Exhibit 4.4
EXECUTION COPY
FORBEARANCE
AGREEMENT
This Forbearance Agreement (this
“ Agreement ”) is effective April 2, 2008
and is entered into by and among the following parties:
(a)
VERTIS RECEIVABLES II, LLC, a
Delaware limited liability company (“ Borrower
”);
(b)
WEBCRAFT, LLC, a Delaware limited
liability company (“ Webcraft ”);
(c)
WEBCRAFT CHEMICALS, LLC, a Delaware
limited liability company (“ Webcraft Chemicals
”);
(d)
ENTERON GROUP, LLC, a Delaware
limited liability company (“ Enteron
”);
(e)
VERTIS MAILING, LLC, a Delaware
limited liability company (“ Vertis Mailing
”);
(f)
VERTIS, INC., a Delaware corporation
(“ Vertis ”), as an “Originator”
under the Sale and Servicing Agreement (in such capacity, an
“ Originator ” and together with Webcraft,
Webcraft Chemicals, Enteron and Vertis Mailing, the “
Originators ”) and as “Servicer” under the
Sale and Servicing Agreement referenced below (in such capacity,
the “ Servicer ” and together with the
Originators, the “ Transaction Parties ”);
and
(g)
GENERAL ELECTRIC CAPITAL
CORPORATION, a Delaware corporation, as a “Lender”
party to the Funding Agreement referenced below, as the
“Swing Line Lender” party to the Funding Agreement (in
such capacities, the “ Lender ”) and as
“Administrative Agent” under the Funding Agreement (in
such capacity, the “ Administrative Agent
”).
W I T N E S S E T H
:
WHEREAS, Borrower, the Servicer and
the Originators are parties to that certain Receivables Sale and
Servicing Agreement, dated as of November 25, 2005, including
all annexes, exhibits and schedules thereto (as the same is amended
hereby and as it may from time to time hereafter be further
amended, restated, supplemented or otherwise modified, the “
Sale and Servicing Agreement ”);
WHEREAS, Borrower, the Lenders and
the Administrative Agent are parties to that certain Receivables
Funding and Administration Agreement, dated as of November 25,
2005, including all annexes, exhibits and schedules thereto (as
amended by: (i) that certain First Amendment dated as of
September 5, 2006, (ii) that certain Second Amendment
dated as of March 30, 2007 and (iii) that certain Third
Amendment dated as of March 19, 2008; as the same
is amended hereby and as it may from time to
time hereafter be further amended, restated, supplemented or
otherwise modified, the “ Funding Agreement
”);
WHEREAS, pursuant to the Funding
Agreement, Borrower has assigned all of its right, title and
interest in and to the Sale and Servicing Agreement to the
Administrative Agent, for the benefit of the Administrative Agent,
the Lenders and other parties;
WHEREAS, on April 1, 2008,
Vertis failed to make the interest payment due on April 1,
2008 on Vertis’ 9-3/4% 2003 Senior Secured Notes due
April 1, 2009 issued pursuant to the Indenture, dated as of
June 6, 2003, between Vertis and the indenture trustee party
thereto (such circumstances, excluding any further events or
actions, the “ Missed Payment ”);
WHEREAS, the Missed Payment
(including any resulting potential cross-default under the Existing
Credit Agreement) constitutes (i) an Incipient Event of
Servicer Termination (the “ Existing Incipient Event of
Servicer Termination ”) under Section 8.01(b) of the
Sale and Servicing Agreement and (ii) an Incipient Termination
Event under Section 8.01(c)(1) and
Section 8.01(o)(i) of the Funding Agreement
(collectively, the “ Existing Incipient Termination
Events ”);
WHEREAS, Servicer acknowledges and
agrees that the Existing Incipient Event of Servicer Termination
has occurred and is continuing as of April 1, 2008, and has
not been cured or waived;
WHEREAS, Borrower acknowledges and
agrees that each of the Existing Incipient Termination Events has
occurred and is continuing as of April 1, 2008, and has not
been cured or waived;
WHEREAS, none of the Borrower, the
Administrative Agent or the Lenders, as applicable, has expressly
or impliedly waived either Existing Incipient Termination Event or
the Existing Incipient Event of Servicer Termination, and as a
result of the occurrence of either Existing Incipient Termination
Event or the Existing Incipient Event of Servicer Termination, the
Administrative Agent and the Lenders, as applicable, may, among
other things, refuse to make any Advances to the Borrower, retain
all unapplied amounts in the Agent Account until the next
Settlement Date and apply any remaining unapplied amounts in the
Agent Account on any Settlement date to repay the outstanding
Advances;
WHEREAS, the Borrower and the
Transaction Parties have requested that the Administrative Agent
and the Lenders forbear from the exercise of their rights and
remedies under the Related Documents in respect of the Existing
Incipient Event of Servicer Termination, the Existing Incipient
Termination Events, any “2003 Indenture Event of Servicer
Termination” (as defined below) and any “2003 Indenture
Events of Termination” (as defined below);
WHEREAS, Borrower, the Originators
and the Servicer has requested that Administrative Agent and the
Lenders agree to (i) continue to make Advances and (ii) except
as expressly set forth herein forbear from the exercise of their
rights and remedies under the Related Documents in respect of the
Existing Incipient Event of Servicer Termination, the
Existing
2
Incipient Termination Events, any 2003 Indenture
Event of Servicer Termination and any 2003 Indenture Events of
Termination;
WHEREAS, subject to the terms and
conditions hereof, the Administrative Agent and the Lenders have
agreed to grant these requests;
WHEREAS, subject to the terms and
conditions hereof, the Borrower, the Administrative Agent and the
Lenders have agreed to amend the Funding Agreement as set forth
herein; and
WHEREAS, this Agreement constitutes
a Related Document and these Recitals shall be construed as part of
this Agreement;
NOW, THEREFORE, in consideration of
the mutual covenants set forth herein and for other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as
follows:
1.
