the greater of
Net Book Value and Fair Market Value)”; and


(b)           inserting the following at the end of
such Schedule 1:



 3
 








 


“The term “Fair Market
Value” for purposes of this Schedule 1 shall mean the value shown with respect
to owned real estate of the Borrower and the other Credit Parties in the most
recently completed Real Estate Appraisal, if any.”


2.7.          Annex B to the
Credit Agreement is hereby amended by:


(a)           deleting the figure “$150,000,000”
appearing opposite the name of General Electric Capital Corporation on such
Annex B and replacing such figure with “$165,000,000”.  Annex B to the Credit Agreement is hereby
further amended by applying the following adjustments to the figure “$165,000,000”
(as herein amended) appearing opposite the name of General Electric Capital
Corporation on such Annex B.  Each
adjustment will be referred to as a “Step Down” and will occur on the dates
detailed in the following table.  The
Revolving Loan Commitment of General Electric Capital Corporation associated
with each Step Down will remain in place until the next Step Down.


 


	
  Step Down

  	
   

  	
  Date

  	
   

  	
  Revolving Loan Commitment

  
	
  1

  	
   

  	
  March 31, 2007

  	
   

  	
  $161,250,000

  
	
  2

  	
   

  	
  June 30, 2007

  	
   

  	
  $157,500,000

  
	
  3

  	
   

  	
  September 30, 2007

  	
   

  	
  $153,750,000

  
	
  4

  	
   

  	
  December 31, 2007

  	
   

  	
  $150,000,000

  



 


provided,
further, that, if, prior to December 31, 2007, Agent receives a
Real Estate Appraisal then the Revolving Loan Commitment of General Electric
Capital Corporation shall become equal to the lesser of (I) $165,000,000 and
(II) the higher of (x) the then otherwise applicable Revolving Loan Commitment
determined in accordance with the foregoing Step Down table and (y) an amount
equal to (A) $150,000,000 plus (B) 45% of (the Fair Market Value of
owned real estate of the Borrower and the other Credit Parties (as reported in
the Real Estate Appraisal) minus the Net Book Value of owned real estate
of the Borrower and the other Credit Parties (as reported in the most recently
delivered Borrowing Base Certificate)), which calculation shall be made each
subsequent time that (x) Agent receives a Real Estate Appraisal, (y) a Step
Down occurs or (z) the Net Book Value of owned real estate of the Borrower and
the other Credit Parties (as reported in the most recently delivered Borrowing
Base Certificate) changes and following each such subsequent calculation the
Revolving Loan Commitment of General Electric Capital Corporation shall be
accordingly adjusted (it being understood and agreed that in no event
whatsoever shall the Revolving Loan Commitment of General Electric Capital
Corporation exceed $165,000,000); and


(b)           deleting the figure “$50,000,000”
appearing opposite the name of Bank of America, N.A. on such Annex B and
replacing such figure with “$55,000,000”. 
Annex B to the Credit Agreement is hereby further amended by applying
the following adjustments to the figure “$55,000,000” (as herein amended)
appearing opposite the name of Bank of America, N.A. on such Annex B.  Each adjustment will be referred to as a “Step
Down” and will occur on the dates detailed in the following table. The
Revolving 



 4
 








 


Loan
Commitment of Bank of America, N.A. associated with each Step Down will remain
in place until the next Step Down.


 


	
  Step Down

  	
   

  	
  Date

  	
   

  	
  Revolving Loan Commitment

  
	
  1

  	
   

  	
  March 31, 2007

  	
   

  	
  $53,750,000

  
	
  2

  	
   

  	
  June 30, 2007

  	
   

  	
  $52,500,000

  
	
  3

  	
   

  	
  September 30, 2007

  	
   

  	
  $51,250,000

  
	
  4

  	
   

  	
  December 31, 2007

  	
   

  	
  $50,000,000

  



