Exhibit 4.5


 


EXECUTION
COPY


 


FIRST
AMENDMENT TO FORBEARANCE AGREEMENT


 


This First Amendment to
Forbearance Agreement (this “Agreement”) is dated May 27, 2008 and
is entered into by and among Vertis Receivables II, LLC (the “Borrower”),
Webcraft, LLC (“Webcraft”), Webcraft Chemicals, LLC (“Webcraft
Chemicals”), Enteron Group, LLC (“Enteron”), Vertis Mailing, LLC (“Vertis
Mailing”), Vertis, Inc. (“Vertis”) and General Electric Capital
Corporation, as a “Lender”, as “Swing Line Lender” (in such capacities, the “Lenders”)
and as “Administrative Agent” under the Funding Agreement (in such capacity,
the “Administrative Agent”).


 


W
I T N E S S E T H :


 


WHEREAS, the parties
hereto are the parties to that certain Forbearance Agreement dated April 2,
2008 (as amended hereby, the “Forbearance Agreement”);


 


WHEREAS, Vertis
represents to Administrative Agent and the Lenders that, as a result, inter
alia, of its entry into the Restructuring Agreement (as defined herein), it
will not make the interest payment due on June 1, 2008 under Vertis’ 131⁄2%
Senior Subordinated Notes due December 7, 2009 issued pursuant to the
Indenture, dated as of February 28, 2003, between Vertis and the indenture
trustee party thereto (the “February 2003 Senior Subordinated Notes
Indenture Trustee”) (the “February 2003 Senior Subordinated Notes”)
(such circumstances, excluding any further events or actions, the “Missed
Senior Subordinated Payment”);


 


WHEREAS, each of Vertis
and Borrower acknowledges that the Missed Senior Subordinated Payment will constitute
(i) an Incipient Event of Servicer Termination under Section 8.01(b) of
the Sale and Servicing Agreement and (ii) an Incipient Termination Event
under Section 8.01(c)(1) and Section 8.01(o)(i) of the
Funding Agreement (collectively, the “Senior Subordinated Incipient
Termination Events”);


 


WHEREAS, Vertis
represents to Administrative Agent and the Lenders that, as a result, inter
alia, of its entry into the Restructuring Agreement, it will not make the
interest payment due on June 15, 2008 under Vertis’ 10 7/8% Senior Notes
due June 15, 2009 issued pursuant to the Indenture, dated as of June 24,
2002, between Vertis and the indenture trustee party thereto (the “2002
Senior Notes Indenture Trustee”) (the “2002 Senior Notes”) (such
circumstances, excluding any further events or actions, the “Missed Senior
Notes Payment”);


 


WHEREAS, each of Vertis
and Borrower acknowledges that the Missed Senior Notes Payment will constitute
a (i) an Incipient Event of Servicer Termination under Section 8.01(b) of
the Sale and Servicing Agreement and (ii) an Incipient Termination Event
under Section 8.01(c)(1) and Section 8.01(o)(i) of the
Funding Agreement (the “Senior Notes Incipient Termination Events”);


 


WHEREAS, Borrower, Vertis
and the other Transaction Parties have requested that Administrative Agent and
the Lenders party to the Forbearance Agreement amend the Forbearance Agreement
as set forth herein so as to modify the definitions of “Forbearance 


 

















 


Termination Event” and “Forbearance
Termination Date” set forth therein and so as to modify certain other
provisions thereof;


 


WHEREAS,
subject to the terms and conditions hereof, Administrative Agent and the
Lenders have agreed to grant this request; and


 


WHEREAS, this Agreement constitutes a Related Document
and these Recitals shall be construed as part of this Agreement;


 


NOW, THEREFORE, in
consideration of the representations and mutual covenants set forth herein and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto hereby agree as follows:


 


1.                                      Defined
Terms.  Each capitalized term used
herein and not otherwise defined herein shall have the meaning attributed to
such term in the Forbearance Agreement (including, without limitation, by
virtue of its reference to defined terms used in the Funding Agreement); provided,
however, that, as used herein, the term “Senior Subordinated
Termination Events” shall mean (i) an Event of Servicer Termination
under Section 8.01(b) of the Sale and Servicing Agreement and (ii) a
Termination Event under Section 8.01(c)(1) and Section 8.01(o)(i) of
the Funding Agreement, each on account of the Missed Senior Subordinated
Payment, and the term “Senior Notes Termination Events” shall mean (i) an
Event of Servicer Termination under Section 8.01(b) of the Sale and
Servicing Agreement and (ii) a Termination Event under Section 8.01(c)(1) and
Section 8.01(o)(i) of the Funding Agreement, each on account of the
Missed Senior Notes Payment; provided, further, that the defined
term “Existing Incipient Termination Events”, as used herein and
in the Forbearance Agreement shall mean, collectively, (i) the Incipient
Event of Servicer Termination under the Sale and Servicing Agreement engendered
by the Missed Payment; (ii) the Incipient Termination Event under the
Funding Agreement engendered by the Missed Payment; (iii) the Senior
Subordinated Incipient Termination Events; and (iv) the Senior
Subordinated Termination Events; (v) the Senior Notes Incipient
Termination Events; and (vi) the Senior Notes Termination Events.


