Exhibit 10.1

SENIOR SECURED PRIMING AND SUPERPRIORITY
DEBTOR-IN-POSSESSION CREDIT AGREEMENT

DATED AS OF JULY 17, 2008

by and among

VERTIS, INC.,

as Borrower,

THE OTHER PERSONS PARTY HERETO THAT

ARE DESIGNATED AS CREDIT PARTIES,

GENERAL ELECTRIC CAPITAL CORPORATION,

as Agent, L/C Issuer, Swing Line Lender and a Lender,

THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO,

as Lenders,

GE CAPITAL MARKETS, INC.,

as Lead Arranger and Book-Running Manager,

and

BANK OF AMERICA, N.A.,

as Documentation Agent

TABLE OF CONTENTS

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INDEX OF APPENDICES

SENIOR SECURED, PRIMING AND SUPERPRIORITY DEBTOR-IN-POSSESSION CREDIT AGREEMENT

This SENIOR SECURED, PRIMING AND SUPERPRIORITY DEBTOR-IN-POSSESSION CREDIT AGREEMENT is dated as of July 17, 2008 and entered into by and among Vertis, Inc., a Delaware corporation, a debtor and debtor in possession under Chapter 11 of the Bankruptcy Code (as defined below) (“ Vertis ” or the “ Borrower ”), Vertis Holdings, Inc., a Delaware corporation, a debtor and debtor in possession under Chapter 11 of the Bankruptcy Code (“ Holdings ”), certain subsidiaries of Borrower, each a debtor and debtor-in-possession under Chapter 11 of the Bankruptcy Code, as Guarantors, the other persons designated as “Credit Parties” (as defined in Annex A hereto), the financial institutions who are or hereafter become parties to this Agreement as Lenders (the “ Lenders ” and each a “ Lender ”), GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation (in its individual capacity “ GE Capital ”), as Agent and BANK OF AMERICA, N.A., as Documentation Agent.

R E C I T A L S :

WHEREAS, on July 15, 2008 (the “ Petition Date ”), the Borrower and the Guarantors commenced prepackaged Chapter 11 Case Nos. 08-11460 through 08-11466, as administratively consolidated at Chapter 11 Case No. 08-11460 (each a “ Prepackaged Chapter 11 Case ” and collectively, the “ Prepackaged Chapter 11 Cases ”) by filing separate voluntary petitions for reorganization under chapter 11, 11 U.S.C. 101 et seq . (the “ Bankruptcy Code ”), with the United States Bankruptcy Court for the District of Delaware (the “ Bankruptcy Court ”).  The Borrower continues to operate its businesses and manage its properties as a debtor and debtor in possession pursuant to Sections 1107(a) and 1108 of the Bankruptcy Code.

WHEREAS, prior to the Petition Date, certain lenders provided financing to Borrower pursuant to that certain Credit Agreement, dated as of December 22, 2004 among the Borrower, the other credit parties signatory thereto, GE Capital, as agent and lender, and the lenders from time to time signatory thereto (as amended, modified or supplemented through the Petition Date, the “ Pre-Petition Credit Agreement ”);

WHEREAS, the Borrower has requested that Lenders provide a senior secured, superpriority revolving and term debtor-in-possession credit facility to Borrower of $380,000,000 in the aggregate to be used for the purposes set forth in Section 3.6 ;

WHEREAS, Borrower desires to secure all of its Obligations (as hereinafter defined) under the Loan Documents (as hereinafter defined) by granting to Agent, for the benefit of Agent and Lenders, a security interest in and lien upon substantially all of their personal and real property; and

WHEREAS, Holdings, which owns all of the Stock of Vertis, is willing to guaranty all of the Obligations and to pledge to Agent, for the benefit of Agent and Lenders, all of the Stock of Vertis and Holdings’ other Subsidiaries (other than Excluded Foreign Subsidiaries (as hereinafter defined)), and substantially all of its other personal and real property to secure the Obligations; and

WHEREAS, each of Borrower’s Subsidiaries, other than Excluded Foreign Subsidiaries (as hereinafter defined), is willing to guaranty all of the Obligations of Borrower and to grant to Agent, for the benefit of Agent and Lenders, a security interest in and lien upon substantially all of its personal and real property to secure the Obligations; and

WHEREAS, all capitalized terms herein shall have the meanings ascribed thereto in Annex A hereto, which is incorporated herein by reference.

NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants herein contained, Borrower, Credit Parties, Lenders and Agent agree as follows:

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)                                   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.  The Revolving Loan shall be repaid in full in cash on the Commitment Termination Date.  Borrower shall, except as any such Revolving Lender may elect pursuant to Section 1.7 , 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 exceeds the Borrowing Base as set forth in the most recently delivered Borrowing 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

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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.

(iii)                                At Borrower’s option, Borrowing Availability may be increased by an amount up to $20 million in excess of the Borrowing Base (the “ Seasonal DIP Overadvance Facility ”) if Borrower requests, no earlier than July 1, 2008 and no later than July 31, 2008 (the “ Seasonal DIP Overadvance Period ”), the ability to use the Seasonal DIP Overadvance Facility; provided , however , that the Seasonal DIP Overadvance Facility shall be subject to the following additional terms and conditions:  (i) at no time shall the outstanding principal balance of the Revolving Loan (including, without limitation, the Seasonal DIP Overadvance Facility) exceed $130 million (or the then existing maximum committed or court-approved amount of the Revolving Loan, whichever is lesser); (ii) requests for Advances under the Seasonal DIP Overadvance Facility (“ Seasonal DIP Overadvances ”) shall be honored only until the end of the Seasonal DIP Overadvance Period; and (iii) and all outstanding Seasonal DIP Overadvances (including, without limitation, all interest accrued thereon) shall be due, payable and paid in full in cash upon, the earlier of (a) the Commitment Termination Date, or (b) October 15, 2008.  In any event, Agent will retain the right in its reasonable credit judgment from time to time to establish or modify, with respect to the Borrowing Base, additional reserves against availability, including, without limitation, reserves in respect of any adequate protection payments required under the Interim Order and the Final Order with respect to interest accrued prior to the commencement of the Prepackaged Chapter 11 Cases, carve-outs for professionals and standards of eligibility.  If a Seasonal DIP Overadvance is made, or permitted to remain outstanding, pursuant to this Section 1.1(a)(iii) , then all Revolving Lenders shall be bound to make, or permit to remain outstanding, such Seasonal DIP Overadvance based upon their Pro Rata Shares of the Revolving Loan Commitment in accordance with the terms of this Agreement.

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(b)                                  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 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.  Regardless of whether the conditions precedent set forth in this 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

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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)                               Intentionally Omitted.

(v)                                  Each Revolving Lender’s obligation to make Revolving Credit Advances in accordance with Section 1.1(b)(iii)  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) .  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, 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, 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 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 (“ L/C Sublimit ”).

(ii)                                   Reimbursement .  Borrower shall be irrevocably and unconditionally obligated forthwith without presentment, demand, protest or other formalities of any kind, 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 or 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, Swing Line Advance or otherwise shall bear interest payable on demand at the interest rate

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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 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.

(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, 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 ten days prior to the Commitment Termination Date; provided , that 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, further, that the L/C Issuer has the right to terminate such Letter of Credit on

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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 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.

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(d)                                  Funding Authorization .  The proceeds of all Loans made to the Borrower pursuant to this Agreement subsequent to the Closing Date are to be funded by Agent by wire transfer to the account designated by Borrower below (the “ Disbursement Account ”):

Bank:  Bank of America, N.A.

ABA No.:  026-009-593

Bank Address:  Charlotte, North Carolina

Account No.:  3750357673

Reference:  Vertis, Inc.

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.

(e)                                   Term Loan A .  Each Term Loan A Lender agrees, severally and not jointly, to lend to Borrower in one draw, on the Closing Date, its Pro Rata Share of the aggregate amount of $50,000,000 (the “ Term Loan A ”).  The principal amount of the Term Loan A 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(e)  and repaid may not be reborrowed.  The Term Loan A shall be evidenced by one or more promissory notes substantially in the form of Exhibit 1.1(e)  (as amended, modified, extended, substituted or replaced from time to time, each a “ Term Loan A Note ” and, collectively, the “ Term Loan A Notes ”), and, except as any such Lender may elect pursuant to Section 1.7 , the Borrower shall execute and deliver each Term Loan A Note to the applicable Term Loan A Lender.  Each Term Loan A Note shall represent the obligation of Borrower to pay the amount of the applicable Term Loan A Lender’s Term Loan Commitment, together with interest thereon.

(f)                                     Term Loan B .  Each Term Loan B Lender agrees, severally and not jointly, to lend to Borrower in one draw, on the Closing Date, its Pro Rata Share of the aggregate amount of $200,000,000 (the “ Term Loan B ”).  The principal amount of the Term Loan B 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(f)  and repaid may not be reborrowed.  The Term Loan B shall be evidenced by one or more promissory notes substantially in the form of Exhibit 1.1(f)  (as amended, modified, extended, substituted or replaced from time to time, each a “ Term Loan B Note ” and, collectively, the “ Term Loan B Notes ”), and, except as any such Lender may elect pursuant to Section 1.7 , the Borrower shall execute and deliver each Term Loan B Note to the applicable Term Loan B Lender.  Each Term Loan B Note shall represent the obligation of Borrower to pay the amount of the applicable Term Loan B 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

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(or in the case of the Swing Line Loan, for the benefit of the 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, 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) the Term Loan A, the Index Rate plus the Applicable Term Loan A Index Margin per annum, or at the request of Borrower, the applicable LIBOR Rate plus the Applicable Term Loan A LIBOR Margin per annum and (v) the Term Loan B, the Index Rate plus the Applicable Term Loan B Index Margin per annum, or at the request of Borrower, the applicable LIBOR Rate plus the Applicable Term Loan B LIBOR Margin per annum.

