Document:

Exhibit 10.50

MANAGEMENT SERVICES
AGREEMENT

WITH

EVERCORE ADVISORS INC.

AGREEMENT entered into as of
December 7, 1999, between Evercore Advisors Inc., a Delaware corporation (the “Consultant”), and Big Flower Holdings, Inc., a Delaware
corporation (“Big Flower”).

WHEREAS, the Consultant has and
its affiliates have staff specially skilled in corporate finance, strategic
corporate planning and other management skills and services;

WHEREAS, as of the date hereof,
Big Flower has completed its merger pursuant to the Amended and Restated
Agreement and Plan of Merger (as amended, the “Merger
Agreement”) dated as of October 11, 1999 between Big Flower and BFH
Merger Corp., a Delaware corporation;

WHEREAS, Big Flower will require
the Consultant’s special skills and management advisory services in connection
with its general business operations; and

WHEREAS, the Consultant is
willing to provide such skills and services to Big Flower.

NOW, THEREFORE,
in consideration of the mutual promises contained herein, the parties hereto,
intending to be legally bound, do hereby agree as follows:

1.         Engagement.
Big Flower hereby engages the Consultant for the Term (as defined in Section 2)
and upon the terms and conditions herein set forth to provide consulting and
management advisory services to Big Flower, as requested by Big Flower. These
services will be in connection with financial and strategic corporate planning
and such other management services as the Consultant and Big Flower shall
mutually agree. In consideration of the remuneration herein specified, the
Consultant accepts such engagement and agrees to perform the services specified
herein.

2.         Term. The engagement hereunder shall
be for a term commencing on January 1, 2000 and expiring on the date that
Evercore (as defined in the Investors’Agreement) ceases to own, at least
one-third of the number of shares of Big Flower common stock that Evercore
holds immediately after the Effective Time (at defined in the Merger
Agreement), unless the Consultant and Big Flower agree to extend the term
beyond such date, in which case the term shall expire on the date agreed to by
the Consultant and Big Flower (the “Term”). “Investors’ Agreement” means the
Investors’

Agreement dated as of the date hereof among Big Flower, R. Theodore
Ammon, Thomas H. Lee Equity Fund IV, L.P., Evercore Capital Partners L.P. and
the other parties named therein.

3.         Services to be Performed.
The Consultant shall devote reasonable time and efforts to the performance of
the consulting and management advisory services contemplated by this Agreement.
However, no precise number of hours is to be devoted by the Consultant on a
weekly or monthly basis. The Consultant may perform services under this
Agreement directly, through its employees or agents, or with such outside
consultants as the Consultant may engage for such purpose. The Consultant
agrees that the consulting and management advisory services provided hereunder
will be performed by individuals qualified in accordance with the Consultant’s
normal business practices and in a manner providing quality of standards no
lower than the quality provided by the Consultant to its other customers.

4.         Compensation; Expense
Reimbursement.

(a)       In
consideration of the management advisory services hereunder, Big Flower agrees
to pay to the Consultant an annual fee equal to $250,000. The annual fee shall
be payable in equal quarterly installments each year, to be paid in advance on
the first day of each calendar quarter with the first such payment to be made
on January 1, 2000, except to the extent that any such payment is prohibited by
Section 9.06 of the Credit Agreement, dated as of the date hereof, among Big
Flower, as a Guarantor, Big Flower Press Holdings, Inc. and various
Subsidiaries of Big Flower Press Holdings, Inc., as Borrowers, various Lenders,
Chase Securities, Inc. and Deutsche Bank Securities Inc. as Joint Lead
Arrangers and Joint Book Managers, The Chase Manhattan Bank, as Administrative
Agent, Bankers Trust Company, as Syndication Agent, Bank of America, N.A., (as such
terms are defined in such Credit Agreement), in which case payments of the
annual fee shall be made in such a manner as to comply with such Section 9.06
of such Credit Agreement.

(b)       Big
Flower shall reimburse the Consultant for all reasonable out-of-pocket expenses
incurred by the Consultant, and its affiliates, in connection with management
advisory services provided by the Consultant hereunder, including, without
limitation, reasonable travel, lodging, accounting, legal, administrative and
similar out-of-pocket costs reasonably incurred by it in connection with its
performance of services for Big Flower hereunder. Reimbursement shall be made
only upon presentation to Big Flower by the Consultant of reasonably itemized
documentation therefor.

5.         Indemnification.
(a) In addition to its agreements and obligations under this Agreement,
Big Flower agrees to indemnify and hold harmless the Consultant, and its
affiliates (including their respective officers, directors, stockholders,
partners, members, employees and agents) from and against any and all actions,
claims, liabilities, losses and damages (or actions in respect thereof), in any
way related to or arising out of

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the execution, delivery and existence of this Agreement, or the
performance by the Consultant of services under Sections 1 and 3 of this
Agreement (other than for expenses described in Section 4(b) hereof which are
reimbursed under Section 4 hereof), and to reimburse the Consultant and any
other such indemnified person for reasonable out-of-pocket legal and other
expenses incurred by it in connection with or relating to investigating,
preparing to defend, or defending any actions, claims or other proceedings
(including any investigation or inquiry) arising in any manner out of or in
connection with the Consultant’s performance under this Agreement (whether or
not such indemni­fied person is a named party in such proceeding); provided,
however, that Big Flower shall not be responsible under this Section 5 for any
claims, liabilities, losses, damages or expenses to the extent that they are
finally judicially determined to result from actions taken by the Consultant
(or such other indemnified person) due to the Consultant’s (or such other
indemnified person’s) gross negligence or willful misconduct.

(b)       Big
Flower also agrees that the Consultant (or such other indemnified person) shall
not have any liability (whether direct or indirect, in contract or tort or
otherwise) to Big Flower or any of its affiliates for or in connection with the
retention of the Consultant pursuant to this Agreement or the performance of
the Consultant of its obligations under this Agreement, except to the extent
that any such liability is finally judicially determined to have resulted from
the Consultant’s (or such other indemnified person’s) gross negligence or
willful misconduct.

(c)       The
indemnification provided for in this Section 5 shall be in addition to any
liability which Big Flower may otherwise have to the Consultant or the other
indemnified persons. Further, if and to the extent that the indemnification
provided for in this Section 5 is not enforceable for any reason, Big Flower
agrees to make the maximum contribution possible pursuant to applicable law to
the payment and satisfaction of any actions, claims, liabilities, losses and
damages incurred by the Consultant or the other indemnified persons for which
they would have otherwise been entitled to be indemnified hereunder.

(d)       If
any action, claim, proceeding or investigation is commenced as to which the
Consultant (or such other indemnified person) proposes to demand
indemnification, the Consultant shall notify Big Flower with reasonable
promptness; provided, however, that any failure by the Consultant
(or such other indemnified person) to notify Big Flower shall not relieve Big
Flower from its obligations hereunder. The Consultant (or such other
indemnified person) shall have the right to retain counsel of its own choice to
represent it, and Big Flower shall pay the reasonable fees, expenses and
disbursements of such counsel as incurred; and such counsel shall, to the
extent consistent with its professional responsibilities, cooperate with Big
Flower and any counsel designated by Big Flower. Big Flower shall be liable for
any settlement of any claim against the Consultant (or such other indemnified
person) made with Big Flower’s written consent, which consent shall not be
unreasonably withheld. Big Flower shall not, without the prior written consent
of the Consultant (or such other indemnified person), settle or

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compromise any claim, or permit a default or consent to the entry of
any judgment in respect thereof, unless such settlement, compromise or consent
includes, as an unconditional term thereof, the giving by the claimant to the
Consultant (or such other indemnified person) of an unconditional release from
all liability in respect of such claim.

6.         Notices. All notices hereunder, to be
effective, shall be in writing and shall be sent by reputable nationwide
courier, or sent by facsimile, as follows:

(i)        If
to the Consultant:

Evercore Advisors Inc.

65 East 55th Street

33rd Floor

New York, New York 10022

Attention: Austin M. Beutner

Facsimile: 212-857-3122

(ii)       If
to Big Flower:

Big Flower Holdings, Inc. 

3 East 54th Street

New York, New York 10022 

Attention: Irene B. Fisher

Facsimile: 212-715-4902

7.         Modifications.
This Agreement constitutes the entire agreement between the parties hereto with
regard to the subject matter hereof, superseding all prior understandings and
agreements whether written or oral. This Agreement may not be amended or
revised except by a writing signed by the parties.

8.         Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit
of the parties and their respective successors and assigns but may not be
assigned by either party without the prior written consent of the other.
Notwithstanding the foregoing (but subject to the final sentence of Section 3),
the Consultant may elect to have its obligations hereunder performed in whole
or in part by a partnership or other entity affiliated with the Consultant, and
the Consultant may direct that any compensation (including all or a portion of
the fees under Section 4(a), and reimbursement of expenses be paid to the
affiliate performing the services hereunder with respect thereto.

9.         Captions.
Captions have been inserted solely for the convenience of reference and in no
way define, limit or describe the scope or substance of any provision and shall
not affect the validity of any other provision.

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10.      Governing
Law. This Agreement shall be construed under and governed by and construed
in accordance with the laws of the State of Delaware, without reference to
principles of conflicts or choice of laws, or any other law that would make the
laws of any jurisdiction other than the State of Delaware applicable hereto.

11.      Counterparts.
This Agreement may be signed in two counter­parts, each of which shall be
deemed an original but which together shall constitute one and the same
instrument.

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IN WITNESS WHEREOF, the
parties have duly executed this Management Services Agreement as of the date
first above written.

 

	
  

  	
   

  	
  EVERCORE ADVISORS INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Neeraj Mital

  	
   

  
	
   

  	
   

  	
       Name:

  	
  Neeraj Mital

  
	
   

  	
   

  	
       Title:

  	
  Authorized Person

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BIG FLOWER HOLDINGS, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Irene B.
  Fisher

  	
   

  
	
   

  	
   

  	
       Name:

  	
   

  
	
   

  	
   

  	
       Title:Exhibit
10.51

LIMITED CONSENT
AND AMENDMENT NO. 7 TO CREDIT AGREEMENT

This Limited
Consent and Amendment No. 7 to Credit Agreement, dated as of March 30, 2007
(this “Amendment”), is entered into by and among Vertis, Inc. (“Borrower”),
as Borrower, the other Credit Parties signatory hereto, General Electric
Capital Corporation, as a Lender and as Agent for Lenders (“Agent”), the
other Lenders, and Crystal Capital Fund, L.P, as a Joint-Lead Arranger.

RECITALS

A.    Borrower, the other Credit Parties, Agent and Lenders are parties
to that certain Credit Agreement, dated as of December 22, 2004, including all
annexes, exhibits and schedules thereto (as amended by: (i) that certain
Limited Consent and Amendment No. 1 to Credit Agreement, dated as of October 3,
2005; (ii) that certain Amendment No. 2 to Credit Agreement, dated as of
November 22, 2005; (iii) that certain Limited Consent and Amendment No. 3 to
Credit Agreement, dated as of December 12, 2005; (iv) that certain Amendment
No. 4 to Credit Agreement, dated as of May 30, 2006; (v) that certain Limited
Consent and Amendment No. 5 to Credit Agreement, dated as of September 5, 2006;
and (vi) that certain Limited Consent and Amendment No. 6 to Credit Agreement,
dated as of November 27, 2006; and as from time to time further amended,
restated, supplemented or otherwise modified, the “Credit Agreement”).

B.     Borrower and the other Credit Parties have requested that Agent
and Lenders consent to certain transactions as described below in this
Amendment and Agent and Lenders are willing to do so as and to the extent, and
solely as and to the extent, and subject to the terms and conditions set forth
in this Amendment.

C.     Borrower and the other Credit Parties have requested that Agent
and Lenders agree to amend the Credit Agreement as and to the extent set forth
in this Amendment and Agent and Lenders are willing to do so as and to the
extent, and solely as and to the extent, and subject to the terms and
conditions set forth in this Amendment.

D.    This Amendment shall constitute a Loan Document and these
Recitals shall be construed as part of this Amendment.

NOW THEREFORE, in consideration of the premises and
the mutual covenants hereinafter contained, and of the Loans and other
extensions of credit heretofore, now or hereafter made to, or for the benefit
of, Borrower by Lenders, Borrower, the other Credit Parties, Agent and Lenders
hereby agree as follows:

1.                                       Definitions.  Except to the extent otherwise specified
herein, capitalized terms used in this Amendment shall have the same meanings
ascribed to them in the Credit Agreement and Annex A thereto.

 

2.                                       Amendments.

2.1.                              Section
1 (AMOUNTS AND TERMS OF LOANS) of the Credit Agreement is hereby amended
by deleting such Section in its entirety and replacing it with the following
new Section 1:

“

SECTION
1.

AMOUNTS AND TERMS OF
LOANS

1.1                                 Loans.  Subject to the terms and conditions of this
Agreement and in reliance upon the representations and warranties of Borrower
and the other Credit Parties contained herein:

(a)                                  Domestic
Revolving Loans.

(i)            Each Revolving Lender agrees,
severally and not jointly, to make available to Borrower from time to time
until the Commitment Termination Date its Pro Rata Share of advances (each a “Revolving
Credit Advance”) requested by the Borrower hereunder.  The Pro Rata Share of the Revolving Loan of
any Revolving Lender (including, without duplication, Swing Line Loan) shall
not at any time exceed its separate Revolving Loan Commitment.  Revolving Credit Advances may be repaid and
reborrowed; provided, that the amount of any Revolving Credit Advance to be
made at any time shall not exceed Borrowing Availability.  Borrowing Availability may be further reduced
by Reserves imposed by Agent in its reasonable credit judgment based on a
change in circumstances; provided, that, as long as Holdings,
Borrower and their Subsidiaries on a consolidated basis shall have, as of the
end of the immediately preceding calendar quarter, EBITDA, adjusted to reflect
restructuring charges, non-recurring charges and including other adjustments,
if any, all as set forth in Section 6.1(a) of Schedule 1 to Annex
F, for the twelve (12) month period then ended of greater than
$180,000,000, Agent’s right to impose any Reserves not previously imposed or to
alter the manner in which previously imposed Reserves are determined shall
require prior written consent of the Borrower. 
The Revolving Loan, including, without limitation, the Alternative
Currency Revolving Credit Subfacility, shall be repaid in full on the
Commitment Termination Date.  Borrower
shall execute and deliver to each Revolving Lender a note to evidence the total
Revolving Loan Commitment of that Revolving Lender.  Each note shall be in the maximum principal
amount of the Revolving Loan Commitment of the applicable Revolving Lender,
dated the Closing Date and substantially in the form of Exhibit 1.1(a)(i)
(as amended, modified, extended, substituted or replaced from time to time,
each a “Revolving Note” and, collectively, the “Revolving Notes”).  Other than pursuant to Section 1.1(a)(ii),
if the aggregate outstanding Revolving Loan (including, without limitation, the
amount outstanding under the Alternative Currency Revolving Credit Subfacility)
exceeds the Borrowing Base as set forth in the most recently delivered Borrowing

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Base Certificate or the
total aggregate Revolving Loan Commitment of all Lenders (any such excess
amount of Revolving Loan is herein referred to as an “Overadvance”),
Lenders shall not be obligated to make Revolving Credit Advances, no additional
Letters of Credit shall be issued and, except as provided in Section
1.1(a)(ii) below, the Revolving Loan must be repaid immediately and/or
Letters of Credit cash collateralized in an amount sufficient to eliminate any
Overadvance.  For the avoidance of doubt,
at no time shall the Revolving Loan balance exceed the Maximum Amount and, if
at any time the Revolving Loan balance shall exceed the Maximum Amount,
Borrower shall immediately repay the Revolving Loan in an amount sufficient to
eliminate any such excess.  All
Overadvances shall constitute Index Rate Loans and shall bear interest payable
upon demand at the Default Rate.  For
funding requests for Revolving Credit Advances to be funded as Index Rate Loans
of less than $5,000,000, written notice must be provided by 1:00 p.m. (New York
time) on the Business Day on which the Revolving Credit Advance is to be
made.  For funding requests of Revolving
Credit Advances to be funded as Index Rate Loans of $5,000,000 or greater,
written notice must be provided by 1:00 p.m. (New York time) on the Business
Day immediately preceding the day on which the Revolving Credit Advance is to
be made.  All Revolving Credit Advances
to be funded as LIBOR Loans require three (3) Business Days prior written
notice. Written notices for funding requests shall be in the form attached as Exhibit
1.1(a)(ii) (“Notice of Revolving Credit Advance”).  Any Loan or group of Loans having the same
proposed LIBOR Period to be made or continued as, or converted into, a LIBOR
Loan must be in a minimum amount of $5,000,000 and integral multiples of
$500,000 in excess of such amount.