 


2.                                      Amendment
to Forbearance Agreement.  The
parties hereto and to the Forbearance Agreement agree to amend the Forbearance
Agreement by:


 


(a)                                 deleting
Section 1(a) therefrom in its entirety and replacing it with the
following:


 


(a)                                 “Forbearance
Termination Event” means (i) the occurrence of any Incipient
Termination Event, Termination Event, Event of Servicer Termination or
Incipient Event of Servicer Termination (other than (A) either Existing
Incipient Termination Event, (B) the Existing Incipient Event of Servicer
Termination, (C) any Termination Event under Section 8.01(c)(1) or
Section 8.01(o)(i) of the Funding Agreement on account of the Missed
Payment (a “2003 Indenture Termination Events”) and (D) any Event
of Servicer Termination under Section 8.01(b) of the Sale and
Servicing Agreement on account of the Missed 


 

















 


Payment
(a “2003 Indenture Event of Servicer Termination”)), (ii) the
failure of Borrower or any Transaction Party to comply with any term, condition
or covenant set forth in this Agreement, (iii) any representation made by
Borrower or any Transaction Party under or in connection with this Agreement
shall prove to be false in any material respect as of the date when made, (iv) any
acceleration of the obligations under Vertis’ 9-3/4% 2003 Senior Secured Notes
due April 1, 2009 issued pursuant to the Indenture, dated as of June 6,
2003, between Vertis and the indenture trustee party thereto (the “2003
Senior Secured Notes Indenture Trustee”) (the “2003 Senior Secured Notes”)
or the Credit Agreement or the taking of any enforcement action or exercise of
any right or remedy under the Credit Agreement or by the holders of the 2003
Senior Secured Notes or the 2003 Senior Secured Notes Indenture Trustee whether
based upon the Missed Payment or otherwise, (v) any acceleration of the
obligations under the February 2003 Senior Subordinated Notes or the
taking of any enforcement action or exercise of any right or remedy by the
holders of the February 2003 Senior Subordinated Notes or the February 2003
Senior Subordinated Notes Indenture Trustee whether based upon the Missed
Senior Subordinated Payment or otherwise, (vi) any acceleration of the
obligations under the February 2002 Senior Notes or the taking of any enforcement
action or exercise of any right or remedy by the holders of the 2002 Senior
Notes or the 2002 Senior Notes Indenture Trustee whether based upon the Missed
Senior Notes Payment or otherwise, (vii) the commencement of any
proceeding (whether judicial, extra-judicial, administrative or otherwise) or
the taking of any other action to liquidate the businesses of Borrower or any
of the other Transaction Parties or the property of any such Person, or to
reorganize Borrower or any of the other Transaction Parties, including, without
limitation, the appointment of a receiver or other custodian or the making of
an assignment to an assignee for the benefit of creditors or other custodians; (viii) the
termination (whether in accordance with its terms or otherwise) of, or any
default or material breach (which default or material breach is not cured by
the deadline (if any) under, as applicable, the Restructuring Agreement or the
Agreement and Plan of Merger or any Ancillary Noteholder Agreement with respect
thereto) under, the Restructuring Agreement (as defined herein), the Agreement
and Plan of Merger (as defined herein) and/or any Ancillary Noteholder
Agreement; (ix) the modification or amendment of the Restructuring
Agreement, the Agreement and Plan of Merger or any Ancillary Noteholder
Agreement without the prior written consent of the Administrative Agent and the
Lenders; and/or (x) other than the 


 

















 


payment
of professional fees and expenses in accordance with Section 5.05 of the
Restructuring Agreement or of ordinary course indenture trustee fees and
expenses pursuant to the existing terms of the 2002 Senior Notes Indenture, the
2003 Senior Secured Notes Indenture or the February 2003 Senior
Subordinated Notes Indenture (each as defined in the Existing Credit
Agreement), the payment by the Borrower or any other Transaction Party of any
principal, interest, fees, costs, expenses, or reimbursement or indemnification
claim under the 2003 Senior Secured Notes, the February 2003 Senior
Subordinated Notes, the 2002 Senior Notes or the Mezzanine Notes (as defined in
the Existing Credit Agreement).


