EXHIBIT 10.1

REVOLVING

CREDIT AND GUARANTY AGREEMENT

dated as of May 2, 2005

(as amended by Amendment No. 3 dated as of January 30, 2007)

among

NEWPAGE CORPORATION,

NEWPAGE HOLDING CORPORATION,

CERTAIN SUBSIDIARIES OF NEWPAGE CORPORATION,

as Guarantors,

VARIOUS LENDERS,

GOLDMAN SACHS CREDIT PARTNERS L.P.,

as Administrative Agent, Joint Lead Arranger, Joint Bookrunner and
Co-Syndication

Agent,

UBS SECURITIES LLC,

as Joint Lead Arranger, Joint Bookrunner and Co-Syndication Agent,

WACHOVIA CAPITAL MARKETS, LLC,

as Co-Syndication Agent,

BANK OF AMERICA, N.A.,

as Documentation Agent

and

JPMORGAN CHASE BANK

as Collateral Agent

$250,000,000 Senior Secured Revolving Loan Credit Facilities

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TABLE OF CONTENTS

 

     Page

SECTION 1. DEFINITIONS AND INTERPRETATION

   2

  1.1. Definitions

   2

  1.2. Accounting Terms

   46

  1.3. Interpretation, etc.

   47

SECTION 2. LOANS AND LETTERS OF CREDIT

   47

  2.1. [Reserved]

   47

  2.2. Revolving Loans

   47

  2.3. Swing Line Loans

   48

  2.4. Issuance of Letters of Credit and Purchase of Participations Therein

   52

  2.5. Pro Rata Shares; Availability of Funds

   56

  2.6. Use of Proceeds

   57

  2.7. Evidence of Debt; Register; Lenders’ Books and Records; Notes.

   57

  2.8. Interest on Loans

   58

  2.9. Conversion/Continuation

   60

2.10. Default Interest

   60

2.11. Fees.

   61

2.12. [Reserved]

   63

2.13. Voluntary Prepayments/Commitment Reductions

   63

2.14. Mandatory Prepayments

   64

2.15. Application of Prepayments

   64

2.16. General Provisions Regarding Payments

   65

2.17. Ratable Sharing

   66

2.18. Making or Maintaining Eurodollar Rate Loans

   67

2.19. Increased Costs; Capital Adequacy

   69

2.20. Taxes; Withholding, etc.

   71

2.21. Obligation to Mitigate.

   73

2.22. Defaulting Lenders

   74

2.23. Removal or Replacement of a Lender

   75

2.24. Determination of Borrowing Base

   76

SECTION 3. CONDITIONS PRECEDENT

   81

  3.1. Closing Date.

   81

  3.2. Conditions to Each Credit Extension

   87

SECTION 4. REPRESENTATIONS AND WARRANTIES

   88

  4.1. Organization; Requisite Power and Authority; Qualification.

   89

  4.2. Capital Stock and Ownership

   89

  4.3. Due Authorization

   89

  4.4. No Conflict

   89

 

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  4.5. Governmental Consents

   90

  4.6. Binding Obligation

   90

  4.7. Historical Financial Statements

   90

  4.8. Projections

   91

  4.9. No Material Adverse Change

   91

4.10. Wickliffe Paper Company

   91

4.11. Adverse Proceedings, etc.

   91

4.12. Payment of Taxes

   91

4.13. Properties

   92

4.14. Environmental Matters

   92

4.15. No Defaults

   93

4.16. Material Contracts

   93

4.17. Governmental Regulation

   93

4.18. Margin Stock

   93

4.19. Employee Matters

   94

4.20. Employee Benefit Plans

   94

4.21. Certain Fees

   95

4.22. Solvency

   95

4.23. Related Agreements

   95

4.24. Compliance with Statutes, etc

   96

4.25. Disclosure

   96

4.26. Patriot Act

   96

4.27. Location of Material Inventory

   97

4.28. Accuracy of Borrowing Base

   97

4.29. Post-Audit Asset Dispositions

   97

4.30. Collateral Documents

   97

4.31. NewPageHoldCo

   98

4.32. Common Enterprise

   98

SECTION 5. AFFIRMATIVE COVENANTS

   98

  5.1. Financial Statements and Other Reports

   99

  5.2. Existence

   103

  5.3. Payment of Taxes and Claims

   103

  5.4. Maintenance of Properties

   104

  5.5. Insurance

   104

  5.6. Maintaining Records; Access to Properties and Inspections

   105

  5.7. Lenders Meetings

   105

  5.8. Compliance with Laws

   105

  5.9. Environmental

   105

5.10. Subsidiaries

   108

 

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5.11. [Reserved

   109

5.12. Interest Rate Protection

   109

5.13. Security Interests; Further Assurances

   109

5.14. Miscellaneous Business Covenants

   109

5.15. Information Regarding Collateral

   110

5.16. Post-Closing Collateral Matters

   111

5.17. Borrowing Base-Related Reports

   111

SECTION 6. NEGATIVE COVENANTS

   113

  6.1. Indebtedness

   113

  6.2. Liens

   116

  6.3. Equitable Lien

   119

  6.4. No Further Negative Pledges

   119

  6.5. Restricted Junior Payments

   119

  6.6. Restrictions on Subsidiary Distributions

   123

  6.7. Investments

   124

  6.8. Financial Covenants

   125

  6.9. Fundamental Changes; Disposition of Assets; Acquisitions

   130

6.10. Disposal of Subsidiary Interests

   132

6.11. Sales and Lease-Backs

   132

6.12. Transactions with Shareholders and Affiliates.

   132

6.13. Conduct of Business

   132

6.14. Permitted Activities of NewPageHoldCo

   133

6.15. Amendments or Waivers of Certain Related Agreements

   133

6.16. Amendments or Waivers of with respect to NewPageHoldCo PIK Note Documents
or Senior Subordinated Notes Indebtedness

   133

6.17. Fiscal Year

   134

SECTION 7. GUARANTY

   134

  7.1. Guaranty of the Obligations

   134

  7.2. Contribution by Guarantors

   134

  7.3. Payment by Guarantors

   135

  7.4. Liability of Guarantors Absolute

   135

  7.5. Waivers by Guarantors

   138

  7.6. Guarantors’ Rights of Subrogation, Contribution, etc.

   138

  7.7. Subordination of Other Obligations

   139

  7.8. Continuing Guaranty

   140

  7.9. Authority of Guarantors or NewPageCo

   140

7.10. Financial Condition of NewPageCo

   140

7.11. Bankruptcy, etc.

   140

7.12. Discharge of Guaranty Upon Sale of Guarantor

   141

 

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SECTION 8. EVENTS OF DEFAULT

   141

  8.1. Events of Default

   141

SECTION 9. COLLATERAL ACCOUNT; APPLICATION OF COLLATERAL PROCEEDS

   145

  9.1. Accounts and Account Collections

   145

  9.2. Inventory

   149

  9.3. Appointment of Collateral Agent as “Fondé de Pouvoir”

   150

SECTION 10. AGENTS

   150

  10.1. Appointment of Agents.

   150

  10.2. Powers and Duties

   151

  10.3. General Immunity

   152

  10.4. Agents Entitled to Act as Lender

   153

  10.5. Lenders’ Representations, Warranties and Acknowledgment

   154

  10.6. Right to Indemnity

   154

  10.7. Successor Administrative Agent.

   154

  10.8. Collateral Documents and Guaranty

   155

  10.9. Overadvances

   156

10.10. Collateral Matters

   157

10.11. Withholding Tax

   158

SECTION 11. MISCELLANEOUS

   158

  11.1. Notices

   158

  11.2. Expenses

   158

  11.3. Indemnity

   159

  11.4. Set-Off

   160

  11.5. Amendments and Waivers

   160

  11.6. Successors and Assigns; Participations

   163

  11.7. Independence of Covenants

   167

  11.8. Survival of Representations, Warranties and Agreements

   167

  11.9. No Waiver; Remedies Cumulative

   167

11.10. Marshalling; Payments Set Aside

   167

11.11. Severability

   168

11.12. Obligations Several; Independent Nature of Lenders’ Rights

   168

11.13. Headings

   168

11.14. APPLICABLE LAW

   168

11.15. CONSENT TO JURISDICTION

   168

11.16. WAIVER OF JURY TRIAL

   169

11.17. Confidentiality

   170

11.18. Usury Savings Clause

   170

11.19. Counterparts

   171

11.20. Effectiveness

   171

11.21. Patriot Act

   171

11.22. Electronic Execution of Assignments

   171

 

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APPENDICES:

   A   Revolving Loan Commitments    B   Notice Addresses

SCHEDULES:

   3.1(j)   Phase I Environmental Reports    4.1   Jurisdictions of Organization
and Qualification    4.2   Capital Stock and Ownership    4.13   Real Estate
Assets    4.14   Environmental Matters    4.16   Material Contracts    4.20  
Employee Benefit Plans    4.27   Locations of Material Inventory    5.16  
Post-Closing Collateral Matters    6.1   Existing Indebtedness    6.2   Existing
Liens    6.7   Existing Investments    6.12   Existing Affiliate Transactions

EXHIBITS:

   A-1   Funding Notice    A-2   Conversion/Continuation Notice    A-3  
Issuance Notice    B-1   Revolving Loan Note    B-2   Swing Line Note    C  
Compliance Certificate    D   Opinions of Counsel    E   Assignment Agreement   
F   Certificate Re Non-bank Status    G-1   Closing Date Certificate    G-2  
Solvency Certificate    H   Counterpart Agreement    I   Pledge and Security
Agreement    J   [Reserved]    K   Landlord Waiver and Consent Agreement    L  
Intercreditor Agreement    M   Borrowing Base Certificate    N-1   Form of
Perfection Certificate    N-2   Form of Perfection Certificate Supplement    O  
Form of Access Grant and Easement Agreement

 

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APPENDICES:   A   Revolving Loan Commitments   B   Notice Addresses SCHEDULES:  
3.1(j)   Phase I Environmental Reports   4.1  

Jurisdictionsof Organization and Qualification

  4.2  

CapitalStock and Ownership

  4.13    Real Estate Assets   4.14    Environmental Matters   4.16   Material
Contracts   4.20    Employee Benefit Plans   4.27    Locations of Material
Inventory   5.16    Post-Closing Collateral Matters   6.1       Existing
Indebtedness   6.2       Existing Liens   6.7       Existing Investments   6.12 
  Existing Affiliate Transactions EXHIBITS:   A-1   Funding Notice   A-2  
Conversion/Continuation Notice   A-3   Issuance Notice   B-1   Revolving Loan
Note   B-2   Swing Line Note   C   Compliance Certificate   D   Opinions of
Counsel   E   Assignment Agreement   F   Certificate Re Non-bank Status   G-1  
Closing Date Certificate   G-2   Solvency Certificate   H   Counterpart
Agreement   I   Pledge and Security Agreement   J   [Reserved]   K   Landlord
Waiver and Consent Agreement   L   Intercreditor Agreement   M   Borrowing Base
Certificate   N-1   Form of Perfection Certificate   N-2   Form of Perfection
Certificate Supplement   O   Form of Access Grant and Easement Agreement

 

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REVOLVING CREDIT AND GUARANTY AGREEMENT

This REVOLVING CREDIT AND GUARANTY AGREEMENT, dated as of May 2, 2005 is entered
into by and among NEWPAGE CORPORATION, a Delaware corporation, as Borrower
(“NewPageCo”), NEWPAGE HOLDING CORPORATION, a Delaware corporation
(“NewPageHoldCo”), and CERTAIN SUBSIDIARIES OF NEWPAGECO, as Guarantors, the
Lenders party hereto from time to time, GOLDMAN SACHS CREDIT PARTNERS L.P.
(“GSCP”), as Joint Lead Arranger, Joint Bookrunner, Co-Syndication Agent, and as
Administrative Agent (together with its permitted successors in such capacity,
“Administrative Agent”), JPMORGAN CHASE BANK as Collateral Agent (together with
its permitted successor in such capacity, “Collateral Agent”), UBS SECURITIES
LLC (“UBSS”), as Joint Lead Arranger, Joint Bookrunner, and as Co-Syndication
Agent (in such capacity, “Co-Syndication Agent”), WACHOVIA CAPITAL MARKETS, LLC,
as Co-Syndication Agent (in such Capacity, “Co-Syndication Agent”), and BANK OF
AMERICA, N.A., as Documentation Agent.

RECITALS:

WHEREAS, capitalized terms used in these Recitals shall have the respective
meanings set forth for such terms in Section 1.1 hereof;

WHEREAS, Lenders have agreed to extend certain credit facilities to NewPageCo,
in an aggregate principal amount not to exceed $250,000,000 of Revolving Loans,
the proceeds of which will be used (i) to fund the Paper Business Acquisition,
(ii) to pay related transaction costs, fees, commissions and expenses, (iii) to
fund permitted capital expenditures and permitted acquisitions, (iv) to fund
certain interest and commodities hedging arrangements, (v) to provide for the
ongoing working capital requirements of the Paper Business, and (vi) for general
corporate purposes of NewPageCo;

WHEREAS, NewPageCo has agreed to secure all of its Obligations by granting to
Collateral Agent, for the benefit of Secured Parties, a First Priority Lien on
all of the Cash, deposit accounts, accounts receivable and inventory of
NewPageCo; and

WHEREAS, Guarantors have agreed to guarantee the obligations of NewPageCo
hereunder and to secure their respective Obligations by granting to Collateral
Agent, for the benefit of Secured Parties, a First Priority Lien on all of the
Cash, deposit accounts, accounts receivable and inventory of the Guarantors.

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

SECTION 1. DEFINITIONS AND INTERPRETATION

1.1. Definitions. The following terms used herein, including in the preamble,
recitals, exhibits and schedules hereto, shall have the following meanings:

“Access Grant and Easement Agreement” means a Real Property Access Grant and
Easement Agreement substantially in the form of Exhibit O, as it may be amended,
supplemented, or otherwise modified from time to time.

“Account Debtor” shall mean any Person who may become obligated to another
Person under, with respect to, or on account of, an Account.

“Accounts” shall mean all “accounts,” as such term is defined in the UCC as in
effect on the date hereof in the State of New York, in which such Person now or
hereafter has rights.

“Activation Notice” as defined in Section 9.1(e).

“Adjusted Eurodollar Rate” means, for any Interest Rate Determination Date with
respect to an Interest Period for a Eurodollar Rate Loan, the rate per annum
obtained by dividing (and rounding upward to the next whole multiple of 1/16 of
1%) (i) (a) the rate per annum (rounded to the nearest 1/100 of 1%) equal to the
rate determined by Administrative Agent to be the offered rate which appears on
the page of the Telerate Screen which displays an average British Bankers
Association Interest Settlement Rate (such page currently being page number 3740
or 3750, as applicable) for deposits (for delivery on the first day of such
period) with a term equivalent to such period in Dollars, determined as of
approximately 11:00 a.m. (London, England time) on such Interest Rate
Determination Date, or (b) in the event the rate referenced in the preceding
clause (a) does not appear on such page or service or if such page or service
shall cease to be available, the rate per annum (rounded to the nearest 1/100 of
1%) equal to the rate determined by Administrative Agent to be the offered rate
on such other page or other service which displays an average British Bankers
Association Interest Settlement Rate for deposits (for delivery on the first day
of such period) with a term equivalent to such period in Dollars, determined as
of approximately 11:00 a.m. (London, England time) on such Interest Rate
Determination Date, or (c) in the event the rates referenced in the preceding
clauses (a) and (b) are not available, the rate per annum (rounded to the
nearest 1/100 of 1%) equal to the offered quotation rate to first class banks in
the London interbank market by GSCP for deposits (for delivery on the first day
of the relevant period) in Dollars of amounts in same day funds comparable to
the principal amount of the applicable Loan of Administrative Agent, in its
capacity as a Lender, for which the Adjusted Eurodollar Rate is then being
determined with maturities comparable to such period as of approximately 11:00
a.m. (London, England time) on such Interest Rate Determination Date, by (ii) an
amount equal to (a) one minus (b) the Applicable Reserve Requirement.

