Exhibit 4.6


 


FORBEARANCE AGREEMENT


 


This Forbearance Agreement (this “Agreement”),
dated as of April 30, 2008, by and among Vertis, Inc. (the “Issuer”),
each of the undersigned entities listed as guarantors (collectively, the “Guarantors”),
and each of the undersigned holders of the Notes (as defined below)
(collectively, the “Holders”).


 


W I T N E S S E T H:


 


WHEREAS, the Issuer,
the Guarantors and the Bank of New York, as Trustee (the “Trustee”) have
entered into that certain Indenture (as amended, modified or supplemented prior
to the date hereof, the “Indenture”), dated as of June 6, 2003, in
respect of the Issuer’s $350,000,000 principal amount of 9.75% Senior Secured
Second Lien Notes due 2009 (the “Notes”);


 


WHEREAS, on April 1,
2008, the Issuer failed to make the interest payment due on the Notes pursuant
to the Indenture and the Notes (the “Missed Payment”), and such failure
constitutes a Default under the Indenture (the “Existing Default”);


 


WHEREAS, the Issuer
acknowledges and agrees that the Existing Default has occurred and is
continuing as of the date hereof, and has not been cured or waived;


 


WHEREAS, the Issuer’s
failure to pay the Missed Payment on or before May 1, 2008, together with
interest on such defaulted interest pursuant to Section 2.12 of the
Indenture, shall constitute an Event of Default under the Indenture (the “Payment
Default”);


 


WHEREAS, the Issuer is
currently negotiating the terms of a restructuring and lock-up agreement by and among the
Issuer, Vertis Holdings, Inc., ACG Holdings, Inc. American Color
Graphics, Inc., the Holders, certain other holders of notes issued by the
Issuer or by American Color Graphics, Inc, and other parties thereto (as may be
amended, the “Restructuring Agreement”);


 


WHEREAS, the Issuer and
the Guarantors have requested that the Holders temporarily forbear from
exercising their rights and remedies under the Indenture and from directing the
Trustee to exercise any such rights and remedies on the Holders’ behalf
resulting from the Existing Default and the Payment Default; and


 


WHEREAS, the Holders
are willing to grant the Issuer and the Guarantors’ request for forbearance
described in the preceding paragraph on the terms and subject to the conditions
contained herein.


 


NOW, THEREFORE, in
consideration of the 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:


 


SECTION 1.   Defined
Terms. Each
capitalized term used herein and not otherwise defined herein shall have the
meaning attributed to such term in the Indenture.  Each of the following capitalized terms shall
have the meaning set forth below:


 


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“Forbearance Period” means the period beginning on the date
hereof and ending on the Forbearance Termination Date.


 


“Forbearance Termination Date” means the date of occurrence of a
Forbearance Termination Event.


 


“Forbearance Termination
Event” means any of the following events: (a) the failure of the  Restructuring Agreement Execution to occur on
or before 5:00 p.m. (New York time) on May 13, 2008; (b) the
termination of the Restructuring Agreement in accordance with its terms; (c) the
occurrence of the “Forbearance Termination Date” under and as defined in the
Forbearance Agreement, dated as of April 3, 2008, as may be amended,
relating to the Senior Credit Facility (the “Senior Credit Forbearance
Agreement”); (d) the occurrence of the “Forbearance Termination Date”
under and as defined in the Forbearance Agreement, dated as of April 2,
2008, by and among Vertis Receivables II, LLC, Webcraft, LLC, Webcraft
Chemicals, LLC, Enteron Group, LLC, Vertis Mailing, LLC, the Issuer and General
Electric Capital Corporation, as may be amended (together with the Senior
Credit Forbearance Agreement, the “Forbearance Agreements”); (e) the
occurrence of a Default or Event of Default under the Indenture other than the
Existing Default or the Payment Default; or (f) the failure of the Issuer
and/or the Guarantors to comply with any term, condition, representation or
covenant contained in this Agreement.


 


“Remedial Action”
means any action to direct enforcement of any of the rights and remedies
available to the Holders or the Trustee under the Indenture, the Notes, the
Security Documents and any amendments or supplements to the foregoing,
including, without limitation, any action to accelerate, or join in any request
for acceleration of, the Notes.


 


“Restructuring Agreement
Execution” means that the Restructuring Agreement shall have been duly
executed and delivered by at least 66-2/3 % of the
outstanding principal amount of each of the Vertis Second Lien Notes, the
Vertis Senior Notes and the ACG Second Lien Notes (each as defined in the
proposed Restructuring Agreement) and each other party thereto, and such
agreement and all related exhibits, schedules and attachments shall in each
case be in form and substance satisfactory to the Holders and shall be in full
force and effect.


 


SECTION 2.   Forbearance.
 (a)   Each Holder hereby agrees that during the
Forbearance Period it will not (x) take any Remedial Action with respect
to the Notes in connection with the Existing Default or the Payment Default or (y) sell,
pledge, hypothecate or otherwise transfer any Notes, except to a purchaser or
other entity who agrees in writing with the Issuer prior to such transfer to be
bound by all of the terms of this Agreement with respect to the relevant Notes
being transferred to such purchaser.  The foregoing limited forbearance shall
not be construed to impair the ability of the Holders or the Trustee to take
any Remedial Action after the Forbearance Period regardless of whether or not
such Remedial Action relates to actions taken or payments received during the
Forbearance Period, or during the Forbearance Period for Defaults or Events of
Default other than the Existing Default and the Payment Default.


