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Exhibit 10.2
 
EXECUTION VERSION
 
 
CREDIT AGREEMENT
Dated as of February 8, 2010
 
among
 
APPLETON PAPERS INC.,
as Borrower,
 
PAPERWEIGHT DEVELOPMENT CORP.,
as Holdings,
 
FIFTH THIRD BANK,
as Administrative Agent, Swing Line Lender and
an L/C Issuer,
 
and
 
The Other Lenders Party Hereto
 
with
 
FIFTH THIRD BANK,
 
as Sole Lead Arranger and Sole Book Manager
 
 
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TABLE OF CONTENTS
 
 
 
Page
 
 
 
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1
1.01.
Defined Terms
1
1.02.
Other Interpretive Provisions
31
1.03.
Accounting Terms
32
1.04.
Rounding
32
1.05.
Times of Day
33
1.06.
Letter of Credit Amounts
33
ARTICLE II
THE COMMITMENTS AND CREDIT EXTENSIONS
33
2.01.
The Loans
33
2.02.
Borrowings, Conversions and Continuations of Loans
33
2.03.
Letters of Credit; Auto-Extension Letters of Credit
35
2.04.
Swing Line Loans
43
2.05.
Prepayments
45
2.06.
Termination or Reduction of Commitments
46
2.07.
Repayment of Loans
47
2.08.
Interest
47
2.09.
Fees
48
2.10.
Computation of Interest and Fees
49
2.11.
Evidence of Debt
49
2.12.
Payments Generally; Administrative Agent's Clawback
49
2.13.
Sharing of Payments by Lenders
51
2.14.
Increase in Facility
52
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
53
3.01.
Taxes
53
3.02.
Illegality
56
3.03.
Inability to Determine Rates
56
3.04.
Increased Costs; Reserves on Eurodollar Rate Loans
56
3.05.
Compensation for Losses
58
3.06.
Mitigation Obligations; Replacement of Lenders
58
3.07.
Survival
59
ARTICLE IV
CONDITIONS PRECEDENT TO CREDIT EXTENSIONS
59
4.01.
Conditions of Initial Credit Extension
59
4.02.
Conditions to all Credit Extensions
63
ARTICLE V
REPRESENTATIONS AND WARRANTIES
63
5.01.
Financial Condition
64
5.02.
No Change
64
5.03.
Corporate Existence; Compliance with Law
64
5.04.
Power; Authorization; Enforceable Obligations
64
5.05.
No Legal Bar
65
5.06.
Litigation
65
5.07.
No Default
65
5.08.
Ownership of Property; Liens; Insurance
65
5.09.
Intellectual Property
65
5.10.
Taxes
66
5.11.
Federal Regulations
66
5.12.
Labor Matters
66
5.13.
ERISA
66

 
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5.14.
Investment Company Act; Other Regulations
67
5.15.
Subsidiaries
67
5.16.
Use of Proceeds
67
5.17.
Environmental Matters
67
5.18.
Accuracy of Information, etc.
68
5.19.
Security Documents
68
5.20.
Solvency
69
5.21.
Senior Indebtedness
69
5.22.
Regulation H
69
5.23.
S Corporation Status
69
ARTICLE VI
AFFIRMATIVE COVENANTS
70
6.01.
Financial Statements
70
6.02.
Certificates; Other Information
71
6.03.
Payment of Obligations
73
6.04.
Maintenance of Existence; Compliance
73
6.05.
Maintenance of Property; Insurance
73
6.06.
Inspection of Property; Books and Records; Discussions
73
6.07.
Notices
74
6.08.
Environmental Laws
75
6.09.
Additional Collateral, etc.
76
6.10.
Further Assurances
77
6.11.
ERISA
78
6.12.
Use of Proceeds
78
ARTICLE VII
NEGATIVE COVENANTS
78
7.01.
Consolidated Fixed Charge Coverage Ratio
78
7.02.
Indebtedness
78
7.03.
Liens
80
7.04.
Fundamental Changes
82
7.05.
Disposition of Property
83
7.06.
Restricted Payments
83
7.07.
Investments
84
7.08.
Prepayments and Modifications of Certain Debt Instruments
86
7.09.
Transactions with Affiliates
87
7.10.
Changes in Fiscal Periods
87
7.11.
Negative Pledge Clauses
87
7.12.
Clauses Restricting Subsidiary Distributions
87
7.13.
Lines of Business
87
7.14.
Material Agreements
88
7.15.
S Corporation Status
88
7.16.
Holding Company Status
88
7.17.
PDC Capital Corporation
88
7.18.
ESOP Amendments
88
ARTICLE VII
I EVENTS OF DEFAULT AND REMEDIES
88
8.01.
Events of Default
88
8.02.
Application of Funds
92
ARTICLE IX
ADMINISTRATIVE AGENT
93
9.01.
Appointment and Authority
93
9.02.
Rights as a Lender
93
9.03.
Exculpatory Provisions
94
9.04.
Reliance by Administrative Agent
94
9.05.
Delegation of Duties
95

 
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9.06.
Resignation of Administrative Agent
95
9.07.
Non-Reliance on Administrative Agent and Other Lenders
96
9.08.
No Other Duties, Etc.
96
9.09.
Administrative Agent May File Proofs of Claim
96
9.10.
Collateral and Guaranty Matters
97
ARTICLE X
MISCELLANEOUS
97
10.01.
Amendments, Etc.
97
10.02.
Notices; Effectiveness; Electronic Communications
99
10.03.
No Waiver; Cumulative Remedies
101
10.04.
Expenses; Indemnity; Damage Waiver
101
10.05.
Payments Set Aside
103
10.06.
Successors and Assigns
103
10.07.
Treatment of Certain Information; Confidentiality
107
10.08.
 Right of Setoff
107
10.09.
Interest Rate Limitation
108
10.10.
Counterparts; Integration; Effectiveness
108
10.11.
Survival of Representations and Warranties
108
10.12.
Severability
108
10.13.
Replacement of Lenders
108
10.14.
Governing Law; Jurisdiction; Etc.
109
10.15.
Waiver of Jury Trial
110
10.16.
No Advisory or Fiduciary Responsibility
110
10.17.
USA PATRIOT Act Notice
111
10.18.
OTHER LIENS ON COLLATERAL; TERMS OF INTERCREDITOR AGREEMENTS; ETC.
111

 
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SCHEDULES
 
1.01(c)
Mortgaged Properties
2.01
Commitments and Percentages
5.08
Real Property
5.15
Subsidiaries
5.17
Environmental Matters
6.09
Guarantors
7.02
Permitted Existing Debt
7.03
Existing Liens
10.02
Administrative Agent's Office, Certain Addresses for Notices
 
 
EXHIBITS
 
 
 
Form of
 
A
Assignment and Assumption
B
Form of Borrowing Base Certificate
C
Committed Loan Notice
D
Compliance Certificate
E
Revolving Credit Note
F
Swing Line Loan Notice
G
Closing Certificate

 
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CREDIT AGREEMENT
 
This CREDIT AGREEMENT ("Agreement") is entered into as of February 8, 2010 among
APPLETON PAPERS INC., a Delaware corporation (the "Borrower"), PAPERWEIGHT
DEVELOPMENT CORP., a Wisconsin corporation ("Holdings"), each lender from time
to time party hereto (collectively, the "Lenders" and individually, a "Lender"),
and FIFTH THIRD BANK, an Ohio banking corporation, as Administrative Agent,
Swing Line Lender and an L/C Issuer.
 
PRELIMINARY STATEMENTS:
 
The Borrower has requested that the Lenders provide a revolving credit facility,
and the Lenders have indicated their willingness to lend and each L/C Issuer has
indicated its willingness to issue letters of credit, in each case, on the terms
and subject to the conditions set forth herein.
 
In consideration of the mutual covenants and agreements herein contained, the
parties hereto covenant and agree as follows:
 
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:
 
"Account Debtor" with respect to any Account, the Person who is obligated on or
under such Account.
 
"Accounts" means, with respect to any Person, as at any date of determination,
all "accounts" (as such term is defined in the Guarantee and Collateral
Agreement) of such Person.
 
"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.
 
"Adjusted Borrowing Base Amount" means, as determined as of the last day of any
fiscal month, an amount equal to (a) the sum of (i) the Borrowing Base as of
such date and (ii) the Borrowing Base as of the last day of the immediately
preceding fiscal month, in each case as set forth in the respective monthly
Borrowing Base Certificates prepared as of the last day of each such fiscal
month and delivered to the Administrative Agent pursuant to
Section 6.02(c) hereof, divided by (b) two (2).
 
"Administrative Agent" means Fifth Third in its capacity as administrative agent
under any of the Loans documents, or any successor administrative agent.
 
"Administrative Agent's Office" means the Administrative Agent's address and, as
appropriate, account as set forth on Schedule 10.02, or such other address or
account as the Administrative Agent may from time to time notify to the Borrower
and the Lenders.
 

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"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.
 
"Agreement" means this Credit Agreement.
 
"AIG Credit Support" means the Indemnity Claim Insurance Policy No. 5295316,
issued on November 9, 2001, by Commerce & Industry Insurance Company in favor of
Bermuda Company, as amended and endorsed as of the date hereof.
 
"Appleton Canada" means Appleton Papers Canada Ltd., a corporation formed under
the laws of the Province of Ontario, Canada.
 
"Applicable Rate" means, (a) for the period commencing on the Closing Date and
ending on the date that is 3 Business Days following the date on which a
Borrowing Base Certificate as of the last day of the fiscal month of the
Borrower ending on or about February 28, 2010 is delivered to the Administrative
Agent in accordance with the terms and provisions hereof, a percentage amount
equal to (i) 4.00%, for purposes of calculating the Letter of Credit Fee
pursuant to Section 2.03(i), (ii) 4.00% for purposes of calculating the interest
rate applicable to Loans that are Eurodollar Rate Loans pursuant to Section 2.08
and (iii) 3.00%, for purposes of calculating the interest rate applicable to
Loans that are Swing Line Loans and Base Rate Loans pursuant to Section 2.08 and
(b) thereafter, the Applicable Rate shall be a percentage based upon the
applicable Average Excess Availability then in effect pursuant to the
appropriate column in the table below:
 
 
 
 
 
Eurodollar Rate
 
 
 
 
 
 
 
Loans
 
 
 
 
 
 
 
and
 
 
 
 
 
Average Excess
 
Letter of Credit
 
Base Rate
 
Pricing Level
 
Availability
 
Fee
 
Loans
 
 
 
 
 
 
 
 
 
1
 
> 66%
 
3.50%
 
2.50%
 
2
 
> 33% but = 66%
 
3.75%
 
2.75%
 
3
 
= 33%
 
4.00%
 
3.00%
 

 
The Applicable Rate shall be adjusted from time to time upon delivery to the
Administrative Agent of the monthly Borrowing Base Certificate for each fiscal
month to be delivered pursuant to and in accordance with the requirements set
forth in Section 6.02(c). If such calculation indicates that the Applicable Rate
shall increase or decrease, then 3 days following the date of delivery of such
Borrowing Base Certificate the Applicable Rate shall be adjusted in accordance
therewith; provided, that if the Borrower shall fail to deliver a Borrowing Base
Certificate for any such fiscal month by the date required pursuant to
Section 6.02(c), then, at the election of the Administrative Agent, effective as
of 3 days following such date, and
 
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continuing until the date that is 3 days following the date when such Borrowing
Base Certificate is finally delivered or the next monthly Borrowing Base
Certificate is delivered by the Borrower pursuant to and in accordance with the
requirements set forth in Section 6.02(c), the Applicable Rate shall be
conclusively presumed to equal the highest Applicable Rate specified in the
pricing table set forth above.
 
In the event that any Borrowing Base Certificate with respect to any fiscal
month is inaccurate, and such inaccuracy, if corrected, would have led to the
imposition of a higher Applicable Rate for any period than the Applicable Rate
applied for that period, then (i) the Borrower shall immediately deliver to the
Administrative Agent a corrected Borrower Base Certificate for that period,
(ii) the Applicable Rate shall be determined based on the corrected Borrowing
Base Certificate for that period, and (iii) the Borrower shall immediately pay
to the Administrative Agent (for the account of the Lenders and the LC Issuer
during such period, or their successors and assigns) the accrued additional
interest and Letter of Credit Fee owing as a result of such increased Applicable
Rate for that period. This paragraph shall not limit the rights of the
Administrative Agent, the Lenders or the L/C Issuer with respect to
Section 2.08(b), Section 2.09 and Article VIII, and shall survive the
termination of this Agreement until the payment in full in cash of the Total
Outstandings.
 
"Appropriate Lender" means, at any time, (a) with respect to the Facility, a
Lender that has a Commitment or holds a Revolving Credit Loan at such time,
(b) with respect to the Letter of Credit Sublimit, (i) the L/C Issuer and
(ii) if any Letters of Credit have been issued pursuant to Section 2.03(a), the
Lenders and (c) with respect to the Swing Line Sublimit, (i) the Swing Line
Lender and (ii) if any Swing Line Loans are outstanding pursuant to
Section 2.04(a), the Lenders.
 
"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.
 
"Arranger" means Fifth Third Bank, an Ohio banking corporation, in its
capacities as sole lead arranger and sole book manager.
 
"Asset Sale" means any Disposition of property or series of related Dispositions
of property, excluding any such Disposition (a) to any Loan Party or
(b) permitted by clause (a), (b), (c) or (d) 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 10.06(b)), and accepted by the Administrative Agent, in
substantially the form of Exhibit A or any other form approved by the
Administrative Agent.
 
"Availability Period" means, in respect of the Facility, the period from and
including the Closing Date to the earliest of (i) the Maturity Date, (ii) the
date of termination of the Commitments pursuant to Section 2.06, and (iii) the
date of termination of the commitment of each Lender to make Loans and of the
obligation of each L/C Issuer to make L/C Credit Extensions pursuant to
Section 8.01.
 
"Availability Trigger Percentage" means, with respect to any fiscal month, an
amount (expressed as a percentage) equal to the following: (a) (i) the Adjusted
Borrowing Base Amount as of the last day of such fiscal month, minus (ii) the
average daily amount of the Total Outstandings during such fiscal month, divided
by (b) the Adjusted Borrowing Base Amount as of the last day of such fiscal
month.
 
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"Availability Trigger Period" shall mean a period commencing on the last day of
any fiscal month with respect to which the Availability Trigger Percentage is
equal to or less than 20% and ending on the last day of the first fiscal month
ending thereafter with respect to which the Availability Trigger Percentage is
greater than 20%.
 
"Available Eligible Inventory Amount" means, at any time, the sum at such time
of (i) Available Paper Raw Materials Inventory, (ii) Available Film Raw
Materials Inventory, (iii) Available Paper Finished Goods Inventory and
(iv) Available Film Finished Goods Inventory.
 
"Available Film Finished Goods Inventory" means, at any time, an amount equal to
the lesser at such time of (a) 70% of Eligible Film Finished Goods Inventory
(valued at the lower of cost (determined on a first-in, first-out basis) or
market value), and (b) 85% of the product of (i) the Net Orderly Liquidation
Value percentage for such Eligible Inventory identified in the most recent
Inventory appraisal provided to the Administrative Agent in accordance with the
terms hereof, multiplied by (ii) an amount equal to such Eligible Inventory
(valued at the lower of cost (determined on a first-in, first-out basis) or
market value) at such time.
 
"Available Film Raw Materials Inventory" means, at any time, an amount equal to
the lesser at such time of (a) 70% of Eligible Film Raw Materials Inventory
(valued at the lower of cost (determined on a first-in, first-out basis) or
market value), and (b) 85% of the product of (i) the Net Orderly Liquidation
Value percentage for such Eligible Inventory identified in the most recent
Inventory appraisal provided to the Administrative Agent in accordance with the
terms hereof, multiplied by (ii) an amount equal to such Eligible Inventory
(valued at the lower of cost (determined on a first-in, first-out basis) or
market value) at such time.
 
"Available Paper Raw Materials Inventory" means, at any time, an amount equal to
the lesser at such time of (a) 70% of Eligible Paper Raw Materials Inventory
(valued at the lower of cost (determined on a first-in, first-out basis) or
market value), and (b) 85% of the product of (i) the Net Orderly Liquidation
Value percentage for such Eligible Inventory identified in the most recent
Inventory appraisal provided to the Administrative Agent in accordance with the
terms hereof, multiplied by (ii) an amount equal to such Eligible Inventory
(valued at the lower of cost (determined on a first-in, first-out basis) or
market value) at such time.
 
"Available Paper Finished Goods Inventory" means, at any time, an amount equal
to the lesser at such time of (a) 70% of Eligible Inventory Paper Finished Goods
Inventory (valued at the lower of cost (determined on a first-in, first-out
basis) or market value), and (b) 85% of the product of (i) the Net Orderly
Liquidation Value percentage for such Eligible Inventory identified in the most
recent Inventory appraisal provided to the Administrative Agent in accordance
with the terms hereof, multiplied by (ii) an amount equal to such Eligible
Inventory (valued at the lower of cost (determined on a first-in, first-out
basis) or market value) at such time.
 
"Average Excess Availability" means, with respect to any fiscal month, the
average daily Excess Availability for such fiscal month.
 
"AWA" means Arjo Wiggins Appleton p.l.c.
 
"AWA Environmental Indemnity" means the indemnification provided pursuant to the
terms of (i) the Fox River AWA Environmental Agreement dated November 9, 2001,
as amended, among Holdings, the Borrower, Arjo Wiggins Appleton PLC and New
Appleton LLC, (ii) the insurance policy (Policy No. 529 5316) issued by
Commerce & Industry Insurance Company to Arjo Wiggins Appleton
 
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(Bermuda) Limited 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.
 
"Base Rate" means for any day a fluctuating rate per annum equal to the highest
of (a) the Federal Funds Rate plus 1/2 of 1%, (b) the rate of interest in effect
for such day as publicly announced from time to time by Fifth Third as its
"prime rate" and (c) the Eurodollar Rate that would be applicable to a new
Eurodollar Rate Loan with a one month Interest Period plus 1%. The "prime rate"
is a rate set by Fifth Third based upon various factors including Fifth Third's
costs and desired return, general economic conditions and other factors, and is
used as a reference point for pricing some loans, which may be priced at, above,
or below such announced rate. Any change in such rate announced by Fifth Third
shall take effect at the opening of business on the day specified in the public
announcement of such change.
 
"Base Rate Loan" means a Revolving Credit Loan that bears interest based on the
Base Rate.
 
"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.
 
"Bermuda Security Agreement" means the Collateral Assignment, dated as of
November 9, 2001, by the Bermuda Company in favor of the Borrower.
 
"Borrower" has the meaning specified in the introductory paragraph hereto.
 
"Borrower Materials" has the meaning specified in Section 6.02.
 
"Borrowing" means a Revolving Credit Borrowing or a Swing Line Borrowing, as the
context may require.
 
"Borrowing Base" means, at any time, an amount equal, in each case at such time,
to (a) 85% of the Eligible Accounts, plus (b) the Available Eligible Inventory
Amount, minus (c) Reserves established by the Administrative Agent in its
Permitted Discretion. The Administrative Agent may, in its Permitted Discretion
and based on new information or a change in circumstances adjust Reserves, with
any such change to be effective three Business Days after delivery of notice
thereof to the Borrower and the Lenders. Subject to the immediately preceding
sentence, the Borrowing Base at any time shall be determined by reference to the
Borrowing Base Certificate most recently delivered to the Administrative Agent
pursuant to Section 6.02(c) (or, in the case of the initial Borrowing Base
Certificate delivered in connection with this Agreement, pursuant to
Section 4.01(a)(x)), subject to adjustments made by the Administrative Agent in
its Permitted Discretion to address any events or conditions relating to any of
the Collateral occurring on or after the date with respect to which such
Borrowing Base Certificate relates.
 
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"Borrowing Base Certificate" means a certificate, signed and certified as
accurate and complete by a Responsible Officer, in substantially the form of
Exhibit B or another form which is reasonably acceptable to each of the
Administrative Agent and the Borrower and attaching thereto a calculation of the
Borrowing Base in form and substance satisfactory to the Administrative Agent in
its Permitted Discretion.
 
"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, the state of New York or the state where the Administrative Agent's
Office with respect to Obligations denominated in Dollars 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.
 
"Canadian Dollar" mean the lawful money of Canada.
 
"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.
 
"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.
 
"Cash Collateralize" has the meaning specified in Section 2.03(g) (and
derivatives of such term have corresponding meanings).
 
"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 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
 
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not less than $500,000,000; (c) commercial paper of an issuer rated at least A-1
by Standard & Poor's Ratings Services ("S&P") or P-1 by Moody's Investors
Service, Inc. ("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 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 any Person that (a) at the time it enters into a
Cash Management Agreement, is a Lender or an Affiliate of a Lender or (b) at the
time it or its Affiliate becomes a Lender, is a party to a Cash Management
Agreement, in each case in its capacity as a party to such Cash Management
Agreement.
 
"CERCLA" means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980.
 
"CERCLIS" means the Comprehensive Environmental Response, Compensation and
Liability Information System maintained by the U.S. Environmental Protection
Agency.
 
"CFC" means a Person that is a controlled foreign corporation under Section 957
of the Code.
 
"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 or application thereof by any Governmental
Authority or (c) the making or issuance of any request, guideline or directive
(whether or not having the force of law) by any Governmental Authority.
 
"Closing Date" means the first date all the conditions precedent in Section 4.01
are satisfied or waived in accordance with Section 10.01.
 
"Code" means the Internal Revenue Code of 1986, as amended.
 
"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.
 
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"Collateral Access Agreement" means, in each case in form and substance
satisfactory to the Administrative Agent in the exercise of its Permitted
Discretion, (a) with respect to any premises leased by the Borrower or any other
Loan Party, an agreement between the Administrative Agent and the lessor of such
premises, and (b) with respect to any other premises at which the Borrower or
any other Loan Party maintains inventory (whether for storage, processing or
otherwise), an agreement between the Administrative Agent and warehouseman or
other bailee, as the case may be, of such Inventory.
 
"Commitment" means, as to each Lender, its obligation to (a) make Revolving
Credit Loans to the Borrower pursuant to Section 2.01, (b) purchase
participations in L/C Obligations, and (c) purchase participations in Swing Line
Loans, 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 "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 from time to time in accordance with this
Agreement..
 
"Committed Loan Notice" means a notice of (a) a Revolving Credit 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 C.
 
"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.
 
"Consolidated EBITDAE" means, for any period, (a) Consolidated Net Income for
such period, plus (b) without duplication, and to the extent reflected as a
charge in the statement of such Consolidated Net Income, for such period, the
sum of (i) income tax expense, (ii) Consolidated Interest Expense, deferred debt
amortization and debt issuance costs, (iii) depreciation and amortization
expense, (iv) impairment of discontinued operations goodwill and long-lived
assets, (v) impairment of continuing operations goodwill, (vi) non-cash
extraordinary charges and non-cash non-recurring charges or losses, (vii) cash
restructuring charges and cash non-recurring charges or losses not to exceed
$2,000,000 in any twelve month period, (viii) non-cash charges from employee
deferrals and employer matching contributions, and (ix) any other non-cash
charges, expenses or losses agreed to in writing by the Administrative Agent;
minus (c) without duplication, and to the extent included in the statement of
such Consolidated Net Income, for such period, the sum of (i) interest income,
(ii) extraordinary income or gains, (iii) cash payments made relating to items
described in preceding clause (b)(ix) and previously added back to EBITDAE, and
(iv) any other non-cash income.
 
"Consolidated Fixed Charge Coverage Ratio" means, for any period, the ratio of
(a) Consolidated EBITDAE for such period minus the sum, without duplication, for
such period of (i) net capital expenditures not funded by Indebtedness, and
(ii) cash taxes, to (b) the sum, without duplication, for such period of
(i) scheduled principal payments on Indebtedness (except to the extent made with
proceeds of Indebtedness that is subordinated in right of payment to the
Obligations on terms reasonably satisfactory to the Administrative Agent and is
not secured by a Lien on any Collateral), (ii) Consolidated Interest Expense
paid in cash, and (iii) cash redemptions of Holdings' common stock pursuant to
the ESOP Documentation.
 
"Consolidated Interest Expense" means, for any period, total cash interest
expense (including that attributable to Capital Lease Obligations but, for the
avoidance of doubt, in any event excluding any
 
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amortization or write-off of financing costs) of Holdings and its Subsidiaries
for such period with respect to all outstanding Indebtedness of Holdings and its
Subsidiaries (including all commissions, discounts and other fees and charges
owed with respect to letters of credit and bankers' acceptance financing and net
costs under Hedge Agreements in respect of interest rates to the extent such net
costs are allocable to such period in accordance with GAAP).
 
"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, trade marks, 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(a)) 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.
 
"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.
 
"Credit Extension" means each of the following: (a) a Borrowing and (b) an L/C
Credit Extension.
 
"Debtor Relief Laws" means the Bankruptcy Code of the United States, 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 any Impacted Lender and any other Lender that (a) has
failed to fund any portion of the Revolving Credit Loans, participations in L/C
Obligations or participations in Swing Line Loans required to be funded by it
hereunder within one Business Day of the date required to be funded by it
hereunder, (b) has otherwise failed to pay over to the Administrative Agent or
any other Lender any other amount required to be paid by it hereunder within one
Business Day of the date when due, unless the subject of a good faith dispute,
or (c) has been deemed insolvent or become the subject of any proceeding under
any Debtor Relief Laws.
 
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"Derivatives Counterparty" means any financial institution, commodities or stock
exchange or clearinghouse.
 
"Dilution Reserve" means, as of any date of determination thereof, an amount
equal to (a) the Dilution Rate then in effect multiplied by (b) 85% of the
Eligible Accounts as of such date.
 
"Dilution Rate" means a rate established from time to time with respect to the
Accounts of the Borrower and its Subsidiaries that are Guarantors equal to a
percentage that is the result of dividing (a) the aggregate amount of all
dilutive items determined by the Administrative Agent in its Permitted
Discretion, including but not limited to discounts, advertising allowances, bid
credits, or other dilutive items with respect to the Eligible Accounts of such
Loan Parties, divided by (b) the aggregate amount of all Eligible Accounts
invoiced by such Persons, in each case for the period covered by the most recent
field examination conducted pursuant to Section 6.06(b); provided, that, until
the date of delivery of the first such field examination, the dilution rate
shall be (i) 14.4% with respect to Accounts generated by the coated solutions,
thermal paper, security paper, micro-encapsulation and any other technical paper
segments, if any, of such Persons, and (ii) 5.4% with respect to Accounts
generated by the performance packaging segments of such Persons.
 
"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 Maturity Date.
 
"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.
 
"Eligible Assignee" means any Person that meets the requirements to be an
assignee under Section 10.06(b)(iii), (v) and (vi) (subject to such consents, if
any, as may be required under Section 10.06(b)(iii)).
 
"Eligible Accounts" means, at any time, the Accounts of the Borrower and each of
its Subsidiaries that is a Guarantor that the Administrative Agent determines in
its Permitted Discretion are eligible as the basis for the extension of
Revolving Credit Loans and the issuance of Letters of Credit.
 
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Without limiting the Administrative Agent's Permitted Discretion, Eligible
Accounts shall not include any Account:
 
(a)           which is not subject to a first priority perfected security
interest in favor of the Administrative Agent;
 
(b)           which is subject to any Lien other than (i) a Lien in favor of the
Administrative Agent and (ii) a Permitted Lien which does not have priority over
the Lien in favor of the Administrative Agent and is described in clauses (a),
(b), (e), (t) or (u) of Section 7.03;
 
(c)           (i) which is unpaid more than 90 days after the date of the
original invoice therefor or more than 60 days after the original due date
therefor, or (ii) which has been written off the books of the any Loan Party or
otherwise designated as uncollectible (in determining the aggregate amount from
the same Account Debtor that is unpaid hereunder there shall be excluded the
amount of any net credit balances relating to Accounts due from an Account
Debtor which are unpaid more than 90 days after the date of the original
invoices therefor or more than 60 days after the original due dates); provided,
that no Account owed by an Account Debtor that (A) does not maintain its chief
executive office in the United States or Canada or (B) is not organized under
applicable law of the United States, any state of the United States, Canada, or
any province of Canada (each such Account Debtor, a "Foreign Account Debtor")
shall be deemed to be ineligible solely by reason of this subsection (c) to the
extent that such Account is paid or payable, as the case may be, within time
periods acceptable to the Administrative Agent in its Permitted Discretion;
 
(d)           which is owing by an Account Debtor for which more than 25% of the
Accounts owing from such Account Debtor and its Affiliates are ineligible
pursuant to clause (c) above;
 
(e)           which is owing by an Account Debtor to the extent the aggregate
amount of Accounts owing from such Account Debtor and its Affiliates to the
Borrower exceeds 25% of the aggregate Eligible Accounts;
 
(f)            with respect to which any covenant, representation, or warranty
contained in this Agreement or in the Guarantee and Collateral Agreements has
been breached or is not true;
 
(g)           which (i) does not arise from the sale of goods or performance of
services in the ordinary course of business, (ii) is not evidenced by an invoice
or other documentation satisfactory to the Administrative Agent which has been
sent to the Account Debtor, (iii) represents a progress billing, (iv) is
contingent upon the any Loan Party's completion of any further performance,
(v) represents a sale on a bill-and-hold, guaranteed sale, sale-and-return, sale
on approval, consignment, cash-on-delivery or any other repurchase or return
basis or (vi) relates to payments of interest;
 
(h)           for which the goods giving rise to such Account have not been
shipped to the Account Debtor or for which the services giving rise to such
Account have not been performed by any Loan Party or if such Account was
invoiced more than once;
 
(i)            with respect to which any check or other instrument of payment
has been returned uncollected for any reason;
 
(j)            which is owed by an Account Debtor which has (i) applied for,
suffered, or consented to the appointment of any receiver, custodian, trustee,
or liquidator of its assets, (ii) has had possession of all or a material part
of its property taken by any receiver, custodian, trustee or liquidator,
(iii) filed, or had filed against it, any request or petition for liquidation,
reorganization, arrangement, adjustment of debts,
 
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adjudication as bankrupt, winding-up, or voluntary or involuntary case under any
state or federal bankruptcy laws, (iv) has admitted in writing its inability, or
is generally unable to, pay its debts as they become due, (v) become insolvent,
or (vi) ceased operation of its business;
 
(k)           which is owed by any Account Debtor which has sold all or a
substantially all of its assets;
 
(l)            which is owed by a Foreign Account Debtor unless, in any such
case, (A) such Account is backed by a letter of credit acceptable to the
Administrative Agent which is in the possession of, has been assigned to and is
directly drawable by, the Administrative Agent or (B) is covered by a credit
insurance policy in form and substance acceptable to the Administrative Agent
and issued by an insurer acceptable to the Administrative Agent;
 
(m)          which is owed in any currency other than Dollars, Canadian Dollars
or Euros; provided, that for purposes of determining the amount of any Account
owned in Canadian Dollars or Euros to be included in the Borrowing Base, the
amount of such Account shall be converted at any time of determination thereof
to Dollars at the applicable Spot Rate of Exchange then in effect with respect
thereto;
 
(n)           which is owed by (i) the government (or any department, agency,
public corporation, or instrumentality thereof) of any country other than the
United States unless such Account is backed by a letter of credit acceptable to
the Administrative Agent which is in the possession of the Administrative Agent,
or (ii) the government of the United States or any department, agency, public
corporation, or instrumentality thereof, unless the Federal Assignment of Claims
Act of 1940, as amended (31 U.S.C. Section 3727 et seq. and 41 U.S.C. Section 15
et seq.), and any other steps necessary to perfect the Lien of the
Administrative Agent in such Account have been complied with to the
Administrative Agent's satisfaction;
 
(o)           which is owed by any Affiliate, employee, officer, director, agent
or stockholder of any Loan Party;
 
(p)           which, for any Account Debtor, exceeds a credit limit determined
by the Administrative Agent in its Permitted Discretion, to the extent of such
excess;
 
(q)           which is owed by an Account Debtor or any Affiliate of such
Account Debtor to which the any Loan Party is indebted, but only to the extent
of such indebtedness or is subject to any security, deposit, progress payment,
retainage or other similar advance made by or for the benefit of an Account
Debtor, in each case to the extent thereof;
 
(r)            which is subject to any counterclaim, deduction, defense, setoff
or dispute but only to the extent of any such counterclaim, deduction, defense,
setoff or dispute;
 
(s)           which is evidenced by any promissory note, chattel paper, or
instrument;
 
(t)            which is owed by an Account Debtor located in any jurisdiction
which requires filing of a "Notice of Business Activities Report" or other
similar report in order to permit the any Loan Party to seek judicial
enforcement in such jurisdiction of payment of such Account, unless such Loan
Party has filed such report or qualified to do business in such jurisdiction;
 
(u)           with respect to which a Loan Party has made any agreement with the
Account Debtor for any reduction thereof, other than discounts and adjustments
given in the ordinary course of business, or
 
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any Account which was partially paid and a Loan Party created a new receivable
for the unpaid portion of such Account;
 
(v)           which does not comply in all material respects with the
requirements of all applicable laws and regulations, whether Federal, state or
local, including the Federal Consumer Credit Protection Act, the Federal Truth
in Lending Act and Regulation Z of the Board;
 
(w)          which is for goods that have been sold under a purchase order or
pursuant to the terms of a contract or other agreement or understanding (written
or oral) that indicates or purports that any Person other than a Loan Party has
or has had an ownership interest in such goods, or which indicates any party
other than a Loan Party as payee or remittance party;
 
(x)            which was created on cash on delivery terms;
 
(y)           which the Administrative Agent determines may not be paid by
reason of the Account Debtor's inability to pay or which the Administrative
Agent otherwise determines is unacceptable in its Permitted Discretion; or
 
(z)            which is subject to any rebate or similar setoff, but only to the
extent of such rebate or setoff.
 
An Account which is at any time an Eligible Account, but which subsequently
fails to meet any of the foregoing requirements, shall cease to be an Eligible
Account. Any ineligibility described in the preceding two sentences shall become
effective immediately.
 
"Eligible Film Raw Materials Inventory" means Eligible Inventory consisting of
raw materials used in the performance packaging segments of the Borrower and its
Subsidiaries (as determined in a manner acceptable to Administrative Agent in
its Permitted Discretion).
 
"Eligible Film Finished Goods Inventory" means Eligible Inventory consisting of
performance packaging finished goods available for sale (as determined in a
manner acceptable to Administrative Agent in its Permitted Discretion).
 