The Applicable Margins with respect to Revolving Credit Advances and Letter of Credit Obligations, whether incurred on or after the date hereof, Term Loan A and Term Loan B are as follows:

(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 is a floating rate 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)  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 and without further notice, motion or application to, hearing before, or order from the Bankruptcy Court, 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

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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 be made as a LIBOR Loan, (ii) convert at any time all or any part of outstanding Loans (other than the Swing Line Loan) from Index Rate Loans to LIBOR Loans, (iii) convert any LIBOR 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.  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 that is to bear interest at the LIBOR Rate (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 shall be converted to an Index Rate Loan at the end of its 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 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,

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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 Letter .  Borrower shall pay to GE Capital, individually, and GE Capital Markets, Inc. (“ GECM ”) the Fees specified in that certain fee letter, dated as of July 8, 2008, among Borrower, GE Capital and GECM (the “ GE 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 month prior to the Commitment Termination Date, commencing with the first calendar month following the Closing Date 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) 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 month during which any Letter of Credit Obligation shall remain outstanding, commencing with the first calendar month 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 month 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 fees, charges, costs and expenses of attorneys, auditors, appraisers, consultants and

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advisors, including, without limitation, any operations consultant and any financial advisor engaged by Agent) incurred by Agent 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 including any Field Examinations, Non-Real Estate Fixed Asset Appraisals and Real Estate Appraisals; provided , however , that Borrower shall not be required to pay any fees, costs or expenses incurred by Agent in connection with any Field Examinations, Non-Real Estate Fixed Asset Appraisals or Real Estate Appraisals conducted within six (6) months following the Closing Date unless an Event of Default shall have occurred.  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 advisors, including, without limitation, any operations consultant and any financial advisor engaged by Agent) incurred by Agent 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) action to enforce any Loan Document or to collect any payments due from Borrower or any other Credit Party, or (iv) any of the matters set forth in the preceding sentence.  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 made without further order of the Bankruptcy Court ( i.e. , other than the Interim Order or the Final Order) and 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 the account identified below (the “ Collection Account ”) or such other place as Agent may from time to time designate in writing.

ABA No. 021-001-033

Account Number 502-79-791

Deutsche Trust Company Americas

New York, New York

ACCOUNT NAME: General Electric Capital Corporation-GSF

Reference:  CFN8891 Vertis, Inc.

(b)                                  Borrower shall make each payment under this Agreement not later than 4:00 p.m. (New York time) on the day when due in immediately available funds in Dollars to the Collection Account.  All payments by Borrower of the Obligations shall be made in Dollars.  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 the Collection Account prior to 4:00 p.m. New York time.  Payments received into the Collection Account after 4:00 p.m. (New York time) on any Business Day shall be deemed to

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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 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 Term Loans, in whole or in part, without premium or penalty subject to LIBOR Breakage Costs, if applicable, and after the Term Loans have been repaid in full, Borrower may prepay the Revolving Loan, in whole or in part, and permanently reduce the Revolving Loan Commitment by a corresponding amount; provided , that voluntary prepayments are accompanied by (A) accrued interest on the amount prepaid to the date of the prepayment and (B) the payment of LIBOR Breakage Costs, if applicable.  Prepayments of the Term Loan shall be applied in accordance with Section 1.5(d) .  For the avoidance of doubt, Borrower may borrow and repay Revolving Credit Advances from time to time in accordance with the terms and conditions of this Agreement without any corresponding permanent reduction in the Revolving Loan Commitment.

(b)                                  Prepayments from Asset Dispositions .

(i)                                      Subject to clause (iii)  below, immediately upon receipt of any Net Proceeds, Borrower shall prepay the Loans in an amount equal to 100% of such Net Proceeds.

(ii)                                   Notwithstanding anything to the contrary in this Agreement (but subject to clause (iii) below), payments from (a) insurance proceeds or (b) condemnation proceeds, in each case, from casualties or losses to Collateral shall be used to prepay the Loans 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 subject to the Interim Order or the Final Order, as applicable.

(iii)                                Borrower or its Subsidiaries may reinvest up to $5,000,000 in the aggregate of Net Proceeds, insurance proceeds and condemnation proceeds in any Fiscal Year in fixed assets, within ninety (90) days after receipt of such Net Proceeds, insurance proceeds and condemnation proceeds.  If the period set forth in the immediately preceding sentence expires without Borrower having reinvested such Net Proceeds, insurance proceeds and condemnation proceeds (as applicable), Borrower shall prepay the Loans in an amount equal to any such Net Proceeds, insurance proceeds and condemnation proceeds (as applicable) not reinvested in accordance with Section 1.5(d) .

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(c)                                   Prepayments from Issuance of Debt and Equity Issuances .  Immediately upon the receipt by Holdings, Borrower or any of their Subsidiaries of the proceeds of (i) the issuance of Stock, or (ii) the incurrence of Indebtedness by Holdings, Borrower or any of its Subsidiaries (other than Indebtedness permitted under Section 5.1 ), Borrower shall prepay the Loans in an amount equal to 100% of 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) .

(d)                                  Application of Proceeds .  With respect to any prepayments of the Term Loans made by Borrower pursuant to Section 1.5(a) , such prepayments shall be applied to the outstanding principal balance of the Term Loans ratably as to the outstanding principal balance of Term Loan A and the outstanding principal balance of Term Loan B.  With respect to any prepayments made by Borrower pursuant to Sections 1.5(b) or (c) , such prepayments shall be applied (in each case, on a pari passu basis, to any liquidated, non-contingent outstanding balance of the Pre-Petition Lender Expense Claims) (i) with respect to the proceeds of that portion of the assets at issue that comprise all or a portion of the Borrowing Base, first , to that portion of the outstanding principal balance of the Swing Line Advances attributable to those Swing Line Advances made on account of the applicable assets, which application shall effect a permanent reduction to the Revolving Loan Commitment, second , to that portion of the outstanding principal balance of the Revolving Credit Advances attributable to those Revolving Credit Advances made on account of the applicable assets, which application shall effect a permanent reduction to the Revolving Loan Commitment, third , to the outstanding principal balance of the Term Loans ratably as to the outstanding principal balance of Term Loan A and the outstanding principal balance of Term Loan B, and fourth , to cash collateralize Letters of Credit as provided in Section 1.5(e) ; (ii) with respect to the proceeds of that portion of the assets at issue that comprise all or a portion of the Pre-Petition Borrowing Base other than Accounts (the proceeds of which Accounts shall be subject to the preceding clause (i)), first , to the outstanding principal balance of Term Loan B, second , to the outstanding principal balance of Term Loan A, third , to the outstanding principal balance of the Swing Line Advances, which shall effect a permanent reduction to the Swing Line Commitment and the Revolving Loan Commitment, fourth , to the outstanding principal balance of the Revolving Credit Advances, which shall effect a permanent reduction to the Revolving Loan Commitment, and fifth , to cash collateralize Letters of Credit as provided in Section 1.5(e) ; and (iii) with respect to the proceeds of that portion of the assets at issue that do not comprise all or a portion of the Borrowing Base or the Pre-Petition Borrowing Base, first , to the outstanding principal balance of the Term Loans ratably as to the outstanding principal balance of Term Loan A and the outstanding principal balance of Term Loan B, second , to the outstanding principal balance of the Swing Line Advances, which shall effect a permanent reduction to the Swing Line Commitment and the Revolving Loan Commitment, third , to the outstanding principal balance of the Revolving Credit Advances, which shall effect a permanent reduction to the Revolving Loan Commitment, and fourth , to cash collateralize Letters of Credit as provided in Section 1.5(e) .  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 or Letters of Credit

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are required to be cash collateralized at any time pursuant to the terms of this Agreement, Borrower shall deposit with Agent for the benefit of all Revolving Lenders cash in an amount equal to 105% 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 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 Loans, 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

15

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 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 unless that Lender is able to make or to continue to fund or to maintain such LIBOR Loan, 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 shall terminate and (ii) each such LIBOR Loan shall automatically be converted into an Index Rate Loan.  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 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.

1.9.                               Taxes .

(a)                                   No Deductions .  Any and all payments or reimbursements made hereunder 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

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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 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

17

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]

(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] .

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(h)                                  Lender Indemnification of Agent . If the 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 Foreign 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 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.                         Priming and Super Priority Nature of Obligations and Lenders’ Liens . The priority of Lenders’ Liens on the Collateral and the superpriority administrative expense claims of Agent and Lenders shall be set forth in the Interim Order and the Final Order.

1.11.                         Payment of Obligations . Notwithstanding the provisions of section 362 of the Bankruptcy Code, and subject to the applicable provisions of the Interim Order or Final Order, as the case may be, upon the maturity (whether by acceleration or otherwise) of any of the Obligations, Agent and Lenders shall be entitled to immediate payment of such Obligations and to enforce the remedies provided for hereunder or under applicable law, in accordance with provisions of the Interim Order and the Final Order, as applicable.

SECTION 2.
CONDITIONS TO LOANS

The obligations of Lenders and L/C Issuers to make Loans, including to issue or cause to be issued Letters of Credit, are subject to satisfaction or waiver of all of the applicable conditions set forth below.

2.1.                               Conditions to Initial Loans . The obligations of Lenders and L/C Issuers to make the initial Loans and to issue or cause to be issued Letters of Credit on the Closing Date are, in addition to the conditions precedent specified in Section 2.2 , subject to:

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(a)                                   Loan Documents . Borrower and the Credit Parties shall have delivered all documents listed on, the taking of all actions set forth on and the satisfaction of all other conditions precedent listed in the Closing Checklist attached hereto as Annex C, all in form and substance, or in a manner reasonably satisfactory to Agent and Lenders.

(b)                                  Consummation of Related Transactions . Agent shall have received fully executed copies of the Related Transactions Documents, each of which shall be in full force and effect in form and substance reasonably satisfactory to Agent. The Related Transactions shall have been consummated in accordance with the terms of the Related Transactions Documents.

(c)                                   Acquisition . All documentation relating to the Acquisition shall have been completed in form and substance reasonably satisfactory to Agent. All such documentation shall be in form and substance satisfactory to the Agent (it being understood that the Agent is satisfied with the Merger Agreement). All conditions precedent to the Acquisition required to have been met prior to or upon the commencement of the Prepackaged Chapter 11 Cases shall have been met (or waived with the written consent of Agent).

