Document:

EXHIBIT 10.2

 

LIMITED CONSENT AND AMENDMENT NO. 1 TO CREDIT AGREEMENT

 

This Limited Consent and
Amendment No. 1 to Credit Agreement, dated as of October 3, 2005
(this “Consent and Amendment”), is entered into by and among Vertis, Inc.
(“Vertis”), Vertis Limited (“Vertis Limited”) and Vertis Digital
Services Limited (“Digital Limited” and, collectively with Vertis and
Vertis Limited, the “Borrowers” and each, individually, a “Borrower”),
as Borrowers, the other Credit Parties signatory hereto, General Electric
Capital Corporation, as a Lender and as Agent for Lenders (“Agent”), and
the other Lenders.

 

RECITALS

 

A.            Borrowers, the other Credit Parties,
Agent and Lenders are parties to that certain Credit Agreement, dated as of December 22,
2004 (as now or hereafter amended, restated or otherwise modified, the “Credit
Agreement”).

 

B.            Borrowers and the other Credit Parties
have requested that Agent and Lenders consent to (i) the sale of all of
the issued and outstanding shares of Stock of Vertis Limited pursuant to an
Agreement to be entered into by and between Webcraft, LLC, as seller, and
Overgoal Limited, as buyer (“Buyer”), substantially in the form of Exhibit A
to this Consent and Amendment (the “Stock Purchase Agreement”), and (ii) certain
related actions as further described in Section 2 herein.  Upon consummation of the transactions
contemplated by the Stock Purchase Agreement, Vertis Limited and each of its
Subsidiaries listed on Schedule 1 attached hereto (each, a “Departing
Entity”, and collectively, the “Departing Entities”) shall cease to
be a Credit Party under the Credit Agreement and the other Loan Documents.

 

C.            This Consent and Amendment shall
constitute a Loan Document and these Recitals shall be construed as part of
this Consent and 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, Borrowers by Lenders, Borrowers, 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 Consent and Amendment shall have the
same meanings ascribed to them in the Credit Agreement and Annex A thereto.

 

2.             Consents.

 

2.1.          Notwithstanding
any provision of the Credit Agreement or any other Loan Document to the
contrary, Agent and Lenders hereby consent to the sale of all of the issued and
outstanding shares of Stock of Vertis Limited to Buyer pursuant to the Stock
Purchase Agreement; provided, that, any changes to the Stock
Purchase Agreement from the version 

 

 

thereof attached to this Consent and Amendment as Exhibit A
shall be reasonably satisfactory to Agent.

 

2.2.          Notwithstanding
any provision of the Credit Agreement or any other Loan Document to the
contrary, Agent and Lenders hereby consent to the release of Agent’s Liens on
all shares of Stock of each Departing Entity upon the closing of the
transactions contemplated by the Stock Purchase Agreement to the extent such
shares of Stock have been pledged to Agent pursuant to the Credit Agreement or
any other Loan Document.

 

2.3.          Notwithstanding
any provision of the Credit Agreement or any other Loan Document to the
contrary, Agent and Lenders hereby consent to the release of Agent’s Liens on
all properties and assets of each Departing Entity upon the closing of the
transactions contemplated by the Stock Purchase Agreement to the extent such
properties and assets have been pledged to Agent pursuant to the Credit
Agreement or any other Loan Document.

 

2.4.          As
a result of the actions described above in Subsections 2.1, 2.2 and 2.3,
upon the closing of the transactions contemplated by the Stock Purchase
Agreement, Vertis Limited shall cease to be either a Borrower or a Credit Party
under the Credit Agreement and the other Loan Documents.  Notwithstanding any provision of the Credit
Agreement or any other Loan Document to the contrary, Agent and Lenders hereby
consent to such termination at, and only at, such time, of Vertis Limited’s
status as a Borrower and a Credit Party under the Credit Agreement and the
other Loan Documents.

 

2.5.          As
a result of the actions described above in Subsections 2.1, 2.2 and 2.3,
upon the closing of the transactions contemplated by the Stock Purchase
Agreement, each Departing Entity shall cease to be a Credit Party under the
Credit Agreement and the other Loan Documents. 
Notwithstanding any provision of the Credit Agreement or any other Loan
Document to the contrary, Agent and Lenders hereby consent to the such
termination at, and only at, such time, of each Departing Entity’s status as a
Credit Party under the Credit Agreement and the other Loan Documents.