"Eligible Inventory" means, at any time, the Inventory of the Borrower and each
of its Subsidiaries that is a Guarantor which the Administrative Agent
determines in its Permitted Discretion is eligible as the basis for the
extension of Revolving Credit Loans and the issuance of Letters of Credit
hereunder. Without limiting the Administrative Agent's Permitted Discretion
provided herein, Eligible Inventory shall not include any Inventory:
 
(a)           which is not subject to a first priority perfected Lien in favor
of the Administrative Agent;
 
(b)           which is subject to any Lien other than (i) a Lien in favor of the
Administrative Agent and (ii) a Permitted Lien which does not have priority over
the Lien in favor of the Administrative Agent and is described in clause (b) of
Section 7.03;
 
(c)           which is, in the Administrative Agent's Permitted Discretion, slow
moving, obsolete, unmerchantable, defective, used, unfit for sale, not salable
at prices approximating at least the cost of such Inventory in the ordinary
course of business or unacceptable due to age, type, category and/or quantity;
 
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(d)           with respect to which any covenant, representation, or warranty
contained in this Agreement or the Guarantee and Collateral Agreements has been
breached or is not true and which does not conform to all standards imposed by
any governmental authority;
 
(e)           in which any Person other than a Loan Party shall (i) have any
direct or indirect ownership, interest or title to such Inventory or (ii) be
indicated on any purchase order or invoice with respect to such Inventory as
having or purporting to have an interest therein;
 
(f)            which is not finished goods or raw materials or which constitutes
work-in-process, spare or replacement parts, subassemblies, packaging and
shipping material, manufacturing supplies, samples, prototypes, displays or
display items, bill-and-hold goods, goods that are returned or marked for
return, repossessed goods, defective or damaged goods, goods held on
consignment, or goods which are not of a type held for sale in the ordinary
course of business;
 
(g)           which is not located in the United States or is in transit with a
common carrier from vendors and suppliers;
 
(h)           which is located in any location leased by a Loan Party unless
(i) the lessor has delivered to Administrative Agent a Collateral Access
Agreement or (ii) a Rent Reserve has been established by the Administrative
Agent with respect to such Inventory;
 
(i)            which is located in any third party warehouse or is in the
possession of a bailee unless (i) a Collateral Access Agreement has been
delivered to the Administrative Agent with respect to such Inventory at such
location or (ii) a Rent Reserve has been established by the Administrative Agent
with respect to such Inventory;
 
(j)            which is being processed offsite at a third party location or
outside processor, or is in-transit to or from said third party location or
outside processor unless (i) a Collateral Access Agreement has been delivered to
the Administrative Agent with respect to such Inventory at such location or
(ii) a Rent Reserve has been established by the Administrative Agent with
respect to such Inventory;
 
(k)           which is a discontinued product or component thereof;
 
(l)            which is the subject of a consignment by any Loan Party as
consignor;
 
(m)          which is perishable;
 
(n)           which contains or bears any intellectual property rights licensed
to any Loan Party unless the Administrative Agent is satisfied that it may sell
or otherwise dispose of such Inventory without (i) infringing the rights of such
licensor, (ii) violating any contract with such licensor, or (iii) incurring any
liability with respect to payment of royalties other than royalties incurred
pursuant to sale of such Inventory under the current licensing agreement;
 
(o)           which is not reflected in a current perpetual inventory report of
any Loan Party;
 
(p)           for which reclamation rights have been asserted by the seller; or
 
(q)           which the Administrative Agent otherwise determines is
unacceptable in its Permitted Discretion.
 
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Inventory which is at any time Eligible Inventory but which subsequently fails
to meet any of the foregoing requirements shall cease to be Eligible Inventory
forthwith.
 
"Eligible Paper Raw Materials Inventory" means Eligible Inventory consisting of
raw materials used (a) in the coated solutions, thermal paper and security paper
segments of the Borrower and its Subsidiaries, (b) the micro-encapsulation
segments of the Borrowers and its Subsidiaries and (c) the other technical paper
segments, if any, of the Borrower and its Subsidiaries (in each case as
determined in a manner acceptable to Administrative Agent in its Permitted
Discretion).
 
"Eligible Paper Finished Goods Inventory" means Eligible Inventory consisting of
technical paper finished goods available for sale (as determined in a manner
acceptable to Administrative Agent in its Permitted Discretion).
 
"EMU Legislation" means the legislative measures of the European Counsel for the
introduction of, changeover to or operation of a single or unified European
currency.
 
"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 and 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.
 
"Environmental Permit" means any permit, approval, identification number,
license or other authorization required under any Environmental Law.
 
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended.
 
"ESOP" means the Appleton Papers Retirement Savings and Employee Stock Ownership
Plan.
 
"ESOP Component" means the employee stock ownership plan component of the ESOP.
 
"ESOP Documentation" means the collective reference to (a) the Appleton Papers
Retirement Savings and Employee Stock Ownership Plan, restated effective
January 1, 2001, (b) the Appleton Papers Inc. Employee Stock Ownership Trust,
adopted July 19, 2001 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.
 
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"Euro" means the lawful currency of the Participating Member States introduced
in accordance with the EMU Legislation
 
"Eurodollar Index Rate" means, for any Interest Period, the rate per annum
(rounded upwards, if necessary, to the next higher one hundred-thousandth of a
percentage point) for deposits in Dollars for a period equal to such Interest
Period, which appears on the Reuters Screen LIBOR01 Page as of 11:00 a.m.
(London, England time) on the day 2 Business Days before the commencement of
such Interest Period.
 
"Eurodollar Rate" means, for an Interest Period for a Borrowing of Eurodollar
Rate Loans, (a) the Eurodollar Index Rate for such Interest Period, if such rate
is available, and (b) if the Eurodollar Index Rate cannot be determined, the
arithmetic average of the rates of interest per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) at which deposits in Dollars in
immediately available funds are offered to the Administrative Agent at
11:00 a.m. (London, England time) two (2) Business Days before the beginning of
such Interest Period by three (3) or more major banks in the interbank
eurodollar market selected by the Administrative Agent for delivery on the first
day of and for a period equal to such Interest Period and in an amount equal or
comparable to the principal amount of the Eurodollar Loan scheduled to be made
by the Administrative Agent as part of such Borrowing.
 
"Eurodollar Rate Loan" means a Revolving Credit Loan that bears interest at a
rate based on the Eurodollar Rate.
 
"Event of Default" has the meaning specified in Section 8.01.
 
"Excess Availability" means, at any time, an amount equal at such time to
(a) the lesser of (i) the aggregate Commitments and (ii) the Borrowing Base,
minus (b) Total Outstandings.
 
"Exchange Offer" means the tender and exchange of Senior Unsecured Notes and
Senior Subordinated Notes for Second Lien Notes pursuant to that certain
Offering Circular, dated August 18, 2009, in respect of the Senior Unsecured
Notes, the Senior Subordinated Notes and the Second Lien Notes.
 
"Excluded Taxes" means, with respect to the Administrative Agent, any Lender,
any L/C Issuer or any other recipient of any payment to be made by or on account
of any obligation of the Borrower hereunder, (a) taxes imposed on or measured by
its overall net income (however denominated), and franchise taxes imposed on it
(in lieu of net income taxes), by the jurisdiction (or any political subdivision
thereof) under the laws of which such recipient is organized or in which its
principal office is located or, in the case of any Lender, in which its
applicable Lending Office is located, (b) any branch profits taxes imposed by
the United States (or any political subdivision thereof) or any similar tax
imposed by any other jurisdiction (or any political subdivision thereof) in
which the Borrower is located, (c) any taxes imposed on a Lender, the
Administrative Agent or the L/C Issuer (if such Lender, Administrative Agent, or
L/C Issuer is not a United States person (as such term is defined under
Section 7701(a)(30) of the Code)) as a result of such Lender's, Administrative
Agent's or L/C Issuer's failure to satisfy the reporting requirements as set
forth in any statute enacted (or regulation or administrative guidance
promulgated thereunder) after the date hereof that is based on, or similar to,
the "Foreign Account Tax Compliance Act of 2009 (HR 3933, S. 1934);" and
(d) except as provided in the following sentence, in the case of a Foreign
Lender (other than an assignee pursuant to a request by the Borrower under
Section 10.13), any withholding tax that is imposed on amounts payable to such
Foreign Lender at the time such Foreign Lender becomes a party hereto (or
designates a new Lending Office) or is attributable to such Foreign Lender's
failure or inability (other than as a result of a Change in Law) to comply with
Section 3.01(e), except to the extent that such Foreign Lender (or its assignor,
if any) was entitled, at the time of designation of a new Lending Office (or
assignment), to receive additional amounts from the Borrower
 
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with respect to such withholding tax pursuant to Section 3.01(a).
Notwithstanding anything to the contrary contained in this definition, "Excluded
Taxes" shall not include any withholding tax imposed at any time on payments
made by or on behalf of a Foreign Subsidiary to any Lender hereunder or under
any other Loan Document, so long as such Lender shall have complied with the
last paragraph of Section 3.01(e), as applicable; provided, that the definition
of "Excluded Taxes" shall include any withholding tax imposed on amounts payable
to an assignee of such Lender except to the extent that such Lender was entitled
to receive additional amounts from such Foreign Subsidiary with respect to such
withholding tax pursuant to Section 3.01(a) at the time of assignment.
 
"Existing Credit Agreement" means that certain Credit Agreement dated as of
June 5, 2007 among the Borrower, Holdings, Bank of America, N.A., as agent, and
a syndicate of lenders, as amended prior to the date hereof.
 
"Facility" means, at any time, the aggregate amount of the Lenders' Commitments
at such time.
 
"Federal Funds Rate" means, for any day, the rate per annum equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day; provided that (a) if such day is not a Business Day,
the Federal Funds Rate for such day shall be such rate on such transactions on
the next preceding Business Day as so published on the next succeeding Business
Day, and (b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate (rounded
upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Fifth Third
on such day on such transactions as determined by the Administrative Agent.
 
"Fee Letter" means the letter agreement, dated January 25, 2010, among the
Borrower and the Arranger.
 
"Fifth Third" means Fifth Third Bank, an Ohio banking corporation.
 
"First Lien Note Documents" means the First Lien Note Indenture, the First Lien
Notes, the First Lien Security Documents and each other document, instrument or
agreement relating to the issuance of the First 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 First
Lien Intercreditor Agreement.
 
"First Lien Note Indenture" means the indenture entered into by Holdings, the
Borrower, certain of its Subsidiaries and U.S. Bank National Association, as
trustee, in connection with the issuance of the First Lien Notes, as the same
may be amended, restated, supplemented, waived and/or otherwise modified from
time to time in accordance the terms thereof, of this Agreement and of the First
Lien Intercreditor Agreement.
 
"First Lien Note Intercreditor Agreement" means the Intercreditor Agreement
executed by Holdings, the Borrower, the other Loan Parties from time to time
party thereto, the Administrative Agent and the collateral agent under the First
Lien Note Indenture, 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.
 
"First Lien Notes" means the 10.50% senior secured first lien notes of the
Borrower due 2015 to be issued and exchanged pursuant to the First Lien Note
Indenture.
 
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"First 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 First Lien
Intercreditor Agreement to secure the obligations and liabilities of Holdings,
the Borrower and certain of its Subsidiaries under the First Lien Note
Documents.
 
"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 AIG Credit Support, 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.
 
"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 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
 
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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, Appleton 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.
 
"Guaranty" means the Guarantee and Collateral Agreements, 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, wastes or other pollutants, including
petroleum or petroleum distillates, asbestos or asbestos-containing materials,
polychlorinated biphenyls, radon gas, 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 any Person that, at the time it enters into a Hedge
Agreement, is a Lender or an Affiliate of a Lender, in its capacity as a party
to such Hedge Agreement.
 
"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.
 
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"Impacted Lender" means any Lender as to which (a) any L/C Issuer has a good
faith belief that the Lender has defaulted in fulfilling its obligations under
one or more other syndicated credit facilities or (b) such Lender or an entity
that controls such Lender has been deemed insolvent or become subject to a
bankruptcy or other similar proceeding.
 
"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 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 Taxes other than Excluded Taxes.
 
"Indemnitees" has the meaning specified in Section 10.04(b).
 
"Information" has the meaning specified in Section 10.07.
 
"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
 
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infringement or other impairment thereof, including the right to receive all
proceeds and damages therefrom.
 
"Intellectual Property Security Agreement" has the meaning specified in
Section 4.01(a)(v).
 
"Intercreditor Agreements" means the First Lien Note Intercreditor Agreement and
the Second Lien Note Intercreditor Agreement.
 
"Interest Payment Date" means, (a) as to any Eurodollar Rate Loan, the last day
of each Interest Period applicable to such Loan and the Maturity Date of the
Facility under which such Loan was made; 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 or Swing Line
Loan, the first Business Day after the end of each March, June, September and
December and the Maturity Date of the Facility under which such Loan was made
(with Swing Line Loans being deemed made under the Revolving Credit Facility for
purposes of this definition).
 
"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, two or three months (or
such other period of time as may be agreed to by each Lender) 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 Maturity Date of the
Facility under which such Loan was made.
 
"Inventory" means all of the "inventory" as such term is defined in the
Guarantee and Collateral Agreement.
 
"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, except as
otherwise provided therein.
 
"IP Rights" has the meaning specified in Section 5.17.
 
"IRS" means the United States Internal Revenue Service.
 
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"ISP" means, with respect to any Letter of Credit, the "International Standby
Practices 1998" published by the Institute of International Banking Law &
Practice, Inc. (or such later version thereof as may be in effect at the time of
issuance).
 
"Issuer Documents" means with respect to any Letter of Credit, the Letter of
Credit Application, and any other document, agreement and instrument entered
into by any L/C Issuer and the Borrower (or any Subsidiary) or in favor of such
L/C Issuer and relating to such Letter of Credit.
 
"Laws" means, collectively, all international, foreign, Federal, state and local
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.
 
"L/C Advance" means, with respect to each Lender, such Lender's funding of its
participation in any L/C Borrowing in accordance with its Percentage.
 
"L/C Borrowing" means an extension of credit resulting from a drawing under any
Letter of Credit which has not been reimbursed on the date when made or
refinanced as a Revolving Credit Borrowing.
 
"L/C Credit Extension" means, with respect to any Letter of Credit, the issuance
thereof or extension of the expiry date thereof, or the increase of the amount
thereof.
 
"L/C Issuer" means (a) Fifth Third or any other Lender acting in the capacity of
an issuer of Letters of Credit hereunder.
 
"L/C Obligations" means, as at any date of determination, the aggregate amount
available to be drawn under all outstanding Letters of Credit plus the aggregate
of all Unreimbursed Amounts, including all L/C Borrowings. For purposes of
computing the amount available to be drawn under any Letter of Credit, the
amount of such Letter of Credit shall be determined in accordance with
Section 1.06. For all purposes of this Agreement, if on any date of
determination a Letter of Credit has expired by its terms but any amount may
still be drawn thereunder by reason of the operation of Rule 3.14 of the ISP,
such Letter of Credit shall be deemed to be "outstanding" in the amount so
remaining available to be drawn.
 
"Lender" has the meaning specified in the introductory paragraph hereto and, as
the context requires, includes the Swing Line Lender.
 
"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.
 
"Letter of Credit" means any standby letter of credit issued hereunder. Letters
of Credit shall be issued in Dollars.
 
"Letter of Credit Application" means an application and agreement for the
issuance or amendment of a Letter of Credit in the form from time to time in use
by the applicable L/C Issuer.
 
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"Letter of Credit Expiration Date" means the day that is five Business Days
prior to the Maturity Date then in effect for the Revolving Credit Facility (or,
if such day is not a Business Day, the next preceding Business Day).
 
"Letter of Credit Fee" has the meaning specified in Section 2.03(i).
 
"Letter of Credit Sublimit" means an amount equal to $25,000,000. The Letter of
Credit Sublimit is part of, and not in addition to, the Facility.
 
"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 Revolving Credit Loan or a Swing Line Loan.
 
"Loan Documents" means, collectively, (a) this Agreement, (b) the Notes, (c) the
Guaranty, (d) the Security Documents, (e) the Fee Letter, (f) each Issuer
Document, (g) each Secured Hedge Agreement (h), each Secured Cash Management
Agreement, (i) the First Lien Note Intercreditor Agreement, and (j) the Second
Lien Note Intercreditor Agreement; 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.
 
"Mandatory Cost" means, with respect to any period, the percentage rate per
annum determined in accordance with Schedule 1.01(b).
 
"Material Adverse Effect" means (a) a material adverse change in, or a material
adverse effect on, the operations, business, assets, properties, liabilities
(actual or contingent) or financial condition of Holdings and its Subsidiaries,
taken as a whole; (b) a material impairment of the rights and remedies of the
Administrative Agent or any Lender under any Loan Document, or of the ability of
the Borrower and the Guarantors taken as a whole to perform their obligations
under any Loan Document to which they are parties; or (c) a material adverse
effect upon the legality, validity, binding effect or enforceability against the
Borrower or any Guarantor of any Loan Document to which it is a party.
 
"Materials of Environmental Concern" means any gasoline or petroleum (including
crude oil or any fraction thereof) or petroleum products or any hazardous or
toxic substances, materials or wastes, defined or regulated as such in or under
any Environmental Law, including asbestos, polychlorinated biphenyls and
urea-formaldehyde insulation.
 
"Maturity Date" means February 8, 2015; provided, however, that if such date is
not a Business Day, the Maturity Date shall be the immediately preceding
Business Day.
 
"Moody's" means Moody's Investors Service, Inc. and any successor thereto.
 
"Mortgages" means each of the mortgages and deeds of trust made by any Loan
Party in favor of, or for the benefit of, the Administrative Agent for the
benefit of the Lenders.
 
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"Mortgaged Properties" means the real properties listed under the heading
"Mortgaged Properties" on Schedule 1.01(c), as to which the Administrative Agent
for the benefit of the Lenders shall be granted a Lien pursuant to the
Mortgages.
 
"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 any Disposition or issuance of
Indebtedness by Holdings or any of its Subsidiaries, or 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.
 
"Net Orderly Liquidation Value" means, with respect to Inventory of any Person,
the orderly liquidation value thereof as determined in a manner acceptable to
the Administrative Agent in its Permitted Discretion by an appraiser acceptable
to the Administrative Agent in its Permitted Discretion, net of all costs of
liquidation thereof.
 
"Non-Guarantor" means any Subsidiary of Holdings that is not a Guarantor.
 
"Note" means any promissory note made by the Borrower in favor of a Lender
evidencing Revolving Credit Loans or Swing Line Loans, as the case may be, made
by such Lender, substantially in the form of Exhibit E.
 
"Obligations" means all advances to, and debts, liabilities, obligations,
covenants and duties of, any Loan Party arising under any Loan Document or
otherwise with respect to any Loan or Letter of Credit, 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.
 
"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 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.
 
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"Other Taxes" means all present or future stamp or documentary taxes or any
other excise or property taxes, charges or similar levies under the laws of the
United States (or any political subdivision thereof) arising from any payment
made hereunder or under any other Loan Document or from the execution, delivery
or enforcement of, or otherwise with respect to, this Agreement or any other
Loan Document.
 
"Outstanding Amount" means (a) with respect to Revolving Credit Loans and Swing
Line Loans on any date, the aggregate outstanding principal amount thereof after
giving effect to any borrowings and prepayments or repayments of Revolving
Credit Loans and Swing Line Loans, as the case may be, occurring on such date;
and (b) with respect to any L/C Obligations on any date, the amount of such L/C
Obligations on such date after giving effect to any L/C Credit Extension
occurring on such date and any other changes in the aggregate amount of the L/C
Obligations as of such date, including as a result of any reimbursements by the
Borrower of Unreimbursed Amounts.
 
"Participant" has the meaning specified in Section 10.06(d).
 
"Participating Member State" means each state so described in any EMU
Legislation.
 
"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.
 
"Percentage" means, with respect to any Lender at any time, the percentage
(carried out to the ninth decimal place) of the Facility represented by such
Lender's Commitment at such time. If the Commitment of each Lender to make Loans
and the respective obligations of each L/C Issuer to make L/C Credit Extensions
have been terminated pursuant to Section 8.01, or if the Commitments have
expired, then the Percentage of each Lender in respect of the Facility shall be
determined based on the Percentage of such Lender in respect of the Facility
most recently in effect, giving effect to any subsequent assignments. The
initial Percentage of each Lender in respect of the Facility is set forth
opposite the name of such Lender on Schedule 2.01 or in the Assignment and
Assumption pursuant to which such Lender becomes a party hereto, as applicable.
 
"Permitted Discretion" means a determination made in good faith and in the
exercise of commercially reasonable (from the perspective of a secured
asset-based lender) business judgment.
 
"Permitted Encumbrances" has the meaning specified in the Mortgages.
 
"Permitted Existing Debt" means Indebtedness described on Schedule 7.02.
 
"Permitted Lien" means any lien permitted pursuant to Section 7.03.
 
"Permitted Refinancing Debt" means:
 
(a)           in connection with any refinancing of the First Lien Notes, new
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 First Lien Notes or otherwise on then market terms and conditions for
comparable debt securities (as determined in good faith by the Borrower) or
otherwise acceptable to the Administrative Agent; provided, that in no event
shall such Indebtedness (i) amortize, or otherwise be subject to scheduled
redemptions, repurchases or other payments of principal or have a final maturity
date
 
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that is earlier than June 15, 2015 (i.e., the original maturity date of the
First Lien Notes), (ii) require prepayments or mandatory redemptions in a manner
materially more extensive than the First Lien Notes, (iii) contain maintenance
financial covenants that are more restrictive than those under this Agreement,
(iv) be secured by Liens that are not subordinated to the Liens securing the
Obligations, except as otherwise permitted under the First Lien Intercreditor
Agreement, or (v) contain other terms and conditions (other than pricing) that
are more restrictive, taken as a whole, than those under this Agreement;
 
(b)           in connection with any refinancing of the Second Lien Notes, new
Indebtedness of the Borrower on then market terms and conditions for comparable
debt securities (as determined in good faith by the Borrower); provided that in
no event shall such Indebtedness (i) 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 Maturity Date with respect to the Facility, (ii) require prepayments or
mandatory redemptions in a manner materially more extensive than the Second Lien
Notes, (iii) contain maintenance financial covenants that are more restrictive
than those under this Agreement, (iv) be secured by Liens 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 Second Lien Note Intercreditor
Agreement or (v) contain other terms and conditions (other than pricing) that
are more restrictive, taken as a whole, than those under this Agreement;
 
(c)           in connection with any refinancing of the Senior Subordinated
Notes, 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 Senior Subordinated Notes or otherwise acceptable to the
Administrative Agent; provided that in no event shall such Indebtedness
(i) 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 Senior Subordinated Notes, (ii) be subordinated to the Obligations in a
manner less favorable to the Lenders than the Senior Subordinated Notes,
(iii) provide for covenants, events of default and remedies materially less
favorable to the Borrower than the Senior Subordinated Notes or (v) require
prepayments or mandatory redemptions in a manner materially more extensive than
the Senior Subordinated Notes; and
 
(d)           in connection with any refinancing of the Senior Unsecured Notes,
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 Senior Unsecured Notes or otherwise on then market terms and
conditions for senior unsecured debt securities (as determined in good faith by
the Borrower) or otherwise acceptable to the Administrative Agent; provided that
in no event shall such Indebtedness (i) 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 Maturity Date with respect to the Facility, (ii) require prepayments or
mandatory redemptions in a manner materially more extensive than the Senior
Unsecured Notes, (iii) contain maintenance financial covenants that are more
restrictive than those under this Agreement or (iv) contain other terms and
conditions that are more restrictive, taken as a whole, than those under this
Agreement.
 
"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.
 
"Person" means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.
 
"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.
 
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"Platform" has the meaning specified in Section 6.02.
 
"Pledged Stock" has the meaning specified in the Guarantee and Collateral
Agreement.
 
"Public Lender" has the meaning specified in Section 6.02.
 
"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 Loan Party.
 
"Register" has the meaning specified in Section 10.06(c).
 
"Reimbursement Obligation" means the obligation of the Borrower to reimburse
each L/C Issuer pursuant to Section 2.03 for amounts drawn under Letters of
Credit.
 
"Related Parties" means, with respect to any Person, such Person's Affiliates
and the partners, directors, officers, employees, agents and advisors of such
Person and of such Person's Affiliates.
 
"Rent Reserve" means, with respect to any warehouse, distribution center or
other location not owned by a Loan Party with respect to which no Collateral
Access Agreement is in effect, a reserve equal to (a) three months' rent in the
case of leased facilities and (b) three months of fees in the case of
third-party warehousers and outside processors.
 
"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 subsections .27, .28, .29, .30, .31, .32, .34 or .35 of PBGC Reg.
Section 4043.
 
"Request for Credit Extension" means (a) with respect to a Borrowing, conversion
or continuation of Revolving Credit Loans, a Committed Loan Notice, (b) with
respect to an L/C Credit Extension, a Letter of Credit Application, and (c) with
respect to a Swing Line Loan, a Swing Line Loan Notice.
 
"Required Lenders" means, as of any date of determination, Lenders holding more
than 50% of the sum of the (a) Total Outstandings (with the aggregate amount of
each Lender's risk participation and funded participation in L/C Obligations and
Swing Line Loans being deemed "held" by such Lender for purposes of this
definition) and (b) aggregate unused Commitments; provided that the Commitment
of, and the portion of the Total Outstandings held or deemed held by, any
Defaulting Lender shall be excluded for 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.
 
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"Reserves" means, at any time of determination thereof, (a) the Dilution Reserve
then in effect, (b) aggregate Rent Reserves then in effect, and (c) any other
reserves that the Administrative Agent deems necessary in the exercise of its
Permitted Discretion to maintain with respect to the Collateral or any Loan
Party, provided, that, in the case of any reserves established pursuant to the
foregoing clause (c), such reserves have been established upon not less than
three Business Days' notice to the Borrower.
 
"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.
 
"Restricted Payment" has the meaning set forth in Section 7.06.
 
"Revolving Credit Borrowing" means a borrowing consisting of simultaneous
Revolving Credit Loans of the same Type and, in the case of Eurodollar Rate
Loans, having the same Interest Period made by each of the Lenders pursuant to
Section 2.01.
 
"Revolving Credit Loan" has the meaning specified in Section 2.01.
 
"S&P" means Standard & Poor's Ratings Services, a division of The McGraw-Hill
Companies, Inc., and any successor thereto.
 
"SEC" means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.
 
"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 Second Lien Intercreditor Agreement.
 
"Second Lien Note Indenture" means the indenture entered into by Holdings, the
Borrower, certain of its Subsidiaries and U.S. Bank National Association, as
trustee, 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 the terms thereof, of this Agreement and of the
Second Lien Intercreditor Agreement.
 
"Second Lien Note Intercreditor Agreement" means the Intercreditor Agreement
executed by Holdings, the Borrower, the other Loan Parties from time to time
party thereto, the Administrative Agent and the collateral agent under the
Second Lien Note Indenture, 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.
 
"Second Lien Notes" means the 11.25% senior secured second lien notes of the
Borrower due 2015 issued and exchanged pursuant to the Second Lien Note
Indenture and in accordance with the Exchange Offer.
 
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"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 Second Lien
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 any Cash
Management Bank.
 
"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 any
Hedge Bank.
 
"Secured Parties" means, collectively, the Administrative Agent, the Lenders,
each L/C Issuer, 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 Mortgages, the Intellectual Property Security
Agreement (and any supplement thereto), each deposit account control agreement,
each securities account control agreement 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.
 
"Senior Subordinated Notes" means the 9 3/4% unsecured subordinated notes of the
Borrower due 2014 in an aggregate original principal amount of $185,000,000
issued and sold on June 11, 2004 pursuant to the Senior Subordinated Note
Indenture.
 
"Senior Subordinated Note Indenture" means the Indenture entered into by
Holdings, the Borrower and certain of its Subsidiaries in connection with the
issuance of the Senior Subordinated Notes, together with all instruments and
other agreements entered into by Holdings, the Borrower or such Subsidiaries in
connection therewith, as amended prior to the Closing Date and as may be amended
thereafter in accordance with the terms of this Agreement.
 
"Senior Unsecured Notes" means the 8 1/8% unsecured notes of the Borrower due
2011 in an aggregate original principal amount of $150,000,000 issued and sold
on June 11, 2004 pursuant to the Senior Unsecured Note Indenture.
 
"Senior Unsecured Note Indenture" means the Indenture entered into by Holdings,
the Borrower and certain of its Subsidiaries in connection with the issuance of
the Senior Unsecured Notes, together with all instruments and other agreements
entered into by Holdings, the Borrower or such Subsidiaries in connection
therewith, as amended prior to the Closing Date and as may be amended thereafter
in accordance with the terms of this Agreement.
 
"Single Employer Plan" means any Plan that is covered by Title IV of ERISA, but
that is not a Multiemployer Plan.
 
"Solvent" and "Solvency" mean, with respect to any Person on any date of
determination, that on such date (a) the fair value of the property of such
Person is greater than the total amount of liabilities, including contingent
liabilities, of such Person, (b) the present fair salable value of the assets of
such
 
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Person is not less than the amount that will be required to pay the probable
liability of such Person on its debts as they become absolute and matured,
(c) such Person does not intend to, and does not believe that it will, incur
debts or liabilities beyond such Person's ability to pay such debts and
liabilities as they mature, (d) such Person is not engaged in business or a
transaction, and is not about to engage in business or a transaction, for which
such Person's property would constitute an unreasonably small capital, and
(e) such Person is able to pay its debts and liabilities, contingent obligations
and other commitments as they mature in the ordinary course of business. The
amount of contingent liabilities at any time shall be computed as the amount
that, in the light of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual or
matured liability.
 
"Specified Change of Control" means a "Change of Control" (or any other defined
term having a similar purpose) as defined in the Senior Subordinated Note
Indenture, in the Senior Unsecured Note Indenture, in the First Lien Note
Indenture, in the Second Lien Note Indenture, in any Permitted Refinancing Debt
Document or in any other document (other than this Agreement) evidencing
Indebtedness, in each case so long as there is at least $15,000,000 aggregate
principal amount outstanding under the respective issue.
 
"Specified Litigation" means that certain litigation commenced by the Borrower
in September 2007 against a former contractor, in which the. Borrower asserted
claims including breach of obligations under a February 2007 agreement to
perform certain engineering services, and in connection with which the Borrower
received a favorable jury verdict on May 14, 2009.
 
"Spot Rate of Exchange" means, on any day, with respect to Canadian Dollars or
Euros, as the case may be, in relation to Dollars, the arithmetic mean of
(a) the spot rate at which Dollars are offered by Fifth Third for such currency,
and (b) the spot rate at which amounts in such currency are offered by Fifth
Third for Dollars, in each case as quoted generally to customers of Fifth Third
on such day.
 
"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 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 Subsidiary or Subsidiaries of
a Loan Party.
 
"Swing Line Borrowing" means a borrowing of a Swing Line Loan pursuant to
Section 2.04.
 
"Swing Line Lender" means Fifth Third in its capacity as provider of Swing Line
Loans, or any successor swing line lender hereunder.
 
"Swing Line Loan" has the meaning specified in Section 2.04(a).
 
"Swing Line Loan Notice" means a notice of a Swing Line Borrowing pursuant to
Section 2.04(b), which, if in writing, shall be substantially in the form of
Exhibit F.
 
"Swing Line Sublimit" means an amount equal to the lesser of (a) $5,000,000 and
(b) the Facility. The Swing Line Sublimit is part of, and not in addition to,
the Facility.
 
"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
 
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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, or similar types of assessments, fees or other charges related to
taxes imposed by any Governmental Authority, including any interest, additions
to tax or penalties applicable thereto.
 
"Total Outstandings" means the aggregate Outstanding Amount of all Loans and all
L/C Obligations.
 
"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 entering into by the Loan Parties and their
applicable Subsidiaries of the First Lien Note Documents to which they are or
are intended to be a party, (c) the refinancing of certain outstanding
Indebtedness of the Borrower and its Subsidiaries and the termination of all
commitments with respect thereto 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.
 
"Unreimbursed Amount" has the meaning specified in Section 2.03(c)(i).
 
"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.
 
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:
 
(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." 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
 
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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 the Borrower and its
Subsidiaries for the fiscal year ended January 3, 2009, and the related
consolidated statements of income or operations, shareholders' equity and cash
flows for such fiscal year of the Borrower 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 or 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 requirement set forth in any Loan Document, and either the
Borrower or the Required Lenders shall so request, the Administrative Agent, 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).
 
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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).
 
1.06.        Letter of Credit Amounts. Unless otherwise specified herein, the
amount of a Letter of Credit at any time shall be deemed to be the stated amount
of such Letter of Credit in effect at such time; provided, however, that with
respect to any Letter of Credit that, by its terms or the terms of any Issuer
Document related thereto, provides for one or more automatic increases in the
stated amount thereof, the amount of such Letter of Credit shall be deemed to be
the maximum stated amount of such Letter of Credit after giving effect to all
such increases, whether or not such maximum stated amount is in effect at such
time.
 
ARTICLE II
 
THE COMMITMENTS AND CREDIT EXTENSIONS
 
2.01.        The Loans. Subject to the terms and conditions set forth herein
(including without limitation the conditions set forth in Section 4.02), each
Lender severally agrees to make loans (each such loan, a "Revolving Credit
Loan") to the Borrower in Dollars from time to time, on any Business Day during
the Availability Period, in an aggregate amount not to exceed at any time
outstanding the amount of such Lender's Commitment; provided, however, that
after giving effect to any Revolving Credit Borrowing, (a) the Total
Outstandings shall not exceed an amount equal at such time to the lesser of
(i) the Facility, and (ii) the Borrowing Base, and (b) the aggregate Outstanding
Amount of the Revolving Credit Loans of any Lender, plus such Lender's
Percentage of the Outstanding Amount of all L/C Obligations, plus such Lender's
Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed an
amount equal at such time to such Lender's Commitment. Within the limits of each
Lender's Commitment, and subject to the other terms and conditions hereof, the
Borrower may borrow under this Section 2.01, prepay under Section 2.05, and
reborrow under this Section 2.01. Revolving Credit Loans made to the Borrower
may be Base Rate Loans or Eurodollar Rate Loans, as further provided herein.
 
2.02.        Borrowings, Conversions and Continuations of Loans.
 
(a)           Each Revolving Credit Borrowing, each conversion of Revolving
Credit 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 11:00 a.m. (i) three
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) on the requested date of any Borrowing of
Base Rate Loans. Each telephonic notice by the 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
$3,000,000 or a whole multiple of $500,000 in excess thereof. Except as provided
in Sections 2.03(c) and 2.04(c), 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 Revolving Credit
Borrowing, a conversion of Revolving Credit 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 Revolving Credit Loans to be
borrowed, converted or continued, (iv) the Type of Revolving Credit Loans to be
borrowed or to which existing Revolving Credit Loans are to be converted, and
(v) if applicable, the duration of the
 
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Interest Period with respect thereto. If the Borrower fails to specify a Type of
Revolving Credit Loan in a Committed Loan Notice or if the Borrower fails to
give a timely notice requesting a conversion or continuation, then the
applicable Revolving Credit 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) a Swing Line Loan
may not be converted to a Eurodollar Rate Loan and (y) no Revolving Credit Loan
shall be made as or converted into a Eurodollar Rate Loan with an Interest
Period of greater than one (1) month until the earlier to occur of
(I) completion of the primary syndication of the Facility, as determined by the
Administrative Agent, and (II) the date that is 90 days following the Closing
Date.
 