 

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“Administrative Agent” as defined in the preamble hereto.

“Adverse Proceeding” means any action, suit, proceeding (whether administrative,
judicial or otherwise), governmental investigation or arbitration (whether or
not purportedly on behalf of NewPageHoldCo or any of its Subsidiaries) at law or
in equity, or before or by any Governmental Authority, domestic or foreign
(including any Environmental Claims), whether pending or, to the knowledge of
NewPageHoldCo or any of its Subsidiaries, threatened in writing against
NewPageHoldCo or any of its Subsidiaries or any property of NewPageHoldCo or any
of its Subsidiaries.

“Affected Lender” as defined in Section 2.18(b).

“Affected Loans” as defined in Section 2.18(b).

“Affiliate” means, as applied to any Person, any other Person directly or
indirectly controlling, controlled by, or under common control with, that
Person. For the purposes of this definition, “control” (including, with
correlative meanings, the terms “controlling”, “controlled by” and “under common
control with”), as applied to any Person, means the possession, directly or
indirectly, of the power (i) to vote 10% or more of the Securities having
ordinary voting power for the election of directors of such Person or (ii) to
direct or cause the direction of the management and policies of that Person,
whether through the ownership of voting securities or by contract or otherwise.

“Agent” means each of the Co-Syndication Agents, Administrative Agent, and the
Collateral Agent.

“Aggregate Amounts Due” as defined in Section 2.17.

“Aggregate Payments” as defined in Section 7.2.

“Agreement” means this Revolving Credit and Guaranty Agreement, dated as of
May 2, 2005, as it may be amended, supplemented or otherwise modified from time
to time.

“Allocation Services Agreement” means the Allocation and Services Agreement
dated as of April 30, 2005 between NewPageCo and TimberCo as it may be amended,
supplemented or otherwise modified from time to time to the extent permitted
under Section 6.15.

 

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“Applicable Margin” means (i) with respect to Revolving Loans that are
Eurodollar Rate Loans, (a) from the Third Amendment Closing Date until the date
of delivery of the Compliance Certificate and the financial statements for the
period ending on the last day of the second full Fiscal Quarter ending after the
Third Amendment Closing Date, an amount equal to 1.75% per annum, and
(b) thereafter, (1) prior to the occurrence of any IPO, a percentage, per annum,
determined by reference to the Total Leverage Ratio in effect from time to time
as set forth below:

 

Leverage

Ratio

  

Applicable Margin

for Revolving Loans

> 3.50:1.00    1.75% < 3.50:1.00    1.50%

and (2) from and after the occurrence of an IPO, 1.50%, and (ii) with respect to
Swing Line Loans and Revolving Loans that are Base Rate Loans, an amount equal
to (a) the Applicable Margin for Eurodollar Rate Loans as set forth in clause
(i)(a) or (i)(b) above, as applicable, minus (b) 1.00% per annum. Each change in
the Applicable Margin shall become effective three Business Days after the date
on which Administrative Agent shall have received the applicable financial
statements and a Compliance Certificate pursuant to Section 5.1(d) calculating
the Total Leverage Ratio as at the end of the Fiscal Quarter to which such
Compliance Certificate relates. At any time prior to the occurrence of any IPO
that NewPageCo has not submitted to Administrative Agent the applicable
information as and when required under Section 5.1(d), the Applicable Margin
shall be determined for the period from the date such information was required
to have been delivered under Section 5.1(d) until three Business Days after the
actual delivery thereof as if the Total Leverage Ratio were in excess of
3.50:1.00 for such period. Prior to the occurrence of any IPO, within one
Business Day of receipt of the applicable information under Section 5.1(d),
Administrative Agent shall give each Lender telefacsimile or telephonic notice
(confirmed in writing) of the Applicable Margin in effect from such date.

“Applicable Reserve Requirement” means, at any time, for any Eurodollar Rate
Loan, the maximum rate, expressed as a decimal, at which reserves (including,
without limitation, any basic marginal, special, supplemental, emergency or
other reserves) are required to be maintained with respect thereto against
“Eurocurrency liabilities” (as such term is defined in Regulation D) under
regulations issued from time to time by the Board of Governors of the Federal
Reserve System or other applicable banking regulator. Without limiting the
effect of the foregoing, the Applicable Reserve Requirement shall reflect any
reserves required to be maintained by such member banks with respect to (i) any
category of liabilities which includes deposits by reference to which the
applicable Adjusted Eurodollar Rate of a Loan is to be

 

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determined, or (ii) any category of extensions of credit or other assets which
include Eurodollar Rate Loans. A Eurodollar Rate Loan shall be deemed to
constitute Eurocurrency liabilities and as such shall be deemed subject to
reserve requirements without benefits of credit for proration, exceptions or
offsets that may be available from time to time to the applicable Lender. The
rate of interest on Eurodollar Rate Loans shall be adjusted automatically on and
as of the effective date of any change in the Applicable Reserve Requirement.

“Asset Sale” means a sale, lease or sub-lease (as lessor or sublessor), sale and
leaseback, assignment, conveyance, transfer or other disposition to, or any
exchange of property with, any Person (other than NewPageCo or any Guarantor
Subsidiary), in one transaction or a series of transactions, of all or any part
of NewPageHoldCo’s or any of its Subsidiaries’ businesses, assets or properties
of any kind, whether real, personal, or mixed and whether tangible or
intangible, whether now owned or hereafter acquired, including, without
limitation, the Capital Stock of any of NewPageHoldCo’ Subsidiaries and the sale
or termination of the Commodities Hedge Agreement, other than (i) inventory (or
other assets) sold or leased in the ordinary course of business (excluding any
such sales by operations or divisions discontinued or to be discontinued),
(ii) leases or subleases of immaterial real property that is no longer used or
useful in the business of NewPageHoldCo, NewPageCo or any of its Subsidiaries,
(iii) dispositions, by means of trade-in, of equipment used in the ordinary
course of business, so long as such equipment is replaced, substantially
concurrently, by like-kind equipment, (iv) the use or transfer of Cash and Cash
Equivalents in a manner that is not prohibited by the terms of this Agreement or
other Credit Documents, (v) licensing, on a non-exclusive basis, of patents,
trademarks, copyrights, and other intellectual property rights in the ordinary
course of business, (vi) to the extent allowable under Section 1031 of the
Internal Revenue Code, any exchange of like property for use in a business of
NewPageCo and its Subsidiaries permitted by Section 6.13, (vii) any issuance of
equity or other beneficial ownership interests by a Subsidiary of NewPageHoldCo
to NewPageHoldCo or a Subsidiary of NewPageHoldCo so long as such interests are
pledged to the Collateral Agent for the benefit of Lenders to the extent
required by this Agreement or any other Credit Document, (viii) the creation of
a Permitted Lien under Section 6.2, and (ix) sales of other assets for aggregate
consideration of less than $500,000 with respect to any transaction and less
than $1,000,000 in the aggregate during any Fiscal Year.

“Assignment Agreement” means an Assignment and Assumption Agreement
substantially in the form of Exhibit E, with such amendments or modifications as
may be approved by Administrative Agent.

“Assignment Effective Date” as defined in Section 11.6(b).

“Authorized Officer” means, as applied to any Person, any individual holding the
position of chairman of the board (if an officer), chief executive officer,
president or one of its vice presidents (or the equivalent thereof), and such
Person’s chief financial officer, treasurer, secretary, or other person
expressly authorized by resolution or written consent to represent such entity
in such capacity.

 

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“Banking Services” means treasury management services (including, without
limitation, controlled disbursement, automated clearinghouse transactions,
return items, overdrafts and interstate depository network services) provided to
any Credit Party by any Banking Services Provider; provided, however, that for
obligations with respect to any of the foregoing to be included as a “Banking
Services Obligation” the applicable Banking Services Provider and the Company
must have previously provided written notice to the Administrative Agent and the
Collateral Agent of (i) the provision of such Banking Services, and (ii) the
maximum dollar amount of obligations arising thereunder to be included as
Banking Services Obligations (the “Banking Services Amount”). No Banking
Services Amount may be established or increased at any time that a Default or an
Event of Default shall have occurred and be continuing, and in no event shall
the aggregate amount of all Banking Services Amounts exceed $10 million (and no
additional Banking Services Amounts may be included as Banking Services
Obligations at any time that the then existing Banking Services Amounts equals
$10 million). Subject to the foregoing limitations, the Banking Services Amount
of any Banking Services Provider may be increased or decreased from time to time
by notice from such Banking Services Provider and the Company to the
Administrative Agent and the Collateral Agent.

“Banking Services Obligations” means any and all obligations of NewPageHoldCo,
NewPageCo or any Guarantor Subsidiary, whether absolute or contingent and
howsoever and whensoever created, arising, evidenced or acquired (including all
renewals, extensions and modifications thereof and substitutions therefore)
owing to any Banking Services Provider in connection with Banking Services.

“Banking Services Provider” means each Lender or any Affiliate of any Lender
providing Banking Services to any Credit Party (including any Person who is a
Lender (and any Affiliate thereof) as of the Closing Date but subsequently,
whether before or after entering into any agreement to provide such Banking
Services, ceases to be a Lender), including, without limitation, each such
Affiliate that enters into a joinder agreement with the Collateral Agent
appointing the Collateral Agent as its agent for purposes of receiving the
benefits of the Collateral as set forth in the Pledge and Security Agreement. As
of the Third Amendment Closing Date JPMorgan Chase Bank, N.A. and its Affiliates
shall constitute the sole Banking Services Providers as of such date with a
Banking Services Amount equal to $10 million.

“Banking Services Reserves” means all Reserves which the Collateral Agent from
time to time establishes in its Permitted Discretion for Banking Services then
provided or outstanding.

 

6

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“Bankruptcy Code” means Title 11 of the United States Code entitled
“Bankruptcy,” as now and hereafter in effect, or any successor statute.

“Base Rate” means, for any day, a rate per annum equal to the greater of (i) the
Prime Rate in effect on such day and (ii) the Federal Funds Effective Rate in
effect on such day plus  1/2 of 1%. Any change in the Base Rate due to a change
in the Prime Rate or the Federal Funds Effective Rate shall be effective on the
effective day of such change in the Prime Rate or the Federal Funds Effective
Rate, respectively.

“Base Rate Loan” means a Loan bearing interest at a rate determined by reference
to the Base Rate.

“Beneficiary” means each Agent, Issuing Bank and Lender.

“Board of Directors” means (i) with respect to a corporation, the board of
directors of the corporation or any committee thereof duly authorized to act on
behalf of such board; (ii) with respect to a partnership, the Board of Directors
of the general partner of the partnership; (iii) with respect to a limited
liability company, the managing member or members or any controlling committee
or board of directors of such company or the sole member or the managing member
thereof; and (iv) with respect to any other Person, the board or committee of
such Person serving a similar function.

“Borrowing Base” shall mean at any time, subject to adjustment as provided in
Section 2.24, an amount equal to the sum of, without duplication:

(a) the book value of Eligible Accounts of NewPageCo and the Borrowing Base
Guarantors multiplied by the advance rate of 85%, plus

(b) the lesser of (i) the Cost of Eligible Inventory of NewPageCo and the
Borrowing Base Guarantors multiplied by the advance rate of 75%, or (ii) the
Cost of Eligible Inventory of NewPageCo and the Borrowing Base Guarantors
multiplied by the advance rate of 85% of the Net Recovery Cost Percentage, minus

(c) effective immediately upon notification thereof to NewPageCo by the
Collateral Agent, any Reserves established from time to time by the Collateral
Agent in the exercise of its Permitted Discretion;

The Borrowing Base at any time shall be determined by reference to the most
recent Borrowing Base Certificate theretofore delivered to the Collateral Agent
and the Administrative Agent with such adjustments as Administrative Agent and
Collateral Agent deem appropriate in their Permitted Discretion to assure that
the Borrowing Base is calculated in accordance with the terms of this Agreement.

 

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“Borrowing Base Certificate” shall mean an Officers’ Certificate from NewPageCo,
substantially in the form of, and containing the information prescribed by,
Exhibit M, delivered to the Administrative Agent and the Collateral Agent
setting forth NewPageCo’s calculation of the Borrowing Base.

“Borrowing Base Guarantor” shall mean any Wholly-Owned Subsidiary of NewPageCo
which may hereafter be approved by Administrative Agent and Collateral Agent in
its Permitted Discretion and which (a) is organized in a State within the United
States, (b) is currently able to prepare all collateral reports in a comparable
manner to NewPageCo’s reporting procedures and (c) has executed and delivered to
Collateral Agent such joinder agreements to guarantees, contribution and set-off
agreements and other Collateral Documents as Collateral Agent has reasonably
requested so long as Collateral Agent has received and approved, in its
reasonable discretion, (i) a collateral audit and Inventory Appraisal conducted
by an independent appraisal firm reasonably acceptable to Collateral Agent and
(ii) all UCC search results necessary to confirm Collateral Agent’s first
priority Lien on all of such Borrowing Base Guarantor’s personal Property,
subject to Permitted Liens. As of the Closing Date, the Borrowing Base
Guarantors shall be (after giving effect to the contemplated name changes
reflected in the Perfection Certificate) Chillicothe Paper, Inc., Escanaba Paper
Company, Luke Paper Company, Rumford Paper Company, and Wickliffe Paper Company.

“Business Day” means (i) any day excluding Saturday, Sunday and any day which is
a legal holiday under the laws of the State of New York or is a day on which
banking institutions located in such state are authorized or required by law or
other governmental action to close and (ii) with respect to all notices,
determinations, fundings and payments in connection with the Adjusted Eurodollar
Rate or any Eurodollar Rate Loans, the term “Business Day” shall mean any day
which is a Business Day described in clause (i) and which is also a day for
trading by and between banks in Dollar deposits in the London interbank market.

“Canadian Dollars” means the lawful money of Canada.

“Capital Lease” means, as applied to any Person, any lease of any property
(whether real, personal or mixed) by that Person as lessee that, in conformity
with GAAP, is or should be accounted for as a capital lease on the balance sheet
of that Person.

“Capital Stock” means any and all shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation, any and all
equivalent ownership interests in a Person (other than a corporation),
including, without limitation, partnership interests and membership interests,
and any and all warrants, rights or options to purchase or other arrangements or
rights to acquire any of the foregoing.

 

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“Cash” means money, currency or a credit balance in any demand or Deposit
Account.

“Cash Dominion Trigger Event” shall mean the occurrence of any one of the
following events: (i) at any time after the Third Amendment Closing Date, Excess
Availability shall be less than $25.0 million for any period of ten
(10) consecutive Business Days or (ii) an Event of Default shall occur and be
continuing; provided, that, to the extent that the Cash Dominion Trigger Event
has occurred due to clause (i) of this definition, if Excess Availability shall
be equal to or greater than $25.0 million for at least sixty (60) consecutive
days, the Cash Dominion Trigger Event shall be deemed to be over. At any time
that a Cash Dominion Trigger Event shall be deemed to be over or otherwise cease
to exist, the Agents shall take such actions, including delivering such notices
and directions to depositary institutions at which Blocked Accounts are
established, to terminate the cash sweeps and other transfers existing pursuant
to Section 9.01(e) as a result of any Activation Notice or other notices or
directions given by any Agent during the existence of such Cash Dominion Trigger
Event.

