Exhibit 10.1

Execution Version

SECOND AMENDMENT TO SUPERPRIORITY SENIOR DEBTOR-IN-

POSSESSION CREDIT AGREEMENT

This SECOND AMENDMENT TO SUPERPRIORITY SENIOR DEBTOR-IN-POSSESSION CREDIT
AGREEMENT (this “Amendment”) is dated as of October 31, 2017 and entered into by
and among APPVION, INC., a Delaware corporation (the “Borrower”), PAPERWEIGHT
DEVELOPMENT CORP., a Wisconsin corporation (“Holdings”), each lender party
hereto (collectively, the “Lenders” and individually, a “Lender”), and
WILMINGTON TRUST, NATIONAL ASSOCIATION, as administrative agent (the
“Administrative Agent”). Capitalized terms used herein without definition shall
have the same meanings herein as set forth in the DIP Credit Agreement (as
defined below).

PRELIMINARY STATEMENTS:

WHEREAS, the Borrower, Holdings, the Lenders and Administrative Agent are
parties to that certain Superpriority Senior Debtor-in-Possession Credit
Agreement, dated as of October 2, 2017 (the “Original DIP Credit Agreement”);

WHEREAS, the Original DIP Credit Agreement was approved by the Bankruptcy Court
in the Chapter 11 Cases on an interim basis by entry of an order dated
October 3, 2017;

WHEREAS, the DIP Credit Agreement was amended by that certain Amendment to
Superpriority Senior Debtor-In-Possession Credit Agreement, dated as of
October 18, 2017 (the “First Amendment”; the Original DIP Credit Agreement, as
amended by the First Amendment, the “DIP Credit Agreement”);

WHEREAS, the Borrower and Holdings have requested that the Required Lenders
amend the DIP Credit Agreement in certain respects, in each case in accordance
with the terms and subject to the conditions herein set forth, and that the
Administrative Agent acknowledge such amendment; and

WHEREAS, the Administrative Agent and Required Lenders agree to accommodate such
requests of the Borrower and Holdings, in each case on the terms and subject to
the conditions herein set forth;

NOW, THEREFORE, in consideration of the premises and the agreements, provisions
and covenants herein contained, the parties hereto agree as follows:

Section 1. AMENDMENTS TO THE DIP CREDIT AGREEMENT

 

1.1 Amendments to Language

A.    In accordance with Section 10.01 of the DIP Credit Agreement, upon the
occurrence of the Amendment Effective Date (as defined in Section 2 hereof), the
DIP Credit Agreement is amended as follows:

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The DIP Credit Agreement and the Exhibits to the DIP Credit Agreement are hereby
amended to delete the bold, stricken text (indicated textually in the same
manner as the following example: stricken text) and to add the bold,
double-underlined text (indicated textually in the same manner as the following
example: double-underlined text) as set forth in the pages of the DIP Credit
Agreement and the Exhibits thereto attached as Exhibit A hereto.

 

1.2 Modification of Schedules

A.    Schedule 1.01(a): Existing Hedge Agreements. Schedule 1.01(a) to the DIP
Credit Agreement is hereby amended by deleting Schedule 1.01(a) in its entirety
and substituting in place thereof a new Schedule 1.01(a) attached hereto as
Annex I to this Amendment.

B.    Schedule 1.01(b): Existing Letters of Credit. Schedule 1.01(b) to the DIP
Credit Agreement is hereby amended by deleting Schedule 1.01(b) in its entirety
and substituting in place thereof a new Schedule 1.01(b) attached hereto as
Annex II to this Amendment.

C.    Schedule 1.01(c): Existing Cash Management Agreements. Schedule 1.01(c) to
the DIP Credit Agreement is hereby amended by deleting Schedule 1.01(c) in its
entirety and substituting in place thereof a new Schedule 1.01(c) attached
hereto as Annex III to this Amendment.

D.    Schedule 2.01: Commitments and Applicable Percentages. Schedule 2.01 to
the DIP Credit Agreement is hereby amended by deleting Schedule 2.01 in its
entirety and substituting in place thereof a new Schedule 2.01(a) and Schedule
2.01(b) attached hereto as Annex IV to this Amendment.

 

1.3 Letter of Credit Facility

A.    The parties hereto agree that, subject to terms and conditions to be
agreed upon, at the election of the Borrower, a portion of the NM Term Loans,
not in excess of an amount equal to $3,000,000, may be made available for the
issuance of standby letters of credit. The parties hereto further agree that the
DIP Credit Agreement may be amended solely with the consent of the Borrower, the
Administrative Agent, the Required Lenders and the applicable letter of credit
issuer solely to add and/or permit such letter of credit facility.

Section 2. REPRESENTATIONS AND WARRANTIES

In order to induce the Administrative Agent and Lenders to enter into this
Amendment and to amend the DIP Credit Agreement in the manner provided herein,
the Borrower and Holdings hereby, jointly and severally, represent and warrant
to the Administrative Agent and each Lender that the following statements are
true, correct and complete:

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A.    Corporate Power and Authority. Each Loan Party has all requisite corporate
power and authority to enter into this Amendment and to carry out the
transactions contemplated by, and perform its obligations under, the DIP Credit
Agreement as amended by this Amendment (the “Amended Agreement”).

B.    Authorization of Agreements. The execution and delivery of this Amendment
have been duly authorized by all necessary corporate action on the part of the
Borrower and Holdings, as the case may be.

C.    No Conflict. The execution and delivery of this Amendment will not
(i) violate any Requirement of Law, the Organization Documents of the Group
Members or any order, judgement or decree of any court or other agency of
government binding on the Group Members, including the Interim Financing Order,
(ii) conflict with, result in a breach of or constitute (with due notice or
lapse of time or both) a default under any Contractual Obligation of the Group
Members, (iii) result in or require the creation or imposition of any Lien upon
any of the properties or assets of the Group Members (other than the Liens
created under any of the Security Documents), or (iv) require any approval or
consent of any Person under any Contractual Obligations of the Group Members.

D.    No Material Adverse Effect. No Requirements of Law or Contractual
Obligations applicable to any Group Member could reasonably be expected, either
individually or in the aggregate, to have a Material Adverse Effect.

E.    Governmental Consents. The execution and delivery by the Borrower and
Holdings of this Amendment does not and will not require any registration with,
consent or approval of, or notice to, or other action to, with or by, any
federal, state or other governmental authority or regulatory body, including the
Bankruptcy Court.

F.    Binding Obligation. This Amendment has been duly executed and delivered by
the Borrower and Holdings and this Amendment and the Amended Agreement are the
legally valid and binding obligations of the Borrower and Holdings, enforceable
against the Borrower and Holdings in accordance with their respective terms.

G.    Incorporation of Representations and Warranties From DIP Credit Agreement.
The representations and warranties contained in Article V of the DIP Credit
Agreement are and will be true, correct and complete in all material respects on
and as of the Amendment Effective Date to the same extent as though made on and
as of that date, except to the extent such representations and warranties
specifically relate to an earlier date, in which case they were true, correct
and complete in all material respects on and as of such earlier date.

H.    Absence of Default. No event has occurred and is continuing or will result
from the consummation of the transactions contemplated by this Amendment that
would constitute a Default or an Event of Default.

Section 3. ACKNOWLEDGEMENT AND CONSENT

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Each Guarantor listed on the signatures pages hereof (each, a “Guarantor”)
hereby acknowledges and agrees that any of the Guarantee and Collateral
Agreements to which it is a party or otherwise bound shall continue in full
force and effect and that all of its obligations thereunder shall be valid and
enforceable and shall not be impaired or limited by the execution or
effectiveness of this Amendment. Each Guarantor represents and warrants that all
representations and warranties contained in the Amended Agreement and the
Guarantee and Collateral Agreement to which it is a party or otherwise bound are
true, correct and complete in all material respects on and as of the Amendment
Effective Date to the same extent as though made on and as of that date, except
to the extent such representations and warranties specifically relate to an
earlier date, in which case they were true, correct and complete in all material
respects on and as of such earlier date.

Each Guarantor acknowledges and agrees that (i) notwithstanding the conditions
to effectiveness set forth in this Amendment, such Guarantor is not required by
the terms of the DIP Credit Agreement or any other Loan Document to consent to
the amendments to the DIP Credit Agreement effected pursuant to this Amendment
and (ii) nothing in the DIP Credit Agreement, this Amendment or any other Loan
Document shall be deemed to require the consent of such Guarantor to any future
amendments to the DIP Credit Agreement.

Section 4. MISCELLANEOUS

A.    Reference to and Effect on the DIP Credit Agreement and the Other Loan
Documents.

(i)    On and after the Amendment Effective Date, each reference in the DIP
Credit Agreement to “this Agreement”, “hereunder”, “hereof”, “herein” or words
of like import referring to the DIP Credit Agreement, and each reference in the
other Loan Documents to the “Credit Agreement”, “DIP Credit Agreement”,
“thereunder”, “thereof” or words of like import referring to the DIP Credit
Agreement shall mean and be a reference to the Amended Agreement. This Amendment
is a Loan Document.

(ii)    Except as specifically amended by this Amendment, the DIP Credit
Agreement and the other Loan Documents shall remain in full force and effect and
are hereby ratified and confirmed.

(iii)    The execution, delivery and performance of this Amendment shall not,
except as expressly provided herein, constitute a waiver of any provision of, or
operate as a waiver of any right, power or remedy of Administrative Agent or any
Lender under, the DIP Credit Agreement or any of the other Loan Documents.

B.    Fees and Expenses. The Borrower acknowledges that all costs, fees and
expenses incurred with respect to this Amendment and the documents and
transactions contemplated hereby shall be provided for as described in, and
solely to the extent required by, Section 11.04(a) of the DIP Credit Agreement.

C.    Headings. Section and subsection headings in this Amendment are included
herein for convenience of reference only and shall not constitute a part of this
Amendment for any other purpose or be given any substantive effect.

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D.    Applicable Law. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT
LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES AND (TO THE EXTENT
APPLICABLE) THE BANKRUPTCY CODE.

E.    Counterparts; Effectiveness. This Amendment may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed and delivered shall be deemed an original, but all
such counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document. This Amendment shall become effective upon the execution of a
counterpart hereof by the Borrower and the Required Lenders and receipt by the
Borrower and Administrative Agent of written notification of such execution and
authorization of delivery thereof.

F.    Agent Authorization. Each of the undersigned Lenders hereby authorizes the
Administrative Agent to execute and deliver this Amendment and, by its execution
below, each of the undersigned Lenders agrees to be bound by the terms and
conditions of this Amendment.

[Remainder of page intentionally left blank]

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SUPERPRIORITY SENIOR DEBTOR-IN-POSSESSION

CREDIT AGREEMENT

Dated as of October 2, 2017

among

APPVION, INC.,

as the Borrower,

PAPERWEIGHT DEVELOPMENT CORP.,

as Holdings,

WILMINGTON TRUST, NATIONAL ASSOCIATION,

as Administrative Agent

and

The Other Lenders Party Hereto,

and

PJT PARTNERS LP,

as Sole Lead Arranger

As amended by:

Amendment to Superpriority Senior Debtor-In-Possession Credit Agreement, dated
as of October 18, 2017

Second Amendment to Superpriority Senior Debtor-In-Possession Credit Agreement,
dated as of October 31, 2017

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TABLE OF CONTENTS

 

         Page  

ARTICLE I DEFINITIONS AND ACCOUNTING TERMS

     2           1.01  

Defined Terms.

     2           1.02  

Other Interpretive Provisions.

     36           1.03  

Accounting Terms.

     37           1.04  

Rounding.

     3738  

        1.05

 

Times of Day.

     3738  

ARTICLE II THE COMMITMENTS AND CREDIT EXTENSIONS

     3738  

        2.01

 

NM Commitments and NM Term Loans; Roll-Up Loans.

     3738  

        2.02

 

Borrowings, Conversions and Continuations of Loans.

     40  

        2.03

 

[Reserved.]

     4142  

        2.04

 

[Reserved.]

     4142  

        2.05

 

Prepayments.

     4142  

        2.06

 

[Reserved.]

     4344  

        2.07

 

Repayment of Loans.

     4344  

        2.08

 

Interest.

     4445  

        2.09

 

Fees.

     4546  

        2.10

 

Computation of Interest and Fees.

     4647  

        2.11

 

Evidence of Debt.

     4647  

        2.12

 

Payments Generally; Administrative Agent’s Clawback.

     4648  

        2.13

 

Sharing of Payments by Lenders.

     4850  

        2.14

 

[Reserved.]

     4950  

        2.15

 

Defaulting Lenders.

     4950  

        2.16

 

Payment of Obligations; No Discharge; Survival of Claims

     5052  

        2.17

 

Security and Priorities. All of the Obligations shall, subject to the Carve-Out,
at all times:

     5152  

ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY

     5254  

        3.01

 

Taxes.

     5254  

        3.02

 

Illegality.

     5758  

        3.03

 

Inability to Determine Rates.

     5759  

        3.04

 

Increased Costs; Reserves on Eurodollar Rate Loans.    

     5859  

 

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         Page  

        3.05

 

Compensation for Losses.

     5960  

        3.06

 

Mitigation Obligations; Replacement of Lenders.

     5961  

        3.07

 

Survival.

     6061  

ARTICLE IV CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

     6062  

        4.01

 

Conditions of Initial NM Term Loans.

     6062  

        4.02

 

Conditions to Borrowings of NM Term Loans in Excess of Initial NM Availability
Amount.

     6465  

        4.03

 

Conditions to all Borrowings.

     6566  

ARTICLE V REPRESENTATIONS AND WARRANTIES

     6667  

        5.01

 

Financial Condition.

     6668  

        5.02

 

No Change.

     6668  

        5.03

 

Corporate Existence; Compliance with Law.

     6668  

        5.04

 

Power; Authorization; Enforceable Obligations.

     6768  

        5.05

 

No Legal Bar.

     6769  

        5.06

 

Litigation.

     6769  

        5.07

 

No Default.

     6869  

        5.08

 

Ownership of Property; Liens; Insurance.

     6870  

        5.09

 

Intellectual Property.

     6870  

        5.10

 

Taxes.

     6870  

        5.11

 

Federal Regulations.

     6970  

        5.12

 

Labor Matters.

     6971  

        5.13

 

ERISA.

     6971  

        5.14

 

Investment Company Act; Other Regulations.

     7072  

        5.15

 

Subsidiaries.

     7172  

        5.16

 

Use of Proceeds.

     7173  

        5.17

 

Environmental Matters.

     7173  

        5.18

 

Accuracy of Information, etc.

     7274  

        5.19

 

Security Documents.

     7274  

        5.20

 

[Reserved.]

     7375  

        5.21

 

Senior Indebtedness.

     7375  

        5.22

 

Reserved.

     7375  

        5.23

 

S Corporation Status.

     7375  

        5.24

 

Anti-Terrorism Law; Foreign Corrupt Practices Act.

     7375  

 

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         Page  

ARTICLE VI AFFIRMATIVE COVENANTS

     7476  

        6.01

 

Financial Statements.

     7476  

        6.02

 

Certificates; Other Information.

     7577  

        6.03

 

Payment of Obligations.

     7779  

        6.04

 

Maintenance of Existence; Compliance.

     7779  

        6.05

 

Maintenance of Property; Insurance.

     7779  

        6.06

 

Inspection of Property; Books and Records; Discussions.

     7879  

        6.07

 

Notices.

     7880  

        6.08

 

Environmental Laws.

     7981  

        6.09

 

Additional Collateral, etc.

     8081  

        6.10

 

Security Interests; Further Assurances.

     8183  

        6.11

 

Reserved.

     8284  

        6.12

 

Use of Proceeds.

     8284  

        6.13

 

[Reserved]

     8284  

        6.14

 

Approved Budget; Additional Reporting.

     8284  

        6.15

 

Post-Closing Actions.

     8385  

        6.16

 

Senior Indebtedness.

     8486  

        6.17

 

Financial Advisor.

     8486  

        6.18

 

Lender and Advisor Calls.

     8587  

        6.19

 

Case Milestones.

     8587  

        6.20

 

Certain Other Bankruptcy Matters.

     8587  

ARTICLE VII NEGATIVE COVENANTS

     8688  

        7.01

 

Financial Covenants; Budget Compliance Covenants

     8688  

        7.02

 

Indebtedness.

     8789  

        7.03

 

Liens.

     8890  

        7.04

 

Fundamental Changes.

     9092  

        7.05

 

Disposition of Property.

     9193  

        7.06

 

Restricted Payments.

     9294  

        7.07

 

Investments.

     9294  

        7.08

 

Prepayments and Modifications of Certain Debt Instruments or Organization
Documents.

     9395  

        7.09

 

Transactions with Affiliates.

     9496  

        7.10

 

Changes in Fiscal Periods; Accounting Changes.

     9597  

 

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         Page  

        7.11

 

Negative Pledge Clauses.

     9597  

        7.12

 

Clauses Restricting Subsidiary Distributions.

     9597  

        7.13

 

Lines of Business.

     9697  

        7.14

 

Material Agreements.

     9698  

        7.15

 

[Reserved].

     9698  

        7.16

 

Holding Company Status.

     9698  

        7.17

 

PDC Capital Corporation.

     9698  

        7.18

 

ESOP Amendments.

     9798  

        7.19

 

[Reserved].

     9799  

        7.20

 

Embargoed Person.

     9799  

        7.21

 

Sale and Leaseback Transactions.

     9799  

        7.22

 

Locations of Collateral.

     9799  

        7.23

 

Canadian Pension Plans.

     9799  

        7.24

 

Additional Bankruptcy Matters.

     9899  

        7.25

 

Other Superpriority Claims.

     98100  

ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES

     98100  

        8.01

 

Events of Default.

     98100  

        8.02

 

Application of Funds.

     105107  

ARTICLE IX ADMINISTRATIVE AGENT

     105107  

        9.01

 

Appointment.

     105107  

        9.02

 

Administrative Agent in its Individual Capacity.

     106108  

        9.03

 

Exculpatory Provisions.

     106108  

        9.04

 

Reliance by Administrative Agent.

     108110  

        9.05

 

Delegation of Duties.

     108110  

        9.06

 

Successor Administrative Agent.

     108110  

        9.07

 

Non-Reliance on Administrative Agent and Other Lenders.

     109111  

        9.08

 

Name Agents.

     110112  

        9.09

 

Indemnification.

     110112  

        9.10

 

Withholding Taxes.

     110112  

        9.11

 

Lender’s Representations, Warranties and Acknowledgments.

     111113  

        9.12

 

Security Documents and Guaranty.

     111113  

        9.13

 

Administrative Agent May File Bankruptcy Disclosure and Proofs of Claim.

     113115  

 

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         Page  

         9.14

 

Administrative Agent to Provide Notice of Any Required Lenders Action.    

     116  

ARTICLE X [RESERVED]

     114117  

ARTICLE XI MISCELLANEOUS

     114117  

        11.01

 

Amendments, Etc.

     114117  

        11.02

 

Notices; Effectiveness; Electronic Communications.

     116119  

        11.03

 

No Waiver; Cumulative Remedies.

     118121  

        11.04

 

Expenses; Indemnity; Damage Waiver.

     118121  

        11.05

 

Payments Set Aside.

     120123  

        11.06

 

Successors and Assigns.

     121123  

        11.07

 

Treatment of Certain Information; Confidentiality.

     125129  

        11.08

 

Right of Setoff.

     126130  

        11.09

 

Interest Rate Limitation.

     127130  

        11.10

 

Counterparts; Integration; Effectiveness.

     127131  

        11.11

 

Survival of Representations and Warranties.

     127131  

        11.12

 

Severability.

     128131  

        11.13

 

Replacement of Lenders.

     128131  

        11.14

 

Governing Law; Jurisdiction; Etc.

     129132  

        11.15

 

Waiver of Jury Trial.

     130133  

        11.16

 

Waiver of Defenses; No Advisory or Fiduciary Responsibility.

     130134  

        11.17

 

USA PATRIOT Act Notice.

     131134  

        11.18

 

Other Liens on Collateral; Etc.

     131135  

        11.19

 

Acknowledgement and Consent to Bail-In of EEA Financial Institutions.

     131135  

CREDIT AGREEMENT SCHEDULES

 

1.01(a)   Existing Hedge Agreements 1.01(b)   Existing Letters of Credit 1.01(c)
  Existing Cash Management Agreements 1.01(d)   Cost-Cutting Transactions 2.01  
Commitments and Applicable Percentages 5.08   Real Property; Insurance

 

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  5.13(a)   ERISA   5.15   Subsidiaries   5.17   Environmental Matters   6.09  
Guarantors   7.02   Permitted Existing Debt   7.03   Existing Liens 11.02  
Administrative Agent’s Office, Certain Addresses for Notices

EXHIBITS

Form of

 

A    Committed Loan Notice C-1    NM Term Loan Note C-2    Roll-Up Loan Note D
   Compliance Certificate E    Assignment and Assumption G    Approved Budget H
   Interim Financing Order I    Closing Certificate J-1    U.S. Tax Compliance
Certificate (Foreign Lenders That Are Not Partnerships) J-2    U.S. Tax
Compliance Certificate (Foreign Participants That Are Not Partnerships) J-3   
U.S. Tax Compliance Certificate (Foreign Participants That Are Partnerships) J-4
   U.S. Tax Compliance Certificate (Foreign Lenders That Are Partnerships)

 

vi

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SUPERPRIORITY SENIOR DEBTOR-IN-POSSESSION CREDIT AGREEMENT

This SUPERPRIORITY SENIOR DEBTOR-IN-POSSESSION CREDIT AGREEMENT (“Agreement”) is
entered into as of October 2, 2017 among APPVION, INC., a Delaware corporation
(the “Borrower”), PAPERWEIGHT DEVELOPMENT CORP., a Wisconsin corporation
(“Holdings”), each lenderLender from time to time party hereto (collectively,
the “Lenders ” and individually, a “Lender”) , and WILMINGTON TRUST, NATIONAL
ASSOCIATION., as Administrative Agent.

PRELIMINARY STATEMENTS:

WHEREAS, on October 1, 2017 (the “Petition Date”), the Borrower commenced
Chapter 11 Case No. 17-12082 (the “Borrower Chapter 11 Case”) and its Domestic
Subsidiaries (together with the Borrower and any other Person later joined
therewith, the “Debtors”) commenced Case Nos. 17-12083, 17-12084, 17-2085 and
17-12086 (the “Subsidiary Chapter 11 Cases” and together with the Borrower
Chapter 11 Case, the “Chapter 11 Cases”) by filing voluntary petitions for
reorganization under Chapter 11 of the Bankruptcy Code, with the Bankruptcy
Court. The Debtors continue to operate their business and manage their
properties as debtors and debtors-in-possession pursuant to Sections 1107(a) and
1108 of the Bankruptcy Code;

WHEREAS, prior to the Petition Date, the Prepetition First Lien Lenders provided
financing to the Borrower pursuant to that certain Credit Agreement, dated as of
June 28, 2013 (as amended or otherwise modified through the Petition Date, the
“Prepetition First Lien Credit Agreement”), among the Borrower, the other credit
parties signatory thereto, the lenders and issuing banks party thereto
(collectively, the “Prepetition First Lien Lenders”), Jefferies Finance LLC, as
administrative agent (in such capacity, the “Prepetition First Lien
Administrative Agent”), Fifth Third Bank, as revolver agent (in such capacity,
the “Prepetition First Lien Revolver Agent” and together with the Prepetition
First Lien Administrative Agent, the “Prepetition First Lien Agents”);

WHEREAS, the Prepetition First Lien Obligations are secured by a security
interest in substantially all of the existing and after acquired assets of the
Borrower and certain of its Subsidiaries as more fully set forth in the Security
Documents (as defined in the Prepetition First Lien Credit Agreement) and such
security interest is perfected and, with certain exceptions, as described in the
Security Documents (as defined in the Prepetition First Lien Credit Agreement),
has priority over other security interests;

WHEREAS, the Borrower has requested the Lenders provide a term loan facility in
an aggregate principal amount of $325,200,000, consisting of (a) NM Term Loans
in an aggregate principal amount of $85,000,000 and (b) Roll-Up Loans in an
aggregate principal amount of $240,200,000, in each case, for the purposes set
forth in Section 5.16; and

In consideration of the mutual covenants and agreements herein contained, the
parties hereto covenant and agree as follows:

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ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

 

1.01 Defined Terms.

As used in this Agreement, the following terms shall have the meanings set forth
below:

“Acceptable Plan of Reorganization” means a plan of reorganization for each of
the Chapter 11 Cases that (a) provides for the termination of the unused NM
Commitments and the payment in full in cash and full discharge of the
Obligations at emergence or, solely with respect to the Roll-Up Loans, as to
which the Lenders having Roll-Up Loans outstanding at such time that represent
at least 66 2/3% of the sum of all (only if the plan of reorganization does not
provide for the payment in full in cash of all Roll-Up Loans and full discharge
of the Obligations related thereto at emergence), has been accepted in writing
by Lenders that hold at least two-thirds in amount of the outstanding Roll-Up
Loans not being paid in cash have informed the Borrower in writing that such
plan is an “Acceptable Plan of Reorganization”,, and represent more than
one-half in number, of Roll-Up Lenders that have accepted or rejected such plan
of reorganization, and (b) contains releases and other exculpatory provisions
for the Administrative Agent, the Arranger and the Lenders in form and substance
reasonably satisfactory to the Administrative Agent, the Arranger and the
Required Lenders, and (c) is otherwise in form and substance reasonably
satisfactory to the Administrative Agent and the Required Lenders.

“Acquisition Agreement” means that Purchase Agreement, dated as of July 5, 2001,
among the Borrower, AWA and the other parties thereto, as amended prior to the
date hereof and, if in accordance with the terms hereof, on or after the date
hereof.

“Acquisition Documentation” means collectively, the Acquisition Agreement and
all schedules, exhibits and annexes thereto and all side letters and agreements
affecting the terms thereof or entered into in connection therewith including,
without limitation, the Fox River Indemnity Arrangements.

“Actual Capital Expenditures” means, for any Period, the actual Capital
Expenditures of the Loan Parties for such Period.

“Actual Collections” means, for any Period, the actual collections of the Loan
Parties during such Period, including collections from any Foreign Subsidiary,
relating to accounts receivable and for work performed by the Loan Parties, but
excluding any collections from any Disposition.

“Actual Disbursements” means the actual disbursements of the Loan Parties during
the relevant Period, including all cash outflows from each Loan Party including,
without limitation, any transfers to any Foreign Subsidiary.

“Adjusted Eurodollar Rate” means, with respect to any Borrowing of Eurodollar
Rate Loans for any Interest Period, (a) an interest rate per annum (rounded
upward, if necessary, to the next 1/100th of 1%) determined by the
Administrative Agent to be equal to the Eurodollar Rate for such Borrowing of
Eurodollar Rate Loans in effect for such Interest Period divided by

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(b) 1 minus the Statutory Reserves (if any) for such Eurodollar Borrowing for
such Interest Period. Notwithstanding the foregoing, (i) solely with respect to
the Adjusted Eurodollar Rate applicable to the Roll-Up Loans, the Adjusted
Eurodollar Rate with respect to any Interest Period will be deemed to be 1.25%
per annum if the Adjusted Eurodollar Rate for such Interest Period determined
pursuant to this definition would otherwise be less than 1.25% per annum and
(ii) solely with respect to the Adjusted Eurodollar Rate applicable to the NM
Term Loans, the Adjusted Eurodollar Rate with respect to any Interest Period
will be deemed to be 1.00% per annum if the Adjusted Eurodollar Rate for such
Interest Period determined pursuant to this definition would otherwise be less
than 1.00% per annum.

“Administrative Agent” means Wilmington Trust, National Association, in its
capacity as administrative agent under any of the Loan Documents, or any
successor administrative agent.

“Administrative Agent Fee Letter” means the letter agreement, to be dated on or
around the Closing Date, between the Borrower and the Administrative Agent.

“Administrative Agent’s Office” means the Administrative Agent’s address and, as
appropriate, account, in each case as set forth on Schedule 11.02, or such other
address or account of the Administrative Agent as the Administrative Agent may
from time to time notify to the Borrower and the Lenders.

“Administrative Questionnaire” means an Administrative Questionnaire in a form
supplied by the Administrative Agent.

“Affiliate” means, as to any Person, any other Person that, directly or
indirectly, is in control of, is controlled by, or is under common control with,
such Person. For purposes of this definition, “control” of a Person means the
power, directly or indirectly, either to (a) vote 10% or more of the securities
having ordinary voting power for the election of directors (or Persons
performing similar functions) of such Person or (b) direct or cause the
direction of the management and policies of such Person, whether by contract or
otherwise.

“Aggregate Commitments” means the Commitments of all the Lenders.

“Agreement” has the meaning specified in the preamble hereto.

“Anti-Terrorism Laws” has the meaning specified in Section 5.24(a).

“Applicable Percentage” means (a) in respect of the NM Term Loans, with respect
to any NM Lender at any time, the percentage (carried out to the ninth decimal
place) of the NM Term Loans represented by the principal amount of such Lender’s
NM Term Loans at such time and (b) in respect of the Roll-Up Loans, with respect
to any Roll-Up Lender at any time, the percentage (carried out to the ninth
decimal place) of the Roll-Up Loans represented by the principal amount of such
Lender’s Roll-Up Loans at such time. If the Commitment of each Lender to make
Loans has been terminated pursuant to Section 8.01, or if the Commitments have
expired, then the Applicable Percentage of each Lender in respect of the NM Term
Loans shall be determined based on the Applicable Percentage of such Lender in
respect of the NM Term Loans most recently in effect, giving effect to any
subsequent assignments or reallocations. The initial Applicable Percentage of
each Lender in respect of the NM Term Loans and Roll-Up

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Loans (to the extent deemed made on the Closing Date) is set forth opposite the
name of such Lender on Schedule 2.01 or2.01-a; the Applicable Percentage of each
Lender in respect of the NM Term Loans and Roll-Up Loans (to the extent deemed
made on the Final Financing Roll Date) is set forth opposite the name of such
Lender on Schedule 2.01-b; or, in each case, in the Assignment and Assumption
pursuant to which such Lender becomes a party hereto, as applicable.

“Applicable Rate” means, (a) with respect to the NM Term Loans, a percentage
amount equal to (i) if a Base Rate Loan, 8.25% per annum and (ii) if a
Eurodollar Rate Loan, 9.25% per annum, and (b) with respect to the Roll-Up
Loans, a percentage amount equal to (i) if a Base Rate Loan, 5.50% per annum and
(ii) if a Eurodollar Rate Loan, 6.50% per annum.

“Appropriate Lender” means, at any time, (a) with respect to the NM Term Loans,
a Lender that has a NM Commitment or holds a NM Term Loan at such time, and
(b) with respect to the Roll-Up Loans, a Lender that holds a Roll-Up Loan at
such time.

“Approved Bankruptcy Court Order” means (a) each Financing Order, as such order
is amended and in effect from time to time in accordance with this Agreement,
(b) any other order entered by the Bankruptcy Court regarding, relating to or
impacting (i) any rights or remedies of any Secured Party, (ii) the Loan
Documents (including the Loan Parties’ obligations thereunder), (iii) the
Collateral, any Liens thereon or any DIP Superpriority Claims (including,
without limitation, any sale or other disposition of Collateral or the priority
of any such Liens or DIP Superpriority Claims), (iv) use of cash collateral,
(v) debtor-in-possession financing, (vi) adequate protection or otherwise
relating to any of the Prepetition Debt, (vii) any plan of reorganization (it
being understood that any Acceptable Plan of Reorganization is in form and
substance satisfactory to the Administrative Agent and the Required Lenders), or
(viii) any transaction outside of the ordinary course of business with any Loan
Party, in any such case, that (x) is in form and substance reasonably
satisfactory to the Administrative Agent and the Required Lenders, (y) has not
been vacated, reversed or stayed and (z) has not been amended or modified except
as agreed in writing by Administrative Agent and the Required Lenders in their
sole discretion, and (c) any other order entered by the Bankruptcy Court that
(i) is in form and substance reasonably satisfactory to the Administrative Agent
and the Required Lenders, (ii) has not been vacated, reversed or stayed and
(iii) has not been amended or modified except in a manner reasonably
satisfactory to the Administrative Agent and the Required Lenders; provided that
any approval of the Required Lenders under clause (b) or (c) shall be deemed
given if the Required Lenders have not notified the Borrower and the
Administrative Agent otherwise within (2) two Business Days (for matters under
clause (b) above) or (4) four Business Days (for matters under clause (c) above)
after the Lenders receive from the Borrower a copy of the proposed order or
proposed amendment or modification to an order, as applicable.

“Approved Budget” means the budget covering the period ending December 31, 2018,
prepared by the Borrower and furnished to the Administrative Agent and the
Lenders on or prior to the Closing Date and which, in the case of the initial
Approved Budget attached hereto as Exhibit G, was approved by all of the Lenders
and their financial advisors , as the same may be updated, modified or
supplemented from time to time with the approval of the Required Lenders and the
Borrower, as provided in Section 6.14.

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“Approved Fund” means any Fund that is administered or managed by (a) a Lender,
(b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that
administers or manages a Lender.

“Appvion Canada” means Appvion Canada, Ltd., a corporation formed under the Laws
of Canada.

“Arranger” means PJT Partners LP in its capacity as sole lead arranger.

“Asset Sale” means any Disposition of property or series of related Dispositions
of property (including the issuance or sale of any Capital Stock of the Borrower
or any Subsidiary), excluding any such Disposition (i) to any Loan Party or
(ii) permitted by clause (a), (b), (c) (provided that Asset Sales shall include
Dispositions permitted under Section 7.04(b)(iii) and (e)), (d), or (f) of
Section 7.05).

“Assignee Group” means two or more Eligible Assignees that are Affiliates of one
another or two or more Approved Funds managed by the same investment advisor.

“Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an Eligible Assignee (with the consent of any party whose consent is
required by Section 11.06(b)), and accepted by the Administrative Agent in
substantially the form of Exhibit E or any other form approved by the
Administrative Agent.

“Availability Period” means, in respect of the NM Term Loans, the period from
and including the Closing Date to the Termination Date.

“Avoidance Actions” has the meaning assigned to such term in Section 2.17(b).

“Avoidance Proceeds” has the meaning assigned to such term in the Interim
Financing Order or, after entry thereof, the Final Financing Order.

“AWA” means Windward Prospects Ltd., formerly known as Arjo Wiggins Appleton
p.l.c.

“AWA Environmental Indemnity” means the indemnification provided pursuant to the
terms of (i) the AWA Environmental Indemnity Agreement dated November 9, 2001,
as amended, among Holdings, the Borrower, AWA and New Appleton LLC, (ii) the
insurance policy (Policy No. 529 5316) issued by Commerce & Industry Insurance
Company to the Bermuda Company and (iii) any other environmental indemnification
agreement or related insurance policy in favor of the Borrower.

“AWA Environmental Indemnity Agreement” means the Fox River AWA Environmental
Indemnity Agreement, dated as of November 9, 2001, among Holdings, the Borrower
and AWA, as amended prior to the date hereof and, if in accordance with the
terms hereof, on or after the date hereof.

“Backstop Party” means the Majority Lender.

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“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by
the applicable EEA Resolution Authority in respect of any liability of an EEA
Financial Institution.

“Bail-In Legislation” means, with respect to any EEA Member Country implementing
Article 55 of Directive 2014/59/EU of the European Parliament and of the Council
of the European Union, the implementing law for such EEA Member Country from
time to time which is described in the EU Bail-In Legislation Schedule.

“Bankruptcy Code” means 11 U.S.C. §§ 101 et seq.

“Bankruptcy Court” means the United States Bankruptcy Court for the District of
Delaware.

“Base Rate” means, for any day, the prime rate published in The Wall Street
Journal for such day; provided that if The Wall Street Journal ceases to publish
for any reason such rate of interest, “Base Rate” means the prime lending rate
as set forth on the Bloomberg page PRIMBB Index (or successor page) for such day
(or such other service as determined by the Administrative Agent from time to
time for purposes of providing quotations of prime lending interest rates); each
change in the Base Rate shall be effective on the date such change is effective.
The prime rate is not necessarily the lowest rate charged by any financial
institution to its customers. Notwithstanding the foregoing, (a) solely with
respect to the Base Rate applicable to the Roll-Up Loans, the Base Rate will be
deemed to be 2.25% per annum if the Base Rate calculated pursuant to this
definition would otherwise be less than 2.25% per annum and (b) solely with
respect to the Base Rate applicable to the NM Term Loans, the Base Rate will be
deemed to be 2.00% per annum if the Base Rate calculated pursuant to this
definition would otherwise be less than 2.00% per annum.

“Base Rate Loan” means a Term Loan that bears interest based on the Base Rate.

“Beneficial Owner” has the meaning assigned to such term in Rule 13d-3 and Rule
13d-5 under the Exchange Act, except that in calculating the beneficial
ownership of any particular “person” (as that term is used in Section 13(d)(3)
of the Exchange Act), such “person” will be deemed to have beneficial ownership
of all securities that such “person” has the right to acquire by conversion or
exercise of other securities, whether such right is currently exercisable or is
exercisable only after the passage of time. The terms “Beneficially Owns” and
“Beneficially Owned” have a corresponding meaning.

“Bermuda Company” means Arjo Wiggins Appleton (Bermuda) Limited, a company
limited by shares organized under the Companies Act of 1981 of the Island of
Bermuda.

“Bermuda Company Agreements” means the collective reference to (a) the Amended
and Restated Relationship Agreement, dated as of June 11, 2004, among Holdings,
AWA, Holdings Sub, and AWA Sub, (b) the Assignment and Assumption Deed, dated as
of November 9, 2001, between AWA and the Bermuda Company, (c) the By-Laws and
Memorandum of Association of the Bermuda Company, (d) the Certificate of
Incorporation and By-laws of Holdings Sub, (e) the By-Laws and Memorandum of
Association of AWA Sub and (f) the Bermuda Security Agreement.

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“Bermuda Security Agreement” means the Collateral Assignment, dated as of
November 9, 2001, by the Bermuda Company in favor of the Borrower.

“Board of Directors” means: (1) with respect to a corporation, the board of
directors of the corporation or any committee thereof duly authorized to act on
behalf of such board; (2) with respect to a partnership, the board of directors
or managing member or members of the general partner of the partnership; and
(3) with respect to a limited liability company, the managing member or members,
any controlling committee of managing members or other governing body thereof.

“Borrower” has the meaning specified in the introductory paragraph hereto.

“Borrower Chapter 11 Case” has the meaning assigned to such term in the recitals
hereto.

“Borrower Materials” has the meaning specified in Section 6.02.

“Borrowing” means a Term Borrowing.

“Budget Variance Report” means a report, in form and detail reasonably
acceptable to the RequisiteRequired Lenders, certified by a Responsible Officer,
showing by line item: (a) Actual Collections, (b) Actual Disbursements and
(c) Actual Capital Expenditures, in each case, for (i) the Prior Week, (ii) the
immediately preceding Cumulative Four Week Period and (iii) the Cumulative
Period. The Budget Variance Report shall include all variances, on a line-item
basis, from amounts set forth for such Period in the Approved Budget, and shall
include explanations for all material variances.

“Budgeted Collections” means, for any Period, all collections in the amounts set
forth in the Approved Budget for such Period relating to accounts receivable and
for work performed by the Loan Parties, but excluding any collections from any
Disposition.

“Business” has the meaning specified in Section 5.17(b).

“Business Day” means any day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close under the Laws of, or are in fact
closed in, New York, New York, Chicago, Illinois or the state where the
Administrative Agent’s Office with respect to Obligations is located and if such
day relates to any interest rate settings as to a Eurodollar Rate Loan, any
fundings, disbursements, settlements and payments in respect of any such
Eurodollar Rate Loan, or any other dealings to be carried out pursuant to this
Agreement in respect of any such Eurodollar Rate Loan, means any such day on
which dealings in deposits in the relevant currency are conducted by and between
banks in the London or other applicable offshore interbank market for such
currency.

“Capital Expenditures” means, for any period, with respect to any Person, the
aggregate of all expenditures by such Person and its Subsidiaries for the
acquisition or leasing (pursuant to a capital lease) of fixed or capital assets
or additions to equipment (including replacements, capitalized repairs and
improvements during such period) that should be capitalized under GAAP on a
consolidated balance sheet of such Person and its Subsidiaries; provided, that
there shall be excluded (without duplication) from the definition of Capital
Expenditures any such

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expenditures incurred in such period which are (i) funded with the proceeds of
an equity issuance or (ii) reinvestments funded with insurance proceeds or the
net proceeds of any Asset Sale; and provided, further, that all expenditures
related to the maintenance shutdown of the pulp and paper mill located in
Roaring Spring shall be deemed Capital Expenditures for purposes of reporting,
variance reporting and testing covenants described in Section 7.01.

“Capital Lease Obligations” means as to any Person, the obligations of such
Person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations are required to be classified and accounted for as capital
leases on a balance sheet of such Person under GAAP and, for the purposes of
this Agreement, the amount of such obligations at any time shall be the
capitalized amount thereof at such time determined in accordance with GAAP.

“Capital Stock” means, with respect to any Person, all of the shares of Capital
Stock of (or other ownership or profit interests in) such Person, all of the
warrants, options or other rights for the purchase or acquisition from such
Person of shares of Capital Stock of (or other ownership or profit interests in)
such Person, all of the securities convertible into or exchangeable for shares
of Capital Stock of (or other ownership or profit interests in) such Person or
warrants, rights or options for the purchase or acquisition from such Person of
such shares (or such other interests), and all of the other ownership or profit
interests in such Person (including partnership, member or trust interests
therein), whether voting or nonvoting, and whether or not such shares, warrants,
options, rights or other interests are outstanding on any date of determination.

“Carve-Out” means an amount equal to the sum of (i) all fees required to be paid
to the clerk of the Bankruptcy Court or any claims agent retained to perform
such services and to the Office of the United States Trustee under section
1930(a) of title 28 of the United States Code plus interest at the statutory
rate (without regard to the notice set forth in (iii) below); (ii) fees and
expenses of up to $50,000 incurred by a trustee under Section 726(b) of the
Bankruptcy Code (without regard to the notice set forth in (iii) below); and
(iii) allowed and unpaid claims for unpaid fees, costs, and expenses (the
“Professional Fees”) incurred by persons or firms retained by the Debtors or the
official committee of unsecured creditors in the Chapter 11 Cases (the
“Creditors’ Committee”), if any, whose retention is approved by the Bankruptcy
Court pursuant to Sections 327 and 1103 of the Bankruptcy Code, but excluding
professionals engaged in the ordinary course of business of the Debtors
(collectively, the “Professional Persons”), subject to the terms of the Interim
Financing Order, the Final Financing Order and any other interim or other
compensation order entered by the Bankruptcy Court that are incurred (A) at any
time before delivery by the Administrative Agent of a Carve-Out Trigger Notice,
whether allowed by the Bankruptcy Court prior to or after delivery of a
Carve-Out Trigger Notice (the “Pre-Trigger Date Fees”), subject to any limits
imposed by the Approved Budget, the Interim Financing Order or Final Financing
Order or otherwise on Professional Fees permitted to be incurred in connection
with any permitted investigations of claims and defenses against any prepetition
secured parties; and (B) after the occurrence (the “Trigger Date”) and during
the continuance of an Event of Default and delivery of written notice (the
“Carve-Out Trigger Notice”) thereof (which may be by email) to the Loan Parties,
the Loan Parties’ counsel, the United States Trustee, and lead counsel for the
Creditors’ Committee, if any, in an aggregate amount not to exceed
$250,000500,000 (the amount set forth in this clause (iii)(B) being the

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“Post-EoD Carve-Out Amount”); provided, that nothing herein shall be construed
to impair the ability of any party to object to the fees, expenses,
reimbursement or compensation described in clauses (i), (ii), (iii)(A) or
(iii)(B) above, on any grounds.

Notwithstanding the foregoing, the Carve-Out shall not include, apply to or be
available for any fees or expenses incurred by any party in connection with
(a) the investigation, initiation or prosecution of any claims, causes of
action, adversary proceedings or other litigation (i) against any of the
Lenders, the Administrative Agent, the Arranger, or the holders of the
indebtedness under the Prepetition First Lien Credit Agreement (whether in such
capacity or otherwise), or (ii) challenging the amount, validity, perfection,
priority or enforceability of or asserting any defense, counterclaim or offset
to, the obligations and the liens and security interests granted under the Loan
Documents or the indebtedness under the Prepetition First Lien Credit Agreement
(whether in such capacity or otherwise), including, in each case, without
limitation, for lender liability or pursuant to Section 105, 510, 544, 547, 548,
549, 550, or 552 of the Bankruptcy Code, applicable non-bankruptcy law or
otherwise; (b) attempts to modify any of the rights granted to the Lenders or
the Administrative Agent; (c) attempts to prevent, hinder or otherwise delay any
of the Lenders’ or the Administrative Agent’s assertion, enforcement or
realization upon any Collateral in accordance with the Loan Documents and the
Final Financing Order; (d) paying any amount on account of any claims arising
before the commencement of the Chapter 11 Cases unless such payments are
approved by an order of the Bankruptcy Court; or (e) after delivery of a
Carve-Out Trigger Notice, any success, completion, back-end or similar fees;
provided that no more than an aggregate of $50,000100,000 of the proceeds of the
NM Term Loans, the Collateral, the collateral securing the obligations under the
Prepetition First Lien Credit Agreement, proceeds of the foregoing and the
Carve-Out may be used by the Creditors’ Committee in respect of the
investigation of the claims and liens of the secured parties under the
Prepetition First Lien Credit Agreement, solely to the extent set forth in the
Interim Financing Order or Final Financing Order (but not to litigate, object to
or challenge any of the foregoing) and potential claims, counterclaims, causes
of action or defenses against the secured parties under the Prepetition First
Lien Credit Agreement, solely to the extent set forth in the Interim Financing
Order or Final Financing Order (but not to litigate any of the foregoing).

For the avoidance of doubt and notwithstanding anything to the contrary herein
or in the Loan Documents, the Carve-Out shall be senior to all liens and claims
granted under the Interim Financing Order and the Loan Documents, any adequate
protection liens, if any, and the superpriority claims, and any and all other
liens or claims securing the Loans.

“Carve-Out Trigger Notice” has the meaning assigned to such term in the
definition of “Carve-Out.”

“Cash Balance” means, on any Business Day, (a) the collected balance of total
cash held by the Borrower and its Subsidiaries, including only those deposited
funds that have cleared bank processing, less (b) outstanding payments made by
check, debit and wire that have been sent to the payee but not yet cleared bank
processing.

“Cash Equivalents” means (a) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of

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acquisition, or in the case of any Foreign Subsidiary only, such local
currencies held by it from time to time in the ordinary course of business;
(b) certificates of deposit, time deposits, eurodollar time deposits or
overnight bank deposits having maturities of one year or less from the date of
acquisition issued by any Lender or by any commercial bank organized under the
Laws of the United States, any state thereof or any member nation of the
Organization for Economic Cooperation and Development having combined capital
and surplus of not less than $500,000,000; (c) commercial paper of an issuer
rated at least A-1 by S&P or P-1 by Moody’s, or carrying an equivalent rating by
a nationally recognized rating agency, if both of the two named rating agencies
cease publishing ratings of commercial paper issuers generally, and maturing
within one year from the date of acquisition; (d) repurchase obligations of any
Lender or of any commercial bank satisfying the requirements of clause (b) of
this definition, having a term of not more than 30 days, with respect to
securities issued or fully guaranteed or insured by the United States
government; (e) securities with maturities of one year or less from the date of
acquisition issued or fully guaranteed by any state, commonwealth or territory
of the United States, by any political subdivision or taxing authority of any
such state, commonwealth or territory or by any foreign government, the
securities of which state, commonwealth, territory, political subdivision,
taxing authority or foreign government (as the case may be) are rated at least A
by S&P or A by Moody’s; (f) securities with maturities of six months or less
from the date of acquisition backed by standby letters of credit issued by any
Lender or any commercial bank satisfying the requirements of clause (b) of this
definition; (g) shares of money market mutual or similar funds at least 95% of
the assets of which satisfy the requirements of clauses (a) through (f) of this
definition; or (h) in the case of any Foreign Subsidiary only, instruments
equivalent to those referred to in clauses (a) through (g) above in each case
denominated in any foreign currency comparable in credit quality and tenor to
those referred to in such clauses above and customarily used by corporations for
cash management purposes in any jurisdiction outside the United States to the
extent reasonably required in connection with any business conducted by any
Foreign Subsidiary.