(b)           Following receipt of a Committed Loan Notice, the Administrative
Agent shall promptly notify each Lender of the amount of its Percentage of the
applicable Revolving Credit 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 Revolving Credit
Loans, in each case as described in Section 2.02(a). In the case of each
Revolving Credit Borrowing, each Appropriate Lender shall make the amount of its
Revolving Credit Loan available to the Administrative Agent in immediately
available funds at the Administrative Agent's Office not later than 1:00 p.m. on
the Business Day specified in the applicable Committed Loan Notice. Upon
satisfaction of the applicable conditions set forth in Section 4.02 (and, if
such Borrowing is the initial Credit Extension, Section 4.01), the
Administrative Agent shall make all funds so received available to the Borrower
either by (i) crediting the account of the Borrower on the books of Fifth Third
with the amount of such funds or (ii) wire transfer of such funds, in each case
in accordance with instructions provided to (and reasonably acceptable to) the
Administrative Agent by the Borrower; provided, however, that if, on the date a
Committed Loan Notice with respect to a Revolving Credit Borrowing is given by
the Borrower, there are L/C Borrowings outstanding, then the proceeds of such
Revolving Credit Borrowing, first, shall be applied to the payment in full of
any such L/C Borrowings, and second, shall be made available to the Borrower as
provided above.
 
(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 an
Event of 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, if the Administrative Agent or the Required Lenders shall have elected
that the restriction set forth in this sentence shall apply.
 
(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 Fifth Third's prime rate used in
determining the Base Rate promptly following the public announcement of such
change.
 
(e)           After giving effect to all Revolving Credit Borrowings, all
conversions of Revolving Credit
 
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Loans from one Type to the other, and all continuations of Revolving Credit
Loans as the same Type, there shall not be more than ten (10) Interest Periods
in effect in respect of the Revolving Credit Facility.
 
2.03.        Letters of Credit; Auto-Extension Letters of Credit.
 
(a)           The Letter of Credit Commitment.
 
(i)            Subject to the terms and conditions set forth herein (including
without limitation the conditions set forth in Section 4.02), (A) each L/C
Issuer agrees, in reliance upon the agreements of the Lenders set forth in this
Section 2.03, (1) from time to time on any Business Day during the period from
the Closing Date until the Letter of Credit Expiration Date, to issue Letters of
Credit denominated in Dollars for the account of the Borrower or one or more of
its Subsidiaries, and to amend or extend such Letters of Credit in accordance
with Section 2.03(b), and (2) to honor drawings under such Letters of Credit;
and (B) the Lenders severally agree to participate in Letters of Credit issued
for the account of the Borrower or one or more of its Subsidiaries and any
drawings thereunder; provided that after giving effect to any L/C Credit
Extension with respect to any Letter of Credit, (I) the Total Outstandings shall
not exceed an amount equal to the lesser at such time of (x) the Facility and
(y) the Borrowing Base, and (II) the aggregate Outstanding Amount of the
Revolving Credit Loans of any Lender, plus such Lender's Percentage of the
Outstanding Amount of all L/C Obligations, plus such Lender's Percentage of the
Outstanding Amount of all Swing Line Loans shall not exceed such Lender's
Commitment, and (z) the Outstanding Amount of the L/C Obligations shall not
exceed the Letter of Credit Sublimit. Each request by the Borrower for the
issuance or amendment of a Letter of Credit shall be deemed to be a
representation by the Borrower that the L/C Credit Extension so requested
complies with the conditions set forth in the proviso to the preceding sentence.
Within the foregoing limits, and subject to the terms and conditions hereof, the
Borrower's ability to obtain Letters of Credit shall be fully revolving, and
accordingly the Borrower may, during the foregoing period, obtain Letters of
Credit to replace Letters of Credit that have expired or that have been drawn
upon and reimbursed.
 
(ii)           No L/C Issuer shall issue any Letter of Credit if:
 
(A)          the expiry date of such requested Letter of Credit would occur more
than twelve months after the date of issuance, unless the Required Lenders have
approved such expiry date; or
 
(B)           the expiry date of such requested Letter of Credit would occur
after the Letter of Credit Expiration Date, unless all the Lenders have approved
such expiry date.
 
(iii)          If the Borrower so requests in any applicable Letter of Credit
Application, the applicable L/C Issuer may, in its sole and absolute discretion,
agree to issue a Letter of Credit that has automatic extension provisions (each,
an "Auto-Extension Letter of Credit"); provided that any such Auto-Extension
Letter of Credit must permit such L/C Issuer to prevent any such extension at
least once in each twelve-month period (commencing with the date of issuance of
such Letter of Credit) by giving prior notice to the beneficiary thereof not
later than a day (the "Non-Extension Notice Date") in each such twelve-month
period to be agreed upon at the time such Letter of Credit is issued. Unless
otherwise directed by an L/C Issuer, the Borrower shall not be
 
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required to make a specific request to such L/C Issuer for any such extension.
Once an Auto-Extension Letter of Credit has been issued, the Lenders shall be
deemed to have authorized (but may not require) the L/C Issuer issuing such
Letter of Credit to permit the extension of such Letter of Credit at any time to
an expiry date not later than the Letter of Credit Expiration Date; provided,
however, that such L/C Issuer shall not permit any such extension if (A) such
L/C Issuer has determined that it would not be permitted, or would have no
obligation at such time to issue such Letter of Credit in its revised form (as
extended) under the terms hereof (by reason of the provisions of clause (ii) or
(iii) of Section 2.03(a) or otherwise), or (B) it has received notice (which may
be by telephone or in writing) on or before the day that is seven Business Days
before the Non-Extension Notice Date (1) from the Administrative Agent that the
Lenders have elected not to permit such extension or (2) from the Administrative
Agent, any Lender or the Borrower that one or more of the applicable conditions
specified in Section 4.02 is not then satisfied, and in each such case directing
such L/C Issuer not to permit such extension.
 
(iv)          No L/C Issuer shall be under any obligation to issue any Letter of
Credit if:
 
(A)          any order, judgment or decree of any Governmental Authority or
arbitrator (in the case of a binding arbitration proceeding) shall by its terms
purport to enjoin or restrain such L/C Issuer from issuing such Letter of
Credit, or any Law applicable to such L/C Issuer or any request or directive
(whether or not having the force of law) from any Governmental Authority with
jurisdiction over such L/C Issuer shall prohibit, or request that such L/C
Issuer refrain from, the issuance of letters of credit generally or such Letter
of Credit in particular or shall impose upon such L/C Issuer with respect to
such Letter of Credit any restriction, reserve or capital requirement (for which
such L/C Issuer is not otherwise compensated hereunder) not in effect on the
Closing Date, or shall impose upon such L/C Issuer any unreimbursed loss, cost
or expense which was not applicable on the Closing Date and which such L/C
Issuer in good faith deems material to it;
 
(B)           the issuance of such Letter of Credit would violate one or more
policies of such L/C Issuer applicable to letters of credit generally;
 
(C)           except as otherwise agreed by the Administrative Agent and such
L/C Issuer, such Letter of Credit is in an initial stated amount less than
$250,000;
 
(D)          except as otherwise agreed by the Administrative Agent and such L/C
Issuer, such Letter of Credit contains any provisions for automatic
reinstatement of the stated amount after any drawing thereunder; or
 
(E)           a default of any Lender's obligations to fund under
Section 2.03(c) exists or any Lender is at such time a Defaulting Lender or an
Impacted Lender hereunder, unless such L/C Issuer has entered into Cash
Collateral or other arrangements satisfactory to such L/C Issuer with the
Borrower or such Lender to eliminate such L/C Issuer's risk with respect to such
Lender.
 
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(v)           No L/C Issuer shall amend any Letter of Credit if such L/C Issuer
would not be permitted at such time to issue such Letter of Credit in its
amended form under the terms hereof.
 
(vi)          No L/C Issuer shall be under any obligation to amend any Letter of
Credit if (A) such L/C Issuer would have no obligation at such time to issue
such Letter of Credit in its amended form under the terms hereof, or (B) the
beneficiary of such Letter of Credit does not accept the proposed amendment to
such Letter of Credit.
 
(vii)         No L/C Issuer shall act on behalf of the Lenders with respect to
any Letters of Credit issued by it and the documents associated therewith, and
each L/C Issuer shall have all of the benefits and immunities (A) provided to
the Administrative Agent in Article IX with respect to any acts taken or
omissions suffered by such L/C Issuer in connection with Letters of Credit
issued by it or proposed to be issued by it and Issuer Documents pertaining to
such Letters of Credit as fully as if the term "Administrative Agent" as used in
Article IX included such L/C Issuer with respect to such acts or omissions, and
(B) as additionally provided herein with respect to such L/C Issuer.
 
(b)           Procedures for Issuance and Amendment of Letters of Credit.
 
(i)            Each Letter of Credit shall be issued or amended, as the case may
be, upon the request of the Borrower delivered to the applicable L/C Issuer
(with a copy to the Administrative Agent) in the form of a Letter of Credit
Application, appropriately completed and signed by a Responsible Officer of the
Borrower. Such Letter of Credit Application must be received by such L/C Issuer
and the Administrative Agent not later than 11:00 a.m. at least three Business
Days (or such later date and time as the Administrative Agent and such L/C
Issuer may agree in a particular instance in their sole discretion) prior to the
proposed issuance date or date of amendment, as the case may be. In the case of
a request for an initial issuance of a Letter of Credit by an L/C Issuer, such
Letter of Credit Application shall specify in form and detail satisfactory to
such L/C Issuer: (A) the proposed issuance date of the requested Letter of
Credit (which shall be a Business Day); (B) the amount thereof; (C) the expiry
date thereof; (D) the name and address of the beneficiary thereof; (E) the
documents to be presented by such beneficiary in case of any drawing thereunder;
(F) the full text of any certificate to be presented by such beneficiary in case
of any drawing thereunder; (G) the purpose and nature of the requested Letter of
Credit; and (H) such other matters as such L/C Issuer may require. In the case
of a request for an amendment of any outstanding Letter of Credit issued by an
Issuing Lender, such Letter of Credit Application shall specify in form and
detail satisfactory to such L/C Issuer (1) the Letter of Credit to be amended;
(2) the proposed date of amendment thereof (which shall be a Business Day);
(3) the nature of the proposed amendment; and (4) such other matters as such L/C
Issuer may require. Additionally, the Borrower shall furnish to the applicable
L/C Issuer and the Administrative Agent such other documents and information
pertaining to such requested Letter of Credit issuance or amendment, including
any Issuer Documents, as such L/C Issuer or the Administrative Agent may
require.
 
(ii)           Promptly after receipt of any Letter of Credit Application, the
applicable L/C Issuer will confirm with the Administrative Agent (by telephone
or in writing) that the Administrative Agent has received a copy of such Letter
of Credit Application from the Borrower and, if not, such L/C Issuer will
provide the Administrative Agent with a
 
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copy thereof. Unless the applicable L/C Issuer has received written notice from
any Lender, the Administrative Agent or any Loan Party, at least one Business
Day prior to the requested date of issuance or amendment of the applicable
Letter of Credit, that one or more applicable conditions contained in Article IV
shall not then be satisfied, then, subject to the terms and conditions hereof,
such L/C Issuer shall, on the requested date, issue a Letter of Credit for the
account of the Borrower or enter into the applicable amendment, as the case may
be, in each case in accordance with such L/C Issuer's usual and customary
business practices. Immediately upon the issuance of each Letter of Credit, each
Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to,
purchase from the applicable L/C Issuer a risk participation in such Letter of
Credit in an amount equal to the product of such Lender's Percentage times the
amount of such Letter of Credit.
 
(iii)          Promptly after its delivery of any Letter of Credit or any
amendment to a Letter of Credit to an advising bank with respect thereto or to
the beneficiary thereof, each L/C Issuer will also deliver to the Borrower and
the Administrative Agent a true and complete copy of such Letter of Credit or
amendment.
 
(c)           Drawings and Reimbursements; Funding of Participations.
 
(i)            Upon receipt from the beneficiary of any Letter of Credit of any
notice of a drawing under a Letter of Credit issued by any L/C Issuer, such L/C
Issuer shall notify the Borrower and the Administrative Agent thereof. Not later
than 11:00 a.m. on the date of any payment by any L/C Issuer under a Letter of
Credit (each such date, an "Honor Date"), the Borrower shall reimburse such L/C
Issuer through the Administrative Agent in an amount equal to the amount of such
drawing, which reimbursement may be in the form of direct cash reimbursement or
in the form of a Base Rate Loan as set forth below. If the Borrower fails to
reimburse such L/C Issuer in the form of a direct cash reimbursement by such
time, the Administrative Agent shall promptly notify each Lender of the Honor
Date, the amount of the unreimbursed drawing (the "Unreimbursed Amount"), and
the amount of such Lender's Percentage thereof. In such event, the Borrower
shall be deemed to have requested a Revolving Credit Borrowing of Base Rate
Loans to be disbursed on the Honor Date in an amount equal to the Unreimbursed
Amount, without regard to the minimum, multiples or notice period specified in
Section 2.02 for the principal amount of Base Rate Loans, but subject to the
amount of the unutilized portion of the Commitments and the conditions set forth
in Section 4.02 (other than the delivery of a Committed Loan Notice, and it
being understood that any failure of the Borrower to directly pay unreimbursed
drawings on the Honor Date in cash and without the need for a Base Rate Loan
shall not constitute a Default in determining whether the conditions to such
Revolving Credit Borrowing are satisfied). Any notice given by any L/C Issuer or
the Administrative Agent pursuant to this Section 2.03(c)(i) may be given by
telephone if immediately confirmed in writing; provided that the lack of such an
immediate confirmation shall not affect the conclusiveness or binding effect of
such notice.
 
(ii)           Each Lender shall upon any notice pursuant to Section
2.03(c)(i) make funds available to the Administrative Agent for the account of
the applicable L/C Issuer at the Administrative Agent's Office in an amount
equal to its Percentage of the Unreimbursed Amount not later than 1:00 p.m. on
the Business Day specified in such notice by the Administrative Agent,
whereupon, subject to the provisions of Section 2.03(c)(iii), each Lender that
so makes funds available shall be deemed to have made a
 
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Base Rate Loan to the Borrower in such amount. The Administrative Agent shall
remit the funds so received to such L/C Issuer.
 
(iii)          With respect to any Unreimbursed Amount that is not fully
refinanced by a Revolving Credit Borrowing of Base Rate Loans because the
conditions set forth in Section 4.02 cannot be satisfied or for any other
reason, the Borrower shall be deemed to have incurred from the applicable L/C
Issuer an L/C Borrowing in the amount of the Unreimbursed Amount that is not so
refinanced, which L/C Borrowing shall be due and payable on demand (together
with interest) and shall bear interest at the interest rate specified in
Section 2.08(b). In such event, each Lender's payment to the Administrative
Agent for the account of such L/C Issuer pursuant to Section 2.03(c)(ii) shall
be deemed payment in respect of its participation in such L/C Borrowing and
shall constitute an L/C Advance from such Lender in satisfaction of its
participation obligation under this Section 2.03.
 
(iv)          Until each Lender funds its Revolving Credit Loan or L/C Advance
pursuant to this Section 2.03(c) to reimburse an L/C Issuer for any amount drawn
under any Letter of Credit issued by such L/C Issuer, interest in respect of
such Lender's Percentage of such amount shall be solely for the account of such
L/C Issuer.
 
(v)           Each Lender's obligation to make Revolving Credit Loans or L/C
Advances to reimburse any L/C Issuer for amounts drawn under Letters of Credit
issued by such L/C Issuer, as contemplated by this Section 2.03(c), shall be
absolute and unconditional and shall not be affected by any circumstance,
including (A) any setoff, counterclaim, recoupment, defense or other right which
such Lender may have against such L/C Issuer, the Borrower or any other Person
for any reason whatsoever; (B) the occurrence or continuance of a Default, or
(C) any other occurrence, event or condition, whether or not similar to any of
the foregoing; provided, however, that each Lender's obligation to make
Revolving Credit Loans pursuant to this Section 2.03(c) is subject to the
conditions set forth in Section 4.02 (other than delivery by the Borrower of a
Committed Loan Notice ). No such making of an L/C Advance shall relieve or
otherwise impair the obligation of the Borrower to reimburse any L/C Issuer for
the amount of any payment made by such L/C Issuer under any Letter of Credit,
together with interest as provided herein.
 
(vi)          If any Lender fails to make available to the Administrative Agent
for the account of any L/C Issuer any amount required to be paid by such Lender
pursuant to the foregoing provisions of this Section 2.03(c) by the time
specified in Section 2.03(c)(ii), such L/C Issuer shall be entitled to recover
from such Lender (acting through the Administrative Agent), on demand, such
amount with interest thereon for the period from the date such payment is
required to the date on which such payment is immediately available to such L/C
Issuer at a rate per annum equal to the greater of the Federal Funds Rate and a
rate determined by such L/C Issuer in accordance with banking industry rules on
interbank compensation, plus any administrative, processing or similar fees
customarily charged by such L/C Issuer in connection with the foregoing. If such
Lender pays such amount (with interest and fees as aforesaid), the amount so
paid (exclusive of interest and fees) shall constitute such Lender's Revolving
Credit Loan included in the relevant Borrowing or L/C Advance in respect of the
relevant L/C Borrowing, as the case may be. A certificate of an L/C Issuer
submitted to any Lender (through the Administrative Agent) with respect to any
amounts owing under this Section 2.03(c)(vi) shall be conclusive absent manifest
error.
 
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(d)           Repayment of Participations.
 
(i)            At any time after any L/C Issuer has made a payment under any
Letter of Credit and has received from any Lender such Lender's L/C Advance in
respect of such payment in accordance with Section 2.03(c), if the
Administrative Agent receives for the account of such L/C Issuer any payment in
respect of the related Unreimbursed Amount or interest thereon (whether directly
from the Borrower or otherwise, including proceeds of Cash Collateral applied
thereto by the Administrative Agent), the Administrative Agent will distribute
to such Lender its Percentage thereof in the same funds as those received by the
Administrative Agent.
 
(ii)           If any payment received by the Administrative Agent for the
account of any L/C Issuer pursuant to Section 2.03(c)(i) is required to be
returned under any of the circumstances described in Section 10.05 (including
pursuant to any settlement entered into by such L/C Issuer in its discretion),
each Lender shall pay to the Administrative Agent for the account of such L/C
Issuer its Percentage thereof on demand of the Administrative Agent, plus
interest thereon from the date of such demand to the date such amount is
returned by such Lender, at a rate per annum equal to the Federal Funds Rate
from time to time in effect. The obligations of the Lenders under this clause
shall survive the payment in full of the Obligations and the termination of this
Agreement.
 
(e)           Obligations Absolute. The obligation of the Borrower to reimburse
each L/C Issuer for each drawing under each Letter of Credit issued by such L/C
Issuer and to repay each L/C Borrowing shall be absolute, unconditional and
irrevocable, and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances, including the following:
 
(i)            any lack of validity or enforceability of such Letter of Credit,
this Agreement, or any other Loan Document;
 
(ii)           the existence of any claim, counterclaim, setoff, defense or
other right that the Borrower or any Subsidiary may have at any time against any
beneficiary or any transferee of such Letter of Credit (or any Person for whom
any such beneficiary or any such transferee may be acting), such L/C Issuer or
any other Person, whether in connection with this Agreement, the transactions
contemplated hereby or by such Letter of Credit or any agreement or instrument
relating thereto, or any unrelated transaction;
 
(iii)          any draft, demand, certificate or other document presented under
such Letter of Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect; or any loss or delay in the transmission or otherwise of any document
required in order to make a drawing under such Letter of Credit;
 
(iv)          any payment by such L/C Issuer under such Letter of Credit against
presentation of a draft or certificate that does not strictly comply with the
terms of such Letter of Credit; or any payment made by such L/C Issuer under
such Letter of Credit to any Person purporting to be a trustee in bankruptcy,
debtor-in-possession, assignee for the benefit of creditors, liquidator,
receiver or other representative of or successor to any beneficiary or any
transferee of such Letter of Credit, including any arising in connection with
any proceeding under any Debtor Relief Law; or
 
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(v)           any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing, including any other circumstance that might
otherwise constitute a defense available to, or a discharge of, the Borrower or
any of its Subsidiaries.
 
The Borrower shall promptly examine a copy of each Letter of Credit and each
amendment thereto that is delivered to it and, in the event of any claim of
noncompliance with the Borrower's instructions or other irregularity, the
Borrower will promptly (and in any event prior to the issuance and/or
effectiveness of such Letter of Credit or amendment) notify the applicable L/C
Issuer. The Borrower shall be conclusively deemed to have waived any such claim
against such L/C Issuer and its correspondents unless such notice is given as
aforesaid.
 
(f)            Role of L/C Issuers. Each Lender and the Borrower agree that, in
paying any drawing under a Letter of Credit issued by any L/C Issuer, such L/C
Issuer shall not have any responsibility to obtain any document (other than any
sight draft, certificates and documents expressly required by such Letter of
Credit) or to ascertain or inquire as to the validity or accuracy of any such
document or the authority of the Person executing or delivering any such
document. None of any L/C Issuer, the Administrative Agent, any of their
respective Related Parties nor any correspondent, participant or assignee of any
L/C Issuer shall be liable to any Lender for (i) any action taken or omitted in
connection herewith at the request or with the approval of the Lenders or the
Required Lenders, as applicable; (ii) any action taken or omitted in the absence
of gross negligence or willful misconduct; or (iii) the due execution,
effectiveness, validity or enforceability of any document or instrument related
to any Letter of Credit or Issuer Document. The Borrower hereby assumes all
risks of the acts or omissions of any beneficiary or transferee with respect to
its use of any Letter of Credit; provided, however, that this assumption is not
intended to, and shall not, preclude the Borrower's pursuing such rights and
remedies as it may have against the beneficiary or transferee at law or under
any other agreement. None of any L/C Issuer, the Administrative Agent, any of
their respective Related Parties or any correspondent, participant or assignee
of any L/C Issuer shall be liable or responsible for any of the matters
described in clauses (i) through (v) of Section 2.03(e); provided, however, that
anything in such clauses to the contrary notwithstanding, the Borrower may have
a claim against an L/C Issuer, and an L/C Issuer may be liable to the Borrower,
to the extent, but only to the extent, of any direct, as opposed to
consequential or exemplary, damages suffered by the Borrower which the Borrower
proves were caused by such L/C Issuer's willful misconduct or gross negligence
or such L/C Issuer's willful failure to pay under any Letter of Credit after the
presentation to it by the beneficiary of a sight draft and certificate(s)
strictly complying with the terms and conditions of a Letter of Credit. In
furtherance and not in limitation of the foregoing, each L/C Issuer may accept
documents that appear on their face to be in order, without responsibility for
further investigation, regardless of any notice or information to the contrary,
and no L/C Issuer shall be responsible for the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or assign a
Letter of Credit or the rights or benefits thereunder or proceeds thereof, in
whole or in part, which may prove to be invalid or ineffective for any reason.
 
(g)           Cash Collateral. Upon the request of the Administrative Agent,
(i) if any L/C Issuer has honored any full or partial drawing request under any
Letter of Credit and such drawing has resulted in an L/C Borrowing, or (ii) if,
as of the Maturity Date, any L/C Obligation for any reason remains outstanding,
the Borrower shall, in each case, immediately Cash Collateralize the then
Outstanding Amount of all L/C Obligations. Sections 2.05 and 8.02(c) set forth
certain additional requirements to deliver Cash Collateral hereunder. For
purposes of this Section 2.03, Section 2.05 and Section 8.02(c), "Cash
Collateralize" means to pledge and deposit with or deliver to the Administrative
Agent, for the benefit of the L/C Issuers and the Lenders, as
 
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collateral for the L/C Obligations, cash or deposit account balances pursuant to
documentation in form and substance satisfactory to the Administrative Agent and
each L/C Issuer (which documents are hereby consented to by the Lenders).
Derivatives of such term have corresponding meanings. The Borrower hereby grants
to the Administrative Agent, for the benefit of the L/C Issuers and the Lenders,
a security interest in all such cash, deposit accounts and all balances therein
and all proceeds of the foregoing. Cash Collateral shall be maintained in
blocked, non-interest bearing deposit accounts at Fifth Third. If at any time
the Administrative Agent determines that any funds held as Cash Collateral are
subject to any right or claim of any Person other than the Administrative Agent
or that the total amount of such funds is less than the aggregate Outstanding
Amount of all L/C Obligations, the Borrower will, forthwith upon demand by the
Administrative Agent, pay to the Administrative Agent, as additional funds to be
deposited as Cash Collateral, an amount equal to the excess of (x) such
aggregate Outstanding Amount over (y) the total amount of funds, if any, then
held as Cash Collateral that the Administrative Agent determines to be free and
clear of any such right and claim. Upon the drawing of any Letter of Credit for
which funds are on deposit as Cash Collateral, such funds shall be applied, to
the extent permitted under applicable Laws, to reimburse the applicable L/C
Issuer.
 
(h)           Applicability of ISP. Unless otherwise expressly agreed by an L/C
Issuer and the Borrower when a Letter of Credit is issued by such L/C Issuer,
the rules of the ISP shall apply to each standby Letter of Credit.
 
(i)            Letter of Credit Fees. The Borrower shall pay to the
Administrative Agent for the account of each Lender in accordance with its
Percentage a Letter of Credit fee (the "Letter of Credit Fee") for each Letter
of Credit equal to the Applicable Rate times the daily amount available to be
drawn under such Letter of Credit. For purposes of computing the daily amount
available to be drawn under any Letter of Credit, the amount of such Letter of
Credit shall be determined in accordance with Section 1.06. Letter of Credit
Fees shall be (i) due and payable on the first Business Day of each April, July,
October and January, commencing with the first such date to occur after the
issuance of such Letter of Credit, on the Letter of Credit Expiration Date and
thereafter on demand and (ii) computed on a quarterly basis in arrears. If there
is any change in the Applicable Rate during any quarter, the daily amount
available to be drawn under each Letter of Credit shall be computed and
multiplied by the Applicable Rate separately for each period during such quarter
that such Applicable Rate was in effect. Notwithstanding anything to the
contrary contained herein, upon the request of the Required Lenders, while any
Event of Default exists, all overdue Letter of Credit Fees shall accrue interest
thereon at the interest rate specified in Section 2.08(b).
 
(j)            Fronting Fee and Documentary and Processing Charges Payable to
L/C Issuer. The Borrower shall pay directly to each L/C Issuer for its own
account a fronting fee with respect to each Letter of Credit issued by such L/C
Issuer, at the rate per annum of 0.125%, computed on the daily amount available
to be drawn under such Letter of Credit on a quarterly basis in arrears. Such
fronting fee shall be due and payable on the first Business Day after the end of
each March, June, September and December in respect of the most recently-ended
quarterly period (or portion thereof, in the case of the first payment),
commencing with the first such date to occur after the issuance of such Letter
of Credit, on the Letter of Credit Expiration Date and thereafter on demand. For
purposes of computing the daily amount available to be drawn under any Letter of
Credit, the amount of such Letter of Credit shall be determined in accordance
with Section 1.06. In addition, the Borrower shall pay directly to each L/C
Issuer for its own account the customary issuance, presentation, amendment and
other processing fees, and other standard costs and charges, of such L/C Issuer
relating to letters of credit as from time to time in effect. Such
 
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customary fees and standard costs and charges are due and payable on demand and
are nonrefundable.
 
(k)           Conflict with Issuer Documents. In the event of any conflict
between the terms hereof and the terms of any Issuer Document, the terms hereof
shall control.
 
2.04.        Swing Line Loans.
 
(a)           The Swing Line. Subject to the terms and conditions set forth
herein (including without limitation the conditions set forth in Section 4.02),
the Swing Line Lender may, in its discretion and in reliance upon the agreements
of the other Lenders set forth in this Section 2.04, make loans (each such loan,
a "Swing Line Loan") to the Borrower from time to time on any Business Day
during the Availability Period in an aggregate amount not to exceed at any time
outstanding the amount of the Swing Line Sublimit, notwithstanding the fact that
such Swing Line Loans, when aggregated with the Percentage of the Outstanding
Amount of Revolving Credit Loans and L/C Obligations of the Lender acting as
Swing Line Lender, may exceed the amount of such Lender's Commitment; provided,
however, that after giving effect to any Swing Line Loan, (i) the Total
Outstandings shall not exceed an amount equal to the lesser at such time of
(x) the Facility and (y) the Borrowing Base, and (ii) the aggregate Outstanding
Amount of the Revolving Credit Loans of any Lender at such time, plus such
Lender's Percentage of the Outstanding Amount of all L/C Obligations at such
time, plus such Lender's Percentage of the Outstanding Amount of all Swing Line
Loans at such time shall not exceed such Lender's Commitment, and provided
further that the Borrower shall not use the proceeds of any Swing Line Loan to
refinance any outstanding Swing Line Loan. Within the foregoing limits, and
subject to the other terms and conditions hereof, the Borrower may borrow under
this Section 2.04, prepay under Section 2.05, and reborrow under this
Section 2.04. Each Swing Line Loan shall bear interest only at a rate based on
the Base Rate. Immediately upon the making of a Swing Line Loan, each Lender
shall be deemed to, and hereby irrevocably and unconditionally agrees to,
purchase from the Swing Line Lender a risk participation in such Swing Line Loan
in an amount equal to the product of such Lender's Percentage times the amount
of such Swing Line Loan.
 
(b)           Borrowing Procedures. Each Swing Line Borrowing shall be made upon
the Borrower's irrevocable notice to the Swing Line Lender and the
Administrative Agent, which may be given by telephone. Each such notice must be
received by the Swing Line Lender and the Administrative Agent not later than
1:00 p.m. on the requested borrowing date, and shall specify (i) the amount to
be borrowed, which shall be a minimum of $250,000 and in integral multiples of
$50,000 in excess thereof and (ii) the requested borrowing date, which shall be
a Business Day. Each such telephonic notice must be confirmed promptly by
delivery to the Swing Line Lender and the Administrative Agent of a written
Swing Line Loan Notice, appropriately completed and signed by a Responsible
Officer of the Borrower. Promptly after receipt by the Swing Line Lender of any
telephonic Swing Line Loan Notice, the Swing Line Lender will confirm with the
Administrative Agent (by telephone or in writing) that the Administrative Agent
has also received such Swing Line Loan Notice and, if not, the Swing Line Lender
will notify the Administrative Agent (by telephone or in writing) of the
contents thereof. Unless the Swing Line Lender has received notice (by telephone
or in writing) from the Administrative Agent (including at the request of any
Lender) prior to 2:00 p.m. on the date of the proposed Swing Line Borrowing
(A) directing the Swing Line Lender not to make such Swing Line Loan as a result
of the limitations set forth in the first proviso to the first sentence of
Section 2.04(a), or (B) that one or more of the applicable conditions specified
in Article IV is not then satisfied, then, subject to the terms and conditions
hereof, the Swing Line Lender will, not later than 3:00 p.m. on the borrowing
date
 
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specified in such Swing Line Loan Notice, make the amount of its Swing Line Loan
available to the Borrower at its office by crediting the account of the Borrower
on the books of the Swing Line Lender in immediately available funds.
 
(c)           Refinancing of Swing Line Loans.
 
(i)            The Swing Line Lender at any time in its sole and absolute
discretion may request, on behalf of the Borrower (which hereby irrevocably
authorizes the Swing Line Lender to so request on its behalf), that each Lender
make a Base Rate Loan in an amount equal to such Lender's Percentage of the
amount of Swing Line Loans then outstanding; provided, that the Swing Line
Lender shall be deemed to have made such a request as of the Wednesday of each
week (provided, further, that if such day is not a Business Day, such request
shall be deemed to have been made as of the next succeeding Business Day) unless
the Swing Line Lender shall otherwise notify the other Lenders. Such request
shall be made in writing (which written request shall be deemed to be a
Committed Loan Notice for purposes hereof) and in accordance with the
requirements of Section 2.02, without regard to the minimum and multiples
specified therein for the principal amount of Base Rate Loans, but subject to
the unutilized portion of the Facility and the conditions set forth in
Section 4.02. The Swing Line Lender shall furnish the Borrower with a copy of
the applicable Committed Loan Notice promptly after delivering such notice to
the Administrative Agent. Each Lender shall make an amount equal to its
Percentage of the amount specified in such Committed Loan Notice available to
the Administrative Agent in immediately available funds for the account of the
Swing Line Lender at the Administrative Agent's Office not later than 1:00 p.m.
on the day specified in such Committed Loan Notice, whereupon, subject to
Section 2.04(c)(ii), each Lender that so makes funds available shall be deemed
to have made a Base Rate Loan to the Borrower in such amount. The Administrative
Agent shall remit the funds so received to the Swing Line Lender.
 
(ii)           If for any reason any Swing Line Loan cannot be refinanced by
such Borrowing in accordance with Section 2.04(c)(i), the request for Base Rate
Loans submitted by the Swing Line Lender as set forth herein shall be deemed to
be a request by the Swing Line Lender that each of the Lenders fund its risk
participation in the relevant Swing Line Loan and each Lender's payment to the
Administrative Agent for the account of the Swing Line Lender pursuant to
Section 2.04(c)(i) shall be deemed payment in respect of such participation.
 
(iii)          If any Lender fails to make available to the Administrative Agent
for the account of the Swing Line Lender any amount required to be paid by such
Lender pursuant to the foregoing provisions of this Section 2.04(c) by the time
specified in Section 2.04(c)(i), the Swing Line Lender shall be entitled to
recover from such Lender (acting through the Administrative Agent), on demand,
such amount with interest thereon for the period from the date such payment is
required to the date on which such payment is immediately available to the Swing
Line Lender at a rate per annum equal to the greater of the Federal Funds Rate
and a rate determined by the Swing Line Lender in accordance with banking
industry rules on interbank compensation, plus any administrative, processing or
similar fees customarily charged by the Swing Line Lender in connection with the
foregoing. If such Lender pays such amount (with interest and fees as
aforesaid), the amount so paid (exclusive of interest and fees) shall constitute
such Lender's Revolving Credit Loan included in the relevant Borrowing or funded
participation in the relevant Swing Line Loan, as the case may be. A certificate
of the
 
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Swing Line Lender submitted to any Lender (through the Administrative Agent)
with respect to any amounts owing under this clause (iii) shall be conclusive
absent manifest error.
 
(iv)          Each Lender's obligation to make Revolving Credit Loans or to
purchase and fund risk participations in Swing Line Loans pursuant to this
Section 2.04(c) shall be absolute and unconditional and shall not be affected by
any circumstance, including (A) any setoff, counterclaim, recoupment, defense or
other right which such Lender may have against the Swing Line Lender, the
Borrower or any other Person for any reason whatsoever, (B) the occurrence or
continuance of a Default, or (C) any other occurrence, event or condition,
whether or not similar to any of the foregoing; provided, however, that each
Lender's obligation to make Revolving Credit Loans pursuant to this
Section 2.04(c) is subject to the conditions set forth in Section 4.02. No such
funding of risk participations shall relieve or otherwise impair the obligation
of the Borrower to repay Swing Line Loans, together with interest as provided
herein.
 
