EXHIBIT 10.4


 


LIMITED CONSENT AND
AMENDMENT NO. 3 TO CREDIT AGREEMENT


 


This Limited Consent and
Amendment No. 3 to Credit Agreement, dated as of December 12, 2005 (this “Consent
and Amendment”), is entered into by and among Vertis, Inc. (“Vertis”)
and Vertis Digital Services Limited (“Digital Limited” and, together
with Vertis, the “Borrowers” and each, individually, a “Borrower”),
as Borrowers, 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.    Borrowers, 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 as from time to time further
amended, restated, supplemented or otherwise modified, the “Credit Agreement”).


 


B.    Borrowers and the other Credit Parties
have requested that Agent and Lenders consent to (i) the sale of all of the
issued and outstanding shares of Stock of Fusion Premedia Group Limited and
Pismo Limited pursuant to an Agreement to be entered into by and between
Digital Limited, as seller, and Adplates Group Limited, as buyer (“Buyer”),
substantially in the form of Exhibit A to this Consent and Amendment
(the “Stock Purchase Agreement”), and (ii) certain related actions as
further described in Section 2 herein. 
Upon consummation of the transactions contemplated by the Stock Purchase
Agreement, (i) Fusion Premedia Group Limited and each of its Subsidiaries
listed on Schedule 1 attached hereto (each, a “Departing Entity”,
and collectively, the “Departing Entities”) shall cease to be a Credit
Party under the Credit Agreement and the other Loan Documents and (ii) Digital
Limited shall cease to be a Borrower under the Credit Agreement but will remain
a Credit Party under, and for all purposes of, the Credit Agreement and all of
the other Loan Documents.


 


C.    This Consent and Amendment shall
constitute a Loan Document and these Recitals shall be construed as part of
this Consent and 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, Borrowers by Lenders, Borrowers, 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 Consent and Amendment shall have the
same meanings ascribed to them in the Credit Agreement and Annex A thereto.


 

















 


2.             Consents.


 


2.1.          Notwithstanding
any provision of the Credit Agreement or any other Loan Document to the
contrary, Agent and Lenders hereby consent to the sale of all of the issued and
outstanding shares of Stock of Fusion Premedia Group Limited and Pismo Limited
to Buyer pursuant to the Stock Purchase Agreement; provided, that,
any changes to the Stock Purchase Agreement from the version thereof attached
to this Consent and Amendment as Exhibit A shall be reasonably
satisfactory to Agent.


 


2.2.          Notwithstanding
any provision of the Credit Agreement or any other Loan Document to the
contrary, Agent and Lenders hereby consent to the release of Agent’s Liens on
all shares of Stock of each Departing Entity upon the closing of the
transactions contemplated by the Stock Purchase Agreement to the extent such
shares of Stock have been pledged to Agent pursuant to the Credit Agreement or
any other Loan Document.


 


2.3.          Notwithstanding
any provision of the Credit Agreement or any other Loan Document to the
contrary, Agent and Lenders hereby consent to the release of Agent’s Liens on
all properties and assets of each Departing Entity upon the closing of the
transactions contemplated by the Stock Purchase Agreement to the extent such
properties and assets have been pledged to Agent pursuant to the Credit
Agreement or any other Loan Document.


 


2.4.          As a result
of the actions described above in Subsections 2.1, 2.2 and 2.3,
upon the closing of the transactions contemplated by the Stock Purchase
Agreement, each Departing Entity shall cease to be a Credit Party under the
Credit Agreement and the other Loan Documents. 
Notwithstanding any provision of the Credit Agreement or any other Loan
Document to the contrary, Agent and Lenders hereby consent to the such termination
at, and only at, such time, of each Departing Entity’s status as a Credit Party
under the Credit Agreement and the other Loan Documents.


