Waiver to Credit Agreement among Vertis Holdings, Inc., Vertis, Inc., Subsidiaries, and Lenders (September 28, 2001)

Summary

This agreement is a waiver to a prior credit agreement between Vertis Holdings, Inc., its subsidiaries, and a group of lenders. The lenders agree to temporarily waive certain financial compliance requirements for Vertis Holdings for a specific period from September 30, 2001, to November 30, 2001. During this time, some financial covenants will not be enforced, but failure to comply after this period will result in default. The waiver also restricts dividend payments during the waiver period. The agreement is governed by New York law and becomes effective once all parties sign.

EX-10.25 28 a2106381zex-10_25.txt EXHIBIT 10.25 EXHIBIT 10.25 WAIVER TO CREDIT AGREEMENT WAIVER TO CREDIT AGREEMENT (this "Waiver"), dated as of September 28, 2001, among VERTIS HOLDINGS, INC. (f/k/a Big Flower Holdings, Inc.), a Delaware corporation ("Holdings"), VERTIS, INC. (f/k/a Big Flower Press Holdings, Inc.), a Delaware corporation ("Vertis"), VERTIS LIMITED (f/k/a Big Flower Limited), a Wholly-Owned Subsidiary of Vertis and a limited company organized under the laws of England ("VL"), VERTIS DIRECT MARKETING SERVICES (CROYDON) LIMITED (f/k/a Olwen Direct Mail Limited), a Wholly-Owned Subsidiary of VL and a limited company organized under the laws of England ("VDMS"), VERTIS DIGITAL SERVICES LIMITED (f/k/a Big Flower Digital Services Limited), an indirect Wholly-Owned Subsidiary of Vertis and a limited company organized under the laws of England ("VDSL"), FUSION PREMEDIA GROUP LIMITED (f/k/a Troypeak Limited), an indirect Wholly-Owned Subsidiary of Vertis and a limited company organized under the laws of England ("Fusion"), PISMO LIMITED, an indirect Wholly-Owned Subsidiary of Vertis and a limited company organized under the laws of England ("Pismo"), VERTIS DIRECT RESPONSE LIMITED (f/k/a Colorgraphic Direct Response Limited), a Wholly-Owned Subsidiary of VL and a limited company organized under the laws of England ("VDRL"), and THE ADMAGIC GROUP LIMITED, an indirect Wholly-Owned Subsidiary of Vertis and a limited company organized under the laws of England ("Admagic" and, together with Vertis, VL, VDMS, VDSL, Fusion, Pismo and VDRL, the "Borrowers", and each, a "Borrower"), the Lenders from time to time party to the Credit Agreement referred to below, CHASE SECURITIES, INC. and DEUTSCHE BANK SECURITIES, INC., as Joint Lead Arrangers and Joint Book Managers (in such capacity, the "Joint Lead Arrangers"), THE CHASE MANHATTAN BANK, as Administrative Agent (the "Administrative Agent"), BANKERS TRUST COMPANY, as Syndication Agent, BANK OF AMERICA, N.A., as Documentation Agent, and certain Managing Agents party to the Credit Agreement. All capitalized terms used herein and not otherwise defined shall have the respective meanings provided such terms in the Credit Agreement. W I T N E S S E T H: WHEREAS, Holdings, the Borrowers, the Lenders, the Agents, the Joint Lead Arrangers and the Managing Agents are parties to a Credit Agreement, dated as of December 7, 1999 (as amended, modified or supplemented from time to time to but not including the date hereof, the "Credit Agreement"); and WHEREAS, subject to the terms and conditions of this Waiver, the Lenders wish to waive compliance with certain provisions of the Credit Agreement, and the parties to the Credit Agreement wish to enter into certain agreements, in each case as herein provided; NOW, THEREFORE, it is agreed: I. WAIVER AND AGREEMENTS. 1. The Lenders hereby waive, during (and only during) the period commencing on September 30, 2001 and ending on November 30, 2001 (the "Waiver Period"), compliance by Holdings with Section 9.08 of the Credit Agreement for (and only for) the Test Period ending on the last day of the fiscal quarter of Holdings ended September 30, 2001 (the "Subject Test Period"), it being understood and agreed that upon the expiration of the Waiver Period, the failure of Holdings to comply with Section 9.08 of the Credit Agreement for the Subject Test Period shall give rise to an immediate Event of Default under Section 10.03 of the Credit Agreement. 