(d)           Repayment of Participations.
 
(i)            At any time after any Lender has purchased and funded a risk
participation in a Swing Line Loan, if the Swing Line Lender receives any
payment on account of such Swing Line Loan, the Swing Line Lender will
distribute to such Lender its Percentage thereof in the same funds as those
received by the Swing Line Lender.
 
(ii)           If any payment received by the Swing Line Lender in respect of
principal or interest on any Swing Line Loan is required to be returned by the
Swing Line Lender under any of the circumstances described in Section 10.05
(including pursuant to any settlement entered into by the Swing Line Lender in
its discretion), each Lender shall pay to the Swing Line Lender its Percentage
thereof on demand of the Administrative Agent, plus interest thereon from the
date of such demand to the date such amount is returned, at a rate per annum
equal to the Federal Funds Rate. The Administrative Agent will make such demand
upon the request of the Swing Line Lender. The obligations of the Lenders under
this clause shall survive the payment in full of the Obligations and the
termination of this Agreement.
 
(e)           Interest for Account of Swing Line Lender. The Swing Line Lender
shall be responsible for invoicing the Borrower for interest on the Swing Line
Loans. Until each Lender funds its Base Rate Loan or risk participation pursuant
to this Section 2.04 to refinance such Lender's Percentage of any Swing Line
Loan, interest in respect of such Percentage shall be solely for the account of
the Swing Line Lender.
 
(f)            Payments Directly to Swing Line Lender.  The Borrower shall make
all payments of principal and interest in respect of the Swing Line Loans
directly to the Swing Line Lender.
 
2.05.        Prepayments.
 
(a)           Optional.
 
(i)            Subject to the last sentence of this Section 2.05(a)(i), the
Borrower may, upon notice from the Borrower to the Administrative Agent, at any
time or from time to time voluntarily prepay Revolving Loans in whole or in part
without premium or penalty; provided that (A) such notice must be received by
the Administrative Agent not later than
 
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11:00 a.m. (1) three Business Days prior to any date of prepayment of Eurodollar
Rate Loans, and (2) on the date of prepayment of Base Rate Loans; (B) any
prepayment of Eurodollar Rate Loans shall be in a principal amount of at least
$3,000,000 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 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.
 
(ii)           The Borrower may, upon notice to the Swing Line Lender (with a
copy to the Administrative Agent), at any time or from time to time, voluntarily
prepay Swing Line Loans in whole or in part without premium or penalty; provided
that (A) such notice must be received by the Swing Line Lender and the
Administrative Agent not later than 1:00 p.m. on the date of the prepayment, and
(B) any such prepayment shall be in a minimum principal amount of $100,000 (or
the amount outstanding, if less). Each such notice shall specify the date and
amount of such prepayment. 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.
 
(b)           Mandatory.
 
(i)            If for any reason the Total Outstandings at any time exceed the
lesser at such time of (x) the Facility, and (y) the Borrowing Base, the
Borrower shall immediately prepay Revolving Credit Loans, Swing Line Loans and
L/C Borrowings and/or Cash Collateralize the L/C Obligations (other than the L/C
Borrowings) in an aggregate amount equal to such excess.
 
(ii)           Prepayments of the Facility made pursuant to this
Section 2.05(b), first, shall be applied ratably to the L/C Borrowings and the
Swing Line Loans, second, shall be applied ratably to the outstanding Revolving
Credit Loans, and, third, shall be used to Cash Collateralize the remaining L/C
Obligations. Upon the drawing of any Letter of Credit that has been Cash
Collateralized, the funds held as Cash Collateral shall be applied (without any
further action by or notice to or from the Borrower or any other Loan Party) to
reimburse the applicable L/C Issuer or the Lenders, as applicable.
 
2.06.        Termination or Reduction of Commitments.
 
(a)           Optional. The Borrower may, upon notice to the Administrative
Agent, terminate in whole or in part the Facility, the Letter of Credit Sublimit
or the Swing Line Sublimit, or from time to time permanently reduce the
Facility, the Letter of Credit Sublimit or the Swing Line Sublimit; provided
that (i) any such notice shall be received by the Administrative Agent not later
than 11:00 a.m. five Business Days prior to the date of termination or
reduction, (ii) any such partial reduction shall be in an aggregate amount of
$5,000,000 or any whole
 
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multiple of $1,000,000 in excess thereof and (iii) the Borrower shall not
terminate or reduce (A) the Facility if, after giving effect thereto and to any
concurrent prepayments hereunder, the Total Outstandings would exceed the
Facility, (B) the Letter of Credit Sublimit if, after giving effect thereto, the
Outstanding Amount of L/C Obligations not fully Cash Collateralized hereunder
would exceed the Letter of Credit Sublimit, or (C) the Swing Line Sublimit if,
after giving effect thereto and to any concurrent prepayments hereunder, the
Outstanding Amount of Swing Line Loans would exceed the Swing Line Sublimit.
 
(b)           Application of Commitment Reductions; Payment of Fees. The
Administrative Agent will promptly notify the Lenders of any termination or
reduction of the Letter of Credit Sublimit, Swing Line Sublimit or the
Commitments under this Section 2.06. Upon any reduction of the Commitments, the
Commitment of each Lender shall be reduced by such Lender's Percentage of such
reduction amount. All fees in respect of the Facility accrued until the
effective date of any termination of the Facility shall be paid on the effective
date of such termination.
 
2.07.        Repayment of Loans.
 
(a)           Revolving Credit Loans. The Borrower shall repay to the Lenders on
the Maturity Date the aggregate principal amount of all Revolving Credit Loans
outstanding on such date.
 
(b)           Swing Line Loans. The Borrower shall repay each Swing Line Loan on
the earlier to occur of (i) within one Business Day of demand by the Swing Line
Lender and (ii) the Maturity Date.
 
2.08.        Interest.
 
(a)           Subject to the provisions of Section 2.08(b), (i) 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 (x) the Eurodollar
Rate for such Interest Period plus (y) the Applicable Rate; (ii) 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 Base Rate plus the
Applicable Rate; and (iii) each Swing Line Loan shall bear interest on the
outstanding principal amount thereof from the applicable borrowing date at a
rate per annum equal to (x) the Base Rate plus the Applicable Rate or (y) such
other rate as mutually agreed to by the Borrower and the Swing Line Lender.
 
(b)           (i) If all or a portion of the principal amount of any Loan or
Reimbursement Obligation 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 (x) in the case of the Loans, the rate that would
otherwise be applicable thereto pursuant to the foregoing provisions of this
Section plus 2% or (y) in the case of Reimbursement Obligations, the rate
applicable to Base Rate Loans plus 2%, and (ii) if all or a portion of any
interest payable on any Loan or Reimbursement Obligation or any commitment fee
or other amount 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-
 
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compliance with Section 7.01, the date of occurrence shall be the applicable
test date, until the date such Event of Default is cured to the satisfaction of
the Required Lenders or waived pursuant to Section 10.01), the Borrower shall
pay interest on the principal amount of all outstanding Obligations hereunder at
the rates set forth above to the fullest extent permitted by applicable Laws.
Notwithstanding the foregoing, upon the occurrence of an Event of Default under
Sections 8.01(a) or 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.  In addition to certain fees described in Sections
2.03(i) and (j):
 
(a)           Commitment Fee. The Borrower shall pay to the Administrative Agent
for the account of each Lender, in accordance with its Percentage, a commitment
fee equal to the Applicable Commitment Fee Rate multiplied by the actual daily
amount by which the Facility exceeds the sum of the Outstanding Amount of the
Revolving Credit Loans and the Outstanding Amount of the L/C Obligations. For
purposes hereof, "Applicable Commitment Fee Rate" means a per annum rate equal
to (i) 0.75%, during the period commencing on the Closing Date and ending on
February 28, 2010, and (ii) during each calendar month ending thereafter,
(x) 0.50%, if the average daily amount, if any, by which the Facility exceeded
the sum of the Outstanding Amount of the Revolving Credit Loans and the
Outstanding Amount of the L/C Obligations, in each case during the immediately
preceding calendar month, was equal to or less than 50% of the Facility, and
(ii) 0.75%, if the average daily amount, if any, by which the Facility exceeded
the sum of the Outstanding Amount of the Revolving Credit Loans and the
Outstanding Amount of the L/C Obligations, in each case during the immediately
preceding calendar month, was greater than 50% of the Facility. The commitment
fee shall accrue at all times during the Availability Period, including at any
time during which one or more of the conditions in Article IV is not met, and
shall be due and payable quarterly in arrears on the first Business Day after
the end of each March, June, September and December, commencing with the first
such date to occur after the Closing Date, and on the last day of the
Availability Period. Notwithstanding anything to the contrary contained herein,
upon the request of the Required Lenders, while any Event of Default exists, all
overdue commitment fees shall accrue interest thereon at the interest rate
specified in Section 2.08(b).
 
(b)           Other Fees.
 
(i)            The Borrower shall pay to the Arranger and the Administrative
Agent for their own respective accounts fees in the amounts and at the times
specified in the Fee Letter. Such fees shall be fully earned when paid and shall
not be refundable for any reason whatsoever.
 
(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.
 
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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.
 
(a)           The Credit Extensions 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 Credit Extensions 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.
 
(b)           In addition to the accounts and records referred to in
Section 2.11(a), each Lender and the Administrative Agent shall maintain in
accordance with its usual practice accounts or records evidencing the purchases
and sales by such Lender of participations in Letters of Credit and Swing Line
Loans. In the event of any conflict between the accounts and records maintained
by the Administrative Agent and the accounts and records of any Lender in
respect of such matters, the accounts and records of the Administrative Agent
shall control in the absence of manifest error.
 
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. Except as otherwise expressly provided herein, 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
2:00 p.m. on the date specified herein. The Administrative Agent will promptly
distribute to each Lender its Percentage (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
2:00 p.m. 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.
 
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(b)           (i)            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 (or, in the
case of any Borrowing of Base Rate Loans, prior to 12:00 noon on the date of
such Borrowing) 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. 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.
 
(ii)           Payments by Borrower;  Presumptions by Administrative Agent.
Unless the Administrative Agent shall have received notice from the Borrower
prior to the time at which any payment is due to the Administrative Agent for
the account of the Lenders or the L/C Issuers 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 Lenders or the L/C Issuers, as the case may
be, the amount due. In such event, if the Borrower has not in fact made such
payment, then each of the Lenders or the L/C Issuers, as the case may be,
severally agrees to repay to the Administrative Agent forthwith on demand the
amount so distributed to such Lender or such L/C Issuer, 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
 
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Administrative Agent because the conditions to the applicable Credit Extension
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 Revolving Credit Loans, to fund participations in Letters of
Credit and Swing Line Loans and to make payments pursuant to
Section 10.04(c) are several and not joint. The failure of any Lender to make
any Loan, to fund any such participation or to make any payment under
Section 10.04(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, to
purchase its participation or to make its payment under Section 10.04(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, L/C Borrowings,
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 and L/C Borrowings then due hereunder,
ratably among the parties entitled thereto in accordance with the amounts of
principal and L/C Borrowings then due to such parties, in each case with respect
to the Obligations of such Loan Party.
 
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 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 the Obligations due and payable to such Lender
at such time to (ii) the aggregate amount of the Obligations due and payable to
all Lenders hereunder and under the other Loan Documents at such time) of
payments on account of the Obligations 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 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 the Obligations
owing (but not due and payable) to such Lender at such time to (ii) the
aggregate amount of the Obligations 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 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) purchase (for cash at
face value) participations in the Loans and subparticipations in L/C Obligations
and Swing Line Loans of the other Lenders, or make such other adjustments as
shall be equitable, so that the benefit of all such payments shall be shared by
the Lenders ratably in accordance with the Obligations then due and payable to
the Lenders or owing (but not due and payable) to the Lenders, as the case may
be, provided that:
 
(i)            if any such participations or subparticipations are purchased and
all or any portion of the payment giving rise thereto is recovered, such
participations or
 
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subparticipations shall be rescinded and the purchase price restored to the
extent of such recovery, without interest; and
 
(ii)           the provisions of this Section shall not be construed to apply to
(A) any payment made by the Borrower pursuant to and in accordance with the
express terms of this Agreement or (B) any payment obtained by a Lender as
consideration for the assignment of or sale of a participation in any of its
Loans or subparticipations in L/C Obligations or Swing Line Loans to any
assignee or participant, other than to the Borrower or any Subsidiary thereof
(as to which the provisions of this Section shall apply) or any amounts received
by any L/C Issuer and/or the Swing Line Lender to secure the obligations of a
Defaulting Lender or an Impacted Lender to fund risk participations hereunder.
 
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.        Increase in Facility.
 
(a)           Increase. Provided there then exists no Default, upon notice to
the Administrative Agent, the Borrower may from time to time after the Closing
Date, increase the Facility by an amount (for all such requests) not exceeding
$25,000,000 such that the maximum amount of the Facility shall at no time exceed
$125,000,000; provided that any such increase shall be in a minimum amount of
$10,000,000 and in a whole multiple of $1,000,000 in excess thereof.
 
(b)           Solicitation of Increase. To achieve the full amount of a
requested increase (i) the Administrative Agent with the consent of the Borrower
(which approval shall not be unreasonably withheld, delayed or conditioned) or
(ii) the Borrower with the consent of the Administrative Agent (which approval
shall not be unreasonably withheld, delayed or conditioned) may solicit
increased commitments from existing Lenders and/or invite Eligible Assignees to
become Lenders; provided, however that no existing Lender shall be obligated or
required to accept an increase in its Commitment pursuant to this Section 2.14
unless it specifically consents to such increase in writing and no Eligible
Assignee (not already a Lender or an Affiliate thereof) shall become a Lender
unless its Commitment is at least $5,000,000 (or such lesser amount as may be
agreed by the Borrower and the Administrative Agent). Any Lender or Eligible
Assignee agreeing to increase its Commitment or provide a new Commitment
pursuant to this Section 2.14 shall, in connection therewith, deliver to the
Administrative Agent a joinder agreement in form and substance satisfactory to
the Administrative Agent and its counsel.
 
(c)           Effective Date and Allocations. If the Commitments are increased
in accordance with this Section, the Administrative Agent and the Borrower shall
determine the effective date (the "Increase Effective Date") and the final
allocation of such increase. The Administrative Agent shall promptly notify the
Borrower and the Lenders of the final allocation of such increase and the
Increase Effective Date and Schedule 2.01 hereto shall be deemed amended to
reflect such increase and final allocation.
 
(d)           Conditions to Effectiveness of Increase. As a condition precedent
to such increase, the Borrower shall deliver to the Administrative Agent (i) a
certificate of each Loan Party dated as of the Increase Effective Date signed by
a Responsible Officer of such Loan Party
 
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(A)          certifying and attaching the resolutions adopted by such Loan Party
approving or consenting to such increase and (B) a statement of reaffirmation
from the Loan Parties pursuant to which each Loan Party ratifies this Agreement
and the other Loan Documents and acknowledges and reaffirms that, after giving
effect to such increase, it is bound by all terms of this Agreement and the
other Loan Documents; (ii) a certificate of the Borrower dated as of the
Increase Effective Date signed by a Responsible Officer of the Borrower
certifying that, before and after giving effect to such increase, (x) the
representations and warranties contained in Article V and the other Loan
Documents are true and correct on and as of the Increase Effective Date, except
to the extent that such representations and warranties specifically refer to an
earlier date, in which case they are true and correct as of such earlier date,
and except that for purposes of this Section 2.14, the representations and
warranties contained in Section 5.01(a) shall be deemed to refer to the most
recent statements furnished pursuant to clauses (a) and (b), respectively, of
Section 6.01, and (y) no Default or Event of Default has occurred or is
continuing, (iii) if any portion of the increase is being provided by a new
Lender, a Note in favor of such Lender if so requested by such Lender; and
(iv) payment of any applicable fees related to such increase (including, without
limitation, any applicable arrangement, upfront and/or administrative fee). The
Borrower shall prepay any Revolving Credit Loans outstanding on the Increase
Effective Date (and pay any additional amounts required pursuant to
Section 3.05) to the extent necessary to keep the outstanding Revolving Credit
Loans ratable with any revised Percentages arising from any nonratable increase
in the under this Section and/or, at the discretion of the Administrative Agent,
add the new Lenders to the existing Borrowings.
 
(e)           Amendments. The Administrative Agent is authorized to enter into,
on behalf of the Lenders and without the consent of any Lender, any amendment to
this Agreement or any other Loan Document as may be necessary to solely
incorporate the terms of any increase in the Commitments under this
Section 2.14.
 
(f)            Conflicting Provisions. This Section shall supersede any
provisions in Section 2.13 or 10.01 to the contrary.
 
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 free and clear of and without reduction or withholding
for any Indemnified Taxes or Other Taxes, provided that if the Borrower or
Holdings shall be required by applicable law to deduct any Indemnified Taxes
(including any Other Taxes) from such payments, then (i) the sum payable shall
be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section)
the Administrative Agent, any Lender or any L/C Issuer, as the case may be,
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower or Holdings, as the case may be, shall
make such deductions and (iii) the Borrower or Holdings, as the case may be,
shall timely pay the full amount deducted to the relevant Governmental Authority
in accordance with applicable law.
 
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(b)           Payment of Other Taxes by the Borrower and Holdings. Without
limiting the provisions of subsection (a) above, the Borrower and Holdings shall
timely pay any Other Taxes to the relevant Governmental Authority in accordance
with applicable law.
 
(c)           Indemnification by the Borrower and Holdings. The Borrower and
Holdings shall, jointly and severally, indemnify the Administrative Agent, each
Lender and each L/C Issuer, within 10 days after demand therefor, for the full
amount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes or
Other Taxes imposed or asserted on or attributable to amounts payable under this
Section) paid by the Administrative Agent, such Lender or such L/C Issuer, as
the case may be, and any penalties, interest and reasonable expenses arising
therefrom or with respect thereto, whether or not such Indemnified Taxes or
Other 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 or an L/C Issuer (with a copy to
the Administrative Agent), or by the Administrative Agent on its own behalf or
on behalf of a Lender or an L/C Issuer, shall be conclusive absent manifest
error.
 
(d)           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, the Borrower 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.
 
(e)           Status of Lenders. Any Foreign Lender that is entitled to an
exemption from or reduction of withholding tax under the law of the jurisdiction
in which the Borrower or Holdings, as applicable, is resident for tax purposes,
or any treaty to which such jurisdiction is a party, with respect to payments
hereunder or under any other Loan Document shall deliver to the Borrower or
Holdings, as applicable (with a copy to the Administrative Agent), at the time
or times prescribed by applicable law or reasonably requested by the Borrower,
Holdings or the Administrative Agent, such properly completed and executed
documentation prescribed by applicable law as will permit such payments to be
made without withholding or at a reduced rate of withholding. In addition, any
Lender, if 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.
 
Without limiting the generality of the foregoing, if the Borrower or Holdings,
as the case may be, is resident for tax purposes in the United States, 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 request of the Borrower,
Holdings or the Administrative Agent, but only if such Foreign Lender is legally
entitled to do so), whichever of the following is applicable:
 
(i)            duly completed copies of Internal Revenue Service Form W-8BEN
claiming eligibility for benefits of an income tax treaty to which the United
States is a party,
 
(ii)           duly completed copies of Internal Revenue Service 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, (A) a
certificate to the effect that
 
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such Foreign Lender is not (1) a "bank" within the meaning of section
881(c)(3)(A) of the Code, (2) a "10 percent shareholder" of the Borrower or
Holdings within the meaning of section 881(c)(3)(B) of the Code, or (3) a
"controlled foreign corporation" described in section 881(c)(3)(C) of the Code
and (B) duly completed copies of Internal Revenue Service Form W-8BEN, or
 
(iv)          any other form prescribed by applicable law as a basis for
claiming exemption from or a reduction in United States Federal withholding tax
duly completed together with such supplementary documentation as may be
prescribed by applicable law to permit the Borrower to determine the withholding
or deduction required to be made.
 
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 the
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 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, 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.
 
(f)            Treatment of Certain Refunds. If the Administrative Agent, any
Lender or any L/C Issuer determines, in its sole discretion, that it has
received a refund of any Taxes or Other Taxes as to which it has been
indemnified by the Borrower or Holdings, as the case may be, or with respect to
which the Borrower or Holdings, as the case may be, has paid additional amounts
pursuant to this Section, it shall pay to the Borrower or Holdings, as the case
may be, an amount equal to such refund (but only to the extent of indemnity
payments made, or additional amounts paid, by the Borrower or Holdings under
this Section with respect to the Taxes or Other Taxes giving rise to such
refund), net of all out-of-pocket expenses of the Administrative Agent, such
Lender or such L/C Issuer, as the case may be, and without interest (other than
any interest paid by the relevant Governmental Authority with respect to such
refund), provided that the Borrower or Holdings, as the case may be, upon the
request of the Administrative Agent, such Lender or such L/C Issuer, agrees to
repay the amount paid over to the Borrower or Holdings, as the case may be,
(plus any penalties, interest or other charges imposed by the relevant
Governmental Authority) to the Administrative Agent, such Lender or such L/C
Issuer if the Administrative Agent, such Lender or such L/C Issuer is required
to repay such refund to such Governmental Authority. This subsection shall not
be construed to require the Administrative Agent, any Lender or any L/C Issuer
to make available its tax returns (or any other information relating to its
taxes that it deems confidential) to the Borrower, Holdings or any other Person.
 
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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 the
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 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 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 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 (with the Base Rate
determined without reference to clause (c) of the definition of "Base Rate") 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 or any L/C Issuer;
 
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(ii)           subject any Lender or any L/C Issuer to any tax of any kind
whatsoever with respect to this Agreement, any Letter of Credit, any
participation in a Letter of Credit or any Eurodollar Rate Loan made by it, or
change the basis of taxation of payments to such Lender or any L/C Issuer in
respect thereof (except for Indemnified Taxes or Other Taxes covered by
Section 3.01 and the imposition of, or any change in the rate of, any Excluded
Tax payable by such Lender or such L/C Issuer); or
 
(iii)          impose on any Lender or any L/C Issuer or the London interbank
market any other condition, cost or expense affecting this Agreement or
Eurodollar Rate Loans made by such Lender or any Letter of Credit or
participation therein;
 
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Rate Loan, or to increase the
cost to such Lender or such L/C Issuer of participating in, issuing or
maintaining any Letter of Credit (or of maintaining its obligation to
participate in or to issue any Letter of Credit), or to reduce the amount of any
sum received or receivable by such Lender or such L/C Issuer hereunder (whether
of principal, interest or any other amount) then, upon request of such Lender or
such L/C Issuer, the Borrower will pay to such Lender or such L/C Issuer, as the
case may be, such additional amount or amounts as will compensate such Lender or
such L/C Issuer, as the case may be, for such additional costs incurred or
reduction suffered; provided that such increase in cost to such Lender is being
charged to customers of such Lender generally.
 
(b)           Capital Requirements. If any Lender or any L/C Issuer determines
that any Change in Law affecting such Lender or such L/C Issuer or any Lending
Office of such Lender or such Lender's or such L/C Issuer's holding company, if
any, regarding capital requirements has or would have the effect of reducing the
rate of return on such Lender's or such L/C Issuer's capital or on the capital
of such Lender's or such L/C Issuer's holding company, if any, as a consequence
of this Agreement, the Commitments of such Lender or the Loans made by, or
participations in Letters of Credit held by, such Lender, or the Letters of
Credit issued by such L/C Issuer, to a level below that which such Lender or
such L/C Issuer or such Lender's or such L/C Issuer's holding company would have
achieved but for such Change in Law (taking into consideration such Lender's or
such L/C Issuer's policies and the policies of such Lender''s or such L/C
Issuer's holding company with respect to capital adequacy), then from time to
time the Borrower will pay to such Lender or such L/C Issuer, as the case may
be, such additional amount or amounts as will compensate such Lender or such L/C
Issuer or such Lender's or such L/C Issuer's holding company for any such
reduction suffered; provided that such compensation for reductions suffered by
such Lender is being charged to customers of such Lender generally.
 
(c)           Certificates for Reimbursement. A certificate of a Lender or an
L/C Issuer setting forth in reasonable detail the amount or amounts necessary to
compensate such Lender or such L/C Issuer or its holding company, as the case
may be, as specified in subsection (a), (b) or (d) of this Section and delivered
to the. Borrower shall be conclusive absent manifest error. The Borrower shall
pay such Lender or such L/C Issuer, as the case may be, the amount shown as due
on any such certificate within 10 days after receipt thereof.
 
(d)           Reserves on Eurodollar Rate Loans. The Borrower shall pay to each
Lender, as long as such Lender shall be required to maintain reserves with
respect to liabilities or assets consisting of or including Eurodollar funds or
deposits (currently known as "Eurodollar liabilities"), additional interest on
the unpaid principal amount of each Eurodollar Rate Loan made in Dollars equal
to the actual costs of such reserves allocated to such Loan by such Lender (as
determined by such Lender in good faith, which determination shall be conclusive
absent
 
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manifest error), which shall be due and payable on each date on which interest
is payable on such Loan, provided the Borrower shall have received at least 10
days' prior notice (with a copy to the Administrative Agent) of such additional
interest from such Lender in reasonable detail; and, provided, further, that
such additional interest is being charged to customers of such Lender generally.
If a Lender fails to give notice 10 days prior to the relevant Interest Payment
Date, such additional interest shall be due and payable 10 days from receipt of
such notice.
 
(e)           Delay in Requests. Failure or delay on the part of any Lender or
any L/C Issuer 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 or such L/C Issuer's right to demand such compensation, provided that
the Borrower shall not be required to compensate a Lender or an L/C Issuer
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 six months
prior to the date that such Lender or such L/C Issuer, as the case may be,
notifies the Borrower of the Change in Law or other event giving rise to such
increased costs or reductions and of such Lender's or such L/C Issuer'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 six-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:
 
(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 10.13;
 
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; provided that such
administrative fees are being charged to customers of such Lender generally.
 
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 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
additional amount to any Lender or
 
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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 additional amount 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 10.13.
 
3.07.        Survival.  Subject to Section 3.04(e), all of the Borrower's
obligations under this Article III shall survive termination of the Commitments
and repayment of all other Obligations hereunder.
 
ARTICLE IV
 
CONDITIONS PRECEDENT TO CREDIT EXTENSIONS
 
4.01.        Conditions of Initial Credit Extension. The obligation of any L/C
Issuer and each Lender to make its initial Credit Extension hereunder is subject
to satisfaction of the following conditions precedent on the date of the initial
Credit Extensions 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 Administrative Agent;
 
(ii)           a Note executed by the Borrower in favor of each Lender
requesting a Note;
 
(iii)          guarantee, pledge and security agreement, in form and substance
reasonably satisfactory to the Administrative Agent (x) as duly executed by the
Domestic Subsidiaries of Borrower (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 Appleton 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:
 
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(A)          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,
 
(B)           a completed "perfection certificate", dated on or before the date
of the initial Credit Extension, describing the assets of the Loan Parties
substantially in the form furnished by or on behalf of the Administrative Agent
prior to such date;
 
(C)           evidence reasonably satisfactory to the Administrative Agent that
all other actions, recordings and filings of or with respect to the Guarantee
and Collateral Agreements that the Administrative Agent may deem necessary or
desirable in order to perfect the Liens created thereby are capable of being
completed promptly following the initial Credit Extensions hereunder,
 
(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 Administrative Agent), duly executed
by the appropriate parties,
 
(E)           evidence that all other action that the Administrative Agent may
reasonably 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
Administrative Agent (to the extent the same are obtainable using commercially
reasonable efforts).
 
(iv)          Mortgages, etc.
 
(A)          The Administrative Agent shall have received a Mortgage with
respect to each Mortgaged Property, executed and delivered by a duly authorized
officer of each party thereto.
 
(B)           The Administrative Agent shall have received for each Mortgaged
Property either (a) a recent or updated survey of the Mortgaged Property, in
form and substance reasonably satisfactory to the Administrative Agent or (b) an
existing survey of the Mortgaged Property (without update), together with an
affidavit of no change (or with changes noted therein to the extent the
Administrative Agent has not objected), so long as the title insurance company
issuing the policy referred to in clause (C) below (the "Title Insurance
Company") shall agree to issue the mortgagee's title insurance policy, excluding
the standard survey exception, but including the survey dependent endorsements.
 
(C)           The Administrative Agent shall have received in respect of each
Mortgaged Property a mortgagee's title insurance policy (or policies) or marked
up unconditional binder for such insurance. Each such policy shall (1) be in an
amount reasonably satisfactory to the Administrative Agent; (2) be issued at
ordinary rates; (3) insure that the Mortgage insured thereby creates a valid
Lien on such Mortgaged Property free and clear of all defects and encumbrances,
except as permitted under Section 7.03 hereof; (4) name the Administrative
 
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Agent for the benefit of the Lenders as the insured thereunder; (5) be in the
form of ALTA Loan Policy - 2006 (or equivalent policies); (6) contain such
endorsements and affirmative coverage as the Administrative Agent may reasonably
request and (7) be issued by First American Title Insurance Company. The
Administrative Agent shall have received evidence reasonably satisfactory to it
that all premiums in respect of each such policy, all charges for mortgage
recording tax, and all related expenses, if any, have been paid.
 
(D)          If requested by the Administrative Agent and the Mortgaged Property
is located in a special flood hazard area under the National Flood Insurance Act
of 1968, the Administrative Agent shall have received (1) a policy of flood
insurance that (a) covers any parcel of improved real property that is
encumbered by the applicable Mortgage, (b) is written in an amount not less than
the outstanding principal amount of the indebtedness secured by such Mortgage
that is reasonably allocable to such real property or the maximum limit of
coverage made available with respect to the particular type of property under
the National Flood Insurance Act of 1968, whichever is less, and (c) has a term
ending not later than the maturity of the Indebtedness secured by such Mortgage
and (2) confirmation that the Borrower has received the notice required pursuant
to Section 208(e)(3) of Regulation H of the FRB.
 
(E)           The Administrative Agent shall have received a copy of all
recorded documents referred to, or listed as exceptions to title in, the title
policy or policies referred to in clause (C) above and a copy of all other
material documents affecting the Mortgaged Properties.
 
(v)           an intellectual property security agreement, in form and substance
reasonably satisfactory to the Administrative Agent (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, together with
evidence that all action that the Administrative Agent may reasonably deem
necessary or desirable in order to perfect the Liens created under the
Intellectual Property Security Agreement has been taken;
 
(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 reasonably 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)         such documents and certifications as the Administrative Agent may
reasonably require to evidence that each Loan Party is duly organized or formed,
and that each of the Borrower, Holdings and the other Guarantors is validly
existing, in good standing and qualified to engage in business in each
jurisdiction where its ownership, lease or operation of properties or the
conduct of its business requires such qualification, except to the extent that
failure to do so could not reasonably be expected to have a Material Adverse
Effect;
 
(viii)        a favorable opinion of White & Case LLP, counsel to the Loan
Parties, addressed to the Administrative Agent and each Lender, as to the
matters concerning the
 
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Loan Parties and the Loan Documents in form and substance reasonably
satisfactory to the Administrative Agent;
 
(ix)           a certificate signed by a Responsible Officer of the Borrower
certifying (A) that there has been no event or circumstance since January 3,
2009 that has had or could be reasonably expected to have, either individually
or in the aggregate, a Material Adverse Effect; and (B) no action, suit,
investigation or proceeding is pending, or to the knowledge of the Borrower,
threatened in any court or before any arbitrator or governmental authority that
could reasonably be expected to have a Material Adverse Effect;
 
(x)            a Borrowing Base Certificate signed by a Responsible Officer
setting forth a calculation of the Borrowing Base as of the Closing Date, based
on information as at January 31, 2010;
 
(xi)           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;
 
(xii) evidence of the receipt by the Borrower in immediately available Dollars
of proceeds of the issuance of the First Lien Notes in an aggregate amount not
less than $275,000,000;
 
(xiii) evidence that the Existing Credit Agreement has been, or concurrently
with the Closing Date is being, terminated and all Liens securing obligations
under the Existing Credit Agreement have been, or concurrently with the Closing
Date are being, released;
 
(xiv) the First Lien Note Intercreditor Agreement duly executed by each of the
parties thereto (other than the Administrative Agent) and in form and substance
satisfactory to the Administrative Agent;
 
(xv)         such other assurances, certificates, documents, consents or
opinions as the Administrative Agent, any L/C Issuer, the Swing Line Lender 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 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.
 
(c)           Unless waived by the Administrative Agent, the Borrower shall have
paid all fees, charges and disbursements of counsel to the Administrative Agent
(directly to such counsel if requested by the Administrative Agent) to the
extent invoiced prior to 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 the
Administrative Agent).
 
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(d)           After giving effect to all Credit Extensions made on the Closing
Date, Excess Availability shall be equal to or greater than 50% of the Borrowing
Base set forth in the initial Borrowing Base Certificate delivered by the
Borrower pursuant to Section 4.01(a)(x).
 
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 all Credit Extensions. The obligation of each Lender
to honor any Request for Credit Extension (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:
 
(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 Credit Extension, 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 4.02, the
representations and warranties contained in Section 5.01(a) 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 pro forma
effect to such proposed Credit Extension and any application of the proceeds
thereof (including, without limitation, if such proposed Credit Extension would
result in the commencement of an Availability Trigger Period, any Event of
Default that would rise under Section 8.01(c) as a result of the Loan Parties'
failure to comply with Section 7.01 as of the end of the next quarterly fiscal
period ending thereafter).
 
(c)           The Administrative Agent and, if applicable, the Swing Line Lender
and the applicable L/C Issuer shall have received a Request for Credit Extension
in accordance with the requirements hereof.
 
Each Request for Credit Extension (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 Credit Extension.
 
ARTICLE V
 
REPRESENTATIONS AND WARRANTIES
 
To induce the Administrative Agent and the Lenders to enter into this Agreement
and to make the Loans and issue or participate in the Letters of Credit, each of
Holdings and the Borrower hereby, jointly and severally, represents and warrants
to the Administrative Agent, each L/C Issuer and each Lender that:
 
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5.01.        Financial Condition.
 
(a)           The audited consolidated balance sheets of Holdings and its
consolidated subsidiaries as at January 3, 2009, and the related consolidated
statements of income and of cash flows for the fiscal year ended on such date,
reported on by and accompanied by an unqualified report from Holdings'
independent auditor (such auditor to be a nationally recognized auditing firm)
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 October 4, 2009, and the
related unaudited consolidated statements of income and cash flows for the
twelve-month 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(a) to
and including the Closing Date, there has been no Disposition by Holdings of any
material part of its business or property except for the sale of all of the
issued and outstanding equity securities of C & H Packaging, Inc., a Wisconsin
corporation, pursuant to the terms of that certain Stock Purchase Agreement
dated December 18, 2009. Without limiting the foregoing, on the Closing Date the
AIG Credit Support and the other Fox River Indemnity Arrangements remain in full
force and effect as described in Holdings' Form 10-K filing for the fiscal year
ended January 3, 2009.
 