“Cash Inflows” means, for any given Week, the amount of Actual Collections in
cash for such Week.

“Cash Management Agreement” means any agreement to provide cash management
services, including treasury, depository, overdraft, credit or debit card
(including corporate purchase and travel card), electronic funds transfer and
other cash management arrangements.

“Cash Management Bank” means such Lenders or Affiliates thereof and any Cash
Management Banks existing on the Closing Date or such Lenders or Affiliates
thereof as may from time to time after the Closing Date be designated in writing
to the Administrative Agent by the Borrower and such Lender or Affiliate as a
Cash Management Bank hereunder.

“Cash Outflows” means, for any given Week, the amount of Actual Disbursements in
cash of the Loan Parties for such Week.

“CFC” means a Person that is a controlled foreign corporation under Section 957
of the Code.

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“Change in Law” means the occurrence, after the date of this Agreement, of any
of the following: (a) the adoption or taking effect of any Law, rule, regulation
or treaty, (b) any change in any Law, rule, regulation or treaty or in the
administration, interpretation, implementation or application thereof by any
Governmental Authority or (c) the making or issuance of any request, rule,
guideline or directive (whether or not having the force of Law) by any
Governmental Authority; provided that notwithstanding anything herein to the
contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and
all requests, rules, guidelines or directives thereunder or issued in connection
therewith and (y) all requests, rules, guidelines or directives promulgated by
the Bank for International Settlements, the Basel Committee on Banking
Supervision (or any successor or similar authority) or the United States or
foreign regulatory authorities, in each case pursuant to Basel III, shall in
each case be deemed to be a “Change in Law”, regardless of the date enacted,
adopted or issued.

“Chapter 11 Cases” has the meaning assigned to such term in the recitals hereto.

“Closing Date” means the first date all the conditions precedent in Section 4.01
are satisfied or waived in accordance with Section 11.01.

“Code” means the Internal Revenue Code of 1986, as amended and the regulations
promulgated thereunder.

“Collateral” means all property of the Loan Parties, now owned or hereafter
acquired, upon which a Lien is created or purported to be created by any
Security Document.

“Commitment” means the NM Commitment and, for the avoidance of doubt, if any
Lender shall become a Defaulting Lender, the Backstop Party’s “Commitment” shall
include the NM Commitment of such Defaulting Lender.

“Committed Loan Notice” means a notice of (a) a Term Borrowing, (b) a conversion
of Loans from one Type to the other, or (c) a continuation of Eurodollar Rate
Loans, pursuant to Section 2.02(a), which, if in writing, shall be substantially
in the form of Exhibit A.

“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et
seq.), as amended from time to time, and any successor statute.

“Commonly Controlled Entity” means an entity, whether or not incorporated, that
is under common control with Holdings or the Borrower within the meaning of
Section 4001 of ERISA or is part of a group that includes Holdings or the
Borrower and that is treated as a single employer under Section 414 of the Code.

“Compliance Certificate” means a certificate substantially in the form of
Exhibit D.

“Connection Income Taxes” means Other Connection Taxes that are imposed on or
measured by net income (however denominated) or that are franchise Taxes or
branch profits Taxes.

“Consolidated EBITDA” means, for any period, the sum of (i) Consolidated Net
Income for such period plus (ii) without duplication and to the extent reflected
as a charge in the

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statement of such Consolidated Net Income for such period, the sum of (a) income
tax expense, (b) interest expense, amortization or writeoff of debt discount and
debt issuance costs and commissions, discounts and other fees and charges
associated with Indebtedness (including the Loans), (c) depreciation and
amortization expense (including, but not limited to, goodwill), (d) any non-cash
extraordinary charges or losses and any non-cash non-recurring charges or losses
determined in accordance with GAAP, (e) non-cash charges from employee
compensation deferrals and employer matching contributions pursuant to the ESOP
Documentation relating to ESOP Stock Issuances, (f) cash losses from Asset
Sales, (g) cash restructuring charges and/or non-recurring cash charges or
losses not to exceed $2,000,000 in any twelve month period, and (h) any other
non-cash charges, non-cash expenses or non-cash losses of Holdings or any of its
Subsidiaries agreed to in writing by the Administrative Agent (at the direction
of the Required Lenders) (provided, however, that cash payments made in any
future period in respect of such non-cash charges added back in determining
Consolidated EBITDA for periods ending after the Closing Date shall be
subtracted from Consolidated Net Income in calculating Consolidated EBITDA in
the period when such payments are made) minus (iii) to the extent included in
the statement of such Consolidated Net Income for such period, the sum of,
without duplication, (a) interest income, (b) any extraordinary income or gains
determined in accordance with GAAP, (c) any cancellation-of-debt income
resulting from repurchases or exchanges of Indebtedness after the Closing Date,
(d) cash gains from Asset Sales and (e) any other noncash income (excluding any
items that represent the reversal of any accrual of, or cash reserve for,
anticipated cash charges in any prior period that are described in the
parenthetical to clause (h) above), all as determined on a consolidated basis.

“Consolidated Forecast” has the meaning assigned to such term in
Section 6.14(c).

“Consolidated Net Income” means, for any period, the consolidated net income (or
loss) of Holdings and its Subsidiaries, determined on a consolidated basis in
accordance with GAAP; provided that there shall be excluded (a) the income (or
deficit) of any Person accrued prior to the date it becomes a Subsidiary of
Holdings or is merged into or consolidated with Holdings or any of its
Subsidiaries, (b) the income (or deficit) of any Person (other than a Subsidiary
of Holdings) in which Holdings or any of its Subsidiaries has an ownership
interest, except to the extent that any such income is actually received by
Holdings or such Subsidiary in the form of dividends or similar distributions
and (c) the undistributed earnings of any Subsidiary of Holdings that is not a
Loan Party to the extent that the declaration or payment of dividends or similar
distributions by such Subsidiary is not at the time permitted by the terms of
any Contractual Obligation (other than under any Loan Document) or Requirement
of Law applicable to such Subsidiary.

“Consolidated Tangible Assets” means, with respect to Holdings and its
Subsidiaries as of any date, the aggregate of the assets of Holdings and its
Subsidiaries excluding goodwill, patents, trade names, trademarks, copyrights,
franchises, experimental expense (to the extent capitalized), organization
expense (to the extent capitalized) and any other assets properly classified as
intangible assets in accordance with GAAP, as of the date on which the most
recent financial statements were delivered pursuant to Section 6.01(a) or (b)
(or Section 5.01) on a consolidated basis, determined in accordance with GAAP.
In the event that information relating to Consolidated Tangible Assets is not
available as of any date, then the most recently available information will be
used.

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“Contractual Obligation” means, as to any Person, any provision of any security
issued by such Person or of any agreement, instrument or other undertaking to
which such Person is a party or by which it or any of its property is bound.

“Cost-Cutting Transactions” means one or more dispositions of certain assets in
connection with the Borrower’s plan to execute certain profit improvement
projects, in an aggregate amount not to exceed $2,500,000, so long as the
proceeds thereof are used in accordance with the Approved Budget.

“Creditors’ Committee” has the meaning assigned to such term in the definition
of the term “Carve-Out.”

“Cumulative Period” means the period from the Petition Date through the most
recent Week ended.

“Cumulative Thirteen Week Period” means the thirteen-week period through the
Saturday of the most recent Week then ended, or if a thirteen-week period has
not then elapsed from the Petition Date, the Cumulative Period.

“Debtor Relief Laws” means the Bankruptcy Code, and all other liquidation,
conservatorship, bankruptcy, assignment for the benefit of creditors,
moratorium, rearrangement, receivership, insolvency, reorganization, or similar
debtor relief Laws of the United States or other applicable jurisdictions from
time to time in effect and affecting the rights of creditors generally.

“Default” means any event or condition that constitutes an Event of Default or
that, with the giving of any notice, the passage of time, or both, would be an
Event of Default.

“Defaulting Lender” means, subject to Section 2.15(b), any Lender that (a) has
failed to (i) fund all or any portion of its Loans within two (2) Business Days
of the date such Loans were required to be funded hereunder unless such Lender
notifies the Administrative Agent and the Borrower in writing that such failure
is the result of such Lender’s determination that one or more conditions
precedent to funding (each of which conditions precedent, together with any
applicable Default, shall be specifically identified in such writing) has not
been satisfied, or (ii) pay to the Administrative Agent or any other Lender any
other amount required to be paid by it hereunder within two (2) Business Days of
the date when due, (b) has notified the Borrower and the Administrative Agent in
writing that it does not intend to comply with its funding obligations
hereunder, or has made a public statement to that effect (unless such writing or
public statement relates to such Lender’s obligation to fund a Loan hereunder
and states that such position is based on such Lender’s determination that a
condition precedent to funding (which condition precedent, together with any
applicable default, shall be specifically identified in such writing or public
statement) cannot be satisfied), (c) has failed, within three (3) Business Days
after written request by the Administrative Agent or the Borrower, to confirm in
writing to the Administrative Agent and the Borrower that it will comply with
its prospective funding obligations hereunder (provided that such Lender shall
cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such
written confirmation by the Administrative Agent and the Borrower), or (d) has,
or has a direct or indirect parent company that has, (i) become the subject of a
proceeding under

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any Debtor Relief Law, (ii) had appointed for it a receiver, custodian,
conservator, trustee, administrator, assignee for the benefit of creditors or
similar Person charged with reorganization or liquidation of its business or
assets, including the Federal Deposit Insurance Corporation or any other state
or federal regulatory authority acting in such a capacity, or (iii) become the
subject of a Bail-In Action; provided that a Lender shall not be a Defaulting
Lender solely by virtue of the ownership or acquisition of any equity interest
in that Lender or any direct or indirect parent company thereof by a
Governmental Authority so long as such ownership interest does not result in or
provide such Lender with immunity from the jurisdiction of courts within the
United States or from the enforcement of judgments or writs of attachment on its
assets or permit such Lender (or such Governmental Authority) to reject,
repudiate, disavow or disaffirm any contracts or agreements made with such
Lender. Any determination by the Administrative Agent that a Lender is a
Defaulting Lender under any one or more of clauses (a) through (d) above shall
be conclusive and binding absent manifest error, and such Lender shall be deemed
to be a Defaulting Lender (subject to Section 2.15(b)) upon delivery of written
notice of such determination to the Borrower and each Lender.

“Derivatives Counterparty” means any financial institution, commodities or stock
exchange or clearinghouse.

“DIP Lender Default Notice” has the meaning assigned to such term in
Section 11.06(h).

“DIP Superpriority Claims” has the meaning assigned to such term in
Section 2.17(a).

“Disposition” or “Dispose” means the sale, transfer or other disposition
(including any sale and leaseback transaction, but excluding the granting of
Liens permitted by this Agreement and any exercise of remedies in connection
therewith, leases, licenses, sub-leases, sub-licenses and transfers pursuant to
condemnation and similar proceedings) of any property by any Person, including
any such sale, assignment, transfer or other disposal, with or without recourse,
of any notes or accounts receivable or any rights and claims associated
therewith.

“Disqualified Capital Stock” means any Capital Stock which, by its terms (or by
the terms of any security or other Capital Stock into which it is convertible or
for which it is exchangeable), or upon the happening of any event or condition
(a) matures or is mandatorily redeemable (other than solely for Capital Stock
that is not Disqualified Capital Stock), pursuant to a sinking fund obligation
or otherwise (except as a result of a change of control or asset sale so long as
any rights of the holders thereof upon the occurrence of a change of control or
asset sale event shall be subject to the prior repayment in full of the Loans
and all other Obligations that are accrued and payable and the termination of
the Commitments), (b) is redeemable at the option of the holder thereof (other
than solely for Capital Stock that is not Disqualified Capital Stock), in whole
or in part, (c) provides for the scheduled payments of dividends in cash, or
(d) is or becomes convertible into or exchangeable for Indebtedness or any other
Capital Stock that would constitute Disqualified Capital Stock, in each case,
prior to the date that is ninety-one (91) days after the Scheduled Termination
Date. Notwithstanding the preceding sentence, any Capital Stock that would
constitute Disqualified Stock solely because the holders of that Capital Stock
have the right to require Holdings, or Holdings has the obligation, to
repurchase such Capital Stock pursuant to the terms of the ESOP will not
constitute Disqualified Stock.

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“Dollar” and “$” mean lawful money of the United States.

“Domestic Subsidiary” means any Subsidiary that is organized under the Laws of
any political subdivision of the United States.

“EEA Financial Institution” means (a) any credit institution or investment firm
established in any EEA Member Country which is subject to the supervision of an
EEA Resolution Authority, (b) any entity established in an EEA Member Country
which is a parent of an institution described in clause (a) of this definition,
or (c) any financial institution established in an EEA Member Country which is a
subsidiary of an institution described in clauses (a) or (b) of this definition
and is subject to consolidated supervision with its parent.

“EEA Member Country” means any of the member states of the European Union,
Iceland, Liechtenstein and Norway.

“EEA Resolution Authority” means any public administrative authority or any
Person entrusted with public administrative authority of any EEA Member Country
(including any delegee) having responsibility for the resolution of any EEA
Financial Institution.

“Eligible Assignee” means any Person that meets the requirements to be an
assignee under Section 11.06(b)(iii), (v) and (vii) (subject to such consents,
if any, as may be required under Section 11.06(b)(iii)).

“Embargoed Person” shall have the meaning assigned to such term in Section 7.20.

“Environmental Laws” means any and all Federal, state, local, and foreign
statutes, Laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution or the protection of the environment or the
release of any materials into the environment, including those related to
hazardous substances or wastes, air emissions and discharges to waste or public
systems.

“Environmental Liability” means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower, any other Loan Party or any of their
respective Subsidiaries directly or indirectly resulting from or based upon
(a) violation of any Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Materials,
(c) exposure to any Hazardous Materials, (d) the release or threatened release
of any Hazardous Materials into the environment or (e) any contract, agreement
or other consensual arrangement pursuant to which liability is assumed or
imposed with respect to any of the foregoing.

“ERISA” means the Employee Retirement Income Security Act of 1974 and the
regulations promulgated thereunder.

“ESOP” means the Appleton Papers Retirement Savings and Employee Stock Ownership
Plan.

“ESOP Component” means the employee stock ownership plan component of the ESOP.

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“ESOP Documentation” means the collective reference to (a) the Appleton Papers
Retirement Savings and Employee Stock Ownership Plan (Amended and Restated
Effective as of January 1, 2009), (b) the Amended and Restated Trust Agreement
for the Appleton Papers Inc. Employee Stock Ownership Trust, adopted April 1,
2013 and (c) all amendments, supplements or other modifications to any of the
foregoing, all schedules, exhibits and annexes thereto and all agreements
affecting the terms thereof or entered into in connection therewith.

“ESOP Stock Issuances” means with respect to any period, any issuance of common
stock by Holdings to the ESOP during such period.

“ESOP Trust” means the Appleton Papers Inc. Employee Stock Ownership Trust.

“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule
published by the Loan Market Association (or any successor Person), as in effect
from time to time.

“Eurodollar Rate” means, with respect to any Eurodollar Rate Loan for any
Interest Period therefor, the rate per annum equal to the arithmetic mean
(rounded to the nearest 1/100th of 1%) of the offered rates for deposits in
Dollars with a term comparable to such Interest Period that appears on Reuters
Screen LIBOR01 Page (or such other page as may replace such page on such service
for the purpose of displaying the rates at which Dollar deposits are offered by
leading banks in the London interbank deposit market as designated by the
Administrative Agent from time to time) at approximately 11:00 a.m., London,
England time, on the second full Business Day preceding the first day of such
Interest Period; provided, however, that (i) if no comparable term for an
Interest Period is available, the Eurodollar Rate shall be determined using the
weighted average of the offered rates for the two terms most nearly
corresponding to such Interest Period and (ii) if Reuters Screen LIBOR01 Page
shall at any time no longer exist, “Eurodollar Rate” means, with respect to each
day during each Interest Period pertaining to Eurodollar Rate Loans comprising
part of the same Borrowing, the rate per annum equal to the average of the
quotations received by the Administrative Agent at which Dollar deposits are
offered by three leading banks in the London deposit market at approximately
11:00 a.m., London, England time, two (2) Business Days prior to the first day
of such Interest Period in the London interbank market for delivery on the first
day of such Interest Period for the number of days comprised therein and in an
amount comparable to its portion of the amount of such Eurodollar Borrowing to
be outstanding during such Interest Period. “Reuters Screen LIBOR01 Page” means
the display designated on the Reuters 3000 Xtra Page (or such other page as may
replace such page on such service for the purpose of displaying the rates at
which Dollar deposits are offered by leading banks in the London interbank
deposit market).

“Eurodollar Rate Loan” means a Term Loan that bears interest at a rate based on
the Adjusted Eurodollar Rate.

“Event of Default” has the meaning specified in Section 8.01.

“Excluded Hedge Obligation” means, with respect to any Guarantor of a Hedge
Obligation, including the grant of a Lien to secure the Guaranty of such Hedge
Obligation, any Hedge Obligation if, and to the extent that, such Hedge
Obligation is or becomes illegal under the Commodity Exchange Act or any rule,
regulation or order of the Commodity Futures Trading

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Commission (or the application or official interpretation of any thereof) by
virtue of such Guarantor’s failure for any reason to constitute an “eligible
contract participant” as defined in the Commodity Exchange Act and the
regulations thereunder at the time the Guaranty or grant of such Lien becomes
effective with respect to such Hedge Obligation. If a Hedge Obligation arises
under a master agreement governing more than one swap, such exclusion shall
apply only to the portion of such Hedge Obligation that is attributable to swaps
for which such Hedge Obligation or security interest is or becomes illegal.

“Excluded Taxes” means any of the following Taxes imposed on or with respect to
a Recipient or required to be withheld or deducted from a payment to a
Recipient, (a) Taxes imposed on or measured by net income (however denominated),
franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result
of such Recipient being organized under the Laws of, or having its principal
office or, in the case of any Lender, its applicable lending office located in,
the jurisdiction imposing such Tax (or any political subdivision thereof) or
(ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal
withholding Taxes imposed on amounts payable to or for the account of such
Lender with respect to an applicable interest in a Loan or Commitment pursuant
to a Law in effect on the date on which (i) such Lender acquires such interest
in the Loan or Commitment (other than pursuant to an assignment request by the
Borrower under Section 3.06(b)) or (ii) such Lender changes its lending office,
except in each case to the extent that, pursuant to Section 3.01, amounts with
respect to such Taxes were payable either to such Lender’s assignor immediately
before such Lender became a party hereto or to such Lender immediately before it
changed its lending office, (c) Taxes attributable to such Recipient’s failure
to comply with Section 3.01(f) and (d) any U.S. federal withholding Taxes
imposed under FATCA.

“Executive Order” has the meaning specified in Section 5.24(a).

“Existing Cash Management Agreements” means those cash management agreements set
forth on Schedule 1.01(c).

“Existing Hedge Agreements” means those existing hedge agreements between the
Borrower and Fifth Third Bank andHedge Agreements described on Schedule
1.01(a).1

“Existing Letters of Credit” means those existing letters of credit described on
Schedule 1.01(b), as may be renewed, extended or otherwise modified from time to
time.

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with), any current or future
regulations or official interpretations thereof and any agreements entered into
pursuant to Section 1471(b)(1) of the Code.

 

1  As amended by the Amendment to Superiority Senior Debtor-In-Possession Credit
Agreement, dated as of October 18, 2017 (the “First Amendment”), by and among
the Borrower, Holdings, the Lenders Party thereto and the Administrative Agent.

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“Federal Funds Rate” means, for any day, the weighted average of the rates on
overnight federal funds transactions with members of the Federal Reserve System
of the United States arranged by federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average
(rounded upwards, if necessary to the next 1/100th of 1%) of the quotations for
the day for such transactions received by the Administrative Agent from three
federal funds brokers of recognized standing selected by it.

“Final Financing Order” has the meaning specified in Section 4.02(a).

“Final Financing Order Roll Date” has the meaning specified in Section 2.01(c
)(ii).

“Financing Orders” means, collectively, the Interim Financing Order and the
Final Financing Order.

“Foreign Lender” means any Lender that is organized under the Laws of a
jurisdiction other than that in which the Borrower is resident for tax purposes.
For purposes of this definition, the United States, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.

“Foreign Subsidiary” means any Subsidiary that is not a Domestic Subsidiary.

“Fox River Indemnity Arrangements” means the collective reference to the PDC
Environmental Indemnity Agreement, the AWA Environmental Indemnity Agreement,
the Fox River Security Agreement, the Bermuda Company Agreements and the NCR
Agreements.

“Fox River Security Agreement” means the Security Agreement, relating to the AWA
Environmental Indemnity Agreement, dated as of November 9, 2001, among the
Borrower, Holdings and AWA.

“FRB” means the Board of Governors of the Federal Reserve System of the United
States.

“Fund” means any Person (other than a natural person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its activities.

“GAAP” means generally accepted accounting principles in the United States set
forth in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or such other
principles as may be approved by a significant segment of the accounting
profession in the United States, that are applicable to the circumstances as of
the date of determination.

“Governmental Authority” means the government of the United States or any other
nation, or of any political subdivision thereof, whether state or local, and any
agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government (including any
supra national bodies such as the European Union or the European Central Bank).

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“Group Members” means the collective reference to Holdings, the Borrower and
their respective Subsidiaries.

“Guarantee and Collateral Agreement” has the meaning specified in
Section 4.01(a)(iii).

“Guarantee and Collateral Agreement (Canada)” has the meaning specified in
Section 4.01(a)(iii).

“Guarantee and Collateral Agreements” means, collectively, the (i) Guarantee and
Collateral Agreement and (ii) the Guarantee and Collateral Agreement (Canada).

“Guarantee Obligation” means, as to any Person (the “guaranteeing person”), any
obligation of (a) the guaranteeing person or (b) another Person (including any
bank under any letter of credit) to induce the creation of which the
guaranteeing person has issued a reimbursement, counterindemnity or similar
obligation, in either case guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other obligations (the “primary obligations”)
of any other third Person (the “primary obligor”) in any manner, whether
directly or indirectly, including any obligation of the guaranteeing person,
whether or not contingent, (i) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (ii) to advance or
supply funds (1) for the purchase or payment of any such primary obligation or
(2) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (iii) to
purchase property, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation or (iv) otherwise to assure or hold
harmless the owner of any such primary obligation against loss in respect
thereof; provided, however that the term Guarantee Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business. The amount of any Guarantee Obligation of any guaranteeing person
shall be deemed to be the lower of (a) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such Guarantee
Obligation is made and (b) the maximum amount for which such guaranteeing person
may be liable pursuant to the terms of the instrument embodying such Guarantee
Obligation, unless such primary obligation and the maximum amount for which such
guaranteeing person may be liable are not stated or determinable, in which case
the amount of such Guarantee Obligation shall be such guaranteeing person’s
maximum reasonably anticipated liability in respect thereof as determined by the
Borrower in good faith.

“Guarantors” means, collectively, Holdings, the Subsidiaries of Holdings listed
on Schedule 6.09, including, without limitation, Appvion Canada, and each other
Subsidiary of Holdings that shall be required to execute and deliver a Guaranty
or guaranty supplement pursuant to Section 6.09, in each case unless and until
released pursuant to the terms of the Loan Documents. For the avoidance of
doubt, in no event shall (i) PDC Capital Corporation or (ii) any Foreign
Subsidiary (other than a Subsidiary organized under the laws of Canada or any
province thereof) be a Guarantor.

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“Guaranty” means the Guaranty made pursuant to the Guarantee and Collateral
Agreements in favor of the Secured Parties, together with each other guaranty
and guaranty supplement delivered pursuant to Section 6.09.

“Hazardous Materials” means all explosive or radioactive substances or wastes
and all hazardous or toxic substances, materials, wastes or other pollutants,
including gasoline or petroleum (including crude oil or any fraction thereof or
petroleum distillates), asbestos or asbestos-containing materials,
polychlorinated biphenyls, radon gas, urea-formaldehyde, infectious or medical
wastes and all other substances or wastes of any nature regulated pursuant to
any Environmental Law.

“Hedge Agreements” means all interest rate swaps, caps or collar agreements or
similar arrangements dealing with interest rates or currency exchange rates or
the exchange of nominal interest obligations or commodity agreements or other
similar arrangements designed to protect against fluctuations in commodity
prices, either generally or under specific contingencies.

“Hedge Bank” means each of (a) KeyBank National Association in its capacity as a
counterparty under certain of the Existing Hedge Agreements, (b) Fifth Third
Bank in its capacity as a counterparty under certain of the Existing Hedge
Agreements, and (c) the Lenders or Affiliates thereof as may from time to time
be designated in writing to the Administrative Agent by the Borrower and such
Lender or Affiliate as a Hedge Bank hereunder.

“Hedge Obligation” means, with respect to any Guarantor, any obligation to pay
or perform under any Hedge Agreement or transaction that constitutes a “swap”
within the meaning of section 1a(47) of the Commodity Exchange Act.

“Hedge Termination Value” means, in respect of any one or more Hedge Agreements,
after taking into account the effect of any legally enforceable netting
agreement relating to such Hedge Agreements, (a) for any date on or after the
date such Hedge Agreements have been closed out and termination value(s)
determined in accordance therewith, such termination value(s), and (b) for any
date prior to the date referenced in clause (a), the amount(s) determined as the
mark-to-market value(s) for such Hedge Agreements, as determined based upon one
or more mid-market or other readily available quotations provided by any
recognized dealer in such Hedge Agreements (which may include a Lender or any
Affiliate of a Lender).

“Holdings” has the meaning specified in the introductory paragraph hereto.

“Holdings Entity Transaction” means the consummation of a merger or
consolidation by Holdings with a Specified Person or the acquisition of more
than 50% of the voting power of all Voting Stock of Holdings by a Specified
Person; provided that such transaction does not result in any “person” (as that
term is used in Section 13(d) of the Exchange Act) other than a Specified Person
becoming the Beneficial Owner, directly or indirectly, of more than 50% of the
voting power of all Voting stock of the Borrower; provided further that the
following conditions precedent to such transaction are met: (i) no Default shall
have occurred and be continuing at the time of the proposed transaction or would
result therefrom, (ii) all guaranty and collateral requirements under the Loan
Documents shall have been satisfied with respect to Holdings (or the Specified
Person, in the case of a transaction in which the Specified Person is the
surviving

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entity), (iii) Holdings (or the Specified Person, in the case of a transaction
in which the Specified Person is the surviving entity) shall own not less than
100% of the Capital Stock of the Borrower, (iv) in the case of a transaction in
which the Specified Person is the surviving entity, the Administrative Agent
shall have received fully executed assumption documentation in connection
therewith and opinions of counsel, in each case, as reasonably requested by the
Administrative Agent (at the direction of the Required Lenders) and (v) the
Administrative Agent shall have received all documentation and other information
with respect to the Specified Person as may be required by regulatory
authorities or the Administrative Agent’s, and/or such Lender’s internal
policies under applicable “know your customer” and anti-money laundering rules
and regulations, including, without limitation, the Patriot Act. In respect of a
Holdings Entity Transaction, “Specified Person” means (a) a special purpose
acquisition company having no material operations, operating assets or
liabilities or (b) a “Morris Trust” vehicle or reverse “Morris Trust” vehicle.
For the avoidance of doubt, the surviving entity of any Holdings Entity
Transaction (to the extent not Holdings) shall be deemed to be “Holdings” as if
such entity were an original party to this Agreement and the other Loan
Documents.

“IDB Loan” means two separate Loan Agreements (as amended or otherwise modified
prior to the date hereof, the “IDB Loan Agreements”), each dated as of August 1,
1997, by and between the Borrower and Village of Combined Locks, Wisconsin,
pursuant to which the Village of Combined Locks, Wisconsin made a loan to the
Borrower with the proceeds of certain Industrial Development Bonds.

“Immaterial Subsidiary” means, at any date of determination, all Foreign
Subsidiaries of Holdings (other than a Subsidiary organized under the laws of
Canada or any province thereof) designated as such in writing by the Borrower to
the Administrative Agent from time to time which does not have either
(a) Consolidated EBITDA that is, when combined with all other Immaterial
Subsidiaries, greater than 5.0% of the Consolidated EBITDA of Holdings and its
Subsidiaries as of the most recent fiscal quarter end for which financial
statements have been delivered under Section 6.01(a) or (b) or (b) total assets
with a book value that are, when combined with all other Immaterial
Subsidiaries, greater than 5.0% of the consolidated total assets of Holdings and
its Subsidiaries as of the most recent fiscal quarter end for which financial
statements have been delivered under Section 6.01(a) or (b). If, at any time and
from time to time after the Closing Date, one or more Subsidiaries shall cease
to qualify as “Immaterial Subsidiaries”, then the Borrower shall, on the date on
which financial statements are due in accordance with Section 6.01(a) or (b),
designate in writing to the Administrative Agent one or more of such
Subsidiaries (which shall cease to constitute “Immaterial Subsidiaries”) as may
be necessary to ensure compliance with this definition.

“Indebtedness” means, of any Person at any date, without duplication, (a) all
indebtedness of such Person for borrowed money, (b) all obligations of such
Person for the deferred purchase price of property or services (other than
current trade payables incurred in the ordinary course of such Person’s
business), (c) all obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments, (d) all obligations created or arising
under any conditional sale or other title retention agreement with respect to
property acquired by such Person (even though the rights and remedies of the
seller or lender under such agreement in the event of default are limited to
repossession or sale of such property, provided that, if recourse in respect of
such Indebtedness is so limited, the amount of such Indebtedness shall be deemed
to

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be the lesser of the principal amount thereof and the fair market value of the
property encumbered by such Lien as determined in good faith by the Board of
Directors of Holdings), (e) all Capital Lease Obligations and all Synthetic Debt
of such Person, (f) all obligations of such Person, contingent or otherwise, as
an account party or applicant under or in respect of acceptances, letters of
credit, surety bonds or similar arrangements, (g) all obligations of such Person
with respect of Disqualified Capital Stock, which in the case of redeemable
preferred Capital Stock shall be deemed to be the liquidation value of such
redeemable preferred Capital Stock of such Person, (h) all Guarantee Obligations
of such Person in respect of obligations of the kind referred to in clauses
(a) through (g) above, (i) all obligations of the kind referred to in clauses
(a) through (h) above secured by (or for which the holder of such obligation has
an existing right, contingent or otherwise, to be secured by) any Lien on
property (including accounts and contract rights) owned by such Person, whether
or not such Person has assumed or become liable for the payment of such
obligation (provided that, if such Person has not assumed or otherwise become
liable in respect of such Indebtedness, the amount of such Indebtedness shall be
deemed to be the lesser of the principal amount of such Indebtedness and the
fair market value of the property encumbered by such Lien as determined in good
faith by the Board of Directors of Holdings) and (j) for the purposes of
Sections 7.02 and 8.01(e) only, all obligations of such Person in respect of
Hedge Agreements. The Indebtedness of any Person shall include the Indebtedness
of any other entity (including any partnership in which such Person is a general
partner) to the extent such Person is liable therefor as a result of such
Person’s ownership interest in or other relationship with such entity, except to
the extent the terms of such Indebtedness expressly provide that such Person is
not liable therefor. The amount of any obligation under any Hedge Agreement on
any date shall be deemed to be the Hedge Termination Value thereof as of such
date.

“Indemnified Taxes” means (a) Taxes other than Excluded Taxes, imposed on or
with respect to any payment made by or on account of any obligation of the
Borrower or Holdings under any Loan Document and (b) to the extent not otherwise
described in clause (a), Other Taxes.

“Indemnitees” has the meaning specified in Section 11.04(b).

“Information” has the meaning specified in Section 11.07.

“Insolvency” means, with respect to any Multiemployer Plan, the condition that
such Plan is insolvent within the meaning of Section 4245 of ERISA.

“Insolvent” means pertaining to a condition of Insolvency.

“Intellectual Property” means the collective reference to all rights, priorities
and privileges relating to intellectual property, whether arising under United
States, multinational or foreign Laws or otherwise, including copyrights,
copyright licenses, patents, patent licenses, trademarks, trademark licenses,
technology, know-how and processes, and all rights to sue at law or in equity
for any infringement or other impairment thereof, including the right to receive
all proceeds and damages therefrom.

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“Intellectual Property Security Agreement” has the meaning specified in
Section 4.01(a)(v).

“Interest Payment Date” means, (a) as to any Eurodollar Rate Loan, the last day
of each Interest Period applicable to such Loan and the Termination Date;
provided, however, that if any Interest Period for a Eurodollar Rate Loan
exceeds three months, the respective dates that fall every three months after
the beginning of such Interest Period shall also be Interest Payment Dates; and
(b) as to any Base Rate Loan, the first Business Day after the end of each
March, June, September and December and the Termination Date.

“Interest Period” means, as to each Eurodollar Rate Loan, the period commencing
on the date such Eurodollar Rate Loan is disbursed or converted to or continued
as a Eurodollar Rate Loan and ending on the date one, three or six months
thereafter, as selected by the Borrower in its Committed Loan Notice; provided
that:

(a)    any Interest Period that would otherwise end on a day that is not a
Business Day shall be extended to the next succeeding Business Day unless such
Business Day falls in another calendar month, in which case such Interest Period
shall end on the next preceding Business Day;

(b)    any Interest Period that begins on the last Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall end on the last
Business Day of the calendar month at the end of such Interest Period; and

(c)    no Interest Period shall extend beyond the Scheduled Termination Date.

“Interim Availability Percentage” means the percentage (carried out to the ninth
decimal place) of the aggregate NM Commitment available to be drawn hereunder
prior to the entry of the Final Financing Order as determined with reference to
the Interim NM Availability Amount.

“Interim Financing Order” has the meaning specified in Section 4.01(e).

“Interim NM Availability Amount” means the lesser of (a) $65,000,000 and
(b) such amount of NM Term Loans authorized to be borrowed by the Borrower
pursuant to the terms of the Interim Financing Order.

“Investment” means, as to any Person, any direct or indirect acquisition or
investment by such Person, by means of (a) the purchase or other acquisition of
Capital Stock of another Person, (b) a loan, advance or capital contribution to,
Guarantee Obligation or assumption of debt of, or purchase or other acquisition
of any other debt or interest in, another Person, or (c) the purchase or other
acquisition (in one transaction or a series of transactions) of assets of
another Person that constitute a business unit or all or a substantial part of
the business of such Person. For purposes of covenant compliance, the amount of
any Investment shall be the amount actually invested, without adjustment for
subsequent increases or decreases in the value of such Investment, but shall be
reduced by all cash returns of principal or capital received on or prior to the
date of determination (including all cash dividends, cash distributions and cash
repayments in the nature of a return of principal or capital), and except as
otherwise provided therein.

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“IRS” means the United States Internal Revenue Service.

“Laws” means, collectively, all international, foreign, Federal, state and local
laws, statutes, treaties, rules, guidelines, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of Law.

“Lender” has the meaning specified in the introductory paragraph heretomeans
each Lender that holds a Term Loan.

“Lending Office” means, as to any Lender, the office or offices of such Lender
described as such in such Lender’s Administrative Questionnaire, or such other
office or offices as a Lender may from time to time notify the Borrower and the
Administrative Agent.

“Lien” means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge, or preference,
priority or other security interest or preferential arrangement in the nature of
a security interest of any kind or nature whatsoever (including any conditional
sale or other title retention agreement, any easement, right of way or other
encumbrance on title to real property, and any financing lease having
substantially the same economic effect as any of the foregoing).

“Loan” means an extension of credit by a Lender to the Borrower under Article II
in the form of a Term Loan.

“Loan Documents” means, collectively, (a) this Agreement, (b) the Notes, (c) the
Security Documents, (d) the PJT Letter Agreement, (e) the Administrative Agent
Fee Letter, (f) each Secured Hedge Agreement, (g) each Secured Cash Management
Agreement, (h) the Interim Financing Order and (i) the Final Financing Order;
provided that for purposes of the definition of “Material Adverse Effect” and
Articles IV through IX “Loan Documents” shall not include Secured Hedge
Agreements or Secured Cash Management Agreements.

“Loan Parties” means, collectively, the Borrower and each Guarantor.

“Majority Lender” means certain funds and accounts managed by
                                .

“Material Adverse Effect” means any event, condition, circumstance or
contingency occurring since June 30, 2017 or subsequent date, as applicable
(other than as customarily occurs as a result of events leading up to and
following the commencement of the Chapter 11 Cases under Chapter 11 of the
Bankruptcy Code by the Debtors) that, individually or in the aggregate, (a) has
had or would reasonably be expected to have, a material adverse effect on the
business, operations, properties, assets or condition of the Borrower and its
Subsidiaries, taken as a whole or (b) has resulted in, or would reasonably be
expected to result in, a material impairment of the validity or enforceability
of, or a material impairment of the material rights, remedies or benefits
available to Lenders, the Administrative Agent or the collateral agent under any
Loan Document. Notwithstanding the foregoing, (i) the filing of the Chapter 11
Cases (and any defaults under

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pre-petition agreements, so long as the exercise of remedies as a result of such
defaults are stayed under the Bankruptcy Code or such agreements are voided or
invalidated by the Bankruptcy Court), (ii) events specifically described in the
Declaration of Alan D. Holtz in Support of Chapter 11 Petitions and First Day
Motions, dated October 1, 2017, and (iii) the existence of any claim or
liability that is Pre-Petition, unsecured and junior in priority to the
Obligations (each of the foregoing clauses (i), (ii) and (iii), collectively,
the “Chapter 11 Events and Circumstances”), will each not be deemed to have a
Material Adverse Effect.

“Maximum Rate” shall have the meaning assigned to such term in Section 11.09.

“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.

“Multiemployer Plan” means a Plan that is a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.

“Net Cash Proceeds” means, with respect to (a) any Disposition, (b) issuance of
Indebtedness by Holdings or any of its Subsidiaries, (c) issuance of Capital
Stock by Holdings or any of its Subsidiaries or (d) any proceeds of casualty
insurance or condemnation awards (or payments in lieu thereof) received or paid
to the account of Holdings or any of its Subsidiaries, the excess, if any, of
(i) the sum of cash and Cash Equivalents received in connection with such
transaction (including any cash or Cash Equivalents received by way of deferred
payment pursuant to, or by monetization of, a note receivable or otherwise, but
only as and when so received) over (ii) the sum of (A) the principal amount of
any Indebtedness that is secured by the applicable asset and that is required to
be repaid in connection with such transaction (other than Indebtedness under the
Loan Documents), (B) the reasonable and customary fees and out-of-pocket
expenses incurred by Holdings or such Subsidiary in connection with such
transaction and (C) income taxes reasonably estimated to be actually payable
within two years of the date of the relevant transaction as a result of any gain
recognized in connection therewith; provided that, if the amount of any
estimated Taxes pursuant to subclause (C) exceeds the amount of Taxes actually
required to be paid in cash in respect of such Disposition, the aggregate amount
of such excess with respect to estimated Taxes shall constitute Net Cash
Proceeds and shall be deemed received as of the date the determination of such
excess with respect to estimated Taxes is made.

“NM Commitments” means, with respect to any Lender, the commitment of such
Lender to make NM Term Loans to the Borrower pursuant to Section 2.01(a) in an
aggregate principal amount at any one time outstanding not to exceed the amount
set forth opposite such Lender’s name on Schedule 2.01 under the caption “NM
Commitment,” or opposite such caption in the Assignment and Assumption pursuant
to which such Lender becomes a party hereto, as applicable, as such amount may
be adjusted in accordance with Section 2.01(b) or otherwise in accordance with
this Agreement.

“NM Commitment Fee” has the meaning specified in Section 2.09(a).

“NM Lender” means each Lender with a NM Commitment and/or that holds a NM Term
Loan.

“NM Term Loans” means the term loans made to the Borrower pursuant to
Section 2.01(a).

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“NM Term Loan Obligations” means (a) the due and punctual payment by the
Borrower of (i) the unpaid principal of and interest (including interest
accruing during the pendency of any bankruptcy, insolvency, receivership or
other similar proceeding, regardless of whether allowed or allowable in such
proceeding) on the NM Term Loans made to the Borrower under this Agreement, when
and as due, whether at maturity, by acceleration, upon one or more dates set for
prepayment or otherwise, and (ii) all other monetary obligations of the Borrower
owed under or pursuant to this Agreement and each other Loan Document with
respect to the NM Term Loans and/or NM Commitments or otherwise owing, due or
payable to a NM Lender (in its capacity as such), including obligations to pay
fees, expense reimbursement obligations and indemnification obligations, whether
primary, secondary, direct, contingent, fixed or otherwise (including monetary
obligations incurred during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding), (b) the due and punctual payment of all
obligations of each other Loan Party under or pursuant to each of the Loan
Documents with respect to the NM Term Loans and/or NM Commitments or otherwise
owing, due or payable to a NM Lender (in its capacity as such) and (c) all other
Loan Obligations that do not constitute Roll-Up Loan Obligations.

“NM Term Loan Note” means a promissory note of the Borrower evidencing NM Term
Loans substantially in the form of Exhibit C-1.

“Non-Consenting Lender” means any Lender that does not approve any consent,
waiver or amendment that (i) requires the approval of all affected Lenders in
accordance with the terms of Section 11.01 and (ii) has been approved by the
Required Lenders.

“Non-Defaulting Lender” means, at any time, each Lender that is not a Defaulting
Lender at such time.

“Non-Guarantor” means any Subsidiary of Holdings (other than the Borrower) that
is not a Guarantor.

“Note” means a NM Term Loan Note or a Roll-Up Loan Note, as the context may
require.

“Obligations” means all advances to, and debts, liabilities, obligations,
covenants and duties of, any Loan Party arising under any Loan Document
(including the Secured Hedge Agreements) or otherwise with respect to any Loan,
whether direct or indirect (including those acquired by assumption), absolute or
contingent, due or to become due, now existing or hereafter arising and
including interest and fees that accrue after the commencement by or against any
Loan Party or any Affiliate thereof of any proceeding under any Debtor Relief
Laws naming such Person as the debtor in such proceeding, regardless of whether
such interest and fees are allowed claims in such proceeding. Notwithstanding
the foregoing, Obligations shall not include any Excluded Hedge Obligations.

“OFAC” has the meaning specified in Section 5.24(b).

“Organization Documents” means, (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction);
(b) with respect to any limited liability company, the

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certificate or articles of formation or organization and operating agreement;
and (c) with respect to any partnership, joint venture, trust or other form of
business entity, the partnership, joint venture or other applicable agreement of
formation or organization and any agreement, instrument, filing or notice with
respect thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.

“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as
a result of a present or former connection between such Recipient and the
jurisdiction imposing such Tax (other than connections arising from such
Recipient having executed, delivered, become a party to, performed its
obligations under, received payments under, received or perfected a security
interest under, engaged in any other transaction pursuant to or enforced any
Loan Document, or sold or assigned an interest in any Loan or Loan Document).

“Other Taxes” means all present or future stamp, court or documentary,
intangible, recording, filing or similar Taxes that arise from any payment made
under any Loan Document, from the execution, delivery, performance, enforcement
or registration of, from the receipt or perfection of a security interest under,
or otherwise with respect to, any Loan Document, except any such Taxes that are
Other Connection Taxes imposed with respect to an assignment (other than an
assignment made pursuant to Section 3.06).

“Outstanding Amount” means with respect to Term Loans on any date, the aggregate
outstanding principal amount thereof after giving effect to any Borrowings,
deemed making of any Roll-Up Loans and prepayments or repayments of Term Loans,
as the case may be, occurring on such date.

“Participant” has the meaning specified in Section 11.06(d).

“Participant Register” has the meaning specified in Section 11.06(d).

“Patriot Act” means the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001,
Public Law 107-56.

“PBGC” means the Pension Benefit Guaranty Corporation.

“PDC Environmental Indemnity Agreement” means the Fox River PDC Environmental
Indemnity Agreement, dated as of November 9, 2001, between Holdings and the
Borrower, as amended prior to the date hereof and, if in accordance with the
terms hereof, on or after the date hereof.

“Period” means the Prior Week, the Trailing Four Week Period, the Cumulative
Thirteen Week Period or the Cumulative Period, as applicable.

“Permitted Existing Debt” means Indebtedness described on Schedule 7.02.

“Permitted Refinancing Debt” means (w) in connection with any refinancing of the
Second Lien Notes, new Indebtedness of the Borrower having terms (other than
pricing, subject

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to the terms of the Prepetition Intercreditor Agreement, if applicable), taken
as a whole, not materially less favorable to the Borrower than those applicable
to the Second Lien Notes or otherwise on then market terms and conditions for
comparable debt issuances, or for senior unsecured notes, as the case may be (in
each case as determined in good faith by the Administrative Agent), or otherwise
acceptable to the Required Lenders; provided that in no event shall such
Indebtedness (a) amortize, or otherwise be subject to scheduled redemptions,
repurchases or other payments of principal or have a final maturity date that is
earlier than the date that is six (6) months after the Scheduled Termination
Date, (b) require prepayments (or mandatory redemptions) in a manner more
extensive than the Second Lien Notes, (c) contain maintenance or other springing
or conditional financial covenants that are more restrictive than this
Agreement, (d) be secured by Liens, if any, that are not subordinated to the
Liens securing the Obligations in a manner at least as favorable to the Lenders
as provided for in the Prepetition Intercreditor Agreement; provided that the
Administrative Agent (at the direction of the Required Lenders in their sole
discretion) may agree to enter into a new intercreditor agreement with the agent
or trustee under such new Indebtedness that is entered into to refinance the
Second Lien Notes to the extent such new intercreditor agreement is in form and
substance satisfactory to the Required Lenders, or (e) contain other terms and
conditions that are more restrictive, taken as a whole, than those under this
Agreement (as determined in good faith by the Required Lenders); (x) in
connection with any refinancing of any Subordinated Indebtedness of the
Borrower, new Subordinated Indebtedness of the Borrower having terms (other than
pricing), taken as a whole, not materially less favorable to the Borrower than
those applicable to the Subordinated Indebtedness being refinanced (as
determined in good faith by the Required Lenders); provided that in no event
shall such Indebtedness (a) amortize, or otherwise be subject to scheduled
redemptions, repurchases or other payments of principal or have a final maturity
date that is earlier than the date that is six (6) months after the Scheduled
Termination Date, (b) be subordinated to the Obligations in a manner less
favorable to the Lenders than the Subordinated Indebtedness being refinanced,
(c) contain maintenance or other springing or conditional financial covenants,
(d) require prepayments or mandatory redemptions in a manner more extensive than
the Subordinated Indebtedness being refinanced or (e) contain other terms and
conditions that are more restrictive, taken as a whole, than those under this
Agreement (as determined in good faith by the Required Lenders); and (y) in
connection with any refinancing of unsecured Indebtedness of the Borrower, new
unsecured Indebtedness of the Borrower having terms (other than pricing), taken
as a whole, not materially less favorable to the Borrower than those applicable
to the unsecured Indebtedness being refinanced or otherwise on then market terms
and conditions for senior unsecured debt securities (in each case as determined
in good faith by the Required Lenders); provided that in no event shall such
Indebtedness (a) amortize, or otherwise be subject to scheduled redemptions,
repurchases or other payments of principal or have a final maturity date that is
earlier than the date that is six (6) months after the Scheduled Termination
Date, (b) require prepayments or mandatory redemptions in a manner more
extensive than the unsecured Indebtedness being refinanced, (c) contain
maintenance or other springing or conditional financial covenants or (d) contain
other terms and conditions that are more restrictive, taken as a whole, than
those under this Agreement (as determined in good faith by the Required
Lenders).

“Permitted Refinancing Debt Documents” means all instruments and other
agreements entered into by Holdings, the Borrower or any Subsidiaries in
connection with any Permitted Refinancing Debt.