“Cash Equivalents” means, as at any date of determination, (i) marketable
securities (a) issued or directly and unconditionally guaranteed as to interest
and principal by the United States Government or (b) issued by any agency of the
United States the obligations of which are backed by the full faith and credit
of the United States, in each case maturing within one year after such date;
(ii) marketable direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof, in each case maturing within one year after such date
and having, at the time of the acquisition thereof, one of the two highest
ratings obtainable from S&P or Moody’s; (iii) commercial paper maturing no more
than one year from the date of creation thereof and having, at the time of the
acquisition thereof, one of the two highest ratings obtainable from S&P or
Moody’s; (iv) certificates of deposit or bankers’ acceptances maturing within
one year after such date and issued or accepted by any Lender or by any
commercial bank organized under the laws of the United States of America or any
state thereof or the District of Columbia that (a) is at least “adequately
capitalized” (as defined in the regulations of its primary Federal banking
regulator) and (b) has Tier 1 capital (as defined in such regulations) of not
less than $100,000,000; and (v) shares of any money market mutual fund that
(a) has substantially all of its assets invested continuously in the types of
investments referred to in clauses (i) and (ii) above, (b) has net assets of not
less than $250,000,000, and (c) having one of the two highest ratings obtainable
from S&P or Moody’s when acquired; and (vi) repurchase obligations with a term
of not more than 90 days for underlying securities of the types described in
clause (i) above entered into with any bank meeting the qualifications specified
in clause (iv) above.

 

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“Cash Management Intercreditor Agreement” means that certain Cash Management
Intercreditor Agreement dated as of the Closing Date by and among the Collateral
Agent, the Collateral Trustee and the Collateral Agent under the TimberCo Credit
Agreement, as such agreement may be amended, restated, supplemented or otherwise
modified from time to time.

“Casualty Event” shall mean, with respect to any Property (including any Real
Estate Asset) of any Person, any loss of or damage to or destruction of, or any
condemnation or other taking (including by any Governmental Authority) of, such
Property for which such Person or any of its Subsidiaries receives insurance
proceeds or proceeds of a condemnation award or other compensation. “Casualty
Event” shall include but not be limited to any taking of all or any part of any
Real Estate Asset of any Person or any part thereof, in or by condemnation or
other eminent domain proceedings pursuant to any law, or by reason of the
temporary requisition of the use or occupancy of all or any part of any Real
Estate Asset of any Person or any part thereof by any Governmental Authority,
civil or military.

“Certificate re Non-Bank Status” means a certificate substantially in the form
of Exhibit F.

“Change of Control” means, at any time, (i) Permitted Holders shall cease to
beneficially own and control, directly or indirectly, at least 51% (or after an
IPO 35%) on a fully diluted basis of the economic and voting interests in the
Capital Stock of NewPageHoldCo; (ii) after an IPO any Person or “group” (within
the meaning of Rules 13d-3 and 13d-5 under the Exchange Act) (a) shall have
acquired beneficial ownership on a fully diluted basis of the voting and/or
economic interest in the Capital Stock of NewPageHoldCo equal to or in excess of
any such interest held by the Permitted Holders or (b) shall have obtained the
power (whether or not exercised) to elect a majority of the members of the board
of directors (or similar governing body) of NewPageHoldCo; (iii) NewPageHoldCo
shall cease to beneficially own and control 100% on a fully diluted basis of the
economic and voting interest in the Capital Stock of NewPageCo; (iv) the
majority of the seats (other than vacant seats) on the board of directors (or
similar governing body) of NewPageHoldCo or NewPageCo cease to be occupied by
Persons who either (a) were members of the board of directors of NewPageHoldCo
or NewPageCo, as applicable, on the Closing Date or (b) were nominated for
election by the board of directors of NewPageHoldCo or NewPageCo, as applicable,
a majority of whom were directors on the Closing Date or whose election or
nomination for election was previously approved by a majority of such directors
; or (v) any “change of control” or similar event under the NewPageHoldCo PIK
Note Documents, NewPageCo First Lien Term Loan Documents, Senior Secured
Floating Rate Note Documents, the Senior Secured Fixed Rate Note Documents or
the Senior Subordinated Note Documents shall occur.

“Closing Date” means May 2, 2005.

 

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“Closing Date Certificate” means a Closing Date Certificate substantially in the
form of Exhibit G-1.

“Closing Date Mortgage Property” has the meaning ascribed to such term in the
NewPageCo First Lien Term Loan Agreement.

“Co-Syndication Agent” as defined in the preamble hereto.

“Coated and Carbonless Papers Group” means the entities and businesses acquired
in the Paper Business Acquisition.

“Collateral” means, collectively, all of the property in which Liens are granted
pursuant to the Collateral Documents as security for the Obligations.

“Collateral Agent” as defined in the preamble hereto.

“Collateral Documents” means (a) the Pledge and Security Agreement, the
Intercreditor Agreement, the Cash Management Intercreditor Agreement, the
Landlord Personal Property Collateral Access Agreements, if any, and the
Perfection Certificate and (b) all other instruments, documents and agreements
delivered by any Credit Party pursuant to this Agreement or any of the other
Credit Documents in order to grant to Collateral Agent, for the benefit of
Lenders, a Lien on any real, personal or mixed property of that Credit Party as
security for the Obligations.

“Collateral Trust Agreement” means that certain Collateral Trust Agreement dated
as of May 2, 2005 by and among the Collateral Trustee, the Senior Secured
Floating Rate Notes Trustee, the Senior Secured Fixed Rate Notes Trustee, the
NewPageCo First Lien Loan Agreement Administrative Agent, as such agreement may
be amended, restated, supplemented or otherwise modified from time to time.

“Collateral Trustee” means The Bank of New York, its successors and assigns as
Collateral Trustee pursuant to the Collateral Trust Agreement.

“Commercial Letter of Credit” shall mean any letter of credit or similar
instrument issued for the account of NewPageCo on behalf of NewPageCo or any
Borrowing Base Guarantor or any of their respective Subsidiaries, for the
purpose of providing the primary payment mechanism in connection with the
purchase of materials, goods or services by NewPageCo or any Borrowing Base
Guarantor or any of their respective Subsidiaries in the ordinary course of
their businesses.

 

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“Commodities Hedge Agreement” means that certain confirmation with respect to
Contract Reference Number 875787959 1 1 dated as of April 6, 2005 between
Sponsor and J. Aron & Company, and assigned to NewPageCo on the Closing Date,
together with the Guaranty of Goldman Sachs & Co. and any related ISDA Master
Agreement, as such confirmation or agreement may be amended, restated,
supplemented or otherwise modified from time to time to the extent permitted
under Section 6.15.

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

“Consolidated Adjusted EBITDA” means, for any period, the Consolidated Net
Income of NewPageHoldCo and its Subsidiaries on a consolidated basis for such
period plus, without duplication (including without duplication of any amounts
previously adjusted for in determining Consolidated Net Income or Net Income):

(1) an amount equal to any extraordinary loss plus any net loss realized by
NewPageHoldCo or any of its Subsidiaries in connection with an Asset Sale, to
the extent such losses were deducted in computing such Consolidated Net Income;
plus

(2) provision for taxes based on income or profits of NewPageHoldCo and its
Subsidiaries for such period, to the extent that such provision for taxes was
deducted in computing such Consolidated Net Income; plus

(3) the Consolidated Interest Expense of NewPageHoldCo and its Subsidiaries for
such period, to the extent that such Consolidated Interest Expense was deducted
in computing such Consolidated Net Income; plus

(4) depreciation, amortization (including amortization of intangibles but
excluding amortization of prepaid cash expenses that were paid in a prior
period) and other non-cash expenses (excluding any such non-cash expense to the
extent that it represents an accrual of or reserve for cash expenses in any
future period or amortization of a prepaid cash expense that was paid in a prior
period) of NewPageHoldCo and its Subsidiaries for such period to the extent that
such depreciation, amortization and other non-cash expenses were deducted in
computing such Consolidated Net Income; plus

(5) nonrecurring costs, charges or expenses made or incurred in connection with
any Permitted Acquisition, any production continuation, remediation, relocation,
severance and benefits continuation costs in connection with plant closings, and
costs and reduction charges directly related to the permanent shutdown of
machinery and equipment (and not a transfer of manufacturing or other capacity
to another plant or facility), in each case, to the extent deducted in computing
such Consolidated Net Income and not to exceed $50,000,000 in the aggregate from
and after the Closing Date; minus

 

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(6) non-cash items increasing such Consolidated Net Income for such period,
other than the accrual of revenue in the ordinary course of business, in each
case, on a consolidated basis and determined in accordance with GAAP; provided
that for each Fiscal Quarter during 2004 and for the first Fiscal Quarter of
2005, the Consolidated Adjusted EBITDA of NewPageCo will be deemed to be $85.0
million and for the portion of the second Fiscal Quarter of 2005 occurring prior
to the Closing Date the Consolidated Adjusted EBITDA of NewPageCo will be deemed
to be the Consolidated Adjusted EBITDA of the Paper Business for such portion of
such Fiscal Quarter.

“Consolidated Capital Expenditures” means, for any period, the aggregate of all
expenditures of NewPageHoldCo and its Subsidiaries during such period determined
on a consolidated basis that, in accordance with GAAP, are or should be included
in “purchase of property and equipment” or similar items reflected in the
consolidated statement of cash flows of NewPageHoldCo and its Subsidiaries;
provided, that “Consolidated Capital Expenditures” shall not include any
expenditures (i) for replacements and substitutions for capital assets, to the
extent made with proceeds of insurance in accordance with Section 5.5, (ii) made
as part of a Permitted Acquisition, or (iii) for replacements and substitutions
for capital assets to the extent made with the proceeds of assets sold,
exchanged or otherwise disposed in accordance with, and permitted by
Section 6.9(b) and (c).

“Consolidated Cash Interest Expense” means, for any period, Consolidated
Interest Expense for such period, excluding any amount not payable in Cash;
provided that for each Fiscal Quarter during 2004 and for the first Fiscal
Quarter of 2005, the Consolidated Cash Interest Expense of NewPageCo will be
deemed to be $34.5 million and for the portion of the second Fiscal Quarter of
2005 occurring prior to the Closing Date the Consolidated Cash Interest Expense
will be deemed to be $11.5 million

“Consolidated Excess Cash Flow” means, for any period, an amount (if positive)
equal to: (i) the sum, without duplication, of the amounts for such period of
(a) Consolidated Adjusted EBITDA, plus (b) the Consolidated Working Capital
Adjustment (as such term is defined in the NewPageCo First Lien Term Loan
Agreement), minus (ii) the sum, without duplication, of the amounts for such
period of (a) voluntary and scheduled repayments of Consolidated Total Debt
(excluding repayments of Revolving Loans or Swing Line Loans except to the
extent the Revolving Commitments are permanently reduced in connection with such
repayments), (b) Consolidated Capital Expenditures (net of any proceeds of
(y) any permitted related financings with respect to such expenditures and
(z) any sales of assets used to finance such expenditures), (c) Consolidated
Cash Interest Expense and (d) provisions for current taxes based on income of
NewPageHoldCo and its Subsidiaries and payable in cash with respect to such
period.

 

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“Consolidated Fixed Charges” means, for any period, the sum, without
duplication, of the amounts determined for NewPageHoldCo and its Subsidiaries on
a consolidated basis equal to (i) Consolidated Cash Interest Expense,
(ii) scheduled payments of principal on Consolidated Total Debt,
(iii) Consolidated Capital Expenditures (other than the portion of such
Consolidated Capital Expenditures during such period financed with Indebtedness
permitted by Section 6.1(j)), and (iv) the portion of taxes based on income
actually paid in cash and provisions for cash income taxes; provided in
calculating Consolidated Fixed Charges for any four Fiscal Quarter period that
includes a Fiscal Quarter or portion thereof occurring prior to the Closing
Date, other than with respect to Consolidated Cash Interest Expense which shall
be calculated as set forth in the definition thereof, all other amounts
described in clauses (ii), (iii) and (iv) above shall be calculated by
annualizing the actual amounts thereof calculated from the Closing Date through
the end of the applicable Fiscal Quarter as of which such calculation is being
made.

“Consolidated Interest Expense” means, for any period, the sum, without
duplication, of:

(1) the consolidated interest expense of NewPageHoldCo and its Subsidiaries for
such period, whether paid or accrued, including, without limitation,
amortization of debt issuance costs and original issue discount, non-cash
interest payments (excluding any such non-cash interest payments on the
NewPageHoldCo PIK Notes), the interest component of any deferred payment
obligations, the interest component of all payments associated with Capital
Leases, imputed interest with respect to commissions, discounts and other fees
and charges incurred in respect of letter of credit or bankers’ acceptance
financings, and net of the effect of all payments made or received pursuant to
Interest Rate Agreements; plus

(2) the consolidated interest expense of NewPageHoldCo and its Subsidiaries that
was capitalized during such period, whether paid or accrued; plus

(3) any interest on Indebtedness of another Person that is guaranteed by
NewPageHoldCo or one of its Subsidiaries or secured by a Lien on assets of
NewPageHoldCo or one of its Subsidiaries, whether or not such guarantee or Lien
is called upon; in each case, determined on a consolidated basis in accordance
with GAAP; provided that for each Fiscal Quarter during 2004 and for the first
Fiscal Quarter of 2005, the Consolidated Interest Expense of NewPageCo will be
deemed to be $34.5 million and for the portion of the second Fiscal Quarter of
2005 occurring prior to the Closing Date the Consolidated Interest Expense will
be deemed to be $11.5 million.

 

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“Consolidated Net Income” means, for any period, the aggregate of the Net Income
of NewPageHoldCo and its Subsidiaries on a consolidated basis for such period,
determined in accordance with GAAP; provided that (and without duplication of
any adjustments made in determining Net Income):

(1) the Net Income (but not loss) of any Person that is not a Subsidiary of
NewPageHoldCo or that is accounted for by the equity method of accounting will
be included only to the extent of the amount of dividends or similar
distributions paid in cash to the specified NewPageCo or one of its
Subsidiaries;

(2) the Net Income (or loss) of any Person accrued prior to the date it becomes
a Subsidiary of NewPageHoldCo or is merged into or consolidated with
NewPageHoldCo or any of its Subsidiaries or that Person’s assets are acquired by
NewPageHoldCo or any of its Subsidiaries will be excluded;

(3) the Net Income of any Subsidiary of NewPageCo will be excluded to the extent
that the declaration or payment of dividends or similar distributions by that
Subsidiary of that Net Income is not at the date of determination permitted
without any prior governmental approval (that has not been obtained) or,
directly or indirectly, by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that Subsidiary or its stockholders;

(4) all goodwill impairment charges will be excluded;

(5) non-cash compensation charges or other non-cash expenses or charges arising
from the grant of or issuance or repricing of stock, stock options or other
equity-based awards to directors, officers or employees of NewPageCo and its
Subsidiaries will be excluded;

(6) transaction costs and restructuring charges incurred in connection with the
Paper Business Acquisition, in an aggregate amount not to exceed $20.0 million,
will be excluded; and

(7) to the extent deducted in determining Net Income, transaction costs incurred
in connection with an IPO, in an aggregate amount not to exceed an amount
approved in writing by the Administrative Agent in its reasonable discretion,
will be added back to determine Consolidated Net Income.