2. The Lenders hereby waive, during (and only during) the Waiver Period, compliance by Holdings with Section 9.09 of the Credit Agreement at all times during the Waiver Period, it being understood and agreed that at all times after the expiration of the Waiver Period, the failure of Holdings to comply with Section 9.09 of the Credit Agreement shall give rise to an immediate Event of Default under Section 10.03 of the Credit Agreement. 3. Notwithstanding anything to the contrary contained in Section 9.03(xii) of the Credit Agreement, no Dividends may be made or paid by Vertis to Holdings pursuant to said Section 9.03(xii) of the Credit Agreement at any time during the Waiver Period. II. MISCELLANEOUS PROVISIONS. 1. In order to induce the Lenders to enter into this Waiver, each Credit Agreement Party hereby represents and warrants that: (a) no Default or Event of Default exists as of the Waiver Effective Date (as defined below), both immediately before and immediately after giving effect to this Waiver; and (b) all of the representations and warranties contained in the Credit Agreement or the other Credit Documents are true and correct in all material respects on the Waiver Effective Date both immediately before and immediately after giving effect to this Waiver, with the same effect as though such representations and warranties had been made on and as of the Waiver Effective Date (it being understood that any representation or warranty made as of a specific date shall be true and correct in all material respects as of such specific date). 2. This Waiver is limited as specified and shall not constitute a modification, acceptance or waiver of any other provision of the Credit Agreement or any other Credit Document. 3. This Waiver may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which counterparts when executed and delivered shall be an original, but all of which shall together constitute one and the same -2- instrument. A complete set of counterparts shall be lodged with Holdings and the Administrative Agent. 4. THIS WAIVER AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK. 5. This Waiver shall become effective on the date (the "Waiver Effective Date") when each Credit Agreement Party, the Administrative Agent and the Lenders constituting the Required Lenders shall have signed a counterpart hereof (whether the same or different counterparts) and shall have delivered (including by way of facsimile transmission) the same to the Administrative Agent at its Notice Office. 6. From and after the Waiver Effective Date, all references in the Credit Agreement and each of the other Credit Documents to the Credit Agreement shall be deemed to be references to the Credit Agreement as modified hereby. -3- IN WITNESS WHEREOF, the parties hereto have caused their duly authorized officers to execute and deliver this Waiver as of the date first above written. VERTIS HOLDINGS, INC. (f/k/a Big Flower Holdings, Inc.), as a Guarantor By /s/ Dean D. Durbin ----------------------------------------------- Name: Dean D. Durbin Title: Chief Financial Officer VERTIS, INC. (f/k/a Big Flower Press Holdings, Inc.), as a Borrower and a Guarantor By /s/ Dean D. Durbin ----------------------------------------------- Name: Dean D. Durbin Title: Chief Financial Officer VERTIS LIMITED (f/k/a Big Flower Limited) as a Borrower By /s/ Adriaan Roosen ----------------------------------------------- Name: Adriaan Roosen Title: Director FUSION PREMEDIA GROUP LIMITED (f/k/a Troypeak Limited), as a Borrower By /s/ Adriaan Roosen ----------------------------------------------- Name: Adriaan Roosen Title: Director PISMO LIMITED, as a Borrower By /s/ Adriaan Roosen ----------------------------------------------- Name: Adriaan Roosen Title: Director VERTIS DIRECT RESPONSE LIMITED (f/k/a Colorgraphic Direct Response Limited), as a Borrower By /s/ Adriaan Roosen ----------------------------------------------- Name: Adriaan Roosen Title: Director THE ADMAGIC GROUP LIMITED, as a Borrower By /s/ Adriaan Roosen ----------------------------------------------- Name: Adriaan Roosen Title: Director VERTIS DIRECT MARKETING SERVICES (CROYDON) LIMITED (f/k/a Olwen Direct Mail Limited) By /s/ Adriaan Roosen ----------------------------------------------- Name: Adriaan Roosen