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“Permitted Variance” has the meaning assigned to such term in Section 7.01(a).

“Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.

“Petition Date” has the meaning assigned to such term in the recitals hereto.

“PJT Letter Agreement” means that certain letter agreement dated September 15,
2017, by and among the Borrower, PJT Partners LP and O’Melveny & Myers LLP.

“Plan” means at a particular time, any employee benefit plan that is covered by
ERISA and in respect of which the Borrower or a Commonly Controlled Entity is
(or, if such plan were terminated at such time, would under Section 4069 of
ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

“Platform” has the meaning specified in Section 6.02.

“Pledged Stock” has the meaning specified in the applicable Guarantee and
Collateral Agreement.

“Post-EoD Carve-Out Amount” has the meaning assigned to such term in the
definition of the term “Carve-Out.”

“Prepetition Debt” means the Indebtedness evidenced by the Prepetition First
Lien Credit Agreement, the Second Lien Notes, the IDB Loan, the State of Ohio
Loan and the Receivables Facility.

“Prepetition First Lien Administrative Agent” has the meaning assigned to such
term in the recitals hereto.

“Prepetition First Lien Agents” has the meaning assigned to such term in the
recitals hereto.

“Prepetition First Lien Credit Agreement” has the meaning assigned to such term
in the recitals hereto.

“Prepetition First Lien Lenders” has the meaning assigned to such term in the
recitals hereto.

“Prepetition First Lien Loan Facility” means the “Facility” as defined in the
Prepetition First Lien Credit Agreement.

“Prepetition First Lien Loans” means any extension of credit made by Prepetition
First Lien Lenders under the Prepetition First Lien Credit Agreement.

“Prepetition First Lien Obligations” shall mean the Indebtedness evidenced by
the Prepetition First Lien Credit Agreement.

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“Prepetition First Lien Revolver Agent” has the meaning assigned to such term in
the recitals hereto.

“Prepetition Intercreditor Agreement” means the Intercreditor Agreement, dated
as of November 19, 2013, executed by Holdings, the Borrower, the other Loan
Parties from time to time party thereto, the Prepetition First Lien
Administrative Agent and the collateral agent under the Second Lien Note
Indenture, and as the same may be amended, restated, supplemented, waived and/or
otherwise modified from time to time in accordance with the terms thereof and of
this Agreement.

“Primed Liens” means the existing liens (x) on any Collateral that secures the
obligations of the applicable Debtor under or governed by (i) the Prepetition
First Lien Credit Agreement, (ii) the Second Lien Notes or (iii) the Receivables
Facility.

“Priming Liens” has the meaning assigned to such term in Section 2.17(d).

“Prior Week” means, as of any date of determination, the immediately preceding
week ended on a Saturday and commencing on the prior Sunday.

“Professional Fees” has the meaning assigned to such term in the definition of
the term “Carve-Out”.

“Properties” has the meaning specified in Section 5.17(a).

“Public Lender” has the meaning specified in Section 6.02.

“Purchase Right” has the meaning specified in Section 11.06(h).

“Purchase Right Parties” has the meaning specified in Section 11.06(h).

“Qualified IPO” means the first bona fide underwritten public offering by
Holdings of its Capital Stock after the Closing Date pursuant to an effective
registration statement filed with the Securities and Exchange Commission in
accordance with the Securities Act of 1933, as amended, that yields cash gross
proceeds to Holdings of at least $50,000,000.

“Receivable” has the meaning specified in the Guarantee and Collateral
Agreements.

“Receivables Facility” means that certain Receivables Purchase Agreement (as
amended or otherwise modified prior to the date hereof, the “Receivables
Facility”), dated as of June 4, 2014, by and among the Borrower, as servicer,
Appvion Receivables Funding I LLC, as seller, the various purchasers from time
to time party thereto, and Fifth Third Bank, as purchaser and administrative
agent.

“Recipient” means (a) the Administrative Agent and (b) any Lender.

“Recovery Event” means any settlement of or payment in respect of any property
or casualty insurance claim or any condemnation proceeding relating to any asset
of any Group Member.

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“Register” has the meaning specified in Section 11.06(c).

“Related Lender” means (a) with respect to any NM Lender, (i) any of its
Affiliates holding Prepetition First Lien Loans on the date of this Agreement or
any other applicable date of determination in connection with the transactions
contemplated by Section 2.01(b) or 2.01(c) or (ii) if and to the extent that
such NM Lender is acting as a “fronting lender” (or similar role) for any Person
that is a Prepetition First Lien Lender, in accordance with the procedures
separately agreed among the Administrative Agent and such NM Lender, such
Prepetition First Lien Lender and any of its Affiliates, and (b) with respect to
any Prepetition First Lien Lender, (i) any of its Affiliates holding Prepetition
First Lien Loans on the date of this Agreement or any other applicable date of
determination in connection with the transactions contemplated by
Section 2.01(b) or 2.01(c) or (ii) any NM Lender acting as a “fronting lender”
(or similar role) for such Prepetition First Lien Lender, in accordance with the
procedures separately agreed among the Administrative Agent and such NM Lender.

“Related Parties” means, with respect to any Person, such Person’s Affiliates
and the partners, directors, officers, employees, agents, trustees,
administrators, managers, representatives and advisors of such Person and of
such Person’s Affiliates.

“Reorganization” means with respect to any Multiemployer Plan, the condition
that such plan is in reorganization within the meaning of Section 4241 of ERISA.

“Reportable Event” means any of the events set forth in Section 4043(c) of
ERISA, other than those events as to which the thirty day notice period is
waived under Subpart B of PBGC Reg. § 4043.

“Request for Borrowing” means with respect to a Borrowing, conversion or
continuation of Term Loans, a Committed Loan Notice.

“Required Lenders” means, as of any date of determination, Lenders holding more
than 50% of the sum of the (a) Total Outstandings and (b) aggregate unused NM
Commitments; provided that the unused NM Commitment of, and the portion of the
Total Outstandings held, or deemed held by, any Defaulting Lender shall be
excluded for the purposes of making a determination of Required Lenders.

“Requirement of Law” means, as to any Person, the Certificate or Articles of
Incorporation and By-Laws or other organizational or governing documents of such
Person, and any Law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.

“Responsible Officer” means the chief executive officer, president, chief
financial officer, treasurer, assistant treasurer or controller of a Loan Party
and any other officer of the applicable Loan Party so designated by any of the
foregoing officers in a notice to the Administrative Agent. Any document
delivered hereunder that is signed by a Responsible Officer of a Loan Party
shall be conclusively presumed to have been authorized by all necessary
corporate, partnership and/or other action on the part of such Loan Party and
such Responsible Officer shall be conclusively presumed to have acted on behalf
of such Loan Party and each

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certification by a Responsible Officer set forth in any such document shall be
deemed given by such Responsible Officer in such Person’s representational
capacity as such Responsible Officer and not in such Person’s individual
capacity.

“Restricted Junior Debt Payment” has the meaning specified in Section 7.08(a).

“Restricted Payment” has the meaning set forth in Section 7.06.

“Roll-Up Challenge” means any liabilities, obligations, losses, damages,
penalties, claims, demands, actions, judgments, suits, costs, expenses and
disbursements (including attorney costs) of any kind or nature whatsoever which
may at any time be imposed on, incurred by or asserted against any Indemnitee in
any way relating to or arising out of or in connection with the design,
development, negotiation, documentation, closing, execution or implementation of
the transfer or designation of the Roll-Up Loans or the effect, operation,
performance or enforcement of the provisions under the Loan Documents with
regard to the Roll-Up Loans (including the receipt of payment in respect
thereof).

“Roll-Up Challenge Period” means the “Challenge Period” as defined in the
Interim Financing Order or Final Financing Order as in effect at the relevant
time.

“Roll-Up Lenders” means each Lender that holds a Roll-Up Loan.

“Roll-Up Loan Obligations” means (a) the due and punctual payment by the
Borrower of (i) the unpaid principal of and interest (including interest
accruing during the pendency of any bankruptcy, insolvency, receivership or
other similar proceeding, regardless of whether allowed or allowable in such
proceeding) on the Roll-Up Loans made to the Borrower under this Agreement, when
and as due, whether at maturity, by acceleration, upon one or more dates set for
prepayment or otherwise, and (ii) all other monetary obligations of the Borrower
owed under or pursuant to this Agreement and each other Loan Document with
respect to the Roll-Up Loans or otherwise owing, due or payable to a Roll-Up
Lender (in its capacity as such), including obligations to pay fees, expense
reimbursement obligations and indemnification obligations, whether primary,
secondary, direct, contingent, fixed or otherwise (including monetary
obligations incurred during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding), and (b) the due and punctual payment of all
obligations of each other Loan Party under or pursuant to each of the Loan
Documents with respect to the Roll-Up Loans or otherwise owing, due or payable
to a Roll-Up Lender (in its capacity as such).

“Roll-Up Loans” has the meaning set forth inmeans the roll-up loans deemed made
on the Closing Date and on the Final Financing Order Roll Date pursuant to
Section 2.01(c).

“Roll-Up Priority Provision” means, subject to the Financing Orders, that the
Roll-Up Loans (i) may be compromised under a plan of reorganization only by a
class vote and (ii) may not be crammed down under a plan of reorganization
pursuant to section 1129(b)(2)(A) of the Bankruptcy Code.

“Roll-Up Loan Note” means a promissory note of the Borrower evidencing Roll-Up
Loans substantially in the form of Exhibit C-2.

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“S&P” means S&P Global Ratings, a division of S&P Global, Inc., and any
successor thereto.

“Sale and Leaseback Transaction” means, with respect to Holdings or any of its
Subsidiaries, any arrangement, directly or indirectly, with any Person whereby
Holdings or such Subsidiary shall sell or transfer property used or useful in
its business, whether now owned or hereafter acquired, and thereafter rent or
lease such property or other property that it intends to use for substantially
the same purpose or purposes as the property being sold or transferred.

“Sanctions” has the meaning specified in Section 5.24(b).

“Scheduled Termination Date” means the date that is nine (9) months after the
Closing Date.

“SEC” means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.

“Second Lien Note Indenture” means the indenture dated as of November 19, 2013,
by and among Holdings, the Borrower, Appvion Canada Ltd., certain of its
Subsidiaries and U.S. Bank National Association, as trustee and as collateral
agent, in connection with the issuance of the Second Lien Notes, as the same may
be amended, restated, supplemented, waived and/or otherwise modified from time
to time in accordance with the terms thereof, of this Agreement and of the
Prepetition Intercreditor Agreement.

“Second Lien Note Documents” means the Second Lien Note Indenture, the Second
Lien Notes, the Second Lien Security Documents and each other document,
instrument or agreement relating to the issuance of the Second Lien Notes, as
the same may be amended, restated, supplemented, waived and/or otherwise
modified from time to time in accordance with the terms thereof, of this
Agreement and of the Prepetition Intercreditor Agreement.

“Second Lien Noteholder Refinancing DIP Facility” has the meaning specified in
Section  2.05(a)(iii).

“Second Lien Noteholders” has the meaning specified in Section  2.05(a)(iii).

“Second Lien Notes” means the senior secured second lien notes of the Borrower
issued pursuant to the Second Lien Note Indenture.

“Second Lien Security Documents” means the collective reference to each security
agreement, pledge agreement, mortgage, deed of trust, collateral agreement,
instrument or other document granting or perfecting a Lien on any asset or
assets of any Person in accordance with the terms of the Prepetition
Intercreditor Agreement to secure the obligations and liabilities of Holdings,
the Borrower and certain of its Subsidiaries under the Second Lien Note
Documents.

“Secured Cash Management Agreement” means any Cash Management Agreement that is
entered into by and between the Borrower or any other Loan Party and a Cash
Management Bank and, notwithstanding anything to the contrary set forth herein
or in any other Loan Document, all Existing Cash Management Agreements shall be
deemed for all purposes to constitute Secured Cash Management Agreements
hereunder and under each of the other Loan Document.

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“Secured Hedge Agreement” means any interest rate, energy, raw materials,
commodity or currency exchange Hedge Agreement permitted under Article VII that
is entered into by and between the Borrower or any other Loan Party and a Hedge
Bank and, notwithstanding anything to the contrary set forth herein or in any
other Loan Document, all Existing Hedge Agreements shall be deemed for all
purposes to constitute Secured Hedge Agreements hereunder and under each of the
other Loan DocumentDocuments.

“Secured Parties” means, collectively, the Administrative Agent, the Arranger,
the Lenders, the Hedge Banks, the Cash Management Banks, each co-agent or
sub-agent appointed by the Administrative Agent from time to time pursuant to
Section 9.05, and the other Persons the Obligations owing to which are or are
purported to be secured by the Collateral under the terms of the Security
Documents.

“Security Documents” means the collective reference to the Guarantee and
Collateral Agreements, the Intellectual Property Security Agreement (and any
supplement thereto) and all other security documents hereafter delivered to the
Administrative Agent granting or perfecting a Lien on any property of any Person
to secure the obligations and liabilities of any Loan Party under any Loan
Document.

“Single Employer Plan” means any Plan that is covered by Title IV of ERISA, but
that is not a Multiemployer Plan.

“State of Ohio Loan” means that certain Loan and Security Agreement (as amended
or otherwise modified prior to the date hereof, the “State of Ohio Loan
Agreement”), dated as of July 1, 2007, by and between the Borrower and the
Director of Development of the State of Ohio on behalf of the State of Ohio,
pursuant to which the State of Ohio made a loan to the Borrower with the
proceeds of certain bonds (the “State of Ohio Loan”).

“Statutory Reserves” means, for any day during any Interest Period for any
Borrowing of Eurodollar Rate Loans, the average maximum rate at which reserves
(including any marginal, supplemental or emergency reserves) are required to be
maintained, during such Interest Period under regulations issued from time to
time (including “Regulation D,” issued by the FRB (the “Reserve Regulations”) by
member banks of the United States Federal Reserve System in New York City with
deposits exceeding one billion Dollars against Eurocurrency funding liabilities
(currently referred to as “Eurocurrency liabilities” (as such term is used in
Regulation D)). Borrowings of Eurodollar Rate Loans shall be deemed to
constitute Eurodollar liabilities and to be subject to such reserve requirements
without benefit of or credit for proration, exceptions or offsets which may be
available from time to time to any Lender under the Reserve Regulations.

“Subordinated Indebtedness” means Indebtedness of any Group Member that is
subordinated in right to and time of payment to the Obligations.

“Subsidiary” of a Person means a corporation, partnership, joint venture,
limited liability company or other business entity of which a majority of the
shares of securities or other interests having ordinary voting power for the
election of directors or other governing body (other than

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securities or interests having such power only by reason of the happening of a
contingency) are at the time beneficially owned, or the management of which is
otherwise controlled, directly, or indirectly through one or more
intermediaries, or both, by such Person. Unless otherwise specified, all
references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a direct
or indirect Subsidiary or Subsidiaries of Holdings.

“Subsidiary Chapter 11 Cases” has the meaning assigned to such term in the
recitals hereto.

“Superpriority Claim” means a claim against any Loan Party in any of the Chapter
11 Cases that is a superpriority administrative expense claim having priority
over any or all administrative expenses and other post-petition claims of the
kind specified in, or otherwise arising or ordered under, any section of the
Bankruptcy Code (including, without limitation, Sections 105, 326, 328, 330,
331, 503(b), 507(a), 507(b), 546(c), 726 (to the extent permitted by law), 1113
and/or 1114 thereof), whether or not such claim or expenses may become secured
by a judgment lien or other non-consensual lien, levy or attachment, other than
the Carve-Out.

“Synthetic Debt” means, with respect to any Person as of any date of
determination thereof, all obligations of such Person in respect of transactions
entered into by such Person that are intended to function primarily as a
borrowing of funds (including any minority interest transactions that function
primarily as a borrowing) but are not otherwise included in the definition of
“Indebtedness” or as a liability on the consolidated balance sheet of such
Person and its Subsidiaries in accordance with GAAP.

“Taxes” means all present or future taxes, levies, imposts, duties, deductions,
withholdings (including backup withholding), assessments, fees or other charges
imposed by any Governmental Authority, including any interest, additions to tax
or penalties applicable thereto.

“Term Borrowing” means a Borrowing consisting of simultaneous NM Term Loans of
the same Type and, in the case of Eurodollar Rate Loans, having the same
Interest Period made by each of the NM Lenders pursuant to Section 2.01(a).

“Term Loan” means NM Term Loans and Roll-up Loans.

“Termination Date” means the earliest of (a) the Scheduled Termination Date,
(b) forty-five (45) days after the entry of the Interim Financing Order (or such
later date (but in no event later than sixty (60) days after the entry of the
Interim Financing Order) as the Required Lenders (as defined below) may
reasonably agree) if the Final Financing Order (as defined below) has not been
entered prior to the expiration of such period, (c) the substantial consummation
(as defined in Section 1101 of the Bankruptcy Code and which for purposes hereof
shall be no later than the “effective date” thereof) of a plan of reorganization
filed in the Chapter 11 Cases that is confirmed pursuant to an order entered by
the Bankruptcy Court, (d) the consummation of a sale of substantially all assets
of the Loan Parties, and (e) the acceleration of the Loans and the termination
of all NM Commitments in accordance with the Loan Documents; provided that, if
such date is not a Business Day, the Termination Date shall be the immediately
preceding Business Day.

“Total Outstandings” means the aggregate Outstanding Amount of all Loans.

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“Trailing Four Week Period” means the four-week period up to and through the
Saturday of the most recent Week then ended, or if a four-week period has not
then elapsed from the Petition Date, the Cumulative Period.

“Transaction” means, collectively, (a) the entering into by the Loan Parties and
their applicable Subsidiaries of the Loan Documents to which they are or are
intended to be a party, (b) the making of the NM Term Loans and Roll-Up Loans
and (c) the payment of the fees and expenses incurred in connection with the
consummation of the foregoing.

“Type” means, with respect to a Loan, its character as a Base Rate Loan or a
Eurodollar Rate Loan.

“UCC” means the Uniform Commercial Code as in effect in the State of New York;
provided that, if perfection or the effect of perfection or non-perfection or
the priority of any security interest in any Collateral is governed by the
Uniform Commercial Code as in effect in a jurisdiction other than the State of
New York, “UCC” means the Uniform Commercial Code as in effect from time to time
in such other jurisdiction for purposes of the provisions hereof relating to
such perfection, effect of perfection or non-perfection or priority.

“United States” and “U.S.” mean the United States of America.

“U.S. Loan Party” means any Loan Party that is organized under the Laws of one
of the states of the United States of America and that is not a CFC.

“U.S. Tax Compliance Certificate” has the meaning assigned to such term in
Section 3.01(f)(ii)(B)(iii).

“Voting Stock” of any specified Person as of any date means the Capital Stock of
such Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.

“Week” means any seven day period commencing on a Sunday and ending on the
immediately following Saturday.

“Wholly Owned Subsidiary” means as to any Person, any other Person all of the
Capital Stock of which (other than directors’ qualifying shares required by Law)
is owned by such Person directly and/or through other Wholly Owned Subsidiaries.

“Withholding Agent” means the Borrower, Holdings, and the Administrative Agent.

“Write-Down and Conversion Powers” means, with respect to any EEA Resolution
Authority, the write-down and conversion powers of such EEA Resolution Authority
from time to time under the Bail-In Legislation for the applicable EEA Member
Country, which write-down and conversion powers are described in the EU Bail-In
Legislation Schedule.

 

1.02 Other Interpretive Provisions.

With reference to this Agreement and each other Loan Document, unless otherwise
specified herein or in such other Loan Document:

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(a)    The definitions of terms herein shall apply equally to the singular and
plural forms of the terms defined. Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms. The words
“include,” “includes” and “including” shall be deemed to be followed by the
phrase “without limitation” unless already followed by such phrase. The word
“will” shall be construed to have the same meaning and effect as the word
“shall.” Unless the context requires otherwise, (i) any definition of or
reference to any agreement, instrument or other document (including any
Organization Document) shall be construed as referring to such agreement,
instrument or other document as from time to time amended, supplemented or
otherwise modified (subject to any restrictions on such amendments, supplements
or modifications set forth herein or in any other Loan Document), (ii) any
reference herein to any Person shall be construed to include such Person’s
successors and assigns, (iii) the words “herein,” “hereof” and “hereunder.” and
words of similar import when used in any Loan Document, shall be construed to
refer to such Loan Document in its entirety and not to any particular provision
thereof, (iv) all references in a Loan Document to Articles, Sections,
Preliminary Statements, Exhibits and Schedules shall be construed to refer to
Articles and Sections of, and Preliminary Statements, Exhibits and Schedules to,
the Loan Document in which such references appear, (v) any reference to any Law
shall include all statutory and regulatory provisions consolidating, amending,
replacing or interpreting such Law and any reference to any Law or regulation
shall, unless otherwise specified, refer to such Law or regulation as amended,
modified or supplemented from time to time, and (vi) the words “asset” and
“property” shall be construed to have the same meaning and effect and to refer
to any and all tangible and intangible assets and properties, including cash,
securities, accounts and contract rights.

(b)    In the computation of periods of time from a specified date to a later
specified date, the word “from” means “from and including;” the words “to” and
“until” each mean “to but excluding;” and the word “through” means “to and
including.”

(c)    Section headings herein and in the other Loan Documents are included for
convenience of reference only and shall not affect the interpretation of this
Agreement or any other Loan Document.

 

1.03 Accounting Terms.

(a)    Generally. All accounting terms not specifically or completely defined
herein shall be construed in conformity with, and all financial data (including
financial ratios and other financial calculations) required to be submitted
pursuant to this Agreement shall be prepared in conformity with, GAAP, as in
effect from time to time, applied in a manner consistent with that used in
preparing the audited consolidated balance sheet of Holdings and its
Subsidiaries for the fiscal year ended December 24, 2016, and the related
consolidated statements of income or operations, shareholders’ equity and cash
flows for such fiscal year of Holdings and its Subsidiaries, including the notes
thereto, except as otherwise required or permitted under GAAP (and subject to
clause (b) below) and disclosed to the Administrative Agent and the Lenders in
the first financial statements in which the change is made.

(b)    Changes in GAAP. If at any time any change in GAAP (or a change by the
Loan Parties in the application thereof) would affect the computation of any
financial ratio or

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requirement set forth in any Loan Document, and either the Borrower or the
Required Lenders shall so request, the Lenders and the Borrower shall negotiate
in good faith to amend such ratio or requirement to preserve the original intent
thereof in light of such change in GAAP (or the application thereof) (subject to
the approval of the Borrower and the Required Lenders); provided that, until so
amended, (i) such ratio or requirement shall continue to be computed in
accordance with GAAP prior to such change therein and (ii) the Borrower shall
provide to the Administrative Agent and the Lenders financial statements and
other documents required under this Agreement or as reasonably requested
hereunder setting forth a reconciliation between calculations of such ratio or
requirement made before and after giving effect to such change in GAAP (or the
application thereof).

 

1.04 Rounding.

Any financial ratios required to be maintained by the Borrower pursuant to this
Agreement shall be calculated by dividing the appropriate component by the other
component, carrying the result to one place more than the number of places by
which such ratio is expressed herein and rounding the result up or down to the
nearest number (with a rounding-up if there is no nearest number).

 

1.05 Times of Day.

Unless otherwise specified, all references herein to times of day shall be
references to Central time (daylight or standard, as applicable).

ARTICLE II

THE COMMITMENTS AND CREDIT EXTENSIONS

 

2.01 NM Commitments and NM Term Loans; Roll-Up Loans.

(a)    NM Term Loans. Subject to the terms and applicable conditions set forth
herein (including without limitation the conditions set forth in Article IV),
each NM Lender agrees to make NM Term Loans to the Borrower during the
Availability Period in an aggregate principal amount not to exceed such NM
Lender’s NM Commitment; provided that (i) the aggregate principal amount of NM
Term Loans made prior to the entry of the Final Financing Order shall not exceed
the Interim NM Availability Amount and (ii) if for any reason the full amount of
any Lender’s NM Term Loan Commitment is not fully drawn on the expiration of the
Availability Period, the undrawn portion thereof shall automatically be
cancelled and shall terminate immediately and without further action; provided
further that if at any time any NM Lender shall become a Defaulting Lender, the
Backstop Party shall assume such NM’s Lender NM Commitment (and such NM Lender
shall remain a Defaulting Lender notwithstanding such assumption and funding by
the Backstop Party). Each Borrowing shall consist of NM Term Loans made
simultaneously by the NM Lenders in accordance with their respective NM
Commitments. Amounts borrowed under this Section 2.01(a) and repaid or prepaid
may not be reborrowed. NM Term Loans may be Base Rate Loans or Eurodollar Rate
Loans as further provided herein.

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(b)    Additional NM Lenders.

(i)    The NM Lenders with NM Commitments as of the Closing Date shall make
reallocations of their respective NM Commitments, and, to the extent applicable,
NM Loans, to allow for additional Prepetition First Lien Lenders having
Prepetition First Lien Loans as of the date of the entry of the Final Financing
Order (without giving effect to any Roll-Up Loans made on such date) to become
parties to this Agreement as NM Lenders no later than the date of the entry of
the Final Financing Order (or one Business Day thereafter) (which election to
become a NM Lender may be exercised though a Related Lender of any such
Prepetition First Lien Lender) (collectively, the “Additional NM Lenders”).

(ii)    NMUpon the entry of the Final Financing Order (or within one Business
Day thereafter), the NM Commitments and, to the extent applicable, NM Loans
shall be reallocated and deemed assigned hereunder to the extent agreed to by,
or in accordance with the procedures separately agreed to among, the
Administrative Agent, the Borrower and the NM Lenders (set forth on Schedule
2.01(b); provided that (xa) each such reallocation and assignment shall be
effective on the date of the entry of the Final Financing Order (or within one
Business Day thereafter), (yb) no Additional NM Lender’s Applicable Percentage
with respect to the NM Commitments and NM Term Loans shall exceed the percentage
of Prepetition First Lien Loans held by such Additional NM Lender as of the date
of the entry of the Final Financing Order (without giving effect to any Roll-up
Loans made on or prior to such date) and, (zc) such allocations and assignments
shall not reduce the aggregate amount of NM Commitment). The NM Lenders agree to
make such payments, sales, assignments and other transactions among themselves
(or through the Administrative Agent, its affiliates or another broker or agent
engaged for any such purposes by any NM Lender) as are necessary to effect such
reallocation, and for or reduce the NM Commitment of any NM Lender to the extent
not assigned pursuant to Schedule 2.01(b), (d) each Additional NM Lender shall
have executed and delivered a joinder to this agreement and shall have paid the
Administrative Agent, for the account of the NM Lenders with NM Commitments and
NM Loans outstanding prior to the entry of the Final Financing Order, an amount
equal to the NM Loans reallocated and assigned to such Additional NM Lender (net
of any Upfront Fee payable to such Additional NM Lender) and (e) such
allocations and assignments shall not reduce, alter or diminish the obligations
of the Backstop Party as in effect on the Closing Date. The NM Lenders, each
Additional NM Lender, the Agent and the Borrower agree that (x) with respect to
each NM Lender that is assigning a portion of its NM Loans and NM Commitments
hereunder in accordance with Schedule 2.01(b), the reallocation and assignment
pursuant to this clause shall constitute a payment in full by the Additional NM
Lenders of the assigned portion of the NM Lenders’ NM Loans and a termination in
full of such assigned NM Commitments, (y) with respect to each Additional NM
Lender that is acquiring NM Loans and NM Commitment, the reallocation and
assignment pursuant to this clause shall result in such Additional NM Lender
having the outstanding NM Loans and NM Commitments as if such were issued on the
date of entry of the Final Financing Order (or within one Business Day
thereafter, if the applicable joinder is effective as of such date) and (z) each
Additional NM Lender shall make the payments set forth on Schedule 2.01(b) to
the Administrative Agent, and

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the Administrative Agent shall immediately transfer such funds plus the balance
of any Upfront Fees held by the Administrative Agent to the NM Lenders with NM
Loans outstanding prior to the entry of the Final Financing Order in accordance
with their Applicable Percentages thereof as set forth on Schedule 2.01(b). For
the avoidance of doubt, no reallocation and assignment shall be effective until
each applicable NM Lender has made such payments, sales, assignments and other
transactions.

(iii)    Notwithstanding anything herein to the contrary, prior to any Person
becoming a Lender or being allocated NM Loans and/or NM Commitments in
connection with the reallocation set forth in Section 2.01(b)(ii) above, the
Administrative Agent shall have received and be reasonably satisfied with all
documentation and other information required by regulatory authorities under
applicable “know your customer” and anti-money laundering rules and regulations,
including without limitation, the USA PATRIOT ACT.

(c)    The Roll-Up Loans.

(i)    On the Closing Date and without any further action of any Person, each NM
Lender having a NM Commitment as of such date and/or Related Lender thereof
shall be deemed to have made Roll-Up Loans hereunder with the proceeds thereof
being applied to the Prepetition First Lien Obligations in respect of such NM
Lenders’ and Related Parties’ then-outstanding Prepetition First Lien Loans;
provided that the aggregate amount of Roll-Up Loans made on such date shall not
exceed the aggregate principal amount of Prepetition First Lien Loans
outstanding as of such date multiplied by the Interim Availability Percentage
(such amount being allocated ratably among such NM Lenders and Related Lenders
as of such date).

(ii)    On the later of (A) the date of the entry of the Final Financing Order
and (B)  October 31, 2017 (such date, the “Final Financing Order Roll Date”),
and without any further action of any Person, the balance of the Prepetition
First Lien Obligations outstanding as of such date (for the avoidance of doubt,
other than Prepetition First Lien Obligations that constitute Letters of Credit
(as defined in the Prepetition First Lien Credit Agreement) which have been cash
collateralized) shall be rolled up and Roll-Up Loans shall be deemed made
hereunder in such amount by each of the Prepetition First Lien Lenders holding
such Prepetition First Lien Obligations.

(iii)    Until the latest of (x) the date of the entry of the Final Financing
Order Roll Date (y) the expiration of any Roll-Up Challenge Period without the
timely commencement of any Roll-Up Challenge or (z) the exhaustion of any and
all appeals in any adversary proceeding or contested matter asserting a Roll-Up
Challenge, the Roll-Up Loans shall continue (A) to be guaranteed and secured by
and entitled to the benefits of all Liens and security interests created and
arising under the Security Documents (as defined in the Prepetition First Lien
Credit Agreement as in effect on the date hereof), which Liens and security
interests shall remain in full force and effect on a continuous basis,
unimpaired, uninterrupted and undischarged, and having the same perfected status
and priority, as if such loans had not been so designated and (B) in the event
that a Roll-Up Challenge is successful, to be entitled to a pro rata share of
any payment, distribution

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or recovery on account of the Prepetition First Lien Obligations as if the
Roll-Up Loans had continued to be administered under the Prepetition First Lien
Credit Agreement. The Administrative Agent shall, and each Roll-Up Lender
authorizes the Administrative Agent to, promptly notify the Prepetition First
Lien Agents or their successors as in such capacities thereunder, of the amount
of each Roll-Up Lender’s Roll-Up Loans, and the amount of Roll-Up Loans subject
to a successful Roll-Up Challenge, so that such Prepetition First Lien Agents
may update the register with respect to the Prepetition First Lien Loan Facility
to reflect the transactions described in this Section 2.01(c) (it being
understood and agreed that the Administrative Agent shall have no liability for
providing such information, absent gross negligence or willful misconduct). For
the avoidance of doubt, each Roll-Up Lender acknowledges and agrees that by
accepting the benefits of this Agreement it shall be deemed to have agreed to
all provisions hereof, including the duties and obligations of a Lender.

(iv)    Notwithstanding anything to the contrary in the Loan Documents, the
Roll-Up Loans shall have the benefit of the Roll-Up Priority Provision.

 

2.02 Borrowings, Conversions and Continuations of Loans.

(a)    Each Borrowing of NM Term Loans, each conversion of Loans from one Type
to the other, and each continuation of Eurodollar Rate Loans shall be made upon
the Borrower’s irrevocable notice to the Administrative Agent, which may be
given by telephone. Each such notice must be received by the Administrative
Agent not later than 10:00 a.m. (New York time) (i) three (3) Business Days
prior to the requested date of any Borrowing of, conversion to or continuation
of Eurodollar Rate Loans or of any conversion of Eurodollar Rate Loans to Base
Rate Loans and (ii) one (1) Business Day prior to the requested date of any
Borrowing of Base Rate Loans. Each telephonic notice by the Borrower pursuant to
this Section 2.02(a) must be confirmed promptly by delivery to the
Administrative Agent of a written Committed Loan Notice, appropriately completed
and signed by a Responsible Officer of the Borrower. Each Borrowing of,
conversion to or continuation of Eurodollar Rate Loans shall be in a principal
amount of at least $500,000 or a whole multiple of $500,000 in excess thereof.
Each Borrowing of or conversion to Base Rate Loans shall be in a principal
amount of $500,000 or a whole multiple of $50,000 in excess thereof. Each
Committed Loan Notice (whether telephonic or written) shall specify (i) whether
the Borrower is requesting a Term Borrowing or a conversion of Term Loans from
one Type to the other, or a continuation of Eurodollar Rate Loans, (ii) the
requested date of the Borrowing, conversion or continuation, as the case may be
(which shall be a Business Day), (iii) the principal amount of Loans to be
borrowed, converted or continued, (iv) the Type of Loans to be borrowed or to
which existing Term Loans are to be converted, and (v) if applicable, the
duration of the Interest Period with respect thereto. If the Borrower fails to
specify a Type of Loan in a Committed Loan Notice or if the Borrower fails to
give a timely notice requesting a conversion or continuation, then the
applicable Term Loans shall be made as, or converted to, Eurodollar Rate Loans
with an Interest Period of one month. Any such automatic conversion to
Eurodollar Rate Loans shall be effective as of the last day of the Interest
Period then in effect with respect to the applicable Eurodollar Rate Loans. If
the Borrower requests a Borrowing of, conversion to, or continuation of
Eurodollar Rate Loans in any such Committed Loan Notice, but fails to specify an
Interest Period, it will be deemed to have specified an Interest Period of one
month. Notwithstanding anything to the contrary herein, (x)

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all Roll-Up Loans shall be Base Rate Loans on the date deemed made pursuant to
Section 2.01(c)Closing Date, subject to conversion or continuation in accordance
with the foregoing procedures and (y) all Roll-Up Loans shall be Eurodollar Rate
Loan as of the Final Financing Order Roll Date, subject to conversion or
continuation in accordance with the foregoing procedures.

(b)    Following receipt of a Committed Loan Notice, the Administrative Agent
shall promptly notify each Lender of the amount of its Applicable Percentage of
the applicable Term Loans, and if no timely notice of a conversion or
continuation is provided by the Borrower, the Administrative Agent shall notify
each Lender of the details of any automatic continuation of Loans, in each case
as described in Section 2.02(a). In the case of the Term Borrowings on the
Closing Date, each NM Lender shall make the amount of its Loan available to the
Administrative Agent in immediately available funds at the Administrative
Agent’s Office not later than 12:00 noon (New York time) on the Business Day
specified in the applicable Committed Loan Notice. Upon satisfaction of the
applicable conditions set forth in Section 4.01, 4.02 and 4.03, the
Administrative Agent shall make all funds so received available to the Borrower
either by crediting an account of the Borrower maintained with Fifth Third Bank
with the amount of such funds or by wire transfer of such funds, in each case in
accordance with instructions provided to (and reasonably acceptable to) the
Administrative Agent by the Borrower.

(c)    Except as otherwise provided herein, a Eurodollar Rate Loan may be
continued only on the last day of an Interest Period for such Eurodollar Rate
Loan, however a Eurodollar Rate Loan may be converted at any time subject to any
applicable breakage fees to be paid by the Borrower. During the existence of a
Default, no Loans may be requested as or converted to Eurodollar Rate Loans or
continued for an Interest Period of longer than one month, in each case, without
the consent of the Required Lenders, and the Required Lenders may demand that
any or all of the then outstanding Eurodollar Rate Loans made to the Borrower be
converted to Base Rate Loans on the last day of the then current Interest Period
with respect thereto.

(d)    The Administrative Agent shall promptly notify the Borrower and the
Lenders of the interest rate applicable to any Interest Period for Eurodollar
Rate Loans upon determination of such interest rate. At any time that Base Rate
Loans are outstanding, the Administrative Agent shall notify the Borrower and
the Lenders of any change in prime rate used in determining the Base Rate
promptly following the public announcement of such change.

(e)    After giving effect to all Term Borrowings, all conversions of Term Loans
from one Type to the other, and all continuations of Term Loans as the same
Type, there shall not be more than six (6) Interest Periods in effect in respect
of the Loans.

 

2.03 [Reserved.]

 

2.04 [Reserved.]

 

2.05 Prepayments.

(a)    Optional.

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(i)    TheSubject to Section  2.05(a)(iii), the Borrower may not voluntarily
prepay the NM Term Loans in whole or in part at any time prior to the Scheduled
Termination Date.

(ii)    Subject to Section 2.07(b) and the last sentence of this
Section 2.05(a)(ii), the Borrower may, upon notice from the Borrower to the
Administrative Agent, at any time or from time to time voluntarily prepay the
Roll-Up Loans in whole or in part subject to the payment of the Payment Premium
concurrently therewith; provided that (A) such notice must be received by the
Administrative Agent not later than 10:00 a.m. (New York time) (1) three (3)
Business Days prior to any date of prepayment of Eurodollar Rate Loans and
(2) one (1) day prior to the date of prepayment of Base Rate Loans; (B) any
prepayment of Eurodollar Rate Loans shall be in a principal amount of at least
$500,000 or a whole multiple of $500,000 in excess thereof (or, if less, the
entire principal amount of the respective Borrowing); and (C) any prepayment of
Base Rate Loans shall be in a principal amount of $500,000 or a whole multiple
of $100,000 in excess thereof or, in each case, if less, the entire principal
amount thereof then outstanding. Each such notice shall specify the date and
amount of such prepayment and the Type(s) of Loans to be prepaid and, if
Eurodollar Rate Loans are to be prepaid, the Interest Period(s) of such Loans.
The Administrative Agent will promptly notify each Lender of its receipt of each
such notice, and of the amount of such Lender’s ratable portion of such
prepayment (based on such Lender’s Applicable Percentage). If such notice is
given by the Borrower, the Borrower shall make such prepayment and the payment
amount specified in such notice shall be due and payable on the date specified
therein. Any prepayment of a Eurodollar Rate Loan shall be accompanied by all
accrued interest on the amount prepaid, together with any additional amounts
required pursuant to Section 3.05 and Section 2.07(b), as applicable.

(iii)     Notwithstanding any other provision of this Agreement to the contrary,
the Lenders agree that upon the delivery by the Required Lenders (or the
Administrative Agent at the direction of the Required Lenders) to the Borrower
of written notice of the occurrence or declaration of an Event of Default (it
being agreed by the Lenders that no remedies shall be exercised in respect of
such Event of Default prior to the date of such written notice or declaration),
the Borrower may, upon notice from the Borrower to the Administrative Agent, at
any time or from time to time repay all (and not less than all) of the accrued
and unpaid Obligations outstanding at such time (including the Outstanding
Amount of the Term Loans) subject to the payment of the Payment Premium and the
Exit Fee concurrently therewith; provided that such notice must be received by
the Administrative Agent not later than 10:00 a.m. (New York time) (1) three (3)
Business Days prior to any date of prepayment of Eurodollar Rate Loans and
(2) one (1) Business Day prior to the date of prepayment of Base Rate Loans (the
“Prepayment Notice”); provided further that, notwithstanding any provision of
the Prepetition Intercreditor Agreement, the Lenders’ consent to a prepayment
made under this Section 2.05(a)(iii) only pertains to prepayments funded with
the proceeds of debtor-in-possession financing provided, in whole or in part, by
institutions, or affiliates or funds related to such institutions, who also hold
the Second Lien Notes (collectively, the “Second Lien Noteholders” and such
debtor -in -possession financing, a “Second Lien Noteholder Refinancing DIP
Facility”). Each such notice shall specify the date and amount of such

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prepayment and the Type(s) of Loans to be prepaid and, if Eurodollar Rate Loans
are to be prepaid, the Interest Period(s) of such Loans. The Administrative
Agent will promptly notify each Lender of its receipt of each such notice, and
of the amount of such Lender’s ratable portion of such prepayment (based on such
Lender’s Applicable Percentage). If such notice is given by the Borrower, the
Borrower shall make such prepayment and the payment amount specified in such
notice shall be due and payable no later than twenty (20) Business Days after
receipt of such notice. Notwithstanding any other terms of this Agreement or the
Prepetition Intercreditor Agreement, the Lenders hereby acknowledge and consent
to the rights of the Borrower and the Second Lien Noteholders in this clause
(iii), and Lenders further agree that they will not raise any objection to,
oppose or contest (or join with or support any third party opposing, objecting
to or contesting) any Second Lien Noteholder Refinancing DIP Facility for any
reason (including on the basis of any provision of the Prepetition Intercreditor
Agreement). If for any reason the roll-up of the balance of the Prepetition
First Lien Obligations outstanding as of the date of the entry of the Final
Financing Order under Section 2.01(c) is not permitted or the Prepetition First
Lien Obligations or the Liens securing the Prepetition First Lien Obligations
remain outstanding for any reason after the Final Financing Order Roll Date,
(A) the claims and liens in respect of the Second Lien Noteholder Refinancing
DIP Facility shall remain junior to the Prepetition First Lien Obligations and
the liens securing the Prepetition First Lien Obligations and the Prepetition
First Lien Lenders shall be satisfied with the adequate protection in respect
thereof or as may be provided by an order of the Bankruptcy
Court.    Notwithstanding anything herein to the contrary, the Secured Parties
may waive any Event of Default giving rise to the prepayment right in this
Section 2.05(a)(iii) at any time prior to the receipt of the Prepayment Notice.

(b)    Mandatory.

(i)    [Reserved.]

(ii)    Other than in connection with a Cost-Cutting Transaction (solely to the
extent the proceeds thereof are incorporated into the Approved Budget effective
as of the date of the applicable Cost-Cutting Transaction and solely to the
extent such proceeds are used as and when contemplated thereby), if any Loan
Party or any of its Subsidiaries (x) Disposes of any property in a Disposition
constituting an Asset Sale which results in the realization by such Person of
Net Cash Proceeds, (y) receives Net Cash Proceeds of casualty insurance or
condemnation awards (or from payments in lieu thereof) (excluding for purposes
of this clause (y) any Net Cash Proceeds from “Recoveries” (as defined in the
AWA Environmental Indemnity Agreement and the PDC Environmental Indemnity
Agreement), which must be paid to AWA under the terms of the applicable Fox
River Indemnity Arrangements) or (z) incurs or issues any Indebtedness (other
than Indebtedness expressly permitted to be incurred or issued pursuant to
Section 7.02), the Borrower shall prepay an aggregate principal amount of Term
Loans equal to 100% of such Net Cash Proceeds within five (5) Business Days of
the receipt thereof by such Person (such prepayments to be applied as set forth
in clause (iii) below); provided, however, that, (A) so long as no Event of
Default shall have occurred and be continuing, with respect to any prepayment of
Term Loans required to be made pursuant to the preceding clause (x) above in
this Section 2.05(b)(ii), subject to the consent of the

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Required Lenders (in their sole discretion), if such prepayment would result in
the prepayment of one or more Eurodollar Rate Loans on a day other than the last
day of the then current Interest Period for each such Eurodollar Rate Loan, the
Borrower may defer the relevant portion of such required payment until the last
day of the relevant then current Interest Period of each such applicable
Eurodollar Rate Loan (provided that such deferral period shall in no case exceed
sixty (60) days, provided further that, upon the occurrence of an Event of
Default or the Termination Date during any such deferral period, the Borrower
shall immediately prepay Term Loans in the amount of all Net Cash Proceeds
received by the Borrower and other amounts, as applicable, that are required to
be applied to prepay Loans under this Section 2.05(b)(ii) (without giving effect
to this clause (A)) but which have not previously been so applied) and (B) with
respect to any Net Cash Proceeds of (1) any property constituting an Asset Sale
otherwise required to be applied under preceding clause (x) above in this
Section 2.05(b)(ii), or (2) casualty insurance or condemnation awards (or from
payment in lieu thereof) otherwise required to be applied under preceding clause
(y) above in this Section 2.05(b)(ii), then in each case, subject to the prior
written consent of the Required Lenders (in their sole discretion), such Loan
Party or such Subsidiary may reinvest all or any portion of such Net Cash
Proceeds in operating assets on terms and conditions reasonably agreed to by the
Required Lenders; and provided further, however, that any Net Cash Proceeds of,
as applicable, Asset Sales or casualty insurance or condemnation awards (or from
payment in lieu thereof) not so reinvested shall be promptly applied if an Event
of Default has occurred and is continuing to the prepayment of the Term Loans as
set forth in this Section 2.05(b)(ii).

(iii)    Subject to Section 2.05(c), if applicable, eachEach prepayment of Term
Loans pursuant to the foregoing provisions of this Section 2.05(b) shall be
applied first, to the outstanding NM Term Loans; and second, to the outstanding
Roll-up Loans.

 

2.06 [Reserved.]

 

2.07 Repayment of Loans.

(a)    The Borrower hereby unconditionally promises to pay to the Administrative
Agent for the account of each Lender the then unpaid principal amount of each
Loan of such Lender on the Termination Date.

(b)    Any repayment or prepayment of all or any portion of the principal amount
of the Roll-Up Loans, (i) prior to June 28, 2019 (including on or after the
occurrence of an Event of Default or pursuant to a plan of reorganization) or
(ii) upon any refinancing or replacement of the Roll-Up Loans or any optional or
mandatory prepayment of Term Loans (in whole or in part) pursuant to
Section 2.05(a) or Section 2.05(b), as applicable, in each case shall be
accompanied by a payment premium equal to 1.50% of the aggregate principal
amount of such Roll-Up Loans so repaid or prepaid, as the case may be (the
“Payment Premium”). Notwithstanding anything to the contrary in this Agreement
or any other Loan Document, it is understood and agreed that if the Obligations
are accelerated as a result of the occurrence and continuance of any Event of
Default (including by operation of law or otherwise), the Payment Premium
determined, in the case of acceleration, as of the date of acceleration as if
the aggregate principal amount of the

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Roll-Up Loans then outstanding were voluntarily prepaid on such date under
Section 2.05(a) will also be due and payable and will be treated and deemed as
though the Roll-Up Loans were prepaid as of such date and shall constitute part
of the Obligations for all purposes herein. The Payment Premium payable in
accordance with this Section 2.07(d) shall be presumed to be equal to the
liquidated damages sustained by the Roll-Up Lenders as the result of the
occurrence of the event giving rise to the payment of the Payment Premium, and
Borrower and the other Loan Parties agree that it is reasonable under the
circumstances currently existing. The Payment Premium shall also be payable in
the event the Obligations (and/or this Agreement) are satisfied or released by
foreclosure (whether by power of judicial proceeding), deed in lieu of
foreclosure or by any other means. BORROWER AND THE OTHER LOAN PARTIES EXPRESSLY
WAIVE THE PROVISIONS OF ANY PRESENT OR FUTURE STATUTE OR LAW THAT PROHIBITS OR
MAY PROHIBIT THE COLLECTION OF THE PAYMENT PREMIUM IN CONNECTION WITH ANY SUCH
ACCELERATION. Borrower and the other Loan Parties expressly agree that (A) the
Payment Premium is reasonable and is the product of an arm’s length transaction
between sophisticated business people, ably represented by counsel, (B) the
Payment Premium shall be payable notwithstanding the then prevailing market
rates at the time payment is made, (C) there has been a course of conduct
between Lenders and the Loan Parties giving specific consideration in this
transaction for such agreement to pay the Payment Premium, (D) the Loan Parties
shall be estopped hereafter from claiming differently than as agreed to in this
Section 2.07(b), (E) their agreement to pay the Payment Premium is a material
inducement to the Lenders to provide the Commitments and make the Loans
hereunder, and (F) the Payment Premium represents a good faith, reasonable
estimate and calculation of the lost profits or damages of the Lenders and that
it would be impractical and extremely difficult to ascertain the actual amount
of damages to the Lenders or profits lost by the Lenders as a result of the
event giving rise to the payment of the Payment Premium.

