Exhibit 10.2
SECURITY AGREEMENT
SECURITY AGREEMENT, dated as of July 17, 2008, between VERTIS, INC., a Delaware
corporation ("Borrower"), VERTIS HOLDINGS, INC., a Delaware corporation
("Holdings"), ENTERON GROUP LLC, a Delaware limited liability company
("Enteron"), WEBCRAFT, LLC, a Delaware limited liability company ("Webcraft"),
WEBCRAFT CHEMICALS, LLC, a Delaware limited liability company ("Webcraft
Chemicals"), USA DIRECT, LLC, a Delaware limited liability company ("USA
Direct"), VERTIS MAILING, LLC, a Delaware limited liability company ("Mailing")
(each a "Grantor" and collectively, the "Grantors"), each a debtor and
debtor-in-possession under chapter 11 of the Bankruptcy Code, and GENERAL
ELECTRIC CAPITAL CORPORATION, a Delaware corporation, in its capacity as Agent
for Lenders.
W I T N E S S E T H:
WHEREAS, pursuant to that certain Senior Secured, Priming and Super Priority
Debtor-in-Possession Credit Agreement dated as of the date hereof by and among
Grantors, the Persons named therein as Credit Parties, Agent and Lenders
(including all annexes, exhibits and schedules thereto, as from time to time
amended, restated, supplemented or otherwise modified, the "Credit Agreement"),
Lenders have agreed to make the Loans and to incur Letter of Credit Obligations
on behalf of Grantors;
WHEREAS, in order to induce Agent and Lenders to enter into the Credit Agreement
and the other Loan Documents and to induce Lenders to make the Loans and to
incur Letter of Credit Obligations as provided for in the Credit Agreement,
Grantors have agreed to grant a continuing Lien on the Collateral (as
hereinafter defined) to secure the Obligations;
NOW, THEREFORE, in consideration of the premises and mutual covenants herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1.
DEFINED TERMS.
(A)
ALL CAPITALIZED TERMS USED BUT NOT OTHERWISE DEFINED HEREIN HAVE
THE MEANINGS GIVEN TO THEM IN THE CREDIT AGREEMENT OR IN ANNEX A THERETO.
ALL
OTHER TERMS CONTAINED IN THIS SECURITY AGREEMENT, UNLESS THE CONTEXT INDICATES
OTHERWISE, HAVE THE MEANINGS PROVIDED FOR BY THE CODE TO THE EXTENT THE SAME ARE
USED OR DEFINED THEREIN.
(B)
"UNIFORM COMMERCIAL CODE JURISDICTION" MEANS ANY JURISDICTION THAT
HAS ADOPTED ALL OR SUBSTANTIALLY ALL OF ARTICLE 9 AS CONTAINED IN THE 2000
OFFICIAL TEXT OF THE UNIFORM COMMERCIAL CODE, AS RECOMMENDED BY THE NATIONAL
CONFERENCE OF COMMISSIONERS ON UNIFORM STATE LAWS AND THE AMERICAN LAW
INSTITUTE, TOGETHER WITH ANY SUBSEQUENT AMENDMENTS OR MODIFICATIONS TO THE
OFFICIAL TEXT.
2.
GRANT OF LIEN.
(A)
TO SECURE THE PROMPT AND COMPLETE PAYMENT, PERFORMANCE AND
OBSERVANCE OF ALL OF THE OBLIGATIONS AND ALL RENEWALS, EXTENSIONS,
RESTRUCTURINGS AND REFINANCINGS THEREOF, EACH GRANTOR HEREBY GRANTS, ASSIGNS,
CONVEYS, MORTGAGES, PLEDGES, HYPOTHECATES AND TRANSFERS TO AGENT, FOR ITSELF AND
THE BENEFIT OF LENDERS, A LIEN UPON ALL OF ITS RIGHT, TITLE AND INTEREST IN, TO
AND UNDER ALL PERSONAL PROPERTY AND OTHER ASSETS, WHETHER NOW OWNED BY OR OWING
TO, OR HEREAFTER ACQUIRED BY OR ARISING IN FAVOR OF SUCH GRANTOR (INCLUDING
UNDER ANY TRADE NAMES, STYLES OR DERIVATIONS THEREOF), AND WHETHER OWNED OR
CONSIGNED