Title: Director VERTIS DIGITAL SERVICES LIMITED (f/k/a Big Flower Digital Services Limited) By /s/ Adriaan Roosen ----------------------------------------------- Name: Adriaan Roosen Title: Director THE CHASE MANHATTAN BANK, Individually, and as Administrative Agent By /s/ Robert T. Sacks ----------------------------------------------- Name: Robert T. Sacks Title: Managing Director BANKERS TRUST COMPANY, Individually, and as Syndication Agent By /s/ Susan L. Lefevre ----------------------------------------------- Name: Susan L. LeFevre Title: Director BANK OF AMERICA, N.A. Individually, and as Documentation Agent By /s/ W. Larry Hess ----------------------------------------------- Name: W. Larry Hess Title: Managing Director ADDISON CDO, LIMITED (Acct 1279) By: Pacific Investment Management Company, LLC, as its Investment Advisor By /s/ Mohan V. Phansalkar ----------------------------------------------- Name: Mohan V. Phansalkar Title: Executive Vice President AMARA-I FINANCE, LTD. By: INVESCO Senior Secured Management, Inc. as Subadviser By /s/ Joseph Rotondo ----------------------------------------------- Name: Joseph Rotondo Title: Authorized Signatory ARCHIMEDES FUNDING II, LTD. By ------------------------------------------ Name: Title: ATHENA CDO, LIMITED (Acct 1227) By: Pacific Investment Management Company, as its Investment Advisor By /s/ Mohan V. Phansalkar ----------------------------------------------- Name: Mohan V. Phansalkar Title: Executive Vice President AVALON CAPITAL LTD. BY: INVESCO Senior Secured Management, Inc., as Portfolio Advisor By /s/ Joseph Rotondo --------------------------------------------- Name: Joseph Rotondo Title: Authorized Signatory AVALON CAPITAL LTD. II BY: INVESCO Senior Secured Management, Inc., as Portfolio Advisor By /s/ Joseph Rotondo ---------------------------------------------- Name: Joseph Rotondo Title: Authorized Signatory FLEET NATIONAL BANK By /s/ Julie V. Jalelian ----------------------------------------------- Name: Julie V. Jalelian Title: Managing Director BEFORD CDO, LIMITED (Acct 1276) By: Pacific Investment Management Company, as its Investment Advisor By /s/ Mohan V. Phansalkar ----------------------------------------------- Name: Mohan V. Phansalkar Title: Executive Vice President BLUE SQUARE FUNDING LTD., SERIES 3 By: Bankers Trust Company, as Trustee By /s/ Susan Anderson ----------------------------------------------- Name: Susan Anderson Title: Assistant Vice President BOEING CAPITAL CORPORATION By /s/ James C. Hammersmith ----------------------------------------------- Name: James C. Hammersmith Title: Senior Documentation Director CAPTIVA III FINANCE LTD., as advised by Pacific Investment Management Company By /s/ David Dyer ----------------------------------------------- Name: David Dyer Title: Director CAPTIVA IV FINANCE LTD. as advised by Pacific Investment Management Company By /s/ David Dyer ----------------------------------------------- Name: David Dyer Title: Director CATALINA CDO LTD. (Acct 1287) By: Pacific Investment Management Company, as its Investment Advisor By /s/ Mohan V. Phansalkar --------------------------------------------- Name: Mohan V. Phansalkar Title: Executive Vice President THE CIT GROUP/EQUIPMENT FINANCING, INC. By ------------------------------------------ Name: Title: CREDIT AGRICOLE INDOSUEZ By /s/ John McCloskey ----------------------------------------------- Name: John McCloskey Title: FVP By /s/ Rene Leblanc ----------------------------------------------- Name: Rene LeBlanc Title: VP - SRM CYPRESSTREE SENIOR FLOATING RATE FUND By: CypressTree Investment Management Company, Inc. as Portfolio Manager By ----------------------------------------------- Name: Title: CYPRESTREE INVESTMENT FUND, LLC By ----------------------------------------------- Name: Title: THE DAI-ICHI KANGYO BANK, LIMITED By /s/ Tsutomu Yamamoto ----------------------------------------------- Name: Tsutomu Yamamoto Title: Vice President DELANO COMPANY (Acct 274) By: Pacific Investment Management Company, as its Investment Advisor By /s/ Mohan V. Phansalkar ----------------------------------------------- Name: Mohan V. Phansalkar Title: Executive Vice President ELF FUNDING TRUST I By: Highland Capital