 

2.6.          In
connection with the closing of the transactions contemplated by the Stock
Purchase Agreement, Vertis and the other Credit Parties (other than the
Departing Entities) intend to forgive and forever discharge intercompany loans
and obligations owing by the Departing Entities to Vertis and such other Credit
Parties in an aggregate principal amount of up to £40,000,000 (the “Departing
Entities Intercompany Debt Discharge”) and to assign to the Buyer an
intercompany loan in the principal amount of £7,000,000 owing to Vertis by
Vertis Limited (the “Assigned Vertis Limited Note”).  Notwithstanding any provision of the Credit
Agreement or any other Loan Document to the contrary, Agent and Lenders hereby
consent to the Departing Entities Intercompany Debt Discharge as a part of, and
at the time of the closing of, the transactions contemplated by the Stock
Purchase Agreement and, upon the closing of the transactions contemplated by
the Stock Purchase Agreement, Agent and Lenders hereby consent to the release
of any Liens which Agent may have on any intercompany notes issued by the
Departing Entities to Vertis and the other Credit Parties (other than the
Departing Entities) in respect of the Departing Entities Intercompany Debt
Discharge, to the assignment by Vertis to the Buyer of the Assigned Vertis
Limited Note and to the release of any Liens which Agent may

 

2

 

have on any intercompany notes issued by Vertis Limited in respect of
the Assigned Vertis Limited Note.

 

3.             Further Assurances.

 

3.1.          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 Section 2, under the Credit Agreement and/or the other Loan
Documents.

 

3.2.          At
the time of the closing of the transactions contemplated by the Stock Purchase
Agreement and from time to time thereafter, Agent and Lenders shall execute and
deliver such lien release instruments and documents and take such related
actions as Vertis may reasonably request to evidence, further document,
effectuate or otherwise implement the release of Agent’s Liens as described
above in Section 2, under the Credit Agreement and the other Loan
Documents.

 

4.             Representations
and Warranties.  The Borrowers and
Credit Parties, jointly and severally, hereby represent and warrant to Agent
and Lenders that:

 

4.1.          Aside
from (v) the agreements to provide indemnification/warranties which are
set forth in the Stock Purchase Agreement, under which the maximum aggregate
exposure is £300,000, (w) the agreement set forth in clause 21.2 of the Stock
Purchase Agreement by Webcraft, LLC pursuant to which the Credit Parties (other
than the Departing Entities) have agreed to be responsible for any liabilities
relating to an employee, Mr. Adriaan Roosen, (x) a guaranty provided to
Reader’s Digest in relation to potential employee liabilities regarding the
Swindon workforce, under which the maximum aggregate exposure is £250,000, (y)
a guaranty in favor of Capital One, a customer of the Departing Entities, under
which the aggregate maximum exposure is £2,000,000, and (z) other claims,
obligations, liabilities and exposures in an aggregate amount not to exceed
£5,000,000, (i) there are no post-closing obligations and liabilities,
including, without limitation, contingent obligations and liabilities, under
the Stock Purchase Agreement of Vertis and the other Credit Parties (other than
the Departing Entities) to the Buyer or any other Person, (ii) from and
after the closing of the transactions contemplated by the Stock Purchase
Agreement, Vertis and the other Credit Parties (other than the Departing
Entities) shall not have any obligations, direct or indirect, contingent or
otherwise, for the benefit of any of the Departing Entities and (iii) there
is no existing guaranty, credit support, indemnity or other similar
arrangement, by Vertis or Digital Limited or any other Credit Party, or by any
of their direct or indirect Subsidiaries, aside from the Departing Entities, in
favor of any Departing Entity, the Buyer or any employee, customer or creditor
relating to any Departing Entity or the Buyer.