 

2.08 Interest.

(a)    Subject to the provisions of Section 2.08(b), (x) each Eurodollar Rate
Loan shall bear interest on the outstanding principal amount thereof for each
Interest Period at a rate per annum equal to the sum of (A) the Adjusted
Eurodollar Rate for such Interest Period plus (B) the Applicable Rate and
(y) each Base Rate Loan shall bear interest on the outstanding principal amount
thereof from the applicable borrowing date at a rate per annum equal to the sum
of (A) the Base Rate plus (B) the Applicable Rate.

(b)    (i) If all or a portion of the principal amount of any Loan shall not be
paid when due (whether at the stated maturity, by acceleration or otherwise),
such amount shall bear interest at a rate per annum equal to in the case of the
Loans, the rate that would otherwise be applicable thereto pursuant to the
foregoing provisions of this Section plus 2%, and (ii) if all or a portion of
any interest payable on any Loan or any commitment fee payable hereunder shall
not be paid when due (whether at the stated maturity, by acceleration or
otherwise), such amount shall bear interest at a rate per annum equal to the
rate then applicable to Base Rate Loans plus 2%, in each case, with respect to
clauses (i) and (ii) above, from the date of such non-payment until such amount
is paid in full (as well after as before judgment). Upon the request of the
Required Lenders, while any other Event of Default exists (i.e. from the date
such Event of Default occurred (it being understood that with respect to an
Event of Default related to non-compliance with Section 7.01, the date of
occurrence shall be the applicable date of determination of such

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Event of Default in accordance with Section 7.01), until the date such Event of
Default is cured to the satisfaction of the Required Lenders or waiver pursuant
to Section 11.01), the Borrower shall pay interest on the principal amount of
all outstanding Obligations hereunder at the rates set forth in the immediately
preceding sentence to the fullest extent permitted by applicable Laws.
Notwithstanding the foregoing, upon the occurrence of an Event of Default under
Section 8.01(f), such increase shall occur automatically. Accrued and unpaid
interest on past due amounts (including interest on past due interest) shall be
due and payable upon demand.

(c)    Interest on each Loan shall be due and payable in arrears on each
Interest Payment Date applicable thereto and at such other times as may be
specified herein. Interest hereunder shall be due and payable in accordance with
the terms hereof before and after judgment, and before and after the
commencement of any proceeding under any Debtor Relief Law.

 

2.09 Fees.

(a)    Commitment Fee. The Borrower agrees to pay to each NM Lender (other than
any Defaulting Lender), through the Administrative Agent, on or before the date
that is three (3) Business Days after the last Business Day of each month (and
the date that is three (3) Business Days after the last day of the Availability
Period), a commitment fee (the “NM Commitment Fee”) on the daily average unused
amount of the NM Commitments (whether or not then available) of such NM Lender
during the preceding month at the rate equal to 0.5% per annum. The NM
Commitment Fee due to each Lender shall commence to accrue on the Closing Date
and shall cease to accrue on the last day of the Availability Period.

(b)    The Borrower agrees to pay the following fees in respect of the NM Term
Loans and NM Commitments (the “Lender Fees”):

(i)    Backstop Fee. To the Administrative Agent, for the account of the
Backstop Party, a backstop fee (the “Backstop Fee”), payable in cash, in an
amount equal to 2.675% of the aggregate Applicable Percentage (as defined in and
determined under the Prepetition First Lien Credit Agreement) of all Prepetition
First Lien Lenders other than the Backstop Party as of the Closing Date (prior
to giving effect to this Agreement) multiplied by the aggregate NM Commitment of
the Backstop Party on the Closing Date, such fee to be earned, due and payable
on the Closing Date.

(ii)    Upfront Fee. To the Administrative Agent, for the account of each NM
Lender, an upfront fee (the “Upfront Fee”), payable in cash, in an amount equal
to 2.00% of the aggregate principal amount of such NM Lender’s NM Commitments on
the Closing Date, such fee to be earned, due and payable on the Closing Date.

(iii)    Exit Fee. To the Administrative Agent, for the account of each NM
Lender, an exit fee (the “Exit Fee”), payable in cash, in an amount equal to
1.50% of the aggregate principal amount of such NM Lender’s NM Commitment as of
the Closing Date, such fee to be earned, due and payable on the earlier of
(a) the Termination Date or (b) repayment in full of all Obligations (other than
inchoate indemnification obligations).

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(iv)    Arranger Fee. To the Administrative Agent, for the account of the
Arranger, an arranger fee (the “Arranger Fee”), payable in cash, in an amount
equal to 0.4875% of the aggregate principal amount of the NM Commitments on the
Closing Date, such fee to be earned, due and payable on the Closing Date.

(c)    Other Fees.

(i)    The Borrower shall pay to the Administrative Agent for its own account,
fees in the amounts and at the times specified in the Administrative Agent Fee
Letter. Such fees shall be fully earned when paid and shall not be refundable
for any reason whatsoever (except as expressly agreed in writing between the
Borrower and the Administrative Agent).

(ii)    The Borrower shall pay to the Administrative Agent such fees as shall
have been separately agreed upon in writing in the amounts and at the times so
specified. Such fees shall be fully earned when paid and shall not be refundable
for any reason whatsoever (except as expressly agreed in writing between the
Borrower and the Administrative Agent or Lender, as applicable).

 

2.10 Computation of Interest and Fees.

All computations of interest for Base Rate Loans shall be made on the basis of a
year of 365 or 366 days, as the case may be, and actual days elapsed. All other
computations of fees and interest shall be made on the basis of a 360-day year
and actual days elapsed (which results in more fees or interest, as applicable,
being paid than if computed on the basis of a 365-day year). Interest shall
accrue on each Loan for the day on which the Loan is made, and shall not accrue
on a Loan, or any portion thereof, for the day on which the Loan or such portion
is paid; provided that any Loan that is repaid on the same day on which it is
made shall, subject to Section 2.12(a), bear interest for one day. Each
determination by the Administrative Agent of an interest rate or fee hereunder
shall be conclusive and binding for all purposes, absent manifest error.

 

2.11 Evidence of Debt.

The Term Loans made or deemed made by each Lender shall be evidenced by one or
more accounts or records maintained by such Lender and by the Administrative
Agent in the ordinary course of business. The accounts or records maintained by
the Administrative Agent and each Lender shall be conclusive absent manifest
error of the amount of the Term Loans made or deemed made by the Lenders to the
Borrower and the interest and payments thereon. Any failure to so record or any
error in doing so shall not, however, limit or otherwise affect the obligation
of the Borrower hereunder to pay any amount owing with respect to the
Obligations. In the event of any conflict between the accounts and records
maintained by any Lender and the accounts and records of the Administrative
Agent in respect of such matters, the accounts and records of the Administrative
Agent shall control in the absence of manifest error. Upon the request of any
Lender made through the Administrative Agent, the Borrower shall execute and
deliver to such Lender (through the Administrative Agent) a Note, which shall
evidence such Lender’s Loans in addition to such accounts or records. Each
Lender may attach schedules to its Note and endorse thereon the date, Type (if
applicable), amount and maturity of its Loans and payments with respect thereto.

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2.12 Payments Generally; Administrative Agent’s Clawback.

(a)    General. All payments to be made by the Borrower shall be made without
condition or deduction for any counterclaim, defense, recoupment or setoff. All
payments by the Borrower hereunder shall be made to the Administrative Agent,
for the account of the respective Lenders to which such payment is owed, at the
Administrative Agent’s Office in Dollars and in immediately available funds not
later than 1:00 p.m. (New York time) on the date specified herein. The
Administrative Agent will promptly distribute to each Lender its Applicable
Percentage in respect of the relevant Term Loans (or other applicable share as
provided herein) of such payment in like funds as received by wire transfer to
such Lender’s Lending Office. All payments received by the Administrative Agent
after 1:00 p.m. (New York time), shall be deemed received on the next succeeding
Business Day and any applicable interest or fee shall continue to accrue. If any
payment to be made by the Borrower shall come due on a day other than a Business
Day, payment shall be made on the next following Business Day, and such
extension of time shall be reflected on computing interest or fees, as the case
may be.

(b)    Funding by Lenders; Presumption by Administrative Agent. Unless the
Administrative Agent shall have received notice from a Lender prior to the
proposed date of any Borrowing of Eurodollar Rate Loans that such Lender will
not make available to the Administrative Agent such Lender’s share of such
Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with Section 2.02 (or, in the case of
a Borrowing of Base Rate Loans, that such Lender has made such share available
in accordance with and at the time required by Section 2.02) and may, in
reliance upon such assumption, make available to the Borrower a corresponding
amount. In such event, if a Lender has not in fact made its share of the
applicable Borrowing available to the Administrative Agent, then the applicable
Lender and the Borrower severally agree to pay to the Administrative Agent
forthwith on demand such corresponding amount in immediately available funds
with interest thereon, for each day from and including the date such amount is
made available to the Borrower to but excluding the date of payment to the
Administrative Agent, at (A) in the case of a payment to be made by such Lender,
the greater of the Federal Funds Rate and a rate determined by the
Administrative Agent in accordance with banking industry rules on interbank
compensation, plus any administrative, processing or similar fees customarily
charged by the Administrative Agent in connection with the foregoing, and (B) in
the case of a payment to be made by the Borrower, the interest rate applicable
to Base Rate Loans in respect of the relevant Term Loan. If the Borrower and
such Lender shall pay such interest to the Administrative Agent for the same or
an overlapping period, the Administrative Agent shall promptly remit to the
Borrower the amount of such interest paid by the Borrower for such period. If
such Lender pays its share of the applicable Borrowing to the Administrative
Agent, then the amount so paid shall constitute such Lender’s Loan included in
such Borrowing. Any payment by the Borrower shall be without prejudice to any
claim the Borrower may have against a Lender that shall have failed to make such
payment to the Administrative Agent.

(i)    Payments by Borrower; Presumptions by Administrative Agent. Unless the
Administrative Agent shall have received notice from the Borrower prior to the
time

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at which any payment is due to the Administrative Agent for the account of the
Lenders hereunder that the Borrower will not make such payment, the
Administrative Agent may assume that the Borrower has made such payment on such
date in accordance herewith and may, in reliance upon such assumption,
distribute to the Appropriate Lenders the amount due. In such event, if the
Borrower has not in fact made such payment, then each of the Appropriate Lenders
severally agrees to repay to the Administrative Agent forthwith on demand the
amount so distributed to such Lender, in immediately available funds with
interest thereon, for each day from and including the date such amount is
distributed to it to but excluding the date of payment to the Administrative
Agent, at the greater of the Federal Funds Rate and a rate determined by the
Administrative Agent in accordance with banking industry rules on interbank
compensation.

A notice of the Administrative Agent to any Lender or the Borrower with respect
to any amount owing under this subsection (b) shall be conclusive, absent
manifest error.

(c)    Failure to Satisfy Conditions Precedent. If any Lender makes available to
the Administrative Agent funds for any Loan to be made by such Lender as
provided in the foregoing provisions of this Article II, and such funds are not
made available to the Borrower by the Administrative Agent because the
conditions to the applicable Borrowing set forth in Article IV are not satisfied
or waived in accordance with the terms hereof, the Administrative Agent shall
return such funds (in like funds as received from such Lender) to such Lender,
without interest.

(d)    Obligations of Lenders Several. The obligations of the Lenders hereunder
to make Term Loans and to make payments pursuant to Section 11.04(c) are several
and not joint. The failure of any Lender to make any Loan or to make any payment
under Section 11.04(c) on any date required hereunder shall not relieve any
other Lender of its corresponding obligation to do so on such date, and no
Lender shall be responsible for the failure of any other Lender to so make its
Loan or to make its payment under Section 11.04(c).

(e)    Funding Source. Nothing herein shall be deemed to obligate any Lender to
obtain the funds for any Loan in any particular place or manner or to constitute
a representation by any Lender that it has obtained or will obtain the funds for
any Loan in any particular place or manner.

(f)    Insufficient Funds. With respect to any Loan Party’s Obligations
hereunder, if at any time insufficient funds are received by and available to
the Administrative Agent to pay fully all amounts of principal, interest and
fees then due hereunder with respect to such Loan Party’s Obligations, such
funds shall be applied (i) first, toward payment of interest and fees then due
hereunder, ratably among the parties entitled thereto in accordance with the
amounts of interest and fees then due to such parties, and (ii) second, toward
payment of principal then due hereunder, ratably among the parties entitled
thereto in accordance with the amounts of principal then due to such parties, in
each case with respect to the Obligations of such Loan Party.

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2.13 Sharing of Payments by Lenders.

If any Lender shall, by exercising any right of setoff or counterclaim or
otherwise, obtain payment in respect of (a) Obligations in respect of the Loans
due and payable to such Lender hereunder and under the other Loan Documents at
such time in excess of its ratable share (according to the proportion of (i) the
amount of such Obligations due and payable to such Lender at such time to
(ii) the aggregate amount of the Obligations in respect of the Loans due and
payable to all Lenders hereunder and under the other Loan Documents at such
time) of payments on account of the Obligations in respect of the Loans due and
payable to all Lenders hereunder and under the other Loan Documents at such time
obtained by all the Lenders at such time or (b) Obligations in respect of the
Loans owing (but not due and payable) to such Lender hereunder and under the
other Loan Documents at such time in excess of its ratable share (according to
the proportion of (i) the amount of such Obligations owing (but not due and
payable) to such Lender at such time to (ii) the aggregate amount of the
Obligations in respect of the Loans owing (but not due and payable) to all
Lenders hereunder and under the other Loan Parties at such time) of payment on
account of the Obligations in respect of the Loans owing (but not due and
payable) to all Lenders hereunder and under the other Loan Documents at such
time obtained by all of the Lenders at such time then the Lender receiving such
greater proportion shall (a) notify the Administrative Agent of such fact, and
(b) make such adjustments as shall be equitable, so that the benefit of all such
payments shall be shared by the Lenders ratably in accordance with the aggregate
amount of Obligations in respect of the Loans then due and payable to the
Lenders or owing (but not due and payable) to the Lenders, as the case may be.

Each Loan Party consents to the foregoing and agrees, to the extent it may
effectively do so under applicable Law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against such
Loan Party rights of setoff and counterclaim with respect to such participation
as fully as if such Lender were a direct creditor of such Loan Party in the
amount of such participation.

 

2.14 [Reserved.]

 

2.15 Defaulting Lenders.

(a)    Defaulting Lender Adjustments. Notwithstanding anything to the contrary
contained in this Agreement, if any Lender becomes a Defaulting Lender, then,
until such time as such Lender is no longer a Defaulting Lender, to the extent
permitted by applicable Law:

(i)    Waivers and Amendments. Such Defaulting Lender’s right to approve or
disapprove any amendment, waiver or consent with respect to this Agreement shall
be restricted as set forth in the definition of Required Lenders.

(ii)    Defaulting Lender Waterfall. Any payment of principal, interest, fees or
other amounts received by the Administrative Agent for the account of such
Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to
Article VIII or otherwise) or received by the Administrative Agent from a
Defaulting Lender pursuant to Section 11.08 shall be applied at such time or
times as may be determined by the Administrative Agent as follows: first, to the
payment of any amounts owing by such Defaulting Lender to the Administrative
Agent

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hereunder; second, as the Borrower may request (so long as no Default or Event
of Default exists), to the funding of any Loan in respect of which such
Defaulting Lender has failed to fund its portion thereof as required by this
Agreement, as determined by the Administrative Agent; third, if so determined by
the Administrative Agent and the Borrower, to be held in a deposit account and
released pro rata in order to satisfy such Defaulting Lender’s potential future
funding obligations with respect to Loans under this Agreement; fourth, to the
payment of any amounts owing to the Lenders as a result of any judgment of a
court of competent jurisdiction obtained by any Lender against such Defaulting
Lender as a result of such Defaulting Lender’s breach of its obligations under
this Agreement; fifth, so long as no Default or Event of Default exists, to the
payment of any amounts owing to the Borrower as a result of any judgment of a
court of competent jurisdiction obtained by the Borrower against such Defaulting
Lender as a result of such Defaulting Lender’s breach of its obligations under
this Agreement; and sixth, to such Defaulting Lender or as otherwise directed by
a court of competent jurisdiction; provided that if (x) such payment is a
payment of the principal amount of any Loans in respect of which such Defaulting
Lender has not fully funded its appropriate share, and (y) such Loans were made
at a time when the applicable conditions set forth in Section 4.01, 4.02 and
4.03 were satisfied or waived, such payment shall be applied solely to pay the
Loans of all Non-Defaulting Lenders on a pro rata basis prior to being applied
to the payment of any Loans of such Defaulting Lender until such time as all
Loans are held by the Lenders pro rata in accordance with their NM Commitments.
Any payments, prepayments or other amounts paid or payable to a Defaulting
Lender that are applied (or held) to pay amounts owed by a Defaulting Lender
pursuant to this Section 2.15(a)(ii) shall be deemed paid to and redirected by
such Defaulting Lender, and each Lender irrevocably consents hereto.

(iii)    Certain Fees.

(A)    No Defaulting Lender shall be entitled to receive any NM Commitment Fee
for any period during which that Lender is a Defaulting Lender (and the Borrower
shall not be required to pay any such fee that otherwise would have been
required to have been paid to that Defaulting Lender).

(B)    [Reserved.]

(C)    With respect to any NM Commitment Fee not required to be paid to any
Defaulting Lender pursuant to clause (A) above, the Borrower shall not be
required to pay the remaining amount of any such fee.

(b)    Defaulting Lender Cure. If the Borrower and the Administrative Agent
agree in writing that a Lender is no longer a Defaulting Lender, the
Administrative Agent will so notify the parties hereto, whereupon as of the
effective date specified in such notice and subject to any conditions set forth
therein, such Lender will, to the extent applicable, purchase at par that
portion of outstanding Loans of the other Lenders or take such other actions as
the Administrative Agent may determine to be necessary to cause the Loans to be
funded in accordance with the NM Commitments; provided that no adjustments will
be made retroactively with respect to fees accrued or payments made by or on
behalf of the Borrower while that Lender was a Defaulting Lender; and provided,
further, that except to the extent otherwise expressly agreed by the affected
parties, no change hereunder from Defaulting Lender to Lender will constitute a
waiver or release of any claim of any party hereunder arising from that Lender’s
having been a Defaulting Lender.

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2.16 Payment of Obligations; No Discharge; Survival of Claims

(a)    Subject to the provisions of Section 8.01, upon the maturity (whether by
acceleration or otherwise) of any of the Obligations of the Loan Parties under
this Agreement or any of the other Loan Documents, the Lenders and the other
Secured Parties shall be entitled to immediate payment of such Obligations
without further application to or order of the Bankruptcy Court.

(b)    Each Loan Party agrees that to the extent that the Obligations hereunder
have not been satisfied in full in cash (other than contingent indemnity or
expense reimbursement obligations and Cash Management Obligations and Secured
Hedge Obligations that are cash collateralized) and the NM Commitments
terminated, (i) its Obligations arising hereunder shall not be discharged by the
entry of any order of the Bankruptcy Court, including but not limited to an
order confirming any Chapter 11 plan or plans filed in any or all of the Chapter
11 Cases and (ii) the DIP Superpriority Claim granted to the Administrative
Agent and the Lenders pursuant to the Financing Orders and described in
Section 2.17 and the Liens granted to the Administrative Agent pursuant to the
Financing Orders and described in Section 2.17 shall not be affected in any
manner by the entry of any order of the Bankruptcy Court confirming any such
plan.

 

2.17 Security and Priorities. All of the Obligations shall, subject to the
Carve-Out, at all times:

(a)    Pursuant to Section 364(c)(1) of the Bankruptcy Code, constitute allowed
superpriority administrative expense claims against the Debtors (without the
need to file any proof of claim) with priority over any and all claims against
the Debtors, now existing or hereafter arising, of any kind whatsoever,
including, without limitation, all administrative expenses of the kind specified
in Sections 503(b) and 507(b) of the Bankruptcy Code and any and all
administrative expenses or other claims arising under Sections 105, 326, 328,
330, 331, 364, 365, 503(b), 506(c), 507(a), 507(b), 726, 1113 or 1114 of the
Bankruptcy Code (including any adequate protection obligations), whether or not
such expenses or claims may become secured by a judgment lien or other
non-consensual lien, levy or attachment, which allowed claims (the “DIP
Superpriority Claims”) shall for purposes of Section 1129(a)(9)(A) of the
Bankruptcy Code be considered administrative expenses allowed under section
503(b) of the Bankruptcy Code, and which DIP Superpriority Claims shall be
payable from and have recourse to all pre- and post-petition property of the
Debtors and all proceeds thereof (excluding Avoidance Actions but including,
effective upon entry of the Final Financing Order, Avoidance Proceeds), subject
only to the Liens thereon and the Carve-Out. The DIP Superpriority Claims shall
be entitled to the full protection of Section 364(e) of the Bankruptcy Code in
the event that the Interim Financing Order (or, after entry thereof, the Final
Financing Order) or any provision thereof is vacated, reversed, amended or
otherwise modified, on appeal or otherwise.

(b)    Pursuant to Section 364(c)(2) of the Bankruptcy Code, be secured by (i) a
valid, perfected, continuing, enforceable, non-avoidable first priority security
interest and lien on the Collateral of each Debtor, (x) to the extent such
Collateral is not subject to valid, perfected and

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non-avoidable liens permitted under the Prepetition First Lien Credit Agreement
as of the Petition Date and (y) including claims and causes of action under
Sections 502(d), 544, 545, 547, 548 and 550 of the Bankruptcy Code (collectively
“Avoidance Actions”) (it being understood that such lien on Avoidance Actions
shall attach upon entry of the Final Financing Order).

(c)    Pursuant to Section 364(c)(3) of the Bankruptcy Code, be secured by a
valid, perfected, continuing, enforceable, non-avoidable security interest and
lien on the Collateral of each Debtor, to the extent that such Collateral, as
applicable, is subject to (x) valid, perfected and unavoidable liens in favor of
third parties that were in existence and permitted under the Prepetition First
Lien Credit Agreement immediately prior to the Petition Date, or (y) valid and
unavoidable liens in favor of third parties that were in existence and permitted
under the Prepetition First Lien Credit Agreement immediately prior to the
Petition Date that were perfected subsequent to the Petition Date as permitted
by Section 546(b) of the Bankruptcy Code, subject as to priority to Prepetition
Prior Liens; provided that this clause (c) shall not apply to the Primed Liens,
which existing liens will be primed by the liens described in clause (d) below,
as applicable.

(d)    Pursuant to Section 364(d)(1) of the Bankruptcy Code, be secured by a
perfected first priority priming security interest and lien on the Collateral of
each Debtor (the “Priming Liens”) to the extent that such Collateral is subject
to the Primed Liens, which Priming Liens pursuant to this clause (d) shall, for
the avoidance of doubt, be senior to (x) any current and future liens granted on
such property of (i) the Prepetition First Lien Lenders under the Prepetition
First Lien Credit Agreement and the other “secured parties” referred to therein
(the “Prepetition First Lien Credit Agreement Primed Parties”), (ii) the holders
of Second Lien Notes and the other “secured parties” under the Second Lien Notes
Indenture and related security agreements (the “Second Lien Notes Primed
Parties”), and (iii) the lenders under the Receivables Facility and the other
“secured parties” under the Receivables Facility and related security agreements
(the “Receivables Facility Primed Parties”), and (y) any liens granted to
provide adequate protection in respect of any of the Primed Liens; provided that
the liens pursuant to this clause (d) shall be subject as to priority only to
(x) the Carve-Out and (y) Permitted Liens on cash collateral securing Cash
Management Agreements with a Cash Management Bank.

(e)    Notwithstanding anything to the contrary in this Section 2.17, with
respect to any Collateral consisting of the proceeds of any sale, transfer or
other disposition of Collateral, the relative priorities of the liens securing
NM Term Loan Obligations and Roll-Up Loan Obligations shall be preserved in all
respects, and (a) the liens securing Roll-Up Loan Obligations shall be entitled
to the priorities otherwise applicable to the liens securing NM Term Loan
Obligations and (b) the liens securing NM Term Loan Obligations shall be
entitled to the priorities otherwise applicable to the liens securing Roll-Up
Loan Obligations, if any.

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ARTICLE III

TAXES, YIELD PROTECTION AND ILLEGALITY

 

3.01 Taxes.

(a)    Payments Free of Taxes. Any and all payments by or on account of any
obligation of the Borrower or Holdings hereunder or under any other Loan
Document shall be made without deduction or withholding for any Taxes, except as
required by applicable Law (including FATCA). If any applicable Law (as
determined in the good faith discretion of an applicable Withholding Agent)
requires the deduction or withholding of any Tax from any such payment by a
Withholding Agent, then the applicable Withholding Agent shall be entitled to
make such deduction or withholding and shall timely pay the full amount deducted
or withheld to the relevant Governmental Authority in accordance with applicable
Law and, if such Tax is an Indemnified Tax, then the sum payable by the Borrower
and Holdings shall be increased as necessary so that after such deduction or
withholding has been made (including such deductions and withholdings applicable
to additional sums payable under this Section), the applicable Recipient
receives an amount equal to the sum it would have received had no such deduction
or withholding been made.

(b)    Payment of Other Taxes by the Borrower and Holdings. The Borrower and
Holdings shall timely pay to the relevant Governmental Authority in accordance
with applicable Law, or at the option of the Administrative Agent timely
reimburse it for the payment of, any Other Taxes.

(c)    Indemnification by the Borrower and Holdings. The Borrower and Holdings
shall, jointly and severally, indemnify each Recipient, within ten (10) days
after demand therefor, for the full amount of any Indemnified Taxes (including
Indemnified Taxes imposed or asserted on or attributable to amounts payable
under this Section) payable or paid by such Recipient or required to be withheld
or deducted from a payment to such Recipient and any reasonable expenses arising
therefrom or with respect thereto, whether or not such Indemnified Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority.
A certificate as to the amount of such payment or liability delivered to the
Borrower by a Lender (with a copy to the Administrative Agent), or by the
Administrative Agent on its own behalf or on behalf of a Lender, shall be
conclusive absent manifest error.

(d)    Indemnification by Lenders. Each Lender shall severally indemnify the
Administrative Agent, within ten (10) days after demand therefor, for (i) any
Indemnified Taxes attributable to such Lender (but only to the extent that the
Borrower or Holdings has not already indemnified the Administrative Agent for
such Indemnified Taxes and without limiting the obligation of the Borrower and
Holdings to do so), (ii) any Taxes attributable to such Lender’s failure to
comply with the provisions of Section 11.06(c) relating to the maintenance of a
Participant Register and (iii) any Excluded Taxes attributable to such Lender
that are payable or paid by the Administrative Agent in connection with any Loan
Document, and any reasonable expenses arising therefrom or with respect thereto,
whether or not such Taxes were correctly or legally imposed or asserted by the
relevant Governmental Authority. A certificate as to the amount of such payment
or liability delivered to any Lender by the Administrative Agent shall

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be conclusive absent manifest error. Each Lender hereby authorizes the
Administrative Agent to set off and apply any and all amounts at any time owing
to such Lender under any Loan Document or otherwise payable by the
Administrative Agent to the Lender from any other source against any amount due
to the Administrative Agent under this paragraph (d).

(e)    Evidence of Payments. As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by the Borrower or Holdings, as the case may
be, to a Governmental Authority pursuant to this Section 3.01, the Borrower or
Holdings, as the case may be, shall deliver to the Administrative 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 Administrative Agent.

(f)    Status of Lenders.    Any Lender that is entitled to an exemption from or
reduction of withholding Tax with respect to payments made under any Loan
Document shall deliver to the Borrower or Holdings, as applicable, and the
Administrative Agent at the time or times reasonably requested by the Borrower,
Holdings or the Administrative Agent, such properly completed and executed
documentation reasonably requested by the Borrower, Holdings or the
Administrative Agent as will permit such payments to be made without withholding
or at a reduced rate of withholding. In addition, any Lender, if reasonably
requested by the Borrower, Holdings or the Administrative Agent, shall deliver
such other documentation prescribed by applicable Law or reasonably requested by
the Borrower, Holdings or the Administrative Agent as will enable the Borrower,
Holdings or the Administrative Agent to determine whether or not such Lender is
subject to backup withholding or information reporting requirements.
Notwithstanding anything to the contrary in the preceding two sentences, the
completion, execution and submission of such documentation (other than such
documentation set forth in Section 3.01(f)(ii)(A), (ii)(B), (ii)(D) and (ii)(E)
below) shall not be required if in the Lender’s reasonable judgment, such
completion, execution or submission would subject such Lender to any material
unreimbursed cost or expense or would materially prejudice the legal or
commercial position of such Lender.

(i)    Without limiting the generality of the foregoing:

(A)    any Lender that is a U.S. Person shall deliver to the Borrower and the
Administrative Agent on or prior to the date on which such Lender becomes a
Lender under this Agreement (and from time to time thereafter upon the
reasonable request of the Borrower or the Administrative Agent), executed
originals of IRS Form W-9 (or successor form) certifying that such Lender is not
subject to U.S. federal backup withholding tax;

(B)    any Foreign Lender shall deliver to the Borrower, Holdings and the
Administrative Agent (in such number of copies as shall be requested by the
Recipient) on or prior to the date on which such Foreign Lender becomes a Lender
under this Agreement (and from time to time thereafter upon the reasonable
request of the Borrower, Holdings or the Administrative Agent), to the extent it
is legally entitled to do so, whichever of the following is applicable.

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(i)    in the case of a Foreign Lender claiming the benefits of an income tax
treaty to which the United States is a party (x) with respect to payments of
interest under any Loan Document, executed originals of IRS Form W-8BEN or Form
W-8BEN-E, as applicable (or successor form), establishing an exemption from, or
reduction of, U.S. federal withholding Tax pursuant to the “interest” article of
such tax treaty and (y) with respect to any other applicable payments under any
Loan Document, IRS Form W-8BEN or Form W-8BEN-E, as applicable (or successor
form),establishing an exemption from, or reduction of, U.S. federal withholding
Tax pursuant to the “business profits” or “other income” article of such tax
treaty;

(ii)    executed originals of IRS Form W-8ECI;

(iii)    in the case of a Foreign Lender claiming the benefits of the exemption
for portfolio interest under Section 881(c) of the Code, (x) a certificate
substantially in the form of Exhibit J-1 to the effect that such Foreign Lender
is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a
“10 percent shareholder” of the Borrower or Holdings within the meaning of
Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation”
described in Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance
Certificate”) and (B) executed originals of IRS Form W-8BEN or Form W-8BEN-E, as
applicable; or

(iv)    to the extent a Foreign Lender is not the beneficial owner, executed
originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN or
Form W-8BEN-E, as applicable, a U.S. Tax Compliance Certificate substantially in
the form of Exhibit J-2 or Exhibit J-3, IRS Form W-9, and/or other certification
documents from each beneficial owner, as applicable; provided that if the
Foreign Lender is a partnership and one or more direct or indirect partners of
such Foreign Lender are claiming the portfolio interest exemption, such Foreign
Lender may provide a U.S. Tax Compliance Certificate substantially in the form
of Exhibit J-4 on behalf of each such direct and indirect partner;

(C)    any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to the Borrower, Holdings and the Administrative Agent (in such number
of copies as shall be requested by the Recipient) on or prior to the date on
which such Foreign Lender becomes a Lender under this Agreement (and from time
to time thereafter upon the reasonable request of the Borrower, Holdings or the
Administrative Agent), executed originals of any other form prescribed by
applicable Law as a basis for claiming exemption from or a reduction in U.S.
federal withholding Tax duly completed, together with such supplementary
documentation as may be prescribed by applicable Law to permit the Borrower or
the Administrative Agent to determine the withholding or deduction required to
be made; and

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(D)    if a payment made to a Lender under any Loan Document would be subject to
U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to
comply with the applicable reporting requirements of FATCA (including those
contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender
shall deliver to the Borrower, Holdings and the Administrative Agent at the time
or times prescribed by Law and at such time or times reasonably requested by the
Borrower, Holdings or the Administrative Agent such documentation prescribed by
applicable Law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code)
and such additional documentation reasonably requested by the Borrower or the
Administrative Agent as may be necessary for the Borrower, Holdings and the
Administrative Agent to comply with their obligations under FATCA and to
determine that such Lender has complied with such Lender’s obligations under
FATCA or to determine the amount to deduct and withhold from such payment.
Solely for purposes of this clause (D), “FATCA” shall include any amendments
made to FATCA after the date of this Agreement.

(E)    Each Lender agrees that if any form or certification it previously
delivered expires or becomes obsolete or inaccurate in any respect, it shall
update such form or certification or promptly notify the Borrower, Holdings and
the Administrative Agent in writing of its legal inability to do so.

Without limiting the obligations of the Lenders set forth above regarding
delivery of certain forms and documents to establish each Lender’s status for
U.S. withholding tax purposes, each Lender agrees promptly to deliver to the
Administrative Agent or the Borrower, as the Administrative Agent or Borrower
shall reasonably request, and in a timely fashion, such other documents and
forms required by any relevant taxing authorities under the Laws of any other
jurisdiction, duly executed and completed by such Lender, as are required under
such Laws to confirm such Lender’s entitlement to any available exemption from,
or reduction of, applicable withholding taxes in respect of all payments to be
made to such Lender outside of the U.S. by the Borrower pursuant to this
Agreement or otherwise to establish such Lender’s status for withholding tax
purposes, or for information collection and reporting purposes, in such other
jurisdiction. Each Lender shall promptly (i) notify the Administrative Agent of
any change in circumstances which would modify or render invalid any such
claimed exemption or reduction, or other information provided, and (ii) take
such steps as shall not be materially disadvantageous to it, in the reasonable
judgment of such Lender, and as may be reasonably necessary (including the
re-designation of its Lending Office) to avoid any requirement of applicable
Laws of any such jurisdiction that the Borrower make any deduction or
withholding for taxes from amounts payable to such Lender. Additionally, the
Borrower shall promptly deliver to the Administrative Agent or any Lender, as
the Administrative Agent or such Lender shall reasonably request, and in a
timely fashion, such documents and forms required by any relevant taxing
authorities under the Laws of any jurisdiction, duly executed and completed by
the Borrower, as are required to be furnished by such Lender or the
Administrative Agent under such Laws in connection with any payment by the
Administrative Agent or any Lender of Taxes or Other Taxes, or otherwise in
connection with the Loan Documents, with respect to such jurisdiction.

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(g)    Treatment of Certain Refunds. If any party determines, in its sole
discretion exercised in good faith, that it has received a refund of any
Indemnified Taxes as to which it has been indemnified pursuant to this
Section 3.01 (including by the payment of additional amounts pursuant to this
Section 3.01), it shall pay to the indemnifying party an amount equal to such
refund (but only to the extent of indemnity payments made under this
Section 3.01 with respect to the Indemnified Taxes giving rise to such refund),
net of all out-of-pocket expenses (including Taxes) of such indemnified party
and without interest (other than any interest paid by the relevant Governmental
Authority with respect to such refund). Such indemnifying party, upon the
request of such indemnified party, shall repay to such indemnified party the
amount paid over pursuant to this subsection (g) (plus any penalties, interest
or other charges imposed by the relevant Governmental Authority) in the event
that such indemnified party is required to repay such refund to such
Governmental Authority. Notwithstanding anything to the contrary in this
subsection (g), in no event will the indemnified party be required to pay any
amount to an indemnifying party pursuant to this subsection (g) the payment of
which would place the indemnified party in a less favorable net after-Tax
position than the indemnified party would have been in if the Tax subject to
indemnification and giving rise to such refund had not been deducted, withheld
or otherwise imposed and the indemnification payments or additional amounts with
respect to such Tax had never been paid. This paragraph shall not be construed
to require any indemnified party to make available its Tax returns (or any other
information relating to its Taxes that it deems confidential) to the
indemnifying party or any other Person.

(h)    Survival. Each party’s obligations under this Section 3.01 shall survive
the resignation or replacement of the Administrative Agent or any assignment of
rights by, or the replacement of, a Lender, the termination of the Commitments
and the repayment, satisfaction or discharge of all obligations under any Loan
Document.

 

3.02 Illegality.

If any Lender determines that any Law has made it unlawful, or that any
Governmental Authority has asserted that it is unlawful, for any Lender or its
applicable Lending Office to make, maintain or fund Eurodollar Rate Loans, or to
determine or charge interest rates based upon the Eurodollar Rate, or any
Governmental Authority has imposed material restrictions on the authority of
such Lender to purchase or sell, or to take deposits of, Dollars in the
applicable interbank market, then, on notice thereof by such Lender to the
Borrower through the Administrative Agent, any obligation of such Lender to make
or continue Eurodollar Rate Loans or to convert Base Rate Loans to Eurodollar
Rate Loans shall be suspended until such Lender notifies Administrative Agent
and the Borrower that the circumstances giving rise to such determination no
longer exist. Upon receipt of such notice, the Borrower shall, upon demand from
such Lender (with a copy to the Administrative Agent), prepay or, if applicable,
convert all Eurodollar Rate Loans of such Lender to Base Rate Loans, either on
the last day of the Interest Period therefor, if such Lender may lawfully
continue to maintain such Eurodollar Rate Loans to such day, or immediately, if
such Lender may not lawfully continue to maintain such Eurodollar Rate Loans.
Notwithstanding the foregoing and despite the illegality for such a Lender to
make, maintain or fund Eurodollar Rate Loans or Base Rate Loans as to which the
interest rate is determined with reference to the Eurodollar Rate, that Lender
shall remain committed to make Base Rate Loans and shall be entitled to recover
interest at the Base Rate; provided that, upon any such notice by any Lender
pursuant to this Section 3.02 of the suspension of its obligation to

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make or continue Eurodollar Loans or to convert Base Rate Loans to Eurodollar
Loans, the Base Rate shall be determined without reference to clause (c) of the
definition of “Base Rate”, and all Base Rate Loans shall be subject to the Base
Rate (as so determined without reference to clause (c) of said definition) until
such time as such suspension of the obligation of such Lender to make or
continue Eurodollar Loans or to convert Base Rate Loans to Eurodollar Loans
shall cease to be in effect. Upon any such prepayment or conversion, the
Borrower shall also pay accrued interest on the amount so prepaid or converted.

 

3.03 Inability to Determine Rates.

If the Required Lenders determine that for any reason in connection with any
request for a Loan or a conversion to or continuation thereof that (a) deposits
are not being offered to banks in the offshore interbank market for such
currency for the applicable amount and Interest Period of such Loan,
(b) adequate and reasonable means do not exist for determining the Adjusted
Eurodollar Rate for any requested Interest Period with respect to a proposed
Eurodollar Rate Loan or in connection with a Base Rate Loan, or (c) the Adjusted
Eurodollar Rate for any requested Interest Period with respect to a proposed
Eurodollar Rate Loan or in connection with a Eurodollar Rate Loan does not
adequately and fairly reflect the cost to such Lenders of funding such Loan, the
Administrative Agent will promptly so notify the Borrower and each Lender.
Thereafter, the obligation of the Lenders to make or maintain Eurodollar Rate
Loans shall be suspended, the Base Rate shall be determined without reference to
clause (c) of the definition of “Base Rate” and all Base Rate Loans shall be
subject to the Base Rate (as so determined without reference to clause (c) of
said definition) until the Administrative Agent (upon the instruction of the
Required Lenders) revokes such notice. Upon receipt of such notice, the Borrower
may revoke any pending request for a Borrowing of, conversion to or continuation
of Eurodollar Rate Loans or, failing that, will be deemed to have converted such
request into a request for a Borrowing of Base Rate Loans in the amount
specified therein.

 

3.04 Increased Costs; Reserves on Eurodollar Rate Loans.

(a)    Increased Costs Generally. If any Change in Law shall:

(i)    impose, modify or deem applicable any reserve, special deposit,
compulsory loan, insurance charge or similar requirement against assets of,
deposits with or for the account of, or credit extended or participated in by,
any Lender (except any reserve requirement reflected in the Adjusted Eurodollar
Rate);

(ii)    subject any Lender to any Taxes (other than (A) Indemnified Taxes,
(B) Taxes described in clauses (b) through (d) of the definition of Excluded
Taxes and (C) Connection Income Taxes) on its loans, loan principal, letters of
credit, commitments, or other obligations, or its deposits, reserves, other
liabilities or capital attributable thereto; or

(iii)    impose on any Lender or the London interbank market any other
condition, cost or expense (other than Taxes) affecting this Agreement or Loans
made by such Lender;

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and the result of any of the foregoing shall be to increase the cost to such
Lender or such other Recipient of making, converting to, continuing or
maintaining any Loan or of maintaining its obligation to make any such Loan, or
to reduce the amount of any sum received or receivable by such Lender or other
Recipient hereunder (whether of principal, interest or any other amount) then,
upon request of such Lender or other Recipient, the Borrower will pay to such
Lender or other Recipient, as the case may be, such additional amount or amounts
as will compensate such Lender or other Recipient, as the case may be, for such
additional costs incurred or reduction suffered.

(b)    Capital Requirements. If any Lender determines that any Change in Law
affecting such Lender or any Lending Office of such Lender or such Lender’s
holding company, if any, regarding capital or liquidity requirements has or
would have the effect of reducing the rate of return on such Lender’s capital or
on the capital of such Lender’s holding company, if any, as a consequence of
this Agreement, the Commitments of such Lender or the Loans made by such Lender
to a level below that which such Lender or such Lender’s holding company would
have achieved but for such Change in Law (taking into consideration such
Lender’s policies and the policies of such Lender’s holding company with respect
to capital adequacy), then from time to time the Borrower will pay to such
Lender such additional amount or amounts as will compensate such Lender or such
Lender’s holding company for any such reduction suffered.

(c)    Certificates for Reimbursement. A certificate of a Lender setting forth
in reasonable detail the amount or amounts necessary to compensate such Lender
or its holding company, as the case may be, as specified in subsection (a) or
(b) of this Section and delivered to the Borrower shall be conclusive absent
manifest error. The Borrower shall pay such Lender the amount shown as due on
any such certificate within ten (10) days after receipt thereof.

(d)    Delay in Requests. Failure or delay on the part of any Lender to demand
compensation pursuant to the foregoing provisions of this Section (or Sections
3.01 or 3.05) shall not constitute a waiver of such Lender’s right to demand
such compensation, provided that the Borrower shall not be required to
compensate a Lender pursuant to the foregoing provisions of this Section (or
Sections 3.01 or 3.05) for any increased costs incurred or reductions suffered
more than nine months prior to the date that such Lender notifies the Borrower
of the Change in Law or other event giving rise to such increased costs or
reductions and of such Lender’s intention to claim compensation therefor (except
that, if the Change in Law or other event giving rise to such increased costs or
reductions is retroactive, then the nine-month period referred to above shall be
extended to include the period of retroactive effect thereof).

 

3.05 Compensation for Losses.

Upon demand of any Lender (with a copy to the Administrative Agent) from time to
time, the Borrower shall promptly compensate such Lender for and hold such
Lender harmless from any loss, cost or expense (but not loss of anticipated
profits or margin) incurred by it as a result of:

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(a)    any continuation, conversion, payment or prepayment of any Loan other
than a Base Rate Loan on a day other than the last day of the Interest Period
for such Loan (whether voluntary, mandatory, automatic, by reason of
acceleration, or otherwise);

(b)    any failure by the Borrower (for a reason other than the failure of such
Lender to make a Loan) to prepay, borrow, continue or convert any Loan other
than a Base Rate Loan on the date or in the amount notified by the Borrower; or

(c)    any assignment of a Eurodollar Rate Loan on a day other than the last day
of the Interest Period therefor as a result of a request by the Borrower
pursuant to Section 11.13;

including, with respect to clauses (a), (b) and (c) above, any loss or expense
arising from the liquidation or reemployment of funds obtained by it to maintain
such Loan or from fees payable to terminate the deposits from which such funds
were obtained. The Borrower shall also pay any customary administrative fees
charged by such Lender in connection with the foregoing.

For purposes of calculating amounts payable by the Borrower to the Lenders under
this Section 3.05, each Lender shall be deemed to have funded each Eurodollar
Rate Loan made by it at the Adjusted Eurodollar Rate for such Loan by a matching
deposit or other borrowing in the London interbank eurodollar market for a
comparable amount and for a comparable period, whether or not such Eurodollar
Rate Loan was in fact so funded.

 

3.06 Mitigation Obligations; Replacement of Lenders.

(a)    Designation of a Different Lending Office. If any Lender requests
compensation under Section 3.04, or the Borrower is required to pay any
Indemnified Taxes or any additional amounts to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 3.01, or if any
Lender gives a notice pursuant to Section 3.02, then such Lender shall use
reasonable efforts to designate a different Lending Office for funding or
booking its Loans hereunder or to assign its rights and obligations hereunder to
another of its offices, branches or Affiliates, if, in the judgment of such
Lender, such designation or assignment (i) would eliminate or reduce amounts
payable pursuant to Section 3.01 or 3.04 as the case may be, in the future, or
eliminate the need for the notice pursuant to Section 3.02, as applicable, and
(ii) in each case, would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender. The Borrower
hereby agrees to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.

(b)    Replacement of Lenders. If any Lender requests compensation under
Section 3.04, or if the Borrower is required to pay any Indemnified Taxes or
additional amounts to any Lender or any Governmental Authority for the account
of any Lender pursuant to Section 3.01, the Borrower may replace such Lender in
accordance with Section 11.13.

 

3.07 Survival.

Subject to Section 3.04(d), all of the Borrower’s obligations under this Article
III shall survive termination of the Aggregate Commitments and repayment of all
other Obligations hereunder.

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ARTICLE IV

CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

 

4.01 Conditions of Initial NM Term Loans.

The obligation of each Lender to make its initial NM Term Loans hereunder is
subject to satisfaction or waiver by the Required Lenders of the following
conditions precedent on the date of the initial Borrowings under this Agreement:

(a)    The Administrative Agent’s receipt of the following, each of which shall
be originals or electronic copies (followed promptly by originals) unless
otherwise specified, each properly executed by a Responsible Officer of the
signing Loan Party, each dated the Closing Date (or, in the case of certificates
of governmental officials, a recent date before the Closing Date) and each in
form and substance satisfactory to the Administrative Agent and each of the
Lenders:

(i)    executed counterparts of this Agreement in the number requested by the
Required Lenders and the Administrative Agent;

(ii)    a Note executed by the Borrower in favor of each Lender requesting a
Note;

(iii)    a guarantee, pledge and security agreement (x) as duly executed by the
U.S. Loan Parties (as it may be amended, restated, modified and/or supplemented
from time to time, the “Guarantee and Collateral Agreement”), and (y) as duly
executed by Appvion Canada (as it may be amended, restated, modified and/or
supplemented from time to time, the “Guarantee and Collateral Agreement
(Canada)”; together with the Guarantee and Collateral Agreement, collectively,
the “Guarantee and Collateral Agreements”), together with:

(A)    [Reserved];

(B)    a completed “perfection certificate”, dated on or before the date of the
initial Borrowing, describing the assets of the Loan Parties;

(C)    the Interim Order shall have created and perfected a legal, valid,
continuing and enforceable security interest in and Lien upon the collateral set
forth in the Guarantee and Collateral Agreements and such UCC financing
statement and PPSA filings as the Required Lenders may reasonably deem necessary
in order to perfect the Liens created by the Interim Order or Guarantee and
Collateral Agreements shall have been (or substantially concurrently with the
Closing Date shall be) filed;

(D)    the control agreements with respect to Deposit Accounts and Securities
Accounts, in each case as referred to in the Guarantee and Collateral Agreements
(to the extent required by the Required Lenders ), duly executed by the
appropriate parties; provided that such agreements may be delivered on a
post-closing basis, but in no case later than sixty (60) days after the Closing
Date unless the Administrative Agent has otherwise agreed in writing; and

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(E)    evidence that all other action that the Required Lenders deem necessary
or desirable in order to perfect the Liens created under the Guarantee and
Collateral Agreements has been taken (including receipt of duly executed payoff
letters, UCC-3 termination statements and any landlords’ and bailees’ waiver and
consent agreements reasonably requested by the Required Lenders (to the extent
the same are obtainable using commercially reasonable efforts); provided that
any required (after taking into account the foregoing standard) landlords’ and
bailee waivers and consent agreements may be delivered on a post-closing basis,
but in no case later than sixty (60) days after the Closing Date unless the
Administrative Agent has otherwise agreed in writing).