(b)           The unaudited and unadjusted consolidated balance sheet of
Holdings and its consolidated Subsidiaries as at January 2, 2010, and the
related unaudited unadjusted consolidated statements of income and cash flows
for the twelve-month 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 twelve-month period then ended (subject to
year-end audit adjustments). The unaudited and unadjusted financial statements
have been prepared in accordance with GAAP applied consistently throughout the
periods involved (subject to normal year-end audit adjustments and the absence
of footnotes).
 
5.02.        No Change.  Since January 3, 2009, there has been no development or
event that has had or could reasonably be expected 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) 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, except where the failure to be so
qualified could not reasonably be expected to have a Material Adverse Effect,
and (d) is in compliance with all Requirements of Law except to the extent that
the failure to comply therewith could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect.
 
5.04.        Power; Authorization; Enforceable Obligations. 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
obtain extensions of credit hereunder. Each Loan Party has taken all necessary
organizational action to authorize the execution, delivery and performance of
the Loan
 
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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. 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. Each Loan Document has been duly executed and delivered on behalf
of each Loan Party that is a party thereto. This Agreement constitutes, and each
other Loan Document upon execution will constitute, a legal, valid and binding
obligation of each Loan Party that is a 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. The execution, delivery and performance of this
Agreement and the other Loan Documents, the issuance of Letters of Credit, the
borrowings hereunder and the use of the proceeds thereof will not violate any
material Requirement of Law or Contractual Obligation of Holdings, the Borrower
or any of its Subsidiaries 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
(other than the Liens created by the Security Documents). No Requirement of Law
or Contractual Obligation applicable to the Borrower or any of its Subsidiaries
could reasonably be expected to have a Material Adverse Effect.
 
5.06.        Litigation. No litigation, investigation or proceeding of or before
any arbitrator or Governmental Authority is pending or, to the knowledge of
Holdings or the Borrower, threatened by or against Holdings, the Borrower or any
of its Subsidiaries or against any of their respective properties or revenues
that, either singly or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
 
5.07.        No Default.  Neither Holdings, the Borrower nor any of their
respective Subsidiaries is in default under or with respect to any of its
Contractual Obligations in any respect that could reasonably be expected to have
a Material Adverse Effect. No Default or Event of Default has occurred and is
continuing.
 
5.08.        Ownership of Property; Liens; Insurance. Each of Holdings, the
Borrower and their respective Subsidiaries has, except to the extent failure
thereof could not reasonably be expected to have a Material Adverse Effect,
title in fee simple to, or a valid leasehold interest in, all its real property
(as more fully described on Schedule 5.08), and good title to, or a valid
leasehold interest in, all its other property, and none of such property is
subject to any Lien except as permitted by Section 7.03. The properties of the
Loan Parties and their Subsidiaries are insured with financially sound and
reputable insurance companies (as reasonably determined by the Borrower at the
time the insurance is taken) 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 the Borrower or the applicable Subsidiary operates.
 
5.09.        Intellectual Property. Holdings, the Borrower and each of its
Subsidiaries owns, or is licensed to use, all Intellectual Property necessary
for the conduct of its business as currently conducted, except where the failure
to own or license such Intellectual Property could not reasonably be expected to
have a Material
 
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Adverse Effect. No claim, which could reasonably be expected to have a Material
Adverse Effect, has been asserted and is pending by any Person challenging or
questioning the use of any Intellectual Property or the validity or
effectiveness of any Intellectual Property, nor does Holdings or the Borrower
know of any valid basis for any such claim. To the best of Holdings' and the
Borrower's knowledge, the use of Intellectual Property by Holdings, the Borrower
and its Subsidiaries does not infringe on the rights of any Person in any
material respect.
 
5.10.        Taxes. Each of Holdings, the Borrower and each of its Subsidiaries
has filed or caused to be filed all Federal, state and other material tax
returns that are required to be filed and has paid all taxes shown to be due and
payable on said returns or on any assessments made against it or any of its
property and all other material taxes, fees or other charges imposed on it or
any of its property by any Governmental Authority (other than any the amount or
validity of that are currently being contested in good faith by appropriate
proceedings and with respect to which reserves in conformity with GAAP (to the
extent required thereby) have been provided on the books of Holdings, the
Borrower or its Subsidiaries, as the case may be); no tax Lien (except to the
extent permitted pursuant to Section 7.03) has been filed, and, to the knowledge
of Holdings and the Borrower, no claim has been asserted, with respect to any
such tax, fee or other charge, which Lien or claim, could reasonably be expected
to have a Material Adverse Effect.
 
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, 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 Holdings
or the Borrower, threatened; (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.
 
(a)           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, and as of the Closing Date each Plan has complied in all material
respects with the applicable provisions of ERISA, the Code and all other
applicable laws and regulations. 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. 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.
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 a liability under ERISA which could
reasonably be expected to have a Material Adverse Effect. No such Multiemployer
Plan is in Reorganization or Insolvent.
 
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(b)           Favorable determination 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.
 
(c)           To Holdings' and the Borrower's knowledge, as of the Closing Date
neither Holdings nor the Borrower 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.
 
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 Subsidiary of Holdings and, as to
each such Subsidiary, the percentage of each class of Capital Stock owned by any
Loan Party and (b) except as set forth in the ESOP 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
Holdings, the Borrower or any of their Subsidiaries, except as created by the
Loan Documents.
 
5.16.        Use of Proceeds. The proceeds of the Revolving Credit Loans shall
be used to (i) finance the repayment of the obligations of the Borrower under
the Existing Credit Agreement, (ii) for the issuance of standby letters of
credit and (iii) for working capital, Capital Expenditures and general corporate
purposes of the Borrower and its Subsidiaries.
 
5.17.        Environmental Matters.  Except as, 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 Materials of Environmental Concern 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 environmental matters or compliance with Environmental Laws with
regard to any of the Properties or the business operated by any Group Member
(the "Business"), nor does Holdings or the Borrower have knowledge or reason to
believe that any such notice will be received or is being threatened;
 
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(c)           Materials of Environmental Concern 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
Materials of Environmental Concern 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 Holdings and the Borrower, threatened, 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 Materials of
Environmental Concern 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;
 
(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 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 is no fact known to any Loan Party that could reasonably be expected to
have a Material Adverse Effect that has not been expressly disclosed herein, in
the other Loan Documents or 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.
 
(a)           The Guarantee and Collateral Agreements are effective to create in
favor of the Administrative Agent, for the benefit of the Lenders, a legal,
valid and enforceable security interest in the Collateral described therein and
proceeds thereof. In the case of the Pledged Stock
 
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described in the Guarantee and Collateral Agreements, when stock certificates
and related stock powers representing such Pledged Stock are delivered to the
Administrative Agent (assuming the Administrative Agent retains possession of
such certificates and stock powers in the State of New York; it being understood
that if such Pledged Stock is held in a jurisdiction other than the State of New
York, the law of such other jurisdiction will govern perfection), and in the
case of the other Collateral described in the Guarantee and Collateral
Agreements, when financing statements and other filings specified on Schedule
3(a) to the Guarantee and Collateral Agreements in appropriate form are filed in
the offices specified on Schedule 3(a) to the Guarantee and Collateral
Agreements, to the extent that a security interest therein can be perfected by
the filing of a financing statement or by the other filings described in
Schedule 3(a) to the Guarantee and Collateral Agreements, the Guarantee and
Collateral Agreements 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 respective Guarantee and Collateral Agreements), in each case prior and
superior in right to any other Person (except Liens permitted by Section 7.03).
 
(b)           Each of the Mortgages is effective to create in favor of the
Administrative Agent, for the benefit of the Lenders, a legal, valid and
enforceable Lien on the Mortgaged Properties described therein, and when the
Mortgages are filed in the offices specified on Schedule 3(b) to the Guarantee
and Collateral Agreement, each such Mortgage shall constitute a fully perfected
Lien on, and security interest in, all right, title and interest of the Loan
Parties in the Mortgaged Properties, as security for the Obligations (as defined
in the relevant Mortgage), in each case prior and superior in right to any other
Person (except as permitted by Section 7.03). Schedule 1.01(c), which lists each
parcel of real property in the United States owned in fee simple by Holdings or
any of its Subsidiaries as of the Closing Date, shall include a sub-heading for
"Mortgaged Properties".
 
5.20.        Solvency.  The Loan Parties are, taken as a whole, and after giving
effect to the Transactions and the incurrence of all Indebtedness and
obligations being incurred in connection herewith and therewith will be,
Solvent.
 
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 Senior Subordinated Note Indenture and any Permitted
Refinancing Debt Document. The obligations of each Subsidiary party thereto
under its respective Guarantee and Collateral Agreements will constitute
"Guarantor Senior Debt" (or any other defined term having a similar purpose) of
such Subsidiary under the Senior Subordinated Note Indenture 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 Senior
Subordinated Note Indenture or for purposes of any Permitted Refinancing Debt
Document.
 
5.22.        Regulation H. As of the Closing Date, no Mortgage encumbers
improved real property that is located in an area that has been identified by
the Secretary of Housing and Urban Development as an area having special flood
hazards and in which flood insurance has been made available, and has not been
obtained, under the National Flood Insurance Act of 1968.
 
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
 
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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
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.
 
ARTICLE VI
 
AFFIRMATIVE COVENANTS
 
Holdings and the Borrower hereby jointly and severally agree that, so long as
the Commitments remain in effect, any Letter of Credit remains outstanding or
any Loan or other amount is owing to the Administrative Agent, any L/C Issuer or
any Lender 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) 90
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, reported on without a "going concern" or like
qualification or exception, or qualification arising out of the scope of the
audit, by PricewaterhouseCoopers LLC or other independent certified public
accountants of nationally recognized standing; and
 
(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) 45
days after the end of each quarterly period of each fiscal year of Holdings
(including the last quarterly period of such fiscal year), and (ii) five days
after such related filing 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).
 
(c)           During any Availability Trigger Period, as soon as available, but
in any event within 30 days after the end of each of fiscal month (excluding the
last fiscal month of each quarterly period in each fiscal year), the unaudited
consolidated balance sheet of Holdings and its consolidated Subsidiaries as at
the end of such fiscal month and the related unaudited consolidated statements
of income and of cash flows for such fiscal month and the portion of the fiscal
year through the end of such fiscal month, 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).
 
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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), (b) and (c) 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, only with
respect to the first three quarterly fiscal periods of any fiscal year, (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;
 
(b)           as soon as available, and in any event no later than 45 days after
the end of each fiscal year of Holdings, a detailed consolidated budget for the
following fiscal year (including a projected consolidated balance sheet of
Holdings and its Subsidiaries as of the end of the following fiscal year, the
related consolidated statements of projected cash flow, projected changes in
financial position and projected income and a description of the underlying
assumptions applicable thereto) (collectively, the "Projections"), which
Projections shall in each case be accompanied by a certificate of a Responsible
Officer stating that such Projections are based on estimates, information and
assumptions believed by such Responsible Officer to be reasonable at the time
made and that such Responsible Officer has no reason to believe that such
Projections are incorrect or misleading in any material respect at the time
provided;
 
(c)           on February 10, 2010 and within 10 Business Days of the end of
each fiscal month ending thereafter, a Borrowing Base Certificate (together with
supporting information required to be attached thereto) setting forth (i) the
Borrowing Base as of the last day of the preceding fiscal month, (ii) Average
Excess Availability for the preceding month and (iii) the Adjusted Borrowing
Base amount as of the last day of the preceding fiscal month; provided, that,
during any Availability Trigger Period, in addition to each monthly Borrowing
Base Certificate, the Borrower shall deliver a Borrowing Base Certificate
(together with any supporting information required to be attached thereto) on a
weekly basis (assuming for such purposes a week that commences on a Monday and
ends on a Sunday) setting forth the Borrowing Base as of the last day of the
preceding week, in each case within 3 days after the end of the prior week;
 
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(d)           promptly upon obtaining knowledge of any such event, circumstance
or change, a written notice of any event, circumstance or change that has
occurred since the delivery of the most recent Borrowing Base Certificate in
accordance with the terms of this Agreement that would materially reduce the
aggregate amount of the Eligible Accounts or the Eligible Inventory or result in
a material portion of the Eligible Accounts reflected thereon ceasing to be
Eligible Accounts or a material portion of the Eligible Inventory reflected
thereon ceasing to the Eligible Inventory;
 
(e)           in the event that the Borrower is no longer required to make
periodic Form 10-Q and 10-K filings with the SEC, together with delivery of the
respective financial statements pursuant to Section 6.01, within 45 days after
the end of each of the first three fiscal quarters of the fiscal year of
Holdings and within 90 days after the end of the last fiscal quarter of the
fiscal year of Holdings, a narrative discussion and analysis of the financial
condition and results of operations of Holdings and its Subsidiaries for such
fiscal quarter and for the period from the beginning of the then current fiscal
year to the end of such fiscal quarter, as compared to the portion of the
Projections covering such periods and to the comparable periods of the previous
year;
 
(f)            no later than 10 Business Days prior to the effectiveness thereof
(or, if such 10 Business Day prior notice is not reasonably possible, 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 First Lien Note Indenture, the
Second Lien Note Indenture, the Senior Subordinated Note Indenture, the Senior
Unsecured Note Indenture, any Permitted Refinancing Debt Document, the ESOP
Documentation or, to the extent relating to indemnity provisions, the
Acquisition Documentation (including, without limitation, the Fox River
Indemnity Arrangements);
 
(g)           without duplication of materials required elsewhere in this
Agreement, within five 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 is required to
file with the SEC;
 
(h)           to the extent permitted by law, during January of each year a
summary valuation analysis, prepared by an independent third party engaged by
the trustee for the ESOP, with respect to the valuation of the common stock of
Holdings owned by the ESOP as of a date at or near the end of the prior year,
together with supporting commentary, such analysis and commentary to be in a
form reasonably consistent with the analysis and commentary delivered to the
Administrative Agent prior to the Closing Date;
 
(i)            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;
 
(j)            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 and the L/C Issuers materials and/or
information provided by or on behalf of the Borrower hereunder (collectively,
"Borrower Materials") by posting the Borrower Materials on
 
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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 so long as the Borrower is
the issuer of any outstanding debt or equity securities that are registered or
issued pursuant to a private offering or is actively contemplating issuing any
such securities it will use commercially reasonable efforts to identify that
portion of the Borrower Materials that may be distributed to the Public Lenders
and that (w) all such Borrower Materials 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 Arranger, the L/C Issuers and the Lenders to treat such Borrower
Materials as not containing any material non-public information (although it may
be sensitive and proprietary) with respect to the Borrower or its securities for
purposes of United States Federal and state securities laws (provided, however,
that to the extent such Borrower Materials constitute Information, they shall be
treated as set forth in Section 10.07); (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 obligations of whatever nature, except where (x) 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 or (y) would not have a Material Adverse
Effect.
 
6.04.        Maintenance of Existence; Compliance. (a) (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 Section 7.04 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) comply with all Contractual
Obligations and Requirements of Law except to the extent that failure to comply
therewith could not, in the aggregate, reasonably be expected to have a Material
Adverse Effect.
 
6.05.        Maintenance of Property; Insurance. (a) Keep all property (other
than property that is the subject of a Recovery Event) useful and necessary in
its business in good working order and condition, ordinary wear and tear
excepted, except to the extent that failure to comply therewith could not, in
the aggregate, reasonably be expected to have a Material Adverse Effect, and
(b) maintain with financially sound and reputable insurance companies (as
reasonably determined by the Borrower at the time the insurance is obtained)
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.
 
6.06.        Inspection of Property; Books and Records; Discussions.
 
(a)           Keep, and cause each of its Subsidiaries to keep, books of record
and account in a manner sufficient to permit the preparation of financial
statements in accordance with GAAP and all material Requirements of Law. The
Borrower will, and will cause each Loan Party to, permit any representatives
designated by the Administrative Agent (who may be accompanied by a
representative of any Lender at such Lender's expense), upon reasonable prior
notice and
 
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during normal working hours, no more frequently than annually, except if an
Event of Default shall have occurred and be continuing, to visit and inspect its
properties, to examine and make extracts from its books and records, and to
discuss its affairs, finances and condition with its officers and independent
accountants.
 
(b)           The Administrative Agent shall be entitled to conduct, on
reasonable prior notice and during normal working hours, periodic field
examinations of the books and records relating to the Accounts of the Borrower
and the Inventory of the Borrower, in each case to ensure the adequacy of the
Collateral that constitutes the Borrowing Base and the related reporting and
control systems; provided, that, so long as no Event of Default has occurred and
is continuing, the Administrative Agent shall be limited (i) in the first
twelve-calendar-month period following the Closing Date, to two such field
examinations, and (ii) in each twelve-calendar-month period thereafter, to one
(or, at the Administrative Agent's option, two) such field examinations.
 
(c)           At any time that the Administrative Agent requests, the Borrower
will provide the Administrative Agent with appraisals or updates thereof of its
Inventory from an appraiser selected and engaged by the Administrative Agent,
and prepared on a basis satisfactory to the Administrative Agent, in each case
in its Permitted Discretion, and such appraisals or updates, as the case may be,
will include information required by applicable law and regulations; provided,
that, so long as no Event of Default has occurred and is continuing, the
Administrative Agent shall be limited (i) in the first twelve-calendar-month
period following the Closing Date, to two such appraisals, and (ii) in each
twelve-calendar-month period thereafter, to one (or, at the Administrative
Agent's option, two) such appraisal. Each such appraisal shall be at the sole
cost and expense of the Borrower.
 
(d)           Borrower acknowledges that the Administrative Agent, after
exercising its rights of inspection, field examination and/or appraisal pursuant
to this Section 6.06, may prepare (or have prepared) and distribute to the
Lenders reports pertaining to the Borrower's and the other Loan Parties' assets
for internal use by the Administrative Agent and the Lenders.
 
6.07.        Notices. Promptly give notice to the Administrative Agent, and each
Lender upon any Responsible Officer becoming aware of:
 
(a)           the occurrence of any Default or Event of Default;
 
(b)           any (i) default or event of default under any Contractual
Obligation of any Group Member or (ii) litigation, investigation or proceeding
that may exist at any time between any Group Member and any Governmental
Authority, that in either case, could reasonably be expected to have a Material
Adverse Effect;
 
(c)           the following events, as soon as possible and in any event within
30 days after the Borrower knows or has reason to know thereof: (i) the
occurrence of any Reportable Event with respect to any Plan, a failure to make
any required contribution to a Plan, the creation of any Lien in favor of the
PBGC or a Plan or any withdrawal from, or the termination, Reorganization or
Insolvency of, any Multiemployer Plan or (ii) the institution of proceedings or
the taking of any other action by the PBGC or the Borrower or any Commonly
Controlled Entity or any Multiemployer Plan with respect to the withdrawal from,
or the termination, Reorganization or Insolvency of, any Plan, in each case, to
the extent such event or proceeding (x) is expected to result in a material
change in the ESOP or ERISA disclosures contained in Holdings' next 10-Q or 10-K
filing (as compared to the most recent 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;
 
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(d)           any material notice received by a Group Member related to the
commencement of, or any material development in, 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 (i) is
expected to result in a material change in the environmental liability
disclosures in Holdings' next 10-Q or 10-K filing, or (ii) to the extent
Holdings is no longer subject to the SEC filing requirements, is of comparable
materiality;
 
(e)           of any matter that has resulted or could reasonably be expected to
result in a Material Adverse Effect, 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:
 
(i)            notice upon the occurrence of any event which could reasonably be
expected to have a material adverse effect on the aggregate value of the
Collateral or on 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
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 a third party, 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 the failure to take
such actions could not, in the aggregate, reasonably be expected to have a
Material Adverse Effect.
 
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(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.
 
6.09.        Additional Collateral, etc.
 
(a)           With respect to any property acquired after the Closing Date by
any Loan Party (other than (x) any property described in paragraph (b), (c) or
(d) below, and (y) any property subject to a Lien expressly permitted by
Section 7.03(f), (g), (p) and (r)) as to which the Administrative Agent, for the
benefit of the Lenders, does not have a perfected Lien, promptly (i) execute and
deliver to the Administrative Agent such amendments to the either of the
Guarantee and Collateral Agreements or such other documents as the
Administrative Agent deems necessary or advisable to grant to the Administrative
Agent, for the benefit of the Lenders, 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 Lenders, a perfected first priority security
interest in such property (subject to Liens permitted by Section 7.03),
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.
 
(b)           With respect to any fee interest in any real property having an
insured value (including with respect to improvements thereof) of at least
$2,000,000 acquired after the Closing Date by any Loan Party (other than (y) any
such real property subject to a Lien expressly permitted by Section 7.03(f),
(g), (p) and (r), promptly (i) execute and deliver a second priority (or, if no
Indebtedness evidenced by First Lien Notes or Permitted Refinancing Debt in
respect thereof is then outstanding, first priority) Mortgage in favor of the
Administrative Agent, for the benefit of the Lenders, covering such real
property, (ii) if requested by the Administrative Agent, provide the Lenders
with (x) title, flood and extended coverage insurance covering such real
property in an amount at least equal to the purchase price of such real property
(or such other amount as shall be reasonably specified by the Administrative
Agent), as well as a current ALTA survey thereof (or an existing survey (without
update), together with an affidavit of no change, so long as Title Insurance
Company shall agree to issue the mortgagee's title insurance policy, excluding
the standard survey exception, but including the survey dependent endorsements),
together with a surveyor's certificate or, in the case of real property located
in any jurisdiction outside the United States, any similar documentation
relevant to such jurisdiction and (y) to the extent obtainable using
commercially reasonable efforts, any consents or estoppels reasonably deemed
necessary or advisable by the Administrative Agent in connection with such
Mortgage, each of the foregoing in form and substance reasonably satisfactory to
the Administrative Agent, and (iii) if requested by the Administrative Agent,
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 Administrative Agent.
 
(c)           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, 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 Administrative Agent deems necessary or advisable to grant to
the Administrative Agent, for the benefit of the Lenders, a perfected first
priority security interest in the Capital Stock of
 
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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 Lenders a
perfected security interest in the Collateral described in the Guarantee and
Collateral Agreements prior and superior in right to any other Person (except
Liens permitted by Section 7.03) 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 and (C) to deliver to the
Administrative Agent a certificate of such Subsidiary, substantially in the form
of Exhibit G, with appropriate insertions and attachments, (iv) cause any such
new Foreign Subsidiary organized under the laws of Canada or any of its
provinces, (A) to execute and deliver to the Administrative Agent the Guarantee
and Collateral Agreement 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 or
other applicable Security Document as the Administrative Agent deems necessary
or advisable to grant a Lien to the Administrative Agent, for the benefit of the
Lenders, on all property of such 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 Lenders a perfected security
interest in the Collateral described in the Guarantee and Collateral Agreements
or other applicable Security Document delivered pursuant to the foregoing clause
(B) prior and superior in right to any other Person (except Liens permitted by
Section 7.03) with respect to such new Subsidiary, including such filings or
other recordings in such jurisdictions as may be required by the Guarantee and
Collateral Agreements or other applicable Security Document or by law or as may
be reasonably requested by the Administrative Agent, and (D) to deliver to the
Administrative Agent a certificate of such Subsidiary, substantially in the form
of Exhibit G, with appropriate insertions and attachments, with such
modifications relevant to the jurisdiction of such Foreign Subsidiary, as may be
requested by the Administrative Agent, and (v) if requested by the
Administrative Agent, 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 Administrative
Agent.
 
(d)           Notwithstanding anything in this Section 6.09 to the contrary, no
Subsidiary shall provide a guarantee of or a lien over any of its assets to
secure all or any portion of the Borrower's obligations under the Senior
Subordinated Notes, Senior Unsecured Notes, First Lien Notes, Second Lien Notes
or any Permitted Refinancing Debt Document unless, prior to or concurrently
therewith, such Subsidiary complies with the requirements of Section 6.09(c).
 
6.10.        Further Assurances. 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 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
the Borrower or any Subsidiary which may be deemed to be part of the Collateral)
pursuant hereto or thereto. Upon the exercise by the 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, 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
 
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required to obtain from the Borrower or any of its Subsidiaries for such
governmental consent, approval, recording, qualification or authorization.
 
6.11.        ERISA.
 
(a)           In the case of Holdings, promptly contribute, loan or repay to the
Borrower all cash received by it (including, without limitation, from the ESOP
but excluding any cash received by it which is forthwith remitted to the ESOP
pursuant to transactions which do not violate the provisions of this Agreement
or used to pay amounts owing or payable by Holdings in connection with its
activities which do not violate this Agreement) unless permitted to be retained
by Holdings in accordance with Section 7.16.
 
(b)           Take all actions necessary to preserve the existence of the ESOP
and to maintain its tax-qualified status under Sections 401(a) and 501(a), or
successor provisions, respectively, of the Code and the ESOP Component's status
as an employee stock ownership plan; and administer the ESOP in compliance in
all material respects with the terms of the ESOP and the provisions of the Code
and ERISA, as applicable to the ESOP, and make any remedial amendments required
by the IRS within the time period allowed for the amendments.
 
6.12.        Use of Proceeds. Use the proceeds of the Credit Extensions for
general corporate purposes not in contravention of any material Law or of any
Loan Document.
 
ARTICLE VII
 
NEGATIVE COVENANTS
 
Holdings and the Borrower hereby jointly and severally agree that, so long as
the Commitments remain in effect, any Letter of Credit remains outstanding or
any Loan or other amount is owing to the Administrative Agent, any L/C Issuer or
any Lender hereunder, each of Holdings and the Borrower shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly:
 
7.01.        Consolidated Fixed Charge Coverage Ratio. Permit the Consolidated
Fixed Charge Coverage Ratio, as determined as of March 31, 2010 and the last day
of each fiscal quarter of Holdings ending thereafter for which financial
statements have been (or were required to have been) delivered pursuant to
Section 6.01(b), in each case for the four (4) fiscal quarters of Holdings
ending on such date, to be less than 1.10 to 1.00; provided, that, if the
Availability Trigger Percentage with respect to every fiscal month ending in any
fiscal quarter, is greater than 20%, Holdings and the Borrower shall not be
required to comply with the foregoing financial covenant as of the last day of
such fiscal quarter (it being understood that, if the Availability Trigger
Percentage with respect to any fiscal month ending in any fiscal quarter is
equal to or less than 20%, Holdings and the Borrower shall be required to comply
with the foregoing financial covenant as of the end of such fiscal quarter).
 
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, the Borrower or any other Subsidiary, (iii) of any
Non-Guarantor to any Non-Guarantor, (iv) of any Non-Guarantor to Holdings, the
Borrower or any other Subsidiary that is a Guarantor, and (v) resulting
 
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from ESOP related loans and advances permitted by Section 7.07(g); provided,
that, in each case, any such Indebtedness described in the foregoing clauses
(i) through (iv) 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; and, provided, further, that, the aggregate outstanding amount of
all Indebtedness incurred pursuant to Section 7.02(b)(iv), when added to the sum
of (A) the aggregate outstanding amount of all Guarantee Obligations incurred
pursuant to Section 7.02(c)(ii), (B) the aggregate net book value of the assets
of any Loan Party subject to any merger, consolidation or amalgamation
consummated pursuant to Section 7.04(a)(iii), (C) the aggregate net book value
of assets disposed of pursuant to Section 7.04(b)(ii), and (D) the aggregate
outstanding amount of Investments made pursuant to Section 7.07(f), shall not
exceed $30,000,000 at any one time;
 
(c)           Guarantee Obligations incurred in the ordinary course of business
by the Borrower or any of its Subsidiaries of (i) obligations of the Borrower
and any Subsidiary that is a Guarantor and (ii) any Non-Guarantor; provided,
that, the aggregate amount of all Guarantee Obligations incurred pursuant to
Section 7.02(c)(ii), when added to the sum of (A) the aggregate outstanding
amount of all Indebtedness incurred pursuant to Section 7.02(b)(iv), (B) the
aggregate net book value of the assets of any Loan Party subject to any merger,
consolidation or amalgamation consummated pursuant to Section 7.04(a)(iii),
(C) the aggregate net book value of assets disposed of pursuant to Section
7.04(b)(ii), and (D) the aggregate outstanding amount of Investments made
pursuant to Section 7.07(f), shall not exceed $30,000,000 at any one time;
 
(d)           Permitted Existing Debt (excluding such Indebtedness referenced in
clauses (f), and (g) 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 $25,000,000 and 3.0% 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 Senior
Subordinated Notes, together with any Permitted Refinancing Debt in connection
therewith, in an aggregate principal amount not to exceed $32,195,000 and
(ii) Guarantee Obligations of Holdings and any Subsidiary that is a Guarantor in
respect of such Indebtedness, provided, that such Guarantee Obligations are
subordinated to the same extent as the obligations of the Borrower in respect of
the Senior Subordinated Notes or the applicable Permitted Refinancing Debt, as
the case may be;
 
(g)           (i) Indebtedness of the Borrower in respect of the Senior
Unsecured Notes, together with any Permitted Refinancing Debt in connection
therewith, in an aggregate principal amount not to exceed $17,491,000 and
(ii) Guarantee Obligations of Holdings and any Subsidiary that is a Guarantor in
respect of such Indebtedness;
 
(h)           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;
 
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(i)            Indebtedness under the AWA Environmental Indemnity Agreement;
provided that such Indebtedness is recourse only to the property described in
Section 7.03(i);
 
(j)            Guarantee Obligations of the Borrower with respect to obligations
of Holdings pursuant to the AWA Environmental Indemnity Agreement;
 
(k)           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 Business Days of the incurrence thereof;
 
(l)            Indebtedness of the Borrower or any of its Subsidiaries in
respect of performance bonds and surety bonds incurred in the ordinary course of
business;
 
(m)          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;
 
(n)           additional Indebtedness of the Borrower or any of its Subsidiaries
in an aggregate principal amount (for the Borrower and all Subsidiaries) not to
exceed $20,000,000 at any one time outstanding;
 
(o)           Indebtedness of one or more Loan Parties incurred in connection
with the Ohio Department of Development financing for the Borrower's finishing
area project investment and additional related investments at West Carrolton,
Ohio plant, and any subsequent refinancings thereof; provided that the aggregate
principal amount of Indebtedness at any time outstanding pursuant to this clause
(r) shall not exceed $12,500,000;
 
(p)           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;
 
(q)           (i) Indebtedness of the Borrower in respect of the First Lien
Notes, together with any Permitted Refinancing Debt in connection therewith, in
an aggregate principal amount not to exceed $305,000,000 and (ii) Guarantee
Obligations of Holdings and any Subsidiary that is a Guarantor in respect of
such Indebtedness; and
 
(r)            (i) Indebtedness of the Borrower in respect of the Second Lien
Notes, together with any Permitted Refinancing Debt in connection therewith, in
an aggregate principal amount not to exceed $161,766,000 (exclusive of any
interest paid and accrued in kind and added to the principal amount thereof) and
(ii) Guarantee Obligations of Holdings and any Subsidiary that is a Guarantor 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 delinquent or that are
being contested in good faith by appropriate proceedings, provided that adequate
reserves with respect thereto are maintained on the books of Holdings or its
Subsidiaries, as the case may be, in conformity with GAAP;
 
(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, are not substantial in amount and
that do not in any case 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 API 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(n);
 
(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)           Liens securing Indebtedness permitted to be incurred pursuant to
Section 7.02(o), which Liens shall extend only to the equipment and other
related personal property which is being financed by such Indebtedness;
 
(q)           Liens not otherwise permitted by this Section so long as (i) the
aggregate outstanding principal amount of the obligations secured thereby does
not exceed $20,000,000 at any one time outstanding and (ii) the aggregate fair
market value (as reasonably determined by the Borrower as of the date the
respective Lien is incurred) of the assets subject thereto does not exceed (as
to the Borrower and all Subsidiaries) $25,000,000 at any one time;
 
(r)            all exceptions to the title polices delivered pursuant to
Section 4.01(a)(iv) or Section 6.09(b);
 
(s)           Liens, if any, in favor of an L/C Issuer and/or Swing Line Lender
to cash collateralize or otherwise secure the obligations of a Defaulting Lender
or an Impacted Lender to fund risk participations hereunder;
 
(t)            to the extent such Liens are permitted under, and subject to, the
First Lien Note Intercreditor Agreement, Liens securing Indebtedness under the
First Lien Note Documents and any Permitted Refinancing Debt in respect thereof;
and
 
(u)           to the extent such Liens are permitted under, and subject to, the
Second Lien Note Intercreditor Agreement, Liens securing Indebtedness under the
Second Lien Note Documents and any Permitted Refinancing Debt in respect
thereof.
 
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),
(iii) with or into any Non-Guarantor, provided, that, the aggregate net book
value of the assets of any Loan Party subject to any merger, consolidation or
amalgamation consummated pursuant to Section 7.04(a)(iii), when added to the sum
of (A) the aggregate outstanding amount of all Indebtedness incurred pursuant to
Section 7.02(b)(iv), (B) the aggregate outstanding amount of all Guarantee
Obligations incurred pursuant to Section 7.02(c)(ii), (C) the aggregate net book
value of assets disposed of pursuant to Section 7.04(b)(ii),
 
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and (D) the aggregate outstanding amount of Investments made pursuant to
Section 7.07(f) shall not exceed $30,000,000 at any one time;
 
(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) to any Non-Guarantor, or (iii) to any other Person in connection
with a Disposition permitted pursuant to Section 7.05; provided, that, the
aggregate net book value of assets disposed of pursuant to Section 7.04(b)(ii),
when added to the sum of (A) the aggregate outstanding amount of all
Indebtedness incurred pursuant to Section 7.02(b)(iv), (B) the aggregate
outstanding amount of all Guarantee Obligations incurred pursuant to
Section 7.02(c)(ii), (C) the aggregate net book value of the assets of any Loan
Party subject to any merger, consolidation or amalgamation consummated pursuant
to Section 7.04(a)(iii), and (D) the aggregate outstanding amount of Investments
made and outstanding pursuant to Section 7.07(f) shall not exceed $30,000,000 at
any one time;
 
(c)           subject to Section 6.09, any Subsidiary of the Borrower merge with
any other Person to effect an Investment permitted pursuant to
Section 7.07(f) or (k); and
 
(d)           any Non-Guarantor may merge with or into any other Non-Guarantor.
 
7.05.        Disposition of Property. Voluntarily Dispose of any of its
property, whether now owned or hereafter acquired, or, in the case of any
Subsidiary, issue or sell any shares of 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;
 
(b)           the sale of inventory in the ordinary course of business;
 
(c)           Dispositions permitted by Sections 7.04, 7.06 and 7.07;
 
(d)           the sale or issuance of any Subsidiary's Capital Stock to the
Borrower or any Guarantor;
 
(e)           the Disposition of other property having a fair market value not
to exceed the greater of $25,000,000 or 3% of Consolidated Tangible Assets in
the aggregate for any fiscal year of the Borrower; and
 
(f)            the sale of Non-Guarantors or the assets of Non-Guarantors.
 