“Consolidated Senior Debt” means, as at any date of determination, Consolidated
Total Debt less Senor Secured Fixed Rate Notes Indebtedness, Senior Secured
Floating Rate Notes Indebtedness, Senior Subordinated Notes Indebtedness and
other Indebtedness of NewPageHoldCo and its Subsidiaries subordinated to the
Obligations on terms satisfactory to, and which Indebtedness contains other
terms, tenor and covenants satisfactory to the Administrative Agent, determined
on a consolidated basis in accordance with GAAP.

 

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“Consolidated Total Debt” means, as at any date of determination, the aggregate
stated balance sheet amount of all Indebtedness of NewPageHoldCo and its
Subsidiaries determined on a consolidated basis in accordance with GAAP,
exclusive of the NewPageHoldco PIK Notes.

“Contractual Obligation” means, as applied to any Person, any provision of any
Security issued by that Person or of any indenture, mortgage, deed of trust,
contract, undertaking, agreement or other instrument to which that Person is a
party or by which it or any of its properties is bound or to which it or any of
its properties is subject.

“Contributing Guarantors” as defined in Section 7.2.

“Conversion/Continuation Date” means the effective date of a continuation or
conversion, as the case may be, as set forth in the applicable
Conversion/Continuation Notice.

“Conversion/Continuation Notice” means a Conversion/Continuation Notice
substantially in the form of Exhibit A-2.

“Cost” shall mean, as determined by Collateral Agent in good faith, with respect
to Inventory, the lower of (a) landed cost computed on first-in a first-out
basis in accordance with GAAP or (b) market value; provided, that for purposes
of the calculation of the Borrowing Base, (i) the Cost of the Inventory shall
not include: (A) the portion of the cost of Inventory equal to the profit earned
by any Affiliate on the sale thereof to NewPageCo or the Borrowing Base
Guarantors (provided that this clause shall not apply to pulpwood purchased from
TimberCo in accordance with the Fiber Supply Agreements) or (B) write-ups or
write-downs in cost with respect to currency exchange rates, and
(ii) notwithstanding anything to the contrary contained herein, the cost of the
Inventory shall be computed in the same manner and consistent with the most
recent Inventory Appraisal which has been received and approved by Collateral
Agent in its reasonable discretion.

“Co-Syndication Agent” as defined in the preamble hereto.

“Counterpart Agreement” means a Counterpart Agreement substantially in the form
of Exhibit H delivered by a Credit Party pursuant to Section 5.10.

“Credit Agreement Obligations” means the Obligations described in clause (i) of
the definition thereof.

 

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“Credit Date” means the date of a Credit Extension.

“Credit Document” means any of (a) this Agreement, the Notes, if any, the
Collateral Documents, and the Letters of Credit, and (b) all other documents,
instruments or agreements executed and delivered by a Credit Party for the
benefit of any Agent, Issuing Bank or any Lender in connection herewith.

“Credit Extension” means the making of a Loan or the issuance of a Letter of
Credit.

“Credit Party” means each Person (other than any Agent, Issuing Bank or any
Lender or any other representative thereof) from time to time party to a Credit
Document.

“Currency Agreement” means any foreign exchange contract, currency swap
agreement, futures contract, option contract, synthetic cap or other similar
agreement or arrangement, each of which is for the purpose of hedging the
foreign currency risk associated with NewPageHoldCo’ and its Subsidiaries’
business and not for speculative purposes.

“Default” means a condition or event that, after notice or lapse of time or both
would constitute an Event of Default.

“Default Excess” means, with respect to any Defaulting Lender, the excess, if
any, of such Defaulting Lender’s Pro Rata Share of the aggregate outstanding
principal amount of Loans of all Lenders (calculated as if all Defaulting
Lenders (other than such Defaulting Lender) had funded all of their respective
Defaulted Loans) over the aggregate outstanding principal amount of all Loans of
such Defaulting Lender.

“Default Period” means, with respect to any Defaulting Lender, the period
commencing on the date of the applicable Funding Default and ending on the
earliest of the following dates: (i) the date on which all Revolving Commitments
are cancelled or terminated and/or the Credit Agreement Obligations are declared
or become immediately due and payable, (ii) the date on which (a) the Default
Excess with respect to such Defaulting Lender shall have been reduced to zero
(whether by the funding by such Defaulting Lender of any Defaulted Loans of such
Defaulting Lender or by the non-pro rata application of any voluntary or
mandatory prepayments of the Loans in accordance with the terms of Section 2.13
or Section 2.14 or by a combination thereof) and (b) such Defaulting Lender
shall have delivered to NewPageCo and Administrative Agent a written
reaffirmation of its intention to honor its obligations hereunder with respect
to its Revolving Commitments, and (iii) the date on which NewPageCo,
Administrative Agent and Requisite Lenders waive all Funding Defaults of such
Defaulting Lender in writing.

 

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“Defaulted Loan” as defined in Section 2.22.

“Defaulting Lender” as defined in Section 2.22.

“Deposit Account” means a demand, time, savings, passbook or like account with a
bank, savings and loan association, credit union or like organization, other
than an account evidenced by a negotiable certificate of deposit.

“Dollars” and the sign “$” mean the lawful money of the United States of
America.

“Domestic Subsidiary” means any Subsidiary organized under the laws of the
United States of America, any State thereof or the District of Columbia.

“Eligible Accounts” shall have the meaning assigned to such term in
Section 2.24(a).

“Eligible Assignee” means (i) any Lender, any Affiliate of any Lender and any
Related Fund (any two or more Related Funds being treated as a single Eligible
Assignee for all purposes hereof), and (ii) any commercial bank, insurance
company, investment or mutual fund or other entity that is an “accredited
investor” (as defined in Regulation D under the Securities Act) and which
extends credit or buys loans as one of its businesses; provided, no Affiliate of
NewPageHoldCo or Sponsor other than a Sponsor Affiliated Lender or Sponsor
Affiliated Institutional Lender shall be an Eligible Assignee.

“Eligible Inventory” shall mean, subject to adjustment as set forth in
Section 2.24(b), items of Inventory of NewPageCo and a Borrowing Base Guarantor.

“Employee Benefit Plan” means any “employee benefit plan” as defined in
Section 3(3) of ERISA which is or was sponsored, maintained or contributed to
by, or required to be contributed by, NewPageHoldCo, any of its Subsidiaries or
any of their respective ERISA Affiliates.

“Environmental Claim” means any investigation, written notice, notice of
violation, claim, action, suit, proceeding, demand, abatement order or other
written order or directive, by any Governmental Authority or any other Person,
arising (i) pursuant to or in connection with any actual or alleged violation of
any Environmental Law; (ii) in connection with any Release or threatened Release
of Hazardous Material or any actual or alleged Hazardous Materials Activity; or
(iii) in connection with any actual or alleged damage, injury, threat or harm to
health, safety, natural resources or the environment.

 

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“Environmental Laws” means any and all current or future foreign or domestic,
federal or state (or any subdivision of either of them), statutes, ordinances,
orders, rules, regulations, judgments, Governmental Authorizations, or any other
legally enforceable requirements of Governmental Authorities relating to
(i) environmental matters, including those relating to any Hazardous Materials
Activity; (ii) the generation, use, storage, transportation or disposal of
Hazardous Materials; or (iii) occupational safety and health, industrial
hygiene, land use, natural resources or the protection of human, plant or animal
health or welfare, in any manner applicable to NewPageHoldCo or any of its
Subsidiaries or any Facility.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and any successor thereto.

“ERISA Affiliate” means, as applied to any Person, (i) any corporation which is
a member of a controlled group of corporations within the meaning of
Section 414(b) of the Internal Revenue Code of which that Person is a member;
(ii) any trade or business (whether or not incorporated) which is a member of a
group of trades or businesses under common control within the meaning of
Section 414(c) of the Internal Revenue Code of which that Person is a member;
and (iii) any member of an affiliated service group within the meaning of
Section 414(m) or (o) of the Internal Revenue Code of which that Person, any
corporation described in clause (i) above or any trade or business described in
clause (ii) above is a member. Any former ERISA Affiliate of NewPageHoldCo or
any of its Subsidiaries shall continue to be considered an ERISA Affiliate of
NewPageHoldCo or any such Subsidiary within the meaning of this definition with
respect to the period such entity was an ERISA Affiliate of NewPageHoldCo or
such Subsidiary and with respect to liabilities arising after such period for
which NewPageHoldCo or such Subsidiary could be liable under the Internal
Revenue Code or ERISA.

“ERISA Event” means (i) a “reportable event” within the meaning of Section 4043
of ERISA and the regulations issued thereunder with respect to any Pension Plan
(excluding those for which the provision for 30-day notice to the PBGC has been
waived by regulation); (ii) the failure to meet the minimum funding standard of
Section 412 of the Internal Revenue Code with respect to any Pension Plan
(whether or not waived in accordance with Section 412(d) of the Internal Revenue
Code) or the failure to make by its due date a required installment under
Section 412(m) of the Internal Revenue Code with respect to any Pension Plan or
the failure to make any required contribution to a Multiemployer Plan; (iii) the
provision by the administrator of any Pension Plan pursuant to
Section 4041(a)(2) of ERISA of a notice of intent to terminate such plan in a
distress termination described in Section 4041(c) of ERISA; (iv) the withdrawal
by NewPageHoldCo, any of its Subsidiaries or any of their respective ERISA
Affiliates from any Pension Plan with two or more contributing sponsors or the
termination of any such Pension Plan resulting in liability to NewPageHoldCo,
any of its Subsidiaries or any of their respective Affiliates pursuant to
Section 4063 or 4064 of ERISA; (v) the institution by the PBGC of proceedings to
terminate any Pension Plan, or the occurrence of any event or condition

 

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which might constitute grounds under ERISA for the termination of, or the
appointment of a trustee to administer, any Pension Plan; (vi) the imposition of
liability on NewPageHoldCo, any of its Subsidiaries or any of their respective
ERISA Affiliates pursuant to Section 4062(e) or 4069 of ERISA or by reason of
the application of Section 4212(c) of ERISA; (vii) the withdrawal of
NewPageHoldCo, any of its Subsidiaries or any of their respective ERISA
Affiliates in a complete or partial withdrawal (within the meaning of Sections
4203 and 4205 of ERISA) from any Multiemployer Plan if there is any potential
liability therefore, or the receipt by NewPageHoldCo, any of its Subsidiaries or
any of their respective ERISA Affiliates of notice from any Multiemployer Plan
that it is in reorganization or insolvency pursuant to Section 4241 or 4245 of
ERISA, or that it intends to terminate or has terminated under Section 4041A or
4042 of ERISA; (viii) the occurrence of an act or omission which could give rise
to the imposition on NewPageHoldCo, any of its Subsidiaries or any of their
respective ERISA Affiliates of material fines, penalties, taxes or related
charges under Chapter 43 of the Internal Revenue Code or under Section 409,
Section 502(c), (i) or (l), or Section 4071 of ERISA in respect of any Employee
Benefit Plan; (ix) the assertion of a material claim (other than routine claims
for benefits) against any Employee Benefit Plan other than a Multiemployer Plan
or the assets thereof, or against NewPageHoldCo, any of its Subsidiaries or any
of their respective ERISA Affiliates in connection with any Employee Benefit
Plan; (x) receipt from the Internal Revenue Service of notice of the failure of
any Pension Plan (or any other Employee Benefit Plan intended to be qualified
under Section 401(a) of the Internal Revenue Code) to qualify under
Section 401(a) of the Internal Revenue Code, or the failure of any trust forming
part of any Pension Plan to qualify for exemption from taxation under
Section 501(a) of the Internal Revenue Code; or (xi) the imposition of a Lien
pursuant to Section 401(a)(29) or 412(n) of the Internal Revenue Code or
pursuant to ERISA with respect to any Pension Plan.

“Eurodollar Rate Loan” means a Loan bearing interest at a rate determined by
reference to the Adjusted Eurodollar Rate.

“Event of Default” means each of the conditions or events set forth in
Section 8.1.

“Excess Availability” shall mean (a) the lesser of (i) the Revolving Commitments
of all of the Lenders and (ii) the Borrowing Base on the date of determination
less (b) the Total Utilization of Revolving Credit Commitments less (c) in the
Collateral Agent’s reasonable credit judgment, the aggregate amount of all the
outstanding and unpaid trade payables and other obligations of NewPageCo or any
Borrowing Base Guarantor which are not paid within 60 days past the due date
according to their original terms of sale, in each case as of such date of
determination less (d) in the Collateral Agent’s reasonable credit judgment, the
amount of checks issued by NewPageCo or any Borrowing Base Guarantor to pay
trade payables and other obligations which are not paid within 60 days past the
due date according to their original terms of sale, in each case as of such date
of determination, but which checks either have not yet been sent or are subject
to other arrangements which are expected to delay the prompt presentation of
such checks for payment.

 

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“Exchange Act” means the Securities Exchange Act of 1934, as amended from time
to time, and any successor statute.

“Existing Indebtedness” means all Indebtedness of the Coated and Carbonless
Papers Group as in existence immediately prior to the Paper Business
Acquisition.

“Facility” means any real property (including all buildings, fixtures or other
improvements located thereon) now, hereafter or heretofore owned, leased,
operated or used by NewPageHoldCo or any of its Subsidiaries or any of their
respective predecessors or Affiliates.

“Fair Share” as defined in Section 7.2.

“Fair Share Contribution Amount” as defined in Section 7.2.

“Federal Funds Effective Rate” means for any day, the rate per annum (expressed,
as a decimal, rounded upwards, if necessary, to the next higher 1/100 of 1%)
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, (i) if such day is not a
Business Day, the Federal Funds Effective 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 (ii) if no such rate is so published on such
next succeeding Business Day, the Federal Funds Effective Rate for such day
shall be the average rate charged to Administrative Agent, in its capacity as a
Lender, on such day on such transactions as determined by Administrative Agent.

“Fiber Supply Agreements” shall mean those certain Fiber Supply Agreements dated
as of May 2, 2005, between TimberCo and certain Subsidiaries of NewPageHoldCo,
as the same may be amended, restated, supplemented or otherwise modified from
time to time in accordance with the terms of this Agreement.

“Financial Officer Certification” means, with respect to the financial
statements for which such certification is required, the certification of the
chief financial officer of NewPageHoldCo that such financial statements fairly
present, in all material respects, the financial condition of NewPageHoldCo and
its Subsidiaries as at the dates indicated and the results of their operations
and their cash flows for the periods indicated, subject to changes resulting
from audit and normal year-end adjustments and the absence of footnotes.

 

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“Financial Plan” as defined in Section 5.1(i).

“First Priority” means, with respect to any Lien purported to be created in any
Collateral pursuant to any Collateral Document, that such Lien is the only Lien
to which such Collateral is subject, other than Permitted Collateral Liens.

“Fiscal Quarter” means a fiscal quarter of any Fiscal Year.

“Fiscal Year” means the fiscal year of NewPageHoldCo and its Subsidiaries ending
on December 31 of each calendar year.

“Fixed Charge Coverage Ratio” means the ratio as of the last day of any Fiscal
Quarter of (i) Consolidated Adjusted EBITDA for the four-Fiscal Quarter Period
then ending, to (ii) Consolidated Fixed Charges for such four-Fiscal Quarter
Period.