Management, L.P., as Collateral Manager By: /s/ Mark K. Okada ---------------------------------------------- Name: Mark K. Okada Title: Executive Vice President EMERALD ORCHARD LIMITED By: /s/ Susan K. Strong ---------------------------------------------- Name: Susan K. Strong Title: Attorney in fact FIRST UNION NATIONAL BANK N.C. By /s/ William R. Goley ----------------------------------------------- Name: William R. Goley Title: Vice President AIM FLOATING RATE FUND BY: INVESCO Senior Secured Management, Inc. as Attorney in Fact By ------------------------------------------------ Name: Title: FRANKLIN FLOATING RATE TRUST By ------------------------------------------------ Name: Title: GENERAL ELECTRIC CAPITAL CORP. By ------------------------------------------------ Name: Title: GLENEAGLES TRADING LLC By /s/ Ann E. Morris ----------------------------------------------- Name: Ann E. Morris Title: Assistant Vice President HIGHLAND LEGACY LIMITED By: Highland Capital Management, L.P., as Collateral Manager By: /s/ Mark K. Okada ---------------------------------------------- Name: Mark K. Okada Title: Executive Vice President JISSEKIKUN FUNDING, LTD. (Acct 1288) By: Pacific Investment Management Company, as its Investment Advisor By /s/ Mohan V. Phansalkar --------------------------------------------- Name: Mohan V. Phansalkar Title: Executive Vice President KZH CYPRESSTREE-1 LLC By /s/ Susan Lee --------------------------------------------- Name: Susan Lee Title: Authorized Agent KZH LANGDALE LLC By /s/ Susan Lee ----------------------------------------------- Name: Susan Lee Title: Authorized Agent KZH HIGHLAND-2 LLC By /s/ Susan Lee ----------------------------------------------- Name: Susan Lee Title: Authorized Agent KZH PAMCO LLC By /s/ Susan Lee ----------------------------------------------- Name: Susan Lee Title: Authorized Agent MAPLEWOODS (CAYMAN) LIMITED BY: MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY, AS INVESTMENT MANAGER By ------------------------------------------------ Name: Title: MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY By ------------------------------------------------ Name: Title: MASSMUTUAL HIGH YIELD PARTNERS II, LLC By: HYP Management, Inc. By ------------------------------------------------ Name: Title: MERRILL LYNCH SENIOR FLOATING RATE FUND, INC. By /s/ Jamin Patel ----------------------------------------------- Name: Jamin Patel Title: Authorized Signatory MASTER SENIOR FLOATING RATE TRUST, INC. By: Merrill Lynch Asset Management, L.P., as Investment Advisor By /s/ Jamin Patel ----------------------------------------------- Name: Jamin Patel Title: Authorized Signatory MERRILL LYNCH PRIME RATE PORTFOLIO By: Merrill Lynch Asset Management, L.P., as Investment Advisor By /s/ Jamin Patel ----------------------------------------------- Name: Jamin Patel Title: Authorized Signatory METROPOLITAN LIFE INSURANCE COMPANY By /s/ James R. Dingler ----------------------------------------------- Name: James R. Dingler Title: Director ML CLO XX PILGRIM AMERICA (CAYMAN) By ------------------------------------------------ Name: Title: MORGAN STANLEY DEAN WITTER PRIME INCOME TRUST By ------------------------------------------------ Name: Title: NATEXIS BANQUE POPULAIRES By: ----------------------------------------------- Name: Title: NEMEAN CLO, LTD. By ----------------------------------------------- Name: Title: NORTH AMERICAN SENIOR FLOATING RATE FUND By ------------------------------------------------ Name: Title: OAK HILL SECURITIES FUND, L.P. By: Oak Hill Securities GenPar, L.P., its General Partner By: Oak Hill Securities Mrp Inc., its General Partner By /s/ Scott D. Krase ----------------------------------------------- Name: Scott D. Krase Title: Vice President 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: Vice President OAKHILL CREDIT PARTNERS I, LIMITED By: Oak Hill CLO Management, LLC as Investment Manager By /s/ Scott D. Krase ----------------------------------------------- Name: Scott D. Krase Title: Authorized Signatory OASIS COLLATERALIZED HIGH INCOME PORTFOLIO-1, LTD. By: INVESCO Senior Secured Management, Inc. as Subadviser By /s/ Joseph Rotondo ----------------------------------------------- Name: Joseph Rotondon