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, and to any other Persons that directly own a
Capital Stock in such
 
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Subsidiary, ratably according to their respective holdings of the type of
Capital Stock in respect of which such Restricted Payment is being made;
 
(b)           so long as no Event of Default has occurred and is continuing
under Section 8.01(a) or Section 8.01(f) or would result therefrom, Subsidiaries
of Holdings may make Restricted Payments to permit Holdings (and Holdings shall
be permitted) (i) to make Restricted Payments to satisfy its obligations to
repurchase its common stock pursuant to the ESOP Documentation from accounts
allocated to participants in the ESOP to the extent representing hardship (with
"hardship" being determined in accordance with the Code and the ESOP
Documentation) distributions to the participants in the ESOP in accordance with
the Code and the ESOP Documentation; provided that the aggregate amount of all
Restricted Payments made pursuant to this clause (b)(i) shall not exceed
$2,000,000 in any fiscal year of Holdings; (ii) to make Restricted Payments to
satisfy its obligations to repurchase its common stock pursuant to the ESOP
Documentation from accounts allocated to participants in the ESOP upon (x) the
election of such participants to diversify a portion of the common stock held in
the account eligible for diversification under section 401(a)(28) of the Code
(or any relevant successor provision) and/or (y) the death, disability,
resignation, dismissal or permanent layoff of such participants and/or
(z) pursuant to a qualified domestic relation order under Section 414(p) of the
Code, so long as the aggregate amount of the Restricted Payments then being made
pursuant to this clause (b)(ii), when aggregated with all other such Restricted
Payments made pursuant to this clause (b)(ii) during the same fiscal quarter and
during the three immediately preceding fiscal quarters, would not exceed
$45,000,000; and (iii) to the extent such Restricted Payments would be permitted
under (x) Section 4.07(a) of the Second Lien Note Indenture as in effect on the
date hereof, and Section 4.07(a) of the First Lien Note Indenture as in effect
on the date hereof, and (in each case taking into account any Investments made
pursuant to Section 7.07(l)), to make other Restricted Payments to, or in
connection with, the ESOP or the ESOP Documentation.
 
(c)           Subsidiaries of Holdings may pay dividends to permit Holdings or
any of its Subsidiaries to (i) pay corporate overhead expenses incurred in the
ordinary course of business and (ii) pay any taxes that are due and payable by
Holdings and or any of its Subsidiaries as part of a consolidated group;
 
(d)           the Borrower and its Subsidiaries may make other Restricted
Payments (without duplication of amounts on-dividended) not to exceed (i)
$3,000,000 in the aggregate during any fiscal year of the Borrower and (ii)
$12,000,000 in the aggregate over the term of this Agreement;
 
(e)           so long as no Default or Event of Default shall have occurred and
be continuing or would result therefrom, the Borrower or Holdings may make
Restricted Payments to repurchase common stock issued to the ESOP in exchange
for, or out of the Net Cash Proceeds of the substantially concurrent sale (other
than to a Subsidiary of the Borrower) of, Capital Stock of the Borrower or
Holdings (other than Disqualified Capital Stock) or from the substantially
concurrent contribution of common equity capital to the Borrower or Holdings;
and
 
(f)            so long as no Default or Event of Default shall have occurred and
be continuing or would result therefrom, the Borrower may make distributions to
permit Holdings to repay intercompany loans so long as the amount of any such
distribution is simultaneously netted against amounts owing to the Borrower
under such loans and no cash is paid as a result of any such distribution.
 
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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;
 
(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 $1,000,000 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 $1,000,000 at any time
outstanding;
 
(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)            So long as no Event of Default shall have occurred and be
continuing, Investments by the Borrower or any of its Subsidiaries in any Person
that, prior to such Investment, is not a Guarantor; provided, that, the
aggregate Investments made pursuant to this Section 7.07(f) (valued at cost net
of returns on such Investments actually received in cash by the Loan Parties),
when added to the sum of (A) the aggregate outstanding amount of all
Indebtedness incurred pursuant to Section 7.02(b)(iv), (B) the aggregate
outstanding amount of all Guarantee Obligations incurred pursuant to
Section 7.02(c)(ii), (C) the aggregate net book value of the assets of any Loan
Party subject to any merger, consolidation or amalgamation consummated pursuant
to Section 7.04(a)(iii), and (D) the aggregate net book value of assets of any
Loan Party disposed of pursuant to Section 7.04(b)(ii), shall not exceed
$30,000,000 at any one time;
 
(g)           so long as (x) no Event of Default has occurred and is continuing
under Section 8.01(a) or Section 8.01(f) or would result therefrom and (y) such
Investment would be permitted under Section 7.06 if it were deemed a "Restricted
Payment" (until repaid), short-term loans and advances (to be repaid in no more
than 180 days) by (i) the Borrower to Holdings to permit Holdings (and Holdings
shall be permitted) (A) to satisfy its obligation to repurchase its common stock
pursuant to the ESOP Documentation from accounts allocated to participants in
the ESOP upon the death, disability or termination of employment of such
participants or upon the exercise by any such participant of his or her
diversification rights under the ESOP Documentation, (B) to make loans to the
ESOP to permit the ESOP to make loans to participants in the ESOP in accordance
with the ESOP Documentation and (C) to provide funds to the ESOP to permit the
ESOP to fund hardship distributions to participants in the ESOP in accordance
with the ESOP Documentation and (ii) Holdings, the Borrower or any Subsidiary to
the ESOP to permit the ESOP (and the ESOP shall be permitted) to satisfy its or
Holdings' obligations to repurchase common stock pursuant to the ESOP
Documentation;
 
(h)           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)            non-cash consideration issued to the Borrower or any of its
Subsidiaries by the purchaser of assets in connection with a sale of such assets
to the extent permitted by Section 7.05 in an aggregate amount not to exceed, in
connection with all Asset Sales theretofore effected after
 
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the Closing Date, 25% of the aggregate fair market value of the property subject
to such Asset Sales;
 
(j)            Guarantee Obligations of customary indemnities and insurance for
directors and officers of any Group Member; and
 
(k)           additional Investments to the extent such Investment, together
with all Restricted Payments made pursuant to Section 7.06(b)(iii), would be
permitted under (x) Section 4.07(a) of the Second Lien Note Indenture as in
effect on the date hereof and (y) Section 4.07(a) of the First Lien Note
Indenture as in effect on the date hereof.
 
7.08.Prepayments and Modifications of Certain Debt Instruments.
 
(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 Senior Unsecured Notes, the
Senior Subordinated Notes, the Second Lien Notes or any Permitted Refinancing
Debt with respect to any of the foregoing (it being understood that this
Section 7.08(a) shall not apply to (x) the payment of any such Indebtedness at
the maturity thereof or (y) the First Lien Notes or any Permitted Refinancing
Debt with respect to the First Lien Notes), 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 Senior Unsecured Notes, the Senior
Subordinated Notes or the Second Lien Notes or any Permitted Refinancing Debt
with respect thereto, other than (A) the refinancing of any Senior Subordinated
Notes, Senior Unsecured Notes or Second Lien Notes, in each case with applicable
Permitted Refinancing Debt, and (B) the payment, prepayment, repurchase or
redemption of the Senior Subordinated Notes, Senior Unsecured Notes, Second Lien
Notes, and any Permitted Refinancing Debt with respect thereto, so long as the
aggregate principal amount of the Senior Subordinated Notes, Senior Unsecured
Notes, Second Lien Notes, and Permitted Refinancing Debt with respect thereto
repaid, prepaid, repurchased or redeemed shall not exceed (x) $35,000,000, in
any fiscal year, and (y) $50,000,000 in the aggregate after the Closing Date,
provided, that in each case under the foregoing clauses (A) and (B), before and
after giving effect to such refinancing payment, repurchase or redemption, as
the case may be, no Default or Event of Default shall have occurred and be
continuing;
 
(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
Senior Unsecured Notes, the Senior Subordinated Notes, the First Lien Notes, the
Second Lien Notes or any Permitted Refinancing Debt with respect thereto (other
than any such amendment, modification, waiver or other change that is not
materially adverse to the Lenders (it being understood and agreed that an
increase of greater than 2.00% to the existing cash interest rate or other yield
provisions is materially adverse to the Lenders so long as the Commitments
remain in effect, any Letter of Credit remains outstanding or any Loan or other
amount is owing to any Lender or Agent hereunder)) and that, in any event, would
not result in such Indebtedness being unable to qualify as Permitted Refinancing
Indebtedness if it were newly issued; or
 
(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 the Senior
Subordinated Note Indenture or any applicable Permitted Refinancing Debt
Document.
 
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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; (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, 7.06 and 7.07 and (vi) transactions among Holdings and its
Subsidiaries to the extent otherwise permitted under this Agreement.
 
7.10.        Changes in Fiscal Periods. 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.
 
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 First Lien Note Indenture, (d) the Second Lien
Note Indenture, (e) the Senior Unsecured Note Indenture, (f) the Senior
Subordinated Note Indenture, (g) any Permitted Refinancing Debt Document,
(h) customary provisions restricting subletting or assignment of any lease
governing a leasehold interest of Holdings or a Subsidiary of Holdings,
(i) customary provisions restricting assignment of any licensing agreement
entered into by Holdings or any Subsidiary of Holdings in the ordinary course of
business, and (j) 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 First Lien Note Indenture, (iv) the Second Lien
Note Indenture, (v) the Senior Unsecured Note Indenture, (vi) the Senior
Subordinated Note Indenture, (vii) any Permitted Refinancing Debt Document,
(viii) the debt agreements in connection with Indebtedness permitted under
Section 7.02, (ix) 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), or (x) 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.
 
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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 (i) the Fox River
Indemnity Arrangements without the consent of the Required Lenders (other than
to the extent necessary to change a notice address or to cure any ambiguity,
defect or inconsistency in a manner not adverse to the Lenders in any material
respect) or (ii) the other indemnities and licenses furnished to Holdings or any
of its Subsidiaries pursuant to the Acquisition Documentation (other than the
Fox River Indemnity Arrangements) such that after giving effect thereto such
indemnities or licenses shall be materially less favorable to the interests of
the Loan Parties or the Lenders with respect thereto, (b) deliver, or vote any
of Capital Stock owned by it in favor of the delivery of, any election of
"Reduced Cumulative Limits" (under and as defined in the AIG Credit Support)
except with the consent of the Administrative Agent or (c) assign any of its
rights under the Fox River Indemnity Arrangements without the consent of the
Required Lenders.
 
7.15.        S Corporation Status. Take, or fail to take, any action that would
terminate, or could reasonably be expected to lead to the termination of,
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.
 
7.16.        Holding Company Status. In the case of Holdings, (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 (x) its
direct or indirect ownership of the Capital Stock of the Borrower, (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), (k), (p), (q) and (r) 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) and cash equivalents) other than the direct ownership of shares of
Capital Stock of the Borrower, 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.
 
7.18.        ESOP Amendments. Amend or terminate the ESOP without the prior
written consent of the Administrative Agent, 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 and (d) to
incorporate other changes so long as, with respect to this clause (d), the
Borrower in good faith determines that such changes could not singly or in the
aggregate reasonably be expected to result in a Material Adverse Effect.
 
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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 or
Reimbursement Obligation when due in accordance with the terms hereof; or the
Borrower shall fail to pay any interest on any Loan or Reimbursement Obligation,
or any other amount payable hereunder or under any other Loan Document, within
five 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, 6.03, 6.04(a) (with respect
to Holdings and the Borrower only), 6.05, 6.06, Section 6.07(a), 6.08, 6.09, or
6.10 or in Section 7 of this Agreement or (B) any agreement contained in
Sections 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 10 days; or
 
(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 30 days after the earlier of
(i) notice to the Borrower from the Administrative Agent or any Lender and
(ii) 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
principal of any Indebtedness (including any Guarantee Obligation, but excluding
the Loans) 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 its 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 Loan Party shall commence any case, proceeding
or other action (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 a 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
 
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substantial part of its assets, or any Loan Party shall make a general
assignment for the benefit of its creditors; or (ii) there shall be commenced
against any 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
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; 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)           (i)            any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the Code)
involving any Plan, (ii) any "accumulated funding deficiency" (as defined in
Section 302 of ERISA), whether or not waived, shall exist with respect to any
Plan or any Lien in favor of the PBGC or a Plan shall arise on the assets of the
Borrower or any Commonly Controlled Entity, (iii) a Reportable Event shall occur
with respect to, or proceedings shall commence to have a trustee appointed, or a
trustee shall be appointed, to administer or to terminate, any Single Employer
Plan, which Reportable Event or commencement of proceedings or appointment of a
trustee is, in the reasonable opinion of the Required Lenders, likely to result
in the termination of such Plan for purposes of Title IV of ERISA, (iv) any
Single Employer Plan shall terminate for purposes of Title IV of ERISA, (v) the
Borrower or any Commonly Controlled Entity shall, or in the reasonable opinion
of the Required Lenders is likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a Multiemployer Plan or
(vi) any other event or condition shall occur or exist with respect to a Plan;
and in each case in clauses (i) through (vi) above, such event or condition,
together with all other such events or conditions, if any, could reasonably be
expected to have a Material Adverse Effect; or
 
(h)           one or more 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 as to which the relevant insurance company has acknowledged
coverage or not fully covered by the AIG Credit Support) of $10,000,000 or more,
and all such judgments or decrees shall not have been vacated, discharged,
stayed or bonded pending appeal within 45 days from the entry thereof; or
 
(i)            any of the 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 guarantee contained in Section 2 of each of the Guarantee and
Collateral Agreements 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)            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 directors of Holdings (determined on a fully diluted basis);
(ii) the ESOP Trust shall cease to own of record and
 
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beneficially greater than 50% of the outstanding Capital 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); (iv) the board of directors of either Holdings or the
Borrower shall cease to include two independent directors; or (v) a Specified
Change of Control shall occur; or
 
(l)            the Senior Subordinated Notes or the guarantees thereof, or any
related Permitted Refinancing Debt or the guarantees thereof, so long as such
Indebtedness is outstanding, shall 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 Senior
Subordinated Note Indenture or any related Permitted Refinancing Debt Document,
as the case may, or any Loan Party, any Affiliate of any Loan Party, the trustee
or agent in respect of the Senior Subordinated Notes or any related Permitted
Refinancing Debt Document, or the holders of at least 25% in aggregate principal
amount of the Senior Subordinated Notes 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 (after
giving effect to any credit support provided with respect to such default
pursuant to the AIG Credit Support), where such default, singly or in the
aggregate with all other such defaults, if any, could reasonably be expected to
have a Material Adverse Effect, (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 any
party thereto, or any Person acting on behalf of any party thereto, shall deny
or disaffirm its obligations under any of the Fox River Indemnity Arrangements
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, where such
default, singly or in the aggregate with all other such defaults, if any, could
reasonably be expected to have a Material Adverse Effect, (iv) any party shall
default in the observance or performance of any agreement contained in the
Bermuda Company Agreements, where such default, singly or in the aggregate with
all other such defaults, if any, could reasonably be expected to have a Material
Adverse Effect, or (v) NCR Corp. shall default in the observance or performance
of any agreement contained in the NCR Agreements, where such default, singly or
in the aggregate with all other such defaults, if any, could reasonably be
expected to have a Material Adverse Effect; or
 
(n)           the First Lien Note 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 First
Lien Note Documents shall, for any reason, cease to be subordinated to the
extent required pursuant to the terms and provisions of the First Lien Note
Intercreditor Agreement to the Lien created under the Security Documents
securing the RCF Obligations under, and as defined in, the First Lien Note
Intercreditor Agreement;
 
(o)           the Second Lien Note 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 Documents 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 Second Lien Note Intercreditor Agreement; or
 
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(p)           the trustee of the ESOP shall at any time fail to be an
independent institutional third-party fiduciary;
 
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Borrower,
automatically the Commitments shall immediately terminate and the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement and the other Loan Documents (including all amounts of L/C
Obligations, whether or not the beneficiaries of the then outstanding Letters of
Credit shall have presented the documents required thereunder) shall immediately
become due and payable, and (B) if such event is any other Event of Default,
either or both of the following actions may be taken: (i) with the consent of
the Required Lenders, the Administrative Agent may, or upon the request of the
Required Lenders, the Administrative Agent shall, by notice to the Borrower
declare the Commitments to be terminated forthwith, whereupon the Commitments
shall immediately terminate; and (ii) with the consent of the Required Lenders,
the Administrative Agent may, or upon the request of the Required Lenders, the
Administrative Agent shall, by notice to the Borrower, declare the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement and the other Loan Documents (including all amounts of L/C
Obligations, whether or not the beneficiaries of the then outstanding Letters of
Credit shall have presented the documents required thereunder) to be due and
payable forthwith, whereupon the same shall immediately become due and payable.
With respect to all Letters of Credit with respect to which presentment for
honor shall not have occurred at the time of an acceleration pursuant to this
paragraph, the Borrower shall at such time Cash Collateralize the L/C
Obligations in accordance with the other provisions of this Agreement. Except as
expressly provided above in this Section, presentment, demand, protest and all
other notices of any kind are hereby expressly waived by the Borrower.
 
8.02.        Application of Funds. After the exercise of remedies provided for
in Section 8.01 (or after the Loans have automatically become immediately due
and payable and the L/C Obligations have automatically been required to be Cash
Collateralized as set forth in clause (A) at the end of Section 8.01), any
amounts received on account of the Obligations shall be applied by the
Administrative Agent in the following order:
 
First, 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, to payment of that portion of the Obligations constituting fees,
indemnities and other amounts (other than principal, interest and Letter of
Credit Fees) payable to the Lenders and the L/C Issuers (including fees, charges
and disbursements of counsel to the respective Lenders and the L/C Issuers
(including fees and time charges for attorneys who may be employees of any
Lender or any L/C Issuer) and amounts payable under Article III, ratably among
them in proportion to the respective amounts described in this clause Second
payable to them;
 
Third, to payment of that portion of the Obligations constituting accrued and
unpaid Letter of Credit Fees and interest on the Loans, L/C Borrowings and other
Obligations, ratably among the Lenders and the L/C Issuers in proportion to the
respective amounts described in this clause Third payable to them;
 
Fourth, to payment of that portion of the Obligations constituting unpaid
principal of the Loans, L/C Borrowings, Secured Hedge Agreements (calculated in
accordance with the applicable Hedge Termination Value) and Secured Cash
Management Agreements, ratably
 
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among the Lenders, the L/C Issuers, the Hedge Banks and the Cash Management
Banks in proportion to the respective amounts described in this clause Fourth
held by them;
 
Fifth, to the Administrative Agent for the account of the L/C Issuers, to Cash
Collateralize that portion of L/C Obligations comprised of the aggregate undrawn
amount of Letters of Credit; and
 
Last, the balance, if any, after all of the Obligations have been indefeasibly
paid in full, to the Borrower or as otherwise required by Law.
 
Subject to Section 2.03(c), amounts used to Cash Collateralize the aggregate
undrawn amount of Letters of Credit pursuant to clause Fifth above shall be
applied to satisfy drawings under such Letters of Credit as they occur. If any
amount remains on deposit as Cash Collateral after all Letters of Credit have
either been fully drawn or expired, such remaining amount shall be applied to
the other Obligations, if any, in the order set forth above.
 
ARTICLE IX
 
ADMINISTRATIVE AGENT
 
9.01.        Appointment and Authority.
 
(a)           Each of the Lenders and L/C Issuers hereby irrevocably appoints
Fifth Third to act on its behalf as the Administrative Agent hereunder and under
the other Loan Documents and authorizes the Administrative Agent to take such
actions on its behalf and to exercise such powers as are delegated to the
Administrative Agent by the terms hereof or thereof, together with such actions
and powers as are reasonably incidental thereto. The provisions of this
Article are solely for the benefit of the Administrative Agent, the Lenders and
the L/C Issuers, and neither the Borrower nor any other Loan Party shall have
rights as a third party beneficiary of any of such provisions.
 
(b)           The Administrative Agent shall also act as the "collateral agent"
under the Loan Documents, and each of the Lenders (in its capacities as a
Lender, Swing Line Lender (if applicable), potential Hedge Bank and potential
Cash Management Bank) and the L/C Issuers hereby irrevocably appoints and
authorizes the Administrative Agent to act as the agent of such Lender and such
L/C Issuer for purposes of acquiring, holding and enforcing any and all Liens on
Collateral granted by any of the Loan Parties to secure any of the Obligations,
together with such powers and discretion as are reasonably incidental thereto.
In this connection, the Administrative Agent, as "collateral agent" and any
co-agents, sub-agents and attorneys-in-fact appointed by the Administrative
Agent pursuant to Section 9.05 for purposes of holding or enforcing any Lien on
the Collateral (or any portion thereof) granted under the Security Documents, or
for exercising any rights and remedies thereunder at the direction of the
Administrative Agent), shall be entitled to the benefits of all provisions of
this Article IX and Article X (including Section 10.04(c), as though such
co-agents, sub-agents and attorneys-in-fact were the "collateral agent" under
the Loan Documents) as if set forth in full herein with respect thereto.
 
9.02.        Rights as a Lender. The 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
expressly indicated or unless the context otherwise requires, include the Person
serving as the Administrative Agent hereunder in its individual capacity. Such
Person and its Affiliates may accept
 
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deposits from, lend money to, act as the financial advisor or in any other
advisory capacity for and generally engage in any kind of business with the
Borrower or any Subsidiary or other Affiliate thereof as if such Person were not
the Administrative Agent hereunder and without any 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 herein and in the other
Loan Documents. Without limiting the generality of the foregoing, the
Administrative Agent:
 
(a)           shall not be subject to any fiduciary or other implied duties,
regardless of whether a Default has occurred and is continuing;
 
(b)           shall not have any duty to take any discretionary action or
exercise any discretionary powers, except discretionary rights and powers
expressly contemplated hereby or by the other 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
expressly provided for herein or in the other Loan Documents), 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 or that is contrary to any Loan Document or applicable law; and
 
(c)           shall not, except as expressly set forth herein and in the other
Loan Documents, have any duty to disclose, and shall not be liable for the
failure to disclose, any information relating to the Borrower or any of its
Affiliates that is communicated to or obtained by the Person serving as 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 Sections 10.01 and 8.02) or (ii) in the absence of
its own gross negligence or willful misconduct. The Administrative Agent shall
be deemed not to have knowledge of any Default unless and until notice
describing such Default is given to the Administrative Agent by the Borrower, a
Lender or an L/C Issuer.
 
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 this Agreement or any other 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 herein or therein or the occurrence of any Default, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement, any other 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 the sufficiency of any Collateral, or (v) the
satisfaction of any condition set forth in Article IV or elsewhere herein, other
than to confirm receipt of items expressly required to be delivered to the
Administrative Agent.
 
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 the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to have been made by the proper Person, and shall not incur
 
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any liability for relying thereon. In determining compliance with any condition
hereunder to the making of a Loan, or the issuance of a Letter of Credit, that
by its terms must be fulfilled to the satisfaction of a Lender or an L/C Issuer,
the Administrative Agent may presume that such condition is satisfactory to such
Lender or such L/C Issuer unless the Administrative Agent shall have received
notice to the contrary from such Lender or such L/C Issuer prior to the making
of such Loan or the issuance of such Letter of Credit. The Administrative Agent
may consult with legal counsel (who may be counsel for the Borrower),
independent accountants and other experts 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 experts.
 
9.05.        Delegation of Duties. The Administrative Agent may perform any and
all of its duties and exercise its rights and powers hereunder or under any
other Loan Document by or through 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. The exculpatory provisions of this
Article shall apply to any such sub-agent and to the Related Parties of the
Administrative Agent and any such sub-agent, and shall apply to their respective
activities in connection with the syndication of the credit facilities provided
for herein as well as activities as Administrative Agent.
 
9.06.        Resignation of Administrative Agent. The Administrative Agent may
at any time give notice of its resignation to the Lenders, the L/C Issuers and
the Borrower. Upon receipt of any such notice of resignation, the Required
Lenders shall have the right, in consultation with the Borrower, to appoint a
successor, which shall be a bank with an office in the United States, or an
Affiliate of any such bank with an office in the United States. If no such
successor shall have been so appointed by the Required Lenders and shall have
accepted such appointment within 30 days after the retiring Administrative Agent
gives notice of its resignation, then the retiring Administrative Agent may on
behalf of the Lenders and the L/C Issuers, appoint a successor Administrative
Agent meeting the qualifications set forth above; provided that if the
Administrative Agent shall notify the Borrower and the Lenders that no
qualifying Person has accepted such appointment, then such resignation shall
nonetheless become effective in accordance with such notice and (a) the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder and under the other Loan Documents (except that in the case of any
collateral security held by the Administrative Agent on behalf of the Lenders or
the L/C Issuers under any of the Loan Documents, the retiring Administrative
Agent shall continue to hold such collateral security until such time as a
successor Administrative Agent is appointed) and (b) all payments,
communications and determinations provided to be made by, to or through the
Administrative Agent shall instead be made by or to each Lender and each L/C
Issuer directly, until such time as the Required Lenders appoint a successor
Administrative Agent as provided for above in this Section. Upon the acceptance
of a successor's appointment as Administrative Agent hereunder, such successor
shall succeed to and become vested with all of the rights, powers, privileges
and duties of the retiring (or retired) Administrative Agent, and the retiring
Administrative Agent shall be discharged from all of its duties and obligations
hereunder or under the other Loan Documents (if not already discharged therefrom
as provided above in this Section). 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 the Borrower and such successor.
After the retiring Administrative Agent's resignation hereunder and under the
other Loan Documents, the provisions of this Article and Section 10.04 shall
continue in effect for the benefit of such retiring Administrative Agent, its
sub-agents and their respective Related Parties in respect of any actions taken
or omitted to be taken by any of them while the retiring Administrative Agent
was acting as Administrative Agent.
 
Any resignation by Fifth Third as Administrative Agent pursuant to this
Section shall also constitute its resignation as an L/C Issuer and Swing Line
Lender. Upon the acceptance of a successor's appointment as Administrative Agent
hereunder, (i) such successor shall succeed to and become vested
 
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with all of the rights, powers, privileges and duties of the retiring L/C Issuer
and Swing Line Lender, (ii) the retiring L/C Issuer and Swing Line Lender shall
be discharged from all of their respective duties and obligations hereunder or
under the other Loan Documents, and (iii) the successor L/C Issuer shall issue
letters of credit in substitution for the Letters of Credit issued by such
retiring L/C Issuer, if any, outstanding at the time of such succession or make
other arrangements satisfactory to the retiring L/C Issuer to effectively assume
the obligations of the retiring L/C Issuer with respect to such Letters of
Credit.
 
9.07.        Non-Reliance on Administrative Agent and Other Lenders. Each Lender
and each L/C Issuer acknowledges that it has, independently and without reliance
upon the Administrative Agent or any other Lender or any of their Related
Parties and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender and each L/C Issuer also acknowledges that it will,
independently and without reliance upon the Administrative Agent or any other
Lender or any of their Related Parties 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 any related agreement or any document furnished
hereunder or thereunder.
 
9.08.        No Other Duties, Etc. Anything herein to the contrary
notwithstanding, the Arranger shall have no powers, duties or responsibilities
under this Agreement or any of the other Loan Documents, except in its capacity,
as applicable, as the Administrative Agent, a Lender or an L/C Issuer hereunder.
 
9.09.        Administrative Agent May File Proofs of Claim. In case of the
pendency of any proceeding under any Debtor Relief Law or any other judicial
proceeding relative to any Loan Party, the Administrative Agent (irrespective of
whether the principal of any Loan or L/C Obligation 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, by intervention in such
proceeding or otherwise
 
(a)           to file and prove a claim for the whole amount of the principal
and interest owing and unpaid in respect of the Loans, L/C Obligations 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, the
L/C Issuers and the Administrative Agent (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Lenders, the L/C
Issuers and the Administrative Agent and their respective agents and counsel and
all other amounts due the Lenders, the L/C Issuers and the Administrative Agent
under Sections 2.03(i) and (j), 2.09 and 10.04) allowed in such judicial
proceeding; and
 
(b)           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 and each L/C Issuer to make such payments to the Administrative
Agent and, if the Administrative Agent shall consent to the making of such
payments directly to the Lenders and the L/C Issuers, 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 Sections 2.09
and 10.04.
 
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 or any L/C
Issuer any plan of reorganization,
 
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arrangement, adjustment or composition affecting the Obligations or the rights
of any Lender or any L/C Issuer to authorize the Administrative Agent to vote in
respect of the claim of any Lender or any L/C Issuer or in any such proceeding.
 
9.10.        Collateral and Guaranty Matters. The Lenders and the L/C Issuers
irrevocably authorize the Administrative Agent, at its option and in its
discretion,
 
(a)           to release any Lien on any property granted to or held by the
Administrative Agent under any Loan Document (i) upon termination of the
Commitments and payment in full of all Obligations (other than contingent
indemnification obligations) and the expiration or termination of all Letters of
Credit, (ii) that is sold or to be sold as part of or in connection with any
sale permitted hereunder or under any other Loan Document, (iii) if approved,
authorized or ratified in writing in accordance with Section 10.01, or (iv) by a
Guarantor that is released pursuant to clause (b) below;
 
(b)           to release any Guarantor from its obligations under the Guaranty
if such Person ceases to be a Subsidiary as a result of a transaction permitted
hereunder; and
 
(c)           to subordinate or release any Lien on any property granted to or
held by the Administrative Agent under any Loan Document to the holder of any
Lien on such property that is permitted by Section 7.03(f), (g), (n), (o),
(p) or (r).
 
Upon request by the Administrative Agent at any time, the Required Lenders will
confirm in writing the Administrative Agent's authority to release or
subordinate its interest in particular types or items of property, or to release
any Guarantor from its obligations under the Guaranty pursuant to this
Section 9.10. In each case as specified in this Section 9.10, the Administrative
Agent will, at the Borrower's expense, execute and deliver to the applicable
Loan Party such documents as such Loan Party may reasonably request to evidence
the release of such item of Collateral from the assignment and security interest
granted under the Security Documents or to subordinate its interest in such
item, or to release such Guarantor from its obligations under the Guaranty, in
each case in accordance with the terms of the Loan Documents and this
Section 9.10.
 
ARTICLE X
 
MISCELLANEOUS
 
10.01.      Amendments, Etc. Except as provided in Section 2.14 with respect to
any increase in the Facility, 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 (or by the Administrative Agent with the consent
of 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 no such amendment, waiver or
consent shall:
 
(a)           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;
 
(b)           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
 
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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);
 
(c)           reduce the principal of, or the rate of interest specified herein
on, any Loan or L/C Borrowing, or (subject to clause (iv) of the proviso to this
Section 10.01) 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 or Letter of Credit Fees at the
interest rate specified in Section 2.08(b);
 
(d)           change Section 8.02 in a manner that would alter the pro rata
sharing of payments required thereby without the written consent of each Lender
affected thereby;
 
(e)           change (i) any provision of this Section 10.01, (ii) 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, or
(iii) without the written consent of Lenders holding more than 75% of the sum of
the (x) Total Outstandings (with the aggregate amount of each Lender's risk
participation and funded participation in L/C Obligations and Swing Line Loans
being deemed "held" by such Lender for purposes hereof) and (y) aggregate unused
Commitments), the definitions of "Eligible Accounts," "Eligible Inventory" or
"Borrowing Base" (including the advance rates referenced therein and any defined
term used therein relevant to the determination of the Borrowing Base);
 
(f)            release all or substantially all of the Collateral in any
transaction or series of related transactions, without the written consent of
each Lender; or
 
(g)           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 9.10 (in which
case such release may be made by the Administrative Agent acting alone);
 
and, provided, further, that (i) no amendment, waiver or consent shall, unless
in writing and signed by an L/C Issuer in addition to the Lenders required
above, affect the rights or duties of such L/C Issuer under this Agreement or
any Issuer Document relating to any Letter of Credit issued or to be issued by
it; (ii) no amendment, waiver or consent shall, unless in writing and signed by
the Swing Line Lender in addition to the Lenders required above, affect the
rights or duties of the Swing Line Lender under this Agreement; (iii) 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 or duties of the Administrative Agent under this Agreement or any other
Loan Document; and (iv) the 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.
Notwithstanding anything to the contrary herein, no Defaulting Lender shall have
any right to approve or disapprove any amendment, waiver or consent hereunder,
except that the Commitment of such Lender may not be increased or extended
without the consent of such Lender.
 
If any Lender does not consent to a proposed amendment, waiver, consent or
release with respect to any Loan Document that requires the consent of each
Lender (or the Lenders required pursuant to Section 10.01(e)(iii)) and that has
been approved by the Required Lenders, the Borrower may replace
 
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such non-consenting Lender in accordance with Section 10.13; provided that such
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).
 
Notwithstanding the foregoing, this Agreement may be amended (or amended and
restated) with the written consent of the Required Lenders, the Administrative
Agent and the Borrower (a) to add one or more additional credit facilities to
this Agreement and to permit the extensions of credit from time to time
outstanding thereunder and the accrued interest and fees in respect thereof to
share ratably in the benefits of this Agreement and the other Loan Documents
(including mandatory prepayments) with the Loans and the accrued interest and
fees in respect thereof and (b) to include appropriately the Lenders holding
such credit facilities in any determination of the Required Lenders.
 
10.02.      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, the Administrative Agent, any L/C
Issuer or the Swing Line Lender, to the address, facsimile number, electronic
mail address or telephone number specified for such Person on Schedule 10.02;
and
 
(ii)           if to any other Lender, to the address, facsimile number,
electronic mail address or telephone number specified in its Administrative
Questionnaire.
 
Notices sent by hand or overnight courier service, or mailed by certified or
registered mail, shall be deemed to have been given when received; notices sent
by facsimile 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 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 and the L/C Issuers hereunder may be delivered or furnished by
electronic communication (including e-mail and Internet or intranet websites)
pursuant to procedures approved by the Administrative Agent, provided that the
foregoing shall not apply to notices to any Lender or any L/C Issuer pursuant to
Article II if such Lender or such L/C Issuer, 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
 
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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 intranet website 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, any
L/C Issuer 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, except to the extent that such losses, claims, damages,
liabilities or expenses are determined by a court of competent jurisdiction by a
final and nonappealable 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,
any L/C Issuer 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, the
Administrative Agent, each L/C Issuer and the Swing Line Lender 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, the Administrative Agent, each L/C Issuer
and the Swing Line Lender. 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, L/C Issuers and Lenders. The
Administrative Agent, the L/C Issuers and the Lenders shall be entitled to rely
and act upon any notices (including telephonic Committed Loan Notices and Swing
Line 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 other form of notice specified herein, or
(ii) the terms thereof, as understood by the recipient, varied from any
confirmation
 
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thereof. The Borrower shall indemnify the Administrative Agent, each L/C Issuer,
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 nonappealable judgment to have resulted
from the gross negligence or willful misconduct of Administrative Agent, the L/C
Issuers 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.
 
10.03.      No Waiver; Cumulative Remedies. No failure by any Lender, any L/C
Issuer 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.
 
