**Exhibit 10.12**

**FIRST AMENDMENT**

THIS FIRST AMENDMENT(this “Amendment”), is dated September 5, 2006, and relates to thatcertain Receivables Funding and Administration Agreement, dated as of November25, 2005 (as amended, restated, supplemented or otherwise modified from time totime, the “Funding Agreement”), among Vertis Receivables II, LLC, aDelaware limited liability company (“Borrower”), the financialinstitutions from time to time party thereto (each a “Lender” andcollectively, the “Lenders”), General Electric Capital Corporation, aDelaware corporation, as administrative agent for the Lenders (the “AdministrativeAgent”), and is hereby made by Borrower, the Administrative Agent, and theLenders. Capitalized terms used herein and not otherwise defined shall have themeanings ascribed to them in the Funding Agreement.

W I T N E S S E T H:

WHEREAS, Borrower hasadvised the Lenders and the Administrative Agent that Webcraft, LLC, a Delawarelimited liability company (“Webcraft”) has agreed to sell certain assetsused in the development, marketing, sale and production of multi-sensorysampling devices and renditions, including, without limitation, fragrance,cosmetics and toiletries-related sampling, labels, scent strips and single usepackaging for fragrances, cosmetics and toiletries (which business ishereinafter referred to as the “Fragrance Business”) pursuant to thatcertain Asset Purchase Agreement (the “FB Purchase Agreement”) amongVertis, Inc., a Delaware corporation (“Vertis”) and Webcraft as “Seller”thereunder and Spice Acquisition Corp., a Delaware corporation (the “FBPurchaser”), dated September 5, 2006 (the transactions relating thereto,the “Sale Transaction”);

WHEREAS, prior to thedate hereof, and continuing until the “Closing Date” (as defined in the FBPurchase Agreement), Webcraft has sold and will continue to sell Receivablesarising out of the Fragrance Business to Borrower (the “FB Receivables”)and after the Closing Date will continue to sell Receivables (other than thosearising out of the Fragrance Business) as provided in the Related Documents;

WHEREAS, the partieshereto have agreed as follows:

## (a)           contemporaneously with theeffectiveness of the Sale Transaction, all Transferred Receivables constitutingFB Receivables shall no longer constitute “Eligible Receivables”;

## (b)           as a result of the foregoing, aFunding Excess shall exist and Borrower shall be required to pay the amount ofsuch Funding Excess in cash to Administrative Agent pursuant to Section 2.08(b)and 2.08(d);

## (c)           if such Funding Excess is not paid asand when required pursuant to Section 2.08(b) and 2.08(d), then AdministrativeAgent has the authority pursuant to Section 9.01(b) to direct the sale of theFB Receivables; and

## (d)           in order to effectuate the provisionsof the Funding Agreement and Related Documents and the orderly disposition ofTransferred Receivables as required to repay the Loans, notwithstanding anytiming differentials between the occurrence of the 

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## foregoing pursuant to the Funding Agreement,the Administrative Agent and the Lenders shall on the Effective Date (asdefined in Section 3 below), direct the sale of the FB Receivables tothe FB Purchaser by the Borrower, and the Borrower will effectuate such sale bythe execution and delivery of a quit-claim assignment agreement with the FBPurchaser in form and substance satisfactory to Administrative Agent (a copy ofwhich is attached hereto as Exhibit A, the “FB Quitclaim”, suchquit-claim transaction, the “Quitclaim Transaction”);

WHEREAS, subject to the termsand conditions set forth herein, in connection with the consummation of theSale Transaction and the Quitclaim Transaction, the Administrative Agent  and Lenders have agreed to consent to theQuitclaim Transaction;

WHEREAS, theAdministrative Agent, the Lenders, and Borrower are willing to amend theFunding Agreement to reflect the foregoing and grant the requested consent onthe terms and conditions set forth herein;

NOW, THEREFORE, inconsideration of the foregoing premises, the parties hereto agree as follows:

# 1.             Consent and Amendments as of Effective Date.  As of the “Effective Date” (as defined in Section3 below):

## (a)           All Transferred Receivablesconstituting FB Receivables shall no longer be deemed “Eligible Receivables”.

## (b)           The Administrative Agent and theLenders hereby direct, and consent to, the Quitclaim Transaction, and Borrowershall enter into the Quitclaim Transaction and use the proceeds thereof to payon the Effective Date any Funding Excess resulting from the amendment describedin clause (a) above.