(iv)    [Reserved];

(v)    an intellectual property security agreement, in form and substance
satisfactory to the Required Lenders (together with each other intellectual
property security agreement and intellectual property security agreement
supplement, in each case as amended, the “Intellectual Property Security
Agreement”), duly executed by each U.S. Loan Party;

(vi)    such certificates of resolutions or other action, incumbency
certificates and/or other certificates of Responsible Officers of each Loan
Party as the Administrative Agent may require evidencing the identity, authority
and capacity of each Responsible Officer thereof authorized to act as a
Responsible Officer in connection with this Agreement and the other Loan
Documents to which such Loan Party is a party or is to be a party;

(vii)    [Reserved];

(viii)    a favorable opinion of DLA Piper (Canada) LLP, Canadian counsel to
Appvion Canada, addressed to the Administrative Agent and each Lender, as to the
matters concerning the Loan Parties and the Loan Documents in form and substance
satisfactory to the Required Lenders;

(ix)    a certificate signed by a Responsible Officer of the Borrower certifying
(A) that there have been no events or circumstances since June 30, 2017 that
have had or could be reasonably expected to have, either individually or in the
aggregate (other than as customarily occurs as a result of events leading up to
and following the commencement of the Chapter 11 Cases under Chapter 11 of the
Bankruptcy Code by the Debtors) a Material Adverse Effect; and (B) other than
the Chapter 11 Cases, no actions, suits, investigations or proceedings are
pending, or to the knowledge of the Borrower, threatened in writing in any court
or before any arbitrator or Governmental Authority that could reasonably be
expected, either individually or in the aggregate (other than as customarily
occurs as a result of events leading up to and following the commencement of the
Chapter 11 Cases under Chapter 11 of the Bankruptcy Code by the Debtors) to have
a Material Adverse Effect;

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(x)    [Reserved];

(xi)    evidence that the Receivables Facility has been, or concurrently with
the Closing Date is being, terminated and all Liens securing obligations under
the Receivables Facility have been, or concurrently with the Closing Date are
being, released or assigned to the Administrative Agent;

(xii)    the Prepetition First Lien Obligations contemplated to be paid with the
Roll-Up Loans deemed made on the Closing Date pursuant to Section 2.01(c)(i)
shall have been repaid substantially concurrently with the Closing Date; and

(xiii)    such other assurances, certificates, documents or consents as the
Administrative Agent or any Lender reasonably may require.

(b)    (i) All fees required to be paid to the Administrative Agent and the
Arranger on or before the Closing Date shall have been paid or shall be paid
concurrently with the Closing Date and (ii) all fees required to be paid to the
Administrative Agent for the benefit of the Lenders on or before the Closing
Date shall have been paid or shall be paid concurrently with the Closing Date.

(c)    The Borrower shall have paid all fees, charges and disbursements of
counsel and financial advisors to the Administrative Agent (directly to such
counsel if requested by the Administrative Agent) to the extent invoiced by the
Administrative Agent, the Arranger and the Lenders prior to or on the Closing
Date, or concurrently with the Closing Date, plus such additional amounts of
such fees, charges and disbursements as shall constitute its reasonable estimate
of such fees, charges and disbursements incurred or to be incurred by it through
the closing proceedings (provided that such estimate shall not thereafter
preclude a final settling of accounts between the Borrower, and such counsel).

(d)    The Petition Date shall have occurred and Borrower and each of its
Domestic Subsidiaries that is a Loan Party shall be a debtor and a
debtor-in-possession. All of the “first day orders” entered by the Bankruptcy
Court on or about the time of commencement of the Chapter 11 Cases (and if any
such orders shall not have been entered by the Bankruptcy Court, the form of
such orders submitted to the Bankruptcy Court for approval) of the type referred
to in clause (a) or (b) of the definition of “Approved Bankruptcy Court Order”
shall be in form and substance satisfactory to the Administrative Agent and the
Required Lenders, and all other “first day orders” entered by the Bankruptcy
Court on or about the time of commencement of the Chapter 11 Cases (and if any
such orders shall not have been entered by the Bankruptcy Court, the form of
such orders submitted to the Bankruptcy Court for approval) shall be reasonably
satisfactory to the Administrative Agent and the Required Lenders.

(e)    Not later than five (5) Business Days following the Petition Date (or
such later date as the Required Lenders may agree), an interim order approving
the Loan Documents in form and substance satisfactory to the Required Lenders in
their sole discretion (and to the extent effecting the rights, duties, benefits,
privileges, protections, indemnities or immunities of the

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Administrative Agent, the Administrative Agent)(as the same may be amended,
supplemented or modified from time to time after entry thereof in accordance
with the terms hereof, the “Interim Financing Order”) (it being understood and
agreed that an order in the form of Exhibit H shall, if entered by the
Bankruptcy Court, be deemed acceptable to the Required Lenders) shall have been
entered by the Bankruptcy Court, which Interim Financing Order shall, among
other things, (i) have been entered on such prior notice to such parties as may
be satisfactory to the Required Lenders in their sole discretion, (ii) authorize
the Loans, each in the amounts and on the terms set forth herein, (iii) grant
the DIP Superpriority Claim status, (iv) authorize and perfect the Liens on the
Collateral with the priority referred to herein and in the other Loan Documents,
(v) approve the payment by the Debtors of the fees provided for herein,
(vi) approve the repayment in of the Prepetition First Lien Obligations from the
proceeds of the Roll-Up Loans to the extent provided in Section 2.01(c)(i),
(vii) approve the repayment in full of the obligations under the Receivables
Facility and, upon the indefeasible repayment of the obligations under the
Receivables Facility, the release of all Liens securing the Receivables
Facility, (viii) grant such adequate protection in respect of the claims secured
by the Primed Liens as shall be acceptable to the Required Lenders in their sole
discretion, and (ix) not have been (A) stayed, vacated or reversed, or
(B) amended or modified except as otherwise agreed to in writing by
Administrative Agent and the Required Lenders in their sole discretion. The
Required Lenders shall have received a signed copy of the Interim Financing
Order.

(f)    The Administrative Agent and the Lenders shall have received, and the
Lenders shall be reasonably satisfied with, (i) the Approved Budget and (ii) the
Consolidated Forecast.

(g)    All necessary governmental and third party consents and approvals
necessary in connection with the making of the Loans and the transactions
contemplated thereby shall have been obtained (without the imposition of any
adverse conditions that are not reasonably acceptable to the Administrative
Agent and the Required Lenders) and shall remain in effect unless non-compliance
is permitted under the Bankruptcy Code; and no Requirements of Law shall be
applicable in the judgment of the Administrative Agent and the Required Lenders
that restrains, prevents or imposes materially adverse conditions upon the Loans
or the transactions contemplated thereby, except to the extent non-compliance is
permitted under the Bankruptcy Code.

Without limiting the generality of the provisions of the last paragraph of
Section 9.03 for purposes of determining compliance with the conditions
specified in this Section 4.01, each of the Administrative Agent and each Lender
that has signed this Agreement shall be deemed to have consented to, approved or
accepted or to be satisfied with, each document or other matter required
thereunder to be consented to or approved by or acceptable or satisfactory to a
Lender unless, in the case of a Lender, the Administrative Agent shall have
received notice from such Lender prior to the proposed Closing Date specifying
its objection thereto.

 

4.02 Conditions to Borrowings of NM Term Loans in Excess of Initial NM
Availability Amount.

The obligations of the Lenders to make NM Term Loans hereunder that exceed the
Interim NM Availability Amount are subject to satisfaction of the following
conditions precedent on the date of such Borrowing under this Agreement:

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(a)    An order approving the Loan Documents in form and substance satisfactory
to the Administrative Agent and the Required Lenders in their sole discretion on
a final basis (as the same may be amended, supplemented or modified from time to
time after entry thereof in accordance with the terms hereof, the “Final
Financing Order”) (it being understood and agreed that an order entered by the
Bankruptcy Court substantially in the form of the Interim Financing Order,
granting such additional relief necessary with respect to the Roll-Up Loans
and/or any Guarantee or Collateral in respect thereof, with only such other
modifications as are satisfactory in form and substance to the Administrative
Agent and the Required Lenders in their sole discretion shall, if entered by the
Bankruptcy Court, be deemed acceptable to the Administrative Agent and the
Required Lenders), (i) shall have been entered and in full force and effect and
(ii) shall not have been (A) vacated, reversed, or stayed, or (B) amended or
modified except as otherwise agreed to in writing by the Required Lenders in
their sole discretion.

(b)    The Administrative Agent shall have received a signed copy of the Final
Financing Order.

(c)    The Administrative Agent shall have received all fees payable thereto or
to any Lender on or prior to the date of such Borrowing and, to the extent
invoiced, all other amounts due and payable pursuant to the Loan Documents on or
prior to such Borrowing, reimbursement or payment of all reasonable and
documented out-of-pocket expenses (including reasonable and documented fees,
out-of-pocket charges and disbursements of (i) O’Melveny & Myers LLP,
(ii) Richards Layton & Finger, P.A., (iii) PJT Partners LP and (iv) Covington &
Burling LLP) required to be reimbursed or paid by the Loan Parties hereunder or
under any Loan Document; provided that any applicable review period provided for
under the Interim Financing Order shall have been satisfied.

(d)    The Prepetition First Lien Obligations contemplated to be paid with the
Roll-Up Loans deemed made on the Final Financing Order Roll Date pursuant to
Section 2.01(c)(i) shall have been repaid substantially concurrently on the
Final Financing Order Roll Date (for the avoidance of doubt, by applying the
Roll-Up Loans to each Lender’s Prepetition First Lien Obligations on a
dollar-for-dollar basis).

Without limiting the generality of the provisions of the last paragraph of
Section 9.03 for purposes of determining compliance with the conditions
specified in this Section 4.02, each Lender shall be deemed to have consented
to, approved or accepted or to be satisfied with each document or other matter
required thereunder to be consented to or approved by or acceptable or
satisfactory to the Lenders unless an officer of the Administrative Agent
responsible for the transactions contemplated by the Loan Documents shall have
received notice from such Lender prior to the date of the applicable Borrowing
specifying its objection thereto and such Lender shall not have made available
to the Administrative Agent such Lender’s ratable portion of such Borrowing.

 

4.03 Conditions to all Borrowings.

The obligation of each Lender to honor any Request for Borrowing (including the
initial Borrowing on the Closing Date, but other than a Committed Loan Notice
requesting only a conversion of Loans to the other Type, or a continuation of
Eurodollar Rate Loans) is subject to the following conditions precedent:

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(a)    The representations and warranties of the Borrower and each other Loan
Party contained in Article V or any other Loan Document shall be true and
correct in all material respects (or, if the applicable representation and
warranty is already subject to a materiality standard, shall be true and correct
in all respects) on and as of the date of such Borrowing, except to the extent
that such representations and warranties specifically relate to an earlier date,
in which case they shall be true and correct in all material respects (or, if
the applicable representation and warranty is already subject to a materiality
standard, shall be true and correct in all respects) as of such earlier date,
and except that for purposes of this Section 4.03, the representations and
warranties contained in Section 5.01 shall be deemed to refer to the most recent
statements furnished pursuant to Sections 6.01(a) and (b), respectively.

(b)    No Default shall then exist, or shall exist after giving effect to such
proposed Borrowing and any application of the proceeds thereof.

(c)    The Administrative Agent shall have received a Request for Borrowing in
accordance with the requirements hereof.

(d)    The making of such Borrowing shall not result in the Total Outstandings
made under this Agreement exceeding the amount authorized at such time by the
Interim Financing Order or the Final Financing Order, as applicable.

(e)    The Interim Financing Order or, after entry thereof, the Final Financing
Order, shall be in full force and effect and shall not have been vacated,
reversed or stayed.

(f)    No trustee or examiner having expanded powers shall have been appointed,
with respect to the Loan Parties, any of their subsidiaries or their respective
properties.

(g)    The making of such Borrowing shall not violate any Requirement of Law
(except to the extent non-compliance is permitted under the Bankruptcy Code) and
shall not be enjoined temporarily, preliminarily or permanently.

Each Request for Borrowing (other than a Committed Loan Notice requesting only a
conversion of Loans to the other Type or a continuation of Eurodollar Rate
Loans) submitted by the Borrower shall be deemed to be a representation and
warranty that the relevant conditions specified in Sections 4.02(a) and (b) have
been satisfied on and as of the date of the applicable Borrowing.

ARTICLE V

REPRESENTATIONS AND WARRANTIES

To induce the Administrative Agent and the Lenders to enter into this Agreement
and to make the Loans, each of Holdings and the Borrower hereby, jointly and
severally, represents and warrants to each Administrative Agent and each Lender
that:

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5.01 Financial Condition.

The audited consolidated balance sheets of Holdings and its consolidated
subsidiaries as at January 1, 2015, December 31, 2015 and December 29, 2016, and
the related consolidated statements of income and of cash flows for the fiscal
years ended on such dates, reported on by and accompanied by an unqualified
report from PricewaterhouseCoopers LLC present fairly in all material respects
the consolidated financial condition of Holdings and its consolidated
subsidiaries as at such dates, and the consolidated results of its operations
and its consolidated cash flows for the respective fiscal years then ended. The
unaudited consolidated balance sheet of Holdings and its consolidated
subsidiaries as at June 30, 2017, and the related unaudited consolidated
statements of income and cash flows for the quarterly period ended on such date,
present fairly in all material respects the consolidated financial condition of
Holdings and its consolidated subsidiaries as at such date, and the consolidated
results of its operations and its consolidated cash flows for the quarterly
period then ended (subject to normal year-end audit adjustments and the absence
of footnotes). All such financial statements, including the related schedules
and notes thereto, have been prepared in accordance with GAAP applied
consistently throughout the periods involved (except as approved by the
aforementioned firm of accountants and disclosed therein). During the period
from the date of the most recent audited consolidated balance sheet delivered
pursuant to this Section 5.01 to and including the Closing Date, there has been
no Disposition by Holdings of any material part of its business or property.

 

5.02 No Change.

Other than the Chapter 11 Events and Circumstances, since June 30, 2017, there
have been no developments or events that have had or could reasonably be
expected, either individually or in the aggregate, to have a Material Adverse
Effect.

 

5.03 Corporate Existence; Compliance with Law.

Each Group Member (a) is duly organized, validly existing and in good standing
under the Laws of the jurisdiction of its organization, (b) has the power and
authority, and the legal right, to own and operate its property, to lease the
property it operates as lessee and to conduct the business in which it is
currently engaged, (c) except where failures to be so qualified could not
reasonably be expected either individually or in the aggregate to have a
Material Adverse Effect, is duly qualified as a foreign entity and in good
standing under the Laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such
qualification, (d) is in compliance with its Organization Documents, and
(e) except to the extent that the failures to comply therewith could not
reasonably be expected either individually or in the aggregate to have a
Material Adverse Effect, is in compliance with all other Requirements of Law, in
each case, except where failure or non-compliance is permitted by the Bankruptcy
Code.

 

5.04 Power; Authorization; Enforceable Obligations.

Subject to entry of the Interim Financing Order (or the Final Financing Order,
when applicable), (a) each Loan Party has the power and authority, and the legal
right, to make, deliver and perform the Loan Documents to which it is a party
and, in the case of the Borrower, to

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obtain extensions of credit hereunder, (b) each Loan Party has taken all
necessary organizational action to authorize the execution, delivery and
performance of the Loan Documents to which it is a party and, in the case of the
Borrower, to authorize the extensions of credit on the terms and conditions of
this Agreement, (c) no consent or authorization of, filing with, notice to or
other act by or in respect of, any Governmental Authority or any other Person is
required in connection with the Transactions and the extensions of credit
hereunder or with the execution, delivery, performance, validity or
enforceability of this Agreement or any of the Loan Documents, except
(i) consents, authorizations, filings and notices, which have been obtained or
made and are in full force and effect, (ii) filings required by, or to perfect
the security interests granted pursuant to, the various Security Documents and
(iii) the filings referred to in Section 5.19, (d) each Loan Document has been
duly executed and delivered on behalf of each Loan Party party thereto, and
(e) this Agreement constitutes, and each other Loan Document upon execution will
constitute, a legal, valid and binding obligation of each Loan Party party
thereto, enforceable against each such Loan Party in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar Laws affecting the enforcement of
creditors’ rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).

 

5.05 No Legal Bar.

Subject to entry of the Interim Financing Order (or the Final Financing Order,
when applicable), the execution, delivery and performance of this Agreement and
the other Loan Documents, the Borrowings hereunder and the use of the proceeds
thereof will not violate any (a) material Requirement of Law, (b) Contractual
Obligation or (c) Organization Document of any Loan Party and will not result
in, or require, the creation or imposition of any Lien on any of their
respective properties or revenues pursuant to any such Requirement of Law or any
such Contractual Obligation or Organization Document (other than the Liens
created by the Security Documents). No Requirements of Law or Contractual
Obligations applicable to any Group Member could reasonably be expected, either
individually or in the aggregate, to have a Material Adverse Effect.

 

5.06 Litigation.

Other than the Chapter 11 Cases, no litigation, investigation or proceeding of
or before any arbitrator or Governmental Authority is pending or, to the
knowledge of any Loan Party, threatened in writing by or against any Group
Members or against any of their respective properties or revenues that (i) could
reasonably be expected either individually or in the aggregate to have a
Material Adverse Effect or (ii) involve any of the Loan Documents (other than
objections or pleadings that may have been filed in the Chapter 11 Cases with
respect to the Loan Parties seeking authorization to enter into the Loan
Documents and incur the Obligations under this Agreement).

 

5.07 No Default.

Except for any such defaults (a) that could not reasonably be expected either
individually or in the aggregate to have a Material Adverse Effect, (b) arising
under any lease that the applicable Debtor has rejected under Section 365 of the
Bankruptcy Code not in prohibition of

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this Agreement, or (c) arising solely as a result of the commencement of the
Chapter 11 Cases and the effects therefore, no Group Member is in default under
or with respect to any of its Contractual Obligations. No Default or Event of
Default has occurred and is continuing .

 

5.08 Ownership of Property; Liens; Insurance.

Each Loan Party has title in fee simple to, or a valid leasehold interest in,
all its real property described on Schedule 5.08, and good title to, or a valid
leasehold interest in, all its other material property, and none of such
property is subject to any Lien except as permitted by Section 7.03. The
properties of each Loan Party are insured with financially sound and reputable
insurance companies (as determined by the Borrower in good faith) not Affiliates
of the Borrower, in such amounts (after giving effect to any self-insurance
compatible with the following standards), with such deductibles and covering
such risks as are customarily carried by companies engaged in similar businesses
and owning similar properties in localities where any Group Member operates.
Schedule 5.08 sets forth in reasonable detail all insurance policies maintained
by the Group Members as of the Closing Date.

 

5.09 Intellectual Property.

Each Loan Party owns, or is licensed to use, all Intellectual Property necessary
for the conduct of its business as currently conducted, except where failures to
own or license such Intellectual Property could not reasonably be expected
either individually or in the aggregate to have a Material Adverse Effect. No
claims that could reasonably be expected either individually or in the aggregate
to have a Material Adverse Effect, have been asserted or are pending by any
Person challenging or questioning the ownership or use of any Intellectual
Property or the validity or effectiveness of any Intellectual Property owned by
or licensed to any Loan Party, nor does any Loan Party know of any valid basis
for any such claim. To the best knowledge of the Loan Parties, the operation of
the business and use of Intellectual Property by no Loan Party infringes,
misappropriates or otherwise violates the rights of any Person in any material
respect. To the best knowledge of the Loan Parties, there is no infringement,
misappropriation or violation by others of any right of Holdings, the Borrower
or any of its Subsidiaries with respect to any Intellectual Property.

 

5.10 Taxes.

Except as permitted by the Bankruptcy Code, each Group Member has filed or
caused to be filed all Federal, state and other material tax returns that are
required to be filed and all such returns are true, correct and complete in all
material respects. Except as permitted by the Bankruptcy Code, each Group Member
has paid all Taxes shown to be due and payable on said returns other than Taxes
properly contested, as set forth in Section 6.03. No tax Liens (except to the
extent permitted pursuant to Section 7.03) have been filed prior to the Closing
Date, and, except for any such claims that could not reasonably be expected
either individually or in the aggregate to have a Material Adverse Effect, to
the knowledge of the Loan Parties, no written claims have been asserted with
respect to any such Tax.

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5.11 Federal Regulations.

No part of the proceeds of any Loans, and no other extensions of credit
hereunder, will be used for “buying” or “carrying” any “margin stock” within the
respective meanings of each of the quoted terms under Regulation U as now and
from time to time hereafter in effect or for any purpose that violates the
provisions of the Regulations of the FRB. If requested by any Lender or the
Administrative Agent, the Borrower will furnish to the Administrative Agent and
each Lender a statement to the foregoing effect in conformity with the
requirements of FR Form G-3 or FR Form U-1, as applicable, referred to in
Regulation U of the FRB.

 

5.12 Labor Matters.

Except as, individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect: (a) there are no strikes or other labor disputes
against any Group Member pending or, to the knowledge of any Loan Party,
threatened in writing; (b) hours worked by and payment made to employees of each
Group Member have not been in violation of the Fair Labor Standards Act or any
other applicable Requirement of Law dealing with such matters; and (c) all
payments due from any Group Member on account of employee wages and employee
health and welfare insurance have been paid or accrued as a liability on the
books of the relevant Group Member.

 

5.13 ERISA.

Except as a result of the Chapter 11 Events and Circumstances:

(a)    Except as set forth on Schedule 5.13(a): (i) neither a Reportable Event
nor an “accumulated funding deficiency” (within the meaning of Section 412 of
the Code or Section 302 of ERISA) has occurred during the five-year period prior
to the Closing Date with respect to any Plan; (ii) no termination of a Single
Employer Plan has occurred, and no Lien in favor of the PBGC or a Plan has
arisen, during such five-year period; (iii) the present value of all accrued
benefits under each Single Employer Plan (based on those assumptions used to
fund such Plans) did not, as of the last annual valuation date prior to the
Closing Date, exceed the value of the assets of such Plan allocable to such
accrued benefits by a material amount; and (iv) neither the Borrower nor any
Commonly Controlled Entity has had a complete or partial withdrawal from any
Multiemployer Plan that has resulted or could reasonably be expected to result
in any liabilities under ERISA which could reasonably be expected, individually
or in the aggregate, to have a Material Adverse Effect. To the knowledge of the
Loan Parties, no such Multiemployer Plan is in Reorganization or Insolvent.

(b)    Favorable determination or opinion letters have been received prior to
the Closing Date from the Internal Revenue Service with respect to each Plan
which at such time is intended to comply with the provisions of Section 401(a)
of the Code. Prior to the Closing Date, the ESOP received a favorable
determination letter from the IRS that the ESOP is tax-qualified and tax exempt
under Sections 401(a) and 501(a), respectively, of the Code and that the ESOP
Component is an “employee stock ownership plan”, within the meaning of
Section 4975(e)(7) of the Code. To the knowledge of Holdings and the Borrower,
as of the Closing Date each Plan (including, without limitation, the ESOP)
complies in form and in operation with the

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requirements of Section 401(a) of the Code, the relevant provisions of ERISA,
and any other applicable Laws, rules, and regulations required as of the date of
this Agreement; provided, however, that to the extent that the Internal Revenue
Service requires amendment of the ESOP as a condition for the issuance of a
future favorable determination letter, the Borrower will cause the ESOP to be
timely amended accordingly.

(c)    To the knowledge of the Loan Parties, as of the Closing Date, no Group
Member nor any Commonly Controlled Entity, nor any trustee, administrator, or
fiduciary of any of the Plans, has (i) engaged in a “prohibited transaction,” as
that term is defined in Section 4975 of the Code or Section 406 of ERISA, which
could directly or indirectly subject the applicable Plan or trust or Holdings,
the Borrower or any Commonly Controlled Entity to any liability for a Tax or
penalty imposed by Section 4975 of the Code or Section 502(i) of ERISA, or
(ii) committed a breach of its fiduciary duties (as defined in Section 404 of
ERISA) which could directly or indirectly subject the applicable Plan or trust
or Holdings, the Borrower, or any Commonly Controlled Entity to any liability
under Section 502 of ERISA.

(d)    As of the Closing Date, the execution and performance of this Agreement
and the consummation of the transactions contemplated by this Agreement do not
(i) involve a prohibited transaction under Section 406 of ERISA or Section 4975
of the Code for which there is no exemption under Section 408 of ERISA or
Section 4975 of the Code, respectively; (ii) constitute a violation of the
fiduciary responsibility standards imposed by Section 404 of ERISA; or
(iii) adversely affect the qualified status of the ESOP under Sections 401(a) or
4975(e)(7) of the Code.

(e)    (i) As of the Closing Date, the ESOP Component is an “employee stock
ownership plan” within the meaning of Section 4975(e)(7) of the Code and the
ESOP is qualified under Section 401(a) of the Code; (ii) the ESOP has been duly
established in accordance with and under applicable Law and the ESOP’s trust is
a tax-exempt trust under Section 501(a) of the Code; (iii) the terms of the ESOP
Documentation comply with the applicable provisions of Title I of ERISA and
(iv) the shares of Capital Stock held by the ESOP Trust are “employer
securities” within the meaning of Section 409(1) of the Code.

(f)    As of the Closing Date, Appvion Canada does not contribute to any defined
benefit pension plan.

 

5.14 Investment Company Act; Other Regulations.

No Loan Party is an “investment company”, or a company “controlled” by an
“investment company”, within the meaning of the Investment Company Act of 1940,
as amended. No Loan Party is subject to regulation under any Requirement of Law
(other than Regulation X of the FRB) that limits its ability to incur
Indebtedness, other than with respect to any such regulations of general
application to companies generally.

 

5.15 Subsidiaries.

On the Closing Date, (a) Schedule 5.15 sets forth the name and jurisdiction of
incorporation of each Group Member and, as to each such Group Member, the
percentage of each class of Capital Stock owned by any Loan Party and (b) except
as set forth in the ESOP

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Documentation, there are no outstanding subscriptions, options, warrants, calls,
rights or other agreements or commitments (other than stock options granted to
employees or directors and directors’ qualifying shares) of any nature relating
to any Capital Stock of any Group Member, except as created by the Loan
Documents.

 

5.16 Use of Proceeds.

The Borrower will use the proceeds of the Loans solely (a) for working capital
and general corporate purposes of the Loan Parties and their Subsidiaries
consistent with the Approved Budget, including, to refinance in full on the
Closing Date the indebtedness outstanding under the Receivables Facility, to
cash collateralize letters of credit outstanding under the Prepetition First
Lien Credit Agreement, and to refinance the other Prepetition First Lien
Obligations, (b) to pay fees, costs and expenses incurred in connection with the
transactions contemplated hereby and (c) other administration costs incurred in
connection with the Chapter 11 Cases consistent with the Approved Budget.

 

5.17 Environmental Matters.

Except as, individually or in the aggregate (excluding matters set forth on
Schedule 5.17 to the extent described therein), could not reasonably be expected
to have a Material Adverse Effect:

(a)    the facilities and properties owned, leased or operated by any Group
Member (the “Properties”) do not contain, and have not previously contained, any
Hazardous Materials in amounts or concentrations or under circumstances that
constitute or constituted a violation of, or could give rise to liability under,
any Environmental Law;

(b)    no Group Member has received or is aware of any notice of violation,
alleged violation, non-compliance, liability or potential liability regarding
compliance with or under Environmental Laws with regard to any of the Properties
or the business operated by any Group Member (the “Business”), nor does any Loan
Party have knowledge or reason to believe that any such notice will be received
or is being threatened in writing;

(c)    Hazardous Materials have not been transported or disposed of from the
Properties in violation of, or in a manner or to a location that could give rise
to liability under, any Environmental Law, nor have any Hazardous Materials been
generated, treated, stored or disposed of at, on or under any of the Properties
in violation of, or in a manner that could give rise to liability under, any
applicable Environmental Law;

(d)    no judicial proceeding or governmental or administrative action is
pending or, to the knowledge of any Loan Party, threatened in writing, under any
Environmental Law to which any Group Member is or will be named as a party with
respect to the Properties or the Business, nor are there any consent decrees or
other decrees, consent orders, administrative orders or other orders, or other
administrative or judicial requirements outstanding under any Environmental Law
with respect to the Properties or the Business;

(e)    there has been no release or threat of release of Hazardous Materials at
or from the Properties, or arising from or related to the operations of any
Group Member in connection with the Properties or otherwise in connection with
the Business, in violation of or in amounts or in a manner that could give rise
to liability under Environmental Laws;

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(f)    the Properties and all operations at the Properties are in compliance,
and have in the last five years been in compliance, with all applicable
Environmental Laws, and there is no contamination at, under or about the
Properties or violation of any Environmental Law with respect to the Properties
or the Business; and

(g)    no Group Member has assumed any liability of any other Person under
Environmental Laws.

 

5.18 Accuracy of Information, etc.

No statement or information, other than the projections and pro forma financial
information, contained in this Agreement, any other Loan Document, or any other
document, certificate or statement furnished by or on behalf of any Loan Party
to the Administrative Agent or the Lenders, or any of them, for use in
connection with the Transactions or the other transactions contemplated by this
Agreement or the other Loan Documents, contained (taken as a whole) as of the
date such statement, information, document or certificate was so furnished, any
untrue statement of a material fact or, in the case of all such information
(taken as a whole) furnished on or prior to the Closing Date, omitted to state a
material fact necessary to make the statements contained herein or therein at
such time, taken as a whole, not misleading. The projections and pro forma
financial information contained in the materials referenced above are based upon
good faith estimates and assumptions believed by management of the Borrower to
be reasonable at the time made, it being recognized by the Lenders that such
financial information as it relates to future events is not to be viewed as fact
and that actual results during the period or periods covered by such financial
information may differ from the projected results set forth therein by a
material amount. As of the date hereof, there are no facts known to any Loan
Party that could reasonably be expected, individually or in the aggregate, to
have a Material Adverse Effect (other than as customarily occurs as a result of
events leading up to and following the commencement of the Chapter 11 Cases
under Chapter 11 of the Bankruptcy Code by the Debtors) that has not been
expressly disclosed herein, in the other Loan Documents, in any other documents,
certificates and statements furnished to the Administrative Agent, and the
Lenders for use in connection with the Transactions or the other transactions
contemplated hereby and by the other Loan Documents.

 

5.19 Security Documents.

Subject to, and upon entry of, the Financing Orders, the Guarantee and
Collateral Agreements and the Financing Orders are effective to create in favor
of the Administrative Agent, for the benefit of the Secured Parties, a legal,
valid and enforceable security interest in the Collateral described therein and
proceeds thereof, which shall constitute a fully perfected Lien on, and security
interest in, all right, title and interest of the Loan Parties in such
Collateral and the proceeds thereof, as security for the Obligations (as defined
in the Guarantee and Collateral Agreements), in each case prior and superior in
right to any other Person (except as provided in Section 2.17(c)). Without
limiting the foregoing, neither the filing of any UCC-1 financing statement nor
the obtaining of “control” (as defined in the UCC) of Collateral is required to

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create or perfect any such security interest or Lien. The Obligations shall,
pursuant to the Interim Financing Order (or the Final Financing Order, when
applicable), be secured by the Liens on the Collateral described in
Section 2.17, which Liens have the priorities described in Section 2.17.

 

5.20 [Reserved.]

 

5.21 Senior Indebtedness.

The Obligations constitute “Senior Debt” and “Designated Senior Debt” (or any
other defined term having a similar purpose) of the Borrower under the
documentation governing any Subordinated Indebtedness and any Permitted
Refinancing Debt Document. The obligations of each Subsidiary party thereto
under the Guarantee and Collateral Agreements, as applicable, will constitute
“Guarantor Senior Debt” (or any other defined term having a similar purpose) of
such Subsidiary under the documentation governing any Subordinated Indebtedness
and under any Permitted Refinancing Debt Document (if such Subsidiary is an
obligor or guarantor thereunder). There is no other Indebtedness (other than the
Obligations) which has been designated as “Designated Senior Debt” (or any other
defined term having a similar purpose) for the purposes of the documentation
governing any Subordinated Indebtedness or for purposes of any Permitted
Refinancing Debt Document.

 

5.22 Reserved.

 

5.23 S Corporation Status.

(a)    Prior to the Closing Date, Holdings has qualified and elected to be
treated as an “S Corporation” under Subchapter S of the Code, and on the Closing
Date each Domestic Subsidiary of Holdings (other than any such Subsidiary that
is an “Ineligible Corporation” under Section 1361(b)(2) of the Code) has
qualified and elected to be treated as a “qualified subchapter S subsidiary”, in
each case for U.S. federal income tax purposes and in accordance with all
applicable Requirements of Law.

(b)    Prior to the Closing Date, no Governmental Authority has disputed in
writing Holdings’ qualification as an “S Corporation” under Subchapter S of the
Code, or the qualification of each Domestic Subsidiary of Holdings (other than
any such Subsidiary that is an “Ineligible Corporation” under Section 1361(b)(2)
of the Code) as a “qualified subchapter S subsidiary”, in each case for U.S.
federal income tax purposes.

 

5.24 Anti-Terrorism Law; Foreign Corrupt Practices Act.

(a)    No Group Member and, to the knowledge of the Loan Parties, none of its
Affiliates is in violation of any Requirements of Law relating to terrorism or
money laundering (“Anti-Terrorism Laws”), including Executive Order No. 13224 on
Terrorist Financing, effective September 24, 2001 (the “Executive Order”), the
Patriot Act, the Proceeds of Crime (Money Laundering) and Terrorist Financing
Act (Canada), Part II.1 of the Criminal Code (Canada), the United Nations Act
(Canada) and the Special Economic Measures Act (Canada).

(b)    No Group Member and to the knowledge of the Loan Parties, no Affiliate or
broker or other agent of any Loan Party acting or benefiting in any capacity in
connection with

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the Borrowings currently subject to any U.S. sanctions administered by the
Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”) or by
any other Governmental Authority under applicable Anti-Terrorism Laws
(collectively, “Sanctions”); and the Borrower will not directly or indirectly
use the proceeds of the Loans or the Letters of Credit or otherwise make
available such proceeds to any Person, for the purpose of financing the
activities of any Person currently subject to Sanctions.

(c)    No Group Member and, to the knowledge of the Loan Parties, no broker or
other agent of any Group Member acting in any capacity in connection with the
Loans (i) conducts any business or engages in making or receiving any
contribution of funds, goods or services to or for the benefit of any Person
described in Section 5.24(b), (ii) deals in, or otherwise engages in any
transaction relating to, any property or interests in property blocked pursuant
to the Executive Order or other applicable Anti-Terrorism Laws, or (iii) engages
in or conspires to engage in any transaction that evades or avoids, or has the
purpose of evading or avoiding, or attempts to violate, any of the prohibitions
set forth in any Anti-Terrorism Law.

(d)    No Group Member nor any director or officer, nor to the knowledge of the
Loan Parties, any agent, employee or other Person acting, directly or
indirectly, on behalf of any Group Member, has, in the course of its actions
for, or on behalf of, any Group Member, directly or indirectly (i) used any
corporate funds for any unlawful contribution, gift, entertainment or other
unlawful expenses relating to political activity; (ii) made any direct or
indirect unlawful payment to any foreign or domestic government official or
employee from corporate funds; (iii) violated or is in violation of any
provision of the U.S. Foreign Corrupt Practices Act of 1977 or the Corruption of
Foreign Public Officials Act (Canada); or (iv) made any unlawful bribe, rebate,
payoff, influence payment, kickback or other unlawful payment to any foreign or
domestic government official or employee.

ARTICLE VI

AFFIRMATIVE COVENANTS

Holdings and the Borrower hereby jointly and severally agree that, so long as
the Commitments remain in effect, or any Loan or other amount is owing to any
Lender or the Administrative Agent hereunder, each of Holdings and the Borrower
shall and shall cause each of its Subsidiaries to:

 

6.01 Financial Statements.

Furnish to the Administrative Agent (who shall then distribute such items to
each Lender):

(a)    as soon as available (but only if Holdings is no longer required to make
such filing with the SEC), but in any event within the earlier of (i) 120 days
after the end of each fiscal year of Holdings and (ii) five days after such
related filing (if any) with the SEC is due, a copy of the audited consolidated
balance sheet of Holdings and its consolidated Subsidiaries as at the end of
such year and the related audited consolidated statements of income and of cash
flows for such year, setting forth in each case in comparative form the figures
for the previous year, accompanied by a customary management’s discussion and
analysis, by RSM US LLP or other independent certified public accountants of
nationally recognized standing; and

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(b)    as soon as available (but only if Holdings is no longer required to make
such filing with the SEC), but in any event within the earlier of (i) forty-five
(45) days after the end of each of the first three quarterly periods of each
fiscal year of Holdings and (ii) five days after such related filing (if any)
with the SEC is due, the unaudited consolidated balance sheet of Holdings and
its consolidated Subsidiaries as at the end of such quarter and the related
unaudited consolidated statements of income and of cash flows for such quarter
and the portion of the fiscal year through the end of such quarter, setting
forth in each case in comparative form the figures for the previous year,
certified by a Responsible Officer as being fairly stated in all material
respects (subject to normal year-end audit adjustments and the absence of
footnotes), accompanied by a customary management’s discussion and analysis.

All such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail, and the financial statement
under paragraph (a) and (b) above shall be prepared in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except for the absence of footnotes in the quarterly statements and as
approved by such accountants or officer, as the case may be, and disclosed
therein). In regard to subsections (a) and (b) of this Section 6.01, the filing
of Forms 10-Q and 10-K with the SEC shall constitute delivery for purposes
thereof (and shall satisfy the information requirements of Section 6.01(a) or
(b) above, as the case may be, and satisfy the time requirements thereof if
filed within the time period required thereby); however, electronic copies of
such reports must still be delivered to the Administrative Agent.

 

6.02 Certificates; Other Information.

Furnish to the Administrative Agent (who shall then distribute such items to
each Lender):

(a)    concurrently with the delivery of any financial statements pursuant to
Section 6.01, (i) a certificate of a Responsible Officer of Holdings or the
Borrower stating that, to the best of such Responsible Officer’s knowledge, each
Loan Party during such period has observed or performed all of its covenants and
other agreements contained in this Agreement and the other Loan Documents to
which it is a party to be observed, performed or satisfied by it, and that such
Responsible Officer has obtained no knowledge of any Default or Event of Default
except as specified in such certificate, (ii) in the case of the financial
statements delivered pursuant to subsections (a) and (b) of Section 6.01, a
Compliance Certificate containing all information and calculations necessary for
determining compliance with the provisions of this Agreement referred to therein
as of the last day of the fiscal quarter or fiscal year of Holdings, as the case
may be and (iii) in the case of annual financial statements, (x) a listing of
any Asset Sale consummated or entered into during the relevant fiscal year,
(y) to the extent not previously disclosed to the Administrative Agent, a
listing of any registered trademarks, patents and copyrights acquired by any
Loan Party since the date of the most recent list delivered pursuant to this
clause (iii) (or, in the case of the first such list so delivered, since the
Closing Date) and (z) annual insurance certificate updates;

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(b)    [Reserved];

(c)    [Reserved];

(d)    no later than ten (10) Business Days prior to the effectiveness thereof
(or, if such ten (10) Business Day prior notice is not reasonably practicable,
five (5) Business Days or such shorter period as may be acceptable to the
Administrative Agent), copies of substantially final drafts of any proposed
amendment, supplement, waiver or other modification with respect to the Second
Lien Note Indenture, any Subordinated Indebtedness, any Permitted Refinancing
Debt Document or the ESOP Documentation;

(e)    without duplication of materials required elsewhere in this Agreement,
within five (5) days after the same are sent, copies of all (i) compliance
certificates and similar reports that Holdings or the Borrower sends to the
holders of any class of its debt securities having an aggregate outstanding
principal amount in excess of $20,000,000 and (ii) reports and registration
statements (if any) which Holdings or the Borrower files with the SEC;

(f)    to the extent permitted by Law, promptly upon completion thereof and
subject to the Administrative Agent’s entry into a reliance letter acceptable to
the trustee of the ESOP Trust, copies of any valuation analyses with respect to
the valuation of the common stock of Holdings owned by the ESOP;

(g)    promptly upon obtaining knowledge of any such event, a written notice of
the implementation by the applicable insurance carrier under any policy of
insurance in effect with respect to any Collateral of any suspension of coverage
thereunder with respect to any item of Collateral;

(h)    promptly upon receipt thereof, copies of all final management letters
identifying a material weakness or significant deficiency submitted by the
independent certified public accountants referred to in Section 5.01 in
connection with each annual, interim or special audit or review of any type of
the financial statements or related internal control systems of Holdings or its
Subsidiaries made by such accountants; and

(i)    promptly, such additional financial and other information as any Lender
through the Administrative Agent may from time to time reasonably request.

The Borrower hereby acknowledges that (a) the Administrative Agent and/or the
Arranger will make available to the Lenders materials and/or information
provided by or on behalf of the Borrower hereunder (collectively, “Borrower
Materials”) by posting the Borrower Materials on IntraLinks or another similar
electronic system (the “Platform”) and (b) certain of the Lenders (each, a
“Public Lender”) may have personnel who do not wish to receive material
non-public information with respect to the Borrower or its Affiliates, or the
respective securities of any of the foregoing, and who may be engaged in
investment and other market-related activities with respect to such Persons’
securities. The Borrower hereby agrees that (w) all the Borrower Materials that
do not contain any material non-public information shall be clearly and
conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word
“PUBLIC” shall appear prominently on the first page thereof; (x) by marking
Borrower Materials “PUBLIC,” the Borrower shall be deemed to have authorized the
Administrative Agent, the

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Arranger, and the Lenders to treat the Borrower Materials as not containing any
material non-public information (although it may be sensitive and proprietary)
with respect to the Borrower or their securities for purposes of United States
Federal and state securities Laws (provided, however, that to the extent the
Borrower Materials constitute Information, they shall be treated as set forth in
Section 11.07); (y) all Borrower Materials marked “PUBLIC” are permitted to be
made available through a portion of the Platform designated “Public Investor;”
and (z) the Administrative Agent and the Arranger shall be entitled to treat any
Borrower Materials that are not marked “PUBLIC” as being suitable only for
posting on a portion of the Platform not designated “Public Investor.”

 

6.03 Payment of Obligations.

Pay, discharge or otherwise satisfy at or before maturity or before they become
delinquent, as the case may be, all its material post-Petition Date obligations
of whatever nature (including with respect to Taxes), except where properly
contested, meaning (i) the amount or validity thereof is currently being
contested in good faith by appropriate proceedings and reserves in conformity
with GAAP with respect thereto have been provided on the books of the relevant
Group Member, (ii) no Lien is imposed upon any assets of any Loan party with
respect to such obligation unless enforcement of such Lien is stayed during the
period prior to the final resolution or disposition of such dispute and
(iii) failures to make any such payments could not reasonably be expected either
individually or in the aggregate to have a Material Adverse Effect. For the
avoidance of doubt, nothing herein requires payment of any obligation subject to
the automatic stay of the Bankruptcy Code.

 

6.04 Maintenance of Existence; Compliance.

(i) Preserve, renew and keep in full force and effect its corporate existence
and (ii) take all reasonable action to maintain all rights, privileges and
franchises necessary or desirable in the normal conduct of its business, except,
in each case, as otherwise permitted by Sections 7.04 or 7.05 and except, in the
case of clause (ii) above, to the extent that failure to do so could not
reasonably be expected to have a Material Adverse Effect; and (b) except as
otherwise excused by the Bankruptcy Code, comply with all Contractual
Obligations and Requirements of Law except to the extent that failures to comply
therewith could not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.

 

6.05 Maintenance of Property; Insurance.

Subject to any entry of any required orders of the Bankruptcy Court including,
without limitation, the entry of the Interim Financing Order and the Final
Financing Order, as applicable, (a) keep all property (other than property that
is the subject of a Recovery Event) necessary in its business in good working
order and condition, ordinary wear and tear excepted and (b) maintain with
financially sound and reputable insurance companies (as determined by the
Borrower in good faith) insurance on all its property in at least such amounts
(after giving effect to any self-insurance compatible with the following
standards) and against at least such risks (but including in any event general
liability, product liability and business interruption) as are usually insured
against in the same general area by companies engaged in the same or a similar
business.

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6.06 Inspection of Property; Books and Records; Discussions.

Keep proper books of records and account in conformity with GAAP and all
material Requirements of Law, (b) during the continuation of any Event of
Default, provide, at the Borrower’s expense, such appraisals of the tangible and
intangible property of the Loan Parties and environmental audits and reports
relating to the real property of the Loan Parties, as the Administrative Agent
may reasonably request (at the direction of the Required Lenders), and
(c) permit representatives of the Administrative Agent (at the direction of the
Required Lenders) to visit and inspect at any reasonable time and upon
reasonable prior notice (at the expense of the Borrower) any of its properties
and examine and make abstracts from any of its books and records and to discuss
the business, operations, properties and financial and other condition of the
Group Members with officers and employees of the Group Members and with their
independent certified public accountants at any reasonable time and upon
reasonable prior notice as often as may reasonably be desired.

 

6.07 Notices.

Promptly give notice to the Administrative Agent upon any Responsible Officer
becoming aware of:

(a)    the occurrence of any Default or Event of Default;

(b)    any (i) defaults or events of default under any Contractual Obligation of
any Group Member or (ii) litigation, investigations or proceedings that may
exist at any time between any Group Member and any Governmental Authority, that
in either case, could reasonably be expected, individually or in the aggregate,
to have a Material Adverse Effect;

(c)    reserved;

(d)    any material notice received by a Group Member related to the
commencement of, or any material development in, (i) any litigation or
proceeding affecting any Group Member, in connection with any applicable
Environmental Laws or Environmental Liability, to the extent such litigation or
proceeding (x) is expected to result in a material change in the Environmental
Liability disclosures in Holdings’ next 10-Q or 10-K filing, or (y) to the
extent Holdings is no longer subject to the SEC filing requirements, is of
comparable materiality (ii) any investigation or audit by the Internal Revenue
Service or the Department of Labor in connection with or related to the ESOP or
any ESOP Document;

(e)    any matters that have resulted or could reasonably be expected,
individually or in the aggregate, to result in a Material Adverse Effect (other
than as customarily occurs as a result of events leading up to and following the
commencement of the Chapter 11 Cases under Chapter 11 of the Bankruptcy Code by
the Debtors), including (i) breach or non-performance of, or any default under,
a Contractual Obligation of any Group Member; (ii) any dispute, litigation,
investigation, proceeding or suspension between any Group member and any
Governmental Authority or (iii) the commencement of, or any material development
in, any litigation or proceeding affecting any Group Member (other than pursuant
to Environmental Laws); and

(f)    as required under the Guarantee and Collateral Agreements:

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(i)    notice upon the occurrence of any event which could reasonably be
expected to adversely affect a material portion of the Collateral or the
security interests created by the Guarantee and Collateral Agreements;

(ii)    a copy of each material demand, notice or document received by it that
challenges the validity or enforceability of more than five percent (5%) of the
aggregate amount of the then outstanding Receivables (as defined in the
Guarantee and Collateral Agreements);

(iii)    notice if it knows that any application or registration relating to any
Intellectual Property may become forfeited, abandoned or dedicated to the
public, or of any adverse determination or development (including, without
limitation, the institution of, or any such determination or development in, any
proceeding in the United States Patent and Trademark Office, the United States
Copyright Office or any court or tribunal in any country) regarding any Loan
Party’s ownership of, or the validity of, any Intellectual Property or such Loan
Party’s right to register the same or to own and maintain the same, in each case
if and to the extent such Intellectual Property is material to the aggregate
value of the Collateral; and

(iv)    in the event that any Intellectual Property is infringed,
misappropriated or diluted by any Person or Holdings, the Borrower or any of its
Subsidiaries infringes, misappropriates or dilutes the Intellectual Property of
any Person, the applicable Loan Party after it learns thereof, to the extent
such Intellectual Property is material to the aggregate value of the Collateral.