 


provided,
further, that, if, prior to December 31, 2007, Agent receives a Real
Estate Appraisal then the Revolving Loan Commitment of Bank of America, N.A.
shall become equal to the lesser of (I) $55,000,000 and (II) the higher of (x)
the then otherwise applicable Revolving Loan Commitment determined in
accordance with the foregoing Step Down table and (y) an amount equal to (A)
$50,000,000 plus (B) 45% of (the Fair Market Value of owned real estate
of the Borrower and the other Credit Parties (as reported in the Real Estate
Appraisal) minus the Net Book Value of owned real estate of the Borrower
and the other Credit Parties (as reported in the most recently delivered
Borrowing Base Certificate)), which calculation shall be made each subsequent
time that (x) Agent receives a Real Estate Appraisal, (y) a Step Down occurs or
(z) the Net Book Value of owned real estate of the Borrower and the other
Credit Parties (as reported in the most recently delivered Borrowing Base
Certificate) changes and following each such subsequent calculation the
Revolving Loan Commitment of Bank of America, N.A. shall be accordingly
adjusted (it being understood and agreed that in no event whatsoever shall the
Revolving Loan Commitment of Bank of America, N.A. exceed $55,000,000).


3.             Representations and Warranties.  Each of Borrower and each other Credit Party,
jointly and severally, hereby represents and warrants to Agent and Lenders
that:


3.1.          The
execution, delivery and performance by the Borrower and each of the other
Credit Parties of this Amendment have been duly authorized by all necessary
corporate action, and this Amendment constitutes the legal, valid and binding
obligation of the Borrower and each of the other Credit Parties enforceable
against each of them in accordance with its terms, except as the enforcement
hereof may be subject to the effect of any applicable bankruptcy, insolvency,
reorganization, moratorium or similar law affecting creditors’ rights generally
or to general principles of equity.


3.2.          Each
of the execution, delivery and performance of this Amendment by Borrower and
each Credit Party and the consummation of the transactions contemplated hereby
does not, and will not, contravene or conflict with any provision of (i) law,
(ii) any judgment, decree or order, or (iii) the certificate or articles of
incorporation or by-laws or other constituent documents of Borrower or any
Credit Party, and does not, and will not, contravene or conflict with, or cause
any Lien to arise under, any provision of any indenture, agreement, mortgage,
lease, instrument or other document, including, without limitation, the
February 2003 Senior Subordinated Debt Documents, the 2002 Senior Debt Documents,
the 2003 Senior Secured Debt



 5
 








 


Documents or the Mezzanine Debt Documents,
binding upon or otherwise affecting Borrower or any Credit Party or any
property of Borrower or any Credit Party.


3.3.          No
Default or Event of Default exists under the Credit Agreement or any other Loan
Document or will exist after or be triggered by the execution, delivery and
performance of this Amendment or the consummation of the transactions
contemplated hereby.  In addition, each
of Borrower and each other Credit Party hereby represents, warrants and
reaffirms that the Credit Agreement and each of the other Loan Documents
remains in full force and effect.


4.             Conditions Precedent to Effectiveness.  The effectiveness of the amendments set forth
in Section 2 hereof are in each instance subject to the satisfaction of
each of the following conditions precedent:


4.1.          Amendment.  This Amendment shall have been duly executed
and delivered by the Borrower, the Credit Parties, Agent and Lenders.


4.2.          No Default.  No Default or Event of Default shall have
occurred and be continuing or would result from the effectiveness of this
Amendment or the consummation of any of the transactions contemplated hereby.


4.3.          Opinion.  Agent and Lenders shall have received an
opinion of counsel to Borrower, Sullivan & Cromwell LLP, with respect to
this Amendment, including, without limitation, as to this Amendment and the
transactions contemplated hereby not conflicting with any provision of the
February 2003 Senior Subordinated Debt Documents, the 2002 Senior Debt
Documents, the 2003 Senior Secured Debt Documents or the Mezzanine Debt
Documents, all in form and substance acceptable to Agent.


4.4.          Notes.  Each Lender shall have received a new
Revolving Note in form and substance acceptable to Agent, duly executed by
Borrower and reflecting such Lender’s increased Revolving Loan Commitment
pursuant to the terms of this Amendment.


4.5.          Amendment Fee.  Borrower shall have paid to the Agent, a
nonrefundable amendment fee for the ratable account of the Lenders, in an
amount equal to $200,000.