(d)                                  Restructuring . All documentation relating to the Restructuring, including all bondholder and noteholder and other interested party consents and approvals, shall have been completed in form and substance satisfactory to the Agent. All such documentation shall be on terms and conditions acceptable to the Agent (it being understood that the Restructuring Agreement and the Ancillary Noteholder Agreements are acceptable to the Agent). All conditions precedent to the Restructuring required to have been met prior to or upon the commencement of the Prepackaged Chapter 11 Cases shall have been met (or waived with the written consent of the Agent).

(e)                                   Absence of Litigation . Except as may be stayed by the Prepackaged Chapter 11 Cases, there shall not exist any action, suit, investigation, litigation or proceeding pending or threatened in any court or before any arbitrator or governmental authority that has or could reasonably be expected to have a material adverse effect on Holdings, Borrower, the Acquired Business, their respective subsidiaries, taken as a whole, the transactions, this Agreement or any of the other transactions contemplated hereby.

(f)                                     No Material Adverse Effect . Since December 31, 2007, and except for the filing of the Prepackaged Chapter 11 Cases and as otherwise disclosed, there have been no events, circumstances, developments or other changes in facts that would, in the aggregate, have a Material Adverse Effect. “ Material Adverse Effect ” means an effect that results in or causes, or could reasonably be expected to result in or cause, a material adverse change in any of (a) the condition (financial or otherwise), business, performance, operations or property of Holdings , Borrower , the Acquired Business and their respective Subsidiaries, taken as a whole; (b) the ability of Borrower, the Acquired Business or any Guarantor to perform their respective obligations hereunder or under the Interim Order; and (c) the validity or enforceability hereof or of the Interim Order or the rights and remedies of Agent, the Lenders and the other secured parties hereunder or under the Interim Order.

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(g)                                  Receipt of Interim Financial Statements . Agent shall have received and be satisfied with, to the extent available, interim unaudited monthly financial statements of Holdings and its subsidiaries, including Borrower, for each month ending after April 30, 2008.

(h)                                  Receipt of Business Plans . Agent shall have received and be satisfied with (i) a pro forma estimated balance sheet of Holdings and its subsidiaries, including Borrower, at the Petition Date after giving effect to the transactions contemplated by the Restructuring Agreement and the Merger Agreement, (ii) the Approved Budget (i.e., for the first 13 weeks after the commencement of the Prepackaged Chapter 11 Cases) and (iii) the Business Plan.

(i)                                      Outstanding Debts and Liens . Agent shall be satisfied that: (i) all outstanding non-contingent obligations under the A/R Securitization Facility shall have been repaid in full in cash with proceeds of the initial Loans hereunder, and the A/R Securitization Facility shall have been terminated; and (ii) all Pre-Petition Revolving Credit Advances and Pre-Petition Letter of Credit Obligations shall have been repaid (or, as applicable, cash collateralized) in full in cash with proceeds of the Term Loan B.

(j)                                      Revolving Loan Outstandings and Borrowing Availability . On the date of entry of the Interim Order in the Prepackaged Chapter 11 Cases and on the Closing Date, after giving effect to the Related Transactions and the other transactions contemplated in this Agreement, no more than $50,000,000 will be outstanding under the Term Loan A, no more than $200,000,000 will be outstanding under the Term Loan B and no more than $95,000,000 (including issued Letters of Credit) will be outstanding under the Revolving Loan; and Borrower shall have Borrowing Availability of at least $1,000,000.

(k)                                   Interim Order . Entry by the Bankruptcy Court of the Interim Order, by no later than 5 days after the Petition Date in form and substance satisfactory to Lenders, among other things, (x) approving the transactions contemplated hereby, (y) granting a first priority perfected security interest in the Collateral subject only to the Carve-Out, the Pari Passu Replacement Liens and the Non-Primed Liens, and (z) modifying the automatic stay to permit the creation and perfection of Lenders’ Liens and, subject to the conditions set forth in the Interim Order, vacating the automatic stay to permit enforcement of Lenders’ default-related rights and remedies under this agreement, the other Loan Documents and applicable law.

(l)                                      Bankruptcy Court Orders . The entry of all orders described or referred to herein shall have been upon proper notice as may be required by the Bankruptcy Code, the Federal Rules of Bankruptcy Procedure and any applicable bankruptcy rules.

(m)                                Plan Confirmation Deadline . No later than July 18, 2008, the Borrower shall have obtained from the Bankruptcy Court an order, in form and substance acceptable to Agent, scheduling the hearing to consider confirmation of the Plan of Reorganization to take place no later than the deadline for the confirmation of the Plan of Reorganization set forth in Section 8.04(d) of the Restructuring Agreement (as such deadline may be and actually is extended pursuant to the terms and conditions thereof) (the “ Confirmation Deadline ”).

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2.2.                               Conditions to All Loans . Except as otherwise expressly provided herein, no Lender or L/C Issuer shall be obligated to fund any Advance or incur any Letter of Credit Obligation, if, as of the date thereof (the “ Funding Date ”):

(a)                                   any representation or warranty by any Credit Party contained herein or in any other Loan Document is untrue or incorrect in any material respect (without duplication of any materiality qualifier contained therein) as of such date, except to the extent that such representation or warranty expressly relates to an earlier date, and Agent or Requisite Lenders have determined not to make such Advance or incur such Letter of Credit Obligation as a result of the fact that such warranty or representation is untrue or incorrect;

(b)                                  any Default or Event of Default has occurred and is continuing or would result, after giving effect to any Advance (or the incurrence of any Letter of Credit Obligation), and Agent or Requisite Lenders shall have determined not to make any Advance or incur any Letter of Credit Obligation as a result of that Default or Event of Default;

(c)                                   after giving effect to any Advance (or the incurrence of any Letter of Credit Obligations), the outstanding amount of the Revolving Loan would exceed remaining Borrowing Availability (except as provided in Section 1.1(b)(ii)) ;

(d)                                  the Advance requested would cause the aggregate outstanding amount of the Loans and/or Letter of Credit Obligations to exceed the amount then authorized by the Interim Order or the Final Order, as the case may be, or any order modifying, reversing, staying or vacating either such order shall have been entered; or

(e)                                   (i) the Interim Order or the Final Order, as the case may be, shall have been vacated, stayed, reversed, modified or amended without Lenders’ consent or shall otherwise not be in full force and effect, or (ii) an appeal of either such order shall have been timely filed and such order is subject to a stay pending appeal.

The request and acceptance by Borrower of the proceeds of any Advance, the incurrence of any Letter of Credit Obligations or the conversion or continuation of any Loan into, or as, a LIBOR Loan shall be deemed to constitute, as of the date thereof, (i) a representation and warranty by Borrower that the conditions in this Section 2.2 have been satisfied and (ii) a reaffirmation by Borrower of the granting and continuance of Agent’s Liens, on behalf of itself and Lenders, pursuant to the Collateral Documents.

SECTION 3.
REPRESENTATIONS AND WARRANTIES

To induce Agent and Lenders to enter into the Loan Documents, to make Loans and to issue or cause to be issued Letters of Credit, Borrower and the other Credit Parties executing this Agreement, jointly and severally, represent, warrant and covenant to Agent and each Lender that the following statements are and remain true, correct and complete until the Termination Date with respect to all Credit Parties:

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3.1.                               Organization, Powers, Capitalization and Good Standing .

(a)                                   Organization and Powers . Each of the Credit Parties and each of their Subsidiaries is duly organized, validly existing and (in relation to Domestic Subsidiaries) in good standing under the laws of its jurisdiction of organization and qualified to do business in all states where such qualification is required except where failure to be so qualified would not reasonably be expected to have a Material Adverse Effect. As of the Closing Date, the jurisdiction of organization and all jurisdictions in which each Credit Party is qualified to do business are set forth on Schedule 3.1(a) . Subject to the entry of the Interim Order (or the Final Order, as applicable), each of the Credit Parties and each of their material Subsidiaries has all requisite organizational power and authority to own and operate its properties, to carry on its business as now conducted and proposed to be conducted, to enter into each Related Transactions Document to which it is a party and to incur and/or guarantee the Obligations, grant liens and security interests in the Collateral and carry out the Related Transactions.

(b)                                  Capitalization . As of the Closing Date:  (i) the authorized Stock of each of the Credit Parties and each of their Subsidiaries (other than Holdings) is as set forth on Schedule 3.1(b) ; (ii) all issued and outstanding Stock of each of the Credit Parties and each of their Subsidiaries is duly authorized and validly issued, fully paid, nonassessable, free and clear of all Liens other than Permitted Encumbrances and those in favor of Agent for the benefit of Agent and Lenders, and such Stock was issued in compliance with all applicable state, federal and foreign laws concerning the issuance of securities; (iii) the identity of the holders of the Stock of each of the Credit Parties (other than Holdings) and the percentage of their fully-diluted ownership of the Stock of each of the Credit Parties is set forth on Schedule 3.1(b) ; and (iv) no Stock of any Credit Party or any of their Subsidiaries, other than those described above, are issued and outstanding. Except as provided in Schedule 3.1(b) , as of the Closing Date, there are no preemptive or other outstanding rights, options, warrants, conversion rights or similar agreements or understandings for the purchase or acquisition from any Credit Party (other than Holdings) or any of their Subsidiaries of any Stock of any such entity.

(c)                                   Binding Obligation . Subject to the entry of the Interim Order (or the Final Order, as applicable), this Agreement is, and the other Related Transactions Documents when executed and delivered will be, the legally valid and binding obligations of the applicable parties thereto, each enforceable against each of such parties, as applicable, in accordance with their respective terms, except as may be limited by the effects of general principles of equity.

3.2.                               Disclosure . No representation or warranty of any Credit Party contained in this Agreement, the Financial Statements referred to in Section 3.5 , the other Related Transactions Documents or any other document, certificate or written statement furnished to Agent or any Lender by or on behalf of any such Person for use in connection with the Loan Documents or the Related Transactions Documents contains any untrue statement of a material fact or omitted, omits or will omit to state a material fact necessary in order to make the statements contained herein or therein not misleading in any material respect in light of the circumstances in which the same were made.