Each notice pursuant to this Section 6.07 shall be accompanied by a statement of
a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action Holdings, the Borrower or the relevant
Subsidiary proposes to take with respect thereto.

 

6.08 Environmental Laws.

(a)    Comply in all respects with, and ensure compliance in all respects by all
tenants and subtenants, if any, with, all applicable Environmental Laws, and
obtain and comply in all respects with and maintain, and ensure that all tenants
and subtenants obtain and comply in all respects with and maintain, any and all
licenses, approvals, notifications, registrations or permits required by
applicable Environmental Laws, except to the extent that failures to take such
actions could not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.

(b)    Conduct and complete all investigations, studies, sampling and testing,
and all remedial, removal and other actions required under Environmental Laws
and promptly comply in all respects with all lawful orders and directives of all
Governmental Authorities regarding Environmental Laws, except to the extent that
the failure to take such actions could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect.

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6.09 Additional Collateral, etc.

(a)    Subject to the entry of the Interim Financing Order, with respect to any
property acquired after the Closing Date by any Loan Party (other than (w) any
property which would not have been subject to the Lien created by the Guarantee
and Collateral Agreement as of the Closing Date had such property been owned as
of the Closing Date as to which the Administrative Agent, for the benefit of the
Secured Parties, does not have a perfected Lien, promptly (i) execute and
deliver to the Administrative Agent such amendments to either of the Guarantee
and Collateral Agreements or such other documents as the Required Lenders deem
necessary or advisable to grant to the Administrative Agent, for the benefit of
the Secured Parties, a security interest in such property and (ii) take all
actions necessary or advisable to grant to the Administrative Agent, for the
benefit of the Secured Parties, a perfected first priority security interest in
such property (subject to Liens permitted to have priority under
Section 2.17(c)), including the filing of Uniform Commercial Code financing
statements or the making of such other filings or recordings in such
jurisdictions as may be required by the Guarantee and Collateral Agreements or
by Law or as may be requested by the Administrative Agent (at the direction of
the Required Lenders).

(b)    [Reserved].

(c)    Subject to Bankruptcy Court approval, subject to paragraph (d) below,
with respect to any new wholly-owned Domestic Subsidiary, or wholly-owned
Foreign Subsidiary organized under the Laws of Canada or any of its provinces or
territories, organized or acquired after the Closing Date by any Group Member,
promptly (i) execute and deliver to the Administrative Agent such amendments to
either of the Guarantee and Collateral Agreements or other applicable Security
Documents, or such new Security Documents as the Required Lenders deem necessary
or advisable to grant to the Administrative Agent, for the benefit of the
Secured Parties, a perfected first priority security interest in the Capital
Stock of such new Subsidiary that is owned by any Loan Party, (ii) deliver to
the Administrative Agent the certificates, if any, representing such Capital
Stock, together with undated stock powers, in blank, executed and delivered by a
duly authorized officer of the relevant Loan Party, (iii) cause any such new
wholly-owned Domestic Subsidiary (A) to become a party to either of the
Guarantee and Collateral Agreements, (B) to take such actions necessary or
advisable to grant to the Administrative Agent for the benefit of the Secured
Parties a perfected security interest in the Collateral described in the
Guarantee and Collateral Agreements prior and superior in right to any other
Person with respect to such new Subsidiary, including the filing of Uniform
Commercial Code financing statements in such jurisdictions as may be required by
either of the Guarantee and Collateral Agreements or by Law or as may be
requested by the Administrative Agent (at the direction of the Required Lenders)
and (C) to deliver to the Administrative Agent a certificate of such Subsidiary,
substantially in the form of Exhibit I, with appropriate insertions and
attachments, (iv) cause any such new Foreign Subsidiary organized under the Laws
of Canada or any of its provinces or territories, (A) to execute and deliver to
the Administrative Agent the Guarantee and Collateral Agreement (Canada) or
other applicable Security Document pursuant to which such Foreign Subsidiary
shall guarantee the Obligations, (B) to execute and deliver to the
Administrative Agent the Guarantee and Collateral Agreement (Canada) or other
applicable Security Document as the Required Lenders deem necessary or advisable
to grant a Lien to the Administrative Agent, for the benefit of the Secured
Parties, on all property of such

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Foreign Subsidiary to secure payment of the Obligations, (C) to take such
actions necessary or advisable to grant to the Administrative Agent for the
benefit of the Secured Parties a perfected security interest in the Collateral
described in the Guarantee and Collateral Agreement (Canada) or other applicable
Security Document delivered pursuant to the foregoing clause (B) prior and
superior in right to any other Person with respect to such new Subsidiary,
including such filings or other recordings in such jurisdictions as may be
required by the Guarantee and Collateral Agreement (Canada) or other applicable
Security Document or by Law or as may be reasonably requested by the
Administrative Agent (at the direction of the Required Lenders), and (D) to
deliver to the Administrative Agent a certificate of such new Foreign
Subsidiary, substantially in the form of Exhibit I, with appropriate insertions
and attachments, with such modifications relevant to the jurisdiction of such
Foreign Subsidiary, as may be requested by the Administrative Agent (at the
direction of the Required Lenders), and (v) if requested by the Administrative
Agent (at the direction of the Required Lenders), deliver to the Administrative
Agent legal opinions relating to the matters described above, which opinions
shall be in form and substance, and from counsel, reasonably satisfactory to the
Required Lenders.

(d)    Notwithstanding anything in this Section 6.09 to the contrary, no
Subsidiary of a Group Member shall provide a guaranty of all or any portion of
the Borrower’s obligations under the Second Lien Note Indenture or any Permitted
Refinancing Debt Document, or grant a Lien on any of its assets to secure any
other the foregoing Indebtedness, unless, prior to or concurrently therewith,
such Subsidiary complies with the requirements of Section 6.09(c).

(e)    For the avoidance of doubt, upon the consent of the Required Lenders,
this Section 6.09 shall not apply to an Immaterial Subsidiary.

 

6.10 Security Interests; Further Assurances.

(a)    Promptly, upon the reasonable request of the Administrative Agent (at the
direction of the Required Lenders) and subject to Bankruptcy Court approval, at
the Borrower’s expense, execute, acknowledge and deliver, or cause the
execution, acknowledgment and delivery of, and thereafter register, file or
record, or cause to be registered, filed or recorded, in an appropriate
governmental office, any document or instrument supplemental to or confirmatory
of the Security Documents or otherwise deemed by the Required Lenders reasonably
necessary or desirable for the continued validity, enforceability, perfection
and priority of the Liens on the Collateral covered thereby subject to no other
Liens (except Liens Permitted under Section 7.03 and with the priority described
in Section 2.17), or obtain any consents or waivers as may be necessary or
appropriate in connection therewith.

(b)    Subject to Bankruptcy Court approval, from time to time execute and
deliver, or cause to be executed and delivered, such additional instruments,
certificates or documents, and take all such actions, as the Administrative
Agent may(at the direction of the Required Lenders) reasonably request for the
purposes of implementing or effectuating the provisions of this Agreement and
the other Loan Documents, or of more fully perfecting or renewing the rights of
the Administrative Agent and the Lenders with respect to the Collateral (or with
respect to any additions thereto or replacements or proceeds thereof or with
respect to any other property or assets hereafter acquired by any Loan Party or
any Subsidiary of any Loan Party which may be deemed to be part of the
Collateral) pursuant hereto or thereto. Upon the exercise by the

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Administrative Agent or any Lender of any power, right, privilege or remedy
pursuant to this Agreement or the other Loan Documents which requires any
consent, approval, recording qualification or authorization of any Governmental
Authority, Holdings and the Borrower will execute and deliver, or will cause the
execution and delivery of, all applications, certifications, instruments and
other documents and papers that the Administrative Agent or such Lenders may be
required to obtain from such Persons for such governmental consent, approval,
recording, qualification or authorization.

 

6.11 Reserved.

 

6.12 Use of Proceeds.

Use the proceeds of the Loans only for the purposes set forth in Section 5.16.

 

6.13 [Reserved]

 

6.14 Approved Budget; Additional Reporting.

(a)    The use of Loans by the Borrower under this Agreement and the other Loan
Documents shall be limited in accordance with the Approved Budget, subject to
the Permitted Variance. The initial Approved Budget delivered by the Borrower to
the Administrative Agent, the Lenders, their financial advisors and their
counsel on the Closing Date shall depict, (i) on a monthly basis, Cash Balances,
Cash Inflows and Cash Outflows, and other information for the period from
January 1, 2018 through December 31, 2018, and (ii) on a weekly basis, Cash
Balances, Cash Inflows and Cash Outflows, payroll and other information for the
13-week period following the Closing Date (the “Initial Weekly Budget Period”),
and such initial Approved Budget as attached hereto as Exhibit G and is in form
and substance satisfactory to, each of the Lenders and their financial advisors
and counsel in their sole discretion. The Approved Budget shall be updated,
modified or supplemented (with the consent and/or at the request of the Required
Lenders) from time to time, but in any event not less than on a monthly basis
(with the delivery to the Administrative Agent being at least seven (7) days
prior to the end of each 4-week period commencing as of the Closing Date), and
such update, modification or supplement shall be in form and detail consistent
with the prior Approved Budget. Upon approval of each such update, modification
or supplement to the Approved Budget by the Required Lenders in their reasonable
sole discretion (such determination shall be provided within seven (7) days of
receipt), the Approved Budget as so updated, modified or supplemented shall then
become the Approved Budget for all purposes hereunder and under the Interim
Financing Order and Final Financing Order. No such update, modification or
supplement to any Approved Budget shall be effective until so approved. Approval
of such update, modification or supplement shall be evidenced by a writing
delivered (which may be through electronic transmission) by the Required Lenders
(which may be by their counsel or financial advisors on their behalves). In the
event that any update, modification or supplement to any Approved Budget is not
approved, the existing Approved Budget without giving effect to such update,
modification or supplement shall remain in effect. Each update, modification or
supplement to an Approved Budget delivered to the Administrative Agent shall be
accompanied by such supporting documentation as reasonably requested by the
Lenders.

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(b)    The Borrower shall deliver to the Administrative Agent and PJT Partners
LP on or before 5:00 p.m. (New York time) on Thursday of each Week (unless such
day is not a Business Day, in which event the next succeeding Business Day): (i)
a compliance certificate, in form and substance satisfactory to the
Administrative Agent and the Required Lenders, signed by a Responsible Officer
certifying that no Default or Event of Default has occurred and is continuing
or, if such a Default or Event of Default has occurred, specifying the nature
and extent thereof and any corrective action taken or proposed to be taken with
respect thereto, (ii) a consolidated accounts payable aging report as of the
Friday of the Prior Week, (iii) a Budget Variance Report, (iv) copies of any
notices received in connection with the Second Lien Notes and (v) such other
information as may be reasonably requested by the Administrative Agent or the
Lenders. Each of the foregoing shall be in form and detail reasonably
satisfactory to the Administrative Agent and the Required Lenders.

(c)    The Borrower shall deliver to the Administrative Agent and PJT Partners
LP on or before 5:00 p.m. (New York time) on Friday of each Week (unless such
day is not a Business Day, in which event the next succeeding Business Day) a
cash flow forecast for the 13-week period beginning on the previous Monday (the
“Consolidated Forecast”), with supporting detail and documentation, in form and
detail reasonably satisfactory to the Required Lenders.

(d)    Administrative Agent and Lenders (i) may assume that the Borrower will
comply with the Approved Budget (subject to the Permitted Variance), (ii) shall
have no duty to monitor such compliance and (iii) shall not be obligated to pay
(directly or indirectly from the Collateral other than indirectly through the
funding of the Loans) any unpaid expenses incurred or authorized to be incurred
pursuant to any Approved Budget. The line items in the Approved Budget for
payment of interest, expenses and other amounts to the Administrative Agent and
the Lenders are estimates only, and the Borrower remains obligated to pay any
and all Obligations in accordance with the terms of the Loan Documents, and the
Interim Financing Order and Final Financing Order. Nothing in any Approved
Budget (including any estimates of a loan balance in excess of borrowing base
restrictions) shall constitute an amendment or other modification of any Loan
Document or any of the availability restrictions or other lending limits set
forth therein.

 

6.15 Post-Closing Actions.

Deliver to the Administrative Agent:

(a)    within sixty (60) days of the Closing Date (or such later date as agreed
to by the Administrative Agent in writing), any landlords’ and bailees’ waiver
and consent agreements reasonably requested by the Administrative Agent (at the
direction of the Required Lenders) (to the extent the same are obtainable using
commercially reasonable efforts).

(b)    (i) within five (5) days of the Closing Date (or such later date as
agreed to by the Required Lenders in writing), evidence that all insurance
required to be maintained pursuant to the Loan Documents has been obtained and
is in effect, together with the certificates of insurance, naming the
Administrative Agent, on behalf of the Lenders, as an additional insured or loss
payee, as the case may be, under all insurance policies maintained with respect
to the assets and properties of the Loan Parties (other than Foreign
Subsidiaries) that constitutes Collateral and (ii) within sixty (60) days of the
Closing Date, (or such later date as agreed to by

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the Administrative Agent in writing), endorsements to such insurance policies of
the Loan Parties naming the Administrative Agent, on behalf of the Lenders, as
an additional insured or loss payee thereunder;

(c)    within fifteen (15) days of entry of the Final Financing Order (or such
later date as agreed to by the Administrative Agent in writing), (i) to the
extent all of the Prepetition First Lien Obligations have been repaid as of such
date, use commercially reasonable efforts to cause all existing control
agreements with respect to Deposit Accounts and Securities Accounts, in each
case, delivered in connection with the Prepetition First Lien Credit Agreement
and the Receivables Facility to be assigned to the Administrative Agent or
(ii) to the extent all of the Prepetition First Lien Obligations have not been
repaid as of such date or if such existing control agreements cannot be
assigned, use commercially reasonable efforts to deliver such control agreements
with respect to Deposit Accounts (other than Permitted Unperfected Accounts (as
defined in the Guarantee and Collateral Agreements)) and Securities Accounts, in
each case as referred to in the Guarantee and Collateral Agreements (in each
case, to the extent required by the Administrative Agent (at the direction of
the Required Lenders)), duly executed by the appropriate parties as the Required
Lenders may request.

(d)    within fifteen (15) days of entry of the Final Financing Order (or such
later date as agreed to by the Administrative Agent in writing), to the extent
all of the Prepetition First Lien Obligations have been repaid as of such date,
use commercially reasonable efforts to cause all existing mortgages delivered in
connection with the Prepetition First Lien Credit Agreement to be assigned to
the Administrative Agent.

(e)    within forty-five (45) days of the Closing Date (or such later date as
agreed to by the RequisiteRequired Lenders in writing), the Borrower shall have
used reasonable best efforts to have obtained a privatepublic rating with
respect to the Term Loans from S&P or Moody’s.

(a)    within fifteen (15) days of entry of the Final Financing Order (or such
later date as agreed to by the Administrative Agent in writing), certificates
representing the Pledged Stock referred to therein accompanied by undated stock
powers executed in blank and instruments evidencing any pledged debt instruments
indorsed in blank.

 

6.16 Senior Indebtedness.

The Borrower will at all times while the Obligations are outstanding, cause such
Obligations to be designated as “Senior Debt” (or any other defined term having
a similar purpose) within the meaning of any agreements governing any
Subordinated Indebtedness of the Borrower.

 

6.17 Financial Advisor.

The Loan Parties shall continuously retain during the term of this Agreement a
restructuring advisor or chief restructuring officer and a financial advisor in
each case which is reasonably satisfactory to the Required Lenders (it being
agreed that AlixPartners and Guggenheim Securities, LLC, respectively, are
reasonably satisfactory to the Required Lenders), and the Loan Parties shall
provide the Lenders and their advisors with reasonable access to the Loan
Parties’ restructuring and financial advisors; provided that, if a restructuring
advisor, chief restructuring

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officer or a financial advisor (including Guggenheim) ceases to be retained, the
Borrower will retain a new restructuring advisor, or chief restructuring officer
or financial advisor, as the case may be, reasonably satisfactory to the
Required Lenders within thirty (30) days (which period may be extended by up to
fifteen (15) days with the approval of the Required Lenders in their sole
discretion) of such cessation.

 

6.18 Lender and Advisor Calls.

The Borrower shall arrange for, once per month, upon reasonable prior notice
(unless waived by the Required Lenders), a conference call with the Lenders
discussing and analyzing the financial condition and results of operations of
each of the Loan Parties for the prior fiscal quarter, status of the Chapter 11
Cases and progress in achieving the milestones set forth in Section 6.19, and
the monthly operating report most recently filed with the Bankruptcy Court.

 

6.19 Case Milestones.

Each Loan Party shall ensure that each of the milestones set forth below is
achieved in accordance with the applicable timing referred to below (or such
later dates as approved by the Required Lenders):

(a)    Not later than 120180 days following the Petition Date, the Debtors shall
file with the Bankruptcy Court an Acceptable Plan of Reorganization and a
disclosure statement reasonably satisfactory to the Required Lenders with
respect thereto.

(b)    Not later than the date that is 180210 days following the Petition Date,
the Bankruptcy Court shall enter an order approving a disclosure statement
reasonably satisfactory to the Required Lenders with respect to an Acceptable
Plan of Reorganization.

(c)    Not later than the date that is 240260 days following the Petition Date,
the Bankruptcy Court shall enter an order confirming an Acceptable Plan of
Reorganization (the date such order is entered, the “Plan Confirmation Date”),
which order shall be in form and substance satisfactory to the Administrative
Agent and the Required Lenders.

(d)    Not later than the date that is 270 days following the Petition Date,
such Acceptable Plan of Reorganization shall become effective.

 

6.20 Certain Other Bankruptcy Matters.

(a)    Holdings, the Borrower and the Subsidiaries shall comply (i) in all
respects, after entry thereof, with all of the requirements and obligations set
forth in the Financing Orders, as such order is amended and in effect from time
to time in accordance with this Agreement, (ii) in all respects, after entry
thereof, with each order of the type referred to in clause (b) of the definition
of “Approved Bankruptcy Court Order”, as such orders, if entered by the
Bankruptcy Court, must comply with, and only be modified from time to time in
accordance with, clause (b) of the definition of “Approved Bankruptcy Court
Order,” and (iii) in all material respects, after entry thereof, with the orders
(to the extent not covered by subclause (i) or (ii) above) approving the
Debtors’ “first day” and “second day” relief obtained in the Chapter 11 Cases,
as such orders, if entered by the Bankruptcy Court, must comply with, and only
be modified from time to time in accordance with, clause (c) of the definition
of “Approved Bankruptcy Court Order”.

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(b)    The Borrower shall provide at least five (5) Business Days’ (or such
shorter notice acceptable to the Required Lenders in their sole discretion)
prior written notice to the Administrative Agent and its advisors prior to any
assumption or rejection of any Debtor’s material contracts or material
non-residential real property leases pursuant to Section 365 of the Bankruptcy
Code, and no such contract or lease shall be assumed or rejected, if such
assumption or rejection adversely impacts (i) the Collateral, any Liens thereon
or any DIP Superpriority Claims payable therefrom (including, without
limitation, any sale or other disposition of Collateral or the priority of any
such Liens or DIP Superpriority Claims) or (ii) any transaction outside of the
ordinary course of business with any Loan Party, if the Required Lenders inform
the Borrower in writing within three (3) Business Days of receipt of the notice
from the Borrower referenced above that they object to such assumption or
rejection, as applicable.

ARTICLE VII

NEGATIVE COVENANTS

Holdings and the Borrower hereby jointly and severally agree that, so long as
the Commitments remain in effect or any Loan or other amount is owing to any
Lender or the Administrative Agent hereunder, each of Holdings and the Borrower
shall not, and shall not permit any of its Subsidiaries to, directly or
indirectly:

 

7.01 Financial Covenants; Budget Compliance Covenants

(a)    Pay any expense or other disbursement other than those set forth in the
Approved Budget outside of the following variances (the “Permitted Variance”);

(i)    permit Actual Collections to be less than eighty-five percent (85%) of
Budgeted Collections for any Trailing Four Week Period set forth in the Approved
Budget commencing on the fifth Friday after the Petition Date; provided, that,
if Actual Collections are less than eighty-five percent (85%) of Budgeted
Collections for any Trailing Four Week Period set forth in the Approved Budget
solely as a result of a delay in receipt of one or more identifiable
receivables(s) that were projected to be received during such Trailing Four Week
Period in the Approved Budget, so long as such receivable(s) are received not
more than fourteen (14) days after the end of such Trailing Four Week Period,
such receivable(s) shall be treated as having being received during such
Trailing Four Week Period solely for purposes of compliance with this
Section 7.01(a)(i);

(ii)    permit Actual Disbursements to be more than the sum of (A) 115% of
Budgeted Disbursements for any Trailing Four Week Period set forth in the
Approved Budget commencing on the fifth Friday after the Petition Date and
(B) the excess of Budgeted Disbursements over Actual Disbursements for the
immediately prior Trailing Four Week Period (i.e. expenses permitted by the
Approved Budged but not actually dispersed in such period); and

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(iii)    permit Actual Capital Expenditures to be more than the sum of (A) 115%
of Budgeted Capital Expenditures for any Trailing Four Week Period set forth in
the Approved Budget commencing on the fifth Friday after the Petition Date and
(B) the excess of Budgeted Capital Expenditures over Actual Capital Expenditures
for the immediately prior Trailing Four Week Period (i.e. Capital Expenditures
permitted by the Approved Budged but not actually made in such period).

 

7.02 Indebtedness.

Create, issue, incur, assume, become liable in respect of or suffer to exist any
Indebtedness, except:

(a)    Indebtedness of any Loan Party pursuant to any Loan Document;

(b)    Indebtedness (i) of Holdings or the Borrower to any of their respective
Subsidiaries, (ii) of the Borrower or any Subsidiary that is a Guarantor to
Holdings or the Borrower or any other Subsidiary, (iii) of any Non-Guarantor to
any Non-Guarantor; provided, in each case, that any such Indebtedness described
in the foregoing clauses (i) through (iii) incurred by a Loan Party to a Group
Member that is not a Loan Party is expressly subordinated to the prior payment
in full in cash of the Obligations;

(c)    Guarantee Obligations incurred in the ordinary course of business by the
Borrower or any of its Subsidiaries of obligations of the Borrower and any
Subsidiary that is a Guarantor;

(d)    Permitted Existing Debt (excluding such Indebtedness referenced in
clauses (f), (g) and (h) in this section) and any refinancings, refundings,
renewals or extensions thereof (without increasing, or shortening the maturity
of, the principal amount thereof);

(e)    Indebtedness (including, without limitation, Capital Lease Obligations)
secured by Liens permitted by Section 7.03(g) in an aggregate principal amount
not to exceed the greater of $12,500,000 and 1.5% of Consolidated Tangible
Assets (measured as of the most recent quarter for which a Compliance
Certificate has been delivered pursuant to Section 6.02(a)) at any one time
outstanding;

(f)    (i) Indebtedness of the Borrower in respect of the Second Lien Notes
under the Second Lien Note Indenture and, to the extent applicable, any
Permitted Refinancing Debt in connection therewith in an aggregate principal
amount not to exceed $250,000,000, plus any premium payable to holders of the
Second Lien Notes and expenses in each case related to or in connection with the
first incurrence of any such Permitted Refinancing Debt; provided that any such
premium and expenses shall not exceed $25,000,000 in the aggregate and
(ii) Guarantee Obligations of Holdings and any Subsidiary that is a Guarantor in
respect of such Indebtedness;

(g)    [Reserved];

(h)    [Reserved];

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(i)    Hedge Agreements (a) in respect of Indebtedness otherwise permitted
hereby that bears interest at a floating rate, so long as such agreements are
not entered into for speculative purposes, (b) in respect of foreign currency
exposure of any Group Member or in respect of energy, raw materials and/or
commodities, so long as, in each case, such agreements are entered into in the
ordinary course of business and not for speculative purposes and (c) Guarantee
Obligations of Holdings and any other Loan Party in respect of such
Indebtedness;

(j)    Indebtedness under the AWA Environmental Indemnity Agreement; provided
that such Indebtedness is recourse only to the property described in
Section 7.03(i);

(k)    Guarantee Obligations of the Borrower with respect to obligations of
Holdings pursuant to the AWA Environmental Indemnity Agreement;

(l)    Indebtedness arising from the honoring by a bank or other financial
institution of a check, draft or similar instrument inadvertently (except in the
case of daylight overdrafts) drawn against insufficient funds in the ordinary
course of business so long as such Indebtedness is extinguished within three
(3) Business Days of the incurrence thereof;

(m)    Indebtedness of the Borrower or any of its Subsidiaries in respect of
performance bonds and surety bonds incurred in the ordinary course of business;

(n)    Indebtedness of the Borrower or any Subsidiary of the Borrower arising
from agreements of the Borrower or a Subsidiary of the Borrower providing for
indemnification, adjustment of purchase price, earn out or other similar
obligations, in each case, incurred or assumed in connection with the
Disposition of any business, assets or a Subsidiary of the Borrower permitted
under this Agreement, other than guarantees of Indebtedness incurred by any
Person acquiring all or any portion of such business, assets or Subsidiary for
the purpose of financing such acquisition;

(o)    [Reserved];

(p)    [Reserved];

(q)    additional Indebtedness of Non-Guarantors in an aggregate principal
amount (for all Non-Guarantors) not to exceed $10,000,000 at any one time
outstanding;

(r)    [Reserved];

(s)    Indebtedness of the Borrower or any Loan Party in respect of Cash
Management Agreements entered into in the ordinary course of business and
Guarantee Obligations of Holdings and any Loan Party in respect of such
Indebtedness.

 

7.03 Liens.

Create, incur, assume or suffer to exist any Lien upon any of its property,
whether now owned or hereafter acquired, except for:

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(a)    Liens for Taxes or assessments not yet due and payable or that are being
properly contested, as set forth in Section 6.03;

(b)    carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or
other like Liens arising in the ordinary course of business that are not overdue
for a period of more than 30 days or that are being contested in good faith by
appropriate proceedings;

(c)    pledges or deposits in connection with workers’ compensation,
unemployment insurance and other social security legislation;

(d)    deposits to secure the performance of bids, trade contracts (other than
for borrowed money), leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature incurred in the
ordinary course of business;

(e)    easements, rights-of-way, restrictions, minor defects or irregularities
in title and other similar encumbrances incurred in the ordinary course of
business that, in the aggregate, do not materially detract from the value of the
property subject thereto or materially interfere with the ordinary conduct of
the business of the Borrower or any of its Subsidiaries;

(f)    Liens in existence on the date hereof listed on Schedule 7.03, securing
Indebtedness permitted by Section 7.02(d); provided that no such Lien is spread
or otherwise extended to cover any additional property after the Closing Date
and that the amount of Indebtedness secured thereby is not increased;

(g)    Liens securing Indebtedness of the Borrower or any other Subsidiary
incurred pursuant to Section 7.02(e) to finance the acquisition of fixed or
capital assets, provided that (i) such Liens shall be created simultaneously
with, or within 120 days after, the acquisition of such fixed or capital assets,
(ii) such Liens do not at any time encumber any property other than the property
financed by such Indebtedness and (iii) the amount of Indebtedness secured
thereby is not increased;

(h)    Liens created pursuant to the Security Documents;

(i)    Liens on rights to “Recovery” in favor of AWA pursuant to and as defined
in the AWA Environmental Indemnity Agreement and the PDC Environmental Indemnity
Agreement;

(j)    any interest or title of a lessor under any lease entered into by the
Borrower or any other Subsidiary in the ordinary course of its business and
covering only the assets so leased;

(k)    Liens arising from judgments, decrees or attachments except to the extent
that they give rise to an Event of Default;

(l)    licenses, leases or subleases granted to third Persons in the ordinary
course of business not interfering in any material respect with the business of
Holdings or any of its Subsidiaries;

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(m)    Liens in favor of customs or revenue authorities arising as a matter of
Law to secure payment of customs duties in connection with the importation of
goods so long as such Lien covers only the goods being imported;

(n)    Liens on the assets of a Non-Guarantor securing Indebtedness incurred by
such Non-Guarantor pursuant to Section 7.02(q);

(o)    Liens existing on any asset prior to the acquisition thereof by the
Borrower or any Subsidiary or on any asset of any Person that becomes a
Subsidiary; provided that (i) such Lien is not created in contemplation of, or
in connection with, such acquisition or such Person becoming a Subsidiary and
(ii) such Lien shall not apply to any other assets;

(p)    [Reserved];

(q)    [Reserved];

(r)    [Reserved];

(s)    Liens on cash used to cash collateralize the Existing Letters of Credit;

(t)    to the extent such Liens are permitted under, and subject to, the
Prepetition Intercreditor Agreement, Liens securing Indebtedness under the
Second Lien Note Documents and any Permitted Refinancing Debt in respect
thereof;

(u)    Liens arising out of conditional sale, title retention, consignment or
similar arrangements for sale of goods entered into by the Borrower or any of
its Subsidiaries in the ordinary course of business;

(v)    Liens arising from precautionary Uniform Commercial Code financing
statement filings; and

(w)    Liens that are contractual rights of set-off (i) relating to the
establishment of depository relations with banks or other financial institutions
not given in connection with the incurrence of Indebtedness, (ii) relating to
pooled deposit or sweep accounts of the Borrower or any Subsidiary to permit
satisfaction of overdraft or similar obligations incurred in the ordinary course
of business of the Borrower or its Subsidiaries or (iii) relating to purchase
orders and other agreements entered into with customers of the Borrower or any
Subsidiary in the ordinary course of business.

 

7.04 Fundamental Changes.

Enter into any merger, consolidation or amalgamation, or liquidate, wind up or
dissolve itself (or suffer any liquidation or dissolution), or Dispose of, all
or substantially all of its property or business, except that:

(a)    any Subsidiary of the Borrower may be merged, consolidated or amalgamated
(i) with or into the Borrower (provided that the Borrower shall be the
continuing or surviving corporation), (ii) with or into any Guarantor (provided
that a Guarantor shall be the continuing or surviving corporation), and
(iii) with respect to any such Subsidiary that is a Non-Guarantor, with or into
any Non-Guarantor;

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(b)    any Subsidiary of the Borrower may Dispose of any or all of its assets
(upon voluntary liquidation or otherwise) (i) to the Borrower or any Guarantor,
(ii) with respect to any such Subsidiary that is a Non-Guarantor, to any
Non-Guarantor, or (iii) to any other Person in connection with a Disposition
permitted pursuant to Section 7.05;

(c)    [Reserved];

(d)    any Non-Guarantor may merge with or into any other Non-Guarantor;

(e)    any Immaterial Subsidiary may be liquidated or dissolved;

(f)    the Borrower may convert to a Delaware limited liability company;
provided that (i) it shall have given the Administrative Agent not less than ten
(10) Business Days’ prior written notice (in the form of an Officers’
Certificate), or such lesser notice period agreed to by the Administrative Agent
of its intention so to do, clearly describing such change and providing such
other information in connection therewith as the Administrative Agent may
reasonably request, (ii) it shall have taken all action necessary to maintain
the validity, enforceability, perfection and priority of the security interest
of the Administrative Agent for the benefit of the Secured Parties in the
Collateral, if applicable, (iii) it shall promptly provide the Administrative
Agent with certified Organizational Documents reflecting any of the changes
described in the preceding clauses (i) and (ii) and (iv) it shall promptly
notify the Administrative Agent of any change in the location of any office in
which it maintains books or records relating to Collateral owned by it or any
office or facility at which Collateral is located (including the establishment
of any such new office or facility), other than changes in location to a
property subject to a landlord access agreement;

(g)    a Holdings Entity Transaction may be consummated; and

(h)    any Cost-Cutting Transactions may be consummated, subject to compliance
with Section 7.01(a)(iii).

 

7.05 Disposition of Property.

Voluntarily Dispose of any of its property, whether now owned or hereafter
acquired, or, in the case of the Borrower or any Subsidiary, issue or sell any
shares of the Borrower’s or such Subsidiary’s Capital Stock to any Person,
except:

(a)    the Disposition of obsolete or worn out property or other assets no
longer used or useful (as reasonably determined by the Borrower and giving
effect to its business plans) in the business of the Borrower and its
Subsidiaries in the ordinary course of business provided that the fair market
value of such assets shall not exceed $100,000 per fiscal year of Borrower;

(b)    the sale of inventory in the ordinary course of business;

(c)    Dispositions permitted by Sections 7.04, 7.06 and 7.07;

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(d)    the sale or issuance of any Subsidiary’s Capital Stock to the Borrower or
any Guarantor to the extent the acquisition thereof is permitted under
Section 7.07;

(e)    the Disposition of other property having a fair market value not to
exceed the greater of $12,500,000 and 1.5% of Consolidated Tangible Assets in
the aggregate for any fiscal year of the Borrower; provided that the Net Cash
Proceeds of any Disposition constituting an Asset Sale shall be subject to the
mandatory prepayment provisions of Section 2.05(b);

(f)    the sale of Non-Guarantors or the assets of Non-Guarantors; and

(g)    Dispositions in connection with any Cost-Cutting Transactions.

 

7.06 Restricted Payments.

Declare or pay any dividend (other than dividends payable solely in common stock
of the Person making such dividend) on, or make any payment on account of, or
set apart assets for a sinking or other analogous fund for, the purchase,
redemption, defeasance, retirement or other acquisition of, any Capital Stock of
any Group Member, whether now or hereafter outstanding, or make any other
distribution in respect thereof, either directly or indirectly, whether in cash
or property or in obligations of Holdings, the Borrower or any Subsidiary
(collectively, “Restricted Payments”), except that:

(a)    any Subsidiary may make Restricted Payments to the Borrower and any
Subsidiary that is a Guarantor, ratably according to their respective holdings
of the type of Capital Stock in respect of which such Restricted Payment is
being made;

(b)    [Reserved]; and

(c)    Subsidiaries of Holdings may pay dividends to permit Holdings or any of
its Subsidiaries to pay corporate overhead expenses incurred in the ordinary
course of business.

 

7.07 Investments.

Make Investments except:

(a)    extensions of trade credit in the ordinary course of business;

(b)    Investments in Cash Equivalents;

(c)    Indebtedness and Guarantee Obligations permitted by Section 7.02(c) or
(k);

(d)    (i) loans and advances to employees of any Group Member of the Borrower
in the ordinary course of business (including for travel, entertainment and
relocation expenses) in an aggregate amount for all Group Members not to exceed
$500,000 at any one time outstanding and (ii) additional loans or advances to
newly hired employees of any Group Member of the Borrower in the ordinary course
of business for the purpose of paying relocation expenses of such employees in
an aggregate amount not to exceed $500,000 at any time outstanding;

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(e)    intercompany Investments by any Group Member in Holdings, the Borrower or
any Subsidiary of the Borrower that, prior to such Investment, is a Guarantor;

(f)    [Reserved];

(g)    [Reserved];

(h)    Investments consisting of extensions of credit in the nature of accounts
receivable or notes receivable arising from the grant of trade credit in the
ordinary course of business, and Investments (including debt obligations)
received in connection with the bankruptcy or reorganization of suppliers and
customers and in settlement of delinquent obligations of, and other disputes
with, customers and suppliers arising in the ordinary course of business;

(i)    [Reserved];

(j)    Guarantee Obligations of customary indemnities and insurance for
directors and officers of any Group Member;

(k)    [Reserved];

(l)    [Reserved];

(m)    investments in the form of a cash deposit or prepayment of expenses to
vendors, suppliers and trade creditors so long as such deposits are made and
such expenses are incurred in the ordinary course of business;

(n)    deposits of cash with banks or other depository institutions and deposits
required by government agencies or utilities, in each case, in the ordinary
course of business;

(o)    [Reserved]; and

(p)    other Investments in an aggregate amount not to exceed $5,000,000 at any
time.

 

7.08 Prepayments and Modifications of Certain Debt Instruments or Organization
Documents.

(a)    Make or offer to make any optional or voluntary payment, prepayment,
repurchase or redemption of or otherwise optionally or voluntarily defease or
segregate funds with respect to the Second Lien Notes, any other Indebtedness
having a permitted junior lien, unsecured Indebtedness or other Subordinated
Indebtedness, any Permitted Refinancing Debt or enter into any derivative or
other transaction with any Derivatives Counterparty obligating Holdings, the
Borrower or any Subsidiary to make payments to such Derivatives Counterparty as
a result of any change in market value of the Second Lien Notes or any
Indebtedness that was incurred prior to the Petition Date (any such action, a
“Restricted Junior Debt Payment”) (other than (i) so long as no Default or Event
of Default shall have occurred or be continuing both before and after giving
effect to such Restricted Junior Debt Payment, the refinancing of any Second
Lien Notes, any other Indebtedness having a permitted junior lien, unsecured
Indebtedness or other Subordinated Indebtedness with applicable Permitted
Refinancing Debt

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and (ii) Restricted Junior Debt Payments made pursuant to the Financing Orders
or, to the extent not in violation of the Financing Orders, any other Approved
Bankruptcy Court Order then in effect;

(b)    amend, modify, waive or otherwise change, or consent or agree to any
amendment, modification, waiver or other change to, any of the terms of the
Second Lien Notes, the Second Lien Note Indenture, the other Prepetition Debt,
any other Indebtedness having a permitted junior lien, unsecured Indebtedness or
other Subordinated Indebtedness or any Permitted Refinancing Debt (other than
any such amendment, modification, waiver or other change that is permitted by
the terms of the Prepetition Intercreditor Agreement or any subordination
agreement applicable thereto; provided that the terms of the Indebtedness being
amended, modified, waived or otherwise changed, after giving effect to such
amendment, modification, waiver or other change, are not materially less
favorable to the Borrower than those applicable to such Indebtedness before
giving effect to such amendment, modification, waiver or other change; provided,
further, that in no event shall such Indebtedness (a) amortize, or otherwise be
subject to scheduled redemptions, repurchases or other payments of principal or
have a final maturity date that is earlier than the date that is six (6) months
after the Scheduled Termination Date, (b) be subordinated to the Obligations in
a manner less favorable to the Lenders than such Indebtedness before giving
effect to such amendment, modification, waiver or other change, (c) contain
maintenance or other springing or conditional financial covenants, (d) be
amended, modified, waived or otherwise changed so as to require prepayments or
mandatory redemptions in a manner more extensive than the terms of such
Indebtedness before giving effect to such amendment, modification, waiver or
other change or (e) contain other terms and conditions that are more
restrictive, taken as a whole, than those under this Agreement (as determined in
good faith by the Required Lenders));

(c)    designate any Indebtedness (other than obligations of the Loan Parties
pursuant to the Loan Documents) as “Designated Senior Debt” (or any other
defined term having a similar purpose) for the purposes of any agreements
governing any Subordinated Indebtedness of the Borrower or any applicable
Permitted Refinancing Debt Document;

(d)    other than any changes necessary solely to implement a Qualified IPO, a
Holdings Entity Transaction or to convert the Borrower to a limited liability
company, amend, supplement, waive or otherwise modify any provision of the
Organization Documents of Holdings, Borrower or its Subsidiaries in a manner
that would be materially adverse to the interests of the Lenders.

 

7.09 Transactions with Affiliates.

Enter into any transaction, including any purchase, sale, lease or exchange of
property, the rendering of any service or the payment of any management,
advisory or similar fees, with any Affiliate (other than Holdings, the Borrower,
any other Guarantor or any Wholly Owned Subsidiary) unless such transaction is
(a) otherwise permitted under this Agreement, (b) in the ordinary course of
business of the relevant Group Member, and (c) upon fair and reasonable terms no
less favorable to the relevant Group Member, than it would obtain in a
comparable arm’s length transaction with a Person that is not an Affiliate;
provided that the following shall in any event be permitted: (i) the
arrangements contemplated by the Fox River Indemnity Arrangements;
(ii) customary fees paid to non-officer directors of Holdings and its
Subsidiaries;

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(iii) employment agreements, employee benefit plans, indemnification provisions,
equity incentive plans and other similar compensatory arrangements entered into
by Holdings and its Subsidiaries with officers and directors of Holdings and its
Subsidiaries in the ordinary course of business, in each case to the extent that
such transactions are otherwise permitted by this Agreement; (iv) transactions
with the ESOP and pursuant to the ESOP Documentation and the terms hereof;
(v) transactions permitted pursuant to Section 7.04, 7.05(f), 7.06 and 7.07;
(vi) transactions among Holdings and its Subsidiaries to the extent otherwise
permitted under this Agreement; (vii) a Holdings Entity Transaction and any
related transactions and documentation in connection therewith and (viii) a
Cost-Cutting Transaction and any related transactions and documentation in
connection therewith.

 

7.10 Changes in Fiscal Periods; Accounting Changes.

(a)    Permit the fiscal year of Holdings to be other than the 52-week or
53-week period ending the Saturday nearest December 31 or change Holdings’
method of determining fiscal quarters.

(b)    Make or permit, any change in accounting policies or reporting practices,
without the consent of the Required Lenders, which consent shall not be
unreasonably withheld, except changes that are required by GAAP (subject in each
case to the provisions of Section 1.03).

 

7.11 Negative Pledge Clauses.

Enter into or suffer to exist or become effective any agreement that prohibits
or limits the ability of any Loan Party to create, incur, assume or suffer to
exist any Lien upon any of its property or revenues, whether now owned or
hereafter acquired, to secure its obligations under the Loan Documents to which
it is a party, other than restrictions existing under or by reason of
(a) applicable Law, (b) this Agreement and the other Loan Documents, (c) the
Second Lien Note Indenture, (d) any Permitted Refinancing Debt Document,
(e) customary provisions restricting subletting or assignment of any lease
governing a leasehold interest of Holdings or a Subsidiary of Holdings,
(f) customary provisions restricting assignment of any licensing agreement
entered into by Holdings or any Subsidiary of Holdings in the ordinary course of
business and (g) any agreements governing any Liens otherwise permitted hereby
(in which case, any prohibition or limitation shall only be effective against
the assets subject to such Liens).

 

7.12 Clauses Restricting Subsidiary Distributions.

Enter into or suffer to exist or become effective any consensual encumbrance or
restriction on the ability of any Subsidiary of the Borrower to (a) make
Restricted Payments in respect of any Capital Stock of such Subsidiary held by,
or pay any Indebtedness owed to, the Borrower or any other Subsidiary of the
Borrower, (b) make loans or advances to, or other Investments in, the Borrower
or any other Subsidiary of the Borrower or (c) transfer any of its assets to the
Borrower or any other Subsidiary of the Borrower, except for such encumbrances
or restrictions existing under or by reason of (i) this Agreement or the other
Loan Documents, (ii) applicable Law, (iii) the Prepetition Debt, (iv) any
Permitted Refinancing Debt Document, (v) the debt agreements in connection with
Indebtedness permitted under Section 7.02, (vi) any agreements governing any
Liens otherwise permitted hereby (in which case, any prohibition or

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limitation shall only be effective against the assets subject to such Liens) and
(vii) any restrictions with respect to a Subsidiary imposed pursuant to an
agreement that has been entered into in connection with the Disposition of all
or substantially all of the Capital Stock or assets of such Subsidiary.

 

7.13 Lines of Business.

Enter into any business, either directly or through any Subsidiary, except for
those businesses in which the Borrower and its Subsidiaries are engaged on the
date of this Agreement or that are reasonably related or complementary thereto.

 

7.14 Material Agreements.

(a) Amend, supplement or otherwise modify, or permit, the amendment, supplement
or modification of (pursuant to a waiver, endorsement or otherwise) the terms
and conditions of the Fox River Indemnity Arrangements without the consent of
the Required Lenders or (b) assign any of its rights under the Fox River
Indemnity Arrangements without the consent of the Required Lenders.

 

7.15 [Reserved].

 

7.16 Holding Company Status.

In the case of Holdings, except to the extent required by the Bankruptcy Court,
(a) conduct, transact or otherwise engage in, or commit to conduct, transact or
otherwise engage in, any business or operations other than those incidental to
(u) the Chapter 11 Cases, (v) any activities necessary to implement a
Cost-Cutting Transaction, (w) any activities necessary solely to implement a
Qualified IPO or a Holdings Entity Transaction, (x) its direct or indirect
ownership of the Capital Stock of the Borrower and PDC Capital Corporation,
(y) its ownership by the ESOP and transactions related to the ESOP and pursuant
to the ESOP Documentation or (z) to the exercise of its rights and remedies
under the Acquisition Documentation, (b) incur, create, assume or suffer to
exist any Indebtedness or other liabilities or financial obligations, except
(i) obligations arising by operation of the ESOP Documentation,
(ii) nonconsensual obligations imposed by operation of Law, (iii) pursuant to
the Loan Documents to which it is a party, (iv) Indebtedness permitted under
clauses (b), (f), (g), (h), (i), (j) or (1) of Section 7.02, and (v) obligations
with respect to its Capital Stock, or (c) own, lease, manage or otherwise
operate any properties or assets (including cash (other than cash received in
connection with dividends made to Holdings in accordance with Section 7.06 or
loans or advances to or by Holdings in accordance with Section 7.07 pending any
required application in the manner contemplated by said Sections or cash
received in transactions relating to the ESOP) and Cash Equivalents) other than
the direct ownership of shares of Capital Stock of the Borrower and PDC Capital
Corporation, as the case may be.

 

7.17 PDC Capital Corporation.

In the case of PDC Capital Corporation, conduct, transact or otherwise engage
in, or commit to conduct, transact or otherwise engage in, any business, or
operations other than those incidental to its obligations under the Bermuda
Company Agreements.

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7.18 ESOP Amendments.

Amend or terminate the ESOP without the prior written consent of the
Administrative Agent (at the direction of the Required Lenders), not to be
unreasonably withheld, except that the Borrower or Holdings may amend the ESOP
(a) to the extent required by the Internal Revenue Service in order to obtain a
favorable determination letter with respect to the ESOP, (b) to comply with
changes in the Law, (c) to incorporate administrative and non-economic changes,
(d) to the extent necessary solely to implement a Qualified IPO of a Holdings
Entity Transaction, (e) if required by the Bankruptcy Court, and (f) to
incorporate other changes so long as, with respect to this clause (f), such
changes are not materially adverse to the interests of any of the Administrative
Agent or the Lenders.

 

7.19 [Reserved].

 

7.20 Embargoed Person.

Cause or permit (a) any of the funds or properties of the Loan Parties that are
used to repay the Loans or other Borrowings to constitute property of, or be
beneficially owned directly or indirectly by, any Person subject to sanctions or
trade restrictions under United States or Canadian Law (“Embargoed Person” or
“Embargoed Persons”) that is identified on (1) the “List of Specially Designated
Nationals and Blocked Persons” maintained by OFAC or any other Governmental
Authority and/or on any other similar list (“Other List”) maintained by OFAC or
any other Governmental Authority pursuant to any authorizing statute including
the International Emergency Economic Powers Act, 50 U.S.C. §§ 1701 et seq., The
Trading with the Enemy Act, 50 U.S.C. App. 1 et seq., any Executive Order or
other applicable Anti-Terrorism Laws, or regulation promulgated thereunder, with
the result that the investment in the Loan Parties (whether directly or
indirectly) is prohibited by applicable Requirements of Law, or the Loans or
other Borrowings made by the Lenders would be in violation of any Requirements
of Law, or (2) the Executive Order, any related enabling legislation or any
other similar executive orders, or (b) any Embargoed Person to have any direct
or indirect interest, of any nature whatsoever in the Loan Parties, with the
result that the investment in the Loan Parties (whether directly or indirectly)
is prohibited by applicable Requirements of Law or the Borrowings are in
violation of applicable Requirements of Law.

 

7.21 Sale and Leaseback Transactions.

Enter into any Sale and Leaseback Transactions.

 

7.22 Locations of Collateral.

Except to the extent otherwise permitted to be so transferred hereunder, no Loan
Party shall cause or permit Collateral having a value in excess of $8,500,000 to
be held in jurisdictions outside of the United States or Canada (or any
constituent jurisdiction thereof).