10.04.      Expenses; Indemnity; Damage Waiver.
 
(a)           Costs and Expenses. The Borrower shall pay (i) all reasonable,
invoiced out-of-pocket expenses incurred by the Administrative Agent and its
Affiliates (including the reasonable fees, charges and disbursements of counsel
for the Administrative Agent), in connection with the syndication of the credit
facilities provided for herein, the preparation, negotiation, execution,
delivery and administration of this Agreement and the other Loan Documents or
any amendments, modifications or waivers of the provisions hereof or thereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated), (ii) all reasonable, invoiced out-of-pocket expenses incurred by
each L/C Issuer in connection with the issuance, amendment, renewal or extension
of any Letter of Credit or any demand for payment thereunder and (iii) all
out-of-pocket expenses incurred by the Administrative Agent, each L/C Issuer
and, during the existence of an Event of Default, any Lender (including the
fees, charges and disbursements of any counsel for the Administrative Agent, any
Lender or any L/C Issuer), 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, or (B) in connection with Loans made or
Letters of Credit issued hereunder, including all such out-of-pocket expenses
incurred during any workout, restructuring or negotiations in respect of such
Loans or Letters of Credit.
 
(b)           Indemnification by the Borrower. The Borrower shall indemnify the
Administrative Agent (and any sub-agent thereof), each Lender and each L/C
Issuer, 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 and related expenses (including
the fees, charges and disbursements of any counsel for any 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-agent thereof)
and its Related Parties only, the administration of this Agreement and the other
Loan Documents, (ii) any Loan or Letter of Credit or the use or proposed use of
the proceeds therefrom (including any refusal by an L/C Issuer to honor a demand
for payment under a Letter of Credit if
 
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the documents presented in connection with such demand do not strictly comply
with the terms of such Letter of Credit), (iii) any actual or alleged presence
or release of Hazardous Materials on or from any property owned or operated by
the Borrower or any of its Subsidiaries, or any Environmental Liability related
in any way to the Borrower or any of its Subsidiaries, 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 the Borrower or any other Loan Party or any of
the Borrower's or such Loan Party'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 nonappealable 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 the Borrower or any other
Loan Party or (z) result from a claim brought by the Borrower or any other Loan
Party against an Indemnitee for material breach of such Indemnitee's obligations
hereunder or under any other Loan Document, if the Borrower or such Loan Party
has obtained a final and nonappealable judgment in its favor on such claim as
determined by a court of competent jurisdiction.
 
(c)           Reimbursement by Lenders. To the extent that the Borrower for any
reason fails to indefeasibly pay any amount required under subsection (a) or
(b) of this Section to be paid by it to the Administrative Agent (or any
sub-agent thereof), any L/C Issuer or any Related Party of any of the foregoing,
each Lender severally agrees to pay to the Administrative Agent (or any such
sub-agent), such L/C Issuer or such Related Party, as the case may be, such
Lender's 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) or such L/C Issuer in its capacity
as such, or against any Related Party of any of the foregoing acting for the
Administrative Agent (or any such sub-agent) or such L/C Issuer 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 Letter of Credit 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
nonappealable judgment of a court of competent jurisdiction.
 
(e)           Payments. All amounts due under this Section shall be payable not
later than ten days after demand therefor.
 
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(f)            Survival. The agreements in this Section shall survive the
resignation of the Administrative Agent, any L/C Issuer and the Swing Line
Lender, the replacement of any Lender, the termination of the Commitments and
the repayment, satisfaction or discharge of all the other Obligations.
 
10.05.      Payments Set Aside. To the extent that any payment by or on behalf
of the Borrower is made to the Administrative Agent, any L/C Issuer or any
Lender, or the Administrative Agent, any L/C Issuer 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, such L/C Issuer 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
and each L/C Issuer 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
and the L/C Issuers under clause (b) of the preceding sentence shall survive the
payment in full of the Obligations and the termination of this Agreement.
 
10.06.      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 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 10.06(b), (ii) by way of participation
in accordance with the provisions of Section 10.06(d), or (iii) by way of pledge
or assignment of a security interest subject to the restrictions of
Section 10.06(f), (and any other attempted assignment or transfer by any party
hereto shall be null and void). 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,
the L/C Issuers and the Lenders) any legal or equitable right, remedy or claim
under or by reason of this Agreement.
 
(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 and the Loans (including
for purposes of this Section 10.06(b), participations in L/C Obligations and in
Swing Line 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 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
 
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(B)           in any case not described in subsection (b)(i)(A) of this Section,
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 $5,000,000, unless each of the Administrative Agent
and, so long as no Event of Default has occurred and is continuing, the Borrower
otherwise consents (each such consent not to be unreasonably withheld, delayed
or conditioned); 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 apply to the Swing Line
Lender's rights and obligations in respect of Swing Line Loans.
 
(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)          the consent of the Borrower (such consent not to be unreasonably
withheld, delayed or conditioned) shall be required unless (1) any Event of
Default has occurred and is continuing at the time of such assignment, or
(2) such assignment is to a Lender or Affiliate of a Lender; and
 
(B)           the consent of the Administrative Agent and each L/C Issuer (such
consent not to be unreasonably withheld, delayed or conditioned) shall be
required unless such assignment is to a Person that is not a Lender or an
Affiliate of a 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, however, 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.
 
(vi)          No Assignment to Natural Persons. No such assignment shall be made
to a natural person.
 
Subject to acceptance and recording thereof by the Administrative Agent pursuant
to subsection (c) of this Section, 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
 
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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 10.04 with respect to facts and circumstances occurring
prior to the effective date of such assignment. 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 10.06(d). Notwithstanding the foregoing,
as of the time of any assignment, no assignee shall be entitled to greater
increased costs or indemnities under Sections 3.01 or 3.04 than the assignor
Lender.
 
(c)           Register. The Administrative Agent, acting solely for this purpose
as an 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 L/C Issuers, and the
Commitments of, and principal amounts of the Loans and L/C Obligations owing to,
each Lender and L/C Issuer, as applicable, pursuant to the terms hereof from
time to time (the "Register"). The entries in the Register shall be conclusive,
and the Borrower, the Administrative Agent, the Lenders and each L/C Issuer may
treat each Person whose name is recorded in the Register pursuant to the terms
hereof as a Lender or L/C Issuer, as applicable, hereunder for all purposes of
this Agreement, notwithstanding notice to the contrary. Any assignment or
transfer of the Commitments of a Lender or L/C Issuer and the rights to the
principal of, and interest on, any Loan or L/C Obligation made pursuant to such
Commitments shall not be effective until such transfer is recorded on the
Register. The Register shall be available for inspection by the Borrower and 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 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 (including such
Lender's participations in L/C Obligations and/or Swing Line 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, the Lenders and the L/C Issuers shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement. 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 10.01 that affects such Participant.
Subject to subsection (e) of this Section, 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 10.06(b). To the extent permitted by law, each Participant
also shall be entitled to the benefits of Section 10.08 as though it were a
Lender, provided such Participant agrees to be subject to Section 2.13 as though
it were a Lender.
 
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(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
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(e) 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)           Resignation as L/C Issuer or Swing Line Lender after Resignation
as Administrative Agent. Notwithstanding anything to the contrary contained
herein, if at any time Fifth Third resigns as Administrative Agent, Fifth Third
may, (i) upon 30 days' notice to the Borrower and the Lenders, resign as an L/C
Issuer and/or (ii) upon 30 days' notice to the Borrower, resign as Swing Line
Lender and the Borrower may, (i) upon 30 days' notice to Fifth Third remove
Fifth Third as an L/C Issuer and/or (ii) upon 30 days' notice to Fifth Third,
remove Fifth Third as Swing Line Lender. In the event of any such resignation as
an L/C Issuer or the Swing Line Lender, the Borrower shall be entitled to
appoint from among the Lenders a successor L/C Issuer or Swing Line Lender
hereunder; provided, however, that no failure by the Borrower to appoint any
such successor shall affect the resignation of Fifth Third as an L/C Issuer or
the Swing Line Lender, as the case may be. If Fifth Third resigns as an L/C
Issuer, it shall retain all the rights, powers, privileges and duties of an L/C
Issuer hereunder with respect to all Letters of Credit issued by it and
outstanding as of the effective date of its resignation as an L/C Issuer and all
L/C Obligations with respect thereto (including the right to require the Lenders
to make Base Rate Loans or fund risk participations in Unreimbursed Amounts with
respect to such Letters of Credit pursuant to Section 2.03(c)). If Fifth Third
resigns as the Swing Line Lender, it shall retain all the rights of the Swing
Line Lender provided for hereunder with respect to Swing Line Loans made by it
and outstanding as of the effective date of such resignation, including the
right to require the Lenders to make Base Rate Loans or fund risk participations
in outstanding Swing Line Loans pursuant to Section 2.04(c). Upon the
appointment of a successor L/C Issuer and/or Swing Line Lender, (a) such
successor shall succeed to and become vested with all of the rights, powers,
privileges and duties of the retiring L/C Issuer or Swing Line Lender, as the
case may be, and (b) the successor L/C Issuer shall issue letters of credit in
substitution for the Letters of Credit, if any, issued by the retiring L/C
Issuer and outstanding at the time of such succession or
 
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make other arrangements satisfactory to Fifth Third to effectively assume the
obligations of Fifth Third respect to such Letters of Credit.
 
10.07.      Treatment of Certain Information; Confidentiality. The
Administrative Agent, each Lender and each L/C Issuer each 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' respective partners, directors, officers, employees, agents,
advisors and representatives who reasonably need to know same (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), (b) to the extent requested by any regulatory
authority purporting to have jurisdiction over it (including any self-regulatory
authority, such as the National Association of Insurance Commissioners), (c) to
the extent required by applicable laws or regulations or by any subpoena or
similar legal process, (d) to any other party hereto, (e) in connection with the
exercise of any remedies hereunder or under any other Loan Document or any
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, 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 or any
Eligible Assignee invited to be a Lender pursuant to Section 2.14(b) or (ii) any
actual or prospective counterparty (or its advisors) to any swap or derivative
transaction relating to the Borrower and its obligations, (g) with the consent
of the Borrower or (h) to the extent such Information (i) becomes publicly
available other than as a result of a breach of this Section or (ii) becomes
available to the Administrative Agent, any Lender, any L/C Issuer or any of
their respective Affiliates on a nonconfidential basis from a source other than
Holdings, the Borrower or any of their Subsidiaries or Related Parties.
 
For purposes of this Section, "Information" means all information received from
any Loan Party or any Subsidiary thereof relating to any Loan Party or any
Subsidiary thereof or their respective businesses, other than any such
information that is available to the Administrative Agent, any Lender or any L/C
Issuer on a nonconfidential basis prior to disclosure by any Loan Party or any
Subsidiary thereof. Any Person required to maintain the confidentiality of
Information as provided in this Section 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, each Lender and each L/C Issuer 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.
 
10.08.      Right of Setoff. If an Event of Default has occurred and is
continuing under Section 8.01(a) or Section 8.01(f), each Lender, each L/C
Issuer 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, such L/C
Issuer 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 such L/C Issuer, irrespective of whether or not
such Lender or such L/C Issuer 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 or office of
such Lender or such L/C Issuer different from the branch or office holding such
deposit or obligated on such indebtedness. The rights of
 
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each Lender, each L/C Issuer and their respective Affiliates under this
Section are in addition to other rights and remedies (including other rights of
setoff) that such Lender, the L/C Issuer or their respective Affiliates may
have. Each Lender and each L/C Issuer 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.
 
10.09.      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.
 
10.10.      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 when it shall
have been executed by the Administrative Agent and when the Administrative Agent
shall have received counterparts hereof that, when taken together, bear the
signatures of each of the other parties hereto. Delivery of an executed
counterpart of a signature page of this Agreement by email, facsimile or any
similar electronic transmission shall be effective as delivery of a manually
executed counterpart of this Agreement.
 
10.11.      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, each Lender and each L/C Issuer, regardless of any
investigation made by the Administrative Agent, any Lender or any L/C Issuer on
their behalf and notwithstanding that the Administrative Agent, any Lender or
any L/C Issuer may have had notice or knowledge of any Default at the time of
any Credit Extension, and shall continue in full force and effect as long as any
Loan or any other Obligation hereunder shall remain unpaid or unsatisfied or any
Letter of Credit shall remain outstanding.
 
10.12.      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.
 
10.13.      Replacement of Lenders. If (i) any Lender requests compensation
under Section 3.04, (ii) the Borrower is required to pay any additional amount
to any Lender or any Governmental Authority for the account of any Lender
pursuant to Section 3.01, (iii) a Lender does not consent to a proposed
 
108

--------------------------------------------------------------------------------

 
amendment, waiver, consent or release with respect to any Loan Document that
requires the consent of each Lender (or the Lenders required pursuant to
Section 10.01(e)(iii)) that has been approved by the Required Lenders, or
(iv) any Lender is a Defaulting Lender or if any other circumstance exists
hereunder that gives the Borrower the right to replace a Lender as a party
hereto, 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 10.06), all of its interests,
rights 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 10.06(b);
 
(b)           such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans and L/C Advances, accrued interest thereon,
accrued fees and all other amounts payable to it hereunder and under the other
Loan Documents (including any amounts under Section 3.05) from the assignee (to
the extent of such outstanding principal and accrued interest and fees) 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; and
 
(d)           such assignment does not conflict with applicable Laws.
 
(e)           in the case of any such assignment resulting from a Lender's
failure to consent to a proposed change, waiver, discharge or termination with
respect to any Loan Document, the applicable amendment, modification and/or
waiver of this Agreement that the Borrower has requested shall become effective
upon giving effect to such assignment (and any related assignments required to
be effected in connection therewith in accordance with this Section 10.13).
 
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.
 
10.14.      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.
 
(b)           SUBMISSION TO JURISDICTION. THE BORROWER AND EACH OTHER LOAN PARTY
IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE
NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW
YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE EASTERN 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 MAY BE
 
109

--------------------------------------------------------------------------------

 
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
OR ANY L/C ISSUER 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. 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.
 
(d)           SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO
SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.02. NOTHING
IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY APPLICABLE LAW
 
10.15.      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.
 
10.16.      No Advisory or Fiduciary Responsibility. In connection with all
aspects of each transaction contemplated hereby (including in connection with
any amendment, waiver or other modification hereof or of any other Loan
Document), each of the Borrower and Holdings acknowledges and agrees, and
acknowledges its Affiliates' understanding, that: (i) (A) the arranging and
other services regarding this Agreement provided by the Administrative Agent and
the Arranger are arm's-length commercial transactions between the Borrower,
Holdings and their respective Affiliates, on the one hand, and the
Administrative Agent and the Arranger on the other hand, (B) each of the
Borrower and Holdings has consulted its own legal, accounting, regulatory and
tax advisors to the extent it has deemed appropriate, and (C) each of the
Borrower and Holdings is capable of evaluating, and understands and
 
110

--------------------------------------------------------------------------------

 
accepts, the terms, risks and conditions of the transactions contemplated hereby
and by the other Loan Documents; (ii) (A) the Administrative Agent and the
Arranger each is and has been acting solely as a principal and, except as
expressly agreed in writing by the relevant parties, has not been, is not, and
will not be acting as an advisor, agent or fiduciary for the Borrower, Holdings
or any of their respective Affiliates, or any other Person and (B) neither the
Administrative Agent nor the Arranger has any obligation to the Borrower,
Holdings or any of their respective Affiliates with respect to the transactions
contemplated hereby except those obligations expressly set forth herein and in
the other Loan Documents; and (iii) the Administrative Agent, the Arranger and
their respective Affiliates may be engaged in a broad range of transactions that
involve interests that differ from those of the Borrower, Holdings and their
respective Affiliates, and neither the Administrative Agent nor any of the Joint
Lead Arrangers has any obligation to disclose any of such interests to the
Borrower, Holdings or any of their respective Affiliates. To the fullest extent
permitted by law, each of the Borrower and Holdings hereby waives and releases
any claims that it may have against the Administrative Agent and the Joint Lead
Arrangers with respect to any breach or alleged breach of agency to the Loan
Parties or fiduciary duty in connection with any aspect of any transaction
contemplated hereby.
 
10.17.      USA PATRIOT Act Notice. Each Lender that is subject to the Act (as
hereinafter defined) and the Administrative Agent (for itself and not on behalf
of any Lender) hereby notifies the Borrower and each other Loan Party that
pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56
(signed into law October 26, 2001)) (the "Act"), it is required to obtain,
verify and record information that identifies each Loan Party, which information
includes the name and address of each Loan Party and other information that will
allow such Lender or the Administrative Agent, as applicable, to identify each
Loan Party in accordance with the Act. Each Loan Party agrees to provide any
such information as reasonably requested by a Lender in order to comply with the
Act.
 
10.18.      OTHER LIENS ON COLLATERAL; TERMS OF INTERCREDITOR AGREEMENTS; ETC.
 
(a)           EACH LENDER HERETO UNDERSTANDS, ACKNOWLEDGES AND AGREES THAT LIENS
EXIST AND SHALL HEREAFTER BE CREATED ON THE COLLATERAL PURSUANT TO THE FIRST
LIEN NOTE DOCUMENTS AND SECOND LIEN NOTE DOCUMENTS, RESPECTIVELY, WHICH LIENS
SHALL BE SUBJECT TO THE TERMS AND PROVISIONS OF EACH OF THE INTERCREDITOR
AGREEMENTS. EACH OF THE INTERCREDITOR AGREEMENTS ALSO HAS OTHER PROVISIONS WHICH
ARE BINDING UPON THE LENDERS, THE HEDGE BANKS AND THE CASH MANAGEMENT BANKS.
PURSUANT TO THE EXPRESS TERMS AND PROVISIONS OF EACH OF THE INTERCREDITOR
AGREEMENTS, IN THE EVENT OF ANY CONFLICT BETWEEN THE TERMS AND PROVISIONS OF
SUCH INTERCREDITOR AGREEMENT AND ANY OF THE LOAN DOCUMENTS, THE PROVISIONS OF
SUCH INTERCREDITOR AGREEMENT SHALL GOVERN AND CONTROL.
 
(b)           EACH LENDER AUTHORIZES AND INSTRUCTS THE ADMINISTRATIVE AGENT TO
ENTER INTO OR OTHERWISE BECOME A PARTY TO EACH INTERCREDITOR AGREEMENT ON BEHALF
OF THE LENDERS, AND TO TAKE ALL ACTIONS (AND TO EXECUTE ALL AGREEMENTS,
DOCUMENTS AND INSTRUMENTS) REQUIRED (OR DEEMED ADVISABLE) BY THE ADMINISTRATIVE
AGENT IN ACCORDANCE WITH THE RESPECTIVE TERMS AND PROVISIONS THEREOF.
 
(c)           THE PROVISIONS OF THIS SECTION 10.18 ARE NOT INTENDED TO SUMMARIZE
ALL RELEVANT PROVISIONS OF THE INTERCREDITOR AGREEMENTS.
 
111

--------------------------------------------------------------------------------

 
REFERENCE MUST BE MADE TO EACH INTERCREDITOR AGREEMENT ITSELF TO UNDERSTAND ALL
TERMS AND CONDITIONS THEREOF. EACH LENDER IS RESPONSIBLE FOR MAKING ITS OWN
ANALYSIS AND REVIEW OF EACH INTERCREDITOR AGREEMENT AND THE TERMS AND PROVISIONS
THEREOF, AND NEITHER THE ADMINISTRATIVE AGENT NOR ANY OF ITS RESPECTIVE
AFFILIATES MAKES ANY REPRESENTATION TO ANY LENDER AS TO THE SUFFICIENCY OR
ADVISABILITY OF THE PROVISIONS CONTAINED IN ANY INTERCREDITOR AGREEMENT.
 
--Remainder of Page Intentionally Left Blank--
[Signature Pages Follow]
 
112

--------------------------------------------------------------------------------

 
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by their duly authorized officers as of the day and year
first above written.
 
 
BORROWER AND HOLDINGS:
 
 
 
APPLETON PAPERS INC., a Delaware corporation
 
 
 
 
 
By:
/s/ Jeffrey J. Fletcher
 
Name:
Jeffrey J. Fletcher
 
Title:
Controller
 
 
 
 
PAPERWEIGHT DEVELOPMENT CORP., a Wisconsin corporation, as Holdings
 
 
 
 
 
 
By:
/s/ Jeffrey J. Fletcher
 
Name:
Jeffrey J. Fletcher
 
Title:
Controller

 

--------------------------------------------------------------------------------

 
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by their duly authorized officers as of the day and year
first above written.
 
 
ADMINISTRATIVE AGENT, L/C ISSUERS SWING LINE LENDER AND LENDERS:
 
 
 
FIFTH THIRD BANK, an Ohio banking corporation, as Administrative Agent, an L/C
Issuer, Swing Line Lender and a Lender
 
 
 
 
 
By:
/s/ Elizabeth Di Cola
 
Name:
Elizabeth Di Cola
 
Title:
Vice President

 

--------------------------------------------------------------------------------

 
SCHEDULE 1
 
Notices
 
GRANTOR:
 
Appleton Papers Canada Ltd.
550 Braidwood Avenue
Peterborough, Ontario Canada
Attention: Jeffrey J. Fletcher
Telephone: 920-991-8452
Telecopier: 920-991-8852
Electronic Mail: jfletcher@appletonideas.com
Taxpayer Identification Number: 100236892 (Ontario: 2446981)
 
ADMINISTRATIVE AGENT, ANY L/C ISSUER, SWING LINE LENDER OR FIFTH THIRD BANK AS A
LENDER:
 
Fifth Third Bank
38 Fountain Square Plaza
Cincinnati, Ohio 45263
Attention: Loan Syndications/Judy Huls
Facsimile: 513-534-0875
 
with copies to:
 
FIFTH THIRD BANK
222 South Riverside Plaza
Suite 3300
Chicago, Illinois 60606
Attention: Elizabeth Di Cola
Facsimile: 312-704-4127
 
KATTEN MUCHIN ROSENMAN LLP
525 West Monroe Street
Chicago, Illinois 60661-3693
Attention: Denise S. Burn, Esq.
Facsimile: 312-577-8778
 

--------------------------------------------------------------------------------

 
SCHEDULE 2
 
Pledged Notes
 
None.
 
Pledged Stock
 
None.
 

--------------------------------------------------------------------------------

 
SCHEDULE 3
 
Perfection of Liens
 
PPSA Filing
 
 
 
Filing Jurisdiction of
 
 
Grantor
 
Organization
 
Corporation No.
 
 
 
 
 
Appleton Papers Canada Ltd.
 
Ontario
 
41268-6

 

--------------------------------------------------------------------------------

 
SCHEDULE 4
 
Jurisdiction of Organization
 
 
 
Jurisdiction of
 
Chief Executive
 
 
Name of Loan Party
 
Organization
 
Office
 
Federal Tax ID No.
Appleton Papers Canada Ltd.
 
Ontario, Canada
 
550 Braidwood Avenue
 
100236892;
 
 
 
 
Peterborough, Ontario
 
2446981 (Ontario)
 
 
 
 
Canada
 
 

 

--------------------------------------------------------------------------------

 
SCHEDULE 5
 
Location of Collateral
 
Party
 
Location
 
Address
 
 
 
 
 
Appleton Papers Canada Ltd.
 
Distribution Center
 
550 Braidwood Avenue
 
 
 
 
Peterborough, Ontario Canada

 

--------------------------------------------------------------------------------

 
SCHEDULE 6
 
Intellectual Property
 
None.
 

--------------------------------------------------------------------------------

 
SCHEDULE 7
 
Commercial Tort Claims
 
None.
 

--------------------------------------------------------------------------------

 
SCHEDULE 8
 
Accounts
 
Deposit Accounts
 
Financial
 
Name on
 
Account
 
Account
 
Value in
 
Date of
Institution
 
Account
 
Type
 
Number
 
Account
 
Value
Bank of Nova Scotia
 
Appleton Papers Canada Ltd.
 
Payroll, payables
 
          Redacted
 
870,446.24 CAD
 
02/05/10
 
 
 
 
 
 
 
 
 
 
 
Bank of Nova Scotia
 
Appleton Papers Canada Ltd.
 
Depository
 
          Redacted
 
$108,439.31
 
02/05/10

 
Securities Accounts
 
None.
 

--------------------------------------------------------------------------------

 
Schedule 1.01(c)
 
MORTGAGED PROPERTIES
 
 
 
Owner
 
Address of Property
 
Parcel/Map Number
1.
 
Appleton Papers Inc.
 
825 E. Wisconsin Avenue, Appleton, Wisconsin
 
31-1-1179-00-0
2.
 
Appleton Papers Inc.
 
1100 N. Lawe Street, Appleton, Wisconsin
 
31-1-0013-00-0
3.
 
Appleton Papers Inc.
 
N. Lawe Street Parking Lot, Appleton, Wisconsin
 
31-1-0016-00-0
4.
 
Appleton Papers Inc.
 
Hancock Street Parking Lot
 
31-1-1134-00-0
5.
 
Appleton Papers Inc.
 
600 East Hancock Street, Appleton Wisconsin
 
31-1-0241-00-0
6.
 
Appleton Papers Inc.
 
702 E. Hancock Street, Appleton Wisconsin
 
31-1-1139-00-0
7.
 
Appleton Papers Inc.
 
714 E. Hancock Street, Appleton, Wisconsin
 
31-1-1139-00-0
8.
 
Appleton Papers Inc.
 
N. Viola Street, Appleton, Wisconsin
 
31-1-2865-00-0
9.
 
Appleton Papers Inc.
 
1408 N. Meade Street, Appleton, Wisconsin
 
31-1-6562-08-0
10.
 
Appleton Papers Inc.
 
1325 and 1401 N. Rankin Street, Appleton, Wisconsin
 
31-1-6562-18-00-0
11.
 
Appleton Papers Inc.
 
2500 W. Wisconsin Street, Portage, Wisconsin
 
11271-2521
12.
 
Appleton Papers Inc.
 
Hydraulic Road, West Carrollton, Ohio
 
K48-009-17-0003
13.
 
Appleton Papers Inc.
 
4000 Hydraulic Road, West Carrollton, Ohio
 
K48-009-17-0004
14.
 
Appleton Papers Inc.
 
1030 W. Alex-Bell Road, West Carrollton, Ohio
 
K48-003-06-0004
15.
 
Appleton Papers Inc.
 
Alexanderville - Bellbrook, West Carrollton, Ohio
 
K48-004-11-0001
16.
 
Appleton Papers Inc.
 
Alex-Bell Road, West Carrollton, Ohio
 
K48-003-08-0009
17.
 
Appleton Papers Inc.
 
301 Pine Street, Roaring Spring, Pennsylvania
 
1800-01-5
18.
 
Appleton Papers Inc.
 
244 N. Main Street, Roaring Spring, Pennsylvania
 
1800-01-34
19.
 
Appleton Papers Inc.
 
N. Main Street, Roaring Spring, Pennsylvania
 
1800-01-1-A
20.
 
Appleton Papers Inc.
 
201-05 Locust, Roaring Spring, Pennsylvania
 
1800-01-21
21.
 
Appleton Papers Inc.
 
202 Locust, Roaring Spring, Pennsylvania
 
1800-01-10
22.
 
Appleton Papers Inc.
 
204 Locust, Roaring Spring, Pennsylvania
 
1800-01-11
23.
 
Appleton Papers Inc.
 
209-13 Locust, Roaring Spring, Pennsylvania
 
1800-01-24
24.
 
Appleton Papers Inc.
 
212 Locust, Roaring Spring, Pennsylvania
 
1800-01-12
25.
 
Appleton Papers Inc.
 
300 Locust, Roaring Spring, Pennsylvania
 
1800-01-14
26.
 
Appleton Papers Inc.
 
308 Locust, Roaring Spring, Pennsylvania
 
1800-01-15
27.
 
Appleton Papers Inc.
 
309 Locust, Roaring Spring, Pennsylvania
 
1800-01-27
28.
 
Appleton Papers Inc.
 
Locust Street, Roaring Spring, Pennsylvania
 
1800-01-25
29.
 
Appleton Papers Inc.
 
Taylor Township, Roaring Spring, Pennsylvania
 
2000-04-16
30.
 
Appleton Papers Inc.
 
Taylor Township, Roaring Spring, Pennsylvania
 
2000-04-5-A
31.
 
Appleton Papers Inc.
 
305 Locust Street, Roaring Spring, Pennsylvania
 
1800-01-26
32.
 
Appleton Papers Inc.
 
Blair Township, Roaring Spring, Pennsylvania
 
0400-06-64-1
33.
 
Appleton Papers Inc.
 
Blair Township, Roaring Spring, Pennsylvania
 
0400-07-26
34.
 
Appleton Papers Inc.
 
304 Pine Street, Roaring Spring, Pennsylvania
 
1800-01-2
35.
 
Appleton Papers Inc.
 
305 Pine Street, Roaring Spring, Pennsylvania
 
1800-01-4
36.
 
Appleton Papers Inc.
 
100 Paper Mill Road, Roaring Spring, Pennsylvania
 
1800-01-1-A
37.
 
New England Extrusion Inc.
 
18 Industrial Boulevard, Turners Falls, Massachusetts
 
17-041
17-020
17-042

 

--------------------------------------------------------------------------------

 
38.
 
New England Extrusion Inc.
 
1264 East High Street, Milton, Wisconsin 53563
 
257-162011003
39.
 
American Plastics Company, Inc.
 
3606 Red Arrow Drive, Rhinelander, WI 54501
 
27601-9011-0801

 

--------------------------------------------------------------------------------

 
Schedule 2.01
 
COMMITMENTS
AND APPLICABLE PERCENTAGES
 
Lender
 
Commitment
 
Percentage
 
Fifth Third Bank
 
$
100,000,000
 
100
%
             

 

--------------------------------------------------------------------------------

 
Schedule 5.08
 
REAL PROPERTY
 
Loan Party
 
Location/Description
 
Address
 
Owned/Leased
Appleton Papers Inc.
 
Appleton, WI - Office & Plant
 
825 E. Wisconsin Avenue Appleton, WI
 
Owned
 
 
 
 
1100 N. Lawe Street Appleton, WI
 
Owned
 
 
 
 
N. Lawe St Parking Lot Appleton, WI
 
Owned
 
 
 
 
Hancock St Parking Lot Appleton, WI
 
Owned
 
 
 
 
702 E. Hancock Street Appleton, WI
 
Owned
 
 
 
 
714 E. Hancock Street Appleton, WI
 
Owned
 
 
 
 
N. Viola Street Appleton, WI
 
Owned
 
 
 
 
1408 N. Meade Street Appleton, WI
 
Owned
 
 
 
 
1325 and 1401 N. Rankin Street Appleton, WI
 
Owned
 
 
 
 
600 East Hancock Street Appleton, WI
 
Owned
 
 
Portage, WI -- Plant
 
2500 W. Wisconsin St. Portage, WI
 
Owned
 
 
West Carrollton, OH -- Mill
 
4000 Hydraulic Road West Carrollton, OH
 
Owned
 
 
 
 
Hydraulic Road West Carrollton, OH
 
Owned
 
 
 
 
1030 W.Alex-Bell Road West Carrollton, OH
 
Owned
 
 
 
 
Alex-Bell Road West Carrollton, OH
 
Owned
 
 
 
 
Alexanderville - Bellbrook West Carrollton, OH
 
Owned
 
 
Roaring Spring, PA -- Mill
 
100 Paper Mill Road Roaring Spring, PA
 
Owned
 
 
 
 
301 Pine Street Roaring Spring, PA
 
Owned
 
 
 
 
244 N. Main Street Roaring Spring, PA
 
Owned
 
 
 
 
N. Main Street Roaring Spring, PA
 
Owned
 
 
 
 
201-05 Locust Street Roaring Spring, PA
 
Owned
 
 
 
 
202 Locust Street Roaring Spring, PA
 
Owned
 
 
 
 
204 Locust Street
 
Owned

 

--------------------------------------------------------------------------------

 
Loan Party
 
Location/Description
 
Address
 
Owned/Leased
 
 
 
 
Roaring Spring, PA
 
 
 
 
 
 
209-13 Locust Street Roaring Spring, PA
 
Owned
 
 
 
 
212 Locust Street Roaring Spring, PA
 
Owned
 
 
 
 
300 Locust Street Roaring Spring, PA
 
Owned
 
 
 
 
308 Locust Street Roaring Spring, PA
 
Owned
 
 
 
 
309 Locust Street Roaring Spring, PA
 
Owned
 
 
 
 
Locust Street Roaring Spring, PA
 
Owned
 
 
 
 
305 Locust Street Roaring Spring, PA
 
Owned
 
 
 
 
304 Pine Street Roaring Spring, PA
 
Owned
 
 
 
 
305 Pine Street Roaring Spring, PA
 
Owned
 
 
 
 
Taylor Township Roaring Spring, PA
 
Owned
 
 
 
 
Taylor Township Roaring Spring, PA
 
Owned
 
 
 
 
Blair Township Roaring Spring, PA
 
Owned
 
 
 
 
Blair Township Roaring Spring, PA
 
Owned
 
 
Distribution Center
 
3000 Warehouse Road Appleton, WI
 
Leased
 
 
Distribution Center
 
115 Kensington Drive Appleton, WI
 
Leased
 
 
Distribution Center
 
120 Declaration Drive McDonough, GA
 
Leased
 
 
Distribution Center
 
1100 Blake Street Edwardsville, KS
 
Leased
 
 
Distribution Center
 
2300 Progress Drive Hebron, KY
 
Leased
 
 
Distribution Center
 
5491 E. Philadelphia Ontario, CA
 
Leased
 
 
Distribution Center
 
6210 North Marine Drive Portland, OR
 
Leased
 
 
Distribution Center
 
2850 Appleton Street Camp Hill, PA
 
Leased
 
 
Miscellaneous Storage Space
 
331 E. Closson Road Roaring Spring, PA
 
Leased
 
 
Miscellaneous Storage Space
 
221 Cove Lane Road Roaring Spring, PA
 
Leased
Appleton Papers Canada Ltd.    Distribution Center   550 Braidwood Avenue,
Peterborough, Ontario Canada   Leased
American Plastics Company, Inc.
 
Rhinelander, WI -- Plant
 
3606 Red Arrow Drive Rhinelander, WI 54501
 
Owned

 

--------------------------------------------------------------------------------

 
Loan Party
 
Location/Description
 
Address
 
Owned/Leased
New England Extrusion Inc.
 
Milton, WI -- Plant
 
1264 East High Street Milton, WI 53563
 
Owned
 
 
Turners Falls -- Plant
 
18 Industrial Boulevard Turners Falls, MA 01376
 
Owned

 

--------------------------------------------------------------------------------

 
Schedule 5.15
 
SUBSIDIARIES
 
 
 
 
 
 
 
No. of
 
Percentage
 
 
 
 
 
 
No. of Shares
 
Shares
 
of
 
 
Subsidiary Name
 
Jurisdiction
 
Outstanding
 
Owned
 
Ownership
 
Owner
Appleton Papers Inc.
 