3.3.                               No Material Adverse Effect . Since December 31, 2007, there have been no events or changes in facts or circumstances affecting any Credit Party or any of its Subsidiaries

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which have had or would reasonably be expected within the next twelve (12) months to have a Material Adverse Effect other than the commencement of the Prepackaged Chapter 11 Cases.

3.4.                               No Conflict . The consummation of the Related Transactions does not and will not violate or conflict with any laws, rules, regulations or orders of any Governmental Authority or violate, conflict with, result in a breach of, or constitute a default (with due notice or lapse of time or both) under any Contractual Obligation or organizational documents of any Credit Party or any of its Subsidiaries, except if such violations, conflicts, breaches or defaults have not had and would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect.

3.5.                               Financial Statements and Financial Projections . All Financial Statements concerning Holdings, Borrower and their Subsidiaries on a consolidated basis (accompanied by mutually acceptable supplemental non-consolidated information customarily prepared by management) which have been or will hereafter be furnished to Agent pursuant to this Agreement, including those listed below, have been or will be prepared in accordance with GAAP consistently applied (except as disclosed therein) and do or will present fairly in all material respects the financial condition of the entities covered thereby as at the dates thereof and the results of their operations for the periods then ended, subject to, in the case of unaudited Financial Statements, the absence of footnotes and normal year-end adjustments.

(a)                                   The consolidated balance sheets at December 31, 2007 and the related statement of income of Holdings and its Subsidiaries, for the Fiscal Year then ended, audited by Deloitte & Touche LLP.

(b)                                  The consolidated balance sheet at April 30, 2008 and the related statement of income of Holdings and its Subsidiaries for the four (4) months then ended.

The Financial Projections and Approved Budget delivered on or prior to the Closing Date and the updated Approved Budgets delivered pursuant to Section 6.2(h)  represent and will represent as of the date thereof the good faith estimate of Borrower and its senior management concerning the most probable course of their business.

3.6.                               Use of Proceeds; Margin Regulations .

(a)                                   No part of the proceeds of any Loan will be used for “buying” or “carrying” “margin stock” within the respective meanings of such terms under Regulation U of the Board of Governors of the Federal Reserve System as now and from time to time hereafter in effect or for any other purpose that violates the provisions of the regulations of the Board of Governors of the Federal Reserve System. If requested by Agent, each Credit Party will furnish to Agent and each Lender a statement to the foregoing effect in conformity with the requirements of FR Form G-3 or FR Form 0-1, as applicable, referred to in Regulation U.

(b)                                  (i)                                      Borrower shall use the proceeds of Term Loan A available upon entry of the Interim Order and a portion of the proceeds from the Revolving Credit Advances to finance the A/R Purchase; provided , however , that all indemnification obligations of Borrower and Guarantors under the A/R Securitization Facility shall survive and Borrower shall agree to assume all indemnification obligations owed under the A/R Securitization Facility by Vertis

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Receivables, in each case in form and substance acceptable to the Securitization Provider (the “ Surviving A/R Obligations ”); and, provided , further , that, the A/R Obligations Pre-Petition Lien shall survive and continue to encumber the Purchased Facility Assets.

(ii)                                   Borrower shall use the proceeds of Term Loan A first made available upon the entry of the Final Order to repay a portion of the then outstanding Revolving Credit Advances equal to the amount of such proceeds (without any corresponding reduction to the Revolving Loan Commitments).

(iii)                                Borrower shall use the necessary proceeds of Revolving Credit Advances necessary to pay Surviving A/R Obligations (whether incurred prior or subsequent to the Petition Date and at the time and in the manner due under the A/R Securitization Facility).

(iv)                               Borrower shall use the proceeds of Term Loan B, upon the entry of the Interim Order, (A) to pay (or, as applicable, cash collateralize) in full in cash the outstanding balance of the Pre-Petition Revolving Credit Advances, (B) to provide cash collateral for the Pre-Petition Letters of Credit in an amount equal to 102% of the face amount of such Pre-Petition Letters of Credit, and (C) to the extent that there are available any proceeds of the Term Loan B following the satisfaction of the obligations described in the preceding clauses (A) and (B), to repay a portion of the then outstanding Revolving Credit Advances equal to the amount of such remaining proceeds (without any corresponding reduction to the Revolving Loan Commitments). The cash collateral described in clause (B) of the preceding sentence shall be used to reimburse the issuer of any Pre-Petition Letters of Credit for any amounts that such issuer is required to pay in the event that any Pre-Petition Letters of Credit are drawn and for any related fees and expenses of such issuer. Upon the expiration or termination of each Pre-Petition Letter of Credit, any related remaining cash collateral in respect of such Pre-Petition Letter of Credit shall be used to repay a portion of the then outstanding Revolving Credit Advances equal to the amount of such remaining proceeds (without any corresponding reduction to the Revolving Loan Commitments).

(v)                                  Borrower shall use the necessary proceeds of Revolving Credit Advances necessary to pay Pre-Petition Agreement Expenses at the time and in the manner due under the Pre-Petition Loan Documents.

(vi)                               Borrower may also use the proceeds of Revolving Credit Advances to (A) make adequate protection payments set forth in the Interim Order and the Final Order and adequate protection interest payments at the non-default contractual rate in respect of the term loan under the Pre-Petition Credit Agreement and such other adequate protection payments of other pre-petition debt as are acceptable to Agent; (B) pay administrative expenses for goods and services (including capital expenditures) in the ordinary course of business (other than fees and expenses of professional persons) and to the extent set forth on the Approved Budget; (C) pay amounts owing to Agent and Lenders hereunder; (D) prior to an Event of Default, pay (x) professional fees and expenses in accordance with Section 5.05 of the Restructuring Agreement and (y) ordinary course indenture trustee fees and expenses pursuant to the existing terms of the indentures governing the Vertis 2003 Senior Notes, the Vertis Senior Notes and/or the Vertis Senior Subordinated Notes; and (E) prior to an Event of Default, pay fees and expenses of professionals retained by Borrower or the Committee (if any), to the extent set forth in the

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Approved Budget and subject to such exceptions and other agreements as may be agreed to by Agent and Lenders, to the extent such professional fees and expenses are approved by final order of the Bankruptcy Court; provided , however , that Borrower and Guarantors shall consult with Agent as to the form of any interim compensation procedures order that they submit to the Bankruptcy Court and that, in any event, any such order shall preserve Agent’s right to review and object to any monthly, interim or final request for the payment of fees or reimbursement of expenses submitted to the Bankruptcy Court; provided, however, that Borrower and Guarantors shall be prohibited from making any payment under the Interim Order or the Final Order (whether on account of adequate protection, reimbursement of professional or indenture trustee fees and expenses or otherwise) until the Pre-Petition Revolving Credit Advances have been repaid in full in cash and the Pre-Petition Letter of Credit Obligations have been repaid or cash collateralized in full in cash.

(c)                                   None of the Credit Parties is required to register as an “investment company” as defined in, or subject to regulation under, the Investment Company Act of 1940.

3.7.                               Brokers . As of the Closing Date, no broker or finder acting on behalf of any Credit Party or any Subsidiary thereof brought about the obtaining, making or closing of the Loans or the Related Transactions, and no Credit Party or any Subsidiary thereof has any obligation to any Person in respect of any finder’s or brokerage fees in connection therewith.

3.8.                               Compliance with Laws . Each Credit Party represents and warrants that it (i) is in compliance and each of its Subsidiaries is in compliance with the requirements of all applicable laws, rules, regulations and orders of any Governmental Authority (including, without limitation, Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001, and the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56) and the obligations, covenants and conditions contained in all Contractual Obligations other than those laws, rules, regulations, orders and provisions of such Contractual Obligations the noncompliance with which would not be reasonably expected to have, either individually or in the aggregate, a Material Adverse Effect, and (ii) maintains and each of its Subsidiaries maintains all licenses, qualifications and permits referred to above.

3.9.                               Intellectual Property . As of the Closing Date, each of the Credit Parties and its Subsidiaries owns, is licensed to use or otherwise has the right to use, all material Intellectual Property used in or necessary for the conduct of its business as currently conducted that is material to the condition (financial or other), business or operations of such Credit Party and its Subsidiaries, if any, and all such material Intellectual Property is identified on Schedule 3.9 . As of the Closing Date, except as disclosed in Schedule 3.9 , the use of such Intellectual Property by the Credit Parties and their Subsidiaries and the conduct of their businesses does not and has not been alleged by any Person to infringe on the rights of any Person.

3.10.                         Investigations, Audits, Etc . As of the Closing Date, except as set forth on Schedule 3.10 , no Credit Party or any of their Subsidiaries is the subject of any review or audit by the IRS or any governmental investigation concerning the violation or possible violation of any law that would reasonably be expected to result in any Material Adverse Effect.

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3.11.                         Employee Matters . As of the Closing Date, except as set forth on Schedule 3.11 , (a) no Credit Party or Subsidiary of a Credit Party nor any of their respective employees is subject to any collective bargaining agreement, (b) no petition for certification or union election is pending with respect to the employees of any Credit Party or any of their Subsidiaries and no union or collective bargaining unit has sought such certification or recognition with respect to the employees of any Credit Party or any of their Subsidiaries, (c) there are no strikes, slowdowns, work stoppages or controversies pending or, to the best knowledge of any Credit Party after due inquiry, threatened between any Credit Party or any of their Subsidiaries and its respective employees, other than employee grievances arising in the ordinary course of business which could not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect and (d) hours worked by and payment made to employees of each Credit Party and each of their Subsidiaries comply with the Fair Labor Standards Act, to the extent applicable, and each other federal, state, provincial, local or foreign law applicable to such matters. Except as set forth on Schedule 3.11 , no Borrower nor any of their Subsidiaries are party to an employment contract with any executive officer.

3.12.                         Litigation; Adverse Facts . Except as set forth on Schedule 3.12 , there are no judgments outstanding against any Credit Party or any of its Subsidiaries or affecting any property of any Credit Party or any of its Subsidiaries as of the Closing Date, nor is there any Litigation pending, or to the best knowledge of any Credit Party threatened, against any Credit Party or any of its Subsidiaries that would reasonably be expected to result in any Material Adverse Effect.