 

4.2.          The
execution, delivery and performance by the Borrowers and each of the other
Credit Parties of this Consent and Amendment have been duly authorized by all
necessary corporate action, and this Consent and Amendment constitutes the
legal, valid and binding obligation of the Borrowers 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 

 

3

 

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

 

4.3.          The
execution, delivery and performance of this Consent and Amendment and the
consummation of the transactions contemplated hereby by Borrowers and each
Credit Party does not, and will not, 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 any Borrower or any Credit Party, and does not, and will not,
contravene or conflict with, or cause any Lien to arise under, any provision of
any indenture, agreement, mortgage, lease, instrument or other document,
including, without limitation, the February 2003 Senior Subordinated Debt
Documents, the 2002 Senior Debt Documents, the 2003 Senior Secured Debt
Documents or the Mezzanine Debt Documents, binding upon or otherwise affecting
any Borrower or any Credit Party or any property of any Borrower or any Credit
Party.

 

4.4.          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 Consent and Amendment or the consummation of the
transactions contemplated hereby and by the Stock Purchase Agreement.  In addition, each 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.

 

5.             Covenants.  Aside from (v) the agreements to provide
indemnification/warranties which are set forth in the Stock Purchase Agreement,
under which the maximum aggregate exposure is £300,000, (w) the agreement set
forth in clause 21.2 of the Stock Purchase Agreement by Webcraft, LLC pursuant
to which the Credit Parties (other than the Departing Entities) have agreed to
be responsible for any liabilities relating to an employee, Mr. Adriaan
Roosen, (x) a guaranty provided to Reader’s Digest in relation to potential
employee liabilities regarding the Swindon workforce, under which the maximum
aggregate exposure is £250,000, (y) a guaranty in favor of Capital One, a
customer of the Departing Entities, under which the aggregate maximum exposure
is £2,000,000, and (z) other claims, obligations, liabilities and exposures in
an aggregate amount not to exceed £5,000,000, each Borrower and each other
Credit Party executing this Consent and Amendment jointly and severally agrees
as to all Credit Parties that from and after the date hereof, the Credit
Parties shall not and shall not cause or permit their Subsidiaries directly or
indirectly to create, incur, assume or otherwise become or remain directly or
indirectly liable with respect to any guaranty, credit support, indemnity or
other similar arrangement, by Vertis or Digital Limited, or by any of their
direct or indirect Subsidiaries (aside from the Departing Entities) in favor of
any Departing Entity, the Buyer or any employee, customer or creditor relating
to any Departing Entity or the Buyer.

 

6.             Conditions
Precedent to Effectiveness.  The
effectiveness of the consents set forth in Section 2 hereof are in
each instance subject to the satisfaction of each of the following conditions
precedent:

 

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

 

4

 

6.2.          No
Default.  No Default or Event of
Default shall have occurred and be continuing or would result from the
effectiveness of this Consent and Amendment or the consummation of any of the
transactions contemplated hereby or by the Stock Purchase Agreement.

 

6.3.          Opinion.  Agent and Lenders shall have received an
opinion of counsel to Borrowers, Sullivan & Cromwell LLP, with respect
to this Consent and Amendment, including, without limitation, as to this
Consent and Amendment, the Stock Purchase Agreement and the transactions
contemplated hereby and thereby not conflicting with any provision of the February 2003
Senior Subordinated Debt Documents, the 2002 Senior Debt Documents, the 2003
Senior Secured Debt Documents or the Mezzanine Debt Documents, all in form and
substance acceptable to Agent.

 

6.4.          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, other than upon consummation of the
transactions contemplated by the Stock Purchase Agreement, the Departing
Entities.

 

7.2.          No
Waiver.  The execution, delivery and
effect of this Consent and 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”, “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 Consent and 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 constitute one and the same
instrument.  Delivery of an executed
counterpart of a signature page to this Consent and Amendment by
telecopier shall be as effective as delivery of a manually executed counterpart
signature page to this Consent and Amendment.

 

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

 

5

 

10.           GOVERNING
LAW.  THIS CONSENT AND 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 Consent and
Amendment are included herein for convenience of reference only and shall not
constitute a part of this Consent and Amendment for any other purpose.