 


2.5.          Upon
closing of the sale of the Stock of the Departing Entities as contemplated by
the Stock Purchase Agreement, Digital Limited shall cease to be a Borrower
under the Credit Agreement but will remain a Credit Party under, and for all
purposes of, the Credit Agreement and all of the other Loan Documents.  Notwithstanding any provision of the Credit
Agreement or any other Loan Document to the contrary, Agent and Lenders hereby
consent to Digital Limited ceasing to be a Borrower under the Credit Agreement
upon, and only upon, closing of such sale; provided, that,
Digital Limited shall remain a Credit Party under, and for all purposes of, the
Credit Agreement and all of the other Loan Documents.  From and after the closing of the sale of the
Stock of the Departing Entities as contemplated by the Stock Purchase
Agreement, Digital Limited shall not (i) own the capital Stock of any Person,
(ii) conduct any business, (iii) hold any material assets other than debts due
from Vertis, Inc. and proceeds from the transactions contemplated by the Stock
Purchase Agreement, or (iv) have any material liabilities other than certain
intercompany receivables due to Vertis or Vertis Holdings, Inc. (“Holdings”)
or pursuant to the Stock Purchase Agreement.


 


2.6.          In
connection with the closing of the transactions contemplated by the Stock
Purchase Agreement, Vertis and the other Credit Parties (other than the
Departing Entities) intend to forgive and/or capitalize intercompany loans and
obligations owing by the Departing


 


2

















 


Entities
to Vertis and such other Credit Parties in an aggregate principal amount of up
to £11,600,000 (the “Departing Entities Intercompany Debt Discharge”)
and to assign to certain parties certain intercompany loans as set forth in Exhibit
B hereto and set off original and assigned receivables against payables as
set forth in Exhibit B hereto (the “Assigned Receivables Transactions”).  Notwithstanding any provision of the Credit
Agreement or any other Loan Document to the contrary, Agent and Lenders hereby
consent to: (i) the Departing Entities Intercompany Debt Discharge as a part
of, and at the time of the closing of, the transactions contemplated by the
Stock Purchase Agreement and, upon the closing of the transactions contemplated
by the Stock Purchase Agreement, Agent and Lenders hereby consent to the
release of any Liens which Agent may have on any intercompany receivables or
notes issued by the Departing Entities to Vertis and the other Credit Parties
(other than the Departing Entities) in respect of the Departing Entities
Intercompany Debt Discharge; (ii) the Assigned Receivables Transactions and the
release of any Liens which Agent may have on any intercompany receivables
issued by Digital Limited in respect of the Assigned Receivables Transactions;
and (iii) the release of any guaranties given by the Credit Parties (other than
the Departing Entities) of obligations of the Departing Entities.


 


3.             Further Assurances.


 


3.1.          Each Credit
Party shall, from time to time, execute and deliver such agreements,
instruments, certificates, reports and other documents and take all such
actions as Agent or Lenders at any time may reasonably request to evidence,
further document, effectuate or otherwise implement the actions described above
in Section 2, under the Credit Agreement and/or the other Loan
Documents.


 


3.2.          At the time
of the closing of the transactions contemplated by the Stock Purchase Agreement
and from time to time thereafter, at Borrowers’ expense, Agent and Lenders
shall execute and deliver such lien release instruments and documents and take
such related actions as Vertis may reasonably request to evidence, further
document, effectuate or otherwise implement the release of Agent’s Liens as
described above in Section 2, under the Credit Agreement and the other
Loan Documents.


 


4.             Representations
and Warranties.  The Borrowers and
Credit Parties, jointly and severally, hereby represent and warrant to Agent
and Lenders that:


 


4.1.          Aside from
(a) the agreements to provide indemnification/warranties and other clauses
which are set forth in the Stock Purchase Agreement and the related tax deed,
under which the maximum aggregate exposure is £2,000,000, (b) other claims,
obligations, liabilities and exposures in an aggregate amount not to exceed
£1,000,000, and (c) a guaranty by Holdings of the obligations of Vertis PRS
Limited under the Agreement Relating to the Provision of Services for
Magazines, dated as of July 10, 2003, by and among Fusion Premedia Group
Limited, Holdings and Express Newspapers (the “Magazines Agreement”) and
the Agreement Relating to the Provision of Auditing and Reprographic Services
and Certain Display Advertising Services for Newspaper Titles, dated as of July
10, 2003, by and among Fusion Premedia Group Limited, Holdings and Express
Newspapers (the “Newspaper Titles Agreement” and, together with the
Magazine Agreement, the “Express Newspapers Agreements”), (i) there are
no post-closing obligations and liabilities, including, without