(ii)           If Borrower requests that Revolving
Lenders make, or permit to remain outstanding an Overadvance, Agent may, in its
sole discretion, elect to make, or permit to remain outstanding such
Overadvance; provided, however, that Agent may not cause
Revolving Lenders to make, or permit to remain outstanding, (a) a
Revolving Loan balance in excess of the Maximum Amount or (b) an
Overadvance in an aggregate amount in excess of $10,000,000.  If
an Overadvance is made, or permitted to remain outstanding, pursuant to the
preceding sentence, then all Revolving Lenders shall be bound to make, or
permit to remain outstanding, such Overadvance based upon their Pro Rata Shares
of the Revolving Loan Commitment in accordance with the terms of this
Agreement.

(b)                                 Domestic
Swing Line Facility.

(i)            Subject to the terms and conditions
hereof, the Swing Line Lender hereby agrees to make available at any time and
from time to time until the Commitment Termination Date advances (each, a “Swing
Line Advance”).  The provisions of
this Section 1.1(b) shall not relieve Revolving Lenders of their
obligations to make Revolving Credit Advances under Section 1.1(a).  Except as provided in Section 1.1(a)(ii)
above, the aggregate amount of

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Swing Line Advances
outstanding shall not exceed at any time the lesser of (A) the Swing Line
Commitment and (B) Borrowing Availability (“Swing Line Availability”).  Until the Commitment Termination Date,
Borrower may from time to time borrow, repay and reborrow under this Section
1.1(b).  Whenever Borrower desires
that the Swing Line Lender make a Swing Line Advance hereunder, Borrower shall
give the Swing Line Lender, not later than 3:30 P.M. (New York time), on the
date that a Swing Line Advance is to be made, written notice or telephonic
notice promptly confirmed in writing of each Swing Line Advance to be made
hereunder.  Each such notice shall be
irrevocable and specify (A) the date of borrowing (which shall be a Business
Day), and  (B) the aggregate principal
amount of the Swing Line Advance to be made pursuant to such borrowing.  Unless the Swing Line Lender has received at
least one (1) Business Day’s prior written notice from Requisite Lenders
instructing it not to make a Swing Line Advance, the Swing Line Lender shall,
notwithstanding the failure of any condition precedent set forth in Section
2.2, be entitled to fund that Swing Line Advance, and to have each
Revolving Lender make Revolving Credit Advances in accordance with Section
1.1(b)(iii) or purchase participating interests in accordance with Section
1.1(b)(iv).  Notwithstanding any
other provision of this Agreement or the other Loan Documents, the Swing Line
Loan shall constitute an Index Rate Loan. 
Borrower shall repay the aggregate outstanding principal amount of the
Swing Line Loan upon demand therefor by Agent. The entire unpaid balance of the
Swing Line Loan and all other noncontingent Obligations (other than as set
forth in Section 1.5) shall be immediately due and payable in full in
immediately available funds on the Commitment Termination Date if not sooner
paid in full.

(ii)           Borrower shall execute and deliver to
the Swing Line Lender a promissory note to evidence the Swing Line Commitment.
Such note shall be in the principal amount of the Swing Line Commitment of the
Swing Line Lender, dated the Closing Date and substantially in the form of Exhibit
1.1(b) (as amended, modified, extended, substituted or replaced from time
to time, the “Swing Line Note”). The Swing Line Note shall represent the
obligation of Borrower to pay the amount of the Swing Line Commitment or, if
less, the aggregate unpaid principal amount of all Swing Line Advances made to
Borrower together with interest thereon as prescribed in Section 1.2.

(iii)          The Swing Line Lender, at any time and
from time to time in its sole and absolute discretion but no less frequently than once weekly, may  on
behalf of Borrower (and Borrower hereby irrevocably authorizes the Swing Line
Lender to so act on its behalf) request each Revolving Lender to make a
Revolving Credit Advance to Borrower (which shall be an Index Rate Loan) in an
amount equal to that Revolving Lender’s Pro Rata Share of the principal amount
of the Swing Line Loan (the “Refunded Swing Line Loan”) outstanding on
the date such notice is given.  Unless
any of the events described in Sections 7.1(f) and 7.1(g) has occurred
(in which event the procedures of Section 1.1(b)(iv) shall apply) and
regardless of whether the conditions precedent set forth in this

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Agreement to the making
of a Revolving Credit Advance are then satisfied, each Revolving Lender shall
disburse directly to Agent, its Pro Rata Share of a Revolving Credit Advance on
behalf of the Swing Line Lender, prior to 3:00 p.m. (New York time), in
immediately available funds on the Business Day next succeeding the date that
notice is given.  The proceeds of those
Revolving Credit Advances shall be immediately paid to the Swing Line Lender
and applied to repay the Refunded Swing Line Loan.

(iv)          If, prior to refunding a Swing Line
Loan with a Revolving Credit Advance pursuant to Section 1.1(b)(iii),
one of the events described in Sections 7.1(f) or 7.1(g) has occurred,
then, subject to the provisions of Section 1.1(b)(v) below, each Revolving
Lender shall, on the date such Revolving Credit Advance was to have been made
for the benefit of Borrower, purchase from the Swing Line Lender an undivided
participation interest in the Swing Line Loan in an amount equal to its Pro
Rata Share (determined with respect to the Revolving Loan) of such Swing Line
Loan.  Upon request, each Revolving
Lender shall promptly transfer to the Swing Line Lender, in immediately
available funds, the amount of its participation interest.

(v)           Each Revolving Lender’s obligation to
make Revolving Credit Advances in accordance with Section 1.1(b)(iii)
and to purchase participation interests in accordance with Section
1.1(b)(iv) shall be absolute and unconditional and shall not be affected by
any circumstance, including (A) any setoff, counterclaim, recoupment,
defense or other right that such Revolving Lender may have against the Swing
Line Lender, Borrower or any other Person for any reason whatsoever;
(B) the occurrence or continuance of any Default or Event of Default; (C) any
inability of Borrower to satisfy the conditions precedent to borrowing set
forth in this Agreement at any time or (D) any other circumstance,
happening or event whatsoever, whether or not similar to any of the foregoing.  Swing Line Lender shall be entitled to
recover, on demand, from each Revolving Lender the amounts required pursuant to
Sections 1.1.(b)(iii) or 1.1(b)(iv), as the case may be.  If any Revolving Lender does not make
available such amounts to Agent or the Swing Line Lender, as applicable, the
Swing Line Lender shall be entitled to recover, on demand, such amount on
demand from such Revolving Lender, together with interest thereon for each day
from the date of non-payment until such amount is paid in full at the
Federal Funds Rate for the first two Business Days and at the Index Rate
thereafter.

(c)           Letters of Credit.  The Revolving Loan Commitment may, in
addition to advances under the Revolving Loan and the Alternative Currency
Revolving Credit Subfacility, be utilized (subject to the limitations imposed
by Section 1.1(a)), upon the request of the Borrower to Agent, for the
issuance of Letters of Credit, which shall be issued in Dollars or, to the
extent available, Pounds Sterling, on behalf of Borrower.  Immediately upon the issuance by an L/C
Issuer of a Letter of Credit, and without further action on the part of Agent
or any of the Lenders, each Revolving Lender shall be deemed to have purchased

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from such L/C Issuer a
participation in such Letter of Credit (or in its obligation under a risk
participation agreement with respect thereto) equal to such Revolving Lender’s
Pro Rata Share of the aggregate amount available to be drawn under such Letter
of Credit.

(i)            Maximum Amount.  The aggregate amount of Letter of Credit
Obligations with respect to all Letters of Credit outstanding or unreimbursed
at any time shall not exceed $45,000,000, or the Dollar Equivalent thereof (“L/C
Sublimit”).

(ii)           Reimbursement.  Borrower shall be irrevocably and
unconditionally obligated forthwith without presentment, demand, protest or
other formalities of any kind (including for purposes of Section 10), to
reimburse any L/C Issuer on demand in immediately available funds for any
amounts paid by such L/C Issuer with respect to a Letter of Credit, including all
reimbursement payments, Fees, Charges, costs and expenses paid by such L/C
Issuer.  Borrower hereby authorizes and
directs Agent, at Agent’s option, to debit Borrower’s accounts (by increasing
the outstanding principal balance of the Revolving Credit Advances, Alternative
Currency Revolving Credit Advances, Swing Line Advances or Alternative Currency
Swing Line Advances made to Borrower, as applicable) in the amount of any
payment made by an L/C Issuer with respect to any Letter of Credit.  All amounts paid by an L/C Issuer with
respect to any Letter of Credit that are not immediately repaid by Borrower
with the proceeds of a Revolving Credit Advance, Alternative Currency Revolving
Credit Advance, Swing Line Advance, Alternative Currency Swing Line Advance or
otherwise shall bear interest payable on demand at the interest rate applicable
to Revolving Credit Advances that are Index Rate Loans plus, at the election of
Agent or Requisite Lenders, an additional two percent (2.00%) per annum.  Each Revolving Lender agrees to fund its Pro
Rata Share of any Revolving Loan made pursuant to this Section 1.1(c)(ii).  In the event Agent elects not to debit
Borrower’s account and Borrower fails to reimburse the L/C Issuer in full on
the date of any payment in respect of a Letter of Credit, Agent shall promptly
notify each Revolving Lender of the amount of such unreimbursed payment and the
accrued interest thereon and each Revolving Lender, on the next Business Day
prior to 3:00 p.m. (New York time), shall deliver to Agent an amount equal to
its Pro Rata Share thereof in same day funds.  Each Revolving Lender hereby absolutely and
unconditionally agrees to pay to the L/C Issuer upon demand by the L/C Issuer
such Revolving Lender’s Pro Rata Share of each payment made by the L/C Issuer
in respect of a Letter of Credit and not immediately reimbursed by Borrower or
satisfied through a debit of Borrower’s account.  Each Revolving Lender acknowledges and agrees
that its obligations pursuant to this subsection in respect of Letters of
Credit are absolute and unconditional and shall not be affected by any
circumstance whatsoever, including setoff, counterclaim, the occurrence and
continuance of a Default or an Event of Default or any failure by Borrower to
satisfy any of the conditions set forth in Section 2.2.  If any Revolving Lender fails to make
available to the L/C Issuer the amount of such

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Revolving Lender’s Pro
Rata Share of any payments made by the L/C Issuer in respect of a Letter of
Credit as provided in this Section 1.1(c)(ii), the L/C Issuer shall be
entitled to recover such amount on demand from such Revolving Lender together
with interest at the Index Rate or at the Alternative Currency Index Rate, as
applicable.

(iii)          Request for Letters of Credit.  Borrower shall give Agent at least three (3)
Business Days prior written notice specifying the date a Letter of Credit is
requested to be issued, the amount and the name and address of the beneficiary
and a description of the transactions proposed to be supported thereby, the
Applicable Currency, and the expiry date (or extended expiry date) of the
Letter of Credit.  Each request by
Borrower for the issuance of a Letter of Credit shall be in the form of Exhibit
1.1(c).  If Agent informs Borrower
that the L/C Issuer cannot issue the requested Letter of Credit directly,
Borrower may request that L/C Issuer arrange for the issuance of the requested
Letter of Credit under a risk participation agreement with another financial
institution reasonably acceptable to Agent, L/C Issuer and Borrower.  The issuance of any Letter of Credit under
this Agreement shall be subject to satisfaction of the conditions set forth in Section
2.2 and the conditions that the Letter of Credit (i) supports a
transaction benefiting the Credit Parties (other than Holdings) or their
wholly-owned Subsidiaries and (ii) is in a form, is for an amount and
contains such terms and conditions as are reasonably satisfactory to the L/C
Issuer and, in the case of standby letters of credit, Agent.  The initial notice requesting the issuance of
a Letter of Credit shall be accompanied by the form of the Letter of Credit and
the Master Standby Agreement or Master Documentary Agreement, as applicable,
and an application for a letter of credit, if any, then required by the L/C
Issuer completed in a manner reasonably satisfactory to such L/C Issuer.  If any provision of any application or
reimbursement agreement is inconsistent with the terms of this Agreement, then
the provisions of this Agreement, to the extent of such inconsistency, shall
control.

(iv)          Expiration Dates of Letters of
Credit.  The expiration date of each
Letter of Credit shall be on a date that is not later than the earlier of
(a) twelve months from its date of issuance or (b) the thirtieth (30th) day prior to the date set
forth in clause (a) of the definition of the term Commitment Termination
Date. Notwithstanding the foregoing, a Letter of Credit may provide for
automatic extensions of its expiration date for one (1) or more successive
periods of up to twelve (12) months for each period; provided that the L/C
Issuer has the right to terminate such Letter of Credit on each such expiration
date and no renewal term may extend the term of the Letter of Credit to a date
that is later than the thirtieth (30th) day prior to the date set forth in
clause (a) of the definition of the term Commitment Termination Date.  Upon direction by Agent or Requisite Lenders,
the L/C Issuer shall not renew any such Letter of Credit at any time during the
continuance of an Event of Default; provided that, in the case of a direction
by Agent or Requisite Lenders, the L/C Issuer receives such directions

 7
 

 

prior to the date notice
of non-renewal is required to be given by the L/C Issuer and the L/C Issuer has
had a reasonable period of time to act on such notice.

(v)           Obligations Absolute.  The obligation of Borrower to reimburse the
L/C Issuer, Agent and Lenders for payments made in respect of Letters of Credit
issued by the L/C Issuer shall be unconditional and irrevocable and shall be paid
under all circumstances strictly in accordance with the terms of this
Agreement, including the following circumstances: (a) any lack of validity
or enforceability of any Letter of Credit; (b) any amendment or waiver of
or any consent or departure from all or any of the provisions of any Letter of
Credit or any Loan Document; (c) the existence of any claim, set-off,
defense or other right which Borrower, any of its Subsidiaries or Affiliates or
any other Person may at any time have against any beneficiary of any Letter of
Credit, Agent, any L/C Issuer, any Lender or any other Person, whether in
connection with this Agreement, any other Loan Document or any other related or
unrelated agreements or transactions; (d) any draft or other document
presented under any  Letter of Credit
proving to be forged, fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect; (e) payment
under any Letter of Credit against presentation of a draft or other document that
does not substantially comply with the terms of such Letter of Credit; or
(f) any other act or omission to act or delay of any kind of any L/C
Issuer, Agent, any Lender or any other Person or any other event or
circumstance whatsoever that might, but for the provisions of this Section
1.1(c)(v), constitute a legal or equitable discharge of Borrower’s
obligations hereunder.  Without limiting
the generality of the foregoing, it is expressly understood and agreed by
Borrower that the absolute and unconditional obligation of Borrower to Agent
and Lenders hereunder to reimburse payments made under a Letter of Credit will
not be excused by the gross negligence or willful misconduct of the L/C
Issuer.  However, the foregoing shall not
be construed to excuse an L/C Issuer from claims which Borrower may assert
against the L/C Issuer subject to the terms of the Master Standby Agreement or
the Master Documentary Agreement.

(vi)          Obligations of L/C Issuers.  Each L/C Issuer (other than GE Capital)
hereby agrees that it will not issue a Letter of Credit hereunder until it has
provided Agent with written notice specifying the amount and intended issuance
date of such Letter of Credit.  Each L/C
Issuer (other than GE Capital) further agrees to provide to Agent:  (a) a copy of each Letter of Credit
issued by such L/C Issuer promptly after its issuance; (b) a weekly report
summarizing available amounts under Letters of Credit issued by such L/C
Issuer, the dates and amounts of any draws under such Letters of Credit, the
effective date of any increase or decrease in the face amount of any Letters of
Credit during such week and the amount of any unreimbursed draws under such
Letters of Credit; and (c) such additional information reasonably
requested by Agent from time to time with respect to the Letters of Credit
issued by such L/C Issuer.

 8
 

 

(d)                                 Alternative
Currency Revolving Credit Subfacility.