3.13.                         Ownership of Property; Liens . As of the Closing Date, the real estate (“ Real Estate ”) listed in Schedule 3.13 constitutes all of the material real property owned, leased or subleased by any Credit Party or any of its Subsidiaries. As of the Closing Date, each of the Credit Parties and each of its Subsidiaries owns good and marketable fee simple title to all of its owned Real Estate, and has a valid leasehold interest in all of its leased Real Estate, all as described on Schedule 3.13 , and copies of all such leases or a summary of terms thereof reasonably satisfactory to Agent have been provided or made available to Agent except, in each case, for such failures as would not reasonably be expected to result in any Material Adverse Effect. Schedule 3.13 further describes any Real Estate with respect to which any Credit Party or any of its Subsidiaries is a lessor, sublessor or assignor as of the Closing Date. As of the Closing Date, each of the Credit Parties and each of its Subsidiaries has good title to, or valid leasehold interests in, all of its personal property and assets except, in each case, for such failures as would not reasonably be expected to result in any Material Adverse Effect. As of the Closing Date, none of the properties and assets of any Credit Party or any of its Subsidiaries are subject to any Liens other than Permitted Encumbrances. As of the Closing Date, Schedule 3.13 also describes any purchase options, rights of first refusal or other similar material contractual rights pertaining to any Real Estate. As of the Closing Date, no portion of any Credit Party’s or any of its Subsidiaries’ Real Estate has suffered any damage by fire or other casualty loss that would reasonably be expected to result in any Material Adverse Effect or that has not heretofore been repaired and restored in all material respects to its original condition or otherwise remedied. As of the Closing Date, all material permits required to have been issued or appropriate to enable the Real Estate to be lawfully occupied and used for all of the purposes for which it is currently occupied and used have been lawfully issued and are in full force and effect, except for permits

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which the failure to possess would not reasonably be expected to result in any Material Adverse Effect.

3.14.                         Environmental Matters .

(a)                                   Except as set forth in Schedule 3.14 , as of the Closing Date: (i) the Real Estate is free of contamination from any Hazardous Material except for such contamination that could not reasonably be expected to materially adversely impact the value or marketability of such Real Estate and that could not reasonably be expected to result in Environmental Liabilities of the Credit Parties or their Subsidiaries in excess of $250,000 in the aggregate; (ii) no Credit Party and no Subsidiary of a Credit Party has caused or suffered to occur any Release of Hazardous Materials on, at, in, under, above, to, from or about any of their Real Estate where such Release could reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect; (iii) the Credit Parties and their Subsidiaries are and have been in compliance with all Environmental Laws, except for such noncompliance that could not reasonably be expected to result in Environmental Liabilities of the Credit Parties or their Subsidiaries in excess of $250,000 in the aggregate; (iv) the Credit Parties and their Subsidiaries have obtained, and are in compliance with, all Environmental Permits required by Environmental Laws for the operations of their respective businesses as presently conducted or as proposed to be conducted, except where the failure to so obtain or comply with such Environmental Permits could not reasonably be expected to result in Environmental Liabilities of the Credit Parties or their Subsidiaries in excess of $250,000 in the aggregate, and all such Environmental Permits are valid, uncontested and in good standing; (v) no Credit Party and no Subsidiary of a Credit Party is involved in operations or knows of any facts, circumstances or conditions, including any Releases of Hazardous Materials, that are likely to result in any Environmental Liabilities of such Credit Party or Subsidiary which could reasonably be expected to be in excess of $250,000 in the aggregate, and no Credit Party or Subsidiary of a Credit Party has permitted any current or former tenant or occupant of the Real Estate to engage in any such operations; (vi) there is no Litigation arising under or related to any Environmental Laws, Environmental Permits or Hazardous Material that seeks damages, penalties, fines, costs or expenses in excess of $250,000 in the aggregate or injunctive relief against, or that alleges criminal misconduct by any Credit Party or any Subsidiary of a Credit Party; (vii) no notice has been received by any Credit Party or any Subsidiary of a Credit Party identifying any of them as a “potentially responsible party” or requesting information under CERCLA or analogous state or foreign law statutes or regulations, and to the knowledge of the Credit Parties, there are no facts, circumstances or conditions that may result in any of the Credit Parties or their Subsidiaries being identified as a “potentially responsible party” under CERCLA or analogous state or foreign law statutes or regulations that could reasonably be expected to result in Environmental Liabilities in excess of $250,000; and (viii) the Credit Parties have provided to Agent copies of all existing environmental reports, reviews and audits and all written information pertaining to actual or potential Environmental Liabilities that could reasonably be expected to result in Environmental Liabilities in excess of $250,000, in each case in possession of the Credit Parties relating to any of the Credit Parties or their Subsidiaries.

(b)                                  Each Credit Party hereby acknowledges and agrees that Agent (i) is not now, and has not ever been, in control of any of the Real Estate or affairs of such Credit Party or its Subsidiaries, and (ii) does not, through the provisions of the Loan Documents or otherwise,

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influence any Credit Party’s or its Subsidiaries’ conduct with respect to the ownership, operation or management of any of their Real Estate or compliance with Environmental Laws or Environmental Permits.

3.15.                         ERISA .

(a)                                   Schedule 3.15 lists all Plans and separately identifies all Pension Plans, including Title IV Plans, Multiemployer Plans, ESOPs and Welfare Plans, including all Retiree Welfare Plans. As of the Closing Date, copies of all such listed Plans other than Multiemployer Plans as defined in ERISA Section 3(37)(A), together with a copy of the latest form IRS/DOL 5500-series for each such Plan (other than such Multiemployer Plans) have been provided or made available to Agent. Except with respect to Multiemployer Plans, each Qualified Plan has been determined by the IRS to qualify under Section 401 of the IRC, and the trusts created thereunder have been determined to be exempt from tax under the provisions of Section 501 of the IRC, and nothing has occurred that would cause the loss of such qualification or tax-exempt status. Each Plan is in material compliance with the applicable provisions of ERISA and the IRC, including the timely filing of all reports required under the IRC or ERISA. Neither any Credit Party nor ERISA Affiliate has failed to make any contribution or pay any amount due as required by either Section 412 of the IRC or Section 302 of ERISA or the terms of any such Plan. Neither any Credit Party nor ERISA Affiliate has engaged in a “prohibited transaction,” as defined in Section 406 of ERISA and Section 4975 of the IRC, in connection with any Plan, that would subject any Credit Party to a material tax on prohibited transactions imposed by Section 502(i) of ERISA or Section 4975 of the IRC.

(b)                                  As of the Closing Date, except as set forth in Schedule 3.15 : (i) no Title IV Plan has any Unfunded Pension Liability; (ii) no ERISA Event or event described in Section 4062(e) of ERISA with respect to any Title IV Plan has occurred or is reasonably expected to occur; (iii) there are no pending, or to the knowledge of Borrower, threatened claims (other than claims for benefits in the normal course), sanctions, actions or lawsuits, asserted or instituted against any Plan or any Person as fiduciary or sponsor of any Plan that would reasonably be expected to result in liabilities to the Credit Parties and their ERISA Affiliates in excess of $500,000; (iv) no Credit Party or ERISA Affiliate has incurred or reasonably expects to incur any liability in excess of $500,000 as a result of a complete or partial withdrawal from a Multiemployer Plan; (v) within the last five years no Title IV Plan of any Credit Party or ERISA Affiliate has been terminated, whether or not in a “standard termination” as that term is used in Section 404(b)(1) of ERISA, nor has any Title IV Plan of any Credit Party or ERISA Affiliate (determined at any time within the past five years) with Unfunded Pension Liabilities been transferred outside of the “controlled group” (within the meaning of Section 4001(a)(14) of ERISA) of any Credit Party or ERISA Affiliate; (vi) except in the case of any ESOP, Stock of all Credit Parties and their ERISA Affiliates makes up, in the aggregate, no more than 10% of fair market value of the assets of any Plan measured on the basis of fair market value as of the latest valuation date of any Plan; and (vii) no liability under any Title IV Plan has been satisfied with the purchase of a contract from an insurance company that is not rated AAA by the S&P or an equivalent rating by another nationally recognized rating agency.

(c)                                   Except as would not reasonably be expected to have a Material Adverse Effect, each Foreign Pension Plan is in compliance and in good standing (to the extent such

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concept exists in the relevant jurisdiction) in all material respects with all laws, regulations and rules applicable thereto, including all funding requirements, and the respective requirements of the governing documents for such Foreign Pension Plan; (ii) with respect to each Foreign Pension Plan maintained or contributed to by any Credit Party or any Subsidiary of a Credit Party, (A) that is required by applicable law to be funded in a trust or other funding vehicle, such Foreign Pension Plan is in compliance with applicable law regarding funding requirements except to the extent permitted under applicable law and (B) that is not required by applicable law to be funded in a trust or other funding vehicle, reasonable reserves have been established where required by ordinary accounting practices in the jurisdiction in which such Foreign Pension Plan is maintained; and (iii) no actions or proceedings have been taken or instituted to terminate or wind-up a Foreign Pension Plan with respect to which the Credit Parties or any Subsidiary of a Credit Party could reasonably be expected to have a Material Adverse Effect.

3.16.                         Deposit and Disbursement Accounts . Schedule 3.16 lists all banks and other financial institutions at which any Credit Party maintains deposit or other accounts as of the Closing Date, including any Disbursement Accounts, other than accounts that have an average daily balance for the immediately preceding 30-day period of less than $500,000 in the aggregate for all such accounts and such Schedule correctly identifies the name, address and telephone number of each depository, the name in which the account is held, a description of the purpose of the account, and the complete account number therefor.

3.17.                         Agreements and Other Documents . On or prior to the Closing Date, each Credit Party has provided or made available to Agent or its counsel, on behalf of Lenders, accurate and complete copies (or summaries) of all of the following agreements or documents to which it is subject and each of which is listed in Schedule 3.17 :  supply agreements and purchase agreements not terminable by such Credit Party within sixty (60) days following written notice issued by such Credit Party and involving transactions in excess of $1,000,000 per annum; leases of Equipment having a remaining term of one year or longer and requiring aggregate rental and other payments in excess of $500,000 per annum; licenses and permits held by the Credit Parties, the absence of which would reasonably be expected to have a Material Adverse Effect; instruments and documents evidencing any material Indebtedness or material Guaranteed Indebtedness of such Credit Party and any Lien granted by such Credit Party with respect thereto; and instruments and agreements evidencing the issuance of any equity securities, warrants, rights or options to purchase equity securities of such Credit Party.