 

[Signature Pages Follow]

 

6

 

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

 

	
   

  	
  BORROWERS:

  
	
   

  	
   

  	
   

  
	
   

  	
  VERTIS,
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Stephen E.
  Tremblay

  	
   

  
	
   

  	
  Name:

  	
  Stephen E. Tremblay

  
	
   

  	
  Title:

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  VERTIS
  LIMITED

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Dean D.
  Durbin

  	
   

  
	
   

  	
  Name:

  	
  Dean D. Durbin

  
	
   

  	
  Title:

  	
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  VERTIS
  DIGITAL SERVICES LIMITED

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Dean D.
  Durbin

  	
   

  
	
   

  	
  Name:

  	
  Dean D. Durbin

  
	
   

  	
  Title:

  	
  Director

  
								

 

 

	
   

  	
  GENERAL
  ELECTRIC CAPITAL 

  CORPORATION

  
	
   

  	
  as Agent, an L/C
  Issuer and Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Daniel D.
  McCready

  	
   

  
	
   

  	
   

  	
  Duly Authorized Signatory

  
					

 

 

	
   

  	
  BANK
  OF AMERICA, N.A.

  
	
   

  	
  as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Richard
  Levenson

  	
   

  
	
   

  	
  Name:

  	
  Richard Levenson

  
	
   

  	
  Title:

  	
  Senior Vice President

  
						

 

 

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

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  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

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PRINTCO,
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  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

  
								

 

 

	
   

  	
  VERTIS
  PRS LIMITED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Dean D.
  Durbin

  	
   

  
	
   

  	
  Name:

  	
  Dean D. Durbin

  
	
   

  	
  Title:

  	
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  THE
  ADMAGIC GROUP LIMITED

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Dean D.
  Durbin

  	
   

  
	
   

  	
  Name:

  	
  Dean D. Durbin

  
	
   

  	
  Title:

  	
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  VERTIS
  DIRECT MARKETING SERVICES (CROYDON) LIMITED

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Dean D.
  Durbin

  	
   

  
	
   

  	
  Name:

  	
  Dean D. Durbin

  
	
   

  	
  Title:

  	
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  VERTIS
  DIRECT MARKETING SERVICES (LEICESTER) LIMITED

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Dean D.
  Durbin

  	
   

  
	
   

  	
  Name:

  	
  Dean D. Durbin

  
	
   

  	
  Title:

  	
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  VERTIS
  FULFILMENT SERVICES LIMITED

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Dean D.
  Durbin

  	
   

  
	
   

  	
  Name:

  	
  Dean D. Durbin

  
	
   

  	
  Title:

  	
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ADMAGIC
  LIMITED

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Dean D.
  Durbin

  	
   

  
	
   

  	
  Name:

  	
  Dean D. Durbin

  
	
   

  	
  Title:

  	
  Director

  
					

 

 

	
   

  	
  VERTIS
  DIRECT RESPONSE LTD

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Dean D.
  Durbin

  	
   

  
	
   

  	
  Name:

  	
  Dean D. Durbin

  
	
   

  	
  Title:

  	
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  FUSION
  PREMEDIA GROUP LTD

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Dean D.
  Durbin

  	
   

  
	
   

  	
  Name:

  	
  Dean D. Durbin

  
	
   

  	
  Title:

  	
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
  VERTIS
  HARVEY HUNTER LTD

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Dean D.
  Durbin

  	
   

  
	
   

  	
  Name:

  	
  Dean D. Durbin

  
	
   

  	
  Title:

  	
  Director

  
						

 

 

EXHIBIT A

to

CONSENT AND AMENDMENT

 

 

Stock Purchase Agreement

 

 

SCHEDULE 1

to

CONSENT AND AMENDMENT

 

 

Departing Entities

 

Vertis Limited

Vertis Direct Marketing
Services (Croydon) Limited

Vertis Direct Marketing
Services (Leicester) Limited

Vertis Fulfilment
Services Limited

Vertis Direct Response
Ltd

Vertis Harvey Hunter LtdEXHIBIT 10.3

 

AMENDMENT NO. 2 TO CREDIT AGREEMENT

 

This Amendment No. 2
to Credit Agreement, dated as of November 22, 2005 (this “Amendment”),
is entered into by and among Vertis, Inc. (“Vertis”) and Vertis
Digital Services Limited (“Digital Limited” and, collectively with
Vertis, the “Borrowers” and each, individually, a “Borrower”), as
Borrowers, the other Credit Parties signatory hereto, General Electric Capital
Corporation, as a Lender and as Agent for Lenders (“Agent”), and the
other Lenders.