 

7.23 Canadian Pension Plans.

In the case of Appvion Canada or any Loan Party organized under the Laws of
Canada or any of its provinces or territories, contribute to any Canadian
defined benefit pension plan.

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7.24 Additional Bankruptcy Matters.

(a)    Assert or prosecute any claim or cause of action against any of the
Secured Parties (in their capacities as such), unless such claim or cause of
action is in connection with the enforcement of the Loan Documents against the
Administrative Agent or Lenders;

(b)    Subject to the terms of the Financing Orders and subject to Section 8.01,
object to, contest, delay, prevent or interfere with in any material manner the
exercise of rights and remedies by the Administrative Agent or the Lenders with
respect to the Collateral following the occurrence of an Event of Default; or

(c)    Except as expressly provided or permitted hereunder (including, without
limitation, to the extent expressly identified in any line item in the Approved
Budget or pursuant to any “first day” or “second day” orders complying with the
terms of this Agreement) or, with the prior consent of the Required Lenders, as
provided pursuant to any other Approved Bankruptcy Court Order, make any payment
or distribution to any Affiliate that is not a Loan Party or to any insider of
the Company outside of the ordinary course of business.

 

7.25 Other Superpriority Claims.

Incur, create, assume, suffer to exist or permit any Superpriority Claim which
is pari passu with or senior to the DIP Superpriority Claim, except for the
Carve-Out.

ARTICLE VIII

EVENTS OF DEFAULT AND REMEDIES

 

8.01 Events of Default.

If any of the following events shall occur and be continuing:

(a)    the Borrower shall fail to pay any principal of any Loan when due in
accordance with the terms hereof; or the Borrower shall fail to pay any interest
on any Loan , or any fee or other amount payable hereunder or under any other
Loan Document, within five (5) days after any such interest or other amount
becomes due in accordance with the terms hereof; or

(b)    any representation or warranty made or deemed made by any Loan Party
herein or in any other Loan Document or that is contained in any certificate,
document or financial or other statement furnished by it at any time under or in
connection with this Agreement or any such other Loan Document shall prove to
have been inaccurate in any material respect on or as of the date made or deemed
made; or

(c)    any Loan Party shall default in the observance or performance of (A) any
agreement contained in Sections 6.01, 6.02, clauses (i) and (ii) of
Section 6.04(a) (with respect to Holdings and the Borrower only), 6.05, 6.06,
6.07(a), 6.08, 6.09, 6.10, 6.12, 6.19, or 6.20 or Article VII of this Agreement
or Section 5.5 of either Guarantee and Collateral Agreement or (B) any agreement
contained in Sections 6.03, 6.07(b), (c), (d), (e) and (f), and, with respect to
a default referenced in this clause (B), such default shall continue unremedied
for a period of ten (10) days; or

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(d)    any Loan Party shall default in the observance or performance of any
other agreement contained in this Agreement or any other Loan Document (other
than as provided in paragraphs (a) through (c) of this Section), and such
default shall continue unremedied for a period of thirty (30) days after the
earlier of (i) notice to the Borrower from the Administrative Agent or any
Lender and (ii) a Responsible Officer becoming aware of any such default or the
delivery by a Loan Party of a default notice pursuant to Section 6.07(a); or

(e)    any Group Member shall (i) default in making any payment of any
post-petition or unstayed Indebtedness (including any Guarantee Obligation, but
excluding the Loans) or any debtor-in-possession financing on the due date with
respect thereto; or (ii) default in making any payment of any interest on any
such Indebtedness beyond the period of grace, if any, provided in the instrument
or agreement under which such Indebtedness was created; or (iii) default in the
observance or performance of any other agreement or condition relating to any
such Indebtedness or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event shall occur or condition exist
(excluding (x) a change of control event, which is covered separately under
Section 8.01(k) and (y) an asset sale or similar event in the ordinary course of
business that requires Indebtedness to become due prior to their stated
maturity, but in the case of this clause (y) only to the extent the amount
becoming due is actually repaid), the effect of which default or other event or
condition is to cause, or to permit the holder or beneficiary of such
Indebtedness (or a trustee or agent on behalf of such holder or beneficiary) to
cause, with the giving of notice if required, such Indebtedness to become due
prior to its stated maturity or (in the case of any such Indebtedness
constituting a Guarantee Obligation) to become payable; provided, that a
default, event or condition described in clause (i), (ii) or (iii) of this
paragraph (e) shall not at any time constitute an Event of Default unless the
same occurs with respect to Indebtedness the outstanding principal amount of
which exceeds in the aggregate $15,000,000; or

(f)    (i) any Subsidiary that is not an Immaterial Subsidiary shall commence
any case, proceeding or other action other than the Chapter 11 Cases (A) under
any Debtor Relief Law or under any other existing or future Law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief entered
with respect to it, or seeking to adjudicate it bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its debts, or
(B) seeking appointment of a receiver, trustee, custodian, conservator or other
similar official for it or for all or any substantial part of its assets, or any
such Subsidiary shall make a general assignment for the benefit of its
creditors; or (ii) there shall be commenced against any material Subsidiary that
is not a Loan Party any case, proceeding or other action of a nature referred to
in clause (i) above that (A) results in the entry of an order for relief or any
such adjudication or appointment or (B) remains undismissed, undischarged or
unbonded for a period of 60 days; or (iii) there shall be commenced against any
material Subsidiary that is not a Loan Party any case, proceeding or other
action seeking issuance of a warrant of attachment, execution, distraint or
similar process against all or any substantial part of its assets that results
in the entry of an order for any such relief that shall not have been vacated,
discharged, or stayed or bonded pending appeal within 60 days from the entry
thereof;

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or (iv) any Loan Party shall take any action in furtherance of, or indicating
its consent to, approval of, or acquiescence in, any of the acts set forth in
clause (i), (ii), or (iii) above; or (v) any Loan Party shall not, or shall be
unable to, or shall admit in writing its inability to, pay its debts as they
become due; or

(g)    reserved; or

(h)    one or more post-petition money judgments or decrees shall be entered
against any Loan Party involving in the aggregate a liability (to the extent not
paid or fully covered by insurance or a third party indemnity as to which the
relevant insurance company or third party has acknowledged coverage) of
$10,000,000 or more, and all such judgments or decrees shall not have been
vacated, discharged, stayed or bonded pending appeal within forty-five (45) days
from the entry thereof or the effectiveness of which or the exercise of remedies
as a result of which shall not have been stayed under the Bankruptcy Code;
provided that this clause (h) shall not apply to any matter or circumstance
referenced in clause (m) hereof; or

(i)    any of the Loan Documents or Security Documents shall cease, for any
reason, to be in full force and effect (except in accordance with the terms
thereof), or any Loan Party or any Affiliate of any Loan Party shall so assert,
or any Lien created by any of the Security Documents covering Collateral having
a fair market or book value in excess of $2,500,000 shall cease to be
enforceable and of the same effect and priority purported to be created thereby;
or

(j)    the Guaranty contained in Section 2 of either Guarantee and Collateral
Agreement shall cease, for any reason (except if such release is in accordance
with the terms thereof), to be in full force and effect or any Loan Party or any
Affiliate of any Loan Party shall so assert;

(k)    (i) prior to the occurrence of a Qualified IPO or a Holdings Entity
Transaction either (x) the ESOP shall cease to have the power to vote or direct
the voting of securities having a majority of the ordinary voting power for the
election of Board of Directors of Holdings (determined on a fully diluted basis)
or (y) the ESOP Trust shall cease to own of record and beneficially greater than
50% of the outstanding Capital Stock of Holdings; (ii) upon and following a
Qualified IPO or a Holdings Entity Transaction, any “person” or “group” (as such
terms are used in Sections 13(d) and 14(d) of the Exchange Act, but excluding
any employee benefit plan of such person or group or its respective
subsidiaries, and any person acting in its capacity as trustee, agent or
fiduciary or administrator of any such plan), other than the ESOP Trust, is or
becomes the Beneficial Owner (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act), directly or indirectly, of Voting Stock of Holdings representing
more than 35% of the voting power of the total outstanding Voting Stock of
Holdings; (iii) Holdings shall cease to own and control, of record and
beneficially, directly, 100% of each class of outstanding Capital Stock of the
Borrower, free and clear of all consensual Liens (except Liens created by the
Guarantee and Collateral Agreements and Liens securing the Obligations under the
Second Lien Security Documents in accordance with the Prepetition Intercreditor
Agreement); or (iv) prior to the occurrence of a Qualified IPO or a Holdings
Entity Transaction, the Board of Directors of either Holdings or the Borrower
shall cease to include two independent directors; or

(l)    any Subordinated Indebtedness or the guarantees thereof or any related
Permitted Refinancing Debt or the guarantees thereof, so long as such
Indebtedness is outstanding, shall

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cease, for any reason, to be validly subordinated to the Obligations or the
obligations of the Subsidiaries party thereto under the Guarantee and Collateral
Agreements as provided in the documentation governing such Subordinated
Indebtedness or any related Permitted Refinancing Debt Document, as the case may
be or any Loan Party, any Affiliate of any Loan Party, the trustee or agent in
respect of any Subordinated Indebtedness or any related Permitted Refinancing
Debt Document, or the holders of at least 25% in aggregate principal amount of
any Subordinated Indebtedness or any related Permitted Refinancing Debt, as the
case may be, shall so assert; or

(m)    (i) AWA shall default in the observance or performance of any agreement
contained in the AWA Environmental Indemnity Agreement, (ii) any of the Fox
River Indemnity Arrangements shall be terminated, held in any judicial
proceeding to be unenforceable or invalid or shall cease for any reason to be in
full force and effect or the Lien created by the Bermuda Security Agreement
shall cease to be enforceable and of the same effect and priority purported to
be created thereby, (iii) any party (other than a Group Member) shall otherwise
default in the observance or performance of any material agreement contained in
the Acquisition Documentation after giving effect to any applicable cure period,
(iv) any party shall default in the observance or performance of any agreement
contained in the Bermuda Company Agreements, or (v) NCR Corp. shall default in
the observance or performance of any agreement contained in the NCR Agreements,
provided, that a default, event or condition described in clause (i), (iii),
(iv) or (v) of this paragraph (m) shall not at any time constitute an Event of
Default unless such default, event or condition could reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect, taking into
account any mitigating arrangements or agreements that the Borrower has
implemented prior to such default, event or condition; or

(n)    the Prepetition Intercreditor Agreement or any provision thereof shall
cease to be in full force and effect, or any Lien securing or purporting to
secure Indebtedness or other obligations owing under the Second Lien Note
Indenture shall, for any reason, cease to be subordinated to the Lien created
under the Security Documents securing the First Lien Obligations under, and as
defined in, the Prepetition Intercreditor Agreement; or

(o)    (i) the entry of an order dismissing any of the Chapter 11 Cases or
converting any of the Chapter 11 Cases to a case under Chapter 7 of the
Bankruptcy Code, or any Loan Party files a motion or other pleading seeking
entry of such an order or supports or fails to promptly oppose such dismissal or
conversion;

(ii)    a trustee, responsible officer or an examiner having expanded powers
under Section 1104 of the Bankruptcy Code (other than (x) a fee examiner or
(y) for purposes of an investigation pursuant to Sections 1106(a)(3) and (4) of
the Bankruptcy Code) is appointed or elected in the Chapter 11 Cases, any Loan
Party or applies for, consents to, supports, acquiesces in or fails to promptly
oppose, any such appointment, or the Bankruptcy Court shall have entered an
order providing for such appointment, in each case without the prior written
consent of the Required Lenders in their sole discretion;

(iii)    the entry of an order staying, reversing or vacating the Interim
Financing Order or the Final Financing Order or modifying or amending the
Interim Financing

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Order or Final Financing Order other than in form and substance satisfactory to
the Administrative Agent and the Required Lenders, or any Loan Party files an
application, motion or other pleading seeking entry of such an order or supports
or fails to promptly oppose entry of such an order, in each case without the
prior written consent of the Administrative Agent and the Required Lenders in
their sole discretion;

(iv)    the entry of an order in any of the Chapter 11 Cases denying or
terminating use of cash collateral by any of the Loan Parties, and the Loan
Parties have not obtained use of cash collateral (consensually or
non-consensually) with the prior written consent of the Administrative Agent and
the Required Lenders;

(v)    the entry of an order in any of the Chapter 11 Cases granting relief from
any stay or proceeding (including, without limitation, the automatic stay) so as
to allow any third party to proceed with foreclosure (or the granting of a deed
in lieu of foreclosure or the like) against any assets of the Loan Parties with
a value in excess of $5,000,000 in the aggregate;

(vi)    the entry of a final non-appealable order in the Chapter 11 Cases
charging any of the Collateral under Section 506(c) of the Bankruptcy Code
against the Lenders or the commencement of other actions by the Loan Parties
that challenges the rights and remedies of the Administrative Agent or the
Lenders under the Loan Documents in any of the Chapter 11 Cases or that is
inconsistent with the Loan Documents;

(vii)    without the prior written consent of the Administrative Agent and the
Required Lenders, any Loan Party shall file a motion seeking or take any action
supporting a motion seeking, or the Bankruptcy Court shall enter an order in any
of the Chapter 11 Cases authorizing (x) financing under Section 364 of the
Bankruptcy Code (other than the Loans) or (y) the sale of all or substantially
all of the Loan Parties’ assets unless such order contemplates payment in full
in cash of the Obligations upon the closing of such financing or consummation of
such sale, whether pursuant to a plan of reorganization or otherwise;

(viii)    without the consent of the Required Lenders (not to be unreasonably
withheld), the entry of an order in any of the Chapter 11 Cases granting
adequate protection to any other person (which, for the avoidance of doubt,
shall not apply to any payments made pursuant to “first day” or other orders
reasonably acceptable to the Administrative Agent and the Required Lenders);

(ix)    termination or expiration of any exclusivity period for any Debtor to
file or solicit acceptances for a plan of reorganization;

(x)    the filing or support of any pleading by any Loan Party (or any direct or
indirect parent thereof) seeking, or otherwise consenting to, any of the matters
set forth in clauses (i) through (ix) above, unless such filing or any pleading
is in connection with the enforcement of the Loan Documents against the
Administrative Agent or the Lenders;

(p)    the commencement of any action, including the filing of any pleading, by
any Loan Party or any direct or indirect subsidiary of any Loan Party (or by any
direct or indirect parent of any Loan Party) against any of the prepetition
secured parties with respect to any of the obligations or liens under or with
respect to the Prepetition First Lien Credit Agreement;

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(q)    the making of any material payments in respect of prepetition obligations
other than (i) to the extent permitted by the Financing Orders or an Approved
Bankruptcy Court Order (including any “first day” orders) in amounts reasonably
satisfactory to the Administrative Agent and Required Lenders (and not otherwise
prohibited by this Agreement or any other Approved Bankruptcy Court Order then
in effect), or (ii) as otherwise agreed to in writing by the Administrative
Agent and Required Lenders;

(r)    the entry of the Final Financing Order shall not have occurred within
forty-five (45) days after entry of the Interim Financing Order (or such later
date (but in no event later than sixty (60) days after the entry of the Interim
Financing Order) as the Administrative Agent and the Required Lenders may
reasonably agree);

(s)    an order of the Bankruptcy Court granting, other than in respect of the
Loans and the Carve-Out or as otherwise permitted under the applicable Loan
Documents, any claim entitled to superpriority administrative expense claim
status in the Chapter 11 Cases pursuant to Section 364(c)(1) of the Bankruptcy
Code pari passu with or senior to the claims of the Administrative Agent and the
Lenders under the Loan Documents, or the filing by any Loan Party of a motion or
application seeking entry of such an order;

(t)    other than with respect to the Carve-Out and the Liens provided for in
the Loan Documents (subject, in the case of the Loans, to the priority set forth
in the Financing Orders and Section 2.17), the Borrower or any other Loan Party
shall create or incur, or the Bankruptcy Court enters an order granting, any
claim on Collateral which is pari passu with or senior to any liens under the
Prepetition First Lien Facility, the adequate protection liens and adequate
protection obligations granted under the Interim Financing Order in
contravention of the lien priorities specified in Section 2.17;

(u)    noncompliance by any Loan Party or any of its Subsidiaries with the terms
of the Interim Financing Order or, after entry thereof, the Final Financing
Order;

(v)    the Loan Parties or any of their Subsidiaries (or any direct or indirect
parent of any Loan Party), or any person claiming by or through any of the
foregoing, shall obtain court authorization to commence, or shall commence, join
in, assist or otherwise participate as an adverse party in any suit or other
proceeding against the Administrative Agent or any of the Lenders regarding the
Loans, unless such suit or other proceeding is in connection with the
enforcement of the Loan Documents against the Administrative Agent or Lenders;
or

(w)    (i) a plan of reorganization shall be confirmed in any of the Chapter 11
Cases that is not an Acceptable Plan of Reorganization, or any order shall be
entered which dismisses any of the Chapter 11 Cases and which order (x) does not
provide for termination of the unused NM Commitments and payment in full in cash
of the Obligations, (y) does not provide for release and exculpatory provisions
relating to the Administrative Agent, the Arranger and the Lenders that are
satisfactory to the Administrative Agent, the Arrangers and the Required Lenders
and (z) is not otherwise reasonably satisfactory to the Administrative Agent and
the Required Lender, or

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(ii) any of the Loan Parties or any of their Subsidiaries (or any of their
direct or indirect parents), shall file, propose, support, or fail to promptly
contest in good faith the filing or confirmation of such a plan or the entry of
such an order; or

(x)    any Loan Party (or any direct or indirect parent thereof) shall file any
motion seeking authority to consummate the sale of assets of any Loan Party
(other than any such sale that is permitted under the Loan Documents and other
than in connection with any Cost-Cutting Transaction permitted hereunder)
pursuant to Section 363 of the Bankruptcy Code having a value in excess of
$2,000,000, without the consent of the Required Lenders, or the Borrower shall
file (or fail to oppose) any motion seeking an order authorizing the sale of all
or substantially all of the assets of the Loan Parties (unless such sale would
result in the repayment in full in cash of all Obligations upon consummation
thereof);

then in every event, and at any time thereafter during the continuance of such
event, the Administrative Agent, on behalf of the Lenders, may (and at the
direction of the Lenders, shall), upon written notice to the Borrower and the
Second Lien Representative (A) declare (i) the Commitments to be terminated,
reduced or restricted forthwith to the extent any such Commitments remain the
applicable Loans hereunder (with accrued interest thereon), (ii) all other
amounts owing under this Agreement and the other Loan Documents to be due and
payable forthwith, whereupon the same shall immediately become due and payable
without presentment, demand, protest or any other notices of any kind which are
hereby expressly waived by the Borrower (except as expressly provided above in
this Section 8.01); and (iii) the termination of the Loan Documents as to any
future liability or obligation of the Administrative Agent and Lenders, without
any effect to any liens or obligations provided hereunder; and (B) whether or
not the maturity of the Obligations shall have been accelerated pursuant hereto,
proceed to protect, enforce and exercise all rights and remedies of the
Administrative Agent or the Lenders under this Agreement, any of the other Loan
Documents or applicable law, including, but not limited to, by suit in equity,
action at law or other appropriate proceeding, whether for the specific
performance of any covenant or agreement contained in this Agreement and the
other Loan Documents or any instrument pursuant to which the Obligations are
evidenced, and, if such amount shall have become due, by declaration or
otherwise, proceed to enforce the payment thereof or any other legal or
equitable right of the Administrative Agent or the Lenders; provided that with
respect to the enforcement of the Liens purported to be created by any Security
Document or exercise of any other rights or remedies with respect to the
Collateral (including rights to set off or apply any amounts in any bank
accounts that are a part of the Collateral), the Required Lenders or the
Administrative Agent (at the direction of the Required Lender) shall provide the
Borrower and the Second Lien Representative with at least five (5) Business
Days’ written notice prior to taking the action contemplated thereby (the
“Remedies Notice”) (and in any hearing after the giving of such notice, the only
issue that may be raised by any party in opposition thereto being whether, in
fact, an Event of Default has occurred and is continuing) (the “Remedies Notice
Period”); provided, that, no notice shall be required for any exercise of rights
or remedies (x) to block or limit withdrawals from any bank accounts that are a
part of the Collateral (including, without limitation, by sending any control
activation notices to depositary banks pursuant to any control agreement),
except that (a) the Loan Parties shall be permitted to continue to use cash
collateral in the ordinary course of business, including, without limitation,
for the purchase and sale of raw materials and work-in-process and finished
goods inventory from affiliates, during such five (5)-Business Day notice period
in accordance with the Approved

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Budget then in effect (without giving effect to any updates thereto after
delivery of such notice, unless consented to by the Required Lenders in their
sole discretion, and subject to conditions to be agreed in the case of other
payments to the Loan Parties’ Affiliates or insiders) and to fund the Post-EoD
Carve-Out Amount, and (b) during such five (5)-Business Day notice period, any
party in interest shall be entitled to seek an emergency hearing with the
Bankruptcy Court and (y) in the event the Obligations have not been repaid in
full in cash on the Scheduled Termination Date.

 

8.02 Application of Funds.

(a)    After the exercise of remedies provided for in Section 8.01 (or after the
Loans have automatically become immediately due and payable), any amounts
received on account of the Obligations shall be applied by the Administrative
Agent in the following order:

First, ratably, to payment of that portion of the Obligations constituting fees,
indemnities, expenses and other amounts (including fees, charges and
disbursements of counsel to the Administrative Agent and amounts payable under
Article III) payable to the Administrative Agent in its capacity as such;

Second, ratably, to payment of that portion of the Obligations constituting
fees, indemnities and other amounts (other than principal and interest) payable
to the Lenders and (including fees, charges and disbursements of counsel to the
respective Lenders (including fees and time charges for attorneys who may be
employees of any Lender) and amounts payable under Article III, ratably among
them in proportion to the respective amounts described in this clause Second
payable to them;

Third, ratably, to payment of that portion of the Obligations constituting
unpaid principal and accrued and unpaid interest on the NM Term Loans, ratably
among the NM Lenders in proportion to the respective amounts described in this
clause Third payable to them;

Fourth, ratably, to payment of that portion of the Obligations constituting
unpaid principal and accrued and unpaid interest on the Roll-up Loans and
amounts owing under Secured Hedge Agreements, ratably among the Lenders and the
Hedge Banks in proportion to the respective amounts described in this clause
Fourth payable to them; and

Last, the balance, if any, after all of the Obligations (other than contingent
indemnification obligations for which no claim has been made) have been
indefeasibly paid in full, to the Borrower or as otherwise required by Law.

(b) The order of priority set forth in clause (a) above shall not be binding in
any exit facility that refinances the Obligations.

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ARTICLE IX

ADMINISTRATIVE AGENT

 

9.01 Appointment.

(a)    Each Lender (and by its acceptance of the benefits of the Security
Documents as a Secured Party thereunder, each Hedge Bank and each Cash
Management Bank) each hereby irrevocably designates and appoints the
Administrative Agent as an agent of such Lender under this Agreement and the
other Loan Documents. Each Lender irrevocably authorizes the Administrative
Agent, in such capacity, through its agents or employees, to take such actions
on its behalf under the provisions of this Agreement and the other Loan
Documents and to exercise such powers and perform such duties as are delegated
to the Administrative Agent by the terms of this Agreement and the other Loan
Documents, together with such actions and powers as are reasonably incidental
thereto. The provisions of this Article IX are solely for the benefit of the
Administrative Agent and the Lenders, and no Loan Party shall have rights as a
third party beneficiary of any such provisions. Without limiting the generality
of the foregoing, the Administrative Agent is hereby expressly authorized to
execute any and all documents (including releases) with respect to the
Collateral and any rights of the Secured Parties with respect thereto as
contemplated by and in accordance with the provisions of this Agreement and the
other Loan Documents. In performing its functions and duties hereunder, the
Administrative Agent shall act solely as an agent of the Lenders and does not
assume and shall not be deemed to have assumed any obligation towards or
relationship of agency or trust with or for Holdings or any of its Subsidiaries.
Without limiting the generality of the foregoing, the use of the term “agent” in
this Agreement with reference to the Administrative Agent is not intended to
connote any fiduciary or other implied (or express) obligations arising under
agency doctrine of any applicable Law. Instead, such term is used merely as a
matter of market custom and is intended to create or reflect only an
administrative relationship between independent contracting parties.

(b)    Each Lender irrevocably appoints each other Lender as its agent and
bailee for the purpose of perfecting Liens (whether pursuant to
Section 8-301(a)(2) of the UCC or otherwise), for the benefit of the Secured
Parties, in assets in which, in accordance with the UCC or any other applicable
Requirement of Law a security interest can be perfected by possession or
control. Should any Lender (other than the Administrative Agent) obtain
possession or control of any such Collateral, such Lender shall notify the
Administrative Agent thereof, and, promptly following the Administrative Agent’s
request therefor, shall deliver such Collateral to the Administrative Agent or
otherwise deal with such Collateral in accordance with the Administrative
Agent’s instructions. The Lenders hereby acknowledge and agree that the
Administrative Agent may act, subject to and in accordance with the terms of the
Guarantee and Collateral Agreements and the other Loan Documents, as the
collateral agent for the Secured Parties.

 

9.02 Administrative Agent in its Individual Capacity.

Each Person serving as the Administrative Agent hereunder shall have the same
rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent, and the term
“Lender” or “Lenders” shall, unless otherwise

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expressly indicated or unless the context otherwise requires, include the Person
serving as an agent hereunder in its individual capacity. Such Person and its
Affiliates may accept deposits from, lend money to, act as financial advisor or
in any other advisory capacity for, and generally engage in any kind of business
with, any Group Member or Affiliate thereof as if it were not the Administrative
Agent hereunder and without duty to account therefor to the Lenders.

 

9.03 Exculpatory Provisions.

The Administrative Agent shall not have any duties or obligations except those
expressly set forth in the Loan Documents, and its duties shall be
administrative in nature. Without limiting the generality of the foregoing:

(a)    the Administrative Agent shall not be subject to any fiduciary or other
implied duties, regardless of whether a Default has occurred and is continuing;

(b)    the Administrative Agent shall not have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary
rights and powers expressly contemplated by the Loan Documents that the
Administrative Agent is required to exercise as directed in writing by the
Required Lenders (or such other number or percentage of the Lenders as shall be
necessary under the circumstances as provided in Section 11.01); provided that
the Administrative Agent shall not be required to take any action that, in its
opinion or the opinion of its counsel, may expose the Administrative Agent to
liability, if the Administrative Agent is not indemnified to its satisfaction,
or that is contrary to any Loan Document or applicable Requirements of Law
including, for the avoidance of doubt any action that may be in violation of the
automatic stay under any Debtor Relief Law or that may effect a foreclosure,
modification or termination of property of a Defaulting Lender under any Debtor
Relief Law; and

(c)    except as expressly set forth in the Loan Documents, the Administrative
Agent shall not have any duty to disclose or shall be liable for the failure to
disclose, any information relating to Holdings, the Borrower, any Subsidiary or
any of their respective Affiliates that is communicated to or obtained by the
Administrative Agent or any of its Affiliates in any capacity.

The Administrative Agent shall not be liable for any action taken or not taken
by it (i) with the consent or at the request of the Required Lenders (or such
other number or percentage of the Lenders as shall be necessary, or as the
Administrative Agent shall believe in good faith shall be necessary, under the
circumstances as provided in Section 11.01) or (ii) in the absence of its own
gross negligence or willful misconduct as determined by a court of competent
jurisdiction by a final and non-appealable judgment.

The Administrative Agent shall not be deemed to have knowledge of any Default or
Event of Default unless and until written notice thereof describing such Default
or Event of Default is given to the Administrative Agent by the Borrower or a
Lender, and the Administrative Agent shall not be responsible for or have any
duty to ascertain or inquire into (i) any statement, warranty or representation
made in or in connection with any Loan Document, (ii) the contents of any
certificate, report or other document delivered hereunder or thereunder or in
connection herewith or therewith, (iii) the performance or observance of any of
the covenants, agreements or other terms or conditions set forth in any Loan
Document or the occurrence of any

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Default or Event of Default, (iv) the validity, enforceability, effectiveness or
genuineness of any Loan Document or any other agreement, instrument or document,
or the creation, perfection or priority of any Lien purported to be created by
the Security Documents, (v) the value or sufficiency of the Collateral, or
(vi) the satisfaction of any condition set forth in Article IV or elsewhere in
any Loan Document. Each party to this Agreement acknowledges and agrees that the
Administrative Agent may from time to time use one or more outside service
providers for the tracking of all UCC financing statements (and/or other
Collateral related filings and registrations from time to time) required to be
filed or recorded pursuant to the Loan Documents and the notification to the
Administrative Agent, of, among other things, the upcoming lapse or expiration
thereof, and that each of such service providers will be deemed to be acting at
the request and on behalf of the Borrower and the other Loan Parties. The
Administrative Agent shall not be liable for any action taken or not taken by
any such service provider. None of the Administrative Agent or any of its
officers, partners, directors, employees or agents shall be liable to the
Lenders or any other Secured Party for any action taken or omitted by the
Administrative Agent under or in connection with any of the Loan Documents.
Notwithstanding anything to the contrary set forth herein, the Administrative
Agent shall not be required to take, or to omit to take, any action under the
Loan Documents, unless, upon demand, the Administrative Agent receives
indemnification satisfactory to it from the Lenders (or, to the extent
applicable and acceptable to the Administrative Agent, any other Secured Party)
against all liabilities, costs and expenses that, by reason of such action or
omission, may be imposed on, incurred by or asserted against the Administrative
Agent or any of its officers, partners, directors, employees or agents.

 

9.04 Reliance by Administrative Agent.

The Administrative Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing (including any electronic
message, internet or intranet website posting or other distribution) believed by
it to be genuine and to have been signed, sent, or otherwise authenticated by a
proper Person. The Administrative Agent also may rely upon any statement made to
it orally and believed by it to be made by a proper Person, and shall not incur
any liability for relying thereon. In determining compliance with any condition
hereunder to the making of a Loan that by its terms must be fulfilled to the
satisfaction of a Lender, the Administrative Agent may presume that such
condition is satisfactory to such Lender unless the Administrative Agent shall
have received written notice to the contrary from such Lender prior to the
making of such Loan. The Administrative Agent may consult with legal counsel
(who may be counsel for Borrower), independent accountants and other advisors
selected by it, and shall not be liable for any action taken or not taken by it
in accordance with the advice of any such counsel, accountants or advisors.

 

9.05 Delegation of Duties.

The Administrative Agent may perform any and all of its duties and exercise its
rights and powers under this Agreement or under any other Loan Document by or
through, or delegate any and all such rights and powers to, any one or more
sub-agents appointed by the Administrative Agent. The Administrative Agent and
any such sub-agent may perform any and all of its duties and exercise its rights
and powers by or through their respective Related Parties.

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The exculpatory, indemnification and other provisions of the preceding
paragraphs shall apply to any such sub-agent and to the Related Parties of the
Administrative Agent and any such sub-agent, and shall apply, without limiting
the foregoing, to their respective activities in connection with the syndication
of the Loans provided for herein as well as activities as the Administrative
Agent. The Administrative Agent shall not be responsible for the negligence or
misconduct of any sub-agent except to the extent that a court of competent
jurisdiction determines in a final and non-appealable judgment that the
Administrative Agent acted with gross negligence or willful misconduct in the
selection of such sub-agent.

 

9.06 Successor Administrative Agent.

The Administrative Agent may resign as such at any time upon at least ten
(10) days’ prior notice to the Lenders and the Borrower. Upon any such
resignation, the Required Lenders shall have the right, subject to the
reasonable approval of the Borrower (unless a Default or Event of Default shall
have occurred and be continuing), to appoint a successor administrative agent
from among the Lenders. If no successor shall have been so appointed by the
Required Lenders and shall have accepted such appointment within ten (10) days
after the retiring administrative agent gives notice of its resignation, then
the retiring administrative agent may, on behalf of the Lenders, appoint a
successor administrative agent, subject to the reasonable approval of the
Borrower (unless a Default or Event of Default shall have occurred and be
continuing), which successor shall be a commercial banking institution organized
under the Laws of the United States (or any State thereof) or a United States
branch or agency of a commercial banking institution, in each case, having
combined capital and surplus of at least $500,000,000; provided that if such
retiring administrative agent is unable to find a commercial banking institution
that is willing to accept such appointment and which meets the qualifications
set forth above, the retiring administrative agent’s resignation shall
nevertheless thereupon become effective and the retiring (or retired)
administrative agent shall be discharged from its duties and obligations under
the Loan Documents, and the Lenders shall assume and perform all of the duties
of the Administrative Agent under the Loan Documents until such time, if any, as
the Required Lenders appoint a successor administrative agent.

Upon the acceptance of its appointment as the Administrative Agent hereunder by
a successor, such successor shall succeed to and become vested with all the
rights, powers, privileges and duties of the retiring administrative agent, and
the retiring (or retired) administrative agent shall be discharged from its
duties and obligations under the Loan Documents; provided that the retiring
administrative agent shall promptly (i) transfer to such successor all sums,
securities and other items of Collateral held under the Security Documents,
together with all records and other documents necessary or appropriate in
connection with the performance of the duties of the successor administrative
agent under the Loan Documents, and (ii) execute and deliver to such successor
administrative agent such amendments to financing statements, and take such
other actions, as may be necessary or appropriate in connection with the
assignment to such successor administrative agent of the security interests
created under the Security Documents. The fees payable by the Borrower to a
successor administrative agent shall be the same as those payable to its
predecessor unless otherwise agreed between Borrower and such successor. After
an administrative agent’s resignation hereunder, the provisions of this Article
IX, Section 11.04 and Sections 11.08 to 11.15 shall continue in effect for the
benefit of such retiring administrative agent, its sub-agents and their
respective Affiliates in respect of any actions taken or omitted to be taken by
any of them while it was acting as administrative agent.

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9.07 Non-Reliance on Administrative Agent and Other Lenders.

Each Lender acknowledges that it has, independently and without reliance upon
the Administrative Agent or any other Lender or any of their respective Related
Parties and based on such documents and information as it has deemed
appropriate, conducted its own independent investigation of the financial
condition and affairs of the Loan Parties and their Subsidiaries and made its
own credit analysis and decision to enter into this Agreement. Each Lender
further represents and warrants that it has reviewed each document made
available to it on the Platform in connection with this Agreement and has
acknowledged and accepted the terms and conditions applicable to the recipients
thereof (including any such terms and conditions set forth, or otherwise
maintained, on the Platform with respect thereto). Each Lender also acknowledges
that it will, independently and without reliance upon the Administrative Agent
or any other Lender or any of their respective Affiliates and based on such
documents and information as it shall from time to time deem appropriate,
continue to make its own decisions in taking or not taking action under or based
upon this Agreement, any other Loan Document or related agreement or any
document furnished hereunder or thereunder.

 

9.08 Name Agents.

The parties hereto acknowledge that the Arranger holds such title in name only,
and that such title confers no additional rights or obligations relative to
those conferred on any Lender hereunder, other than those rights expressly
provided to or for the benefit of the Arranger hereunder.

 

9.09 Indemnification.

The Lenders severally agree to indemnify the Administrative Agent in its
capacity as such and each of its Related Parties (to the extent not reimbursed
by the Borrower or the Guarantors and without limiting the obligation of the
Borrower or the Guarantors to do so), ratably according to their respective
outstanding Loans and Commitments in effect on the date on which indemnification
is sought under this Section 9.09 (or, if indemnification is sought after the
date upon which all Commitments shall have terminated and the Loans shall have
been paid in full, ratably in accordance with such outstanding Loans and
Commitments as in effect immediately prior to such date), from and against any
and all liabilities, obligations, losses, damages, fines, penalties, actions,
claims, suits, judgments, litigations, investigations, inquiries or proceedings,
costs, expenses or disbursements of any kind whatsoever that may at any time
(whether before or after the payment of the Loans ) be imposed on, incurred by
or asserted against the Administrative Agent or Related Party in any way
relating to or arising out of, the Commitments, this Agreement, any of the other
Loan Documents or any documents contemplated by or referred to herein or
therein, the Transactions or any of the other transactions contemplated hereby
or thereby or any action taken or omitted by the Administrative Agent or Related
Party under or in connection with any of the foregoing (IN ALL CASES, WHETHER OR
NOT CAUSED OR ARISING, IN WHOLE OR IN PART, OUT OF THE COMPARATIVE, CONTRIBUTORY
OR SOLE NEGLIGENCE OF THE

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ADMINISTRATIVE AGENT OR RELATED PERSON); provided that no Lender shall be liable
for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, claims, suits, judgments, litigations,
investigations, inquiries or proceedings, costs, expenses or disbursements that
are found by a final and non-appealable judgment of a court of competent
jurisdiction to have directly resulted solely and directly from the
Administrative Agent’s or Related Party’s, as the case may be, gross negligence
or willful misconduct. The agreements in this Section 9.09 shall survive the
payment of the Loans and all other amounts payable hereunder.

 

9.10 Withholding Taxes.

To the extent required by any applicable Law, the Administrative Agent may
withhold from any payment to any Lender an amount equivalent to any applicable
withholding Tax. If the Internal Revenue Service or any other Governmental
Authority asserts a claim that the Administrative Agent did not properly
withhold Tax from amounts paid to or for the account of any Lender because the
appropriate form was not delivered or was not properly executed or because such
Lender failed to notify the Administrative Agent of a change in circumstance
which rendered the exemption from, or reduction of, withholding Tax ineffective
or for any other reason, or if the Administrative Agent reasonably determines
that a payment was made to a Lender pursuant to this Agreement without deduction
of applicable withholding Tax from such payment, such Lender shall indemnify the
Administrative Agent fully for all amounts paid, directly or indirectly, by the
Administrative Agent as Tax or otherwise, including any penalties or interest
and together with all expenses (including legal expenses, allocated internal
costs and out-of-pocket expenses) incurred.

 

9.11 Lender’s Representations, Warranties and Acknowledgments.

(a)    Each Lender represents and warrants that it has made its own independent
investigation of the financial condition and affairs of Holdings and its
Subsidiaries in connection with Borrowings hereunder and that it has made and
shall continue to make its own appraisal of the creditworthiness of Holdings and
its Subsidiaries. The Administrative Agent shall not have any duty or
responsibility, either initially or on a continuing basis, to make any such
investigation or any such appraisal on behalf of Lenders or to provide any
Lender with any credit or other information with respect thereto, whether coming
into its possession before the making of the Loans or at any time or times
thereafter, and the Administrative Agent shall not have any responsibility with
respect to the accuracy of or the completeness of any information provided to
the Lenders. Each Lender acknowledges that neither the Administrative Agent nor
any Related Party of the Administrative Agent has made any representation or
warranty to it. Except for documents expressly required by any Loan Document to
be transmitted by the Administrative Agent to the Lenders, the Administrative
Agent shall not have any duty or responsibility (either express or implied) to
provide any Lender with any credit or other information concerning any Loan
Party, including the business, prospects, operations, property, financial and
other condition or creditworthiness of any Loan Party or any Affiliate of a Loan
Party, that may come in to the possession of the Administrative Agent or any of
its Related Parties.

(b)    Each Lender, by delivering its signature page to this Agreement or an
Assignment and Assumption and funding its Loan, shall be deemed to have
acknowledged receipt of, and

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consented to and approved, each Loan Document and each other document required
to be approved by the Administrative Agent, the Required Lenders or the Lenders,
as applicable, on the Closing Date.

 

9.12 Security Documents and Guaranty.

(a)    Administrative Agent under Security Documents and Guaranty. Each Secured
Party hereby further authorizes the Administrative Agent, on behalf of and for
the benefit of the Secured Parties, to be the agent for and representative of
the Secured Parties with respect to the Guaranty, the Collateral and the Loan
Documents; provided that the Administrative Agent shall not owe any fiduciary
duty, duty of loyalty, duty of care, duty of disclosure or any other obligation
whatsoever to any holder of Obligations with respect to any Secured Hedge
Agreement or Secured Cash Management Agreements. Subject to Section 9.12(c) and
Section 11.01, without further written consent or authorization from any Secured
Party, the Administrative Agent, upon the commercially reasonable request of the
Borrower (and at the Borrower’s sole cost and expense) with reasonable advance
notice, may execute any documents or instruments necessary to (i) in connection
with a sale or Disposition of assets permitted by this Agreement, release any
Lien encumbering any item of Collateral that is the subject of such sale or
other Disposition of assets or to which the Required Lenders (or such other
Lenders as may be required to give such consent under Section 11.01) have
otherwise consented or (ii) release any Guarantor from the Guaranty pursuant to
the applicable provisions of the applicable Guarantee and Collateral Agreement
or with respect to which the Required Lenders (or such other Lenders as may be
required to give such consent under Section 11.01) have otherwise consented.

(b)    Right to Realize on Collateral and Enforce Guaranty. Anything contained
in any of the Loan Documents to the contrary notwithstanding, the Borrower, the
Administrative Agent and each Secured Party hereby agree that (i) no Secured
Party shall have any right individually to realize upon any of the Collateral or
to enforce the Guaranty, it being understood and agreed that all powers, rights
and remedies hereunder and under any of the Loan Documents may be exercised
solely by the Administrative Agent, for the benefit of the Secured Parties in
accordance with the terms hereof and thereof, and (ii) in the event of a
foreclosure or similar enforcement action by the Administrative Agent on any of
the Collateral pursuant to a public or private sale or other Disposition
(including, without limitation, pursuant to Section 363(k),
Section 1129(b)(2)(a)(ii) or otherwise of the Bankruptcy Code), the
Administrative Agent (or any Lender, except with respect to a “credit bid”
pursuant to Section 363(k), Section 1129(b)(2)(a)(ii) or otherwise of the
Bankruptcy Code) may be the purchaser or licensor of any or all of such
Collateral at any such sale or other Disposition and the Administrative Agent,
as agent for and representative of the Secured Parties (but not any Lender or
Lenders in its or their respective individual capacities) shall be entitled,
upon instructions from the Required Lenders, for the purpose of bidding and
making settlement or payment of the purchase price for all or any portion of the
Collateral sold at any such sale or Disposition, to use and apply any of the
Obligations as a credit on account of the purchase price for any Collateral
payable by the Administrative Agent at such sale or other Disposition.

(c)    Release of Collateral and Guarantees, Termination of Loan Documents.

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(i)    Notwithstanding anything to the contrary contained herein or in any other
Loan Document, the Administrative Agent shall (without notice to, or vote or
consent of, any Lender, or any Affiliate of any Lender that is a party to any
Secured Hedge Agreement or Secured Cash Management Agreement) take such actions
as shall be required to release its security interest in any Collateral subject
to any Disposition permitted by the Loan Documents, and to release any Guarantee
Obligations under any Loan Document of any person subject to such Disposition,
to the extent necessary to permit consummation of such disposition in accordance
with the Loan Documents. For the avoidance of doubt, the Administrative Agent
shall promptly (and the Lenders hereby authorize the Administrative Agent to)
take such action and execute any such documents as may be reasonably requested
by the Borrower (at the Borrower’s expense) to evidence the release of any Liens
created by any Loan Document in respect of Collateral permitted to be disposed
pursuant to this Agreement and the Guarantee and Collateral Agreements.

(ii)    Notwithstanding anything to the contrary contained herein or any other
Loan Document, when all Obligations have been paid in full and all Commitments
have terminated or expired, upon request of the Borrower, the Administrative
Agent shall (without notice to, or vote or consent of, any Lender, or any
Affiliate of any Lender that is a party to any Secured Hedge Agreement or
Secured Cash Management Agreement) take such actions as shall be required to
release its security interest in all Collateral, and to release all Guarantee
Obligations provided for in any Loan Document. Any such release of Guarantee
Obligations shall be deemed subject to the provision that such Guarantee
Obligations shall be reinstated if after such release any portion of any payment
in respect of the Obligations guaranteed thereby shall be rescinded or must
otherwise be restored or returned upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of the Borrower or any Guarantor, or upon or as a
result of the appointment of a receiver, intervenor or conservator of, or
trustee or similar officer for, the Borrower or any Guarantor or any substantial
part of its property, or otherwise, all as though such payment had not been
made.

(d)    The Administrative Agent shall not be responsible for or have a duty to
ascertain or inquire into any representation or warranty regarding the
existence, value or collectability of the Collateral, the existence, priority or
perfection of the Administrative Agent’s Lien thereon, or any certificate
prepared by any Loan Party in connection therewith, nor shall the Administrative
Agent be responsible or liable to the Lenders for any failure to monitor or
maintain any portion of the Collateral. Upon request by the Administrative Agent
at any time, the Required Lenders will confirm in writing the Administrative
Agent’s authority to release its interest in particular types of items of
property, or to release any Guarantor from its obligations under the Guaranty
pursuant to this Section 9.12.

(e)    No Hedging Agreement or Cash Management Agreement will create (or be
deemed to create) in favor of any Hedge Bank or Cash Management Bank, as the
case may be, that is a party thereto any rights in connection with the
management or release of any Collateral or of the obligations of any Guarantor
under the Loan Documents.

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9.13 Administrative Agent May File Bankruptcy Disclosure and Proofs of Claim.

In case of the pendency of any proceeding under any Debtor Relief Laws relative
to any Loan Party, the Administrative Agent (irrespective of whether the
principal of any Loan shall then be due and payable as herein expressed or by
declaration or otherwise and irrespective of whether the Administrative Agent
shall have made any demand on the Borrower or any other Loan Party) shall be
entitled and empowered (but not obligated) by intervention in such proceeding or
otherwise:

(a)    to file a verified statement pursuant to rule 2019 of the Federal Rules
of Bankruptcy Procedure that, in its sole opinion, complies with such rule’s
disclosure requirements for entities representing more than one creditor;

(b)    to file and prove a claim for the whole amount of the principal and
interest owing and unpaid in respect of the Loans and all other Obligations that
are owing and unpaid and to file such other documents as may be necessary or
advisable in order to have the claims of the Lenders and the Administrative
Agent (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Lenders, the Administrative Agent and their
respective agents and counsel and all other amounts due the Lenders and the
Administrative Agent hereunder and under each other Loan Document) allowed in
such judicial proceeding; and

(c)    to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to the Administrative Agent and, in the event
that the Administrative Agent shall consent to the making of such payments
directly to the Lenders, to pay to the Administrative Agent any amount due for
the reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent under this Agreement. To the extent that the payment of any
such compensation, expenses, disbursements and advances of the Administrative
Agent, its agents and counsel, and any other amounts due the Administrative
Agent under this Agreement out of the estate in any such proceeding, shall be
denied for any reason, payment of the same shall be secured by a Lien on, and
shall be paid out of, any and all distributions, dividends, money, securities
and other properties that the Lenders may be entitled to receive in such
proceeding whether in liquidation or under any plan of reorganization or
arrangement or otherwise.

Nothing contained herein shall be deemed to authorize the Administrative Agent
to authorize or consent to or accept or adopt on behalf of any Lender any plan
of reorganization, arrangement, adjustment or composition affecting the
Obligations or the rights of any Lender or to authorize the Administrative Agent
to vote in respect of the claim of any Lender in any such proceeding.

 

9.14 Notice of Required Lenders Action.

Promptly upon receiving written notice of any action taken under this Agreement
or any other Loan Document by the Required Lenders, including, without
limitation, (a) any waiver or

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amendment by the Required Lenders of the provisions of this Agreement or any
other Loan Document pursuant to Section 11.01 hereof or otherwise, or (b) any
other direction or instruction provided by the Required Lender to the
Administrative Agent pursuant to the terms hereof or any other Loan Document,
the Administrative Agent shall provide a copy of such notice to each of the
Lenders.