“Foreign Cash Equivalents” means the foreign equivalent of Cash and Cash
Equivalents described in clauses (i), (ii) and (iv) of the definition of Cash
Equivalents in respect of each country that is a member of the Organization for
Economic Development.

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

“Funding Default” as defined in Section 2.22.

“Funding Guarantors” as defined in Section 7.2.

“Funding Notice” means a notice substantially in the form of Exhibit A-1.

“GAAP” means, subject to the limitations on the application thereof set forth in
Section 1.2, United States generally accepted accounting principles in effect as
of the date of determination thereof.

“Governmental Acts” means any act or omission, whether rightful or wrongful, of
any present or future de jure or de facto Governmental Authority.

“Governmental Authority” means any federal, state, municipal, national or other
government, governmental department, commission, board, bureau, court, agency or
instrumentality or political subdivision thereof or any entity or officer
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to any government or any court, in each case whether
associated with a state of the United States, the United States, or a foreign
entity or government.

 

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“Governmental Authorization” means any permit, license, authorization, plan,
directive, consent order or consent decree of or from any Governmental
Authority.

“Grantor” as defined in the Pledge and Security Agreement.

“Guaranteed Obligations” as defined in Section 7.1.

“Guarantor” means each of NewPageHoldCo and each Domestic Subsidiary of
NewPageHoldCo (other than NewPageCo). As of the Closing Date, in addition to the
Borrowing Base Guarantors, such Subsidiary Guarantors shall include Chilicothe
Paper, Inc., NewPage Energy Services LLC, Upland Resources Inc., Rumford
Cogeneration Inc. and Rumford Falls Power Company.

“Guarantor Subsidiary” means each Guarantor other than NewPageHoldCo.

“Guaranty” means the guaranty of each Guarantor set forth in Section 7.

“Hazardous Materials” means any chemical, material or substance, exposure to
which is prohibited or regulated by any Governmental Authority or which may or
could pose a hazard to the health and safety of the owners, occupants or any
Persons in the vicinity of any Facility or to the environment.

“Hazardous Materials Activity” means any activity involving the use, storage,
Release, threatened Release, generation, transportation, processing, treatment,
disposal, disposition or handling of any Hazardous Materials, including any
Remedial Action.

“Hedge Agreement” means, excluding the Commodities Hedge Agreement, (i) an
Interest Rate Agreement or a Currency Agreement entered into in order to satisfy
the requirements of this Agreement or otherwise in the ordinary course of
NewPageCo’s or any of its Subsidiaries’ businesses or (ii) commodity futures
contract, forward contract, option to purchase or sell a commodity, or option,
warrant or other right with respect to a commodity futures contract or other
similar agreement or arrangement entered into for the purpose of hedging the
risk of fluctuations in commodities prices associated with the businesses of
NewPageCo and its Subsidiaries and not for speculative purposes.

“Highest Lawful Rate” means the maximum lawful interest rate, if any, that at
any time or from time to time may be contracted for, charged, or received under
the laws applicable to any Lender from time to time in effect.

“Historical Financial Statements” means as of the Closing Date, (i) the audited
financial statements of the Coated and Carbonless Papers Group for the 11-month
period ended

 

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December 31, 2002 and the Fiscal Years ended December 31, 2003 and December 31,
2004, consisting of balance sheets and the related consolidated statements of
income, stockholders’ equity and cash flows for such Fiscal Years, and (ii) the
unaudited financial statements of the Coated and Carbonless Papers Group as at
the most recently ended Fiscal Quarter of the then-current Fiscal Year for which
such statements are available, if any, consisting of a balance sheet and the
related consolidated statements of income, stockholders’ equity and cash flows
for the three-, six-or nine-month period, as applicable, ending on such date,
and, in the case of clauses (i) and (ii), certified by the chief financial
officer of NewPageCo that they fairly present, in all material respects, the
financial condition of the Coated and Carbonless Papers Group as at the dates
indicated and the results of their operations and their cash flows for the
periods indicated, subject to changes resulting from audit and normal year-end
adjustments and the absence of footnotes.

“Increased-Cost Lenders” as defined in Section 2.23.

“Indebtedness”, as applied to any Person, means, without duplication, (i) all
indebtedness for borrowed money; (ii) that portion of obligations with respect
to Capital Leases that is properly classified as a liability on a balance sheet
in conformity with GAAP; (iii) notes payable and drafts accepted representing
extensions of credit whether or not representing obligations for borrowed money;
(iv) any obligation owed for all or any part of the deferred purchase price of
property or services (excluding any such obligations incurred under ERISA),
which purchase price is (a) due more than six months from the date of incurrence
of the obligation in respect thereof including any earn out or similar
obligation payable more than six months after the date of any Permitted
Acquisition or (b) evidenced by a note or similar written instrument; (v) all
indebtedness secured by any Lien on any property or asset owned or held by that
Person regardless of whether the indebtedness secured thereby shall have been
assumed by that Person or is nonrecourse to the credit of that Person; (vi) the
face amount of any letter of credit issued for the account of that Person or as
to which that Person is otherwise liable for reimbursement of drawings;
(vii) the direct or indirect guaranty, endorsement (otherwise than for
collection or deposit in the ordinary course of business), co-making,
discounting with recourse or sale with recourse by such Person of the obligation
of another; (viii) any obligation of such Person the primary purpose or intent
of which is to provide assurance to an obligee that the obligation of the
obligor thereof will be paid or discharged, or any agreement relating thereto
will be complied with, or the holders thereof will be protected (in whole or in
part) against loss in respect thereof; (ix) any liability of such Person for an
obligation of another through any agreement (contingent or otherwise) (a) to
purchase, repurchase or otherwise acquire such obligation or any security
therefor, or to provide funds for the payment or discharge of such obligation
(whether in the form of loans, advances, stock purchases, capital contributions
or otherwise) or (b) to maintain the solvency or any balance sheet item, level
of income or financial condition of another if, in the case of any agreement
described under subclauses (a) or (b) of this

 

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clause (ix), the primary purpose or intent thereof is as described in clause
(viii) above; and (x) all obligations of such Person in respect of any exchange
traded or over the counter derivative transaction, including, without
limitation, any Interest Rate Agreement and Currency Agreement, whether entered
into for hedging or speculative purposes; provided, in no event shall
obligations under any Interest Rate Agreement and any Currency Agreement be
deemed “Indebtedness” for any purpose under Section 6.8. For purposes of this
definition, (A) the amount of any Indebtedness represented by a guaranty or
other similar instrument shall be the lesser of the principal amount of the
obligations guaranteed and still outstanding and the maximum amount for which
the guaranteeing Person may be liable pursuant to the terms of the instrument
embodying such Indebtedness, (B) the amount of any Indebtedness described in
clause (iv) above for which recourse is limited to certain property of such
Person shall be the lower of the amount of the obligation and fair market value
of the property securing such obligation, and (C) the principal amount of the
Indebtedness under any Hedge Agreement at any time shall be equal to the amount
payable as a result of the termination of such Hedge Agreement at such time.
Notwithstanding the foregoing, in connection with the purchase by NewPageCo or
any of its Subsidiaries of any business, the term “Indebtedness” will exclude
post-closing payment adjustments to which the seller may become entitled to the
extent such payment is determined by a final closing balance sheet or such
payment depends on the performance of such business after the closing; provided,
however, that at the time of closing, the amount of any such payment is not
determinable and, to the extent such payment thereafter becomes fixed and
determined, the amount is paid within 30 days thereafter.

“Indemnified Liabilities” means, collectively, any and all liabilities,
obligations, losses, damages (including natural resource damages), penalties,
claims (including Environmental Claims), costs (including the costs of any
investigation, study, sampling, testing, abatement, cleanup, removal,
remediation or other response action necessary to remove, remediate, clean up or
abate any Hazardous Materials Activity), expenses and disbursements of any kind
or nature whatsoever (including the reasonable fees and disbursements of counsel
for Indemnitees in connection with any investigative, administrative or judicial
proceeding commenced or threatened by any Person, whether or not any such
Indemnitee shall be designated as a party or a potential party thereto, and any
fees or expenses incurred by Indemnitees in enforcing this indemnity), whether
direct, indirect or consequential and whether based on any federal, state or
foreign laws, statutes, rules or regulations (including securities and
commercial laws, statutes, rules or regulations and Environmental Laws), on
common law or equitable cause or on contract or otherwise, in each case other
than Taxes, that may be imposed on, incurred by, or asserted against any such
Indemnitee, in any manner relating to or arising out of (i) this Agreement or
the other Credit Documents or the transactions contemplated hereby or thereby
(including the Lenders’ agreement to make Credit Extensions or the use or
intended use of the proceeds thereof, or any enforcement of any of the Credit
Documents (including any sale of, collection from, or other realization upon any
of the Collateral or the enforcement of the

 

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Guaranty)); or (ii) any Environmental Claim or any Hazardous Materials Activity
relating to or arising from, directly or indirectly, any past or present
activity, operation, land ownership, or practice of NewPageHoldCo or any of its
Subsidiaries.

“Indemnitee” as defined in Section 11.3.

“Intercreditor Agreement” means the Intercreditor Agreement substantially in the
form of Exhibit L, dated as of the date hereof, among NewPageCo, the Guarantors,
Collateral Agent and the Collateral Trustee, as it may be amended, supplemented
or otherwise modified from time to time.

“Interest Coverage Ratio” means the ratio as of the last day of any Fiscal
Quarter of (i) Consolidated Adjusted EBITDA for the four-Fiscal Quarter period
then ended, to (ii) Consolidated Cash Interest Expense for such four-Fiscal
Quarter period.

“Interest Payment Date” means with respect to (i) any Base Rate Loan, each
April 1, July 1, October 1 and January 1 of each year, commencing on the first
date to occur after the Closing Date and through the final maturity date of such
Loan; and (ii) any Eurodollar Rate Loan, the last day of each Interest Period
applicable to such Loan; provided, in the case of each Interest Period of longer
than three months “Interest Payment Date” shall also include each date that is
three months, or an integral multiple thereof, after the commencement of such
Interest Period.

“Interest Period” means, in connection with a Eurodollar Rate Loan, an interest
period of one-, two-, three- or six-months, as selected by NewPageCo in the
applicable Funding Notice or Conversion/Continuation Notice, (i) initially,
commencing on the Credit Date or Conversion/Continuation Date thereof, as the
case may be; and (ii) thereafter, commencing on the day on which the immediately
preceding Interest Period expires; provided, (a) if an Interest Period would
otherwise expire on a day that is not a Business Day, such Interest Period shall
expire on the next succeeding Business Day unless no further Business Day occurs
in such month, in which case such Interest Period shall expire on the
immediately 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, subject to clause (c), of this definition, end on the last
Business Day of a calendar month; and (c) no Interest Period with respect to any
portion of the Loans shall extend beyond the Revolving Commitment Termination
Date.

“Interest Rate Agreement” means any interest rate swap agreement (whether from
fixed to floating or from floating to fixed), interest rate cap agreement,
interest rate collar agreement, interest rate hedging agreement or other similar
agreement or arrangement, each of which is for the purpose of hedging the
interest rate exposure associated with NewPageHoldCo’ and its Subsidiaries’
operations and not for speculative purposes.

 

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“Interest Rate Determination Date” means, with respect to any Interest Period,
the date that is two Business Days prior to the first day of such Interest
Period.

“Internal Revenue Code” means the Internal Revenue Code of 1986, as amended to
the date hereof and from time to time hereafter, and any successor statute.

“Inventory” shall mean all “inventory,” as such term is defined in the UCC as in
effect on the date hereof in the State of New York, wherever located, in which
any Person now or hereafter has rights.

“Inventory Appraisal” shall mean (a) on the Closing Date, the appraisal prepared
by Hilco Appraisal Services LLC dated February 28, 2005 and (b) thereafter, the
most recent inventory appraisal conducted by an independent appraisal firm and
delivered pursuant to Section 5.17(g) hereof and satisfactory to the Collateral
Agent.

“Investment” means (i) any direct or indirect purchase or other acquisition by
NewPageHoldCo or any of its Subsidiaries of, or of a beneficial interest in, any
of the Securities of any other Person (other than NewPageCo or a Guarantor
Subsidiary); (ii) any direct or indirect purchase or other acquisition for
value, by any Subsidiary of NewPageHoldCo from any Person (other than
NewPageHoldCo, NewPageCo or any Guarantor Subsidiary), of any Capital Stock of
such Person; and (iii) any direct or indirect loan, advance (other than advances
to officers and employees for moving, entertainment and travel expenses, drawing
accounts and similar expenditures in the ordinary course of business) or capital
contribution by NewPageHoldCo or any of its Subsidiaries to any other Person
(other than NewPageHoldCo, NewPageCo or any Guarantor Subsidiary), including all
indebtedness and accounts receivable from that other Person that are not current
assets or did not arise from sales to that other Person in the ordinary course
of business. The amount of any Investment shall be the original cost of such
Investment plus the cost of all additions thereto, without any adjustments for
increases or decreases in value, or write-ups, write-downs or write-offs with
respect to such Investment.

“IPO” means a bona fide underwritten initial public offering of Capital Stock of
NewPageHoldCo (or the direct or indirect parent of NewPageHoldCo) pursuant to a
registration statement filed with and declared effective by the Securities and
Exchange Commission resulting in total gross proceeds received by NewPageHoldCo,
its direct or indirect parent or any holder of the Capital Stock of
NewPageHoldCo or such parent of at least $200,000,000.

“Issuance Notice” means an Issuance Notice substantially in the form of
Exhibit A-3.

 

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“Issuing Bank” means means (i) JP Morgan Chase Bank, N.A., with respect to any
Letter of Credit issued hereunder by JP Morgan Chase Bank, N.A. and
(ii) Wachovia Bank, National Association, with respect to any Letter of Credit
issued hereunder by Wachovia Bank, National Association, in each case together
with its respective successors and assigns in such capacity. References to the
“Issuing Bank” under this Agreement or any other Credit Document shall mean
either or both of JP Morgan Chase Bank, N.A. and Wachovia Bank, National
Association, as applicable.

“Joint-Lead Arranger” as defined in the preamble hereto.

“Joint Venture” means a joint venture, partnership or other similar arrangement,
whether in corporate, partnership or other legal form; provided, in no event
shall any corporate Subsidiary of any Person be considered to be a Joint Venture
to which such Person is a party.

“Landlord Personal Property Collateral Access Agreement” means a Landlord Waiver
and Consent Agreement substantially in the form of Exhibit K with such
amendments or modifications as may be approved by Collateral Agent.

“Leasehold Property” means any leasehold interest of any Credit Party as lessee
under any lease of real property.

“Lender” means each financial institution listed on the signature pages hereto
as a Lender, or, in the case of Lenders on and after the Refinancing Date, on
Schedule A to the Third Amendment and any other Person that becomes a party
hereto pursuant to an Assignment Agreement.

“Letter of Credit” shall mean any (i) Standby Letter of Credit and
(ii) Commercial Letter of Credit, in each case, issued or to be issued by an
Issuing Bank for the account of NewPageCo pursuant to Section 2.4.

“Letter of Credit Sublimit” means the lesser of (i) $100,000,000 and (ii) the
aggregate unused amount of the Revolving Commitments then in effect.

“Letter of Credit Usage” means, as at any date of determination, the sum of
(i) the maximum aggregate amount which is, or at any time thereafter may become,
available for drawing under all Letters of Credit then outstanding, and (ii) the
aggregate amount of all drawings under Letters of Credit honored by Issuing Bank
and not theretofore reimbursed by or on behalf of NewPageCo.