 

RECITALS

 

A.            Borrowers, 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 that
certain Limited Consent and Amendment No. 1 to Credit Agreement, dated as
of October 3, 2005, and as from time to time further amended, restated,
supplemented or otherwise modified, the “Credit Agreement”).

 

B.            Borrowers have requested that Agent and Lenders consent
to certain amendments to the Credit Agreement as set forth herein in connection
with the formation of Vertis Receivables II, LLC (“Vertis Receivables II”),
a new wholly-owned Subsidiary of Vertis, to which Vertis and certain other
Credit Parties will sell or otherwise transfer accounts receivable pursuant to
that certain Receivables Sale and Servicing Agreement, dated as of November 25,
2005 (the “Receivables II Sale Agreement”), by and among the Originators
(as defined therein), Vertis Receivables II, as Buyer, and Vertis, as Servicer,
as well as certain other related transactions.

 

C.            Borrowers, Agent and Lenders are willing to consent to
the amendments set forth herein pursuant to, 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, Borrowers by Lenders, Borrowers, 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 to Credit Agreement.

 

2.1.          Section 5.4 of the Credit
Agreement is hereby amended by deleting the word “and” which appears at the end
of clause (g), replacing the period at the end of clause (h) with “; and”,
and inserting the following new clause (i) at the end thereof:

 

“(i)          Holdings
and Borrowers may guarantee obligations of their Subsidiaries as sellers
pursuant to the Receivables Purchase Agreement and related documents, so long
as no such guaranty shall give rise to recourse liability (other than in
connection with standard securitization undertakings) for the payment of any
Receivables Purchase Agreement Assets.”

 

2.2.          Section 5.19 of the Credit
Agreement is hereby amended by deleting the words “in accordance with the
provisions of Section 5.7(c)” and replacing them with the words “in
accordance with the provisions of Section 5.7(d)”.

 

2.3.          The definition of “Permitted
Encumbrances” set forth in Annex A to the Credit Agreement is hereby amended by
replacing the word “Borrowers” in clause (n) of such definition with the words “Receivables
Sellers”.

 

2.4.          The definition of “Receivables
Indenture” set forth in Annex A to the Credit Agreement is hereby amended by
replacing the words “Amended and Restated Indenture and Servicing Agreement,
dated as of December 9, 2002, among Vertis Receivables, LLC, Vertis and
Manufacturers and Traders Trust Company, as Trustee” with the following:

 

“Receivables Funding and
Administration Agreement, dated as of November 25, 2005, by and among the
Receivables Subsidiary, as Borrower, the financial institutions signatory
thereto from time to time as Lenders, and General Electric Capital Corporation,
as a Lender, as Swing Line Lender and as Administrative Agent”.

 

2.5.          The definition of “Receivables
Purchase Agreement” set forth in Annex A to the Credit Agreement is hereby
amended by replacing the words “Amended and Restated Receivables Purchase
Agreement dated as of December 9 2002 among Vertis as Initial Servicer,
Vertis and certain of its Subsidiaries, as Sellers, and Vertis Receivables, LLC
as Buyer” with the following:

 

“Receivables
Sale and Servicing Agreement, dated as of November 25, 2005, by and among
each of the Receivables Sellers party thereto from time to time as Originators,
the Receivables Subsidiary, as Buyer, and Vertis, as Servicer”.

 

2.6.          The definition of “Receivables
Purchase Agreement Assets” set forth in Annex A to the Credit Agreement is
hereby amended by replacing the words “Collateral (as defined in Section 2.1
of the Receivables Indenture)” with the words “Borrower Collateral (as defined
in the Receivables Indenture)”.

 

2

 

2.7.          The definition of “Receivables
Subsidiary” set forth in Annex A to the Credit Agreement is hereby amended by
replacing the words “Vertis Receivables, LLC” with the words “Vertis
Receivables II, LLC”.