ARTICLE X

[RESERVED]

ARTICLE XI

MISCELLANEOUS

 

11.01 Amendments, Etc.

No amendment or waiver of any provision of this Agreement or any other Loan
Document, and no consent to any departure by the Borrower or any other Loan
Party therefrom, shall be effective unless in writing signed by the Required
Lenders and the Borrower or the applicable Loan Party, as the case may be, and
acknowledged by the Administrative Agent, and each such waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which given; provided, however, that in lieu of approval by the Required
Lenders, no such amendment, waiver or consent shall:

(a)    waive any condition set forth in Section 4.01 (other than
Section 4.01(b)(i)) or, in the case of the initial Borrowing, Section 4.02,
without the written consent of each Lender;

(b)    extend or increase the Commitment of any Lender (or reinstate any
Commitment terminated pursuant to Section 8.01) without the written consent of
such Lender;

(c)    postpone any date fixed by this Agreement or any other Loan Document for
any payment (excluding mandatory prepayments) of principal, interest, fees or
other amounts due to the Lenders (or any of them) hereunder or under such other
Loan Document without the written consent of each Lender entitled to such
payment; provided, however, that only the consent of the Required Lenders shall
be necessary to waive any mandatory prepayment pursuant to Section 2.05(b);

(d)    reduce the principal of, or the rate of interest specified herein on, any
Loan, or (subject to clause (v) of the proviso to this Section 11.01) any fees
or other amounts payable hereunder or under any other Loan Document without the
written consent of each Lender entitled to such amount; provided, however, that
only the consent of the Required Lenders shall be necessary to amend the
interest rate specified in Section 2.08(b) or to waive any obligation of the
Borrower to pay interest at the interest rate specified in Section 2.08(b);

(e)    change (i) Section 8.02 in a manner that would alter the pro rata sharing
of payments required thereby without the written consent of each Lender or
(ii) the order of application of any reduction in the Commitments or any
prepayment of Loans among the Loans from the application thereof set forth in
the applicable provisions of Section 2.05(b) in any manner that materially and
adversely affects the Lenders hereunder without the written consent of the
Required Lenders;

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(f)    change (i) any provision of this Section 11.01 or the definition of
“Required Lenders” or any other provision hereof specifying the number or
percentage of Lenders required to amend, waive or otherwise modify any rights
hereunder or make any determination or grant any consent hereunder (other than
the definitions specified in clause (ii) of this Section 11.01(f)), without the
written consent of each Lender;

(g)    release all or substantially all of the Collateral in any transaction or
series of related transactions, without the written consent of each Lender;

(h)    release all or substantially all of the value of the Guaranty, without
the written consent of each Lender, except to the extent the release of any
Subsidiary from the Guaranty is permitted pursuant to Section 9.12 (which
release, in each case, may be made by the Administrative Agent acting alone);

(i ) [Reserved];

(i)    change, modify or waive the terms of Section 8.02(b) of this Agreement
without the written consent of each Roll-Up Lender;

(j)    impose any greater restriction on the ability of any Lender hereunder to
assign any of its rights or obligations hereunder without the written consent of
the Required Lenders;

(k)    assign any rights or obligations of any Loan Party hereunder or under any
other Loan Document, without written consent of each Lender; and

(l)    notwithstanding anything to the contrary contained herein, the
reallocation of the NM Commitments pursuant to Section 2.01(b) shall not require
the consent or approval of any Lender;

and provided, further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the Administrative Agent in addition to the Lenders
required above, affect the rights, duties, benefits, privileges, protections,
indemnities or immunities of the Administrative Agent under this Agreement or
any other Loan Document;(ii) the PJT Letter Agreement, the Administrative Agent
Fee Letter, any Secured Hedge Agreement and any Secured Cash Management
Agreement may be amended, or rights or privileges thereunder waived, in a
writing executed only by the parties thereto; and (iii) the Second Lien Notes
Primed Parties are express third party beneficiaries of each of Sections
2.05(a)(iii) and 11.06(h) and this clause (iii), and such provisions cannot be
amended, waived or otherwise modified without the prior written consent of the
holders of at least a majority of the outstanding balance of the Second Lien
Notes. Notwithstanding anything to the contrary herein, no Defaulting Lender
shall have any right to approve or disapprove any amendment, waiver or consent
hereunder (and any amendment, waiver or consent which by its terms requires the
consent of all Lenders or each affected Lender may be effected with the consent
of the applicable Lenders other than Defaulting Lenders), except that the
Commitment of such Lender may not be increased or extended without the consent
of such Lender.

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The Borrower may replace any Non-Consenting Lender in accordance with
Section 11.13; provided that the applicable amendment, waiver, consent or
release can be effected as a result of the assignment contemplated by such
Section (together with all other such assignments required by the Borrower to be
made pursuant to this paragraph).

 

11.02 Notices; Effectiveness; Electronic Communications.

(a)    Notices Generally. Except in the case of notices and other communications
expressly permitted to be given by telephone (and except as provided in
subsection (b) below), all notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier service,
mailed by certified or registered mail or sent by facsimile transmission as
follows, and all notices and other communications expressly permitted hereunder
to be given by telephone shall be made to the applicable telephone number, as
follows:

(i)    if to Holdings, the Borrower or the Administrative Agent, to the address,
facsimile number, electronic mail address or telephone number specified for such
Person on Schedule 11.02; and

(ii)    if to any other Lender, to the address, facsimile number, electronic
mail address or telephone number specified in its Administrative Questionnaire.

Notices and other communications sent by hand or overnight courier service, or
mailed by certified or registered mail, shall be deemed to have been given when
received; notices and other communications sent by facsimile transmission shall
be deemed to have been given when sent (except that, if not given during normal
business hours for the recipient, shall be deemed to have been given at the
opening of business on the next Business Day for the recipient). Notices and
other communications delivered through electronic communications to the extent
provided in subsection (b) below shall be effective as provided in such
subsection (b).

(b)    Electronic Communications. Notices and other communications to the
Lenders hereunder may be delivered or furnished by electronic communication
(including e-mail and internet or intranet website posting or other
distribution) pursuant to procedures approved by the Administrative Agent,
provided that the foregoing shall not apply to notices to any Lender pursuant to
Article II if such Lender, as applicable, has notified the Administrative Agent
that it is incapable of receiving notices under such Article by electronic
communication. The Administrative Agent or the Borrower may, in its discretion,
agree to accept notices and other communications to it hereunder by electronic
communications pursuant to procedures approved by it, provided that approval of
such procedures may be limited to particular notices or communications.

Unless the Administrative Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender’s receipt of an acknowledgement from the intended recipient (such as by
the “return receipt requested” function, as available, return e-mail or other
written acknowledgement), provided that if such notice or other communication is
not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next Business Day for the recipient, and (ii) notices or communications
posted to an internet or

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intranet website or other distribution shall be deemed received upon the deemed
receipt by the intended recipient at its e-mail address as described in the
foregoing clause (i) of notification that such notice or communication is
available and identifying the website address therefor.

(c)    The Platform. THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” THE
AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF
THE BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM
LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS. NO WARRANTY OF
ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD
PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT
PARTY IN CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM. In no event
shall the Administrative Agent or any of its Related Parties (collectively, the
“Agent Parties”) have any liability to Holdings, the Borrower, any Lender or any
other Person for losses, claims, damages, liabilities or expenses of any kind
(whether in tort, contract or otherwise) arising out of the Borrower’s or the
Administrative Agent’s transmission of Borrower Materials through the internet
or intranet website or other distribution, except to the extent that such
losses, claims, damages, liabilities or expenses are determined by a court of
competent jurisdiction by a final and non-appealable judgment to have resulted
from the gross negligence or willful misconduct of such Agent Party; provided,
however, that in no event shall any Agent Party have any liability to Holdings,
the Borrower, any Lender or any other Person for indirect, special, incidental,
consequential or punitive damages (as opposed to direct or actual damages).

(d)    Change of Address, Etc. Each of Holdings, the Borrower and the
Administrative Agent may change its address, facsimile or telephone number for
notices and other communications hereunder by notice to the other parties
hereto. Each other Lender may change its address, facsimile or telephone number
for notices and other communications hereunder by notice to the Borrower and the
Administrative Agent. In addition, each Lender agrees to notify the
Administrative Agent from time to time to ensure that the Administrative Agent
has on record (i) an effective address, contact name, telephone number,
facsimile number and electronic mail address to which notices and other
communications may be sent and (ii) accurate wire instructions for such Lender.
Furthermore, each Public Lender agrees to cause at least one individual at or on
behalf of such Public Lender to at all times have selected the “Private Side
Information” or similar designation on the content declaration screen of the
Platform in order to enable such Public Lender or its delegate, in accordance
with such Public Lender’s compliance procedures and applicable Law, including
United States Federal and state securities Laws, to make reference to Borrower
Materials that are not made available through the “Public Side Information”
portion of the Platform and that may contain material non-public information
with respect to the Borrower or its securities for purposes of United States
Federal or state securities Laws.

(e)    Reliance by Administrative Agent and Lenders. The Administrative Agent
and the Lenders shall be entitled to rely and act upon any notices (including
telephonic Committed Loan Notices) purportedly given by or on behalf of the
Borrower even if (i) such notices were not made in a manner specified herein,
were incomplete or were not preceded or followed by any

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other form of notice specified herein, or (ii) the terms thereof, as understood
by the recipient, varied from any confirmation thereof. The Borrower shall
indemnify the Administrative Agent, each Lender and the Related Parties of each
of them from all losses, costs, expenses and liabilities resulting from the
reliance by such Person on each notice purportedly given by or on behalf of the
Borrower except to the extent that such losses, costs, expenses or liabilities
are determined by a court of competent jurisdiction by a final and
non-appealable judgment to have resulted from the gross negligence or willful
misconduct of Administrative Agent or the Lenders. All telephonic notices to and
other telephonic communications with the Administrative Agent may be recorded by
the Administrative Agent, and each of the parties hereto hereby consents to such
recording.

 

11.03 No Waiver; Cumulative Remedies.

No failure by any Lender or the Administrative Agent to exercise, and no delay
by any such Person in exercising, any right, remedy, power or privilege
hereunder or under any other Loan Document shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges herein provided, and provided under each other Loan
Document, are cumulative and not exclusive of any rights, remedies, powers and
privileges provided by Law.

 

11.04 Expenses; Indemnity; Damage Waiver.

(a)    Costs and Expenses. The Loan Parties shall joint and severally pay
(i) all reasonable, invoiced out-of-pocket expenses incurred by the
Administrative Agent (including reasonable and documented fees and expenses of
Covington & Burling LLP and local bankruptcy counsel to the Administrative
Agent) and the Backstop Party and their respective Affiliates (including
reasonable and documented fees and expenses of PJT Partners LP under the PJT
Letter Agreement, O’Melveny & Myers LLP and Richards Layton & Finger, P.A.), in
connection with (A) the syndication of the Loans provided for herein, (B) the
preparation, negotiation, execution, delivery and administration of this
Agreement and the other Loan Documents and the on-going administration of the
Loan Documents (including any amendments, modifications or waivers of the
provisions hereof or thereof (whether or not the transactions contemplated
hereby or thereby shall be consummated)) and the Chapter 11 Cases, and (C) the
creation, perfection or protection of the liens under the Loan Documents
(including all search, filing and recording fees); and (ii) all actual,
invoiced, out-of-pocket expenses incurred by the Administrative Agent (including
reasonable and documented fees and expenses of Covington & Burling LLP and local
bankruptcy counsel to the Administrative Agent) and the Backstop Party and,
during the existence of an Event of Default, any Lender (including the fees,
charges and disbursements of any counsel for the Administrative Agent and
professional advisors to the Backstop Party (including PJT Partners LP under the
PJT Letter Agreement, O’Melveny & Myers LLP, and Richards Layton & Finger,
P.A.)) in connection with the enforcement or protection of its rights (A) in
connection with this Agreement and the other Loan Documents, including its
rights under this Section 11.04, (B) in connection with Loans made hereunder,
including all such out-of-pocket expenses incurred during any workout,
restructuring, refinancing or negotiations in respect of such Loans, and (C) any
legal proceedings relating to or arising out of the Loans or the other
transactions contemplated by this Agreement and the other Loan Documents,
including the Chapter 11 Cases.

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(b)    Indemnification by the Borrower. The Loan Parties shall jointly and
severally indemnify the Administrative Agent (and any sub-agent thereof), each
Lender, the Arranger and each Related Party of any of the foregoing Persons
(each such Person being called an “Indemnitee”) against, and hold each
Indemnitee harmless from, any and all losses, claims, damages, liabilities,
costs and related expenses (including the reasonable fees, charges and
disbursements of one counsel for all Indemnitees (and, if necessary, one firm of
local counsel in each appropriate jurisdiction (which may include a single
special counsel acting in multiple jurisdictions) for all Indemnitees (and, in
the case of an actual or perceived conflict of interest, where the Indemnitee
affected by such conflict informs the Borrower of such conflict and thereafter
retains its own counsel, of another firm of counsel for such affected
Indemnitee)) incurred by any Indemnitee or asserted against any Indemnitee by
any third party or by the Borrower or any other Loan Party arising out of, in
connection with, or as a result of (i) the execution or delivery of this
Agreement, any other Loan Document or any agreement or instrument contemplated
hereby or thereby, the performance by the parties hereto of their respective
obligations hereunder or thereunder or the consummation of the transactions
contemplated hereby or thereby, or, in the case of the Administrative Agent (and
any sub-agents thereof) and its Related Parties only, the administration of this
Agreement and the other Loan Documents, (ii) any Loan or the use or proposed use
of the proceeds therefrom, (iii) any actual or alleged presence or release of
Hazardous Materials on or from any property owned or operated by any Group
Member, or any Environmental Liability related in any way to any Group Member,
or (iv) any actual or prospective claim, litigation, investigation or proceeding
relating to any of the foregoing, whether based on contract, tort or any other
theory, whether brought by a third party or by any Group Member or any Group
Member’s directors, shareholders or creditors, and regardless of whether any
Indemnitee is a party thereto; provided that such indemnity shall not, as to any
Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses (x) are determined by a court of competent
jurisdiction by final and non-appealable judgment to have resulted from the
gross negligence or willful misconduct of such Indemnitee or its Related Parties
or (y) is solely amongst Indemnitees and/or their Related Parties and does not
involve an act or omission by any Group Member or (z) result from a claim
brought by any Group Member against an Indemnitee for material breach of such
Indemnitee’s obligations hereunder or under any other Loan Document, if such
Group Member has obtained a final and non-appealable judgment in its favor on
such claim as determined by a court of competent jurisdiction. For the avoidance
of doubt, this Section 11.04 shall not apply to Taxes, other than Taxes arising
in connection with non-Tax claims.

(c)     Reimbursement by Lenders. To the extent that any Loan Party for any
reason fails to indefeasibly pay any amount required under subsection (a) or (b)
of this Section 11.04 to be paid by it to the Administrative Agent (or any
sub-agent thereof) or any Related Party of any of the foregoing, each Lender
severally agrees to pay to the Administrative Agent (or any such sub-agent) or
such Related Party, as the case may be, such Lender’s Applicable Percentage
(determined as of the time that the applicable unreimbursed expense or indemnity
payment is sought) of such unpaid amount; provided that the unreimbursed expense
or indemnified loss, claim, damage, liability or related expense, as the case
may be, was incurred by or asserted against the Administrative Agent (or any
such sub-agent) in its capacity as such, or against any

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Related Party of any of the foregoing acting for the Administrative Agent (or
any such sub-agent) in connection with such capacity. The obligations of the
Lenders under this subsection (c) are subject to the provisions of
Section 2.12(d).

(d)    Waiver of Consequential Damages, Etc. To the fullest extent permitted by
applicable Law, neither the Borrower nor Holdings shall assert, and each of them
hereby waives, any claim against any Indemnitee, on any theory of liability, for
special, indirect, consequential or punitive damages (as opposed to direct or
actual damages) arising out of, in connection with, or as a result of, this
Agreement, any other Loan Document or any agreement or instrument contemplated
hereby, the transactions contemplated hereby or thereby, any Loan or the use of
the proceeds thereof. No Indemnitee referred to in subsection (b) above shall be
liable for any damages arising from the use by unintended recipients of any
information or other materials distributed to such unintended recipients by such
Indemnitee through telecommunications, electronic or other information
transmission systems in connection with this Agreement or the other Loan
Documents or the transactions contemplated hereby or thereby other than for
direct or actual damages resulting from the gross negligence or willful
misconduct of such Indemnitee as determined by a final and non-appealable
judgment of a court of competent jurisdiction.

(e)    Payments. All amounts due under this Section 11.04 shall be payable not
later than ten (10) days after demand therefor.

(f)    Survival. The agreements in this Section 11.04 shall survive the
resignation of the Administrative Agent, the replacement of any Lender, the
termination of the Aggregate Commitments and the repayment, satisfaction or
discharge of all the other Obligations.

 

11.05 Payments Set Aside.

To the extent that any payment by or on behalf of the Borrower is made to the
Administrative Agent or any Lender, or the Administrative Agent or any Lender
exercises its right of setoff, and such payment or the proceeds of such setoff
or any part thereof is subsequently invalidated, declared to be fraudulent or
preferential, set aside or required (including pursuant to any settlement
entered into by the Administrative Agent or such Lender in its discretion) to be
repaid to a trustee, receiver or any other party, in connection with any
proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of
such recovery, the obligation or part thereof originally intended to be
satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such setoff had not occurred, and (b) each Lender
severally agrees to pay to the Administrative Agent upon demand its applicable
share (without duplication) of any amount so recovered from or repaid by the
Administrative Agent, plus interest thereon from the date of such demand to the
date such payment is made at a rate per annum equal to the Federal Funds Rate
from time to time in effect. The obligations of the Lenders under clause (b) of
the preceding sentence shall survive the payment in full of the Obligations and
the termination of this Agreement.

 

11.06 Successors and Assigns.

(a)    Successors and Assigns Generally. The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and

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assigns permitted hereby, except that neither the Borrower nor any other Loan
Party may assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of the Administrative Agent and each
Lender and no Lender may assign or otherwise transfer any of its rights or
obligations hereunder except (i) to an assignee in accordance with the
provisions of Section 11.06(b), (ii) by way of participation in accordance with
the provisions of Section 11.06(d), or (iii) by way of pledge or assignment of a
security interest subject to the restrictions of Section 11.06(f), (and any
other attempted assignment or transfer by any party hereto shall be null and
void) or (iv) to the Borrower solely for the purpose of carrying out the
reallocation described in Section 2.01(b), provided that the Borrower shall
subsequently assign such assigned or transferred rights or obligations to a
Prepetition First Lien Lender no later than one (1) Business Day following such
assignment or transfer to the Borrower. For purposes of this sub-clause (iv),
any interest assigned to the Borrower shall not possess Borrower with any
equitable interest or title and Borrower’s further assignment or transfer of
such interest shall not be a “disbursement” under 28 U.S.C. § 1930. The Parties
shall seek to have the foregoing sentence approved by the Bankruptcy Court in
the Final Financing Order. Nothing in this Agreement, expressed or implied,
shall be construed to confer upon any Person (other than the parties hereto,
their respective successors and assigns permitted hereby, Participants to the
extent provided in subsection (d) of this Section and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent and
the Lenders) any legal or equitable right, remedy or claim under or by reason of
this Agreement.2

(b)    Assignments by Lenders. Any Lender may at any time assign to one or more
assignees all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitment(s) and the Loans at the time owing
to it); provided that any such assignment shall be subject to the following
conditions:

(i)    Minimum Amounts.

(A)    in the case of an assignment of the entire remaining amount of the
assigning Lender’s NM Commitment and the Loans at the time owing to it or in the
case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund,
no minimum amount need be assigned; and

(B)    in any case not described in subsection (b)(i)(A) of this Section 11.06,
the aggregate amount of the Commitment (which for this purpose includes Loans
outstanding thereunder) or, if the Commitment is not then in effect, the
principal outstanding balance of the Loans of the assigning Lender subject to
each such assignment, determined as of the date the Assignment and Assumption
with respect to such assignment is delivered to the Administrative Agent, or, if
“Trade Date” is specified in the Assignment and Assumption, as of the Trade
Date, shall not be less than $1,000,000, in the case of any assignment in
respect of any Loans, unless the Administrative Agent and, so long as no Default
or Event of Default has occurred and is continuing, the Borrower otherwise
consents (each such consent not to be unreasonably withheld or delayed);

 

2 

As amended by the First Amendment.

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provided, however, that concurrent assignments to members of an Assignee Group
and concurrent assignments from members of an Assignee Group to a single
Eligible Assignee (or to an Eligible Assignee and members of its Assignee Group)
will be treated as a single assignment for purposes of determining whether such
minimum amount has been met;

(ii)    Proportionate Amounts. Each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Agreement with respect to the Loans and the Commitment
assigned, except that this clause (ii) shall not prohibit any Lender from
assigning all or a portion of its rights and obligations among NM Term Loans and
Roll-Up Loans on a non-pro rata basis;

(iii)    Required Consents. No consent shall be required for any assignment
except to the extent required by subsection (b)(i)(B) of this Section and, in
addition:

(A)    in the case of assignments of NM Commitments only, the consent of the
Borrower (such consent not to be unreasonably withheld or delayed) shall be
required unless (1) a Default or Event of Default has occurred and is continuing
or (2) such assignment is to an existing Lender, an Affiliate of an existing
Lender or an Approved Fund; provided that the Borrower shall be deemed to have
consented to any such assignment unless it shall object thereto by written
notice to the Administrative Agent within ten (10) Business Days after having
received notice thereof; and

(B)    the consent of the Administrative Agent (such consent not to be
unreasonably withheld or delayed) shall be required for assignments in respect
of any Commitment or Loans if such assignment is to a Person that is not an
existing Loan Lender, an Affiliate of such Lender or an Approved Fund with
respect to such Lender.

(iv)    Assignment and Assumption. The parties to each assignment shall execute
and deliver to the Administrative Agent an Assignment and Assumption, together
with a processing and recordation fee in the amount of $3,500 (provided that
such processing and recordation fee shall be payable only to the Administrative
Agent; provided, further that the Administrative Agent may, in its sole
discretion, elect to waive such processing and recordation fee in the case of
any assignment) The assignee, if it is not a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire.

(v)    No Assignment to Borrower. No such assignment shall be made to the
Borrower or any of the Borrower’s Affiliates or Subsidiaries, except pursuant to
Section 11.06(iiv).

(vi)    Certain Additional Payments. In connection with any assignment of rights
and obligations of any Defaulting Lender hereunder, no such assignment shall be
effective unless and until, in addition to the other conditions thereto set
forth herein, the parties to the assignment shall make such additional payments
to the Administrative

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Agent in an aggregate amount sufficient, upon distribution thereof as
appropriate (which may be outright payment, purchases by the assignee of
participations or subparticipations, or other compensating actions, including
funding, with the consent of the Borrower and the Administrative Agent, the
applicable pro rata share of Loans previously requested but not funded by the
Defaulting Lender, to each of which the applicable assignee and assignor hereby
irrevocably consent), to (x) pay and satisfy in full all payment liabilities
then owed by such Defaulting Lender to the Administrative Agent and each other
Lender hereunder (and interest accrued thereon), and (y) acquire (and fund as
appropriate) its full pro rata share of all Loans in accordance with its
Applicable Percentage. Notwithstanding the foregoing, in the event that any
assignment of rights and obligations of any Defaulting Lender hereunder shall
become effective under applicable Law without compliance with the provisions of
this paragraph, then the assignee of such interest shall be deemed to be a
Defaulting Lender for all purposes of this Agreement until such compliance
occurs.

(vii)    No Assignment to Certain Persons. No such assignment shall be made to
(A) a natural person or (B) to any Defaulting Lender or any of its Subsidiaries,
or any Person who, upon becoming a Lender hereunder, would constitute any of the
foregoing Persons described in this clause (B).

Subject to acceptance and recording thereof by the Administrative Agent pursuant
to subsection (c) of this Section 11.06, from and after the effective date
specified in each Assignment and Assumption, the assignee thereunder shall be a
party to this Agreement and, to the extent of the interest assigned by such
Assignment and Assumption, have the rights and obligations of a Lender under
this Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender’s rights and obligations under
this Agreement, such Lender shall cease to be a party hereto) but shall continue
to be entitled to the benefits of Sections 3.01, 3.04, 3.05 and 11.04 with
respect to facts and circumstances occurring prior to the effective date of such
assignment; provided, that except to the extent otherwise expressly agreed by
the affected parties, no assignment by a Defaulting Lender will constitute a
waiver or release of any claim of any party hereunder arising from that Lender’s
having been a Defaulting Lender. Upon request, the Borrower (at its expense)
shall execute and deliver a Note to the assignee Lender. Any assignment or
transfer by a Lender of rights or obligations under this Agreement that does not
comply with this subsection shall be treated for purposes of this Agreement as a
sale by such Lender of a participation in such rights and obligations in
accordance with Section 11.06(d).

(c)    Register. The Administrative Agent, acting solely for this purpose as a
non-fiduciary agent of the Borrower, shall maintain at the Administrative
Agent’s Office a copy of each Assignment and Assumption delivered to it and a
register for the recordation of the names and addresses of the Lenders, and the
Commitments of, and principal amounts (and stated interest) of the Loans owing
to, each Lender pursuant to the terms hereof from time to time (the “Register”).
The entries in the Register shall be conclusive absent manifest error, and the
Borrower, the Administrative Agent and the Lenders may treat each Person whose
name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary. In addition, the Administrative Agent

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shall maintain information on the Register regarding the designation, and
revocation of designation, of any Lender as a Defaulting Lender. The Register
shall be available for inspection by the Borrower and (as to itself) any Lender,
at any reasonable time and from time to time upon reasonable prior notice.

(d)    Participations. Any Lender may at any time, without the consent of, or
notice to, the Borrower or the Administrative Agent, sell participations to any
Person (other than a natural person, a Defaulting Lender or the Borrower or any
of the Borrower’s Affiliates or Subsidiaries) (each, a “Participant”) in all or
a portion of such Lender’s rights and/or obligations under this Agreement
(including all or a portion of its Commitment and/or the Loans owing to it);
provided that (i) such Lender’s obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (iii) the Borrower, the
Administrative Agent, and the Lenders shall continue to deal solely and directly
with such Lender in connection with such Lender’s rights and obligations under
this Agreement. For the avoidance of doubt, each Lender shall be responsible for
the indemnity under Section 9.09 with respect to any payments made by such
Lender to its Participant(s).

Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided, that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, waiver or other modification described in the first proviso to
Section 11.01 that affects such Participant. Subject to subsection (e) of this
Section 11.06, the Borrower agrees that each Participant shall be entitled to
the benefits of Sections 3.01, 3.04 and 3.05 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to Section 11.06(b).
To the extent permitted by Law, each Participant also shall be entitled to the
benefits of Section 11.08 as though it were a Lender, provided such Participant
agrees to be subject to Section 2.13 as though it were a Lender. Each Lender
that sells a participation shall, acting solely for this purpose as an agent of
the Borrower, maintain a register on which it enters the name and address of
each Participant and the principal amounts (and stated interest) of each
Participant’s interest in the Loans or other obligations under the Loan
Documents (the “Participant Register”); provided that no Lender shall have any
obligation to disclose all or any portion of the Participant Register (including
the identity of any Participant or any information relating to a Participant’s
interest in any Commitments, Loans or its other Obligations under any Loan
Document) to any Person except to the extent that such disclosure is necessary
to establish that such Commitment, Loan or other Obligation is in registered
form under Section 5f.103-1(c) of the United States Treasury Regulations. The
entries in the Participant Register shall be conclusive absent manifest error,
and such Lender shall treat each Person whose name is recorded in the
Participant Register as the owner of such participation for all purposes of this
Agreement notwithstanding any notice to the contrary. For the avoidance of
doubt, the Administrative Agent shall not have any responsibility for
maintaining a Participant Register.

(e)    Limitations upon Participant Rights. A Participant shall not be entitled
to receive any greater payment under Section 3.01 or 3.04 than the applicable
Lender would have been entitled to receive with respect to the participation
sold to such Participant, unless the sale of the participation to such
Participant (expressly including the ability to receive payments under

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Section 3.01 and 3.04 independent of the applicable Lender) is made with the
Borrower’s prior written consent. A Participant that would be a Foreign Lender,
if it were a Lender, shall not be entitled to the benefits of Section 3.01
unless the Borrower is notified of the participation sold to such Participant
and such Participant agrees, for the benefit of the Borrower, to comply with
Section 3.01(f) as though it were a Lender.

(f)    Certain Pledges. Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement (including
under its Note, if any) to secure obligations of such Lender, including any
pledge or assignment to secure obligations to a Federal Reserve Bank; provided,
that, no such pledge or assignment shall release such Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.

(g)    Electronic Execution of Assignments. The words “execution,” “signed,”
“signature,” and words of like import in any Assignment and Assumption shall be
deemed to include electronic signatures or the keeping of records in electronic
form, each of which shall be of the same legal effect, validity or
enforceability as a manually executed signature or the use of a paper-based
recordkeeping system, as the case may be, to the extent and as provided for in
any applicable Law, including the Federal Electronic Signatures in Global and
National Commerce Act, the New York State Electronic Signatures and Records Act,
or any other similar state Laws based on the Uniform Electronic Transactions
Act.

(h)    Purchase Right. The Lenders agree that (a) within two (2) Business Days
after the delivery by the Required Lenders (or the Administrative Agent at the
instruction of the Required Lenders) to the Borrower of written notice of the
occurrence or declaration of an Event of Default (it being agreed by the Lenders
that no remedies shall be exercised in respect of such Event of Default prior to
the date of such written notice or declaration), the Required Lenders shall
instruct the Administrative Agent in writing to give written notice of such
Event of Default to the indenture trustee under the Second Lien Notes Indenture
(the “Second Lien Representative”), at which point the Administrative Agent
shall promptly deliver such written notice (a “DIP Lender Default Notice”) to
such indenture trustee via facsimile transmission and overnight air courier
guaranteeing next day delivery to the following address: U.S. Bank, National
Association, 1555 North RiverCenter Drive Suite 203, Milwaukee, WI 53212,
Facsimile No.: (414) 905-5049, Attention: Global Corporate Trust Services –
Appvion, Inc., with a copy to counsel to the Second Lien Noteholders via
electronic email and overnight air courier guaranteeing next day delivery to the
following address: Stroock  & Stroock & Lavan LLP, 180 Maiden Lane, New York, NY
10038, E-mail: lcharleston@stroock.com, Attention: Lucas Charleston, Esq., (b)
within thirty (30) days after the occurrence of an the Event of Default
(provided that the expiration of such 30-day period shall be tolled until such
time as the indenture trustee under the Second Lien Notes Indenture receives the
DIP Lender Default Notice, at which time such 30-day period shall reset and
commence), Second Lien Noteholders holding at least a majority of the Second
Lien Notes and/or one or more third parties that are approved by the Second Lien
Noteholders holding at least a majority of the Second Lien Notes (such
institutions, affiliates, funds and third parties, the “Purchase Right Parties”)
may request, and the Secured Parties hereby offer such Persons, the option to
purchase all (and not less than all) of the accrued and unpaid Obligations
outstanding at such time, at par with respect to the Loans and in the full
amount of all other Obligations, and without warranty or representation or
recourse

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(except for representations and warranties required to be made by assigning
lenders pursuant to the Assignment and Assumption), and, in each case, including
the Payment Premium and the Exit Fee (the foregoing option, the “Purchase
Right”); provided that (x) the receipt of the DIP Lender Default Notice by the
indenture trustee under the Second Lien Notes Indenture shall not be a condition
to the exercise of the Purchase Right and the Purchase Right Parties shall have
the right to exercise the Purchase Right notwithstanding any failure by the
Secured Parties to instruct the Administrative Agent to deliver a DIP Lender
Default Notice or the failure by the Administrative Agent to deliver a DIP
Lender Default Notice and (y) if for any reason the roll-up of the balance of
the Prepetition First Lien Obligations outstanding as of the date of the entry
of the Final Financing Order under Section 2.01(c) is not permitted or the
Prepetition First Lien Obligations or the Liens securing the Prepetition First
Lien Obligations remain outstanding for any reason, (A) the claims and liens
acquired pursuant to the Purchase Right shall remain junior to the Prepetition
First Lien Obligations and the liens securing the Prepetition First Lien
Obligations and (B) the Prepetition First Lien Lenders shall be satisfied with
the adequate protection in respect thereof. If such right is exercised, the
parties shall endeavor to close promptly thereafter but in any event within
twenty (20) Business Days of the request. If one or more of the Purchase Right
Parties timely exercises the Purchase Right, it shall be exercised pursuant to
customary Loan Syndications & Trading Association documentation and terms. If
none of the Purchase Right Parties timely exercise such right, the Secured
Parties shall have no further obligations pursuant to this Section 11.06(h) for
any Event of Default and may take any further actions in their sole discretion
in accordance with the Loan Documents and this Agreement. Each Secured Party
will retain all rights to indemnification provided in the relevant Loan Document
for all claims relating to period prior to the purchase of the Outstanding
Amount pursuant to this Section 11.06(h). Notwithstanding anything herein to the
contrary, the Secured Parties may waive any Event of Default at any time prior
to the receipt of notice that a Purchase Right Party has timely exercised the
Purchase Right.

 

11.07 Treatment of Certain Information; Confidentiality.

Each of the Administrative Agent and the Lenders agrees to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its Affiliates and to its and its Affiliates’ and
Approved Funds’ respective directors, officers, employees, agents, advisors and
other representatives, including accountants, legal counsel and other advisors
(it being understood that the Persons to whom such disclosure is made will be
informed of the confidential nature of such Information and instructed to keep
such Information confidential pursuant to the terms hereof), (b) to the extent
requested by any regulatory authority or any quasi-regulatory authority (such as
the National Association of Insurance Commissioners), (c) to the extent required
by applicable Requirements of Law or by any subpoena or similar legal process,
(d) to any other party to this Agreement and, in connection with
Section 2.01(b), to any Prepetition First Lien Lender, (e) in connection with
the exercise of any remedies under the Loan Documents or any suit, action or
proceeding relating to this Agreement or any other Loan Document or the
enforcement of rights hereunder or thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section 11.07, to
(i) any assignee of or Participant in, or any prospective assignee of or
Participant in, any of its rights or obligations under this Agreement, (ii) any
actual or prospective counterparty (or its advisors) to any swap or derivative
transaction relating to Borrower and its obligations, or (iii) any actual or
prospective investor in a special purpose funding vehicle, (g) with the consent

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of the Borrower, (h) to any rating agency when required by it, (i) to an
investor or prospective investor in securities issued by an Approved Fund of any
Lender that also agrees that Information shall be used solely for the purpose of
evaluating an investment in such securities issued by an Approved Fund of any
Lender or to a trustee, collateral manager, servicer, backup servicer,
noteholder or secured party in securities issued by an Approved Fund of any
Lender in connection with the administration, servicing and reporting on the
assets serving as collateral for securities issued by such Approved Fund, or
(j) to the extent such Information (x) is publicly available at the time of
disclosure or becomes publicly available other than as a result of a breach of
this Section 11.07 or (y) becomes available to the Administrative Agent or any
Lender on a non-confidential basis from a source other than Holdings, the
Borrower or any Subsidiary. In addition, each of the Administrative Agent and
the Lenders may disclose the existence of this Agreement and the information
about this Agreement to the CUSIP Service Bureau or any similar agency in
connection with the issuance and monitoring of CUSIP numbers with respect to the
Loans, market data collectors, similar service providers to the lending
industry, and service providers to the Administrative Agent and the Lenders in
connection with the administration and management of this Agreement and the
other Loan Documents. For the purposes of this Section 11.07, “Information”
means all information received from Holdings or the Borrower relating to
Holdings, the Borrower or any of its Subsidiaries or its business that is
clearly identified at the time of delivery as confidential, other than any such
information that is available to the Administrative Agent or any Lender on a
non-confidential basis prior to disclosure by the Borrower. Any Person required
to maintain the confidentiality of Information as provided in this Section 11.07
shall be considered to have complied with its obligation to do so if such Person
has exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.

The Administrative Agent and each Lender each acknowledges that (a) the
Information may include material non-public information concerning the Borrower
or a Subsidiary, as the case may be, (b) it has developed compliance procedures
regarding the use of material non-public information and (c) it will handle such
material non-public information in accordance with applicable Law, including
United States Federal and state securities Laws.

 

11.08 Right of Setoff.

Subject to the Financing Orders, if an Event of Default shall have occurred and
be continuing under Section 8.01(a) or Section 8.01(f), each Lender and each of
their respective Affiliates is hereby authorized at any time and from time to
time, to the fullest extent permitted by applicable Law, to set off and apply
any and all deposits (general or special, time or demand, provisional or final,
in whatever currency) at any time held, and other obligations (in whatever
currency) at any time owing, by such Lender or any such Affiliate, to or for the
credit or the account of the Borrower or any other Loan Party against any and
all of the obligations of the Borrower or such Loan Party now or hereafter
existing under this Agreement or any other Loan Document to such Lender or their
respective Affiliates, irrespective of whether or not such Lender or Affiliate
shall have made any demand under this Agreement or any other Loan Document and
although such obligations of the Borrower or such Loan Party may be contingent
or unmatured or are owed to a branch, office or Affiliate of such Lender
different from the branch, office or Affiliate holding such deposit or obligated
on such Indebtedness; provided that in the event that any Defaulting Lender
shall exercise any such right of setoff, (x) all amounts so

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set off shall be paid over immediately to the Administrative Agent for further
application in accordance with the provisions of Section 2.15 and, pending such
payment, shall be segregated by such Defaulting Lender from its other funds and
deemed held in trust for the benefit of the Secured Parties, and (y) the
Defaulting Lender shall provide promptly to the Administrative Agent a statement
describing in reasonable detail the Obligations owing to such Defaulting Lender
as to which it exercised such right of setoff. The rights of each Lender and
their respective Affiliates under this Section 11.08 are in addition to other
rights and remedies (including other rights of setoff) that such Lender or their
respective Affiliates may have. Each Lender agrees to notify the Borrower and
the Administrative Agent promptly after any such setoff and application;
provided that the failure to give such notice shall not affect the validity of
such setoff and application. Notwithstanding the foregoing, the provisions of
Section 2.15 shall supersede any provisions of this Section 11.08 to the
contrary.

 

11.09 Interest Rate Limitation.

Notwithstanding anything to the contrary contained in any Loan Document, the
interest paid or agreed to be paid under the Loan Documents shall not exceed the
maximum rate of non-usurious interest permitted by applicable Law (the “Maximum
Rate”). If the Administrative Agent or any Lender shall receive interest in an
amount that exceeds the Maximum Rate, the excess interest shall be applied to
the principal of the Loans or, if it exceeds such unpaid principal, refunded to
the Borrower. In determining whether the interest contracted for, charged, or
received by the Administrative Agent or a Lender exceeds the Maximum Rate, such
Person may, to the extent permitted by applicable Law, (a) characterize any
payment that is not principal as an expense, fee, or premium rather than
interest, (b) exclude voluntary prepayments and the effects thereof and
(c) amortize, prorate, allocate and spread in equal or unequal parts the total
amount of interest throughout the contemplated term of the Obligations
hereunder.

 

11.10 Counterparts; Integration; Effectiveness.

This Agreement may be executed in counterparts (and by different parties hereto
in different counterparts), each of which shall constitute an original, but all
of which when taken together shall constitute a single contract. This Agreement
and the other Loan Documents constitute the entire contract among the parties
relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof. Except as provided in Section 4.01, this Agreement shall become
effective as to each party hereto when executed by such party. Delivery of an
executed counterpart of a signature page of this Agreement by email, facsimile
or similar electronic transmission shall be effective as delivery of a manually
executed counterpart of this Agreement.

 

11.11 Survival of Representations and Warranties.

All representations and warranties made hereunder and in any other Loan Document
or other document delivered pursuant hereto or thereto or in connection herewith
or therewith shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied upon by the
Administrative Agent and each Lender, regardless of any investigation made by
any of such the Administrative Agent or any Lender on their behalf and
notwithstanding that the Administrative Agent or any Lender may have had notice
or knowledge of any Default at the time of any Borrowing, and shall continue in
full force and effect as long as any Loan or any other Obligation hereunder
shall remain unpaid or unsatisfied.

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11.12 Severability.

If any provision of this Agreement or the other Loan Documents is held to be
illegal, invalid or unenforceable, (a) the legality, validity and enforceability
of the remaining provisions of this Agreement and the other Loan Documents shall
not be affected or impaired thereby and (b) the parties shall endeavor in good
faith negotiations to replace the illegal, invalid or unenforceable provisions
with valid provisions the economic effect of which comes as close as possible to
that of the illegal, invalid or unenforceable provisions. The invalidity of a
provision in a particular jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

 

11.13 Replacement of Lenders.

If (i) any Lender requests compensation under Section 3.04, (ii) the Borrower is
required to pay any Indemnified Taxes or any additional amount to any Lender or
any Governmental Authority for the account of any Lender pursuant to
Section 3.01, (iii) a Lender is a Non-Consenting Lender or (iv) any Lender is a
Defaulting Lender, then the Borrower may, at its sole expense and effort, upon
notice to such Lender and the Administrative Agent, require such Lender to
assign and delegate, without recourse (in accordance with and subject to the
restrictions contained in, and consents required by, Section 11.06), all of its
interests, rights (other than its existing rights to payments pursuant to
Sections 3.01 and 3.04) and obligations under this Agreement and the related
Loan Documents to an assignee that shall assume such obligations (which assignee
may be another Lender, if a Lender accepts such assignment), provided that:

(a)    the Borrower shall have paid to the Administrative Agent the assignment
fee specified in Section 11.06(b);

(b)    such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans, accrued interest thereon, accrued fees and
all other amounts payable to it hereunder and under the other Loan Documents
(including any amounts under Section 2.05(c), Section 2.07, and Section 3.05)
from the assignee (to the extent of such outstanding principal and accrued
interest, fees and premium) or the Borrower (in the case of all other amounts);

(c)    in the case of any such assignment resulting from a claim for
compensation under Section 3.04 or payments required to be made pursuant to
Section 3.01, such assignment will result in a reduction in such compensation or
payments thereafter;

(d)    such assignment does not conflict with applicable Laws; and

(e)    in the case of any such assignment resulting from a Lender becoming a
Non-Consenting Lender, the applicable assignee shall have consented to the
applicable amendment, waiver or consent; provided, that the failure by any
Lender to execute and deliver an Assignment and Assumption in connection with
any of the foregoing assignments shall not impair the validity of the removal of
such Lender and the mandatory assignment of such

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Lender’s Commitment and outstanding Loans and participations pursuant to this
Section 11.13 shall nevertheless be effective without the execution by such
Lender of an Assignment and Assumption.

A Lender shall not be required to make any such assignment or delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrower to require such assignment and delegation
cease to apply.

 

11.14 Governing Law; Jurisdiction; Etc.

(a)    GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK AND (TO THE EXTENT APPLICABLE)
THE BANKRUPTCY CODE.

(b)    SUBMISSION TO JURISDICTION. THE BORROWER AND EACH OTHER LOAN PARTY
IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE
EXCLUSIVE JURISDICTION OF THE BANKRUPTCY COURT OR, IF THE BANKRUPTCY COURT DOES
NOT HAVE OR ABSTAINS FROM JURISDICTION, THE COURTS OF THE STATE OF NEW YORK
SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE
SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF
THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN
RESPECT OF ANY SUCH ACTION OR PROCEEDING SHALL BE HEARD AND DETERMINED IN SUCH
NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN
SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN
ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT
THAT THE ADMINISTRATIVE AGENT, ANY LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION
OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST THE
BORROWER OR ANY OTHER LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF ANY
JURISDICTION.

(c)    WAIVER OF VENUE. THE BORROWER AND EACH OTHER LOAN PARTY IRREVOCABLY AND
UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (B) OF THIS SECTION 11.14. EACH
OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF
SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

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(d)    SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF
PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 11.02. NOTHING IN THIS
AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY APPLICABLE LAW.

 

11.15 Waiver of Jury Trial.

EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED
ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION 11.15.

 

11.16 Waiver of Defenses; No Advisory or Fiduciary Responsibility.

(a)    Each of the Loan Parties hereby waives any and all suretyship defenses
available to it as a Guarantor arising out of the joint and several nature of
its respective duties and obligations hereunder.

(b)    The Administrative Agent, each Lender and their Affiliates (collectively,
and solely for purposes of this paragraph, the “Lenders”), may have economic
interests that conflict with those of the Loan Parties, their stockholders
and/or their Affiliates. Each Loan Party agrees that nothing in the Loan
Documents or otherwise will be deemed to create an advisory, fiduciary or agency
relationship or fiduciary or other implied duty between any Lender, on the one
hand, and such Loan Party, its stockholders or its Affiliates, on the other. The
Loan Parties acknowledge and agree that (i) the transactions contemplated by the
Loan Documents (including the exercise of rights and remedies hereunder and
thereunder) are arm’s-length commercial transactions between the Lenders, on the
one hand, and the Loan Parties, on the other, and (ii) in connection therewith
and with the process leading thereto, (x) no Lender has assumed an advisory or
fiduciary responsibility in favor of any Loan Party, its stockholders or its
Affiliates with respect to the transactions contemplated hereby or the exercise
of rights or remedies with respect thereto) or the process leading thereto
(irrespective of whether any Lender has advised, is currently advising or will
advise any Loan Party, its stockholders or its Affiliates on other matters) or
any other obligation to any Loan Party except the obligations expressly set
forth in the Loan Documents and (y) each Lender is acting solely as principal
and not as the agent or fiduciary of any Loan Party, its management,
stockholders, creditors or any other Person. Each Loan Party acknowledges and
agrees that it has consulted its own legal and financial advisors to the extent
it deemed appropriate and that it is responsible for making its own independent

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judgment with respect to such transactions and the process leading thereto. Each
Loan Party agrees that it will not claim that any Lender has rendered advisory
services of any nature or respect, or owes a fiduciary or similar duty to such
Loan Party, in connection with such transaction or the process leading thereto.

 

11.17 USA PATRIOT Act Notice.

Each Lender hereby notifies each Loan Party that pursuant to the requirements of
the Patriot Act and the Proceeds of Crime (Money Laundering) and Terrorist
Financing Act (Canada), as applicable, it is required to obtain, verify and
record information that identifies the Loan Parties, which information includes
the name, address and taxpayer identification number of each Loan Party and
other information that will allow such Lender to identify such Loan Party in
accordance with the Patriot Act and the Proceeds of Crime (Money Laundering) and
Terrorist Financing Act (Canada), as applicable.

 

11.18 Other Liens on Collateral; Etc.

EACH LENDER HERETO UNDERSTANDS, ACKNOWLEDGES AND AGREES THAT LIENS EXIST ON THE
COLLATERAL PURSUANT TO THE SECOND LIEN SECURITY DOCUMENTS, WHICH LIENS ARE
SUBORDINATED AND JUNIOR TO THE LIENS CREATED PURSUANT TO THE LOAN DOCUMENTS IN
ACCORDANCE WITH THE TERMS OF THE INTERIM FINANCING ORDER OR, AFTER ENTRY
THEREOF, THE FINAL FINANCING ORDER.

 

11.19 Acknowledgement and Consent to Bail-In of EEA Financial Institutions.

Notwithstanding anything to the contrary in any Loan Document or in any other
agreement, arrangement or understanding among any such parties, each party
hereto acknowledges that any liability of any EEA Financial Institution arising
under any Loan Document, to the extent such liability is unsecured, may be
subject to the write-down and conversion powers of an EEA Resolution Authority
and agrees and consents to, and acknowledges and agrees to be bound by:

(a)    the application of any Write-Down and Conversion Powers by an EEA
Resolution Authority to any such liabilities arising hereunder, which may be
payable to it by any party hereto that is an EEA Financial Institution; and

(b)    the effects of any Bail-In Action on any such liability, including, if
applicable:

(i)    a reduction in full or in part or cancellation of any such liability;

(ii)    a conversion of all, or a portion of, such liability into shares or
other instruments of ownership in such EEA Financial Institution, its parent
undertaking, or a bridge institution that may be issued to it or otherwise
conferred on it, and that such shares or other instruments of ownership will be
accepted by it in lieu of any rights with respect to any such liability under
this Agreement or any other Loan Document; or

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(iii)    the variation of the terms of such liability in connection with the
exercise of the write-down and conversion powers of any EEA Resolution
Authority.

[Signature Pages Follow]