## (c)           Any collections received in aLockbox, Collection Account or Concentration Account with respect to FBReceivables on and after the Effective Date shall be deemed “Unrelated Amounts”.Borrower shall identify to Administrative Agent such Unrelated Amounts withinone Business Day of deposit therein, and Administrative Agent agrees that uponsuch notice Administrative Agent shall (i) until the 90th day after the Effective Date, remit suchamounts to the FB Purchaser as directed by Servicer and (ii) after the 90th day after the Effective Date, address suchUnrelated Amounts as otherwise provided in the Related Documents.

## (d)           No later than 5:00 p.m. (New Yorktime) on each Tuesday, Borrower shall deliver a report identifying anycollections received by Borrower, Webcraft, any other Originator or Servicerfrom FB Receivables during the previous calendar week (including a total ofsuch amounts identified pursuant to clause (c) above), prepared as ofthe last day of such week.

## (e)           On each Settlement Date until the 90th day after the Closing Date, Borrower shallprovide (or cause Servicer to so provide) a written report to 

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## Administrative Agent certifying that nocollections from FB Receivables have been remitted to the Agent Account aboutwhich Administrative Agent has not been advised.

## (f)            Borrower agrees that it will, on orbefore the close of business on the fifth Business Day after the “Closing Date”(as defined in the FB Purchase Agreement), cause Servicer to send writtennotice to each Obligor of FB Receivables to remit payment to a deposit accountother than a Collection Account or Concentration Account (and a lockbox otherthan a Lockbox) and a Person other than Borrower, Servicer and Webcraft. Shouldnotwithstanding such instructions any collections from FB Receivables beremitted to Servicer, Webcraft, Borrower, any Originator, any CollectionAccount, Concentration Account or Lockbox, Borrower shall exercise commerciallyreasonable efforts to cause FB Purchaser to renotify such Obligors regardingthe proper direction of payments. The parties hereto agree that a failure tosend such notices by the date set forth in the first sentence of this clause(f) shall not be subject to any grace period set forth in Section 8.01 ofthe Funding Agreement.

## (g)           The Administrative Agent, on behalfof the Lenders, hereby releases all security interests with respect to all ofthe Administrative Agent’s right, title and interest in and to the FBReceivables.

# 2.             Representations and Warranties. As of theEffective Date, Borrower hereby represents and warrants to Administrative Agentand the Lenders that (i) all of the representations and warranties of suchPerson in the Related Documents are true and correct in all material respectson and as of such date as though made to each such Person on and as of suchdate (other than representations and warranties which expressly speak as of adifferent date, which representations shall be made only on such date), (ii)each of the recitals accurately describes the transactions described therein inall respects, and (iii) as of such date, no Incipient Termination Event,Termination Event, Incipient Servicer Termination Event or Event of ServicerTermination Event has occurred and is continuing (it being agreed andunderstood by all parties that the Sale Transaction, Quitclaim Transaction andany Funding Excess created thereby but remedied in accordance with Section3(c) below do not constitute any of the foregoing types of events).

# 3.             Effective Date. The “Effective Date” shall occur upon the satisfaction of thefollowing conditions precedent:

## (a)           The Administrative Agent shall havereceived counterparts hereof executed by each Person for which a signatureblock is attached hereto.

## (b)           Each of the representations andwarranties contained in this Amendment which speaks as of the Effective Dateshall be true and correct in all respects on and as of the Effective Date.

## (c)           Borrower shall have delivered to theAdministrative Agent on or prior to the Effective Date a Daily Report giving *pro forma* effect to the foregoingamendment and consent, and from the amount received from the proceeds of theQuitclaim Transaction, Borrower shall have paid to the Administrative Agent, in

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## immediately available funds, an amount equalto the amount, if any, of Funding Excess created by the foregoing amendment andconsent.

## (d)           The Administrative Agent shall havereceived an execution copy of the FB Purchase Agreement and the FB Quitclaimexecuted and delivered by all parties thereto in form and substance reasonablysatisfactory to Administrative Agent.

## (e)           The “Closing Date” pursuant to the FBPurchase Agreement shall have occurred, and the Sale Transaction and theQuitclaim Transaction shall have been consummated.

# 4.             Reference to and Effect on the Related Documents.

## (a)           As applicable, on and after theEffective Date, each reference in the Funding Agreement to “this Agreement”, “hereunder”,“hereof” or words of like import, and each reference in the other RelatedDocuments to the Funding Agreement, shall mean and be a reference to theFunding Agreement as modified hereby.

## (b)           Except as specifically amended orconsented to above, all of the terms of the Funding Agreement and all otherRelated Documents remain unchanged and in full force and effect.

## (c)           The execution, delivery andeffectiveness of this Amendment shall not operate as a waiver of any right,power or remedy of any Lender or of Administrative Agent under any of theRelated Documents, nor constitute an amendment, other than as set forth herein,or waiver of any provision of any of the Related Documents, nor obligate anyLender or Administrative Agent to agree to similar consents in the future.