(i)            The Revolving Loan Commitment may,
in addition to advances under the Revolving Loan and the issuance of any
Letters of Credit, be utilized (subject to the limitations imposed by Section
1.1(a) and this Section 1.1(d)), upon the request of Borrower, for
advances under the Alternative Currency Revolving Credit Subfacility as set
forth herein.  Each Revolving Lender
agrees, severally and not jointly, to make available to the Borrower from time
to time until the Commitment Termination Date its Pro Rata Share of advances
denominated in an Alternative Currency (each an “Alternative Currency
Revolving Credit Advance”) requested by Borrower hereunder, which request
shall specify the Alternative Currency. 
The Pro Rata Share of the Alternative Currency Revolving Credit Advances
of any Revolving Lender shall not at any time exceed the Assigned Dollar Value of
such Lender’s Unused Alternative Currency Revolving Credit Sub-Commitment
at such time; provided, however, that the aggregate amount of all
Alternative Currency Revolving Credit Advances at any time outstanding shall
not at any time exceed the Assigned Dollar Value of $150,000,000 (the “Alternative
Currency Revolving Credit Subfacility”), and, provided, further,
that the aggregate amount of all Alternative Currency Revolving Credit
Borrowings shall in no event exceed the aggregate of the Unused Alternative
Currency Revolving Credit Sub-Commitments of the Revolving Lenders at
such time.  Each Alternative Currency
Revolving Credit Borrowing  shall be in
the Assigned Dollar Value of approximately Two Million Dollars ($2,000,000) or
an integral multiple of approximately One Million Dollars ($1,000,000) in
excess thereof on the date of the applicable Notice of Alternative Currency
Borrowing or, if less, the then Dollar Equivalent amount of the aggregate
Unused Alternative Currency Revolving Credit Sub-Commitments other than,
in the case of continuations or conversions of any Alternative Currency
Revolving Credit Borrowing, to the extent a failure to comply with the
foregoing is solely a result of currency fluctuations.  Each Alternative Currency Revolving Credit
Borrowing shall consist of Alternative Currency Revolving Credit Advances made
simultaneously by the Revolving Lenders ratably according to their Alternative
Currency Revolving Credit Sub-Commitments.

(ii)           Each Alternative Currency Revolving
Credit Borrowing shall be made on notice, given not later than 1:00 P.M. (New
York, New York time) on the 3rd Business Day prior to the date of the proposed
Borrowing by the Borrower to the Agent. 
Each such notice of an Alternative Currency Revolving Credit Borrowing (a
“Notice of Alternative Currency Borrowing”) shall be in substantially
the form of Exhibit 1.1(d)(ii) hereto, specifying therein the requested
(i) date of such Alternative Currency Revolving Credit Borrowing, (ii)
Applicable Currency, and (iii) aggregate amount of such Alternative Currency
Revolving Credit Borrowing.

 9
 

 

(e)                                  Alternative
Currency Swing Line Facility.

(i)            Subject to the terms and conditions
hereof, the Alternative Currency Swing Line Lender hereby agrees to make
available at any time and from time to time until the Commitment Termination
Date advances (each, an “Alternative Currency Swing Line Advance”).  The provisions of this Section 1.1(e)
shall not relieve Revolving Lenders of their obligations to make Revolving
Credit Advances under Section 1.1(b) or Alternative Revolving Credit
Advances under Section 1.1(d). 
Except as provided in Section 1.1(a)(ii) above, the aggregate
amount of Alternative Currency Swing Line Advances outstanding shall not exceed
at any time the lesser of (A) the Alternative Currency Swing Line
Commitment and (B) Borrowing Availability (“Alternative Currency Swing Line
Availability”).  Until the Commitment
Termination Date, Borrower may from time to time borrow, repay and reborrow
under this Section 1.1(e). 
Whenever Borrower desires that the Alternative Currency Swing Line
Lender make an Alternative Currency Swing Line Advance hereunder, Borrower
shall give the Alternative Currency Swing Line Lender not later than 10:00 A.M.
(New York time) on the Business Day prior to the date that an Alternative
Currency Swing Line Advance is to be made, written notice or telephonic notice
promptly confirmed in writing of each Alternative Currency Swing Line Advance
to be made hereunder.  Each such notice
shall be irrevocable and specify (A) the date of Borrowing (which shall be a
Business Day), and (B) the aggregate principal amount of the Alternative
Currency Swing Line Advance to be made pursuant to such Borrowing.  Unless the Alternative Currency Swing Line
Lender has received at least one (1) Business Day’s prior written notice from
Requisite Lenders instructing it not to make an Alternative Currency Swing Line
Advance, the Alternative Currency Swing Line Lender shall, notwithstanding the
failure of any condition precedent set forth in Section 2.2, be entitled
to fund that Alternative Currency Swing Line Advance, and to have each
Revolving Lender make Alternative Currency Revolving Credit Advances in
accordance with Section 1.1(e)(iii) or purchase participating interests
in accordance with Section 1.1(e)(iv). 
Notwithstanding any other provision of this Agreement or the other Loan
Documents, the Alternative Currency Swing Line Loan shall constitute an Index
Rate Loan.  Borrower shall repay the
aggregate outstanding principal amount of the Alternative Currency Swing Line
Loan upon demand therefor by Agent.  The
entire unpaid balance of the Alternative Currency Swing Line Loan and all other
noncontingent Obligations shall be immediately due and payable in full in
immediately available funds on the Commitment Termination Date if not sooner
paid in full.

(ii)           Borrower shall execute and deliver to
the Alternative Currency Swing Line Lender a promissory note to evidence the
Alternative Currency Swing Line Commitment. 
Such note shall be in the principal amount of the Alternative Currency
Swing Line Commitment of the Alternative Currency Swing Line Lender, dated the
Closing Date and substantially in the form of Exhibit 1.1(e) (as
amended, modified, extended, substituted or replaced from time to time, the “Alternative
Currency Swing Line Note”).  The
Alternative Currency Swing Line Note shall represent the obligation

 10

of Borrower to pay the
amount of the Alternative Currency Swing Line Commitment or, if less, the
aggregate unpaid principal amount of all Alternative Currency Swing Line
Advances made to Borrower together with interest thereon as prescribed in Section
1.2.

(iii)          The Alternative Currency Swing Line
Lender, at any time and from time to time in its sole and absolute discretion but no less frequently than once every two
weeks, may on behalf of Borrower (and Borrower hereby irrevocably
authorizes the Alternative Currency Swing Line Lender to so act on its behalf)
request each Revolving Lender to make an Alternative Currency Revolving Credit
Advance to Borrower (which shall be a LIBOR Loan at the Alternative Currency
LIBOR Rate) in an amount equal to that Revolving Lender’s Pro Rata Share of the
difference between (A) the principal amount of the Alternative Currency Swing
Line Loan (such amount, the “Refunded Alternative Currency Swing Line Loan”)
outstanding on the date such notice is given and (B) the then Pounds Sterling
equivalent of $2,500,000.  Prior to
sending such notice the Alternative Currency Swing Line Lender shall contact
the Borrower which shall specify the LIBOR Period for the Alternative Currency
Revolving Credit Advance to be made by each Lender in order to repay the
Refunded Alternative Currency Swing Line Loan and, accordingly, such notice
sent by the Alternative Currency Swing Line Lender to each Lender shall specify
both such Lender’s Pro Rata Share of the Refunded Alternative Currency Advance
and the LIBOR Period selected by the Borrower for the Alternative Currency
Revolving Credit Advances to be made by the Lenders in the amount of the
Refunded Alternative Currency Swing Line Loan. 
Unless any of the events described in Sections 7.1(f) and 7.1(g)
has occurred (in which event the procedures of Section 1.1(e)(iv) shall
apply) and regardless of whether the conditions precedent set forth in this
Agreement to the making of an Alternative Currency Revolving Credit Advance are
then satisfied, each Revolving Lender shall disburse directly to Agent, its Pro
Rata Share of an Alternative Currency Revolving Credit Advance on behalf of the
Alternative Currency Swing Line Lender, prior to 3:00 p.m. (New York time), in
immediately available funds on the third (3rd) Business Day next following the
date that such notice is given by the Alternative Currency Swing Line
Lender.  The proceeds of those
Alternative Currency Revolving Credit Advances shall be immediately paid to the
Alternative Currency Swing Line Lender and applied to repay the Refunded
Alternative Currency Swing Line Loan.

(iv)          If, prior to refunding an Alternative
Currency Swing Line Loan with an Alternative Currency Revolving Credit Advance
pursuant to Section 1.1(e)(iii), one of the events described in Sections
7.1(f) or 7.1(g) has occurred, then, subject to the provisions of Section
1.1(e)(v) below, each Revolving Lender shall, on the date such Alternative
Currency Revolving Credit Advance was to have been made for the benefit of
Borrower, purchase from the Alternative Currency Swing Line Lender an undivided
participation interest in the Alternative Currency Swing Line Loan in an amount
equal to its Pro Rata Share (determined with respect to Alternative Currency
Revolving Credit Borrowings) 

 11
 

of such Alternative
Currency Swing Line Loan.  Upon request,
each Revolving Lender shall promptly transfer to the Alternative Currency Swing
Line Lender, in immediately available funds, the amount of its participation
interest.

(v)           Each Revolving Lender’s obligation to
make Alternative Currency Revolving Credit Advances in accordance with Section
1.1(e)(iii) and to purchase participation interests in accordance with Section
1.1(e)(iv) shall be absolute and unconditional and shall not be affected by
any circumstance, including (A) any setoff, counterclaim, recoupment,
defense or other right that such Revolving Lender may have against the
Alternative Currency Swing Line Lender, Borrower or any other Person for any
reason whatsoever; (B) the occurrence or continuance of any Default or
Event of Default; (C) any inability of Borrower to satisfy the conditions
precedent to borrowing set forth in this Agreement at any time or (D) any
other circumstance, happening or event whatsoever, whether or not similar to any
of the foregoing.  Alternative Currency
Swing Line Lender shall be entitled to recover, on demand, from each Revolving
Lender the amounts required pursuant to Sections 1.1.(e)(iii) or 1.1(e)(iv),
as the case may be.  If any Revolving
Lender does not make available such amounts to Agent or the Alternative
Currency Swing Line Lender, as applicable, the Alternative Currency Swing Line
Lender shall be entitled to recover, on demand, such amount on demand from such
Revolving Lender, together with interest thereon for each day from the date of
non-payment until such amount is paid in full at the Federal Funds Rate
for the first two Business Days and at the Alternative Currency Index Rate
thereafter.

(f)            Funding Authorization.

(i)            The proceeds of all Loans made to
the Borrower pursuant to this Agreement (other than Loans made to the Borrower
pursuant to the Alternative Currency Revolving Credit Subfacility) subsequent
to the Closing Date are to be funded by Agent by wire transfer to the account
designated by Borrower below (the “US Disbursement Account”):

Bank:  Deutsche 
Trust Company Americas

ABA No.:  021-001-033

Bank Address:  New York, New York

Account No.:  00360911

Reference: 
Vertis, Inc.

(ii)           The proceeds of all Loans made to the
Borrower pursuant to the Alternative Currency Revolving Credit Subfacility
under this Agreement subsequent to the Seventh Amendment Effective Date are to
be funded by Agent by wire transfer to the applicable account designated in
writing by Borrower to Agent at least ten (10) Business Days prior to the
funding of any such Loan under the Alternative Currency Revolving Credit
Subfacility (each, a “European Disbursement Account”, and collectively
the “European Disbursement 

 12
 

Accounts” and
collectively with the US Disbursement Account, the “Disbursement Accounts”).

Borrower shall provide
Agent with written notice of any change in the foregoing instructions at least
three (3) Business Days before the desired effective date of such change.

(g)           Term Loan.  Each Term Lender agrees, severally and not jointly,
to lend to Borrower in one draw, on the Seventh Amendment Effective Date, its
Pro Rata Share of the aggregate amount of $50,000,000 (the “Term Loan”).  The principal amount of the Term Loan shall
be due and payable in full, in cash in one installment, on the Commitment
Termination Date; subject, however, to acceleration upon (or
following) the occurrence of an Event of Default and during its continuation,
or upon earlier termination of this Agreement, as provided for herein.  Amounts borrowed under this Section 1.1(g)
and repaid may not be reborrowed.  The
Term Loan shall be evidenced by promissory notes substantially in the form of Exhibit
1.1(g) (as amended, modified, extended, substituted or replaced from time
to time, each a “Term Note” and, collectively, the “Term Notes”),
and, except as provided in Section 1.7, the Borrower shall execute and
deliver each Term Note to the applicable Term Lender.  Each Term Note shall represent the obligation
of Borrower to pay the amount of the applicable Term Lender’s Term Loan
Commitment, together with interest thereon.

1.2           Interest
and Applicable Margins.

(a)           Borrower shall pay interest to Agent,
for the ratable benefit of Lenders, with respect to the various Loans (other
than Letter of Credit Obligations) made by each Lender (or in the case of the
Swing Line Loan, for the benefit of the Swing Line Lender or, in the case of
the Alternative Currency Swing Line Loan, for the benefit of the Alternative
Currency Swing Line Lender), in arrears on each applicable Interest Payment
Date, at the following rates with respect to (i) Revolving Credit Advances that
are Index Rate Loans, the Index Rate plus the Applicable Revolver Index Margin
per annum, (ii) Revolving Credit Advances that are LIBOR Loans, at the election
of Borrower, the applicable LIBOR Rate plus the Applicable Revolver LIBOR
Margin per annum, (iii) the Swing Line Loan, the Index Rate plus the Applicable
Revolver Index Margin per annum, (iv) Alternative Currency Revolving Credit
Advances that are LIBOR Loans, at the election of Borrower, the applicable
Alternative Currency LIBOR Rate plus the Applicable Revolver LIBOR Margin per
annum, (v) Alternative Currency Swing Line Loan, the Alternative Currency Index
Rate plus the Applicable Alternative Currency Revolver Index Margin per annum,
and (vi) the Term Loan, the applicable LIBOR Rate plus the Applicable Term Loan
Margin per annum.

 13
 

As of the Seventh
Amendment Effective Date, the Applicable Margins with respect to Revolving
Credit Advances, Alternative Currency Revolving Credit Advances and Letter of
Credit Obligations are as follows:

	
  Applicable Revolver Index Margin

  	
   

  	
  1.75

  	
  %

  
	
  Applicable
  Alternative Currency

  Revolver Index Margin

  	
   

  	
  3.00

  	
  %

  
	
  Applicable
  Revolver LIBOR Margin

  	
   

  	
  3.00

  	
  %

  
	
  Applicable L/C Margin

  	
   

  	
  3.00

  	
  %

  

 

The Applicable Term Loan
Margin shall in all events equal the greater of (I) 4.75% and (II) 1.75% in
excess of the then Applicable Revolver LIBOR Margin.

The Applicable Margins
shall be adjusted (up or down) prospectively on a quarterly basis as determined
by Holdings’ and its Subsidiaries’ consolidated financial performance,
commencing with the first day of the first calendar month that occurs more than
one (1) day after delivery of Holdings’ quarterly Financial Statements to
Lenders for the Fiscal Quarter ending June 30, 2005.  Adjustments in Applicable Margins with
respect to Revolving Credit Advances, Alternative Currency Revolving Credit
Advances and Letter of Credit Obligations will be determined by reference to
the following grid:

	
  If Leverage Ratio is:

  	
   

  	
  Level of

  Applicable Margins:

  
	
  <0.7

  	
   

  	
  Level I

  
	
  <1.0, but > 0.7

  	
   

  	
  Level II

  
	
  <1.6, but > 1.0

  	
   

  	
  Level III

  
	
  >1.6

  	
   

  	
  Level IV

  

 

	
  

  	
   

  	
  Applicable Margins

  	
   

  
	
   

  	
   

  	
  Level I

  	
   

  	
  Level II

  	
   

  	
  Level III

  	
   

  	
  Level IV

  	
   

  
	
  Applicable
  Revolver Index Margin

  	
   

  	
   

  	
  1.00

  	
  %

  	
   

  	
   

  	
  1.25

  	
  %

  	
   

  	
   

  	
  1.50

  	
  %

  	
   

  	
   

  	
  1.75

  	
  %

  	
   

  
	
  Applicable
  Alternative Currency Revolver Index Margin

  	
   

  	
   

  	
  2.25

  	
  %

  	
   

  	
   

  	
  2.50

  	
  %

  	
   

  	
   

  	
  2.75

  	
  %

  	
   

  	
   

  	
  3.00

  	
  %

  	
   

  
	
  Applicable
  Revolver LIBOR Margin

  	
   

  	
   

  	
  2.25

  	
  %

  	
   

  	
   

  	
  2.50

  	
  %

  	
   

  	
   

  	
  2.75

  	
  %

  	
   

  	
   

  	
  3.00

  	
  %

  	
   

  
	
  Applicable L/C Margin

  	
   

  	
   

  	
  2.25

  	
  %

  	
   

  	
   

  	
  2.50

  	
  %

  	
   

  	
   

  	
  2.75

  	
  %

  	
   

  	
   

  	
  3.00

  	
  %

  	
   

  

 

All adjustments in the
Applicable Margins  after June 30, 2005
shall be implemented quarterly on a prospective basis, for each calendar month
commencing at least one (1) day after the date of delivery to Lenders of the 

 14
 

quarterly unaudited
Financial Statements evidencing the need for an adjustment.  Concurrently with the delivery of quarterly
unaudited Financial Statements, Borrower shall deliver to Agent and Lenders a
certificate, signed by its chief financial officer, setting forth in reasonable
detail the basis for the continuance of, or any change in, the Applicable
Margins.  Failure to timely deliver such
Financial Statements shall, in addition to any other remedy provided for in
this Agreement, result in an increase in the Applicable Margins to the highest
level set forth in the foregoing grid, until the first day of the first
calendar month following the delivery of those Financial Statements
demonstrating that such an increase is not required.  If any Default or an Event of Default has
occurred and is continuing at the time any reduction in the Applicable Margins
is to be implemented, that reduction shall be deferred until the first day of
the first calendar month following the date on which all Defaults or Events of
Default are waived or cured.

