REPAY ALL OF ITS OBLIGATIONS (OTHER THAN THE
SURVIVING A/R OBLIGATIONS) UNDER THE A/R SECURITIZATION FACILITY, CAUSE OR
PERMIT VERTIS RECEIVABLES TO OWN ANY ASSETS. IN THE EVENT THAT VERTIS
RECEIVABLES COMES TO OWN ANY ASSETS IN VIOLATION OF THE PRECEDING SENTENCE, THE
CREDIT PARTIES SHALL IMMEDIATELY CAUSE ALL SUCH ASSETS TO BE TRANSFERRED AND
CONVEYED TO BORROWER.
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SECTION 6.
FINANCIAL COVENANTS/REPORTING
Borrower covenants and agree that from and after the date hereof until the
Termination Date, Borrower shall perform and comply with, and shall cause each
of the other Credit Parties to perform and comply with, all covenants in this
Section 6 applicable to such Person.
6.1.
FINANCIAL COVENANTS.
(A)
MINIMUM FIXED CHARGE COVERAGE RATIO.
BORROWER AND ITS SUBSIDIARIES SHALL HAVE ON A CONSOLIDATED BASIS AT THE END OF
EACH FISCAL MONTH SET FORTH BELOW, A FIXED CHARGE COVERAGE RATIO FOR THE
12-MONTH PERIOD THEN ENDED OF NOT LESS THAN THE FOLLOWING:
Fiscal Month Ending
Fixed Charge Coverage Ratio
July 31, 2008
0.33 to 1.0
August 31, 2008
0.26 to 1.0
September 30, 2008
0.24 to 1.0
October 31, 2008
0.23 to 1.0
(B)
MAXIMUM REVOLVING LOAN AMOUNT.
BORROWER
SHALL NOT, AT ANY TIME, PERMIT THE OUTSTANDING AMOUNT OF THE REVOLVING LOAN TO
BE MORE THAN 135% OF THE AMOUNT OF THE OUTSTANDING REVOLVING LOAN SET FORTH IN
THE APPROVED BUDGET FOR SUCH TIME.
(C)
BUDGET COMPLIANCE.
(I)
SUBJECT TO THE TERMS AND CONDITIONS SET
FORTH BELOW, THE PROCEEDS OF LOANS MADE UNDER THIS AGREEMENT SHALL BE USED BY
THE BORROWER SOLELY FOR THE PURPOSES AND UP TO THE AMOUNTS SET FORTH IN THE
APPROVED BUDGET FOR THE APPLICABLE LINE ITEM DURING THE APPLICABLE SEVEN-DAY
PERIOD.
(II)
FOR EACH PERIOD BEGINNING ON JULY 18, 2008
AND ENDING ON THE LAST DAY OF EACH SEVEN-DAY PERIOD SET FORTH IN THE APPROVED
BUDGET, THE (A) AGGREGATE CUMULATIVE CASH INFLOWS OF THE BORROWER SHALL BE AT
LEAST 67% OF THE AGGREGATE CUMULATIVE AMOUNT AND (B) AGGREGATE CUMULATIVE
EXPENDITURES BY THE BORROWER SHALL NOT EXCEED 126.5% OF THE AGGREGATE CUMULATIVE
AMOUNT; PROVIDED, HOWEVER, THAT, NOTWITHSTANDING THE FOREGOING, WITH RESPECT TO
RESTRUCTURING PROFESSIONAL FEES AND EXPENSES, THE AGGREGATE CUMULATIVE
EXPENDITURES BY THE BORROWER FOR RESTRUCTURING PROFESSIONAL FEES AND EXPENSES
SHALL NOT EXCEED 100% OF THE AGGREGATE CUMULATIVE AMOUNT, IN EACH CASE, BUDGETED
FOR SUCH CUMULATIVE TIME PERIOD PURSUANT TO THE APPROVED BUDGET.
(III)
IN ADDITION, THE BORROWER'S EXPENDITURES
UNDER ANY LINE ITEM FOR ANY SEVEN-DAY PERIOD MAY INCLUDE THE SUM OF THE BUDGETED
AMOUNT FOR SUCH LINE ITEM FOR SUCH SEVEN-DAY PERIOD PLUS ANY EXCESS OF THE
CUMULATIVE AMOUNTS BUDGETED FOR SUCH LINE ITEM FOR THE
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IMMEDIATELY PRECEDING THREE SEVEN-DAY PERIODS (OR IF SHORTER, THE POST-PETITION
PERIOD ENDING ON THE LAST DAY OF THE IMMEDIATELY PRECEDING SEVEN-DAY PERIOD)
OVER THE CUMULATIVE AMOUNT OF BORROWER'S ACTUAL EXPENDITURES UNDER SUCH LINE
ITEM FOR SUCH PRIOR TIME PERIOD.
(IV)
TO THE EXTENT ANY ADDITIONAL LINE ITEM IS
ADDED TO THE APPROVED BUDGET IN ACCORDANCE WITH THE PROVISIONS OF THE INTERIM
ORDER OR THE