“Lien” means (i) any lien, mortgage, pledge, assignment, security interest,
charge or encumbrance of any kind (including any agreement to give any of the
foregoing, any

 

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conditional sale or other title retention agreement, and any lease in the nature
thereof) and any option, trust or other preferential arrangement having the
practical effect of any of the foregoing and (ii) in the case of Securities, any
purchase option, call or similar right of a third party with respect to such
Securities.

“Loan” means a Revolving Loan or a Swing Line Loan.

“Margin Stock” as defined in Regulation U of the Board of Governors of the
Federal Reserve System as in effect from time to time.

“Material Adverse Effect” means a material adverse effect on and/or material
adverse developments with respect to (i) the business, operations, properties,
assets or financial condition of NewPageHoldCo and its Subsidiaries taken as a
whole, and, prior to the Closing Date, NewPageHoldCo, its Subsidiaries and the
Paper Business taken as a whole; (ii) the ability of the Credit Parties taken as
a whole to fully and timely perform the Obligations; (iii) the legality,
validity, binding effect or enforceability against a Credit Party of a material
Credit Document to which it is a party; or (iv) the rights, remedies and
benefits available to, or conferred upon, any Agent and any Lender or any
Secured Party under any material Credit Document.

“Material Contract” means any contract or other written agreement to which
NewPageHoldCo or any of its Subsidiaries is a party (other than the Credit
Documents) for which breach, nonperformance, cancellation or failure to renew
could reasonably be expected to have a Material Adverse Effect.

“MeadWestvaco” means MeadWestvaco Corporation, a Delaware corporation.

“Moody’s” means Moody’s Investor Services, Inc.

“Multiemployer Plan” means any Employee Benefit Plan which is a “multiemployer
plan” as defined in Section 3(37) of ERISA.

“NAIC” means The National Association of Insurance Commissioners and any
successor thereto.

“Narrative Report” means, with respect to the financial statements for which
such narrative report is required, a narrative report describing the operations
of NewPageHoldCo and its Subsidiaries in the form prepared for presentation to
senior management thereof for the applicable month, Fiscal Quarter or Fiscal
Year and for the period from the beginning of the then current Fiscal Year to
the end of such period to which such financial statements relate; provided, that
such narrative report may be in the form of a management’s discussion and
analysis of financial condition and results of operations customarily included
in filings made with the Securities and Exchange Commission.

 

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“Net Asset Sale Proceeds” means, with respect to any Asset Sale, an amount equal
to: (i) Cash payments (including any Cash received by way of deferred payment
pursuant to, or by monetization of, a note receivable or otherwise, but only as
and when so received) received by NewPageHoldCo or any of its Subsidiaries from
such Asset Sale (net of purchase price adjustments reasonably expected to be
payable in connection therewith; provided that to the extent such purchase price
adjustment is determined to be not payable or is otherwise not paid within 180
days of such Asset Sale (other than as a result of a dispute with respect to
such purchase price adjustment which is subject to a resolution procedure set
forth in the applicable transaction documents), such proceeds shall constitute
Net Asset Sale Proceeds), minus (ii) any bona fide costs incurred in connection
with such Asset Sale, including (a) income or gains taxes payable by the seller
as a result of any gain recognized in connection with such Asset Sale and any
transfer, documentary or other taxes payable by seller in connection therewith,
(b) payment of the outstanding principal amount of, premium or penalty, if any,
and interest on any Indebtedness (other than the Loans) that is secured by a
Lien on the stock or assets in question and that is required to be repaid under
the terms thereof as a result of such Asset Sale and (c) a reasonable reserve
for any payments (fixed or contingent) attributable to the seller’s indemnities
and representations and warranties to the purchaser or the seller’s retained
liabilities in respect of such Asset Sale undertaken by NewPageHoldCo or any of
its Subsidiaries in connection with such Asset Sale including pension and other
post-employment benefit liabilities and liabilities related to environmental
matters and liabilities under indemnification obligations associated with such
Asset Sale, and (d) brokerage fees, accountants’ fees, investment banking fees,
legal fees, costs and expenses, survey costs, title insurance premiums and other
customary fees, costs and expenses actually incurred in connection with such
Asset Sale.

“Net Income” means the net income (loss) of NewPageHoldCo and its Subsidiaries,
determined on a consolidated basis and in accordance with GAAP and before any
reduction in respect of preferred stock dividends, excluding, however, without
duplication:

(1) any gain (or loss), together with any related provision for taxes on such
gain (or loss), realized in connection with: (a) any Asset Sale (without giving
effect to the dollar thresholds provided in the definition thereof); or (b) the
disposition of any securities by NewPageHoldCo or any its Subsidiaries or the
extinguishment of any Indebtedness of NewPageHoldCo or any of its Subsidiaries;

(2) any extraordinary gain (or loss), together with any related provision for
taxes on such extraordinary gain (or loss); and

 

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(3) any unrealized non-cash gains or losses in respect of Hedging Agreements
(including those resulting from the application of FAS 133), to the extent that
such gains or losses are deducted in computing Net Income.

“Net Recovery Cost Percentage” shall mean the fraction, expressed as a
percentage, (a) the numerator of which is the amount equal to the recovery on
the aggregate amount of the Inventory at such time on a “net orderly liquidation
value” basis as set forth in the most recent Inventory Appraisal received by
Collateral Agent in accordance with Section 5.17, net of operating expenses,
liquidation expenses and commissions reasonably anticipated in the disposition
of such assets, and (b) the denominator of which is the Cost of the aggregate
amount of the Inventory subject to such Inventory Appraisal.

“NewPageCo” as defined in the preamble hereto.

“NewPageCo First Lien Term Loan Agreement” means that certain Term Loan A Credit
and Guaranty Agreement dated as of the date hereof among NewPageCo, as borrower,
the Guarantors, the lenders party thereto, GSCP as Joint Lead Arranger, Joint
Bookrunner, Co-Syndication Agent, and Administrative Agent, as amended,
restated, replaced, supplemented or modified from time to time in accordance
with the provision of Section 6.15 hereof and the Intercreditor Agreement.

“NewPageCo First Lien Term Loan Agreement Administrative Agent” means GSCP in
its capacity as Administrative Agent under the NewPageCo First Lien Term Loan
Agreement, and its successors and assigns.

“NewPageCo First Lien Term Loan Documents” means the NewPageCo First Lien Term
Loan Agreement, the notes issues pursuant thereto and each other document
executed in connection therewith, and any documents executed in connection with
any refinancings or replacements thereof to the extent permitted under
Section 6.1, as each such document may be amended, restated, supplemented or
otherwise modified from time to time.

“NewPageHoldCo” as defined in the preamble hereto.

“NewPageHoldCo PIK Note Documents” means the NewPageHoldCo PIK Note Indenture,
the NewPageHoldCo PIK Notes and each other document executed in connection
therewith, and any documents executed in connection with any refinancings or
replacements thereof to the extent permitted under Section 6.1, as each such
document may be amended, restated, supplemented or otherwise modified from time
to time.

“NewPageHoldcoCo PIK Note Indenture means that certain Indenture dated as of the
date hereof pursuant to which the NewPageHoldCo PIK Notes are issued.

 

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“NewPageHoldCo PIK Notes” means the notes issued pursuant to the NewPageHoldCo
PIK Indenture Note in the aggregate principal amount of not less than
$125,000,000 and any promissory notes issued in respect of any refinancing or
replacement of such NewPageHoldCo PIK Notes in a transaction permitted under
Section 6.1, in each case as such notes may thereafter be amended, restated,
supplemented or otherwise modified from time to time to the extent permitted
under Section 6.16.

“NewPageHoldCo PIK Notes Indebtedness” means the obligations of NewPageHoldCo
pursuant to the NewPageHoldCo PIK Note Documents.

“Non-Consenting Lender” as defined in Section 2.23.

“Non-US Lender” as defined in Section 2.20(c).

“Note” means a Revolving Loan Note or a Swing Line Note.

“ Notes Offering Memorandum” shall mean that certain Offering Memorandum dated
as of April 22, 2005, relating to the issuance of the Senior Secured Fixed Rate
Notes, Senior Secured Floating Rate Notes and the Senior Subordinated Notes.

“Notice” means a Funding Notice, an Issuance Notice or a Conversion/Continuation
Notice.

“Obligations” means (i) all obligations of every nature of each Credit Party
from time to time owed to the Agents (including former Agents), the Lenders or
any of them under any Credit Document, whether for principal, interest
(including interest which, but for the filing of a petition in bankruptcy with
respect to such Credit Party, would have accrued on any Obligation, whether or
not a claim is allowed against such Credit Party for such interest in the
related bankruptcy proceeding), reimbursement of amounts drawn under Letters of
Credit, fees, expenses, indemnification or otherwise, (ii) the due and punctual
payment and performance of all obligations (not to exceed $1,500,000 in the
aggregate for all such obligations) in respect of any purchasing card or similar
program owed to any Lender, any Affiliate of any Lender, the Administrative
Agent or the Collateral Agent by NewPageCo or any Guarantor, and (iii) the due
and punctual payment and performance of all Banking Services Obligations (not to
exceed $10,000,000 in the aggregate for all such Banking Services Obligations).

“Obligee Guarantor” as defined in Section 7.7.

“Organizational Documents” means (i) with respect to any corporation, its
certificate or articles of incorporation or organization, as amended, and its
by-laws, as amended, or, as the case may be, its memorandum and articles, as
amended, (ii) with respect to any limited

 

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partnership, its certificate of limited partnership, as amended, and its
partnership agreement, as amended, (iii) with respect to any general
partnership, its partnership agreement, as amended, (iv) with respect to any
limited liability company, its articles of organization, as amended, and its
operating agreement, as amended, and (v) with respect to any other Person,
comparable instruments and documents. In the event any term or condition of this
Agreement or any other Credit Document requires any Organizational Document to
be certified by a secretary of state or similar governmental official, the
reference to any such “Organizational Document” shall only be to a document of a
type customarily certified by such governmental official.

“Other Taxes” means any and all present or future stamp or documentary taxes or
any other excise or property taxes, charges or similar levies (including
interest, fines, penalties and additions to tax) arising from any payment made
or required to be made under any Credit Document or from the execution, delivery
or enforcement of, or otherwise with respect to, any Credit Document.

“Paper Business” means the businesses of the Coated and Carbonless Papers Group.

“Paper Business Acquisition” means the consummation of the acquisition of the
Coated and Carbonless Papers Group and the other transactions contemplated by
the Purchase Agreement, except the purchase of the Timber Business.

“PBGC” means the Pension Benefit Guaranty Corporation or any successor thereto.

“Pension Plan” means any Employee Benefit Plan, other than a Multiemployer Plan,
which is subject to Section 412 of the Internal Revenue Code or Section 302 of
ERISA.

“Perfection Certificate” shall mean a certificate in the form of Exhibit N-1 or
any other form approved by the Collateral Agent, as it shall be supplemented
from time to time by a Perfection Certificate Supplement or otherwise.

“Perfection Certificate Supplement” shall mean a certificate supplement in the
form of Exhibit N-2 or any other form approved by the Collateral Agent.

“Permitted Acquisition” means any acquisition by NewPageCo or any of its
wholly-owned Subsidiaries, whether by purchase, merger or otherwise, of all or
substantially all of the assets of, all of the Capital Stock of, or a business
line or unit or a division of, any Person; provided,

 

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(i) immediately prior to, and after giving effect thereto, no Default or Event
of Default shall have occurred and be continuing or would result therefrom;

(ii) all transactions in connection therewith shall be consummated, in all
material respects, in accordance with all applicable laws and in conformity with
all applicable Governmental Authorizations;

(iii) in the case of the acquisition of Capital Stock, all of the Capital Stock
(except for any such Securities in the nature of directors’ qualifying shares
required pursuant to applicable law) acquired or otherwise issued by such Person
or any newly formed Subsidiary of NewPageCo in connection with such acquisition
shall be owned 100% by NewPageCo or a Guarantor Subsidiary thereof, and
NewPageCo shall have taken, or caused to be taken, as of the date such Person
becomes a Subsidiary of NewPageCo, each of the actions set forth in Sections
5.10 and/or 5.11, as applicable;

(iv) NewPageHoldCo and its Subsidiaries shall be in compliance with the
financial covenants set forth in Section 6.8 on a pro forma basis after giving
effect to such acquisition as of the last day of the Fiscal Quarter most
recently ended, (as determined in accordance with Section 6.8(f));

(v) NewPageCo shall have delivered to Administrative Agent (A) at least 10
Business Days prior to such proposed acquisition, a Compliance Certificate
evidencing compliance with Section 6.8 as required under clause (iv) above,
together with all relevant financial information with respect to such acquired
assets, including, without limitation, the aggregate consideration for such
acquisition and any other information required to demonstrate compliance with
Section 6.8;

(vi) any Person or assets or division as acquired in accordance herewith shall
be engaged solely in a Permitted Business;

(vii) such Permitted Acquisition shall be consensual and shall have been
approved by the Board of Directors of the Person being acquired.

“Permitted Business” means any business engaged in by the Coated and Carbonless
Papers Group on the date the Paper Business Acquisition is consummated and any
business or other activities that are reasonably similar, or related to, the
business in which the Coated and Carbonless Papers Group is engaged on such
date.

“Permitted Collateral Liens” means the Liens described in clauses (a), (b), (c),
(d) with respect to Liens on cash and cash deposits only, (g), (i), (k), (n) and
(p) of Section 6.2.

 

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“Permitted Cure Securities” means equity Securities of NewPageHoldCo having no
mandatory redemption, repurchase, repayment or similar requirements prior to the
date which occurs six (6) months after the final maturity date of the Senior
Subordinated Notes and upon which all dividends or distributions, at the
election of NewPageHoldCo, may be payable in additional shares of such Security.

“Permitted Discretion” shall mean the Administrative Agent’s and Collateral
Agent’s judgment exercised in good faith based upon its consideration of any
factor which the Administrative Agent or Collateral Agent believes in good
faith: (a) will or could adversely affect the value of any Collateral, the
enforceability or priority of the Collateral Agent’s Liens thereon or the amount
which the Collateral Agent and the Lenders would be likely to receive (after
giving consideration to delays in payment and costs of enforcement) in the
liquidation of such Collateral; (b) suggests that any collateral report or
financial information delivered to the Agents, by or on behalf of, NewPageCo is
incomplete, inaccurate or misleading in any material respect; (c) materially
increases the likelihood of a bankruptcy, reorganization or other insolvency
proceeding involving NewPageCo or any of its Subsidiaries or any of the
Collateral; or (d) creates or reasonably could be expected to create a Default
or Event of Default. In exercising such judgment, the Administrative Agent and
Collateral Agent may consider such factors already included in or tested by the
definition of Eligible Accounts or Eligible Inventory, as well as any of the
following: (i) changes in collection history and dilution with respect to the
Accounts, (ii) changes in demand for, and pricing of, Inventory, (iii) changes
in any concentration of risk with respect to the Accounts and Inventory,
(iv) changes in turnover statistics with respect to Inventory and/or Accounts,
including actual versus historical and projected, and (v) any other factors that
change the credit risk of lending to NewPageCo on the security of the Accounts
and Inventory. The burden of establishing lack of good faith hereunder shall be
on NewPageCo.

“Permitted Holders” means Sponsor and any of its affiliated investment funds or
managed accounts which are managed or advised by Sponsor or an Affiliate of
Sponsor in the ordinary course of business and pursuant to written agreements.

“Permitted Liens” means each of the Liens permitted pursuant to Section 6.2.