3.18.                         Insurance . Each Credit Party represents and warrants that it and each of its Subsidiaries currently maintains in good repair, working order and condition all material properties, if any, as set forth in Section 4.2 and maintains all insurance described in such Section. Schedule 3.18 lists all insurance policies maintained, as of the Closing Date, for current occurrences by each Credit Party.

3.19.                         Taxes and Tax Returns .

(a)                                   As of the Closing Date, (i) all Tax Returns required to be filed by the Credit Parties have been timely and properly filed and (ii) all taxes that are due (other than taxes being or about to be contested in good faith by appropriate proceedings and for which adequate reserves have been provided for in accordance with GAAP) have been paid, except where the

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failure to file Tax Returns or pay Taxes would not have a Material Adverse Effect. No Governmental Authority has asserted any claim for taxes, or to any Credit Party’s knowledge, has threatened to assert any claim for taxes that would, if not paid by a Credit Party, have a Material Adverse Effect. All taxes required by law to be withheld or collected and remitted (including, without limitation, income tax, unemployment insurance and workmen’s compensation premiums) with respect to the Credit Parties have been withheld or collected and paid to the appropriate Governmental Authorities (or are properly being held for such payment), except for amounts the nonpayment of which would not be reasonably likely to have a Material Adverse Effect.

(b)                                  None of the Credit Parties has been notified that either the IRS, or any other Governmental Authority, has raised, or intends to raise, any adjustments with respect to Taxes of the Credit Parties, which adjustments would be reasonably likely to have a Material Adverse Effect.

(c)                                   It is not necessary that this Agreement or any other Loan Document be filed, registered, recorded or enrolled in connection with any Taxes with any court, public office or other authority in any jurisdiction or that any ad valorem stamp duty, stamp duty, documentary, registration or similar tax or duty be paid on the execution or delivery of this Agreement or any other Loan Document.

3.20.                         Senior Indebtedness and Designated Senior Indebtedness . This Agreement, the credit facilities created hereunder and all present and future Obligations constitute the “Senior Credit Facility,” “Senior Indebtedness,” “Secured Indebtedness,” “Subsidiary Guarantor Senior Indebtedness” and “Designated Senior Indebtedness,” as applicable, under and as such terms are defined in the 2003 Senior Secured Debt Documents, the 2002 Senior Debt Documents, the Mezzanine Debt Documents, the February 2003 Senior Subordinated Debt Documents, the Senior Subordinated Debt Documents and any other Subordinated Debt documents. Without limiting the foregoing, all present and future Obligations are hereby designated as “Senior Indebtedness” and “Designated Senior Indebtedness” in each case as such terms are used in the 2003 Senior Secured Debt Documents, the 2002 Senior Debt Documents, the Mezzanine Debt Documents, the February 2003 Senior Subordinated Debt Documents, the Senior Subordinated Debt Documents and any other Subordinated Debt documents.

3.21.                         Reorganization Matters .

(a)                                   The Prepackaged Chapter 11 Cases were commenced on the Petition Date in accordance with applicable law and proper notice thereof and the proper notice for (x) the motion seeking approval of the Loan Documents and the Interim Order and Final Order, (y) the hearing for the approval of the Interim Order, and (z) the hearing for the approval of the Final Order will be given. Borrower shall give, on a timely basis as specified in the Interim Order or the Final Order, as applicable, all notices required to be given to all parties specified in the Interim Order or Final Order, as applicable.

(b)                                  After the entry of the Interim Order, and pursuant to and to the extent permitted in the Interim Order and the Final Order, the Obligations will constitute allowed administrative expense claims in the Prepackaged Chapter 11 Cases having priority over all

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administrative expense claims and unsecured claims against the Borrower now existing or hereafter arising, of any kind whatsoever, including, without limitation, all administrative expense claims of the kind specified in sections 105, 326, 330, 331, 503(b), 506(c), 507(a), 507(b), 546(c), 726, 1114 or any other provision of the Bankruptcy Code or otherwise, as provided under section 364(c)(l) of the Bankruptcy Code, subject, as to priority only, to the Carve-Out.

(c)                                   After the entry of the Interim Order and pursuant to and to the extent provided in the Interim Order and the Final Order, the Obligations will be secured by a valid and perfected first priority Lien on all of the Collateral, subject, as to priority only, to the Carve-Out, the Pari Passu Replacement Liens and the Non-Primed Liens.

(d)                                  The Interim Order (with respect to the period prior to entry of the Final Order) or the Final Order (with respect to the period on and after entry of the Final Order), as the case may be, is in full force and effect has not been reversed, stayed, modified or amended without the Agent’s and Lenders’ consent.

SECTION 4.
AFFIRMATIVE COVENANTS

Each Credit Party executing this Agreement jointly and severally agrees as to all Credit Parties that from and after the date hereof and until the Termination Date:

4.1.                               Compliance With Laws and Contractual Obligations . Except for obligations with respect to which the Bankruptcy Code prohibits any Credit Party from complying, each Credit Party will (a) comply with and shall cause each of its Subsidiaries to comply with (i) the requirements of all applicable material laws, rules, regulations and orders of any Governmental Authority (including, without limitation, laws, rules, regulations and orders relating to taxes, employer and employee contributions, securities, employee retirement and welfare benefits, environmental protection matters and employee health and safety) as now in effect and which may be imposed in the future in all jurisdictions in which any Credit Party or any of its Subsidiaries is now doing business or may hereafter be doing business and (ii) the obligations, covenants and conditions contained in all Contractual Obligations of such Credit Party or any of its Subsidiaries other than those laws, rules, regulations, orders and provisions of such Contractual Obligations the noncompliance with which would not be reasonably expected to have, either individually or in the aggregate, a Material Adverse Effect, and (b) maintain or obtain and shall cause each of its Subsidiaries to maintain or obtain all licenses, qualifications and permits now held or hereafter required to be held by such Credit Party or any of its Subsidiaries, for which the loss, suspension, revocation or failure to obtain or renew, would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect. This Section 4.1 shall not preclude any Credit Party or its Subsidiaries from contesting any taxes or other payments, if they are being diligently contested in good faith in a manner which stays enforcement thereof and if appropriate expense provisions have been recorded in conformity with GAAP, subject to Section 5.2 and no Lien (other than a Permitted Encumbrance) in respect thereof has been created.

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4.2.                               Insurance . Each Credit Party will maintain or cause to be maintained, with financially sound and reputable insurers, public liability and property damage insurance with respect to its business and properties and the business and properties of its Subsidiaries against loss or damage of the kinds customarily carried or maintained by corporations of established reputation engaged in similar businesses and in amounts acceptable to Agent and will deliver evidence thereof to Agent. Each Credit Party will maintain business interruption insurance providing coverage consistent with that in place on the Closing Date. Each Credit Party shall, pursuant to endorsements and/or assignments in form and substance reasonably satisfactory to Agent, (i) cause Agent to be named as lender’s loss payee in the case of casualty insurance, and assignee in the case of all business interruption insurance, in each case for the benefit of Agent and Lenders provided, that, in the event that no Default or Event of Default has occurred and is continuing and that no mandatory prepayment is required under the terms of this Agreement, Agent shall with reasonable promptness return any proceeds so received by Agent to the Borrower, and (ii) cause Agent and each Lender to be named as additional insureds in the case of all liability insurance. In the event any Credit Party fails to provide Agent with evidence of the insurance coverage required by this Agreement, Agent may purchase insurance at such Credit Party’s expense to protect Agent’s interests in the Collateral. This insurance may, but need not, protect such Credit Party’s interests. The coverage purchased by Agent may not pay any claim made by such Credit Party or any claim that is made against such Credit Party in connection with the Collateral. Such Credit Party may later cancel any insurance purchased by Agent, but only after providing Agent with evidence that such Credit Party has obtained insurance as required by this Agreement. If Agent purchases insurance for the Collateral, such Credit Party will be responsible for the costs of that insurance, including interest and other Charges imposed by Agent in connection with the placement of the insurance, until the effective date of the cancellation or expiration of the insurance. The costs of the insurance may be added to the Obligations. The costs of the insurance may be more than the cost of insurance such Credit Party is able to obtain on its own.

4.3.                               Field Examination; Fixed Asset Appraisal; Lender Meeting . Each Credit Party shall permit any authorized representatives of Agent to conduct a field examination of any of the properties of such Credit Party and its Subsidiaries, including its and their financial and accounting records, and to make copies and take extracts therefrom, and to discuss its and their affairs, finances and business with its and their officers and certified public accountants, at such reasonable times during normal business hours and as often as may be reasonably requested (a “ Field Examination ”).Representatives of each Lender will be permitted to accompany representatives of Agent during each Field Examination at such Lender’s expense. In addition to the foregoing, each Credit Party shall permit any authorized representatives of Agent to conduct Fixed Asset Appraisals subject to and upon the terms and conditions set forth in Section 6.2(g)  hereof. In addition to the foregoing, each Credit Party will participate and will cause key management personnel of each Credit Party and its Subsidiaries to participate in a meeting with Agent and Lenders at least once during each year, which meeting shall be held at a mutually agreeable location and time. Notwithstanding the foregoing, the Credit Parties shall not be required to permit Agent to conduct any Field Examinations or Fixed Asset Appraisals within six (6) months following the Closing Date unless an Event of Default shall have occurred.

4.4.                               Organizational Existence . Except as occasioned by the Prepackaged Chapter 11 Cases, and as otherwise permitted by Section 5.6 , each Credit Party will and will cause its

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material Subsidiaries, if any, to at all times preserve and keep in full force and effect its organizational existence and all rights and franchises material to its business; provided , however , that nothing in this Section 4.4 shall prevent the dissolution of any Subsidiary that is not a Credit Party hereunder, or withdrawal by Holdings or any of its Subsidiaries of any Subsidiary’s qualification to do business in any jurisdiction (other than its jurisdiction of organization) where such dissolution or withdrawal would not reasonably be expected to have a Material Adverse Effect, or the withdrawal of the qualification to do business in any jurisdiction of any Subsidiary that is not a Credit Party hereunder.