## (d)           This Amendment shall constitute aRelated Document.

# 5.             Costs and Expenses.  Borrower agrees to pay upon demand inaccordance with the terms of Section 12.04 of the Funding Agreement allreasonable costs and expenses of the Administrative Agent in connection withthe preparation, negotiation, execution and delivery of this Amendment,including, without limitation, the reasonable fees, expenses and disbursementsof Sidley Austin LLP, counsel for the Administrative Agent with respect to anyof the foregoing.

# 6.             Miscellaneous. The headings herein are for convenience of reference only and shall notalter or otherwise affect the meaning hereof.

# 7.             Counterparts. This Amendment may be executed in any number of counterparts and by thedifferent parties hereto in separate counterparts, each of which when soexecuted and delivered by facsimile shall be an original, but all of whichshall together constitute one and the same instrument.

# 8.             GOVERNING LAW. **THIS AMENDMENTAND THE OBLIGATIONS ARISING HEREUNDER SHALL IN ALL RESPECTS, INCLUDING ALLMATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, BE**

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# **GOVERNEDBY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEWYORK (INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAWS BUTOTHERWISE WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES) EXCEPT TO THE EXTENTTHAT THE PERFECTION, EFFECT OF PERFECTION OR PRIORITY OF THE INTERESTS OF THEADMINISTRATIVE AGENT IN THE RECEIVABLES OR REMEDIES HEREUNDER OR THEREUNDER, INRESPECT THEREOF, ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THESTATE OF NEW YORK, AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.**

*              *              *

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IN WITNESS WHEREOF,Borrower, the Administrative Agent, and the Lenders, have caused this Amendmentto be executed by their respective officers thereunto duly authorized as of thedate first above written.
|        | ** ** | **VERTIS RECEIVABLES II, LLC** |
|--------|------------|--------------------------------|
|   |       | as the Borrower                |
|   |       |                           |
|   |       | By:                            | /S/ JOHN V. HOWARD, JR. |   |
|   |       |                           | Name: | John V. Howard, Jr |
|   |       |                           | Title: | Secretary |
|        |            |                                |  |  |  |

 

 

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|        | ** **               | ** **                          |
|--------|--------------------------|-------------------------------------|
|   | ** **               | ** **                          |
|   | ** **               | **GENERAL ELECTRIC CAPITAL**        |
|   | ** **               | **CORPORATION**                     |
|   | ** **               | as Administrative Agent             |
|   | ** **               | ** **                          |
|   | ** **               | ** **                          |
|   | ** **               | By:                                 | /S/ SUSAN  TIMMERMAN | ** ** |
|   | ** **               | ** **                          | Name: Susan Timmerman |
|   | ** **               | ** **                          | Duly Authorized Signatory |
|   | ** **               | ** **                          |
|   | Commitment: $130,000,000 | ** **                          | **GENERAL ELECTRIC CAPITAL** |
|   | ** **               | **CORPORATION**                     |
|   | ** **               | as the Lender and Swing Line Lender |
|   | ** **               |                                |
|   | ** **               | ** **                          |
|   | ** **               | By:                                 | /S/ Susan  Timmerman | ** ** |
|   |                     |                                | Name: Susan Timmerman |
|   |                     |                                | Duly Authorized Signatory |
|        |                          |                                     |  |  |  |

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| **ACKNOWLEDGED & AGREED:** | ** ** | ** **       |
|--------------------------------|------------|------------------|
|                           | ** ** | ** **       |
|                                | ** ** | **VERTIS, INC.** |
|                           | ** ** | as Servicer      |
|                           | ** ** |             |
|                           | ** ** |             |
|                           | ** ** | By:              | /S/ John V.  Howard, Jr. | ** ** |
|                           | ** ** | ** **       | Name: John V. Howard, Jr. |
|                           | ** ** | ** **       | Title:   Secretary |
|                           | ** ** | ** **       |
|                           | ** ** | ** **       |
|                           | ** ** | ** **       |

 

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Exhibit A

QuitclaimAgreement

**SEE ATTACHED**

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ACCOUNTS RECEIVABLE ASSIGNMENT

THIS ACCOUNTS RECEIVABLEASSIGNMENT (the “Accounts Receivable Assignment”) is entered into as ofSeptember 8, 2006 by and between VERTIS RECEIVABLES II, LLC (“Assignor”)and SPICE ACQUISITION CORP (“Assignee”).