“Person” means and includes natural persons, corporations, limited partnerships,
general partnerships, limited liability companies, limited liability
partnerships, joint stock companies, Joint Ventures, associations, companies,
trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and Governmental Authorities.

“Phase I Report” means, with respect to any Facility, a report that (i) conforms
to the ASTM Standard Practice for Environmental Site Assessments, E 1527-00 or,
if reasonably

 

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requested by the Administrative Agent, USEPA’s currently applicable standards
for “All Appropriate Inquiry”, and (ii) was conducted no more than six months
prior to the date such report is required to be delivered hereunder by one or
more environmental consulting firms reasonably satisfactory to Administrative
Agent.

“Pledge and Security Agreement” means the Pledge and Security Agreement to be
executed by NewPageCo and each Guarantor substantially in the form of Exhibit I,
as it may be amended, supplemented or otherwise modified from time to time.

“Portfolio Company Account” means an Account of NewPageCo or any Borrowing Base
Guarantor owing by an Affiliate of NewPageCo or such Borrowing Base Guarantor
(i) that contains arms-length terms and arises in the ordinary course of
business of NewPageCo or such Borrowing Base Guarantor and such Affiliate and
(ii) the Account Debtor with respect thereto is an Affiliate of NewPageCo or
such Borrowing Base Guarantor solely as a result of the Sponsor’s common
ownership or the existence of common directors with NewPageCo or such Borrowing
Base Guarantor and such Account Debtor.

“Prime Rate” means the rate of interest quoted in The Wall Street Journal, Money
Rates Section as the Prime Rate (currently defined as the base rate on corporate
loans posted by at least 75% of the nation’s thirty (30) largest banks), as in
effect from time to time. The Prime Rate is a reference rate and does not
necessarily represent the lowest or best rate actually charged to any customer.
Administrative Agent or any other Lender may make commercial loans or other
loans at rates of interest at, above or below the Prime Rate.

“Principal Office” means, for each of Administrative Agent, Swing Line Lender
and Issuing Bank, such Person’s “Principal Office” as set forth on Appendix B,
or such other office or office of a third party or sub-agent, as appropriate, as
such Person may from time to time designate in writing to NewPageCo and each
Lender.

“Projections” as defined in Section 4.8.

“Property” shall mean any right, title or interest in or to property or assets
of any kind whatsoever, whether real, personal or mixed and whether tangible or
intangible and including Capital Stock or other ownership interests of any
Person and whether now in existence or owned or hereafter entered into or
acquired, including, without limitation, all Real Estate Assets.

“Pro Rata Share” means with respect to all payments, computations and other
matters relating to the Revolving Commitment or Revolving Loans of any Lender or
any Letters of Credit issued or participations purchased therein by any Lender
or any participations in any Swing Line Loans purchased by any Lender, the
percentage obtained by dividing (a) the Revolving Exposure of that Lender by
(b) the aggregate Revolving Exposure of all Lenders.

 

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“Purchase Agreement” means that certain Equity and Asset Purchase Agreement
dated as of January 14, 2005 among MeadWestvaco, and TimberCo as it may be
amended, restated, supplemented or otherwise modified from time to time to the
extent permitted under Section 6.15.

“Real Estate Asset” means, at any time of determination, any fee interest then
owned by any Credit Party in any real property.

“Refunded Swing Line Loans” as defined in Section 2.3(b) (iv).

“Register” as defined in Section 2.7(b).

“Regulation D” means Regulation D of the Board of Governors of the Federal
Reserve System, as in effect from time to time.

“Reimbursement Date” as defined in Section 2.4(d).

“Related Agreements” means, collectively, the NewPageHoldCo PIK Note Documents,
the NewPageCo First Lien Term Loan Documents, the Senior Secured Fixed Rate Note
Documents, the Senior Secured Floating Rate Note Documents, the Senior
Subordinated Note Documents, the Commodities Hedge Agreement, the Fiber Supply
Agreements, the Allocation and Services Agreement, the Transition Services
Agreement, and the Purchase Agreement.

“Related Fund” means, with respect to any Lender that is an investment fund, any
other investment fund that invests in commercial loans and that is managed or
advised by the same investment advisor as such Lender or by an Affiliate of such
investment advisor.

“Release” means any release, spill, emission, leaking, pumping, pouring,
injection, escaping, deposit, disposal, discharge, dispersal, dumping, leaching
or migration of any Hazardous Material into the environment (including the
abandonment or disposal of any barrels, containers or other closed receptacles
containing any Hazardous Material), including the movement of any Hazardous
Material through the air, soil, surface water or groundwater.

“Remedial Action” means all actions taken to (i) clean up, remove, remediate,
contain, treat, monitor, assess, evaluate or in any other way address Hazardous
Materials in the environment; (ii) perform pre-remedial studies and
investigations and post-remedial operation and maintenance activities; or
(iii) any response actions authorized by 42 U.S.C. 9601 et. seq.

 

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“Replacement Lender” as defined in Section 2.23.

“Required Prepayment Date” as defined in Section 2.15(c).

“Requisite Lenders” means one or more Lenders having or holding Revolving
Exposure and representing more than 50% of the aggregate Revolving Exposure of
all Lenders. For purposes of this definition, the amount of the Revolving
Exposure (“Voting Power Determinants”) shall be determined by excluding all
Voting Power Determinants held or beneficially owned by a Sponsor Affiliated
Lender but including all Voting Power Determinants held or beneficially owned by
Sponsor Affiliated Institutional Lenders so long as the aggregate Voting Power
Determinants held or beneficially owned by all Sponsor Affiliated Institutional
Lenders does not exceed 30% of all Voting Power Determinants. If the aggregate
Voting Power Determinants held or beneficially owned by all Sponsor Affiliated
Institutional Lenders exceed more than 30%, then, for purposes solely of this
definition, (x) the Voting Power Determinants held or beneficially owned by
Sponsor Affiliated Institutional Lenders shall be ratably reduced so as to
equal, in the aggregate, 30% of the aggregate Voting Power Determinants and
(y) the Voting Power Determinants held or beneficially owned by Lenders other
than Sponsor Affiliated Institutional Lenders shall be ratably increased so as
to equal, in the aggregate, 70% of the aggregate Voting Power Determinants.

“Reserves” shall mean reserves established against the Borrowing Base that the
Collateral Agent may, in its Permitted Discretion, establish from time to time,
including, without limitation, any Banking Services Reserves.

“Restricted Junior Payment” means (i) any dividend or other distribution, direct
or indirect, on account of any shares of any class of stock of NewPageHoldCo or
NewPageCo now or hereafter outstanding, except a dividend payable solely in
shares of that class of stock to the holders of that class; (ii) any redemption,
retirement, sinking fund or similar payment, purchase or other acquisition for
value, direct or indirect, of any shares of any class of stock of NewPageHoldCo
or NewPageCo now or hereafter outstanding; (iii) any payment made to retire, or
to obtain the surrender of, any outstanding warrants, options or other rights to
acquire shares of any class of stock of NewPageHoldCo or NewPageCo now or
hereafter outstanding; (iv) management or similar fees payable to Sponsor or any
of its Affiliates; or (v) any payment or prepayment of principal of, premium, if
any, or interest on, or redemption, purchase, retirement, defeasance (including
in-substance or legal defeasance), sinking fund or similar payment with respect
to, the NewPageHoldCo PIK Notes (other than payments of interest solely with the
issuance of additional notes as permitted by the NewPageHoldCo PIK Note
Documents), the NewPageCo First Lien Term Loan Agreement, any Senior Secured
Floating Rate Notes, the Senior Secured Fixed Rate Notes or the Senior
Subordinated Notes.

 

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“Revolving Commitment” means the commitment of a Lender to make or otherwise
fund any Revolving Loan and to acquire participations in Letters of Credit and
Swing Line Loans hereunder and “Revolving Commitments” means such commitments of
all Lenders in the aggregate. The amount of each Lender’s Revolving Commitment,
if any, is set forth on Appendix A or in the applicable Assignment Agreement,
subject to any adjustment or reduction pursuant to the terms and conditions
hereof. The aggregate amount of the Revolving Commitments as of the Third
Amendment Closing Date is $250,000,000.

“Revolving Commitment Period” means the period from the Closing Date to but
excluding the Revolving Commitment Termination Date.

“Revolving Commitment Termination Date” means the earliest to occur of (i) the
fifth anniversary of the Closing Date, (ii) the date the Revolving Commitments
are permanently reduced to zero pursuant to Section 2.13(b) or 2.14, and
(iii) the date of the termination of the Revolving Commitments pursuant to
Section 8.1.

“Revolving Exposure” means, with respect to any Lender as of any date of
determination, (i) prior to the termination of the Revolving Commitments, that
Lender’s Revolving Commitment; and (ii) after the termination of the Revolving
Commitments, the sum of (a) the aggregate outstanding principal amount of the
Revolving Loans of that Lender, (b) in the case of Issuing Bank, the aggregate
Letter of Credit Usage in respect of all Letters of Credit issued by that Lender
(net of any participations by Lenders in such Letters of Credit), (c) the
aggregate amount of all participations by that Lender in any outstanding Letters
of Credit or any unreimbursed drawing under any Letter of Credit, (d) in the
case of Swing Line Lender, the aggregate outstanding principal amount of all
Swing Line Loans (net of any participations therein by other Lenders), and
(e) the aggregate amount of all participations therein by that Lender in any
outstanding Swing Line Loans.

“Revolving Loan” means a Loan made by a Lender to NewPageCo pursuant to
Section 2.2(a) and/or 2.22.

“Revolving Loan Note” means a promissory note in the form of Exhibit B-1, as it
may be amended, supplemented or otherwise modified from time to time.

“Rumford JV Interests” means the Capital Stock of Rumford Cogeneration Company
LP not owned as of the date of this Agreement, directly or indirectly, by a
Subsidiary of NewPageCo.

“S&P” means Standard & Poor’s Ratings Group, a division of The McGraw Hill
Corporation.

 

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“Second Lien Financing Collateral” means all property and assets of the Credit
Parties other than the Revolving Credit Collateral (as defined in the
Intercreditor Agreement).

“Secured Parties” has the meaning assigned to that term in the Pledge and
Security Agreement.

“Securities” means any stock, shares, partnership interests, voting trust
certificates, certificates of interest or participation in any profit-sharing
agreement or arrangement, options, warrants, bonds, debentures, notes, or other
evidences of indebtedness, secured or unsecured, convertible, subordinated or
otherwise, or in general any instruments commonly known as “securities” or any
certificates of interest, shares or participations in temporary or interim
certificates for the purchase or acquisition of, or any right to subscribe to,
purchase or acquire, any of the foregoing.

“Securities Act” means the Securities Act of 1933, as amended from time to time,
and any successor statute.

“Senior Leverage Ratio” means the ratio as of the last day of any Fiscal Quarter
of (i) Consolidated Senior Debt as of such day to (ii) Consolidated Adjusted
EBITDA for the four-Fiscal Quarter period ending on such date.

“Senior Officer” means the President, Chief Executive Officer, Chief Financial
Officer, or Chief Operating Officer of NewPageCo.

“Senior Secured Fixed Rate Notes” means the 10% Senior Secured Fixed Rate Notes
Due 2012 of NewPageCo in the aggregate principal amount of not less than
$350,000,000 and issued pursuant to the Senior Secured Fixed Rate Notes
Indenture, and any registered notes issued by NewPageCo in exchange for, and as
contemplated by, such notes with substantially identical terms as such notes,
and any promissory notes issued in respect of any refinancing or replacement of
such Senior Secured Fixed Rate Notes in a transaction permitted under
Section 6.1, in each case as such notes may be amended, restated, supplemented
or otherwise modified from time to time to the extent permitted under
Section 6.15.

“Senior Secured Fixed Rate Notes Documents” means the Senior Secured Fixed Rate
Notes Indenture, the Senior Secured Fixed Rate Notes and each other document
executed in connection with the Notes and any documents executed in connection
with any refinancings and replacements thereof to the extent permitted under
Section 6.1, as each such document may be amended, restated, supplemented or
otherwise modified from time to time to the extent permitted under Section 6.15.

 

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“Senior Secured Fixed Rate Notes Indebtedness” means the obligations of
NewPageCo pursuant to the Senior Secured Fixed Rate Note Documents.

“Senior Secured Fixed Rate Notes Indenture” means that certain Indenture, dated
May 2, 2005, pursuant to which the Senior Secured Fixed Rate Notes are issued.

“Senior Secured Fixed Rate Notes Trustee” means HSBC Bank USA, N.A., as trustee
under the Senior Secured Fixed Rate Notes Indenture, and its successors and
assigns.

“Senior Secured Floating Rate Notes” means the Senior Secured Floating Rate
Notes Due 2012 of NewPageCo in the aggregate principal amount of not less than
$225,000,000 and issued pursuant to the Senior Secured Floating Rate Notes
Indenture, and any registered notes issued by NewPageCo in exchange for, and as
contemplated by, such notes with substantially identical terms as such notes,
and any promissory notes issued in respect of any refinancing or replacement of
such Senior Secured Floating Rate Notes in a transaction permitted under
Section 6.1, in each case as such notes may be amended, restated, supplemented
or otherwise modified from time to time to the extent permitted under
Section 6.15.

“Senior Secured Floating Rate Notes Documents” means the Senior Secured Floating
Rate Notes Indenture, the Senior Secured Floating Rate Notes and each other
document executed in connection with the Notes, and any documents executed in
connection with any refinancings or replacements thereof to the extent permitted
under Section 6.1, as each such document may be amended, restated, supplemented
or otherwise modified from time to time to the extent permitted under
Section 6.15.

“Senior Secured Floating Rate Notes Indebtedness” means the obligations of
NewPageCo pursuant to the Senior Secured Notes Documents.

“Senior Secured Floating Rate Notes Indenture” means that certain Indenture,
dated May 2, 2005, pursuant to which the Senior Secured Floating Rate Notes are
issued.

“Senior Secured Floating Rate Notes Trustee” means HSBC Bank USA, N.A., as
trustee under the Senior Secured Floating Rate Notes Indenture, and its
successors and assigns.

“Senior Subordinated Notes” means the 12% Senior Subordinated Notes Due 2013 of
NewPageCo in the aggregate principal amount of not less than $200,000,000 and
issued pursuant to the Senior Subordinated Notes Indenture, and any registered
notes issued by NewPageCo in exchange for, and as contemplated by, such notes
with substantially identical terms as such notes, and any subordinated
promissory notes issued in respect of any refinancing or replacement of such
Senior Subordinated Notes in a transaction permitted under Section 6.1, in each
case as such notes may be amended, restated, supplemented or otherwise modified
from time to time to the extent permitted under Section 6.16.

 

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“Senior Subordinated Notes Documents” means the Senior Subordinated Notes
Indenture, the Senior Subordinated Notes and each other document executed in
connection with the Notes, as each such document may be amended, restated,
supplemented or otherwise modified from time to time to the extent permitted
under Section 6.16.

“Senior Subordinated Notes Indebtedness” means the obligations of NewPageCo
pursuant to the Senior Subordinated Notes Documents.

“Senior Subordinated Notes Indenture” means that certain Indenture, dated May 2,
2005, pursuant to which the Senior Subordinated Notes are issued.

“Significant Subsidiary” means any Subsidiary of NewPageHoldCo that would be a
“significant subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date hereof; provided, however, at all times NewPageCo shall be deemed to be
a “Significant Subsidiary”.

