Waiver, Consent and Amendment to Senior Subordinated Credit Agreement among Vertis, Inc., Vertis Holdings, Inc., Subsidiary Guarantors, Lenders, and Agents

Summary

This agreement, dated November 21, 2002, amends the Senior Subordinated Credit Agreement among Vertis, Inc., Vertis Holdings, Inc., their subsidiaries, various lenders, and agents. It allows Vertis to issue up to $100 million in additional senior notes, provided the proceeds are used to pay issuance costs and repay existing loans. The lenders waive certain restrictions and confirm that this issuance will not trigger a default. The amendment also updates definitions and confirms that all other terms of the original credit agreement remain in effect.

EX-10.16 19 a2106381zex-10_16.txt EXHIBIT 10.16 EXHIBIT 10.16 WAIVER, CONSENT AND AMENDMENT Waiver, Consent and Amendment, dated as of November 21, 2002 (the "Amendment"), to the Senior Subordinated Credit Agreement, dated as of December 7, 1999, as amended, among Vertis, Inc. (f/k/a Big Flower Press Holdings, Inc.), a Delaware corporation (the "Company"), Vertis Holdings, Inc. (f/k/a Big Flower Holdings, Inc.), a Delaware corporation ("Holdings"), the Subsidiary Guarantors named on the signature pages hereto, the Lenders named on the signature pages hereto (the "Lenders") and Deutsche Bank Trust Company Americas (f/k/a Bankers Trust Company), JP Morgan Chase Bank (f/k/a The Chase Manhattan Bank) and Banc of America Bridge LLC (f/k/a NationsBridge, L.L.C.) as Agents for the Lenders (in such capacity, the "Agents") (the "Credit Agreement"). Except as otherwise indicated herein, capitalized terms used herein have the same meanings as set forth in the Credit Agreement. W I T N E S S E T H : WHEREAS, the Company is contemplating issuing up to $100.0 million of un-secured senior notes (the "Additional Senior Notes") which notes will be sold pursuant to Rule 144A or Regulation S under the Securities Act of 1933, as amended (such issuance, the "Senior Notes Issuance"); WHEREAS, the Additional Senior Notes will have the same terms and interest rate as the $250.0 million principal amount of 10 7/8% senior notes issued by the Company on June 24, 2002; WHEREAS, pursuant to Section 12.6 of the Credit Agreement, the Company desires to have the Required Lenders waive certain provisions of the Credit Agreement and consent to the departure of the Company therefrom and amend certain provisions of the Credit Agreement; NOW THEREFORE, in consideration of the premises and covenants contained herein, and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows: 1. WAIVER AND CONSENT. The Required Lenders hereby waive compliance by the Company with and consent to the departure from the provisions of the Credit Agreement (including, without limitation, Exhibit XIV to the Credit Agreement) with respect to the Senior Notes Issuance; provided that the proceeds of such Senior Notes Issuance are applied as follows: First, to the payment of all fees and expenses relating to the Senior Notes Issuance; and Second, 50% of the remaining proceeds after the payment of fees and expenses to the repayment of term loan borrowings under the Senior Credit Facility and 50% of the remaining proceeds after the payment of fees and expenses to the repayment of amounts outstanding under the Credit Agreement. The Required Lenders hereby agree that the Senior Note Issuance or the application of the -2- proceeds thereof as described above shall not constitute an Event of Default or Potential Event of Default under the Credit Agreement. 2. AMENDMENT. EXHIBIT XIV. Exhibit XIV to the Credit Agreement is hereby amended as follows: (1) The section entitled "Certain Definitions" is hereby amended by adding the following definition in alphabetical order therein: "Additional Senior Notes" means the Company's senior notes issued after November 1, 2002 in an aggregate principal amount not to exceed $100.0 million; PROVIDED that the proceeds from such senior notes are used First, to the payment of all fees and expenses relating to the issuance of such senior notes; and Second, 50% of the remaining proceeds after the payment of fees and expenses to the repayment of term loan borrowings under the Senior Credit Facility and 50% of the remaining proceeds after the payment of fees and expenses to the repayment of amounts outstanding under the Senior Subordinated Credit Agreement; PROVIDED, FURTHER that such senior notes have the same terms and interest rate as the Senior Notes. (2) The definition of "Permitted Indebtedness" is hereby amended by (1) deleting the word "and" at the end of clause (15) thereof and replacing it with a semicolon, and (2) deleting the period at the end of clause (16) thereof and replacing it with a semicolon and the word "and" and (3) adding a new clause (17) thereto which reads as follows, "Indebtedness of the Company represented by the Additional Senior Notes and guarantees of the Additional Senior Notes by certain of the Company's Restricted Subsidiaries." 3. ADDITIONAL FEES. The Company agrees to pay on demand all costs and expenses of the Agents and Lenders in connection with the preparation, execution and delivery of this Amendment and the documentation contemplated hereby, including the reasonable fees and out-of-pocket expenses of Cahill Gordon & Reindel, counsel for the Agents and Lenders, with respect thereto. 