Delaware
 
100
 
100
 
100
 
Paperweight Development Corp.
PDC Capital Corporation
 
Delaware
 
100
 
100
 
100
 
Paperweight Development Corp.
Appleton Papers Canada Ltd.
 
Canada
 
100
 
100
 
100
 
Appleton Papers Inc.
Appleton Papers de Mexico SA de CV
 
Mexico
 
50,000
 
49,999
 
99.998
 
Appleton Papers Inc.
 
 
 
 
 
 
1
 
.002
 
American Plastics Company, Inc.
American Plastics Company, Inc.
 
Wisconsin
 
5 (voting)
 
5
 
100
 
Appleton Papers Inc.
 
 
 
 
5,000 (non-voting)
 
5,000
 
100
 
Appleton Papers Inc.
New England Extrusion Inc.
 
Wisconsin
 
10
 
10
 
100
 
Appleton Papers Inc.
Rose Holdings Limited
 
U.K.
 
10,000,001
 
10,000,001
 
100
 
Appleton Papers Inc.
HBGI Holdings Limited
 
U.K.
 
1
 
1
 
100
 
Rose Holdings Limited

 

--------------------------------------------------------------------------------

 
Schedule 5.17
 
ENVIRONMENTAL MATTERS
 
1.               Carbonless paper containing PCBs was manufactured at the
Appleton facility between 1954 and 1971. Wastewater from the manufacturing of
this paper and reprocessing of the paper at other paper mills in the Fox River
Valley carried PCBs into the Fox River. Based on these discharges, claims have
been asserted against Appleton and National Cash Register Corporation ("NCR")
(as current and former owners and operators of the Appleton facility) and others
for remediation costs and natural resources damage concerning the environmental
conditions of the Lower Fox River, as more fully described on Appleton Papers
Inc.'s 2008 Form 10-K.
 
2.               Confidential Settlement Agreement between U.S. Borrower and NCR
Corporation, dated effective February 12, 1998 under which the parties agreed to
share both defense and liability costs arising from the Lower Fox River.
 
3.               Confidential Appleton-NCR Subsequent Allocation Arbitration
Agreement among U.S. Borrower, NCR Corporation and B.A.T. Industries P.L.C.,
dated effective February 12, 1998 and related Arbitration Award dated
November 28, 2005 which defines the parties' obligations to share both defense
and liability costs arising from the Lower Fox River.
 
4.               The West Carrollton, Ohio mill operates pursuant to various
state and federal permits for discharges and emissions to air and water. As a
result of the de-inking of carbonless paper containing PCBs through the early
1970s, there have been releases of PCBs and volatile organic compounds into the
soil in the area of the wastewater impoundments at the West Carrollton facility
and low levels of PCBs have been detected in the groundwater immediately under
this area. In addition, PCB contamination is present in sediment in the adjacent
Great Miami River, but it is believed that this contamination is from a source
other than the West Carrollton mill. Based on investigation and delineation of
PCB contamination in soil and groundwater in the area of the wastewater
impoundments, Appleton believes that it may be necessary to undertake remedial
action in the future as more fully described on Appleton Papers Inc.'s 2008
Form 10-K, although Appleton is currently under no obligation to do so. Appleton
has not had any discussions or communications with any federal, state or local
agencies or authorities regarding remedial action to address PCB contamination
at the West Carrollton mill.
 

--------------------------------------------------------------------------------

 
Schedule 6.09
 
GUARANTORS
 
1.               Paperweight Development Corp. ("Holdings")
2.               American Plastics Company, Inc.
3.               New England Extrusion Inc.
4.               Appleton Papers Canada Ltd.
 

--------------------------------------------------------------------------------

 
Schedule 7.02
 
PERMITTED EXISTING DEBT
 
1.                                       Bond Purchase Agreement between Village
of Combined Locks, Wisconsin, Thornton Farish Inc. and Borrower for $6,000,000
in Variable Rate Demand Industrial Revenue Bonds, Series 1997, dated as of
August 1997, including without limitation, indebtedness under the following
additional documents:
 
a.               Loan Agreement between Appleton and Village of Combined Locks,
Wisconsin, dated effective August 1, 1997, assigned to M&I First National Bank,
West Bend, Wisconsin under an indenture of Trust dated August 1, 1997;
 
b.              Promissory Note from Appleton to Village of Combined Locks,
Wisconsin, dated August 14, 1997; and
 
c.               Remarketing Agreement between Appleton and Thornton Farish
Inc., dated effective August 1, 1997.
 
2.                                       Bond Purchase Agreement between Village
of Combined Locks, Wisconsin and Appleton for $2,650,000 in Variable Rate Demand
Pollution Control Refunding Revenue Bonds, Series 1997, dated as of August 1997,
including without limitation, indebtedness under the following additional
documents:
 
a.               Loan Agreement between Appleton and Village of Combined Locks,
Wisconsin, dated effective August 1, 1997, assigned to M&I First National Bank,
West Bend, Wisconsin under an indenture of Trust dated August 1, 1997;
 
b                 Promissory Note from Appleton to Village of Combined Locks,
Wisconsin, dated August 14, 1997; and
 
c.               Remarketing Agreement between Appleton and Thornton Farish
Inc., dated effective August 1, 1997.
 
3.                                       Loan and Security Agreement dated
November 7, 2008 by and between Icon Appleton, LLC and Appleton Papers Inc., for
$22,000,000, as amended March 26, 2009.
 

--------------------------------------------------------------------------------

 
Schedule 7.03
 
EXISTING LIENS
 
 
 
 
 
 
 
 
 
 
 
FILING DATE
 
 
 
 
 
 
 
 
 
 
 
 
AND FILE
 
 
LOAN PARTY
 
SECURED PARTY
 
COLLATERAL
 
STATE
 
JURISDICTION
 
NUMBER
 
COMMENT
 
 
 
 
 
 
 
 
 
 
 
 
 
APPLETON PAPERS INC.
 
Domtar Industries Inc.
 
Inventory held by Debtor as Bailee for Domtar Industries Inc.
 
DE
 
Department of State: Division Of Corporations
 
7/19/2005
#5222306 4
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
APPLETON PAPERS INC.
 
Arjo Wiggins Appleton p.l.c.
 
All of Debtors' right, title and interest in and to the Recoveries per Fox River
AWA Environmental Indemnity Agreement dated 11/9/01
 
WI
 
Department of Financial Institutions
 
11/21/2001
#010008932729
 
Paperweight Develop Corp. & New Appleton LLC as additional Debtors
 
 
 
 
 
 
 
 
 
 
 
 
 
APPLETON PAPERS INC.
 
Director of Development of the State of Ohio
 
Certain equipment, including proceeds, substitutions and accessions
 
DE
 
Department of State: Division of Corporations
 
7/24/2007
#20072782059
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
APPLETON PAPERS INC.
 
ICON Appleton, LLC
 
Equipment located at 1030 West Alex-Bell Road, W. Carrollton, OH, including
proceeds and parts as set forth in Firm Quotation No. MPQN000103 from Metso
Paper USA, Inc.
 
DE
 
Department of State: Division of Corporations
 
11/7/2008
20083748595
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NEW ENGLAND EXTRUSION INC.
 
CITIBANK, N.A.
 
Accounts Receivable for Alcan Inc.
 
WI
 
Department of Financial Institutions
 
8/21/2006
#060012534217
 
 

 

--------------------------------------------------------------------------------

 
Schedule 10.02
 
ADMINISTRATIVE AGENT'S OFFICE, CERTAIN ADDRESSES FOR NOTICES
 
BORROWER:
 
Appleton Papers Inc.
825 E. Wisconsin Avenue
Appleton, WI 54912-0353
Attention: Jeffrey J. Fletcher
Telephone: 920-991-8452
Telecopier: 920-991-8852
Electronic Mail: jfletcher@appletonideas.com
Website Address: www.appletonideas.com
U.S. Taxpayer Identification Number: 36-2556469
 
ADMINISTRATIVE AGENT, ANY L/C ISSUER, SWING LINE LENDER OR FIFTH THIRD BANK AS A
LENDER:
 
Fifth Third Bank
38 Fountain Square Plaza
Cincinnati, Ohio 45263
Attention: Loan Syndications/Judy Huls
Facsimile: 513-534-0875
 
with copies to:
 
FIFTH THIRD BANK
222 South Riverside Plaza
Suite 3300
Chicago, Illinois 60606
Attention: Elizabeth Di Cola
Facsimile: 312-704-4127
 
KATTEN MUCHIN ROSENMAN LLP
525 West Monroe Street
Chicago, Illinois 60661-3693
Attention: Denise S. Burn, Esq.
Facsimile: 312-577-8778
 

--------------------------------------------------------------------------------

EXHIBIT A
 
FORM OF
ASSIGNMENT AND ASSUMPTION
 
This Assignment and Assumption (this “Assignment and Assumption”) is dated as of
the Effective Date set forth below and is entered into by and between
[the][each](1) Assignor identified in item 1 below ([the][each, an] “Assignor”)
and [the][each](2) Assignee identified in item 2 below ([the][each, an]
“Assignee”).   [It is understood and agreed that the rights and obligations of
[the Assignors][the Assignees](3) hereunder are several and not joint.](4) 
Capitalized terms used but not defined herein shall have the meanings given to
them in the Credit Agreement identified below (the “Credit Agreement”), receipt
of a copy of which is hereby acknowledged by the Assignee. The Standard Terms
and Conditions set forth in Annex 1 attached hereto (the “Standard Terms and
Conditions”) are hereby agreed to and incorporated herein by reference and made
a part of this Assignment and Assumption as if set forth herein in full.
 
For an agreed consideration, [the][each] Assignor hereby irrevocably sells and
assigns to [the Assignee][the respective Assignees], and [the][each] Assignee
hereby irrevocably purchases and assumes from [the Assignor][the respective
Assignors], subject to and in accordance with the Standard Terms and Conditions
and the Credit Agreement, as of the Effective Date inserted by the
Administrative Agent as contemplated below (i) all of [the Assignor’s][the
respective Assignors’] rights and obligations in [its capacity as a
Lender][their respective capacities as Lenders] under the Credit Agreement and
any other documents or instruments delivered pursuant thereto to the extent
related to the amount and percentage interest identified below of all of such
outstanding rights and obligations of [the Assignor][the respective Assignors]
under the respective facilities identified below (including, without limitation,
the Letters of Credit and the Swing Line Loans included in such facilities) and
(ii) to the extent permitted to be assigned under applicable law, all claims,
suits, causes of action and any other right of [the Assignor (in its capacity as
a Lender)][the respective Assignors (in their respective capacities as Lenders)]
against any Person, whether known or unknown, arising under or in connection
with the Credit Agreement, any other documents or instruments delivered pursuant
thereto or the loan transactions governed thereby or in any way based on or
related to any of the foregoing, including, but not limited to, contract claims,
tort claims, malpractice claims, statutory claims and all other claims at law or
in equity related to the rights and obligations sold and assigned pursuant to
clause (i) above (the rights and obligations sold and assigned by [the][any]
Assignor to [the][any] Assignee pursuant to clauses (i) and (ii) above being
referred to herein collectively as [the][an] “Assigned Interest”). Each such
sale and assignment is without recourse to [the][any] Assignor and, except as
expressly provided in this Assignment and Assumption, without representation or
warranty by [the][any] Assignor.
 
1.
Assignor[s]:
                   

 
(1)   For bracketed language here and elsewhere in this form relating to the
Assignor(s), if the assignment is from a single Assignor, choose the first
bracketed language. If the assignment is from multiple Assignors, choose the
second bracketed language.
 
(2)   For bracketed language here and elsewhere in this form relating to the
Assignee(s), if the assignment is to a single Assignee, choose the first
bracketed language. If the assignment is to multiple Assignees, choose the
second bracketed language.
 
(3)   Select as appropriate.
 
(4)   Include bracketed language if there are either multiple Assignors or
multiple Assignees.
 
 
 

--------------------------------------------------------------------------------

 

 
2.
 
Assignee[s]:
                             
[for each Assignee, indicate [Affiliate][Approved Fund] of [identify Lender]]
     
3.
 
Borrower(s): Appleton Papers Inc.
     
4.
 
Administrative Agent: Fifth Third Bank, an Ohio banking corporation, as the
administrative agent under the Credit Agreement
     
5.
 
Credit Agreement: Credit Agreement, dated as of February 8, 2010, among Appleton
Papers Inc., a Delaware corporation (the “Borrower”), Paperweight Development
Corp., a Wisconsin corporation (“Holdings”), each lender from time to time party
hereto (collectively, the “Lenders” and individually, a “Lender”), and Fifth
Third Bank, as Administrative Agent, Swing Line Lender and an L/C Issuer.
     
6.
 
Assigned Interest:

 
Assignor[s]
 
Assignee[s]
 
Facility
Assigned
 
Aggregate
Amount of
Commitment/Loans
for all Lenders(5)
 
Amount of
Commitment
/Loans
Assigned
 
Percentage
Assigned of
Commitment/
Loans(6)
 
CUSIP
Number
             
$
   
$
     
%
               
$
   
$
     
%
               
$
   
$
     
%
   

 
[7.
Trade Date:                                    ](7)

 
Effective Date:                                    , 20   [TO BE INSERTED BY
ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF
TRANSFER IN THE REGISTER THEREFOR.]
 
[Missing Graphic Reference]
(5)           Amounts in this column and in the column immediately to the right
to be adjusted by the counterparties to take into account any payments or
prepayments made between the Trade Date and the Effective Date.
(6)           Set forth, to at least 9 decimals, as a percentage of the
Commitment/Loans of all Lenders thereunder.
(7)           To be completed if the Assignor and the Assignee intend that the
minimum assignment amount is to be determined as of the Trade Date.
 
 
 

--------------------------------------------------------------------------------

 

 
The terms set forth in this Assignment and Assumption are hereby agreed to:
 

   
ASSIGNOR
   
[NAME OF ASSIGNOR]
           
By:
       
Title:
         
ASSIGNEE
   
[NAME OF ASSIGNEE]
           
By:
       
Title:
           
[Consented to and](8) Accepted:
         
FIFTH THIRD BANK, as
   
Administrative Agent
           
By:
       
Title:
         
[Consented to:](9)
           
By:
       
Title:
   

 
(8)           To be added only if the consent of the Administrative Agent is
required by the terms of the Credit Agreement.
(9)           To be added only if the consent of the Borrower and/or other
parties (e.g. Swing Line Lender, L/C Issuer) is required by the terms of the
Credit Agreement.
 
 
 

--------------------------------------------------------------------------------

 

 
ANNEX 1 TO ASSIGNMENT AND ASSUMPTION
 
APPLETON PAPERS INC.
 
STANDARD TERMS AND CONDITIONS FOR
 
ASSIGNMENT AND ASSUMPTION
 
1.             Representations and Warranties.
 
1.1.          Assignor. [The][Each] Assignor (a) represents and warrants that
(i) it is the legal and beneficial owner of [the][[the relevant] Assigned
Interest, (ii) [the][such] Assigned Interest is free and clear of any lien,
encumbrance or other adverse claim and (iii) it has full power and authority,
and has taken all action necessary, to execute and deliver this Assignment and
Assumption and to consummate the transactions contemplated hereby; and
(b) assumes no responsibility with respect to (i) any statements, warranties or
representations made in or in connection with the Credit Agreement or any other
Loan Document, (ii) the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Loan Documents or any collateral
thereunder, (iii) the financial condition of the Borrower, any of its
Subsidiaries or Affiliates or any other Person obligated in respect of any Loan
Document or (iv) the performance or observance by the Borrower, any of its
Subsidiaries or Affiliates or any other Person of any of their respective
obligations under any Loan Document.
 
1.2.          Assignee. [The][Each] Assignee (a) represents and warrants that
(i) it has full power and authority, and has taken all action necessary, to
execute and deliver this Assignment and Assumption and to consummate the
transactions contemplated hereby and to become a Lender under the Credit
Agreement, (ii) it meets all the requirements to be an assignee under
Section 10.06(b)(v) and (vi) of the Credit Agreement (subject to such consents,
if any, as may be required under Section 10.06(b)(iii) of the Credit Agreement),
(iii) from and after the Effective Date, it shall be bound by the provisions of
the Credit Agreement as a Lender thereunder and, to the extent of [the][the
relevant] Assigned Interest, shall have the obligations of a Lender thereunder,
(iv) it is sophisticated with respect to decisions to acquire assets of the type
represented by [the][such] Assigned Interest and either it, or the Person
exercising discretion in making its decision to acquire [the][such] Assigned
Interest, is experienced in acquiring assets of such type, (v) it has received a
copy of the Credit Agreement, and has received or has been accorded the
opportunity to receive copies of the most recent financial statements delivered
pursuant to Section          thereof, as applicable, and such other documents
and information as it deems appropriate to make its own credit analysis and
decision to enter into this Assignment and Assumption and to purchase
[the][such] Assigned Interest, (vi) it has, independently and without reliance
upon the Administrative Agent or any other Lender and based on such documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Assignment and Assumption and to purchase
[the][such] Assigned Interest, and (vii) if it is a Foreign Lender or a Lender
required to provide documentation pursuant to Section 3.01 of the Credit
Agreement, attached hereto is any documentation required to be delivered by it
pursuant to the terms of the Credit Agreement, duly completed and executed by
[the][such] Assignee; and (b) agrees that (i) it will, independently and without
reliance upon the Administrative Agent, [the][any] Assignor or any other Lender,
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Loan Documents, and (ii) it will perform in accordance with their
terms all of the obligations which by the terms of the Loan Documents are
required to be performed by it as a Lender.
 
2.             Payments. From and after the Effective Date, the Administrative
Agent shall make all payments in respect of [the][each] Assigned Interest
(including payments of principal, interest, fees and other amounts) to [the][the
relevant] Assignor for amounts which have accrued to but excluding the Effective
Date and to [the][the relevant] Assignee for amounts which have accrued from and
after the Effective Date.
 
 
 

--------------------------------------------------------------------------------

 
 
3.             General Provisions. This Assignment and Assumption shall be
binding upon, and inure to the benefit of, the parties hereto and their
respective successors and assigns. This Assignment and Assumption may be
executed in any number of counterparts, which together shall constitute one
instrument. Delivery of an executed counterpart of a signature page of this
Assignment and Assumption by telecopy shall be effective as delivery of a
manually executed counterpart of this Assignment and Assumption. This Assignment
and Assumption shall be governed by, and construed in accordance with, the law
of the State of New York.
 
 
 

--------------------------------------------------------------------------------

 

 
EXHIBIT B
 
FORM OF BORROWING BASE CERTIFICATE
 
APPLETON PAPERS INC.
 
Date:                         , 20   
 
This Borrowing Base Certificate (this “Certificate”) is given by APPLETON PAPERS
INC., a Delaware corporation (the “Borrower”), pursuant to Section 6.02(c) of
that certain Credit Agreement dated as of February 8, 2010, among the Borrower,
PAPERWEIGHT DEVELOPMENT CORP., a Wisconsin corporation, as a Loan Party, FIFTH
THIRD BANK, an Ohio banking corporation, as administrative agent (in such
capacity, the “Administrative Agent”), and as the Swing Line Lender, an L/C
Issuer and a Lender, and the additional Lenders and L/Credit Issuers from time
to time party thereto (as such agreement may be amended, restated, supplemented,
waived and/or otherwise modified and in effect from time to time, the “Credit
Agreement”). Capitalized terms used herein without definition shall have the
respective meanings ascribed to such terms in the Credit Agreement.
 
The Person executing this Borrowing Base Certificate is a Responsible Officer of
the Borrower and as such is duly authorized to execute and deliver this
Borrowing Base Certificate on behalf of the Borrower. By executing this
Borrowing Base Certificate, such Responsible Officer hereby certifies to the
Administrative Agent, each Lender and each L/C Issuer, for on behalf of the
Borrower, that:
 
(a)           attached hereto as Exhibit A is a schedule setting forth the
Borrowing Base as of the date set forth above [INSERT AS APPLICABLE: for the
fiscal month][week comprising Monday through Sunday] then ended, and the
respective calculations made with respect thereto, and based on such schedule,
the Borrowing Base as of such date is $                         ; and
 
(c)           [INCLUDE ONLY WITH CALCULATION OF BORROWING BASE AS AT LAST DAY OF
ANY FISCAL MONTH] Average Excess Availability for the fiscal month ending as of
the date set forth above is $                        , and based on the such
Average Excess Availability, (i) the Applicable Rate for Revolving Credit Loans
that are Base Rate Loans and Swing Loans is                 %, (ii) the
Applicable Rate for Revolving Credit Loans that are Eurodollar Rate Loans is
                % , (iii) the Applicable Rate with respect to the Letter of
Credit Fee is                 %.
 
IN WITNESS WHEREOF, the Borrower has caused this Certificate to be executed by
one of its Responsible Officers this             day
of                                , 20     .
 
 

 
APPLETON PAPERS INC.,
 
a Delaware corporation
       
By:
   
Name:
   
Title:
 

 
 
 

--------------------------------------------------------------------------------

 

 
EXHIBIT C
 
FORM OF COMMITTED LOAN NOTICE
 
Date:           ,         
 
To:          Fifth Third Bank, as Administrative Agent
 
Ladies and Gentlemen:
 
Reference is made to that certain Credit Agreement, dated as of February 8, 2010
(as amended, restated, supplemented and/or otherwise modified from time to time,
the “Credit Agreement”), among Appleton Papers Inc., a Delaware corporation (the
“Borrower”), Paperweight Development Corp., a Wisconsin corporation
(“Holdings”), each lender from time to time party thereto (collectively, the
“Lenders” and individually, a “Lender”), and Fifth Third Bank, an Ohio banking
corporation, as Administrative Agent, Swing Line Lender and an L/C Issuer. Terms
defined in the Credit Agreement and not otherwise defined herein are used herein
with the meanings so defined.
 
The undersigned on behalf of the Borrower hereby requests (select one):
   
o
A Borrowing of Revolving Credit Loans
   
o
A conversion or continuation of Revolving Credit Loans
     
1.
 
On                                                                     (a
Business Day).
     
2.
 
In the amount of $                                   .
     
3.
 
Comprised of                                           .
   
[Type of Loan requested]
     
4.
 
For Eurodollar Rate Loans: with an Interest Period of      months.

 
 

The Borrowing, conversion or continuation requested hereby conforms to the
requirements set forth in Sections 2.01 and 2.02 of the Credit Agreement. [In
accordance with the requirements of Section 4.02, the Borrower hereby reaffirms
that the representations and warranties set forth in the Credit Agreement are
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) and confirms that no Default or Event of Default exists
or shall exist after giving effect to the Borrowing or the application of the
proceeds thereof.](10)
 
 

 
APPLETON PAPERS INC.,
 
a Delaware corporation
       
By:
   
Name:
   
Title:
 

 
(10) Not required for conversion of Loans to the other Type, or a continuation
of Eurodollar Rate Loans.
 
 
 

--------------------------------------------------------------------------------

 

 
EXHIBIT D
 
FORM OF COMPLIANCE CERTIFICATE
 
This Compliance Certificate (this “Certificate”) is delivered to you pursuant to
Section 6.02(a) of the Credit Agreement, dated as of February 8, 2010 (as
amended, restated, supplemented and/or otherwise modified from time to time, the
“Credit Agreement”), among Appleton Papers Inc., a Delaware corporation (the
“Borrower”), Paperweight Development Corp., a Wisconsin corporation
(“Holdings”), each lender from time to time party hereto (collectively, the
“Lenders” and individually, a “Lender”), and Fifth Third Bank, an Ohio banking
corporation, as Administrative Agent, Swing Line Lender and an L/C Issuer. Terms
defined in the Credit Agreement and not otherwise defined herein are used herein
with the meanings so defined.
 
 
1.                                       I am the duly elected, qualified and
acting [insert title of Responsible Officer] of Holdings.

 
 

 
2.                                       I have reviewed and am familiar with
the contents of this Certificate.

 
 

 
3.                                      I have reviewed the terms of the Credit
Agreement and the Loan Documents and have made or caused to be made under my
supervision, a review in reasonable detail of the transactions and condition of
the Borrower during the accounting period covered by the financial statements
attached hereto as Attachment 1 (the “Financial Statements”). Such review did
not disclose the existence during or at the end of the accounting period covered
by the Financial Statements, and I have no knowledge of the existence, as of the
date of this Certificate, of any condition or event which constitutes a Default
or Event of Default [, except as set forth below].

 
 

 
4.                                       Attached hereto as Attachment 2 are the
computations showing compliance with (x) the financial covenant set forth in
Section 7.01 of the Credit Agreement (to the extent compliance is required under
such section) and (y) the various financial baskets set forth in Sections 7.02,
7.03, 7.05 (including the amount of all Asset Sales), 7.06 and 7.07 of the
Credit Agreement.

 
 

 
5.                                       Attached hereto as Attachment 3 is the
information required to be delivered pursuant to (i) Section 6.02(a)(iii) of the
Credit Agreement, to the extent applicable, and (ii) Section 5.8(c) and 5.10 of
the Guarantee and Collateral Agreement.

 
 

IN WITNESS WHEREOF, I execute this Certificate this              day
of           , 20    .
 

 
PAPERWEIGHT DEVELOPMENT CORP., a
Wisconsin corporation
           
By:
     
Name:
   
Title:

 
 
 

--------------------------------------------------------------------------------

 

 
EXHIBIT E
 
FORM OF REVOLVING CREDIT NOTE
 
                      ,            
 
FOR VALUE RECEIVED, Appleton Papers Inc., a Delaware corporation the
“Borrower”), hereby promises to pay to
                                            or its registered assigns (the
“Lender”), in accordance with the provisions of the Agreement (as hereinafter
defined), the principal amount of each Revolving Credit Loan from time to time
made by the Lender to the Borrower under that certain Credit Agreement, dated as
of February 8, 2010 (as amended, restated, extended, supplemented and/or
otherwise modified in writing from time to time, the “Agreement;” the terms
defined therein being used herein as therein defined), among the Appleton Papers
Inc., Paperweight Development Corp., a Wisconsin corporation (“Holdings”), each
lender from time to time party hereto (collectively, the “Lenders” and
individually, a “Lender”), and Fifth Third Bank, an Ohio banking corporation, as
Administrative Agent, Swing Line Lender and an L/C Issuer.
 
The Borrower promises to pay interest on the unpaid principal amount of each
Revolving Credit Loan from the date of such Revolving Credit Loan until such
principal amount is paid in full, at such interest rates and at such times as
provided in the Agreement. All payments of principal and interest shall be made
to the Administrative Agent for the account of the Lender in Dollars in
immediately available funds at the Administrative Agent’s Office. If any amount
is not paid in full when due hereunder, such unpaid amount shall bear interest,
to be paid upon demand, from the due date thereof until the date of actual
payment (and before as well as after judgment) computed at the per annum rate
set forth in the Agreement.
 
This Revolving Credit Note is one of the Notes referred to in the Agreement, is
entitled to the benefits thereof and may be prepaid in whole or in part subject
to the terms and conditions provided therein. This Revolving Credit Note is also
entitled to the benefits of the Guaranty and is secured by the Collateral, in
each case in accordance with the terms of the Agreement and the Guaranty and
Collateral Agreement (as defined in the Agreement). Upon the occurrence and
continuation of one or more of the Events of Default specified in the Agreement,
all amounts then remaining unpaid on this Revolving Credit Note shall become, or
may be declared to be, immediately due and payable, all as provided in the
Agreement. Revolving Credit Loans made by the Lender shall be evidenced by one
or more loan accounts or records maintained by the Lender in the ordinary course
of business. The Lender may also attach schedules to this Revolving Credit Note
and endorse thereon the date, amount and maturity of its Revolving Credit Loans
and payments with respect thereto.
 
The Borrower, for itself and its successors and assigns, hereby waives
diligence, presentment, protest and demand and notice of protest, demand,
dishonor and non-payment of this Revolving Credit Note.
 
 
 

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THIS NOTE SHALL FOR ALL PURPOSES BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK. THIS NOTE INCORPORATES BY REFERENCE, AND THE
BORROWER AND THE LENDERS HEREBY AGREE TO BE SUBJECT TO THE PROVISIONS SET FORTH
IN SECTION 10.14 OF THE AGREEMENT.
 

 
APPLETON PAPERS INC.,
 
a Delaware corporation
       
By:
   
Name:
   
Title:
 

 
 
 

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REVOLVING CREDIT LOANS AND PAYMENTS WITH RESPECT THERETO
 

   
Type of
 
Amount of
     
Amount of 
 
Outstanding
         
Revolving
 
Revolving
 
End of
 
Principal or
 
Principal
         
Credit Loan
 
Credit Loan
 
Interest
 
Interest Paid
 
Balance This
 
Notation
 
Date
 
Made
 
Made
 
Period
 
This Date
 
Date
 
Made By
                                                                               
     

 
 
 

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EXHIBIT F
 
FORM OF SWING LINE LOAN NOTICE
 
Date:                       , 20   
 
To:          Fifth Third Bank, as Swing Line Lender
 
Cc:          Fifth Third Bank, as Administrative Agent
 
Ladies and Gentlemen:
 
Reference is made to that certain Credit Agreement, dated as of February 8, 2010
(as amended, restated, supplemented and/or otherwise modified from time to time,
the “Credit Agreement”), among Appleton Papers Inc., a Delaware corporation (the
“Borrower”), Paperweight Development Corp., a Wisconsin corporation
(“Holdings”), each lender from time to time party hereto (collectively, the
“Lenders” and individually, a “Lender”), and Fifth Third Bank, an Ohio banking
corporation, as Administrative Agent, Swing Line Lender and an L/C Issuer. Terms
defined in the Credit Agreement and not otherwise defined herein are used herein
with the meanings so defined.
 
The undersigned hereby requests a Swing Line Loan:
 
1.          On                       , 20    (a Business Day).
 
2.          In the amount of $                     .
 
The Borrowing requested hereby conforms to the requirements set forth in
Section 2.04 of the Credit Agreement. In accordance with the requirements of
Section 4.02, the Borrower hereby reaffirms that the representations and
warranties set forth in the Credit Agreement are 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)
and confirms that no Default or Event of Default exists or shall exist after
giving effect to the Borrowing or the application of the proceeds thereof.
 

 
APPLETON PAPERS INC.,
 
a Delaware corporation
           
By:
   
Name:
   
Title:
 

 
 
 

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EXHIBIT G
 
FORM OF CLOSING CERTIFICATE
 
Pursuant to the Credit Agreement dated as of February 8, 2010 (as amended,
restated, supplemented and/or otherwise modified from time to time, the “Credit
Agreement”, terms defined therein being used herein as therein defined), among
Appleton Papers Inc., a Delaware corporation (the “Borrower”), Paperweight
Development Corp., a Wisconsin corporation (“Holdings”), each lender from time
to time party hereto (collectively, the “Lenders” and individually, a “Lender”),
and Fifth Third Bank, an Ohio banking corporation, as Administrative Agent,
Swing Line Lender and an L/C Issuer, the undersigned [INSERT TITLE OF OFFICER]
of [INSERT NAME OF LOAN PARTY] hereby certifies, solely in [his/her] capacity as
an officer of [LOAN PARTY] and not in [his/her] individual capacity, on behalf
of [Loan Party] as follows:
 
1.             The representations and warranties of [LOAN PARTY] set forth in
each of the Loan Documents to which it is a party or which are contained in any
certificate furnished by or on behalf of [LOAN PARTY] pursuant to any of the
Loan Documents to which it is a party are true and correct in all material
respects on and as of the date hereof with the same effect as if made on the
date hereof, except for representations and warranties expressly stated to
relate to a specific earlier date, in which case such representations and
warranties were true and correct in all material respects as of such earlier
date.
 
2.                                           is the duly elected and qualified
Corporate Secretary of [LOAN PARTY] and the signature set forth for such officer
below is such officer’s true and genuine signature.
 
3.             No Default or Event of Default has occurred and is continuing as
of the date hereof or after giving effect to the Loans to be made on the date
hereof. [Borrower and Holdings only]
 
4.             The conditions precedent set forth in Section 4.01 of the Credit
Agreement were satisfied as of the Closing Date except as set forth on Schedule
I hereto. For purposes of determining compliance with the conditions specified
in Section 4.01, each of the Administrative Agent and 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 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. [Borrower and Holdings
only]
 
5.             There are no liquidation or dissolution proceedings pending or to
my knowledge threatened against [LOAN PARTY], nor has any other event occurred
adversely affecting or threatening the continued corporate existence of [LOAN
PARTY].
 
6.             There has been no event or circumstance since [          ] that
has had or could reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect [Borrower only].
 
7.             No action, suit, investigation or proceeding is pending, or to my
knowledge, threatened in any court or before any arbitrator or governmental
authority that could reasonably be expected to have a Material Adverse Effect
[Borrower only].
 
The undersigned Corporate Secretary of [LOAN PARTY] certifies, solely in
[his/her] capacity as an officer of [LOAN PARTY] and not in [his/her] individual
capacity, on behalf of [Loan Party] as follows:
 
 
 

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1.             [LOAN PARTY] is a [                  ] duly incorporated, validly
existing [and in good standing] under the laws of the jurisdiction of its
organization.
 
2.             Attached hereto as Annex 1 is a true and complete copy of
resolutions duly adopted by the Board of Directors of [LOAN PARTY]
on                        ; such resolutions have not in any way been amended,
modified, revoked or rescinded, have been in full force and effect since their
adoption to and including the date hereof and are now in full force and effect
and are the only corporate proceedings of [LOAN PARTY] now in force which deal
with the execution, delivery or performance of the Loan Documents to which [LOAN
PARTY] is a party.
 
3.             Attached hereto as Annex 2 is a true and complete copy of the
By-Laws of [LOAN PARTY] as in effect on the date hereof.
 
4.             Attached hereto as Annex 3 is a true and complete copy of the
Certificate of Incorporation of [LOAN PARTY] as in effect on the date hereof,
and such certificate has not been amended, repealed, modified or restated,
except as set forth on such Annex 2.
 
5.             Attached hereto as Annex 4 are true and complete copies of the
following documents: [Borrower Only]
 
(i)            Senior Subordinated Note Indenture
(ii)           Senior Unsecured Note Indenture
(iii)          Second Lien Note Indenture
(iv)          Second Lien Security Documents
(iv)          First Lien Note Indenture
(vi)          First Lien Security Documents
 
6.             The following persons are now duly elected and qualified officers
of [LOAN PARTY] holding the offices indicated next to their respective names
below, and the signatures appearing opposite their respective names below are
the true and genuine signatures of such officers, and each of such officers is
duly authorized to execute and deliver on behalf of [LOAN PARTY] each of the
Loan Documents to which it is a party and any certificate or other document to
be delivered by [LOAN PARTY] pursuant to the Loan Documents to which it is a
party:
 
Name
Office
Signature

 
 
 

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IN WITNESS WHEREOF, the undersigned have hereunto set our names as of the date
set forth below.
 

     
Name:
 
Name:
Title:
 
Title:
           
Date:                     , 2010
   

 
 
 

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