(b)           If any payment on any Loan becomes due
and payable on a day other than a Business Day, the maturity thereof will be
extended to the next succeeding Business Day (except as set forth in the
definition of LIBOR Period) and, with respect to payments of principal,
interest thereon shall be payable at the then applicable rate during such
extension.

(c)           All computations of Fees calculated on
a per annum basis and interest shall be made by Agent on the basis of a 360-day
year, in each case for the actual number of days occurring in the period for
which such Fees and interest are payable. 
The Index Rate and the Alternative Currency Index Rate are each floating
rates determined for each day.  Each
determination by Agent of an interest rate and Fees hereunder shall be final,
binding and conclusive on Borrower, absent manifest error.

(d)           So long as an Event of Default has
occurred and is continuing under Section 7.1(a), (f) or (g)
and without notice of any kind, or so long as any other Event of Default has
occurred and is continuing and at the election of Agent (or upon the written
request of Requisite Lenders) confirmed by written notice from Agent to
Borrower, the interest rates applicable to the Loans and the Letter of Credit
and Unused Line Fees shall be increased by two percentage points (2%) per annum
above the rates of interest or the rate of such Fee otherwise applicable
hereunder (“Default Rate”), and all other outstanding Obligations which
are past due shall bear interest at the then applicable Index Rate applicable
to such other Obligations plus the Default Rate.  Interest, Unused Line Fees and Letter of
Credit Fees at the Default Rate shall accrue from the initial date of such
Event of Default until that Event of Default is cured or waived and shall be
payable upon demand, but in any event, shall be payable on the next regularly
scheduled payment date set forth herein for such Obligation.

(e)           Borrower shall have the option to
(i) request that any Revolving Credit Advance or Alternative Currency
Revolving Credit Advance be made as a LIBOR Loan, (ii) convert at any time
all or any part of outstanding 

 15
 

Loans (other than the
Swing Line Loan) from Index Rate Loans to LIBOR Loans, (iii) convert any
LIBOR Loan (other than an Alternative Currency Revolving Credit Advance or the
Term Loan) to an Index Rate Loan, subject to payment of the LIBOR Breakage
Costs in accordance with Section 1.3(e) if such conversion is made prior
to the expiration of the LIBOR Period applicable thereto, or (iv) continue
all or any portion of any Loan (other than the Swing Line Loan) as a LIBOR Loan
upon the expiration of the applicable LIBOR Period and the succeeding LIBOR
Period of that continued Loan shall commence on the first day after the last
day of the LIBOR Period of the Loan to be continued, provided, however,
Loans that bear interest by reference to the Alternative Currency LIBOR Rate
and the Alternative Currency Index Rate may not be converted or continued as
Loans that bear interest by reference to the LIBOR Rate or the Index Rate.  Any such election must be made by 1:00 p.m.
(New York time) on the 3rd Business Day prior to (1) the date of any
proposed Revolving Credit Advance or Alternative Currency Revolving Credit
Advance that is to bear interest at the LIBOR Rate or the Alternative Currency
LIBOR Rate, as applicable, (2) the end of each LIBOR Period with respect
to any LIBOR Loans to be continued as such, or (3) the date on which
Borrower wishes to convert any Index Rate Loan to a LIBOR Loan for a LIBOR
Period designated by Borrower in such election. 
If no election is received with respect to a LIBOR Loan by 1:00 p.m.
(New York time) on the 3rd Business Day prior to the end of the LIBOR Period with
respect thereto, that LIBOR Loan (other than an Alternative Currency Revolving
Credit Advance) shall be converted to an Index Rate Loan at the end of its
LIBOR Period.  With respect to any Loan
consisting of an Alternative Currency Revolving Credit Advance, if no election
is received with respect to a LIBOR Loan by 1:00 p.m. (New York time) on the
3rd Business Day prior to the end of the LIBOR Period with respect thereto,
that LIBOR Loan shall be continued as a LIBOR Loan for the same LIBOR
Period.  Borrower must make such election
by notice to Agent in writing, by fax or overnight courier.  In the case of any conversion or
continuation, such election must be made pursuant to a written notice (a “Notice
of Conversion/Continuation”) in the form of Exhibit 1.2(e).  No Loan shall be made, converted into or
continued as a LIBOR Loan, if an Event of Default has occurred and is
continuing and Agent or Requisite Lenders have determined not to make or
continue any Loan as a LIBOR Loan as a result thereof.

(f)            Notwithstanding anything to the
contrary set forth in this Section 1.2, if a court of competent
jurisdiction determines in a final order that the rate of interest payable
hereunder exceeds the highest rate of interest permissible under law (the “Maximum
Lawful Rate”), then so long as the Maximum Lawful Rate would be so
exceeded, the rate of interest payable hereunder shall be equal to the Maximum
Lawful Rate; provided, however, that if at any time thereafter
the rate of interest payable hereunder is less than the Maximum Lawful Rate,
Borrower shall continue to pay interest hereunder at the Maximum Lawful Rate
until such time as the total interest received by Agent, on behalf of Lenders,
is equal to the total interest that would have been received had the interest
rate 

 16
 

payable hereunder been
(but for the operation of this paragraph) the interest rate payable since the
Closing Date as otherwise provided in this Agreement.  Thereafter, interest hereunder shall be paid
at the rate(s) of interest and in the manner provided in Sections 1.2(a)
through (e), unless and until the rate of interest again exceeds the
Maximum Lawful Rate, and at that time this paragraph shall again apply.  In no event shall the total interest received
by any Lender pursuant to the terms hereof exceed the amount that such Lender
could lawfully have received had the interest due hereunder been calculated for
the full term hereof at the Maximum Lawful Rate.  If the Maximum Lawful Rate is calculated
pursuant to this paragraph, such interest shall be calculated at a daily rate
equal to the Maximum Lawful Rate divided by the number of days in the year in
which such calculation is made.  If,
notwithstanding the provisions of this Section 1.2(f), a court of
competent jurisdiction shall determine by a final, non-appealable order that a
Lender has received interest hereunder in excess of the Maximum Lawful Rate,
Agent shall, to the extent permitted by applicable law, promptly apply such
excess as specified in Section 1.5(d) and thereafter shall refund any
excess to Borrower or as such court of competent jurisdiction may otherwise
order.

1.3           Fees.

(a)           Fee Letters.  Borrower shall pay: (i) to GE Capital,
individually, the Fees specified in that certain fee letter, dated as of
November 5, 2004  among Borrower and GE Capital
(the “GE Capital Fee Letter”), at the times specified for payment
therein; and (ii) for so long as Crystal Capital is a “Lender”, to Crystal
Capital, individually, the Fees specified in that certain fee letter, dated as
of March 13, 2007  among Borrower and Crystal
Capital (the “Crystal Capital Fee Letter”), at the times specified for
payment therein.

(b)           Unused Line Fee.  As additional compensation for the Revolving
Lenders, Borrower shall pay to Agent, for the ratable benefit of such Lenders,
in arrears, on the first Business Day of each calendar quarter prior to the
Commitment Termination Date, commencing with January, 2005 and on the
Commitment Termination Date, a fee for Borrower’s non-use of available
funds in an amount equal to one-half of one percent (0.50%)  per
annum multiplied by the difference between (x) the Maximum Amount (as it
may be reduced from time to time) and (y) the average for the period of
the daily closing balances of the Revolving Loan (including, without
duplication, Swing Line Loans and Alternative Currency Revolving Loans)
outstanding during the period for which such Fee is due.

(c)           Letter of Credit Fee.  Borrower agrees to pay to Agent for the
benefit of Revolving Lenders, as compensation to such Revolving Lenders for
Letter of Credit Obligations incurred hereunder, (i) without duplication
of reasonable, documented, out-of-pocket costs and expenses otherwise payable
to Agent or Lenders hereunder, all costs and expenses incurred by Agent or any
Lender on account of such Letter of Credit Obligations, and (ii) for each
calendar 

 17
 

quarter during which any
Letter of Credit Obligation shall remain outstanding, commencing with the first
calendar quarter following the Closing Date, a fee (the “Letter of Credit
Fee”) in an amount equal to the
Applicable L/C Margin from time to time in effect multiplied by the
maximum amount available from time to time to be drawn under the applicable
Letter of Credit.  Such fee shall be paid
to Agent for the benefit of the Revolving Lenders in arrears, on the first
Business Day of each calendar quarter and on the Commitment Termination
Date.  In addition, Borrower shall pay to
any L/C Issuer, on demand, such fees (including all per annum fees), charges
and expenses of such L/C Issuer in respect of the issuance, negotiation,
acceptance, amendment, transfer and payment of such Letter of Credit or
otherwise payable pursuant to the application and related documentation under
which such Letter of Credit is issued.

(d)           LIBOR Breakage Costs.  Upon (i) any default by Borrower in
making any borrowing of, conversion into or continuation of any LIBOR Loan
following Borrower’s delivery to Agent of any LIBOR Loan request in respect
thereof or (ii) any payment of a LIBOR Loan on any day that is not the
last day of the LIBOR Period applicable thereto (regardless of the source of
such prepayment and whether voluntary, by acceleration or otherwise), Borrower
shall pay Agent, for the benefit of all Lenders that funded or were prepared to
fund any such LIBOR Loan, LIBOR Breakage Costs, if applicable.

(e)           Expenses and Attorneys’ Fees.  Borrower agrees to pay all reasonable,
documented, out-of-pocket fees, charges, costs and expenses (including, without
duplication, reasonable attorneys’ fees and expenses) incurred by Agent, and,
on and after the Seventh Amendment Effective Date, by Crystal Capital
(regardless of whether incurred prior to the Seventh Amendment Effective Date
in connection with the Seventh Amendment to Credit Agreement or after the
Seventh Amendment Effective Date in connection with any of the Loan Documents),
in connection with any matters contemplated by or arising out of the Loan
Documents, in connection with the examination, review, due diligence
investigation, documentation, negotiation, closing and syndication of the
transactions contemplated herein and in connection with the continued
administration of the Loan Documents including any amendments, modifications,
consents and waivers, and Agent will use its best efforts to give Borrower
reasonable notice of all such out-of-pocket fees, charges, costs and expenses; provided,
however, that so long as no Default or Event of Default has occurred and
is continuing, Borrower’s obligation to reimburse out-of-pocket expenses in
respect of (i) any Field Examination (as defined in Section 4.3 hereof)
shall not exceed $40,000 and (ii) any Non-Real Estate Fixed Asset Appraisal (as
defined in Section 6.2(g) hereof) shall not exceed $125,000.  Borrower agrees to promptly pay reasonable
documentation charges assessed by Agent for amendments, waivers, consents and
any of the documentation prepared by Agent’s internal legal staff.  Borrower agrees to promptly pay, without
duplication, all reasonable, documented, out-of-pocket fees, charges, costs and
expenses (including fees, charges, costs and expenses of attorneys, auditors,
appraisers, consultants and 

 18
 

advisors) incurred by
Agent, and, after the Seventh Amendment Effective Date, by Crystal Capital, in
connection with any (i) amendment, waiver or consent requested by a Credit
Party with respect to the Loan Documents, (ii) Event of Default, (iii) work-out
or (iv) action to enforce any Loan Document or to collect any payments due from
Borrower or any other Credit Party.  In
addition, in connection with any work-out or action to enforce any Loan
Document or to collect any payments due from Borrower or any other Credit
Party, Borrower agrees to promptly pay all reasonable fees, charges, costs and
expenses, including, without limitation, reasonable attorneys’ fees, incurred
by Lenders.  All fees, charges, costs and
expenses for which Borrower is responsible under this Section 1.3(e)
shall be deemed part of the Obligations when incurred, payable in accordance
with the final sentence of Section 1.4 and secured by the Collateral.

1.4           Receipt of Payments.

(a)           All payments by Borrower of the
Obligations shall be without deduction, defense, setoff or counterclaim and
shall be made in same day funds and delivered to Agent, for the benefit of
Agent and Lenders, as applicable, by wire transfer to (i) with respect to payments
in U.S. Dollars, the account identified below under the heading “US Collection
Account” and (ii) with respect to payments in Pounds Sterling, the account
identified below under the heading “UK Collection Account” or such other place
as Agent may from time to time designate in writing (collectively, the US
Collection Account and the UK Collection Account are herein referred to as the “Collection
Account”).

US Collection Account

ABA No. 021-001-033

Account Number 502-328-54

Deutsche Trust Company
Americas

New York, New York

ACCOUNT NAME: GECC/CAF
DEPOSITORY

Reference:  GE
Capital re Vertis, Inc. CFN5830

UK Collection Account

Swift Code BARCGB22

Sort Code 200000

Barclays Bank PLC
(London)

ACCOUNT NAME: GE CAPITAL
COMMERCIAL FINANCE

Account Number: 60802697

Account ID: 5130

Reference: Vertis, Inc. CFN5830

(b)           Borrower shall make each payment under
this Agreement not later than (i) with respect to payments in Dollars, 4:00
p.m. (New York time) on the day when due in immediately available funds in
Dollars to the US Collection Account and (ii) with respect to payments in
Pounds Sterling, 11:00 

 19
 

a.m. (New York time) on
the day when due in immediately available funds in Pounds Sterling to the UK
Collection Account.  All payments by
Borrower of the Obligations denominated in Dollars shall be made in Dollars;
all payments by Borrower of the Obligations denominated in Pounds Sterling
shall be made in Pounds Sterling.  For
purposes of computing interest and Fees and determining Borrowing Availability
as of any date, all payments shall be deemed received on the day of receipt of
immediately available funds therefor in (i) the U.S. Collection Account prior
to 4:00 p.m. New York time and (ii) the UK Collection Account prior to 11:00
a.m. (New York time).  Payments received
(i) into the U.S. Collection Account after 4:00 p.m. (New York time) and (ii)
after 11:00 a.m. (New York time) in the UK Collection Account on any Business
Day shall be deemed to have been received on the following Business Day.

Whenever any payment to
be made hereunder shall be stated to be due on a day that is not a Business
Day, the payment may be made on the next succeeding Business Day and such
extension of time shall be included in the computation of the amount of
interest and Fees due hereunder.

(c)           Borrower hereby authorizes Lenders to
make Revolving Credit Advances, Alternative Currency Revolving Credit Advances
or Swing Line Advances for the payment of interest, Fees and expenses, Letter
of Credit reimbursement obligations and any amounts required to be deposited
with respect to outstanding Letter of Credit Obligations pursuant to Sections
1.5(e) or 7.3; provided, that so long as no Event of Default has
occurred and is continuing, expense reimbursements pursuant to Section
1.3(e) shall be payable 10 days after notice thereof to Borrower (and
otherwise such expense reimbursements shall be payable upon demand).

1.5           Prepayments.

(a)           Voluntary Prepayments of Loans.  At any time, Borrower may prepay the Loans,
in whole or in part, without premium or penalty subject to the payment of  LIBOR Breakage Costs, if applicable.  Prepayments of the Term Loan shall be applied
in accordance with Section 1.5(d).

(b)           Prepayments
from Asset Dispositions.

(i)            Except as provided in Section
1.5(b)(ii) below and other than any asset dispositions in connection with
the Permitted Receivables Financing as otherwise permitted hereunder,
immediately upon receipt of any Net Proceeds in excess of $2,500,000 in the
aggregate during any Fiscal Year,
Borrower shall prepay the Loans in an amount equal to such Net Proceeds, except
that Borrower or its Subsidiaries may
reinvest all or a portion of the Net Proceeds of any such Asset Disposition,
within three hundred and sixty (360) days, in fixed assets.  If Borrower does not intend to so reinvest
such Net Proceeds or if the period set forth in the immediately preceding
sentence expires without Borrower

 20

 

having
reinvested the Net Proceeds of any such Asset Disposition, Borrower shall
prepay the Loans in an amount equal to such remaining Net Proceeds in
accordance with Section 1.5(d). 
Notwithstanding anything to the contrary in this Agreement, in the event
that, and for so long as, Borrower has Borrowing Availability, both before and
after giving effect to any such prepayment, in excess of $20,000,000, the
provisions of this Section 1.5(b) shall not be applicable (i.e. no
mandatory prepayment pursuant to this Section 1.5(b) shall be required).