 


3

















 


limitation,
contingent obligations and liabilities, under the Stock Purchase Agreement of
Vertis and the other Credit Parties (other than the Departing Entities) to the
Buyer or any other Person, (ii) from and after the closing of the transactions
contemplated by the Stock Purchase Agreement, Vertis and the other Credit
Parties (other than the Departing Entities) shall not have any obligations,
direct or indirect, contingent or otherwise, for the benefit of any of the
Departing Entities and (iii) there is no existing guaranty, credit support,
indemnity or other similar arrangement, by Vertis or Digital Limited or any
other Credit Party, or by any of their direct or indirect Subsidiaries, aside
from the Departing Entities, in favor of any Departing Entity, the Buyer or any
employee, customer or creditor relating to any Departing Entity or the Buyer.


 


4.2.          The
execution, delivery and performance by the Borrowers and each of the other
Credit Parties of this Consent and Amendment have been duly authorized by all
necessary corporate action, and this Consent and Amendment constitutes the
legal, valid and binding obligation of the Borrowers 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.


 


4.3.          The
execution, delivery and performance of this Consent and Amendment and the
consummation of the transactions contemplated hereby by Borrowers and each
Credit Party 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 any
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 Documents or the
Mezzanine Debt Documents, binding upon or otherwise affecting any Borrower or
any Credit Party or any property of any Borrower or any Credit Party.


 


4.4.          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 Consent and Amendment or the consummation of the
transactions contemplated hereby and by the Stock Purchase Agreement.  In addition, each 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.


 


5.             Covenants.  Aside from (a) the agreements to provide
indemnification/warranties and other clauses which are set forth in the Stock
Purchase Agreement and the related tax deed, under which the maximum aggregate
exposure is £2,000,000, (b) other claims, obligations, liabilities and exposures
in an aggregate amount not to exceed £1,000,000, and (c) a guaranty by Holdings
of the obligations of Vertis PRS Limited under the Express Newspapers
Agreements, each Borrower and each other Credit Party (other than the Departing
Entities) executing this Consent and Amendment jointly and severally agrees as
to all Credit Parties that from and after the date hereof, the Credit Parties
shall not and shall not cause or permit their Subsidiaries directly or
indirectly to create, incur, assume or otherwise become or remain directly or
indirectly liable with respect to any guaranty, credit support, indemnity or
other similar


 


4

















 


arrangement,
by Vertis or Digital Limited, or by any of their direct or indirect Subsidiaries
(aside from the Departing Entities) in favor of any Departing Entity, the Buyer
or any employee, customer or creditor relating to any Departing Entity or the
Buyer.


 


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


 


6.1.          Consent
and Amendment.  This Consent and
Amendment shall have been duly executed and delivered by the Borrowers, the
Credit Parties, Agent and Lenders.


 


6.2.          No
Default.  No Default or Event of
Default shall have occurred and be continuing or would result from the
effectiveness of this Consent and Amendment or the consummation of any of the
transactions contemplated hereby or by the Stock Purchase Agreement.


 


6.3.          Opinion.  Agent and Lenders shall have received an
opinion of counsel to Borrowers, Sullivan & Cromwell LLP, with respect to
this Consent and Amendment, including, without limitation, as to this Consent
and Amendment, the Stock Purchase Agreement and the transactions contemplated
hereby and thereby 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.


 


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


 


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


 


7.1.          Full
Force and Effect.  Except as
specifically provided herein, the Credit Agreement, the Notes and each other
Loan Document shall remain in full force and effect and each is hereby ratified
and confirmed by all Credit Parties (including in its capacity as a Credit
Party, Digital Limited), other than upon consummation of the transactions
contemplated by the Stock Purchase Agreement, the Departing Entities.


 


7.2.          No
Waiver.  The execution, delivery and
effect of this Consent and 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) 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, the Notes or any other Loan Document.


 


7.3.          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.


 


5

















 


8.             Counterparts.  This Consent and 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 Consent and Amendment by telecopier
shall be as effective as delivery of a manually executed counterpart signature
page to this Consent and Amendment.