 

2.8.          The definition of “Subsidiary” set
forth in Annex A to the Credit Agreement is hereby amended and restated in its
entirety to read as follows:

 

“Subsidiary
means, with respect to any Person, (a) any corporation of which an
aggregate of more than 50% of the outstanding Stock having ordinary voting
power to elect a majority of the board of directors of such corporation
(irrespective of whether, at the time, Stock of any other class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time, directly or indirectly, owned
legally or beneficially by such Person or one or more Subsidiaries of such
Person, or with respect to which any such Person has the right to vote or
designate the vote of 50% or more of such Stock whether by proxy, agreement,
operation of law or otherwise, and (b) any partnership or limited
liability company in which such Person and/or one or more Subsidiaries of such
Person shall have an interest (whether in the form of voting or participation
in profits or capital contribution) of more than 50% or of which any such
Person is a general partner or may exercise the powers of a general
partner.  Notwithstanding the foregoing
(and except for purposes of Sections 3.7(c), 3.9 and 3.15, and the definitions
of Unrestricted Subsidiary and Receivables Subsidiary contained herein), an
Unrestricted Subsidiary shall be deemed not to be a Subsidiary of Holdings or
any of its other Subsidiaries for purposes of this Agreement.  Unless the context otherwise requires, each
reference to a Subsidiary shall be a reference to a Subsidiary of a Borrower.”

 

2.9.          The last paragraph in the definition
of “Unrestricted Subsidiary” set forth in Annex A to the Credit Agreement is
hereby amended and restated in its entirety to read as follows:

 

“Vertis
may designate by written notice to the Agent any Subsidiary (including any
newly acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary
unless such Subsidiary owns any Stock of, or owns any property of, Holdings or
any Subsidiary thereof that is not a Subsidiary of the Subsidiary to be so
designated; provided that each Subsidiary to be so designated and each
of its Subsidiaries has not at the time of designation, and does not
thereafter, create, incur, issue, assume, guarantee or otherwise become
directly or indirectly liable with respect to any Indebtedness pursuant to
which Agent or any Lender has recourse to any of the assets of Vertis or any of
its Restricted Subsidiaries.”

 

3

 

2.10.        The Agent and Lenders hereby consent to
the prior formation of Vertis Receivables II, LLC.

 

3.             Representations and Warranties.  The Borrowers and Credit Parties, jointly and
severally, hereby represent and warrant to Agent and Lenders that:

 

3.1.          The execution, delivery and
performance by the Borrowers 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 the Borrowers
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, insolvency, reorganization, moratorium
or similar law affecting creditors’ rights generally or to general principles
of equity.

 

3.2.          The execution, delivery and
performance of this Amendment and the consummation of the transactions
contemplated hereby by Borrowers and each Credit Party does not, and will not,
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 any Borrower or any Credit Party, and
does not, and will not, contravene or conflict with, or cause any Lien to arise
under, any provision of any indenture, agreement, mortgage, lease, instrument
or other document, including, without limitation, the Loan Documents, the February 2003
Senior Subordinated Debt Documents, the 2002 Senior Debt Documents, the 2003
Senior Secured Debt Documents or the Mezzanine Debt Documents, binding upon or
otherwise affecting any Borrower or any Credit Party or any property of any
Borrower or any Credit Party.

 

3.3.          No Default or Event of Default exists
under the Credit Agreement or any other Loan Document or will be triggered by
the execution, delivery and performance of this Amendment or the consummation
of the transactions contemplated hereby and by the Receivables II Sale
Agreement.  In addition, each 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.

 

4.             Conditions Precedent to Effectiveness.  The effectiveness of the amendments set forth
in Section 2 hereof are in each instance subject to the
satisfaction of each of the following conditions precedent:

 

4.1.          Amendment.  This Amendment shall have been duly executed
and delivered by the Borrowers, the Credit Parties, Agent and Lenders.

 

4.2.          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 or
by the Receivables II Sale Agreement.

 

4.3.          Opinion.  Agent and Lenders shall have received an
opinion of counsel to Borrowers, Sullivan & Cromwell LLP, with respect
to this Amendment, including, without limitation, as to this Amendment, the
Receivables II Sale Agreement and the transactions contemplated hereby and
thereby not conflicting with any provision of the Loan Documents, the 

 

4

 

February 2003 Senior Subordinated Debt Documents, the 2002 Senior
Debt Documents, the 2003 Senior Secured Debt Documents or the Mezzanine Debt
Documents, all in form and substance acceptable to Agent.