Title: Authorized Signatory ORIX USA CORPORATION By ------------------------------------------------ Name: Title: PILGRIM PRIME RATE TRUST By: Pilgrim Investments, Inc., as its investment manager By ------------------------------------------------ Name: Title: PAMCO CAYMAN LTD. By: Highland Capital Management, L.P. as Collateral Manager By /s/ Mark K. Okada ----------------------------------------------- Name: Mark K. Okada Title: Executive Vice President PILGRIM AMERICA HIGH INCOME INVESTMENTS LTD. By: Pilgrim Investments, Inc. as its investment manager By ------------------------------------------------ Name: Title: PILGRIM CLO 1999-1 LTD. By: Pilgrim Investments, Inc. as its investment manager By ----------------------------------------------- Name: Title: PROMETHEUS INVESTMENT FUNDING I LTD By: CPF Asset Advisory, LLC, as Investment Manager By /s/ Thomas L. Mowat ----------------------------------------------- Name: Thomas L. Mowat Title: Associate Director By /s/ Timothy L. Harrod ----------------------------------------------- Name: Timothy L. Harrod Title: Managing Director PUTNAM DIVERSIFIED INCOME TRUST By: ----------------------------------------------- Name: Title: PUTNAM HIGH YIELD ADVANTAGE FUND By: ----------------------------------------------- Name: Title: PUTNAM HIGH YIELD MANAGED TRUST By: ----------------------------------------------- Name: Title: PUTNAM HIGH YIELD TRUST By: ----------------------------------------------- Name: Title: PUTNAM HIGH YIELD TRUST II By: ----------------------------------------------- Name: Title: PUTNAM MASTER INCOME TRUST By: ----------------------------------------------- Name: Title: PUTNAM MASTERINTERMEDIATE INCOME TRUST By: ----------------------------------------------- Name: Title: PUTNAM PREMIER INCOME TRUST By: ----------------------------------------------- Name: Title: PUTNAM STRATEGIC INCOME FUND By: ----------------------------------------------- Name: Title: PUTNAM VT DIVERSIFIED INCOME FUND By: ----------------------------------------------- Name: Title: PUTNAM VARIABLE TRUST HIGH YIELD FUND By: ----------------------------------------------- Name: Title: ROYALTON COMPANY (Acct 280) By: Pacific Investment Management Company, as its Investment Advisor By /s/ Mohan V. Phransalkar ----------------------------------------------- Name: Mohan V. Phransalkar Title: Executive Vice President SEQUILS - PILGRIM I, LTD. By: Pilgrim Investments, Inc. as its investment manager By ----------------------------------------------- Name: Title: SIMSBURY CLO, LIMITED BY: MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY, AS COLLATERAL MANAGER By ----------------------------------------------- Name: Title: SRV HIGHLANDS, INC. By /s/ Ann E. Morris ----------------------------------------------- Name: Ann E. Morris Title: Assistant Vice President TEXTRON FINANCIAL CORPORATION By /s/ Matthew J. Colgan ----------------------------------------------- Name: Matthew J. Colgan Title: Director TORONTO DOMINION (NEW YORK), INC By /s/ Susan K. Strong ----------------------------------------------- Name: Susan K. Strong Title: Vice President TRAVELERS SERIES FUND-PUTNAM DIV. By ----------------------------------------------- Name: Title: TRITON CDO IV LIMITED By: INVESCO Senior Secured Management, Inc. as Investment Advisor By /s/ Joseph Rotondo ----------------------------------------------- Name: Joseph Rotondo Title: Authorized Signatory VAN KAMPEN PRIME RATE INCOME TRUST By: Van Kampen Investment Advisory Corp. By /s/ Darvin D. Pierce ----------------------------------------------- Name: Darvin D. Pierce Title: Executive Director VAN KAMPEN SENIOR INCOME TRUST By: Van Kampen Investment Advisory Corp. By /s/ Darvin D. Pierce ----------------------------------------------- Name: Darvin D. Pierce Title: Executive Director ML CBO IV (CAYMAN) LTD. By: Highland Capital Management, L.P., as Collateral Manager By /s/ Mark K. Okada ----------------------------------------------- Name: Mark K. Okada Title: Executive Vice President HIGHLAND LOAN FUNDING V LTD. By: Highland Capital Management, L.P., as Collateral Manager By /s/ Mark K. Okada ----------------------------------------------- Name: Mark K. Okada Title: Executive Vice President