 


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


 


10.           GOVERNING
LAW.  THIS CONSENT AND 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.


 


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


 


 


[Signature Pages Follow]


 


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


 


	
   

  	
  BORROWERS:

  
	
   

  	
   

  
	
   

  	
  VERTIS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /S/ 

  	
  Donald E. Roland

  	
   

  
	
   

  	
  Name:

  	
  Donald E. Roland

  
	
   

  	
  Title:

  	
  Chairman and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  VERTIS DIGITAL SERVICES LIMITED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /S/ 

  	
  Donald E. Roland

  	
   

  
	
   

  	
  Name:

  	
  Donald E. Roland

  
	
   

  	
  Title:

  	
  Chairman and Chief Executive Officer

  



 

















 


	
   

  	
  GENERAL ELECTRIC CAPITAL

  
	
   

  	
  CORPORATION

  
	
   

  	
  as Agent, an L/C Issuer and Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: Sandra Claghorn

  
	
   

  	
  Duly Authorized Signatory

  



 












 


	
   

  	
  BANK OF AMERICA, N.A.

  
	
   

  	
  as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /S/ 

  	
  Richard Levenson

  	
   

  
	
   

  	
  Name:

  	
  Richard Levenson

  
	
   

  	
  Title:

  	
  Senior Vice President

  



 

















 


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


 


	
   

  	
  VERTIS HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /S/ 

  	
  Donald E. Roland

  	
   

  
	
   

  	
  Name:

  	
  Donald E. Roland

  
	
   

  	
  Title:

  	
  Chairman and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
  ENTERON GROUP LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /S/ 

  	
  Donald E. Roland

  	
   

  
	
   

  	
  Name:

  	
  Donald E. Roland

  
	
   

  	
  Title:

  	
  Chairman and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
  WEBCRAFT, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /S/ 

  	
  Donald E. Roland

  	
   

  
	
   

  	
  Name:

  	
  Donald E. Roland

  
	
   

  	
  Title:

  	
  Chairman and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  PRINTCO, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /S/ 

  	
  Donald E. Roland

  	
   

  
	
   

  	
  Name:

  	
  Donald E. Roland

  
	
   

  	
  Title:

  	
  Chairman and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  VERTIS MAILING, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /S/ 

  	
  Donald E. Roland

  	
   

  
	
   

  	
  Name:

  	
  Donald E. Roland

  
	
   

  	
  Title:

  	
  Chairman and Chief Executive Officer

  



 

















 


	
   

  	
  WEBCRAFT CHEMICALS, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /S/ 

  	
  Donald E. Roland

  	
   

  
	
   

  	
  Name:

  	
  Donald E. Roland

  
	
   

  	
  Title:

  	
  Chairman and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  VERTIS PRS LIMITED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /S/ 

  	
  Donald E. Roland

  	
   

  
	
   

  	
  Name:

  	
  Donald E. Roland

  
	
   

  	
  Title:

  	
  Chairman and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  THE ADMAGIC GROUP LIMITED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /S/ 

  	
  Donald E. Roland

  	
   

  
	
   

  	
  Name:

  	
  Donald E. Roland

  
	
   

  	
  Title:

  	
  Chairman and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  ADMAGIC LIMITED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /S/ 

  	
  Donald E. Roland

  	
   

  
	
   

  	
  Name:

  	
  Donald E. Roland

  
	
   

  	
  Title:

  	
  Chairman and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  FUSION PREMEDIA GROUP LTD

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /S/ 

  	
  Donald E. Roland

  	
   

  
	
   

  	
  Name:

  	
  Donald E. Roland

  
	
   

  	
  Title:

  	
  Chairman and Chief Executive Officer

  



 

















 


EXHIBIT A


to


CONSENT AND AMENDMENT


 


 


Stock
Purchase Agreement


 

















 


EXHIBIT B


to


CONSENT AND AMENDMENT


 


 


Assigned
Receivables Transactions


 

















 


SCHEDULE 1


to


CONSENT AND AMENDMENT


 


 


Departing
Entities


 


 


Fusion Premedia Group Limited


Vertis PRS Limited


The Admagic Group Limited


Admagic Limited