 


(b)  Unless earlier terminated in accordance
with the terms of this Agreement, the Holders’ forbearance, as provided herein,
shall immediately cease without notice on the Forbearance Termination Date, and
the Issuer and Guarantors at that time shall be obligated to


 


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comply with and perform all terms, conditions
and provisions of the Indenture and the Notes without giving effect to the
forbearance set forth herein.


 


(c)  The Holders’ forbearance is further
expressly subject to and conditioned upon the Issuer and Guarantors’ strict
compliance with each and every term and provision of this Agreement, and,
except with respect to the Existing Default and the Payment Default, the Issuer
and Guarantors’ strict compliance with each and every term and provision of the
Indenture and Notes, except as such terms and provisions are modified by this
Agreement.


 


(d)  The Holders hereby request
that the Trustee not take any Remedial Action, including without limitation,
any action to accelerate the Notes during the Forbearance Period.  In the
event that the Trustee takes any action to declare all of the Notes immediately
due and payable pursuant to Section 6.2(a) of the Indenture during
the Forbearance Period solely due to the Existing Default or the Payment
Default, the Holders agree, pursuant to Section 6.2(b) of the
Indenture, to promptly rescind and cancel such acceleration; provided,
however, that if the Holders rescind and cancel such acceleration by the
Trustee in accordance with Section 6.2(b) of the Indenture, each
Holder shall defer its right to receive any cure of the Payment Default until
such time as set forth in the proposed Restructuring Agreement or
otherwise; provided further, however, that such rescission and
deferral shall be of no further force and effect to the extent that the “Forbearance
Period” with respect to either of the Forbearance Agreements (and as defined
therein) has ended.


 


SECTION 3.   Conditions
to Effectiveness.  The
effectiveness of this Agreement shall be subject to the satisfaction of each of
the following conditions:


 


(a)           Holders
representing in the aggregate more than 75% of the outstanding principal amount
of the Notes shall have executed this Agreement;


 


(b)           the
Holders shall have received from the Issuer a duly executed counterpart of this
Agreement from each Holder, the Issuer and each Guarantor listed on the
signature pages hereto; and


 


(c)           (i) all
representations and warranties made by the Issuer and the Guarantors in the
Indenture, the Note and the Security Documents shall be true and correct in all
material respects on and as of the effective date of this Agreement as though
made on and as of such date (unless any such representation or warranty relates
solely to an earlier date, in which case it shall have been true and correct in
all material respects as of such earlier date); and (ii) no Default or Event
of Default (except with respect to the Existing Default) has occurred or is
continuing as of the effective date of this Agreement.


 


SECTION 4.   Representations
and Warranties of the Issuer.  In order to induce the Holders to enter into
this Agreement, the Issuer hereby represents and warrants to the Holders that


 


(a)           Representations
and Warranties. (i) No Default or Event of Default (other than the
Existing Default) has occurred under the Indenture or is continuing and (ii) no
representation or warranty of the Issuer or any Guarantor contained in the
Indenture, any Note, the Security Documents or 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


 


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earlier date, in which case it shall be true
and correct in all material respects as of such earlier date.


 


(b)           Authorization.  Each of Issuer and each of the Guarantors has
the power and authority to execute, deliver and perform this Agreement.  Each of Issuer and each of the Guarantors 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 the Issuer’s or any Guarantor’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 Issuer and the Guarantors and constitutes the legal, valid
and binding obligation of each of the Issuer and the Guarantors, 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 the Issuer’s
and the Guarantors’ 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 the Issuer or any of the Guarantors by reason of the terms of (i) any
contract, mortgage, lease, agreement, indenture or instrument to which the
Issuer or any of the Guarantors is a party or which is binding upon them or any
one of them or any of their properties, (ii) any law or regulation or
order or decree of any court applicable to Issuer or any of the Guarantors, or (iii) the
certificate of incorporation and bylaws, or the certificate of formation and
operating agreement, as applicable, of the Issuer or any of the Guarantors.


 


SECTION 5. 
 Representation of the
Holders.  Each Holder severally
represents that it is the beneficial owner and/or investment advisor or manager
of discretionary accounts for the holders or beneficial owners of the aggregate
principal amount of the Notes set forth on the signature page hereof
beneath its name.


 


SECTION 6.   Release. In consideration of the
agreements of the Holders set forth herein, each of the Issuer and each
Guarantor hereby releases, remises, acquits and forever discharges the Holders,
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 Indenture, the Note or the Security Documents (collectively,
the “Released Matters”). Each of the Issuer and each Guarantor 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 


 


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Matters.
Each of the Issuer and each Guarantor hereby represents and warrants to each
Holder 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 THE ISSUER AND EACH GUARANTOR 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 ISSUER AND EACH GUARANTOR 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.