Defined
Terms . Each capitalized term
used herein and not otherwise defined herein shall have the meaning
attributed to such term in the Funding Agreement. Each of the
following capitalized terms shall have the meaning set forth
below:
(a)
“
Forbearance Termination Event ” means (i) the
occurrence of any Incipient Termination Event, Termination Event,
Event of Servicer Termination or Incipient Event of Servicer
Termination (other than (A) either Existing Incipient
Termination Event, (B) the Existing Incipient Event of
Servicer Termination, (C) any Termination Event under
Section 8.01(c)(1) or Section 8.01(o)(i) of the
Funding Agreement on account of the Missed Payment (a “
2003 Indenture Termination Events ”) and (D) any
Event of Servicer Termination under Section 8.01(b) of
the Sale and Servicing Agreement on account of the Missed Payment
(a “ 2003 Indenture Event of Servicer Termination
”)), (ii) the failure of Borrower or any Transaction
Party to comply with any term, condition or covenant set forth in
this Agreement, (iii) any representation made by Borrower or
any Transaction Party under or in connection with this Agreement
shall prove to be false in any material respect as of the date when
made, (iv) any acceleration of the obligations under the 2003
Senior Secured Notes or the Credit Agreement or the taking of any
enforcement action or exercise of any right or remedy under the
Credit Agreement or by the holders of the 2003 Senior Secured Notes
or the 2003 Senior Secured Notes Indenture Trustee whether based
upon the Missed Payment or otherwise, and/or (v) the
commencement of any proceeding (whether judicial, extra-judicial,
administrative or otherwise) or the taking of any other action to
liquidate the businesses of Borrower or any Transaction Party or
the property of any such Person, or reorganize the Borrower or any
Transaction Party, including, without limitation, the appointment
of a receiver or other custodian or the making of an assignment to
an assignee for the benefit of creditors or other
custodians.
(b)
“
Forbearance Period ” means the period beginning on the
date hereof and ending on the Forbearance Termination
Date.
(c)
“
Forbearance Termination Date ” means the earliest to
occur of (i) 5:00 p.m. (New York time) on May 27,
2008, (ii) the date upon which a Forbearance Termination Event
occurs or (iii) the “Forbearance Termination Date”
under the Forbearance Agreement
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related to the Existing
Credit Agreement dated as of the date hereof among Vertis, certain
Affiliates of Vertis, the lenders party thereto and General
Electric Capital Corporation, as agent.
2.
Agreement to
Forbear .
(a)
Solely during the
Forbearance Period, the Administrative Agent and the Lenders hereby
agree to forbear from exercising (i) the right to determine
not to make any Advances solely because the Borrower is not able to
satisfy the condition precedent to requesting Advances set forth in
Section 3.02(b) of the Funding Agreement because of the
existence of the Existing Incipient Termination Events, the
Existing Incipient Event of Servicer Termination, any 2003
Indenture Termination Event and any 2003 Indenture Event of
Servicer Termination and (ii) except as specified in
clauses (d) and (e) below, any of their
rights and remedies against Borrower and the Transaction Parties
under the Related Documents that may exist, now or during the
Forbearance Period, by virtue of the Existing Incipient Termination
Events, the Existing Incipient Event of Servicer Termination, any
2003 Indenture Termination Events and any 2003 Indenture Event of
Servicer Termination.
(b)
Nothing in this
Agreement shall be construed as a waiver of or acquiescence to any
Existing Incipient Termination Event, the Existing Incipient Event
of Servicer Termination, any 2003 Indenture Termination Event or
any 2003 Indenture Event of Servicer Termination, and the Existing
Incipient Termination Events and Existing Incipient Event of
Servicer Termination shall continue in existence notwithstanding
the agreement of the Administrative Agent and the Lenders, as set
forth herein, to forbear in the exercise of rights and remedies
against Borrower and the Transaction Parties on the terms and for
the period set forth herein. Except as expressly provided
herein, the execution and delivery of this Agreement shall not:
(i) constitute an extension, modification, or waiver of any
term or aspect of the Sale and Servicing Agreement, the Funding
Agreement or the other Related Documents; (ii) extend the
terms of the Sale and Servicing Agreement, the Funding Agreement,
the due date of any of Borrower Obligations or the due date in
respect of any of the obligations of the Transaction Parties under
the other Related Documents; (iii) give rise to any obligation
on the part of the Administrative Agent or any Lender to extend,
amend, waive or otherwise modify any term or condition of the Sale
and Servicing Agreement, the Funding Agreement or any of the other
Related Documents; or (iv) give rise to any defenses or
counterclaims to the right of the Administrative Agent or any
Lender to compel payment of Borrower Obligations, the obligations
of any of the Transaction Parties under the Related Documents or to
otherwise enforce their rights and remedies under the Sale and
Servicing Agreement, the Funding Agreement and the other Related
Documents. Except as expressly limited herein, the
Administ