(ii)           Notwithstanding anything to the
contrary in this Agreement, payments from (a) insurance proceeds or (b)
condemnation proceeds, in each case, from casualties or losses to Collateral
shall be applied to the Loan in accordance with this Section1.5(b)(ii).  If (i) Borrower notifies Agent in writing
within thirty (30) days after the occurrence of such event that it intends to
replace or restore the affected Collateral, (ii) the cost required to replace
the Collateral with the same or substantially similar assets or restore the
Collateral to the same value as it had prior to the casualty or condemnation
does not exceed $2,500,000 and (iii) such proceeds, together with any amounts
contributed to or otherwise available to Borrower to replace or restore the
Collateral, are sufficient to cover all or substantially all of the replacement
or restoration of the affected Collateral, Agent shall permit Borrower to
replace or restore the Collateral in a diligent and expeditious manner with
materials and workmanship of substantially the same quality as existed before
the casualty or condemnation; provided, that if Borrower has not completed such
replacement or restoration within 360 days of such event, such insurance
proceeds or condemnation proceeds shall be applied to the Obligations in
accordance with Section 1.5(b)(i). 
To the extent not used to replace or restore the affected Collateral
within 360 days of the casualty or condemnation, such proceeds shall be applied
in accordance with Section 1.5(b)(i). 
To the extent such prepayments exceed the then outstanding principal
balance of the Loans, they shall be returned to Borrower.

(c)           Prepayments from Issuance of
Securities.  Immediately upon the
receipt by Holdings, Borrower or any of their Subsidiaries of the proceeds of
the issuance of Stock, Borrower shall prepay the Loans in an amount equal to
such proceeds, net of underwriting discounts and commissions and other
reasonable, documented, out-of-pocket costs associated therewith.  The payments shall be applied in accordance
with Section 1.5(d). 
Notwithstanding the foregoing, the following proceeds of stock issuances
shall be excluded from any mandatory prepayment: (i) proceeds of issuances of
Stock by any Credit Party on or prior to the Closing Date, (ii) proceeds of
issuances of Stock of Holdings to management employees of any Credit Party,
(iii) proceeds of issuances of Stock by any Subsidiary of Borrower to Borrower
that constitute an Investment permitted hereunder and (iv) proceeds of
issuances of Stock by Holding to (I) THL and Evercore  (Holdings’ two principal shareholders), THL Affiliates,
Evercore Affiliates and any other existing shareholders of Holdings as of the
Closing Date or (II) additional Person(s) that become shareholder(s) of
Holdings following the Closing Date and are reasonably acceptable to Agent, provided,

 21
 

 

however,
that any such issuance(s) pursuant to this clause (II) do not result in
a Change of Control .

(d)                                 Application
of Proceeds.

(i)            With respect to any prepayments made
by Borrower pursuant to Sections 1.5(b) and 5.17, such prepayments shall be applied as follows:  first,  to reduce the
outstanding principal balance of the Swing Line Loan or Alternative Currency
Swing Line Loan, as applicable, outstanding to Borrower until the same have
been repaid in full; second, to the Revolving Credit Advances or
Alternative Currency Revolving Credit Advances, as applicable, outstanding to
Borrower until the same have been repaid in full and, in the event that at the
time of such prepayment Borrowing Availability both before and after giving
effect to any such prepayment, is less than $20,000,000, as a permanent
reduction of the Revolving Loan Commitment; and third, to reduce the
outstanding principal balance of the Term Loan outstanding to Borrower until
the same has been repaid in full.

(ii)           With respect to any prepayments made
by Borrower pursuant to Section 1.5(c), such prepayments shall be applied as follows:  first,  to reduce the outstanding
principal balance of the Swing Line Loan outstanding to Borrower until the same
has been repaid in full; second, to the Revolving Credit Advances or
Alternative Currency Revolving Credit Advances, as applicable, outstanding to
Borrower until the same have been repaid in full; and third, to reduce
the outstanding principal balance of the Term Loan outstanding to Borrower
until the same has been repaid in full.  Considering each type of Loan being prepaid
separately, any such prepayment shall be applied first to Index Rate Loans of
the type required to be prepaid before application to LIBOR Loans of the type
required to be prepaid, in each case in a manner that minimizes any resulting
LIBOR Breakage Costs.

(e)                                  Letter
of Credit Obligations.  In the event
any Letters of Credit are outstanding at the time that the Revolving Loan
Commitment is terminated, Borrower shall deposit with Agent for the benefit of
all Revolving Lenders cash in an amount equal to 102% of the aggregate
outstanding Letter of Credit Obligations to be available to Agent to reimburse
payments of drafts drawn under such Letters of Credit and pay any Fees and
expenses related thereto.

1.6           Maturity.  All of the Obligations shall become due and
payable as otherwise set forth herein, but in any event all of the remaining
Obligations (other than contingent indemnification obligations as to which no
unsatisfied claim has been asserted) shall become due and payable upon the
Commitment Termination Date.  Until the
Termination Date, Agent shall be entitled to retain the Liens on the Collateral
granted under the Collateral Documents and the ability to exercise all rights
and remedies available to them under the Loan Documents and applicable
laws.  Notwithstanding anything contained
in this Agreement to the

 22
 

 

contrary, upon any termination
of the Revolving Loan Commitment, all of the Obligations (other than contingent
indemnification obligations as to which no unsatisfied claim has been asserted)
shall be due and payable.

1.7           Loan Accounts.  Agent shall maintain a loan account (the “Loan
Account”) on its books to record: 
the name and federal employer identification number of each Lender, all
Advances and the Term Loan, all payments made by Borrower, and  all other debits and credits as provided in
this Agreement with respect to the Loans or any other Obligations.  All entries in the Loan Account shall be made
in accordance with Agent’s customary accounting practices as in effect from
time to time.  The balance in the Loan
Account, as recorded on Agent’s most recent printout or other written
statement, shall, absent manifest error, be presumptive evidence of the amounts
due and owing to Agent and Lenders by Borrower; provided that any
failure to so record or any error in so recording shall not limit or otherwise
affect Borrower’s duty to pay the Obligations. 
Agent shall render to Borrower a monthly accounting of transactions with
respect to the Loans setting forth the balance of the Loan Account as to
Borrower for the immediately preceding month. 
Unless Borrower notifies Agent in writing of any objection to any such
accounting (specifically describing the basis for such objection), within
forty-five (45) days after the date thereof, each and every such accounting
shall, absent manifest error, be deemed final, binding and conclusive on Borrower
in all respects as to all matters reflected therein.  Only those items expressly objected to in
such notice shall be deemed to be disputed by Borrower.  Notwithstanding any provision herein
contained to the contrary, any Lender may elect (which election may be revoked)
to dispense with the issuance of Notes to that Lender and may rely on the Loan
Account as evidence of the amount of Obligations from time to time owing to it.

1.8                               Yield
Protection.

(a)           Capital Adequacy and Other
Adjustments.  In the event that any
Lender shall have determined that the adoption or implementation after the date
hereof of any law, treaty, directive, governmental (or quasi-governmental)
rule, regulation, guideline or order, or any change in (or the interpretation,
administration or application of) any of the same regarding capital adequacy,
reserve requirements or similar requirements or compliance by any Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy, reserve requirements or similar requirements (whether or not
having the force of law and whether or not failure to comply therewith would be
unlawful), in each case adopted or implemented after the Closing Date, from any
central bank or governmental agency or body having jurisdiction does or shall
have the effect of increasing the amount of capital, reserves or other funds
required to be maintained by such Lender or any corporation controlling such
Lender against commitments made by it under this Agreement in connection with
the making or financing of the Revolving Loan and thereby reducing the rate of
return on such Lender’s or such corporation’s capital as a consequence of its

 23
 

 

obligations hereunder,
then Borrower shall from time to time within fifteen (15) days after notice and
demand from such Lender (together with the certificate referred to in the next
sentence and with a copy to Agent) pay to Agent, for the account of such
Lender, additional amounts sufficient to compensate such Lender for such
reduction.  A certificate as to the
amount of such cost and showing the basis of the computation of such cost
submitted by such Lender to Borrower and Agent shall, absent manifest error, be
final, conclusive and binding for all purposes.

(b)           Increased LIBOR Funding Costs; Illegality.  Notwithstanding anything to the contrary
contained herein, if the introduction of or any change in any law, rule,
regulation, treaty or directive (or any change in the interpretation,
administration or application thereof) shall make it unlawful, or any central
bank or other Governmental Authority shall assert that it is unlawful, for any
Lender to agree to make or to make or to continue to fund or maintain any LIBOR
Loan or Alternative Currency LIBOR Loan, as applicable, then, unless that Lender
is able to make or to continue to fund or to maintain such LIBOR Loan or
Alternative Currency LIBOR Loan, as applicable, at another branch or office of
that Lender without, in that Lender’s opinion, adversely affecting it or its
LIBOR Loans or the income obtained therefrom, on notice thereof and demand
therefor by such Lender to Borrower through Agent, (i) the obligation of
such Lender to agree to make or to make or to continue to fund or maintain
LIBOR Loans or Alternative Currency LIBOR Loans, as applicable, shall terminate
and (ii) each such LIBOR Loan or Alternative Currency LIBOR Loan, as
applicable, shall automatically be converted into an Index Rate Loan or
Alternative Currency Index Rate Loan, respectively.  If, after the date hereof, the introduction
of, change in or interpretation of any law, rule, regulation, treaty or
directive would impose or increase reserve requirements (other than as taken
into account in the definition of LIBOR Rate or Alternative Currency LIBOR
Rate, as applicable) and the result of any of the foregoing is to increase the
cost to Agent or any such Lender of issuing any Letter of Credit or making or
continuing any LIBOR Loan hereunder, as the case may be, or to reduce any
amount receivable hereunder, then Borrower shall from time to time within
thirty (30) days after notice and demand from Agent to Borrower (together with
the certificate referred to in the next sentence) pay to Agent itself or, for
the account of (and Agent shall promptly pay over to) all such affected Lenders,
as applicable, additional amounts sufficient to compensate the Agent and such
Lenders for such increased cost or reduced amount; provided, that such
Lender shall not be entitled to any such amounts to the extent that the event
giving rise to such assessment occurred more than ninety (90) days prior to the
date such notice and demand is given to Borrower; provided, however,
that if the event giving rise to such assessment has a retroactive effect, then
such ninety (90) day period shall be extended to include the period of such
retroactive effect.  A certificate as to
the amount of such cost and showing the basis of the computation of such cost
submitted by Agent on behalf of all such affected Lenders to Borrower shall,
absent manifest error, be final, conclusive and binding for all purposes.

 24
 

 

1.9                                 Taxes.

(a)           No Deductions.  Any and all payments or reimbursements made
hereunder (including any payments made pursuant to Section 10) or under
any other Loan Document shall be made free and clear of and without deduction
for any and all Charges, present or future, taxes, levies, imposts, deductions
or withholdings, and all liabilities with respect thereto (including any
interest, additions to tax or penalties applicable thereto) of any nature
whatsoever imposed by any Governmental Authority or by any political
subdivision or taxing authority thereof or therein with respect to such
payments (but excluding any tax imposed on or measured by the net income or
profits or any franchise or other tax in lieu thereof (including branch profits
or similar taxes) of Agent or Lender by (i) the jurisdiction under the
laws of which such Agent or Lender is organized or any political subdivision
thereof, or (ii) the jurisdiction of such Agent’s or Lender’s applicable
lending office or any political subdivision thereof) and all interest,
penalties or similar liabilities with respect thereto (all such non-excluded
taxes, levies, imposts, duties, fees, assessments or other charges being
referred to collectively as “Taxes”). 
If Borrower shall be required by law to deduct any Taxes from or in
respect of any sum payable hereunder or under any other Loan Document to any
Lender or Agent, (i) the sum payable hereunder shall be increased as may
be necessary so that, after making all required deductions (including
deductions applicable to additional sums payable pursuant to this Section 1.9),
such Lender or Agent (as the case may be) receives an amount equal to the sum
it would have received had no such deductions been made, (ii) Borrower
shall make such deductions, (iii) Borrower shall timely pay the full
amount deducted to the relevant Governmental Authority in accordance with
applicable law, and (iv) Borrower shall furnish to the Agent the original
copy of a receipt evidencing payment thereof within thirty (30) days after such
payment is made.

(b)           Other Taxes.  In addition, Borrower hereby agrees to pay
any present or future stamp or documentary taxes or any other excise or
property taxes, charges or similar levies and irrevocable value added taxes
which arise from any payment made hereunder or under any other Loan Document or
from the execution, delivery, enforcement or registration of, transfer or
assignment or otherwise with respect to, this Agreement or any other Loan
Document (“Other Taxes”).

(c)                                  Foreign
Lenders.

(i)            Prior to becoming a Lender under
this Agreement and within fifteen (15) days after a reasonable written request
of Borrower or Agent from time to time thereafter, each such Person or Lender
that is not in each case a “United States person” (as such term is defined in
IRC Section 7701(a)(30)) for U.S. federal income tax purposes (a “Foreign
Lender”) shall

 25
 

 

deliver to each of the
Borrower and Agent two duly completed copies of United States IRS Form W-8BEN,
Form W-8ECI or Form W-8IMY or other applicable or successor form,
certificate or document prescribed by the IRS or substitute therefor as
applicable, certifying such Foreign Lender’s entitlement to receive payments
under this Agreement and under the Notes free of any United States withholding
tax (a ”Certificate of Exemption”). 
Each Foreign Lender claiming exemption from U.S. federal withholding tax
under Section 871(h) or Section 881(c) of the IRC with respect to
payments of “portfolio interest” hereby represents and warrants to Borrower and
Agent that, as of the date that it became a Lender, such Foreign Lender
(i) is not a “bank” within the meaning of Section 881(c)(3)(A) of the IRC,
(ii) is not a “10 percent shareholder” of Borrower within the meaning
of Section 871(h)(3)(B) of the IRC, and (iii) is not a controlled foreign
corporation receiving interest from a related person within the meaning of
Section 864(d)(4) of the IRC.  Each
Foreign Lender further undertakes to deliver to each of Borrower and Agent
renewals or additional copies of such Certificates of Exemption on or before
the date that such Certificate of Exemption expires or becomes obsolete as may
be reasonably requested by Borrower or Agent, and after the occurrence of
any event requiring a change in the Certificate of Exemption so delivered by
it, such additional forms or amendments thereto reflecting such change.  All Certificates of Exemption, additional
forms or amendments thereto described in the preceding sentence shall certify
that such Lender is entitled to receive payments under this Agreement without
deduction or withholding of any United States federal income taxes, unless an
event (including without limitation any change in treaty, law or regulation, or
any change in the interpretation or administration thereof by any Governmental
Authority) has occurred prior to the date on which any such delivery would
otherwise be required which renders all such forms inapplicable or which would
prevent such Lender from duly completing and delivering any such form or amendment
with respect to it and such Lender advises the Borrower and the Agent that it
is not capable of receiving payments without any deduction or withholding of
United States federal income tax.

(ii)           For any period during which Foreign
Lender has failed to provide  Borrower
with an appropriate Certificate of Exemption pursuant to clause (c)(i), above
(unless such failure is due to a change in treaty, law or regulation, or any
change in the interpretation or administration thereof by any Governmental
Authority, occurring subsequent to the date on which a form originally was
required to be provided), such Foreign Lender shall not be entitled to
indemnification under this Section 1.9 with respect to Taxes
imposed by the United States; provided that, should Foreign Lender that
is otherwise exempt from or subject to a reduced rate of withholding tax become
subject to Taxes because of its failure to deliver a Certificate of Exemption
required under clause (i), above, Borrower shall take such steps as such
Foreign Lender shall reasonably request to assist such Foreign Lender to
recover such Taxes.

(d)           [Intentionally Omitted].

 26
 

 

(e)           United States Lenders.  Each Lender that is a “United States person”
(as such term is defined in IRC Section 7701(a)(30)) shall deliver to each of
the Borrower and Agent two duly completed copies of United States IRS Form W-9.

(f)            Borrower Indemnification.  Borrower agrees to indemnify and hold
harmless each Lender and Agent, and reimburse each such Lender or Agent (as the
case may be) upon its written request, for the full amount of Taxes (including
any Taxes and Other Taxes imposed by any jurisdiction on amounts payable under
this Section 1.9) levied or imposed and paid by such Lender or Agent (as
the case may be) and any liability (including penalties, interest and expenses,
including reasonable attorney’s fees and expenses) arising therefrom or with
respect thereto whether or not such Taxes or Other Taxes were correctly or
legally asserted by the relevant Governmental Authority.  Additionally, Borrower agrees to pay
additional amounts and to indemnify each Lender (without regard to the identity
of the jurisdiction requiring the deduction or withholding) in respect of any
amounts deducted or withheld by it as described under this Section 1.9
as a result of any changes after the Closing Date in any applicable law,
treaty, governmental rule, regulation, guideline or order, or in the
interpretation thereof, relating to the deducting or withholding of Taxes.