4.5.                               Environmental Matters . Each Credit Party shall and shall cause each Person within its control to: (a) conduct its operations and keep and maintain its Real Estate in compliance with all Environmental Laws and Environmental Permits other than noncompliance that would not reasonably be expected to have a Material Adverse Effect; (b) implement any and all investigation, remediation, removal and response actions that are appropriate or necessary to maintain the value and marketability of the Real Estate or to otherwise comply with Environmental Laws and Environmental Permits pertaining to the presence, generation, treatment, storage, use, disposal, transportation or Release of any Hazardous Material on, at, in, under, above, to, from or about any of its Real Estate, except where the failure to do so would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect; (c) notify Agent promptly after such Credit Party or any Person within its control becomes aware of any violation of Environmental Laws or Environmental Permits or any Release on, at, in, under, above, to, from or about any Real Estate that is reasonably likely to result in Environmental Liabilities to a Credit Party or its Subsidiaries in excess of $1,000,000; and (d) promptly forward to Agent a copy of any order, notice of actual or alleged violation or liability, request for information or any communication or report received by such Credit Party or any Person within its control in connection with any such violation or Release or any other matter relating to any Environmental Laws or Environmental Permits that would reasonably be expected to (x) have a Material Adverse Effect or (y) result in Environmental Liabilities in excess of $1,000,000, in each case whether or not the Environmental Protection Agency or any Governmental Authority has taken or threatened any action in connection with any such violation, Release or other matter. If Agent at any time has a reasonable basis to believe that there may be a violation of any Environmental Laws or Environmental Permits by any Credit Party or any Person under its control or any Environmental Liability arising thereunder, or a Release of Hazardous Materials on, at, in, under, above, to, from or about any of its Real Estate, that, in each case, would reasonably be expected to have a Material Adverse Effect, then such Credit Party and its Subsidiaries, as applicable, shall, upon Agent’s written request (i) cause the performance of such environmental audits including subsurface sampling of soil and groundwater to assess such potential violations, Environmental Liabilities, or Releases, and preparation of such environmental reports, at Borrower’s expense, as Agent may from time to time reasonably request, which shall be conducted by reputable environmental consulting firms reasonably acceptable to Agent and shall be in form and substance reasonably acceptable to Agent, and (ii) if such Credit Party or Subsidiary, as applicable, fail to perform (or cause performance of) any environmental audit under Section 4.5(d)(i)  above within a reasonable time after receiving a written request from Agent, the Credit Parties shall permit Agent or its representatives to have reasonable access to all Real Estate, to the extent that the Credit Parties have control and authority to permit access to such Real Estate, for the purpose of conducting such environmental audits and testing as Agent deems appropriate, including subsurface

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sampling of soil and groundwater. Borrower shall reimburse Agent for the costs of such audits and tests and the same will constitute a part of the Obligations.

4.6.                               Landlords’ Agreements and Mortgagee Agreements . As reasonably requested by Agent and to the extent not otherwise addressed to Agent’s reasonable satisfaction in the Interim Order or the Final Order, as applicable, or in existing contractual arrangements, each Credit Party shall use reasonable efforts to obtain a landlord’s agreement, mortgagee agreement or bailee letter, as applicable, from the lessor of each leased property, mortgagee of owned property or bailee with respect to any warehouse, processor or converter facility or other location where Collateral is stored or located (other than locations (i) outside the U.S. or (ii) containing Collateral in an aggregate amount not to exceed $1,500,000 for each individual location or for all such locations not to exceed $2,500,000 in the aggregate), which agreement or letter shall contain a waiver or subordination of all Liens or claims that the landlord, mortgagee or bailee may assert against the Collateral at that location, and shall otherwise be reasonably satisfactory in form and substance to Agent. With respect to such locations or warehouse space leased, owned or where Collateral is stored or located as of the Closing Date and thereafter, if Agent has not received a landlord or mortgagee agreement or bailee letter or (if there is no existing contractual arrangement with respect to providing collateral access) entry of the Final Order providing for collateral access as of the Closing Date (or, if later, as of the date such location is acquired, leased or Collateral stored or located), the Eligible Inventory at that location shall, in Agent’s reasonable discretion, be subject to such Reserves as may be established by Agent in its reasonable credit judgment.

4.7.                               Further Assurances .

(a)                                   Each Credit Party shall, from time to time, execute such guaranties, financing statements, documents, security agreements and reports as Agent or Requisite Lenders at any time may reasonably request to evidence, perfect or otherwise implement the guaranties and security for repayment of the Obligations contemplated by the Loan Documents.

(b)                                  In the event any Credit Party acquires a fee ownership interest in real property after the Closing Date, such Credit Party shall, upon request of Agent, deliver to Agent a fully executed mortgage or deed of trust over such real property in form and substance satisfactory to Agent, together with such title insurance policies, surveys, appraisals, evidence of insurance, legal opinions, environmental assessments and other documents and certificates as shall be reasonably required by Agent.

(c)                                   After the date hereof, each Credit Party shall (i) cause each Person, upon its becoming a Subsidiary of such Credit Party (provided that this shall not be construed to constitute consent by any of the Lenders to any transaction not expressly permitted by the terms of this Agreement), promptly to guaranty the Obligations and to grant to Agent, for the benefit of Agent and Lenders, a security interest in the real, personal and mixed property of such Subsidiary to secure the Obligations and (ii) pledge, or cause to be pledged, to Agent, for the benefit of Agent and Lenders, all of the Stock of such Subsidiary, other than Excluded Foreign Subsidiaries. The documentation for such guaranty, security and pledge shall be substantially similar to the Loan Documents executed concurrently herewith with such modifications as are reasonably requested by Agent.

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4.8.                               Payment of Taxes . Each Credit Party shall timely pay and discharge (or cause to be paid and discharged) all material taxes, assessments and governmental and other charges or levies imposed upon it or upon its income or profits, or upon property belonging to it; provided that such Credit Party shall not be required to pay any such tax, assessment, charge or levy that is being contested in good faith by appropriate proceedings or other appropriate actions diligently conducted and for which the affected Credit Party shall have set aside on its books adequate reserves with respect thereto in conformance with GAAP and deemed appropriate by such Credit Party and its independent public accountants.

4.9.                               Cash Management Systems . Borrower shall, and shall cause each other Credit Party to, enter into Control Agreements providing for full cash dominion with respect to each U.S. deposit account maintained by Borrower or any Subsidiary of Borrower as of or after the Closing Date (other than (a) any payroll account so long as such payroll account either (i) is a zero balance account or (ii) does not contain any amounts in excess of payroll due and payable within four (4) Business Days, (b) accounts funded solely to pay sales and use tax, and any such funds are so used within two (2) Business Days, (c) accounts which individually and in the aggregate at all times have a balance of less than $150,000 and (d) accounts in the name of Borrower or any other Credit Party that hold cash of its customers in a fiduciary capacity). Each such deposit account control agreement shall be in form and substance reasonably satisfactory to Agent.

4.10.                         Covenants Regarding Accounts . In the ordinary course of its business, each Credit Party processes its Accounts in a manner such that each payment received by such Credit Party in respect of an Account is allocated to a specifically identified invoice, which invoice corresponds to a particular Account owing to such Credit Party.

SECTION 5.
NEGATIVE COVENANTS

Each Credit Party executing this Agreement jointly and severally agrees as to all Credit Parties that from and after the date hereof until the Termination Date:

5.1.                               Indebtedness . 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 Indebtedness (other than pursuant to a Contingent Obligation permitted under Section 5.4 ) except:

(a)                                   Indebtedness described on Schedule 5.1 ;

(b)                                  the Obligations, the Surviving A/R Obligations, the Adequate Protection Obligations, the Pre-Petition Term Loans and the 2003 Senior Secured Notes Adequate Protection Obligations;

(c)                                   intercompany Indebtedness arising from loans made in the ordinary course of business by any Credit Party (other than Holdings) (i) to any other Credit Party (other than Holdings) or (ii) to any other Subsidiary in an amount not to exceed $500,000 in aggregate principal amount at any time outstanding; provided , that , upon the request of Agent at any time, such Indebtedness shall be evidenced by unsecured promissory notes (each, an “ Intercompany

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Note ”), the sole originally executed counterparts of which shall be pledged and delivered to Agent, for the benefit of Agent and Lenders, as security for the Obligations;

(d)                                  Subordinated Debt of Holdings and Borrower issued pursuant to the February 2003 Senior Subordinated Notes as in existence as of the Closing Date in an amount not to exceed $293,500,000 in aggregate principal amount at any time outstanding;

(e)                                   the 2002 Senior Debt of Borrower issued pursuant to the 2002 Senior Debt Documents as in existence on the Closing Date in an amount not to exceed $350,000,000 in aggregate principal amount at any time outstanding;

(f)                                     the 2003 Senior Secured Debt of Borrower issued pursuant to the 2003 Senior Secured Debt Documents as in existence as of the Closing Date in an amount not to exceed $350,000,000 in aggregate principal amount at any time outstanding;

(g)                                  the Mezzanine Debt of Holdings issued pursuant to the Mezzanine Debt Documents or other mezzanine debt of Holdings issued on terms and conditions substantially similar to those set forth in the Mezzanine Debt Documents in an amount not to exceed $147,500,000 in aggregate principal amount at any time outstanding (as (x) increased as a result of the issuance of any additional Mezzanine Debt to pay-in-kind any regularly accruing interest on then outstanding Mezzanine Debt in accordance with the terms of the Mezzanine Debt Documents (including interest, which, but for the occurrence of a Default or Event of Default, would be payable in cash) and (y) reduced by any repayments of principal thereof);

(h)                                  Indebtedness not to exceed $10,000,000 in an aggregate principal amount at any time outstanding secured by purchase money Liens or incurred with respect to Capital Leases;

(i)                                      Accrued expenses and current trade accounts payable incurred in the ordinary course of business;

(j)                                      Indebtedness under Interest Rate Protection Agreements reasonably related to outstanding floating or fixed rate debt permitted under this Agreement entered into for non-speculative purposes;

(k)                                   Guaranties of Holdings or any of its Subsidiaries as a guarantor of the lessee under any lease pursuant to which Holdings or any of its Subsidiaries is the lessee, so long as such lease is otherwise permitted hereunder;

(l)                                      intercompany Indebtedness that may be deemed to exist by and among the Credit Parties (and solely by and among the Credit Parties) pursuant to the Tax Sharing Agreement;

(m)                                Obligations of any Subsidiary of Holdings incurred with respect to performance bonds and/or fidelity bonds required to be furnished by such Subsidiary in connection with contracts entered into by such Subsidiary in the ordinary course of its business, so long as the aggregate amount of outstanding obligations at any time pursuant to this clause (m) does not exceed $1,000,000;

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(n)                                  Indebtedness of Borrower and/or its Subsidiaries under Currency Agreements, in each case so long as the respective Currency Agreement is reasonably related to revenues or payments of Borrower and/or its Subsidiaries in the respective currency subject to the Currency Agreement and is entered into for non-speculative purposes; and

(o)                                  any other unsecured Indebtedness of the Credit Parties not to exceed $1,000,000 in an aggregate principal amount at any time outstanding.