4.6.          Miscellaneous.  Agent and Lenders shall have received such
other agreements, instruments and documents as Agent or Lenders may reasonably
request.


5.             Reference to and Effect Upon the Credit Agreement and
other Loan Documents.  


5.1.          Full Force and
Effect.  Except as specifically
provided herein, the Credit Agreement and each other Loan Document shall remain
in full force and effect and each is hereby ratified and confirmed by all
Credit Parties.


5.2.          No Waiver.  The execution, delivery and effect of this
Amendment shall be limited precisely as written and shall not be deemed to (i)
be a consent to any waiver of any term or condition, or to any amendment or
modification of any term or condition (except as specifically provided herein)
of the Credit Agreement or any other Loan Document or (ii)



 6
 








 


prejudice any
right, power or remedy which the Agent or any Lender now has or may have in the
future under or in connection with the Credit Agreement or any other Loan
Document.


5.3.          Certain Terms.  Each reference in the Credit Agreement to “this
Agreement”, “hereunder”, “hereof”, “herein” or any other word or words of
similar import shall mean and be a reference to the Credit Agreement as amended
hereby, and each reference in any other Loan Document to the Credit Agreement
or any word or words of similar import shall be and mean a reference to the
Credit Agreement as amended hereby.


6.             Counterparts. 
This Amendment may be executed in any number of counterparts, each of
which when so executed shall be deemed an original but all such counterparts
shall constitute one and the same instrument. 
Delivery of an executed counterpart of a signature page to this
Amendment by telecopier or “pdf” shall be as effective as delivery of a
manually executed counterpart signature page to this Amendment.


7.             Costs and Expenses.  As provided in the Credit Agreement, Borrower
shall pay the fees, costs and expenses incurred by Agent in connection with the
preparation, execution and delivery of this Amendment (including, without
limitation, attorneys’ fees).


8.             GOVERNING LAW. 
THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
CONFLICTS OF LAW PRINCIPALS.


9.             Headings. 
Section headings in this Amendment are included herein for convenience
of reference only and shall not constitute a part of this Amendment for any
other purpose.


[Signature Pages Follow]


 



 7















IN WITNESS WHEREOF, this Amendment has been duly
executed as of the date first written above.


	
  

  	
  BORROWER:

  
	
   

  	
   

  
	
   

  	
  VERTIS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John V. Howard, Jr.

  
	
   

  	
  Name: John V. Howard, Jr.

  
	
   

  	
  Title: Secretary

  












 


	
  

  	
  GENERAL ELECTRIC CAPITAL

  CORPORATION

  
	
   

  	
  as Agent, an L/C Issuer and a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Sandra Claghorn

  
	
   

  	
   

  	
  Duly Authorized Signatory

  




 2
 








 


	
  

  	
  BANK OF AMERICA, N.A.

  
	
   

  	
  as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert Andchundia

  
	
   

  	
  Name: Robert Andchundia

  
	
   

  	
  Title: Vice President

  



 



 3
 








The following Persons are signatory to this Amendment
in their capacity as Credit Parties and not as Borrowers:


	
  

  	
  VERTIS HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John V. Howard, Jr.

  
	
   

  	
  Name: John V. Howard, Jr.

  
	
   

  	
  Title: Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  VERTIS DIGITAL SERVICES LIMITED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John V. Howard, Jr.

  
	
   

  	
  Name:  John V.
  Howard, Jr.

  
	
   

  	
  Title: 
  Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ENTERON GROUP LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John V. Howard, Jr.

  
	
   

  	
  Name:  John V.
  Howard, Jr.

  
	
   

  	
  Title:  Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WEBCRAFT, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John V. Howard, Jr.

  
	
   

  	
  Name:  John V.
  Howard, Jr.

  
	
   

  	
  Title: 
  Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  VERTIS MAILING, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John V. Howard, Jr.

  
	
   

  	
  Name:  John V.
  Howard, Jr.

  
	
   

  	
  Title: 
  Secretary

  



 



 4
 








 


	
  

  	
  WEBCRAFT CHEMICALS, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John V. Howard, Jr.

  
	
   

  	
  Name:  John V.
  Howard, Jr.

  
	
   

  	
  Title: 
  Secretary

  



 



 5