(g)           [Intentionally Omitted].

(h)           Lender Indemnification of Agent.  If the U.S. IRS or any other Governmental
Authority of the United States or any other country or any political
subdivision thereof asserts a claim that Agent did not properly withhold tax
from amounts paid to or for the account of any Lender (because the appropriate
Certificate of Exemption was not delivered or properly completed, because such
Lender failed to notify the Agent of a change in circumstances which rendered
its exemption from withholding ineffective, or for any other reason), such
Lender shall indemnify the Agent fully for all amounts paid, directly or
indirectly, by Agent as tax, withholding therefor, or otherwise, including
penalties and interest, and including taxes imposed by any jurisdiction on
amounts payable to Agent under this subsection, together with all costs and
expenses related thereto (including attorneys fees and time charges of
attorneys for Agent).

(i)            Evidence of Payments.  As soon as practicable after any payment of
Taxes and Other Taxes by the Borrower to a Governmental Authority, the Borrower
shall deliver to the Agent the original or a certified copy of a receipt issued
by such Governmental Authority evidencing such payment, a copy of the return
reporting such payment or other evidence of such payment reasonably
satisfactory to the Agent.  Any Non-U.S.
Lender or Treaty Lender that is entitled to an exemption from or reduction of
withholding tax with respect to payments under this Agreement or any Note
pursuant to the law of any relevant jurisdiction or any treaty shall deliver to
Borrower (with a copy to Agent), at the time or times

 27
 

 

prescribed by applicable
law, such properly completed and executed documentation prescribed by
applicable law as will permit such payments to be made without withholding or
at a reduced rate.

(j)            Survival.  The agreements in this Section 1.9
shall survive the termination of this Agreement and the payment of the Obligations.

1.10         Borrower Representative.  Borrower hereby designates Vertis as its representative and agent
on its behalf for the purposes of issuing Notice of Revolving Credit Advances,
Notice of Alternative Currency Revolving Credit Advances and Notice of
Conversion/Continuation, giving instructions with respect to the disbursement
of the proceeds of the Loans, selecting interest rate options, requesting
Letters of Credit, giving and receiving all other notices and consents
hereunder or under any of the other Loan Documents and taking all other actions
(including in respect of compliance with covenants) on behalf of Borrower under
the Loan Documents.  Borrower
Representative hereby accepts such appointment. 
Agent and each Lender may regard any notice or other communication
pursuant to any Loan Document from Borrower Representative as a notice or
communication from Borrower.  Each
warranty, covenant, agreement and undertaking made on its behalf by Borrower
Representative shall be deemed for all purposes to have been made by Borrower
and shall be binding upon and enforceable against Borrower to the same extent
as it if the same had been made directly by Borrower.”

2.2.          Section 4.6 (Landlords’
Agreements and Mortgagee Agreements) of the Credit Agreement is hereby
amended by inserting the following sentence immediately after the last sentence
of such Section 4.6 of the Credit Agreement:

“If Agent receives a
landlord or mortgagee agreement or bailee letter, as applicable, each to be in
form and substance reasonably satisfactory to Agent, after the Seventh
Amendment Effective Date, Agent shall (x) review any Reserves that have been
established by Agent based on Agent not having received such landlord or
mortgagee agreement or bailee letter, as applicable, prior to the Seventh
Amendment Effective Date and (y) reduce such Reserves if and to the extent
appropriate based on Agent’s reasonable credit judgment.”

2.3.          Section 4.9 (Cash
Management Systems) of the Credit Agreement is hereby amended by inserting
the following new language immediately after the last sentence of such Section
4.9 of the Credit Agreement:

“Notwithstanding the
foregoing requirements, Borrower and each other Credit Party shall cause each
deposit account of USA Direct, LLC to become subject to a Control Agreement in
form and substance reasonably satisfactory to Agent within sixty (60) days
following the Seventh Amendment Effective Date.”

 28
 

 

2.4.          Section 6.1(a) (Minimum
EBITDA) of the Credit Agreement is hereby amended by deleting the first
sentence of such Section and replacing it with the following new sentence:

“Holdings and its
Subsidiaries on a consolidated basis shall have: (i) at the end of each Fiscal
Month ending during Fiscal Year 2007, EBITDA for the twelve trailing Fiscal
Months, adjusted to reflect restructuring charges, non-cash non-recurring
charges and other adjustments, if any, all as set forth in Section 6.1(a)
of Schedule 1 to Annex F, of not less than $125,000,000; and (ii)
at the end of each Fiscal Quarter ending during Fiscal Year 2008, EBITDA for
the twelve trailing Fiscal Months, adjusted to reflect restructuring charges,
non-cash non-recurring charges and other adjustments, if any, all as set forth
in Section 6.1(a) of Schedule 1 to Annex F, of not less
than $125,000,000.”

2.5.          Section 6.2 (Financial
Statements and Other Reports) of the Credit Agreement is hereby amended by
inserting the following new clause immediately after clause (p) of such Section
6.2 of the Credit Agreement:

“(q)         Bank Account Balances.  To Agent, within fifteen (15) Business Days
after the end of each Fiscal Month, a report in form and substance reasonably
satisfactory to Agent with respect to the bank account balances of Borrower and
each other Credit Party.”

2.6.          Clause (l) (Damage;
Casualty) of Section 7.1 (Event of Default) of the Credit Agreement
is hereby amended by deleting such clause (l) and replacing it with the
following new clause (l):

“(l)          Damage; Casualty.  Any event occurs, whether or not insured or
insurable, as a result of which EBITDA for the immediately preceding 12 Fiscal
Month period then ended, giving pro forma effect to any such event would be
less than $125,000,000 and any such event cannot reasonably be expected to be
corrected or reversed within 45 days; or”

2.7.          Section 7.5 (Application
of Proceeds) of the Credit Agreement is hereby amended by deleting such
Section in its entirety and replacing it with the following new Section 7.5:

“7.5         Application of Proceeds.  Notwithstanding anything to the contrary
contained in this Agreement, upon the occurrence and during the continuance of
an Event of Default, Borrower irrevocably waives the right to direct the
application of any and all payments at any time or times thereafter received by
Agent from or on behalf of Borrower, and Agent shall have the continuing and
exclusive right to apply and to reapply any and all payments received at any
time

 29
 

 

or times after the
occurrence and during the continuance of an Event of Default.  Notwithstanding anything to the contrary
contained in this Agreement (including, without limitation, Section 1.1
and Section 1.5 hereof), all payments (including the proceeds of any
Asset Disposition or other sale of, or other realization upon, all or any part
of the Collateral) received after acceleration of the Obligations shall be
applied as follows: first, to all costs and expenses incurred by or
owing to Agent and any Lender with respect to this Agreement, the other Loan
Documents or the Collateral; second, to accrued and unpaid interest and
Fees with respect to Revolving Credit Advances (including any interest which
but for the provisions of the Bankruptcy Code, would have accrued on such
amounts); third, to the principal amount of Revolving Credit Advances
outstanding and to cash collateralize outstanding Letters of Credit (pro rata
among all such Revolving Credit Advances or Letters of Credit, as applicable,
based upon the principal amount of such Revolving Credit Advances or the
outstanding face amount of such Letters of Credit, as applicable); fourth,
to accrued and unpaid interest and Fees with respect to the Term Loan
(including any interest which but for the provisions of the Bankruptcy Code,
would have accrued on such amounts); fifth, to the principal amount of
the Term Loan outstanding; and sixth to any other Obligations owing to
Agent or any Lender under the Loan Documents or any Interest Rate
Agreement.  Any balance remaining shall
be delivered to Borrower or to whomever may be lawfully entitled to receive
such balance or as a court of competent jurisdiction may direct.”

2.8.          Section 7 (DEFAULTS,
RIGHTS AND REMEDIES) of the Credit Agreement is hereby amended by inserting
the following new Section 7.6 immediately following Section 7.5 of such Section
7:

“7.6         Requisite Term Lender Remedies.  Upon the occurrence and during the
continuance of either an Each Lender Event of Default or a Requisite Term
Lender Event of Default, Requisite Term Lenders may send a notice to Agent of
their intent to direct Agent to exercise enforcement rights and remedies
against Borrower, the other Credit Parties and/or the Collateral (a “Requisite
Term Lender Notice”).  On the 91st day after receipt of a Requisite Term Lender
Notice by Agent, unless (i) Agent shall have previously begun and be diligently
pursuing the exercise of enforcement rights and remedies against Borrower, the
other Credit Parties and/or the Collateral, as applicable, (ii) Requisite Term
Lenders shall have withdrawn such Requisite Term Lender Notice, or (iii) the
Each Lender Event of Default or Requisite Term Lender Event of Default for
which the Requisite Term Lenders have sent the Requisite Term Lender Notice no
longer exists or has been waived, Agent shall begin and thereafter continue to
take such action as Requisite Term Lenders may require to exercise such
enforcement rights and remedies against Borrower, the other Credit Parties
and/or the Collateral as are available to Agent under this Agreement and the
other Loan Documents and are specified in the Requisite Term Lender Notice.”

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2.9.          Section 9.2 (Amendments
and Waivers) of the Credit Agreement is hereby amended by inserting the
following new clause (c) immediately following clause (b) of such Section 9.2:

“              (c)           (I)  Notwithstanding the foregoing provisions of
this Section 9.2, no amendment, waiver or other modification shall,
without the consent of the Requisite Term Lenders and any other consent
required under this Section 9.2: 
(i) amend, waive or otherwise modify the Applicable Term Loan Margin;
(ii) amend, waive or otherwise modify (including, solely for purposes of the
following, any such amendment, waiver or other modification effected through an
amendment or other modification of any defined term used therein), or grant any
consent under the provisions of, Section 1.1(a)(ii), Section 1.1(g),
Section 1.5, Section 5.1, Section 5.2, Section 5.3,
Section 5.4, Section 5.5, Section 5.7, Section 5.10,
Section 5.18, Section 6.1, Section 7.1, Section 7.2,
Section 7.3, Section 7.5, Section 7.6, Section
8.2(h)(i) or this Section 9.2(c); (iii) increase the aggregate
amount of the Revolving Loan Commitment of all Revolving Lenders; (iv) amend,
waive or otherwise modify (including, solely for purposes of the following, any
such amendment, waiver or other modification effected through an amendment or
other modification of any defined term used therein), or grant any consent to
depart from the provisions of, any Event of Default resulting from
noncompliance with Section 9.2(b) or with any of the Sections of this
Agreement set forth in clause (ii) above or with clause (iii)
above; or (v) amend, waive or otherwise modify (including, solely for purposes
of the following, any such amendment, waiver or other modification effected
through an amendment or other modification of any defined term used therein),
or grant any consent to depart from, the provisions of the Existing Security
Agreement.  Any such amendment, waiver or
other modification shall apply equally to each Lender and shall be binding upon
Credit Parties, Agent, Lenders, and all future holders of the Obligations.

                (II)  Notwithstanding any other provision of this
Agreement to the contrary, prior to the making of any Alternative Currency
Revolving Credit Advance or Alternative Currency Swing Line Advance Borrower
shall first obtain the written approval of Requisite Term Lenders (which
approval may be provided by the Requisite Term Lenders (i) for a specific
Alternative Currency Revolving Credit Advance or Alternative Currency Swing
Line Advance or (ii) for Alternative Currency Revolving Credit Advances and
Alternative Currency Swing Line Advances in an aggregate amount not to exceed a
specified maximum Assigned Dollar Value amount).

                (III)  In the event, if any, that Borrower or any
other Credit Party shall become debtors in any case under the Bankruptcy Code
and, in connection with such case or cases, Agent and/or Revolving Lenders
desire to permit the use of “Cash Collateral” (as such term is defined in
Section 363 (a) of the Bankruptcy Code) or to permit Borrower or any other
Credit Party to obtain debtor-in-possession financing from Agent or Lenders or
any other Person secured by the Collateral or otherwise, Term Lenders shall
retain whatever legal rights Term

 31
 

 

Lenders would have to
object to such usage of cash collateral or provision of debtor-in-possession
financing and Agent and/or Revolving Lenders shall retain whatever legal rights
Agent and/or Revolving Lenders would have to oppose any such objection, permit
use of “Cash Collateral” or provide debtor-in possession financing.”

2.10.        Section 9.13 (Confidentiality)
of the Credit Agreement is hereby amended by inserting the following new
sentence at the end of such Section 9.13:

“Notwithstanding anything
to the contrary herein or in any other Loan Document, the Borrower and the
other Credit Parties agree that Crystal Capital shall have the right to issue
press releases, advertisements or tombstones regarding the making of the Term
Loan to the Borrower pursuant to the terms of this Agreement; provided,
that such press releases, advertisements and tombstones shall be subject to the
prior approval of the Borrower and, to the extent that Agent’s name is
contained in any such press release, advertisement or tombstone or that any
reference to Agent is made therein, the Agent (with each such approval not to
be unreasonably withheld or delayed).”

2.11.        Clause (c) of Section
9.19 (Replacement of Lenders) of the Credit Agreement is hereby amended
by deleting such clause (c) in its entirety and replacing it with the following
new clause (c):

“(c)         If,
in connection with any proposed amendment, modification, waiver or termination
pursuant to Section 9.2 (a “Proposed Change”) requiring (i) the
consent of all affected Lenders, the consent of Requisite Lenders is obtained,
but the consent of other Lenders whose consent is required is not obtained (any
such Lender whose consent is not obtained being referred to as a “Non-Consenting
Lender”), (ii) the consent of Supermajority Lenders, the consent of
Requisite Lenders is obtained but the consent of Supermajority Lenders is not
obtained, or (iii) the consent of both Requisite Lenders and Requisite Term
Lenders, the consent of Requisite Lenders is obtained but the consent of
Requisite Term Lenders is not obtained, then, so long as Agent is not a
Non-Consenting Lender, at Borrower’s request Agent, or a Person reasonably
acceptable to Agent, shall have the right with Agent’s consent and in Agent’s
sole discretion (but shall have no obligation) to purchase from such
Non-Consenting Lenders, and such Non-Consenting Lenders agree that they shall,
upon Agent’s request, sell and assign to Agent or such Person, all of the Loans
and Commitments of such Non-Consenting Lenders for an amount equal to the
principal balance of all Loans held by the Non-Consenting Lenders and all
accrued interest and Fees and other Obligations owing with respect thereto
through the date of sale, such purchase and sale to be consummated pursuant to
an executed Assignment Agreement.”

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2.12.        The definition of the
term “Alternative Currency LIBOR Rate” contained in Annex A (Definitions)
to the Credit Agreement is hereby amended by deleting the words “Telerate Page
3750” from clause (a) of such definition and replacing them with the words “Reuters
Screen LIBOR01 Page”.

2.13.        The definition of the
term “Commitments” contained in Annex A (Definitions) to the Credit
Agreement is hereby amended by deleting such definition in its entirety and
replacing it with the following new definition:

“Commitments means
(a) as to any Lender, the aggregate of such Lender’s  Revolving Loan Commitment and Term Loan
Commitment each as set forth on Annex B to the Agreement or in the most
recent Assignment Agreement executed by such Lender and (b) as to all
Lenders, the aggregate of all Lenders’ (i) Revolving Loan Commitments, which
aggregate commitment shall be Two Hundred Million Dollars ($200,000,000) as of
the Seventh Amendment Effective Date, and (ii) Term Loan Commitments, which
aggregate commitment shall be Fifty Million Dollars ($50,000,000) as of the
Seventh Amendment Effective Date, as such Commitments may be reduced, amortized
or adjusted from time to time in accordance with this Agreement.  For the avoidance of doubt, the aggregate
amount of the Revolving Loan Commitments shall not be subject to any of the
adjustments or reductions contemplated by the Fourth Amendment to Credit
Agreement.”

2.14.        The definition of the
term “Lenders” contained in Annex A (Definitions) to the Credit
Agreement is hereby amended by deleting such definition in its entirety and
replacing it with the following new definition:

“Lenders means GE
Capital, the Revolving Lenders, the Term Lenders, and, if any such Lender shall
decide to assign all or any portion of the Obligations pursuant to and in
accordance with the terms of this Agreement, the term “Lenders” shall include
any assignee of such Lender.”

2.15.        The definition of the
term “LIBOR Loans” contained in Annex A (Definitions) to the Credit
Agreement is hereby amended by deleting such definition in its entirety and
replacing it with the following new definition:

“LIBOR Loans means
an Advance or Term Loan or any portion thereof bearing interest by reference to
the LIBOR Rate or Alternative Currency LIBOR Rate, as applicable.”

2.16.        The definition of the
term “LIBOR Rate” contained in Annex A (Definitions) to the Credit
Agreement is hereby amended by deleting the words “Telerate Page

 33
 

 

3750” from clause (a) of such definition and replacing them with the
words “Reuters Screen LIBOR01 Page”.