 


(b)                                 deleting
Section 1(c) therefrom and replacing it with the following:


 


(c)                                  “Forbearance
Termination Date” means the earliest to occur of (i) 5:00 p.m.
(New York time) on July 16, 2008, (ii) the date upon which a
Forbearance Termination Event occurs or (iii) the “Forbearance Termination
Date” under the Forbearance Agreement related to the Existing Credit Agreement
dated as of the date hereof among Vertis, certain Affiliates of Vertis, the
lenders party thereto and General Electric Capital Corporation, as agent.


 


3.                                      Conditions
to Effectiveness.  The effectiveness
of this Agreement is expressly conditioned upon Administrative Agent’s receipt
(on behalf of itself and the Lenders) from Borrower and each Transaction Party
of the following:


 


(a)                                 Agreement.  A duly executed counterpart of this Agreement
from Borrower, the Lenders and the other Transaction Parties listed on the
signature pages hereto.


 


(b)                                 Restructuring
Agreement.  An execution copy of the
Restructuring and Lock-Up Agreement dated as of May 22, 2008 (the “Restructuring
Agreement”)among, inter alia, Vertis, various other Affiliates of
Vertis and the holders of the 2003 Senior Secured Notes, the February 2003
Senior Subordinated Notes, the 2002 Senior Notes and the Mezzanine Notes (each
as defined in the Existing Credit Agreement) party thereto or to agreements
(each, an “Ancillary Noteholder Agreement” and, together, the “Ancillary
Noteholder Agreements”) entered into by Vertis and/or one or more other
Transaction Parties in connection therewith and a certificate executed by the
chief financial officer of Vertis stating that (I) the Restructuring
Agreement and/or the Ancillary Noteholder Agreements have been executed and
delivered by the Vertis Parties (as defined in the Restructuring Agreement),
the ACG Parties (as defined in the Restructuring Agreement), the holders of at
least 66-2/3% of the outstanding principal amount of each of the 2003 Senior
Secured Notes, the February 2003 Senior Subordinated Notes and the 2002
Senior Notes and the holders of at least 60% of the outstanding principal
amount of ACG Second Lien Notes (as defined in the Restructuring Agreement) and
are in effect; and (II) Ancillary Noteholder Agreements have been executed
by the Vertis Parties thereto and the legal and/or beneficial holders of a
substantial majority of the outstanding principal amount of the Mezzanine Notes
(the “Majority Mezzanine Holders”), contain provisions pursuant to which



 

















 


the Majority Mezzanine Holders have agreed to support (and/or to cause
the legal holders thereof to support) the transactions contemplated in the
Restructuring Agreement and are in effect.


 


(c)                                  Agreement
and Plan of Merger.  A duly executed
copy of the Agreement and Plan of Merger (as such term is defined in the
Restructuring Agreement) dated as of May 22, 2008.


 


(d)                                 Other
Documents.  Such other documents,
instruments and agreements as Administrative Agent may reasonably request, all
of which shall be in form and substance satisfactory to Administrative Agent.


 


4.                                      Representations
and Warranties of Borrower.  In order
to induce Administrative Agent and the Lenders to enter into this Agreement,
each of the Transaction Parties hereby represents and warrants to
Administrative Agent and the Lenders that:


 


(a)                                 Representations
and Warranties.  (i) No
Incipient Termination Event or Termination Event (other than the Existing
Incipient Termination Events) has occurred or is continuing, (ii) no
Incipient Event of Servicer Termination or Existing Incipient Event of Servicer
Termination (other than the Existing Incipient Event of Servicer Termination)
has occurred or is continuing and (iii) no representation or warranty of
Borrower or any Transaction Party contained in the Funding Agreement, the Sale
and Servicing Agreement or any of the other Related Documents, including this
Agreement, is untrue or incorrect in any material respect as of the date
hereof, except to the extent that such representation or warranty expressly
relates to an earlier date, in which case it shall be true and correct in all
material respects as of such earlier date.