4. SCOPE OF AMENDMENT. Except as specifically amended hereby, the Credit Agreement, shall remain unchanged. It is declared and agreed by each of the parties hereto that the Credit Agreement, including but not limited to Section 5.12 thereof, subject to this Amendment, shall continue, in full force and effect, and that the Amendment and the Credit Agreement shall be read as and shall constitute one document. -3- 5. COUNTERPARTS. This Amendment may be executed in multiple counterparts, and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. 6. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW. 7. ACKNOWLEDGMENT AND CONSENT BY THE SUBSIDIARY GUARANTORS. Each Subsidiary Guarantor hereby acknowledges that it has read this Amendment and consents to the terms hereof and further confirms and agrees that, notwithstanding the effectiveness of this Amendment, its obligations under its Guarantee shall not be impaired or affected and its Guarantee is, and shall continue to be, in full force and effect and is hereby confirmed and ratified in all respects. S-1 WITNESS the due execution hereof by the respective duly authorized officers of the undersigned as of the date first written above. VERTIS, INC. By: /s/ John V. Howard, Jr. -------------------------------- Name: John V. Howard, Jr. Title: Senior Vice President VERTIS HOLDINGS, INC. By: /s/ John V. Howard, Jr. -------------------------------- Name: John V. Howard, Jr. Title: Senior Vice President SUBSIDIARY GUARANTORS: PRINTCO., INC. By: /s/ John V. Howard, Jr. -------------------------------- Name: John V. Howard, Jr. Title: Senior Vice President WEBCRAFT LLC By: /s/ John V. Howard, Jr. -------------------------------- Name: John V. Howard, Jr. Title: Senior Vice President WEBCRAFT CHEMICALS LLC By: /s/ John V. Howard, Jr. -------------------------------- Name: John V. Howard, Jr. Title: Senior Vice President S-2 ENTERON GROUP LLC. By: /s/ John V. Howard, Jr. -------------------------------- Name: John V. Howard, Jr. Title: Senior Vice President BIG FLOWER DIGITAL SERVICES (DELAWARE), INC. By: /s/ John V. Howard, Jr. -------------------------------- Name: John V. Howard, Jr. Title: Senior Vice President BIG FLOWER DIGITAL LLC By: BIG FLOWER DIGITAL SERVICES (DELAWARE), INC. By: /s/ John V. Howard, Jr. -------------------------------- Name: John V. Howard, Jr. Title: Senior Vice President S-3 AGENTS: DEUTSCHE BANK TRUST COMPANY AMERICAS, as co-agent By: /s/ David J. Flannery -------------------------------- Name: David J. Flannery Title: Managing Director JP MORGAN CHASE BANK as co-agent By: /s/ Randolph E. Cates -------------------------------- Name: Randolph E. Cates Title: Vice President BANC OF AMERICA BRIDGE LLC, as co-agent By: /s/ S. Paul Trapani, III -------------------------------- Name: S. Paul Trapani Title: Managing Director S-4 LENDERS: DEUTSCHE BANK TRUST CORPORATION By: /s/ David J. Flannery -------------------------------- Name: David J. Flannery Title: Managing Director JP MORGAN CHASE BANK By: /s/ Randolph E. Cates -------------------------------- Name: Randolph E. Cates Title: Vice President BANC OF AMERICA BRIDGE LLC By: /s/ S. Paul Trapani, III -------------------------------- Name: S. Paul Trapani, III Title: Senior Vice President ARCHIMEDES FUNDING III, LTD. By: ING Capital Advisors LLC, as Collateral Manager By: /s/ Jane Musser Nelson -------------------------------- Name: Jane Musser Nelson Title: Managing Director S-5 OAK HILL SECURITIES FUND II, L.P. By: Oak Hill Securities GenPar II, L.P., its General Partner By: Oak Hill Securities MGP II, Inc., its General Partner By: /s/ Scott D. Krase -------------------------------- Name: Scott D. Krase Title: Authorized Signatory D.K. ACQUISITION PARTNERS, L.P. By: M.H. Davidson & Co., its General Partner By: /s/ Thomas Kempner -------------------------------- Name: Thomas Kempner Title: Partner FRANKLIN FLOATING RATE TRUST By: /s/ Richard Hsu -------------------------------- Name: Richard Hsu Title: Vice President S-6 TCW LEVERAGED INCOME TRUST, L.P. By: TCW Advisers (Bermuda), Ltd. as Investment Adviser By: /s/ Mark L. Gold -------------------------------- Name: Mark L. Gold Title: Managing Director By: TCW Investment Management Company, as Investment Adviser By: /s/ Jonathan R. Insull -------------------------------- Name: Jonathan R. Insull Title: Managing Director TCW LEVERAGED INCOME TRUST II, L.P. By: TCW Advisers (Bermuda), Ltd. as General Partner By: /s/ Mark L. Gold -------------------------------- Name: Mark L. Gold Title: Managing Director By: TCW Investment Management Company, as Investment Adviser By: /s/ Jonathan R. Insull -------------------------------- Name: Jonathan R. Insull Title: Managing Director S-7 FLEET CORPORATE FINANCE, INC. By: /s/ Timothy C. Shoyer -------------------------------- Name: Timothy C. Shoyer Title: Vice President MERRILL LYNCH GLOBAL INVESTMENT SERIES: INCOME STRATEGIES PORTFOLIO By: Merrill Lynch Asset Management, L.P., as Investment Advisor By: /s/ Jaimin Patel -------------------------------- Name: Jaimin Patel Title: Authorized Signatory