2.17.        The definition of the
term “Loans” contained in Annex A (Definitions) to the Credit Agreement
is hereby amended by deleting such definition in its entirety and replacing it
with the following new definition:

“Loans means the
Revolving Loan, including, without limitation, any loans pursuant to Alternative
Currency Revolving Credit Advances, the Term Loan, and the Swing Line Loan.”

2.18.        The definition of the
term “Notes” contained in Annex A (Definitions) to the Credit Agreement
is hereby amended by deleting such definition in its entirety and replacing it
with the following new definition:

“Notes means,
collectively, the Revolving Notes, the Term Notes, and the Swing Line Note.”

2.19.        The definition of the
term “Pro Rata Share” contained in Annex A (Definitions) to the Credit
Agreement is hereby amended by deleting such definition in its entirety and
replacing it with the following new definition:

“Pro Rata Share
means with respect to all matters relating to any Lender (a) with respect
to the Revolving Loan, the percentage obtained by dividing (i) the Revolving
Loan Commitment of that Lender by (ii) the aggregate Revolving Loan
Commitments of all Lenders, (b) with respect to the Term Loan, the
percentage obtained by dividing (i) the Term Loan Commitment of that
Lender by (ii) the aggregate Term Loan Commitments of all Lenders,
(c) with respect to all Loans, the percentage obtained by dividing
(i) the aggregate Commitments of that Lender by (ii) the aggregate
Commitments of all Lenders, and (d) with respect to all Loans on and after
the Commitment Termination Date, the percentage obtained by dividing
(i) the aggregate outstanding principal balance of the Loans held by that
Lender, by (ii) the outstanding principal balance of the Loans held by all
Lenders, as any such percentages may be adjusted by assignments pursuant to Section
8.1.”

2.20.        The definition of the
term “Revolving Loan Commitment” contained in Annex A (Definitions) to
the Credit Agreement is hereby amended by deleting such definition in its
entirety and replacing it with the following new definition:

“Revolving Loan
Commitment means (a) as to any Lender, the commitment of such Lender
to make its Pro Rata Share of Revolving Credit Advances and Alternative
Currency Revolving Credit Advances or incur its Pro Rata Share of

 34
 

 

Letter of Credit
Obligations (including, in the case of the Swing Line Lender, its commitment to
make Swing Line Advances as a portion of its Revolving Loan Commitment and in
the case of the Alternative Currency Swing Line Lender, its commitment to make
Alternative Currency Swing Line Advances as a portion of its Revolving Loan
Commitment) as set forth on Annex B or in the most recent Assignment
Agreement, if any, executed by such Lender and (b) as to all Lenders, the
aggregate commitment of all Lenders to make the Revolving Credit Advances
(including, in the case of the Swing Line Lender, Swing Line Advances and in
the case of the Alternative Currency Swing Line Lender, Alternative Currency
Swing Line Advances) and Alternative Currency Revolving Credit Advances or
incur Letter of Credit Obligations, which aggregate commitment shall be Two
Hundred Million Dollars ($200,000,000) as of the Seventh Amendment Effective
Date, as such amount may be adjusted, if at all, from time to time in
accordance with the Agreement.”

2.21.        Annex A (Definitions)
to the Credit Agreement is hereby further amended by inserting the following
new defined terms into such Annex in appropriate alphabetical order:

“Applicable Term Loan
Margin means the per annum interest rate from time to time in effect and
payable in addition to the LIBOR Rate, applicable to the Term Loan, as
determined by reference to Section 1.2(a).”

“Crystal Capital
means Crystal Capital Fund, L.P., a limited partnership organized under the
laws of Delaware, in its capacity as a Term Lender.”

“Crystal Capital Fee
Letter has the meaning set forth in Section 1.3(a).”

“Each Lender Event of
Default means an Event of Default which has resulted from noncompliance
with any covenant or agreement contained in this Agreement the amendment,
waiver or other modification of which would require the consent of each Lender
directly affected thereby pursuant to Section 9.2(b).”

“Fourth Amendment to
Credit Agreement means that certain Amendment No. 4 to Credit Agreement,
dated as of May 30, 2006, by and among the Borrower, the other Credit Parties,
the Agent and Lenders.”

“Requisite Term
Lenders means Term Lenders having (a) more than 50% of the Term Loan
Commitments of all Term Lenders, or (b) if the Term Loan Commitments have
been terminated, more than 50% of the aggregate outstanding amount of the Term
Loans; provided  that if there is more than one Term Lender,
Requisite Term Lenders shall in any event be at least two (2) Term Lenders.”

“Requisite Term Lender
Notice has the meaning set forth in Section 7.6.”

“Requisite Term Lender
Event of Default means an Event of Default which has resulted from
noncompliance with any covenant or agreement contained in this

 35
 

 

Agreement the amendment,
waiver or other modification of which would require the consent of the
Requisite Term Lenders pursuant to Section 9.2(c).”

“Seventh Amendment to
Credit Agreement or Seventh Amendment means that certain Limited
Consent and Amendment No. 7 to Credit Agreement, dated as of March    ,
2007, by and among the Borrower, the other Credit Parties, the Agent and
Lenders.”

“Seventh Amendment
Effective Date means the date on which the conditions precedent to the
effectiveness of the Seventh Amendment to Credit Agreement are satisfied and
the Seventh Amendment to Credit Agreement becomes effective.”

“Term Lenders
means those Lenders having a Term Loan Commitment.”

“Term Loan has the
meaning ascribed to it in Section 1.1(g).”

“Term Loan Commitment
means: (x) (a) as to any Term Lender, the commitment of such Lender to
make its Pro Rata Share of the Term Loan as set forth on Annex B or in
the most recent Assignment Agreement, if any, executed by such Lender and
(b) as to all Term Lenders, the aggregate commitment of all Lenders to
make the Term Loan, which aggregate commitment shall be Fifty Million Dollars
($50,000,000) on the Seventh Amendment Effective Date; and (y) after the
$50,000,000 Term Loan has been funded by the Term Lenders, (a) as to any Term
Lender, the Pro Rata Share of the outstanding principal amount of the Term Loan
owing to such Lender and (b) as to all Term Lenders, the aggregate outstanding
principal amount of the Term Loan, which shall be Fifty Million Dollars
($50,000,000), as such amount may be reduced, if at all, from time to time in
accordance with the Agreement.”

“Term Notes has the
meaning ascribed to it in Section 1.1(g).”

2.22.        Annex B (Pro Rata
Shares and Commitment Amounts) to the Credit Agreement is hereby amended by
deleting such Annex B in its entirety and replacing it with the new Annex B set
forth in Exhibit A to this Amendment.

2.23.        Section 6.1(a) (Minimum
EBITDA) of Schedule 1 to Annex F (Compliance and Pricing Certificate)
of the Credit Agreement is hereby amended by:

(a)            replacing the figure “$160,000,000”
appearing opposite the term “Required EBITDA” in such Section 6.1(a) of
Schedule 1 to Annex F and replacing it with the figure “$125,000,000”; and

(b)           inserting the following new footnote
at the end of such Section 6.1(a) of Schedule 1 to Annex F:

 36
 

 

“To the extent the
management fees permitted to be paid to (A) THL and/or any THL Affiliates or
(B) Evercore and/or any Evercore Affiliates, in accordance with Section 5.8 of
the Agreement are accrued rather than paid, such accrued management fees may be
considered and included on the line item above for “any other non-cash
gains/(losses) (other than non-cash losses relating to write-offs, write-downs
or reserves with respect to Accounts and Inventory” for purposes of calculating
Minimum EBITDA.”

2.24.        Schedule
1 to Exhibit 6.2(e) to the Credit Agreement is hereby amended by deleting such
Schedule 1 in its entirety and replacing it with the new Schedule 1 to Exhibit
6.2(e) set forth in Exhibit B to this Amendment.

2.25.        For
the purpose of clarification and notwithstanding anything to the contrary in
the Fourth Amendment to Credit Agreement, the terms and provisions set forth in
Section 2.5 and Section 2.7 of the Fourth Amendment to Credit Agreement,
including the “Step Downs” (as defined in and set forth in the Fourth Amendment
to Credit Agreement) and any other adjustments or reductions to the Advance
Rate and the Commitments set forth in the Fourth Amendment to Credit Agreement,
shall no longer be applicable and shall be of no further force and effect.

2.26.        Additional
Joint-Lead Arranger.  Crystal Capital
Fund, L.P. is hereby appointed as a Joint-Lead Arranger in respect of the
Agreement.

2.27.        Certain
Mortgage Matters.  With respect to
those mortgaged properties set forth on Exhibit C to this Amendment,
within thirty (30) days following the Seventh Amendment Effective Date, which
30-day period may be extended to sixty (60) days by Agent in its discretion,
Agent shall have received duly executed and effective date down endorsements to
the title policies with respect to each of the Mortgages relating to such
mortgaged properties and such other instruments, amendments, agreements and
documents as Agent may reasonably request relating to such Mortgages in
connection with this Amendment, all in form and substance reasonably
satisfactory to Agent.

2.28.        Certain
Good Standing Certificates.  Within
thirty (30) days following the Seventh Amendment Effective Date Agent shall
have received good standing certificates and certificates of qualification to
conduct business, each dated a recent date relative to the date of this
Amendment and certified by the applicable Secretary of State or other
authorized Governmental Authority (1) from the State of New York with respect
to USA Direct, LLC, (2) from the District of Columbia and the State of Indiana
with respect to Vertis, Inc., and (3) from the State of Connecticut with
respect to Webcraft, LLC.

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3.             Consents.

3.1.          Notwithstanding
any term or provision of the Credit Agreement or any other Loan Document to the
contrary, Agent and Lenders hereby consent to the incurrence by the Borrower of
the Term Loan in the aggregate principal amount of $50,000,000, as further
described in and subject to the terms and provisions set forth in Section 2
above.

3.2.          Notwithstanding
any term or provision of the Credit Agreement or any other Loan Document to the
contrary, Agent and Lenders hereby consent to a sale-leaseback transaction with
respect to the Real Estate currently owned by Webcraft, LLC and located in
Chalfont, Pennsylvania (the “Chalfont Sale-Leaseback”) and, in
connection therewith, the release of Agent’s Liens on those specific assets of
Webcraft, LLC which relate to such Real Estate and are being transferred by
Webcraft, LLC to the Chalfont Purchaser (as defined below) upon the closing of
and in connection with the Chalfont Sale-Leaseback; provided, that: (i)
the Chalfont Sale-Leaseback shall be entered into with a third party purchaser
(the “Chalfont Purchaser”) and shall be an arms-length transaction; (ii)
on or prior to the date of consummation of the Chalfont Sale-Leaseback, Agent
shall have received an opinion, in form and substance satisfactory to Agent,
and from outside legal counsel to the Borrower acceptable to Agent, stating
that the consummation of the Chalfont Sale-Leaseback does not conflict with any
provision of the Existing Security Agreement, the February 2003 Senior
Subordinated Debt Documents, the 2002 Senior Debt Documents, the 2003 Senior
Secured Debt Documents, the Mezzanine Debt Documents, the Receivables Indenture
or the Receivables Purchase Agreement; (iii) as a condition to the consummation
of the Chalfont Sale-Leaseback, Borrower and the other Credit Parties shall
obtain a landlord waiver agreement with the Chalfont Purchaser which agreement
shall contain a waiver or subordination of all Liens or claims that the
Chalfont Purchaser may assert against the Collateral at that location, and
shall otherwise be reasonably satisfactory in form and substance to Agent; and
(iv) the Net Proceeds of the Chalfont Sale-Leaseback shall be applied in
accordance with the provisions of Section 1.5 of the Credit Agreement.  At Borrower’s expense, Agent shall execute
and deliver such lien release instruments and documents and take such related
actions as Borrower may reasonably request to evidence and otherwise effectuate
the release of Agent’s Liens on such Real Estate and specific assets of
Webcraft, LLC which relate to such Real Estate upon the closing of the Chalfont
Sale-Leaseback in accordance with the provisions of this Section 3.2.

4.             Further Assurances. 
Each Credit Party shall, from time to time, execute and deliver such
agreements, instruments, certificates, reports and other documents and take all
such actions as Agent or Lenders at any time may reasonably request to
evidence, further document, effectuate or otherwise implement the actions
described above in Sections 2 and 3 under the Credit Agreement
and/or the other Loan Documents.

5.             Representations and Warranties.  Borrower and Credit Parties, jointly and
severally, hereby represent and warrant to Agent and Lenders that:

5.1.          The
execution, delivery and performance by Borrower and each of the other Credit
Parties of this Amendment have been duly authorized by all necessary corporate
action, and this Amendment constitutes the legal, valid and binding obligation
of Borrower and each of the other Credit Parties enforceable against each of
them in accordance with its terms, except as the enforcement hereof may be
subject to the effect of any applicable bankruptcy,

 38
 

 

insolvency, reorganization, moratorium or
similar law affecting creditors’ rights generally or to general principles of
equity.

5.2.          The
execution, delivery and performance of this Amendment and the consummation of
the transactions contemplated hereby by Borrower and each other Credit Party do
not, and will not:

(a)           contravene or
conflict with any provision of (i) law, (ii) any judgment, decree or order, or
(iii) the certificate or articles of incorporation or by-laws or other
constituent documents of Borrower or any other Credit Party; or

(b)           contravene or
conflict with, or cause any Lien to arise under, (i) except if such
contraventions, conflicts, or Liens do not have and would not reasonably be
expected to have, either individually or in the aggregate, a Material Adverse
Effect, any provision of any indenture, agreement, mortgage, lease, instrument
or other document binding upon or otherwise affecting Borrower or any Credit
Party or any property of Borrower or any Credit Party or (ii) the Security
Agreement, the February 2003 Senior Subordinated Debt Documents, the 2002
Senior Debt Documents, the 2003 Senior Secured Debt Documents or the Mezzanine
Debt Documents.

5.3.          Each
of the representations and warranties set forth in Section 3 of the Credit
Agreement is true, complete and correct as of the date of this Amendment other
than in the case of representations and warranties that speak as of a specific
date in which case such representations and warranties shall have been true,
complete and correct as of such date. 
Each Schedule to the Credit Agreement remains true, complete and correct
except to the extent set forth in the attached Exhibit D to this
Amendment.

5.4.          No
Default or Event of Default exists under the Credit Agreement or any other Loan
Document or will exist after or be triggered by the execution, delivery and
performance of this Amendment or the consummation of the transactions
contemplated hereby.  In addition, each
of Borrower and each other Credit Party hereby represents, warrants and
reaffirms that the Credit Agreement and each of the other Loan Documents
remains in full force and effect.

6.             Conditions Precedent to
Effectiveness.  The effectiveness of
the amendments set forth in Section 2 hereof and the consents set forth
in Section 3 hereof are in each instance subject to the satisfaction of
each of the following conditions precedent, each in a manner satisfactory to
Agent:

6.1.          Amendment.  This Amendment shall have been duly executed
and delivered by Borrower, the other Credit Parties, Agent and Lenders.

6.2.          Revolving
Lender Fees.  Agent shall have
received in cash an amendment fee from Borrower in an amount equal to 0.20% of
the aggregate amount of all of the Revolving Loan Commitments, to be
distributed by Agent pro rata to the Revolving Lenders.

 39
 

 

6.3.          Term
Lender Fees.  Crystal Capital shall
have received any fees due and payable to Crystal Capital pursuant to and in
accordance with the terms of the Crystal Capital Fee Letter.

6.4.          No
Default.  No Default or Event of
Default shall have occurred and be continuing or would result from the
effectiveness of this Amendment or the consummation of any of the transactions
contemplated hereby.

6.5.          Consents
and Approvals.  Agent shall have
received evidence satisfactory to Agent that any necessary consents and
approvals to any and all transactions contemplated by this Amendment have been
obtained by the Borrower and each other Credit Party.

6.6.          Term
Notes.  Each Term Lender shall have
received a Term Note dated the date of this Amendment in the amount of such
Term Lender’s Term Loan Commitment duly executed by the Borrower.

6.7.          Revolving
Notes.  Each Revolving Lender shall
have received a new Revolving Note in form and substance satisfactory to Agent
dated the date of this Amendment and reflecting such Revolving Lender’s reduced
Revolving Loan Commitment pursuant to the terms of this Amendment.

6.8.          Mortgage
Matters.  Agent shall have received
duly executed and effective date down endorsements to the title policies with
respect to each of the Mortgages other than those addressed by Section 2.27
of this Amendment and such other instruments, amendments, agreements and
documents as Agent may reasonably request relating to such Mortgages in
connection with this Amendment, all in form and substance satisfactory to
Agent.

6.9.          Security
Interests.  Agent and Lenders shall
have received evidence satisfactory to them that Agent (for the benefit of
itself and Lenders) has a valid and perfected first priority security interest
in the Collateral.