 


SECTION 7.   Covenant
Not to Sue. Each of the Issuer and each Guarantor, 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 6 above. If any of the Issuer or the Guarantors or any of their
respective successors, assigns or other legal representatives violates the
foregoing covenant, both the Person violating such covenant and the Issuer, 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.


 


SECTION 8.   Effect
on the Indenture and the Notes.  Except as specifically set forth above with
respect to each Holder’s agreement to not enforce its rights during the
Forbearance Period with respect to the Existing Default and the Payment
Default, all of the terms of the Indenture shall remain unchanged and in full
force and effect.  Except as specifically
set forth herein, each Holder’s execution of this Agreement shall not
constitute (i) a waiver of any of the rights or remedies such Holder or
the Trustee under the Indenture, including, but not limited to, any rights or
remedies with respect to the Existing Default or the Payment Default and right
to receive default interest pursuant to Section 2.12 of the Indenture,
which shall continue in existence subject only to the Holders’ agreement, as
set forth in this Agreement, not to take any of the actions set forth in Section 2(a) hereof
based upon the Existing Default or the Payment Default during the Forbearance
Period or (ii) a waiver, forbearance or other indulgence with respect to
any other Event of Default now existing or hereafter arising under the
Indenture.  For the avoidance of doubt,
notwithstanding the provisions contained in this Agreement, all covenants and
obligations of the Issuer and the Guarantors under the Indenture following the
occurrence of a Default and/or Event of Default (including the Existing Default
and the Payment Default) under the Indenture shall remain unchanged and in full
force and effect.


 


SECTION 9.   Costs
and Expenses.  The Issuer
agrees to pay on demand all costs and expenses of the Holders in connection
with the preparation, execution and delivery of this Agreement, including the
reasonable fees, costs and expenses of counsel for the Holders with respect
thereto.


 


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SECTION 10.   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.


 


SECTION 11.   Integration. 
This Agreement and any agreements referred to herein constitute the
entire contract among the parties hereto relating to the subject matter hereof
and supersede any and all previous agreements and understandings, oral or
written, relating to the subject matter hereof. 
Upon the effectiveness of this Agreement as set forth in Section 3
hereof, this Agreement shall be binding upon and inure to the benefit of the
parties to the Indenture and, subject to and in accordance with Section 11.10
of the Indenture, their respective successors and assigns.


 


SECTION 12.   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.


 


SECTION 13.   Applicable
Law.  This Agreement shall be
governed by and be construed and enforced in accordance with, the laws of the
State of New York (including without limitation Section 5-1401 of the New
York General Obligations Law).


 


SECTION 14.   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.


 


SECTION 15.   Confidentiality.  Each of the Issuer, each Guarantor and each
Holder (and their respective successors and assigns) shall not publicly
disclose any information provided to them by any Holder in connection with this
Agreement, nor shall they publicly disclose signature pages to this
Agreement or any other provision of this Agreement that discloses the Holders’
holdings (collectively, the “Holder Information”) except: (1) in
any legal proceeding relating to this Agreement, provided that the Issuer, the
relevant Guarantor and/or Holder, as applicable, shall use their reasonable
best efforts to maintain the confidentiality of Holder Information in the
context of any such proceeding; (2) to the extent required by law; and (3) in
response to a subpoena, discovery request, or a request from a government
agency for information regarding Holder Information or the information
contained therein; provided that in the case of clauses (2) and (3) above,
the disclosing party provides notice to the applicable Holder, promptly upon
receipt of the subpoena or request, unless such notice would be prohibited by
law.  If the applicable Holder wishes to
oppose the production of such information, it may do so at its own
expense.  Responding to any such subpoena
or other request, after providing notice as set forth herein, shall not be
deemed to be a breach of any provision of this Agreement.  Notwithstanding anything to the contrary in
this Section 15, the Issuer may: (i) disclose the aggregate principal
amount of Notes held by the Holders executing this Agreement, taken as a whole
and without reference to the names of the Holders constituting such amount; and
(ii) provide the Trustee with 


 


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the
executed copy of this Agreement that includes the individual signature pages of
each of the Holders, but only in the event that the Issuer first obtains the
Trustee’s written consent not to publicly disclose any information relating to
the individual holdings of each Holder.


 


[SIGNATURE PAGES FOLLOW]


 


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IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be duly executed and delivered by their respective
officers thereunto duly authorized as of the date first written above.


 


 


	
   

  	
  VERTIS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  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

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  USA DIRECT, 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

  



 


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  WEBCRAFT CHEMICALS, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ John V.
  Howard, Jr.

  
	
   

  	
   

  	
   Name: 

  	
  John V. Howard, Jr.

  
	
   

  	
   

  	
   Title: 

  	
  Secretary

  



 


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  [                                  ]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   Name:

  
	
   

  	
   

  	
   Title:

  
	
   

  	
   

  
	
   

  	
  $

  
	
   

  	
  Aggregate
  principal amount of Notes

  
	
   

  	
  beneficially
  owned or managed on behalf

  
	
   

  	
  of
  accounts that hold or beneficially own Notes

  



 


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