 


(b)                                 Authorization,
etc.  Each of Borrower and the other
Transaction Parties has the power and authority to execute, deliver and perform
this Agreement.  Each of Borrower and the
other Transaction Parties has taken all necessary action (including, without
limitation, obtaining approval of its members, if necessary) to authorize its
execution, delivery and performance of this Agreement.  No consent, approval or authorization of, or
declaration or filing with, any Governmental Authority, and no consent of any
other Person, is required in connection with Borrower’s or any other
Transaction Party’s execution, delivery and performance of this Agreement,
except for those already duly obtained. 
This Agreement has been duly executed and delivered by each of Borrower
and the other Transaction Parties and constitutes the legal, valid and binding
obligation of each of Borrower and the other Transaction Parties, enforceable
against them in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors’ rights generally and by general principles of
equity (regardless of whether such enforceability is considered in a proceeding
in equity or law).  Each of Borrower’s
and the other Transaction Parties’ execution, delivery or performance of this
Agreement does not conflict with, or constitute a violation or breach of, or
constitute a default under, or result in the creation or imposition of any Lien
upon the property of Borrower or any of the other Transaction Parties by reason
of the terms of (i) any contract, mortgage, lease, agreement, indenture or
instrument to which Borrower or any of the other Transaction Parties is a party
or which is binding upon them or any one of them, (ii) the February 2003
Senior Subordinated Debt Documents, the 2002 Senior Debt Documents, the 2003
Senior Secured Debt Documents, the Mezzanine Debt 


 

















 


Documents (in each case, as defined in the Existing Credit Agreement),
the Restructuring Agreement (or any document entered into by Borrower or any of
the other Transaction Parties in connection therewith), the Agreement and Plan
of Merger (or any document entered into by Borrower or any of the other
Transaction Parties in connection therewith) or any Ancillary Noteholder
Agreement (or any document entered into by Vertis or any of the other
Transaction Parties in connection therewith), (iii) any law or regulation
or order or decree of any court applicable to Borrower or any of the other
Transaction Parties, or (iv) the certificate of formation or operating
agreement of Borrower or any of the other Transaction Parties.


 


5.                                      Release.  In consideration of the agreements of
Administrative Agent and the Lenders set forth herein, each of Borrower and
each Transaction Party hereby releases, remises, acquits and forever discharges
the Administrative Agent and the Lenders, and each of their respective
employees, agents, representatives, consultants, attorneys, officers,
directors, partners, fiduciaries, predecessors, successors and assigns,
subsidiary corporations, parent corporations and related corporate divisions
(collectively, the “Released Parties”), from any and all actions, causes
of action, judgments, executions, suits, debts, claims, demands, liabilities,
obligations, damages and expenses of any and every character, known or unknown,
direct or indirect, at law or in equity, of whatever nature or kind, whether
heretofore or hereafter arising, for or because of any matter of things done,
omitted or suffered to be done by any of the Released Parties prior to and
including the date of execution hereof, and in any way directly or indirectly
arising out of any or in any way connected to this Agreement, the Sale and
Servicing Agreement, the Funding Agreement or the Related Documents
(collectively, the “Released Matters”). 
Each of Borrower and each Transaction Party hereby acknowledges that the
foregoing releases in this Agreement are intended to be in full satisfaction of
all or any alleged injuries or damages arising in connection with the Released
Matters.  Each of Borrower and each
Transaction Party hereby represents and warrants to each of Administrative
Agent and the Lenders that it has not purported to transfer, assign or
otherwise convey any right, title or interest in any Released Matter to any
other Person and that the foregoing constitutes a full and complete release of
all Released Matters.


 


EACH OF BORROWER AND EACH
TRANSACTION PARTY AGREES TO ASSUME THE RISK OF ANY AND ALL UNKNOWN,
UNANTICIPATED OR MISUNDERSTOOD DEFENSES, CLAIMS, CONTRACTS, LIABILITIES,
INDEBTEDNESS AND OBLIGATIONS WHICH ARE RELEASED, WAIVED AND DISCHARGED BY THIS
AGREEMENT.  EACH OF BORROWER AND EACH
TRANSACTION PARTY WAIVES AND RELEASES ANY RIGHT OR DEFENSE WHICH IT MIGHT
OTHERWISE HAVE UNDER ANY OTHER LAW OR ANY APPLICABLE JURISDICTION WHICH MIGHT
LIMIT OR RESTRICT THE EFFECTIVENESS OR SCOPE OF ANY OF ITS WAIVERS OR RELEASES
HEREUNDER.


 


6.                                      Covenant
Not to Sue.  Each of Borrower and
each Transaction Party, on behalf of itself and its successors, assigns, and
other legal representatives, hereby absolutely, unconditionally and
irrevocably, covenants and agrees with and in favor of each of the Released
Parties that it will not sue (at law, in equity, in any regulatory proceeding
or otherwise) any Released Party on the basis of any Released Matters released,
remised and discharged by such Person pursuant to Section 5
above.  If each of Borrower and each
Transaction Party or any of their respective successors, assigns or other legal
representatives violates the foregoing covenant, 


 

















 


both the Person violating such covenant and Borrower, on a joint and
several basis, shall be obligated to pay, in addition to such other damages as
any Released Party may sustain as a result of such violation, all attorneys’
fees and costs incurred by any Released Party as a result of such violation.