6.10.        Lien
Search Results.  Agent shall have
received lien search results with respect to the Borrower and each other Credit
Party (other than Vertis Digital Services Limited) satisfactory in form and
substance to Agent.

6.11.        Charters
and Bylaws.  Agent shall have
received each of Borrower’s and each other Credit Party’s (a) charter (or
foreign equivalent) and all amendments thereto, if any, and (b) bylaws or
operating agreement, as applicable, together with all amendments thereto, if
any.

6.12.        Good
Standing Certificates.  Agent shall
have received, other than as addressed by Section 2.28 of this
Amendment, with respect to each of Borrower and each other Credit Party (other
than Vertis Digital Services Limited): (a) good standing certificates in such
entity’s state of formation (or foreign equivalent); and (b) good standing
certificates and certificates of qualification to conduct business (or foreign
equivalent) in each jurisdiction where such entity’s ownership or lease of
property or the conduct of its business requires such qualification, each dated
a recent date prior to the date of this Amendment and certified by the
applicable Secretary of State or other authorized Governmental Authority.

 40
 

 

6.13.        Resolutions.  Agent shall have received resolutions of
Borrower’s and each other Credit Party’s Board of Directors or other applicable
body, approving and authorizing the execution, delivery and performance of this
Amendment and the transactions to be consummated in connection with this
Amendment, each certified by such entity’s corporate secretary or assistant
secretary as being in full force and effect without any modification or
amendment as of the date of this Amendment.

6.14.        Opinions.  Agent and Lenders shall have received: (a) an
opinion of counsel to Borrower, DLA Piper US LLP, with respect to this
Amendment, covering such matters as Agent shall reasonably request, in form and
substance acceptable to Agent; provided, however, that no
opinions relating to Vertis Digital Services Limited shall be required; and (b)
an opinion of special counsel to Borrower, Sullivan & Cromwell LLP, with
respect to this Amendment, including, without limitation, as to this Amendment
and the transactions contemplated hereby not conflicting with any provision of
the Security Agreement, the February 2003 Senior Subordinated Debt Documents,
the 2002 Senior Debt Documents, the 2003 Senior Secured Debt Documents or the
Mezzanine Debt Documents, in form and substance acceptable to Agent.

6.15.        Minimum
Borrowing Availability.  After giving
effect to the funding of the $50,000,000 Term Loan on the Seventh Amendment
Effective Date, Borrower shall have Borrowing Availability of at least
$80,000,000 (with accounts payable and taxes being paid in the ordinary course,
other than those accounts payable and taxes which are subject to disputes and
challenges being pursued in good faith). 

6.16.        Miscellaneous.  Agent and Lenders shall have received such
other agreements, instruments and documents as Agent or Lenders may reasonably
request.

7.             Reference to and Effect Upon the
Credit Agreement and other Loan Documents. 

7.1.          Full
Force and Effect.  Except as
specifically provided herein, the Credit Agreement, the Notes and each other
Loan Document shall remain in full force and effect and each is hereby ratified
and confirmed by all Credit Parties.

7.2.          No
Waiver.  The execution, delivery and
effect of this Amendment shall be limited precisely as written and shall not be
deemed to (i) be a consent to any waiver of any term or condition, or to any
amendment or modification of any term or condition (except as specifically
provided herein) of the Credit Agreement or any other Loan Document or (ii)
prejudice any right, power or remedy which the Agent or any Lender now has or
may have in the future under or in connection with the Credit Agreement, the
Notes or any other Loan Document.

7.3.          Certain
Terms.  Each reference in the Credit
Agreement to “this Agreement”, “the Agreement”, “hereunder”, “hereof”, “herein”
or any other word or words of similar import shall mean and be a reference to
the Credit Agreement as amended hereby, and each reference in any other Loan
Document to the Credit Agreement or any word or words of similar import shall
be and mean a reference to the Credit Agreement as amended hereby.

8.             Counterparts.  This Amendment may be executed in any number
of counterparts, each of which when so executed shall be deemed an original but
all such counterparts shall

 41
 

 

constitute one and
the same instrument.  Delivery of an
executed counterpart of a signature page to this Amendment by telecopier or “pdf”
shall be as effective as delivery of a manually executed counterpart signature
page to this Amendment.

9.             Costs and Expenses.  As provided in the Credit Agreement, Borrower
shall pay the fees, costs and expenses incurred by Agent in connection with the
preparation, execution and delivery of this Amendment (including, without
limitation, attorneys’ fees).

10.           GOVERNING LAW.  THIS AMENDMENT SHALL BE GOVERNED BY AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW
YORK WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPALS.

11.           Headings.  Section headings in this Amendment are
included herein for convenience of reference only and shall not constitute a
part of this Amendment for any other purpose.

[Signature Pages
Follow]

 

 42

 

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

	
  

  	
  BORROWER:

  	
   

  
	
   

  	
   

  
	
   

  	
  VERTIS, INC.

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /S/ Stephen
  E. Tremblay

  	
   

  
	
   

  	
  Name: Stephen E. Tremblay

  
	
   

  	
  Title:

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
						

 

 

	
  

  	
  GENERAL
  ELECTRIC CAPITAL

  
	
   

  	
  CORPORATION

  
	
   

  	
  as Agent, an L/C
  Issuer and a Lender

  
	
   

  
	
   

  
	
   

  	
  By: 

  	
  /S/ Sandra
  Claghorn

  	
   

  
	
   

  	
  Duly Authorized
  Signatory

  

 

 

	
  

  	
  BANK OF AMERICA, N.A.

  
	
   

  	
  as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /S/ Robert Scalzitt

  
	
   

  	
  Name:

  	
  Robert Scalzitt

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CRYSTAL CAPITAL FUND, L.P.

  
	
   

  	
  as a Lender

  
	
   

  	
   

  
	
   

  	
  By: Crystal Capital GP, LLC,

  	
  its 

  
	
   

  	
  General
  Partner

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /S/ Steven
  Migliero, Jr.

  
	
   

  	
  Name:

  	
  Steven Migliero,
  Jr.

  
	
   

  	
  Title:

  	
  Director

  
					

 

 

The following Persons are signatory to this Amendment
in their capacity as Credit Parties and not as Borrowers:

	
  

  	
  VERTIS HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /S/ Stephen
  E. Tremblay

  
	
   

  	
  Name: 

  	
  Stephen E.
  Tremblay

  
	
   

  	
  Title:

  	
  Chief Financial
  Officer

  
	
   

  	
   

  
	
   

  	
  VERTIS DIGITAL SERVICES LIMITED

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /S/ Stephen
  E. Tremblay

  
	
   

  	
  Name: 

  	
  Stephen E.
  Tremblay

  
	
   

  	
  Title:

  	
  Chief Financial
  Officer

  
	
   

  	
   

  
	
   

  	
  ENTERON GROUP LLC

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /S/ Stephen
  E. Tremblay

  
	
   

  	
  Name: 

  	
  Stephen E.
  Tremblay

  
	
   

  	
  Title:

  	
  Chief Financial
  Officer

  
	
   

  	
   

  
	
   

  	
  WEBCRAFT, LLC

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /S/ Stephen
  E. Tremblay

  
	
   

  	
  Name: 

  	
  Stephen E.
  Tremblay

  
	
   

  	
  Title:

  	
  Chief Financial
  Officer

  
	
   

  	
   

  
	
   

  	
  USA DIRECT, LLC

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /S/ Stephen
  E. Tremblay

  
	
   

  	
  Name: 

  	
  Stephen E.
  Tremblay

  
	
   

  	
  Title:

  	
  Chief Financial
  Officer

  

 

 

	
  

  	
  VERTIS MAILING, LLC

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /S/ Stephen
  E. Tremblay

  
	
   

  	
  Name: 

  	
  Stephen E.
  Tremblay

  
	
   

  	
  Title:

  	
  Chief Financial
  Officer

  
	
   

  	
   

  
	
   

  	
  WEBCRAFT CHEMICALS, LLC

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /S/ Stephen
  E. Tremblay

  
	
   

  	
  Name: 

  	
  Stephen E.
  Tremblay

  
	
   

  	
  Title:

  	
  Chief Financial
  Officer

  
	
   

  	
   

  	
   

  

 

 

EXHIBIT A

to

LIMITED CONSENT
AND AMENDMENT NO. 7 TO CREDIT AGREEMENT

Annex B

to

Credit
Agreement

PRO RATA SHARES
AND COMMITMENT AMOUNTS

	
   

  	
   

  	
  Lender(s)

  
	
  Revolving Loan Commitment (including a Swing Line
  Commitment and Alternative Currency Swing Line Commitment collectively of
  $30,000,000, and an Alternative Currency Revolving Credit Sub-Commitment of
  $112,500,000) of $145,000,000

  	
   

  	
  General Electric
  Capital Corporation

  
	
   

  	
   

  	
   

  
	
  Revolving Loan Commitment (including an Alternative
  Currency Revolving Credit Sub-Commitment of $37,500,000) of $55,000,000

  	
   

  	
  Bank of America,
  N.A.

  
	
   

  	
   

  	
   

  
	
  Term Loan Commitment of $50,000,000

  	
   

  	
  Crystal Capital
  Fund, L.P.

  

 

 

EXHIBIT B

to

LIMITED CONSENT
AND AMENDMENT NO. 7 TO CREDIT AGREEMENT

Schedule 1

to

Exhibit
6.2(e) — Form of Borrowing Base Certificate

Vertis, Inc.
(Consolidated)

Borrowing Base
Certificate

      /        /       

	
  (000’s)

  	
   

  	
  MMS

  	
   

  	
  VPS

  	
   

  	
  UK

  	
   

  	
  Total

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Accounts Receivable per
          /         /        
  aging

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Ineligibles

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Past Due (>90 Days
  Past Invoice Date)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Credits in Past Due
  (>90 Days Past Invoice Date)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Cross Age (>50% Past
  Due)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Contra Accounts

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Foreign Customers

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Government Accounts

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Intra-Company Accounts

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Bankrupt Accounts

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Volume Rebate Reserve

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Credit Memo Reserve

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Payment Error

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total Ineligibles

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Eligible Accounts
  Receivable

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
   

  
	
  Advance Rate

  	
   

  	
  85

  	
  %

  	
  85

  	
  %

  	
  85

  	
  %

  	
   

  	
   

  	
  85

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Available Accounts Receivable

  	
   

  	
  $

  	
  0

  	
   

  	
  $

  	
  0

  	
   

  	
  $

  	
  0

  	
   

  	
   

  	
   

  	
  $

  	
  0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Reserves: none

  	
   

  	
  $

  	
  0

  	
   

  	
  $

  	
  0

  	
   

  	
  $

  	
  0

  	
   

  	
   

  	
   

  	
  $

  	
  0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Net Available Accounts
  Receivable

  	
   

  	
  $

  	
  0

  	
   

  	
  $

  	
  0

  	
   

  	
  $

  	
  0

  	
   

  	
   

  	
   

  	
  $

  	
  0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (000’s)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Total

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Residual Interest as of
           /         /        
  (as reported in the     /      /        
  Daily Report)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Accounts Receivable Sold to Securitization

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

	
  Net Advances Under
  Securitization

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Residual Interest

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Ineligibles

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Ineligible obligors

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Ineligibles receivables

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Carry cost reserve

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total Ineligible

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Eligible Residual
  Interest

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Advance Rate

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  65

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Net Residual Interest Available

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

	
  (000’s)

  	
   

  	
  Paper

  	
   

  	
  Ink

  	
   

  	
  Finished

  Goods

  	
   

  	
  Maint.

  Parts

  	
   

  	
  Unbilled

  A/R

  	
   

  	
  Total

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Inventory as of
          /         /         

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
   

  	
   

  
	
  Ineligibles

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Excess Obsolete

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Locations < $100M

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Cost Test Reserve

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Consigned Inventory
  Reserve

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  GECFS Reserve (30% of
  Unbilled A/R)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total Ineligibles

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Eligible Inventory

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  
	
  Advance Rate

  	
   

  	
  65.0

  	
  %

  	
  65.0

  	
  %

  	
  65.0

  	
  %

  	
  65.0

  	
  %

  	
  65.0

  	
  %

  	
  65.0

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Available Inventory

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Reserves: none

  	
   

  	
  $

  	
  0

  	
   

  	
  $

  	
  0

  	
   

  	
  $

  	
  0

  	
   

  	
  $

  	
  0

  	
   

  	
  $

  	
  0

  	
   

  	
  $

  	
  0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Net Inventory Availability

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total Current Asset
  Availability

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

	
  (000s)

  	
   

  	
  Total

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Fixed Assets as of

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	 

	
  Machinery &
  Equipment — Leased Locations

  	
   

  	
   

  	
   

  	 

	
  Net Book Value

  	
   

  	
   

  	
   

  	 

	
  Net Orderly Liquidation
  Value

  	
   

  	
   

  	
   

  	 

	
  Lesser of (i) 55% of
  Net Book Value and (ii) 100% of Net Orderly 

  	
   

  	
   

  	
   

  	 

	
  Liquidation Value

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	 

	
  Machinery &
  Equipment — Owned Locations

  	
   

  	
   

  	
   

  	 

	
  Net Book Value

  	
   

  	
   

  	
   

  	 

	
  Orderly Liquidation
  Value In-Place

  	
   

  	
   

  	
   

  	 

	
  Lesser of (i) 55% of
  Net Book Value and (ii) 100% of Orderly 

  	
   

  	
   

  	
   

  	 

	
  Liquidation Value
  In-Place

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	 

	
  Total Machinery & Equipment
  Availability

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	 

	
  Real Estate (Fair
  Market Value)

  	
   

  	
   

  	
   

  	 

	
  Advance Rate for Real
  Estate

  	
   

  	
  80

  	
  %

  	 

	
   

  	
   

  	
   

  	
   

  	 

	
  Total Real Estate Availability

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	 

	
  Total Fixed Assets Availability

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	 

	
  Reserves:

  	
   

  	
   

  	
   

  	 

	
  Assets Purchased under
  Capital Leases

  	
   

  	
  —

  	
   

  	 

	
  Rent Reserve

  	
   

  	
  $

  	
  1,700,000

  	
   

  	 

	
  Control Agreements

  	
   

  	
  —

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	 

	
  Total Availability

  	
   

  	
   

  	
   

  	 

	
  Revolver Commitment

  	
   

  	
  $

  	
  200,000,000

  	
   

  	 

	
  Lesser of Commitment
  and Availability

  	
   

  	
   

  	
   

  	 

	
  Less: Outstanding
  Revolving Loan Balance

  	
   

  	
   

  	
   

  	 

	
  Less: Letters of Credit

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	 

	
  Excess (Deficit) Availability

  	
   

  	
   

  	
   

  	 

									

 

For the avoidance of
doubt, Advance Rates with respect to Fixed Assets shall not be subject to any
of the reductions contemplated by the Fourth Amendment to Credit Agreement.

The term “Fair Market
Value” for purposes of this Schedule 1 shall mean the value shown
with respect to owned real estate of the Borrower and the other Credit Parties
in the most recently completed Real Estate Appraisal, if any.

 

The term “Net Orderly
Liquidation Value” for purposes of this Schedule 1 shall mean with
respect to eligible machinery and equipment, the aggregate net orderly
liquidation value as determined by the most recent Fixed Asset Appraisal (or
update thereof), provided by AccuVal Associates, Inc. or other appraisal firm
approved by Agent, of the eligible machinery and equipment of the Borrower and
the other Credit Parties delivered to Agent pursuant to the Credit Agreement.

The term “Orderly
Liquidation Value In-Place” for purposes of this Schedule 1 shall
mean with respect to eligible machinery and equipment, the aggregate orderly
liquidation value in place thereof as determined by the most recent Fixed Asset
Appraisal (or update thereof), provided by AccuVal Associates, Inc. or other
appraisal firm approved by Agent, of eligible machinery and equipment of the
Borrower and the other Credit Parties delivered to Agent pursuant to the Credit
Agreement.

 

EXHIBIT C

to

LIMITED CONSENT
AND AMENDMENT NO. 7 TO CREDIT AGREEMENT

Certain
Mortgaged Properties 

	
   

  
	
  6111 Woodlake Center Dr., San Antonio, TX 

  Bexar County

  
	
   

  
	
  Route 1 & Adams Station 

  North Brunswick, NJ 

  County: Middlesex

  
	
   

  
	
  1202 Shore Street 

  West Sacramento, CA 

  County: Yolo

  
	
   

  

 

 

EXHIBIT D

to

LIMITED CONSENT
AND AMENDMENT NO. 7 TO CREDIT AGREEMENT

Schedules

to

Credit
Agreement 

[See attached]

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00120-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00120-of-00352.parquet"}]]