 

4.4.          Pledge of Equity in Vertis
Receivables II.  As required by Section 4.7
of the Credit Agreement, 100% of the capital Stock of Vertis Receivables II
shall have been pledged by Vertis pursuant to an amendment or supplement, in
form and substance satisfactory to Agent, to the Pledge Agreement, dated as of December 22,
2004, between Vertis, as Pledgor, and General Electric Capital Corporation, as
Agent, and in connection therewith, Vertis shall have delivered to Agent the
original stock certificate(s) evidencing 100% of the capital Stock of Vertis
Receivables II, together with a stock power(s) duly endorsed in blank by
Vertis.

 

4.5.          Unrestricted Subsidiary Designation.  The Credit Parties shall have delivered to
the Agent evidence, in form and substance satisfactory to it, that Vertis
Receivables II has been designated, and constitutes, an Unrestricted
Subsidiary.

 

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

 

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

 

5.1.          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.

 

5.2.          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.

 

5.3.          Certain Terms.  Each reference in the Credit Agreement to “this
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.

 

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

 

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

 

5

 

8.             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 PRINCIPLES.

 

9.             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]

 

6

 

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

 

 

	
   

  	
  BORROWERS:

  
	
   

  	
   

  	
   

  
	
   

  	
  VERTIS,
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Donald E.
  Roland

  	
   

  
	
   

  	
  Name:

  	
  Donald E. Roland

  
	
   

  	
  Title:

  	
  Chairman and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  VERTIS
  DIGITAL SERVICES LIMITED

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Donald E.
  Roland

  	
   

  
	
   

  	
  Name:

  	
  Donald E. Roland

  
	
   

  	
  Title:

  	
  Chairman and Chief Executive Officer

  
					

 

 

	
   

  	
  GENERAL
  ELECTRIC CAPITAL 

  CORPORATION

  
	
   

  	
  as Agent, an L/C
  Issuer and Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Sandra Claghorn

  
	
   

  	
  Duly Authorized
  Signatory

  

 

 

	
   

  	
  BANK
  OF AMERICA, N.A.

  
	
   

  	
  as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Richard
  Levenson

  	
   

  
	
   

  	
  Name:

  	
  Richard Levenson

  
	
   

  	
  Title:

  	
  Senior Vice President

  
					

 

 

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

 

	
   

  	
  VERTIS
  HOLDINGS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Donald E.
  Roland

  	
   

  
	
   

  	
  Name:

  	
  Donald E. Roland

  
	
   

  	
  Title:

  	
  Chairman and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ENTERON
  GROUP LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Donald E.
  Roland

  	
   

  
	
   

  	
  Name:

  	
  Donald E. Roland

  
	
   

  	
  Title:

  	
  Chairman and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  WEBCRAFT,
  LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Donald E.
  Roland

  	
   

  
	
   

  	
  Name:

  	
  Donald E. Roland

  
	
   

  	
  Title:

  	
  Chairman and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PRINTCO,
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Donald E.
  Roland

  	
   

  
	
   

  	
  Name:

  	
  Donald E. Roland

  
	
   

  	
  Title:

  	
  Chairman and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  VERTIS
  MAILING, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Donald E.
  Roland

  	
   

  
	
   

  	
  Name:

  	
  Donald E. Roland

  
	
   

  	
  Title:

  	
  Chairman and Chief Executive Officer

  
						

 

 

	
   

  	
  WEBCRAFT
  CHEMICALS, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Donald E.
  Roland

  	
   

  
	
   

  	
  Name:

  	
  Donald E. Roland

  
	
   

  	
  Title:

  	
  Chairman and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  VERTIS
  PRS LIMITED

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Donald E.
  Roland

  	
   

  
	
   

  	
  Name:

  	
  Donald E. Roland

  
	
   

  	
  Title:

  	
  Chairman and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  THE
  ADMAGIC GROUP LIMITED

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Donald E.
  Roland

  	
   

  
	
   

  	
  Name:

  	
  Donald E. Roland

  
	
   

  	
  Title:

  	
  Chairman and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ADMAGIC
  LIMITED

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Donald E.
  Roland

  	
   

  
	
   

  	
  Name:

  	
  Donald E. Roland

  
	
   

  	
  Title:

  	
  Chairman and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  FUSION
  PREMEDIA GROUP LTD

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Donald E. Roland

  	
   

  
	
   

  	
  Name:

  	
  Donald E. Roland

  
	
   

  	
  Title:

  	
  Chairman and Chief Executive Officer

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