 


7.                                      Effect
on the Sale and Servicing Agreement, the Funding Agreement and Related
Documents.  Except as expressly set
forth herein, all of the terms, conditions and covenants of the Forbearance
Agreement, the Sale and Servicing Agreement, the Funding Agreement and the
other Related Documents shall remain unaltered and in full force and effect and
shall be binding upon Borrower and the other Transaction Parties in all
respects and are hereby ratified and confirmed.


 


8.                                      Costs
and Expenses.  Borrower agrees to pay
on demand all reasonable costs and expenses of Administrative Agent in
connection with the preparation, execution and delivery of this Agreement,
including the reasonable fees and out-of-pocket expenses of counsel for
Administrative Agent with respect thereto.


 


9.                                      Execution
in Counterparts.  This Agreement may
be executed in any number of counterparts and by different 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.  Delivery of an executed
signature page to this Agreement by facsimile transmission or otherwise
transmitted or communicated by email shall be as effective as delivery of a
manually executed counterpart of this Agreement.


 


10.                               Headings.  Section headings in this Agreement are
included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purposes.


 


11.                               Severability.  Wherever possible, each provision of this
Agreement shall be interpreted in such a manner as to be effective and valid
under applicable law, but if any provision of this Agreement shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without invalidating
the remainder of such provision or the remaining provisions of this Agreement.


 


12.                               Reviewed
by Attorneys.  Borrower and each
Transaction Party represents and warrants to Administrative Agent and the
Lenders that it (a) understands fully the terms of this Agreement and the
consequences of the execution and delivery of this Agreement, (b) has been
afforded an opportunity to have this Agreement reviewed by, and to discuss this
Agreement and the documents executed in connection herewith, with such attorneys
and other persons and advisors as Borrower may wish, and (c) has entered
into this Agreement and executed and delivered all documents in connection
herewith of its own free will and accord and without threat, duress or other
coercion of any kind by any Person.  The
parties hereto acknowledge and agree that neither this Agreement nor any other
documents executed pursuant hereto shall be construed more favorably in favor
of one than the other based upon which party drafted the same, it being
acknowledged that all parties hereto contributed substantially to the
negotiation and preparation of this Agreement and the other documents executed
pursuant hereto or in connection herewith.


 

















 


[signature pages to follow]


 

















 


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


 


 


	
   

  	
  VERTIS RECEIVABLES II, LLC, as Borrower  

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Barry Kohn

  
	
   

  	
   

  	
  Name:
  Barry Kohn

  
	
   

  	
   

  	
  Title:
  Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GENERAL ELECTRIC CAPITAL

  CORPORATION, as
  Administrative Agent  

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  David Johnson  

  
	
   

  	
   

  	
  Name:
  David Johnson  

  
	
   

  	
   

  	
  Duly
  Authorized Signatory

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GENERAL ELECTRIC CAPITAL

  CORPORATION, as the
  Lender and the Swing Line

  Lender  

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  David Johnson  

  
	
   

  	
   

  	
  Name:
  David Johnson  

  
	
   

  	
   

  	
  Duly
  Authorized Signatory

  



 


Signature Page to

First Amendment to Forbearance Agreement


 

















 


	
   

  	
  VERTIS, INC., as an Originator and as Servicer 

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Barry Kohn  

  
	
   

  	
   

  	
  Name:
  Barry Kohn  

  
	
   

  	
   

  	
  Title:
  Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
  WEBCRAFT, LLC, as an Originator  

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Barry Kohn  

  
	
   

  	
   

  	
  Name:
  Barry Kohn  

  
	
   

  	
   

  	
  Title:
  Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
  WEBCRAFT CHEMICALS, LLC, as an

  Originator  

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Barry Kohn  

  
	
   

  	
   

  	
  Name:
  Barry Kohn  

  
	
   

  	
   

  	
  Title:
  Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
  ENTERON GROUP, LLC, as an Originator  

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Barry Kohn  

  
	
   

  	
   

  	
  Name:
  Barry Kohn

  
	
   

  	
   

  	
  Title:
  Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
  VERTIS MAILING, LLC, as an Originator  

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Barry Kohn  

  
	
   

  	
   

  	
  Name:
  Barry Kohn  

  
	
   

  	
   

  	
  Title:
  Chief Financial Officer

  



 


Signature
Page to

First Amendment to Forbearance Agreement