**WHEREAS,**Vertis, Inc. and Webcraft, LLC andcertain of their Affiliates other than Assigor (collectively “Business Seller”),are engaged in the business of the development,marketing, sale and production of multi-sensory sampling devices andrenditions, including, without limitation, fragrance, cosmetics andtoiletries-related sampling, labels, scent strips and single use packaging forfragrances, cosmetics and toiletries (the “Business”);

**WHEREAS,** Business Seller and Assignee, haveentered into that certain Asset Purchase Agreement as of September 5, 2006 (the“Asset Purchase Agreement”) pursuant to which Business Seller has agreedto sell to Assignee, as Purchaser thereunder, the Business and certain assetsused in or comprising the Business; and

**WHEREAS,**Assignor is the owner of accountsreceivable arising out of the Business, and collateral and supportingobligations securing such accounts receivable (collectively, the “A/R Assets”),

**NOW, THEREFORE**

1.             In consideration of the payment made by Assignee in theamount of $8,022,279 in immediately available funds remitted to Bank ofAmerica, N.A., Account No. 3751970318, ABA No. 026009593, upon receipt of suchamount, the Assignor hereby sells, assigns, transfers and conveys, absolutelyand without recourse, all of its right, title and interest in, to and under allof the A/R Assets.

2.             Assignorcovenants and agrees to execute and deliver, or cause to be executed anddelivered, any and all agreements, instruments, papers, or deeds, as may bereasonably required by Assignee for the purpose of evidencing the vesting inAssignee of the property, rights, title and interests of the Assignor soldhereunder and the release of any liens created by Assignor, other thanPermitted Liens (as defined in the Asset Purchase Agreement).

3.             Assignor hereby authorizes Assignee to file a financingstatement in the form attached as Exhibit A hereto.  If Assignee causes a financing statement tobe filed, Assignee hereby agrees to cause such financing statement to beterminated promptly following its receipt of payment from the obligors on theA/R Assets transferred hereunder.

4.             Except as expressly stated herein, Assignor makes noother representations, warranties or covenants. We refer you to the representations, warranties and covenants made byBusiness Seller in the Asset Purchase Agreement with respect to the Assignorand the A/R Assets.

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5.             Wherever possible, each provision of this AccountsReceivable Assignment shall be interpreted in such a manner as to be effectiveand valid under applicable law, but if any provision of this AccountsReceivable Assignment shall be prohibited by or invalid under applicable law,such provision shall be ineffective only to the extent of such prohibition orinvalidity without invalidating the remainder of such provision or theremaining provisions of this Accounts Receivable Assignment.

6.             THIS ACCOUNTS RECEIVABLE ASSIGNMENT SHALL BE GOVERNEDBY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THESTATE OF NEW YORK (INCLUDING SECTION 5-1401 AND SECTION 5-1402 OF THE GENERALOBLIGATIONS LAWS BUT OTHERWISE WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES),AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.

7.             Assigneehereby agrees that from and after the date hereof, until the date that is oneyear and one day after all obligations of the Assignor under the ReceivablesFunding and Administration Agreement (and all amendments and replacementsthereof) have terminated, it will not, directly or indirectly, institute orcause to be instituted against the Assignor any bankruptcy case, insolvency ordissolution proceedings.

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IN WITNESS WHEREOF, the partieshave caused this Accounts Receivable Assignment to be executed by theirrespective officers thereunto duly authorized, as of the day and year firstabove written.
| VERTIS RECEIVABLES II, LLC, as       |
|--------------------------------------|
| Assignor                             |
|                                 |
| By:                                  | /S/ John V. Howard,  Jr. |   |
| Name:                                | John V. Howard, Jr. |
| Title:                               | Secretary |
|                                 |
|                                 |
| Agreed and accepted:                 |
|                                 |
| SPICE ACQUISITION CORP., as Assignee |
|                                 |
| By:                                  | /S/ Paul  Carousso |   |
| Name:                                | Paul Carousso |
| Title:                               | SVP Finance |
|                                 |
|                                 |
|                                      |  |  |  |  |

The undersigned, asAdministrative Agent on behalf of the lenders under that certain ReceivablesFunding and Administration Agreement, dated as of November 25, 2005, among theAssignor, the financial institutions identified as lenders therein, and GeneralElectric Capital Corporation, as Administrative Agent, consents and agrees tothe sale, assignment and conveyance provided for herein and hereby releases anyan all liens, security interests or other interests in the A/R Assets (andproceeds thereof, other than the purchase price paid as provided herein)conveyed hereunder, any and all such liens or security interest to attach tothe purchase price provided herein.

 
| GENERAL ELECTRIC CAPITAL             |
|--------------------------------------|
| CORPORATION, as Administrative Agent |
|                                 |
| By:                                  | /S/ Susan  Timmerman |   |
| Name:                                | Susan Timmerman |
| Title:                               | Duly Authorized Signatory |
|                                 |
|                                      |  |  |  |

 

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