Notwithstanding the foregoing, no Indebtedness (other than the Pre-Petition Lender Expense Claims and Indebtedness permitted under Section 5.1(h) ) permitted under Section 5.1 shall be permitted to have an administrative expense claim status under the Bankruptcy Code senior to or pari passu with the superpriority administrative expense claims of Agent and the Lenders as set forth herein and in the Interim Order and Final Order.

5.2.                               Liens and Related Matters .

(a)                                   No Liens . The Credit Parties shall not and shall not cause or permit their Subsidiaries to directly or indirectly create, incur, assume or permit to exist any Lien on or with respect to any property or asset of such Credit Party or any such Subsidiary, whether now owned or hereafter acquired, or any income or profits therefrom, except Permitted Encumbrances (including, without limitation, those Liens constituting Permitted Encumbrances existing on the date hereof and renewals and extensions thereof, as set forth on Schedule 5.2 ); provided , that, the provisions of this Section 5.2(a) shall not prevent the creation, incurrence, filing, assumption or existence of the following subject to the priorities provided in the Interim Order or the Final Order, as applicable:

(i)                                      Liens placed after the Petition Date and in accordance with the Bankruptcy Code upon assets used in the ordinary course of business of Holdings or any of its Subsidiaries at the time of acquisition thereof by Holdings or any such Subsidiary or within 90 days thereafter to secure Indebtedness incurred to pay all or a portion of the purchase price thereof, provided that (x) the aggregate outstanding principal amount of all Indebtedness secured by Liens permitted by this clause (i) shall not at any time exceed the amount permitted by Section 5.1(h), and (y) in all events, the Lien encumbering the assets so acquired does not encumber any other asset of Holdings or such Subsidiary;

(ii)                                   Liens in favor of customs and revenue authorities arising after the Petition Date as a matter of law or regulation and in accordance with the Bankruptcy Code to secure the payment of customs duties in connection with the importation of goods and deposits made to secure statutory obligations in the form of excise taxes; and

(iii)                                the Pre-Petition Lender Replacement Liens, the Securitization Provider Replacement Lien, the 2003 Senior Secured Notes Replacement Lien and the Non-Primed Liens.

The prohibition provided for in this Section 5.2 specifically includes, without limitation, any effort by Borrower, any Committee, or any other party-in-interest in any Prepackaged Chapter 11 Case to prime or create pari passu to any claims, Liens or interests of Agent and Lenders any

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Lien (other than for the Carve-Out, the Non-Primed Liens and the Pari Passu Replacement Liens) irrespective of whether such claims, Liens or interests may be “adequately protected”.

(b)                                  No Negative Pledges . The Credit Parties shall not and shall not cause or permit their Subsidiaries to directly or indirectly enter into or assume any agreement (other than the Loan Documents) prohibiting the creation or assumption of any Lien upon its properties or assets, whether now owned or hereafter acquired and other than (i) provisions restricting subletting or assignment under any lease governing a leasehold interest or lease of personal property; (ii) restrictions with respect to a Subsidiary imposed pursuant to any agreement which has been entered into for the sale of disposition of all or substantially all of the equity interests or assets of such Subsidiary, so long as such sale or disposition of all or substantially all of the equity interests or assets of such Subsidiary is permitted under this Agreement; and (iii) restrictions on assignments or sublicensing of licensed Intellectual Property.

(c)                                   No Restrictions on Subsidiary Distributions to Borrower . Except as provided herein, the Credit Parties shall not and shall not cause or permit their Subsidiaries to directly or indirectly create or otherwise cause or suffer to exist or become effective any consensual encumbrance or restriction of any kind on the ability of any such Subsidiary to: (1) pay dividends or make any other distribution on any of such Subsidiary’s Stock owned by Borrower or any other Subsidiary; (2) pay any Indebtedness owed to Borrower or any other Subsidiary; (3) make loans or advances to Borrower or any other Subsidiary; or (4) transfer any of its property or assets to Borrower or any other Subsidiary other than the assets set forth on Schedule 5.8 and other than encumbrances or restrictions existing under or by reason of (i) this Agreement and the other Loan Documents; (ii) customary provisions restricting subletting or assignment of any lease governing a leasehold interest of Holdings or any of its Subsidiaries; and (iii) restrictions imposed by any holder of a Lien permitted under Section 5.2(a)  on the transferability of any asset subject to such Lien.

5.3.                               Investments . The Credit Parties shall not and shall not cause or permit their Subsidiaries to directly or indirectly make or own any Investment in any Person except:

(a)                                   Borrower and its Subsidiaries may make and own Investments in Cash Equivalents subject to Control Agreements in favor of Agent; provided that such Cash Equivalents are not subject to setoff rights;

(b)                                  Each Credit Party may make intercompany loans to other Credit Parties (other than Holdings) to the extent permitted under Section 5.1 ;

(c)                                   Each Credit Party may make equity contributions to other Credit Parties (other than Holdings);

(d)                                  Borrower and its Subsidiaries may each make non-cash Investments in any other Subsidiaries of the Borrower for the purpose of the extinguishment of intercompany Indebtedness solely through the offset of an intercompany receivable to an intercompany payable ( i.e. , no transfer or payment of cash consideration is permitted);

(e)                                   Credit Parties and their Subsidiaries may make loans and advances to employees, officers and directors, to the extent permissible by law, for moving, entertainment,

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travel and other similar expenses in the ordinary course of business consistent with past practices;

(f)                                     Investments existing on the Closing Date, as set forth on Schedule 5.3 and any renewals, amendments and replacements thereof that do not increase the amount thereof;

(g)                                  each Credit Party may hold investments comprised of notes payable, or stock or other securities issued by financially troubled Account Debtors (excluding Affiliates) to such Credit Party pursuant to agreements with respect to settlement of such Account Debtor’s Accounts with such Credit Party negotiated in the ordinary course of business;

(h)                                  Borrower and its Subsidiaries may make advances in the form of a prepayment of expenses, so long as such expenses were incurred in the ordinary course of business and are being paid in accordance with customary trade terms of such Borrower or such Subsidiary;

(i)                                      each of the Subsidiaries of Holdings may acquire and hold accounts receivables owing to any of them, if created or acquired in the ordinary course of business and payable or dischargeable in accordance with customary terms of such Subsidiary;

(j)                                      Borrower may enter into Interest Rate Protection Agreements to the extent permitted in Section 5.1(j) ;

(k)                                   any of the Credit Parties and/or their Subsidiaries may enter into Currency Agreements in accordance with the requirements contained in Section 5.1(n) ; and

(l)                                      Investments representing non-cash consideration received in accordance with Section 5.7 .

5.4.                               Contingent Obligations . The Credit Parties shall not and shall not cause or permit their Subsidiaries to directly or indirectly create or become or be liable with respect to any Contingent Obligation except:

(a)                                   Letter of Credit Obligations and the Pre-Petition Lender Expense Claims;

(b)                                  those resulting from endorsement of negotiable instruments for collection in the ordinary course of business;

(c)                                   those existing on the Closing Date and described in Schedule 5.4 ;

(d)                                  those arising under indemnity agreements to title insurers to cause such title insurers to issue to Agent mortgagee title insurance policies;

(e)                                   those arising with respect to customary indemnification obligations incurred in connection with transactions permitted hereunder;

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(f)                                     those incurred in the ordinary course of business with respect to surety bonds, performance and return-of-money bonds and other similar obligations not exceeding at any time outstanding $1,000,000 in aggregate liability;

(g)                                  those incurred with respect to Indebtedness permitted by Section 5.1 provided that (i) any such Contingent Obligation is subordinated to the Obligations to the same extent as the Indebtedness to which it relates is subordinated to the Obligations and (ii) no Credit Party may incur Contingent Obligations in respect of Indebtedness incurred by any Person that is not a Credit Party under this paragraph (g) ; and

(h)                                  any other Contingent Obligation not expressly permitted by clauses (a)  through (g)  above, so long as any such other Contingent Obligations, in the aggregate at any time outstanding, do not exceed $500,000 and no Credit Party may incur Contingent Obligations in respect of Indebtedness incurred by any Person that is not a Credit Party under this paragraph (h) .

5.5.                               Restricted Payments . The Credit Parties shall not and shall not cause or permit their Subsidiaries to directly or indirectly declare, order, pay, make or set apart any sum for any Restricted Payment, except that:

(a)                                   Each Credit Party other than Holdings may make payments and distributions to Holdings (whether directly or through sequential upstream Restricted Payments) that are used by Holdings to pay federal and state income taxes then due and owing, franchise taxes and other similar licensing expenses incurred in the ordinary course of business, operating expenses and payables owing by Holdings in the ordinary course of its business, and other similar corporate overhead costs and expenses; and

(b)                                  Subsidiaries of Borrower