“Solvency Certificate” means a Solvency Certificate of the chief financial
officer of NewPageHoldCo substantially in the form of Exhibit G-2.

“Solvent” means, with respect to any Credit Party, that as of the date of
determination, (a) the sum of such Credit Party’s debt (including contingent
liabilities) does not exceed the present fair saleable value of such Credit
Party’s present assets; (b) such Credit Party’s capital is not unreasonably
small in relation to its business as contemplated on the Closing Date and
reflected in the Projections or with respect to any transaction contemplated or
undertaken after the Closing Date; and (c) such Person has not incurred and does
not intend to incur, or believe (nor should it reasonably believe) that it will
incur, debts beyond its ability to pay such debts as they become due (whether at
maturity or otherwise). For purposes of this definition, the amount of any
contingent liability at any time shall be computed as the amount that, in light
of all of the facts and circumstances existing at such time, represents the
amount that can reasonably be expected to become an actual or matured liability
(irrespective of whether such contingent liabilities meet the criteria for
accrual under Statement of Financial Accounting Standard No. 5).

“Sponsor” means Cerberus Capital Management, L.P.

“Sponsor Affiliated Institutional Lender” means a bank, insurance company,
investment bank, commercial finance company or other institutional lender that
is an Affiliate of NewPageCo as a result of common direct or indirect ownership
by Sponsor, so long as (i)

 

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Sponsor owns directly or indirectly less than all of the Capital Stock of such
Lender, and (ii) Sponsor does not directly appoint any Person with
responsibility for reviewing or approving credit decisions with respect to the
transactions contemplated by the Loan Documents; provided that such Person shall
agree in the applicable Assignment and Acceptance (or in its Lender Addendum, as
applicable) that it will not provide any information obtained by such Sponsor
Affiliated Institutional Lender in its capacity as a Lender to Sponsor or any
Affiliate of Sponsor.

“Sponsor Affiliated Lender” means investment funds or managed accounts with
respect to which Sponsor or an Affiliate of Sponsor is an advisor or manager in
the ordinary course of business and pursuant to written agreements provided such
Person executes a waiver in form and substance reasonably satisfactory to
Administrative Agent that it shall have no right whatsoever so long as such
Person is an Affiliate of NewPageCo, NewPageHoldCo or Sponsor, and except as
provided under Section 11.5(e), (i) to consent to any amendment, modification,
waiver, consent or other such action with respect to any of the terms of this
Agreement or any other Credit Document, (ii) to require any Agent or other
Lender to undertake any action (or refrain from taking any action) with respect
to this Agreement or any other Credit Document, (iii) otherwise vote on any
matter related to this Agreement or any other Credit Document, (iv) attend any
meeting with any Agent or Lender or receive any information from any Agent or
Lender or (v) make or bring any claim, in its capacity as Lender, against the
Agent or any Lender with respect to the duties and obligations of such Persons
under the Credit Documents.

“Standby Letter of Credit” shall mean any standby letter of credit or similar
instrument issued for the purpose of supporting (a) workers’ compensation
liabilities of NewPageCo or any Borrowing Base Guarantor of its Subsidiaries,
(b) the obligations of third-party insurers of NewPageCo or any of its
Subsidiaries arising by virtue of the laws of any jurisdiction requiring
third-party insurers to obtain such letters of credit, (c) performance, payment,
deposit or surety obligations of NewPageCo, Borrowing Base Guarantor or any of
its Subsidiaries if required by law or governmental rule or regulation or in
accordance with custom and practice in the industry or (d) such other
obligations as the Issuing Bank and the Administrative Agent shall approve in
their reasonable judgment.

“Subject Transaction” as defined in Section 6.8(f).

“Subsidiary” means, with respect to any Person, any corporation, partnership,
limited liability company, association, joint venture or other business entity
of which more than 50% of the total voting power of shares of stock or other
ownership interests entitled (without regard to the occurrence of any
contingency) to vote in the election of the Person or Persons (whether
directors, managers, trustees or other Persons performing similar functions)
having the power to direct or cause the direction of the management and policies
thereof is at the time owned or controlled, directly or indirectly, by that
Person or one or more of the other Subsidiaries of that Person or a combination
thereof; provided, in determining the percentage of ownership interests of any
Person controlled by another Person, no ownership interest in the nature of a
“qualifying share” of the former Person shall be deemed to be outstanding.

 

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“Supermajority Lenders” means one or more Lenders having or holding Revolving
Exposure and representing more than 66 2/3% of the aggregate Revolving Exposure
of all Lenders that are not Sponsor Affiliated Lenders.

“Swing Line Lender” means Wachovia Bank, National Association, in its capacity
as Swing Line Lender hereunder, together with its permitted successors and
assigns in such capacity.

“Swing Line Loan” means a Loan made by Swing Line Lender to NewPageCo pursuant
to Section 2.3.

“Swing Line Note” means a promissory note in the form of Exhibit B-2, as it may
be amended, supplemented or otherwise modified from time to time.

“Swing Line Sublimit” means the lesser of (i) $25,000,000, and (ii) the
aggregate unused amount of Revolving Commitments then in effect.

“Tax” means any present or future tax, levy, impost, duty or similar assessment,
charge, fee, deduction or withholding imposed, levied, collected, withheld or
assessed by any Governmental Authority; provided, “Tax on the overall net
income” of a Person shall be construed as a reference to a tax imposed by the
jurisdiction in which that Person is organized or in which that Person’s
applicable principal office (and/or, in the case of a Lender, its lending
office) is located or in which that Person (and/or, in the case of a Lender, its
lending office) is deemed to be doing business on all or part of the net income,
profits or gains (whether worldwide, or only insofar as such income, profits or
gains are considered to arise in or to relate to a particular jurisdiction, or
otherwise) of that Person (and/or, in the case of a Lender, its applicable
lending office).

“Terminated Lender” as defined in Section 2.23.

“Third Amendment Closing Date” means January 30, 2007

“Timber Business” means the ownership, operation, maintenance, and harvesting of
the Timberlands (as defined in the Purchase Agreement) and the use or sale of
products derived therefrom, which is being acquired by TimberCo pursuant to the
Purchase Agreement.

 

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“Timber Business Acquisition” means the consummation of the acquisition of the
Timber Business and the related transactions contemplated by the Purchase
Agreement except the purchase of the Paper Business.

“TimberCo” means Escanaba Timber LLC, a Delaware limited liability company.

“TimberCo Credit Agreement” means that certain Term Loan Credit and Guaranty
Agreement dated as of the date hereof providing for term loans in an aggregate
amount equal to $235,000,000 among TimberCo, as borrower, the guarantors
thereunder, the lenders party thereto, GSCP as Joint Lead Arranger, Joint
Bookrunner, Co-Syndication Agent, and Administrative Agent and General Electric
Capital Corporation as Collateral Agent, as amended, restated, replaced,
supplemented or modified from time to time in accordance with the provision of
Section 6.15 hereof.

“Title Policy” as defined in Section 3.1(i).

“Total Leverage Ratio” means the ratio as of the last day of any Fiscal Quarter
of (i) Consolidated Total Debt as of such day to (ii) Consolidated Adjusted
EBITDA for the four-Fiscal Quarter period ending on such date.

“Total Utilization of Revolving Commitments” means, as at any date of
determination, the sum of (i) the aggregate principal amount of all outstanding
Revolving Loans (other than Revolving Loans made for the purpose of repaying any
Refunded Swing Line Loans or reimbursing Issuing Bank for any amount drawn under
any Letter of Credit, but not yet so applied), (ii) the aggregate principal
amount of all outstanding Swing Line Loans, and (iii) the Letter of Credit
Usage.

“Transaction Costs” means the fees, costs and expenses payable by NewPageHoldCo,
NewPageCo or any of NewPageCo’s Subsidiaries on or before the Closing Date (or
within a reasonable period of time after the Closing Date) in connection with
the transactions contemplated by the Credit Documents and the Related Agreements
which Transaction Costs shall not exceed $154,000,000.

“Transition Services Agreement” means (i) the Transition Services Agreement
between MeadWestvaco Corporation and NewPageCo, (ii) the Information Technology
Transition Services Agreement between MeadWestvaco Corporation and NewPageCo,
(iii) the Human Resources Transition Services Agreement between MeadWestvaco
Corporation and NewPageCo, (iv) the Wickliffe Services Agreement between
MeadWestvaco Corporation and NewPageCo, (v) the Chillicothe Services Agreement
between MeadWestvaco Corporation and Chillicothe Paper, Inc., and (vi) the Lease
and Services Agreement between MeadWestvaco

 

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Corporation and Chillicothe Paper, Inc, each dated as of April 30, 2005, as the
same may be amended, restated, supplemented or otherwise modified from time to
time to the extent permitted under Section 6.15.

“Type of Loan” means (i) with respect to Revolving Loans, a Base Rate Loan or a
Eurodollar Rate Loan, and (ii) with respect to Swing Line Loans, a Base Rate
Loan.

“UCC” means the Uniform Commercial Code (or any similar or equivalent
legislation) as in effect in any applicable jurisdiction.

“Unadjusted Eurodollar Rate Component” means that component of the interest
costs to NewPageCo in respect of a Eurodollar Rate Loan that is based upon the
rate obtained pursuant to clause (i) of the definition of Adjusted Eurodollar
Rate.

“Wholly Owned Subsidiary” shall mean, as to any Person, (a) any corporation 100%
of whose capital stock (other than directors’ qualifying shares) is at the time
owned by such Person and/or one or more Wholly Owned Subsidiaries of such Person
and (b) any partnership, association, joint venture, limited liability company
or other entity in which such Person and/or one or more Wholly Owned
Subsidiaries of such Person own 100% of the Capital Stock of such partnership,
association, joint venture, limited liability company or other entity at such
time. Unless otherwise set forth herein, reference in this Agreement to “Wholly
Owned Subsidiary” shall mean NewPageCo’s direct and indirect Wholly Owned
Subsidiaries.

1.2. Accounting Terms. Except as otherwise expressly provided herein, all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP. Financial statements and other information
required to be delivered by NewPageHoldCo to Lenders pursuant to Section 5.1(a),
5.1(b) and 5.1(c) shall be prepared in accordance with GAAP as in effect at the
time of such preparation (and delivered together with the reconciliation
statements provided for in Section 5.1(e), if applicable). Subject to the
foregoing, calculations in connection with the definitions, covenants and other
provisions hereof shall utilize accounting principles and policies in conformity
with those used to prepare the Historical Financial statements. In the event
that any Accounting Change shall occur and such change results in a change in
the method of calculation of financial covenants, standards or terms in this
Agreement, then NewPageHoldCo and Administrative Agent agree to enter into
negotiations to amend such provisions of this Agreement so as to equitably
reflect such Accounting Change with the desired result that the criteria for
evaluating NewPageHoldCo’s financial condition shall be the same after such
Accounting Change as if such Accounting Change had not been made. Until such
time as such an amendment shall have been executed and delivered by the
appropriate Credit Parties and the Requisite Lenders, all financial covenants,
standards and terms in this Agreement shall continue to be calculated or
construed as if such Accounting Change had not occurred.

 

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1.3. Interpretation, etc. Any of the terms defined herein may, unless the
context otherwise requires, be used in the singular or the plural, depending on
the reference. References herein to any Section, Appendix, Schedule or Exhibit
shall be to a Section, an Appendix, a Schedule or an Exhibit, as the case may
be, hereof unless otherwise specifically provided. The use herein of the word
“include” or “including”, when following any general statement, term or matter,
shall not be construed to limit such statement, term or matter to the specific
items or matters set forth immediately following such word or to similar items
or matters, whether or not no limiting language (such as “without limitation” or
“but not limited to” or words of similar import) is used with reference thereto,
but rather shall be deemed to refer to all other items or matters that fall
within the broadest possible scope of such general statement, term or matter.

SECTION 2. LOANS AND LETTERS OF CREDIT

2.1. [Reserved].

2.2. Revolving Loans.

(a) Revolving Commitments. During the Revolving Commitment Period, subject to
the terms and conditions hereof, each Lender severally agrees to make Revolving
Loans to NewPageCo in an aggregate amount up to but not exceeding such Lender’s
Revolving Commitment; provided, that after giving effect to the making of any
Revolving Loans in no event shall the Total Utilization of Revolving Commitments
exceed the lesser of (i) the Revolving Commitments then in effect and (ii) the
Borrowing Base then in effect. Amounts borrowed pursuant to this Section 2.2(a)
may be repaid and reborrowed during the Revolving Commitment Period. Each
Lender’s Revolving Commitment shall expire on the Revolving Commitment
Termination Date and all Revolving Loans and all other amounts owed hereunder
with respect to the Revolving Loans and the Revolving Commitments shall be paid
in full on the Revolving Commitment Termination Date. Notwithstanding anything
herein to the contrary, the aggregate amount of Revolving Loans made on the
Closing Date shall not exceed $176,000,000.

(b) Borrowing Mechanics for Revolving Loans.

(i) Except pursuant to 2.4(d), Revolving Loans that are Base Rate Loans shall be
made in an aggregate minimum amount of $5,000,000 and integral multiples of
$1,000,000 in excess of that amount, and Revolving Loans that are Eurodollar
Rate Loans shall be in an aggregate minimum amount of $5,000,000 and integral
multiples of $1,000,000 in excess of that amount.

(ii) Whenever NewPageCo desires that Lenders make Revolving Loans, NewPageCo
shall deliver to Administrative Agent a fully executed Funding Notice no

 

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later than 10:00 a.m. (New York City time) at least three Business Days in
advance of the proposed Credit Date in the case of a Eurodollar Rate Loan, and
at least one Business Day in advance of the proposed Credit Date in the case of
a Revolving Loan that is a Base Rate Loan. Except as otherwise provided herein,
a Funding Notice for a Revolving Loan that is a Eurodollar Rate Loan shall be
irrevocable on and after the related Interest Rate Determination Date, and
NewPageCo shall be bound to make a borrowing in accordance therewith.

(iii) Notice of receipt of each Funding Notice in respect of Revolving Loans,
together with the amount of each Lender’s Pro Rata Share thereof, if any,
together with the applicable interest rate, shall be provided by Administrative
Agent to each applicable Lender by telefacsimile with reasonable promptness, but
(provided Administrative Agent shall have received such notice by 10:00 a.m.
(New York City time)) not later than 2:00 p.m. (New York City time) on the same
day as Administrative Agent’s receipt of such Notice from NewPageCo.

(iv) Each Lender shall make the amount of its Revolving Loan available to
Administrative Agent not later than 12:00 p.m. (New York City time) on the
applicable Credit Date by wire transfer of same day funds in Dollars, at the
Principal Office designated by Administrative Agent. Except as provided herein,
upon satisfaction or waiver of the conditions precedent specified herein,
Administrative Agent shall make the proceeds of such Revolving Loans available
to NewPageCo on the applicable Credit Date by causing an amount of same day
funds in Dollars equal to the proceeds of all such Revolving Loans received by
Administrative Agent from Lenders to be credited to the account of NewPageCo at
the Principal Office designated by Administrative Agent or such other account as
may be designated in writing to Administrative Agent by NewPageCo.

2.3. Swing Line Loans.

(a) Swing Line Loans Commitments. During the Revolving Commitment Period,
subject to the terms and conditions hereof, Swing Line Lender hereby agrees to
make Swing Line Loans to NewPageCo in the aggregate amount up to but not
exceeding the Swing Line Sublimit; provided, that after giving effect to the
making of any Swing Line Loan, in no event shall the Total Utilization of
Revolving Commitments exceed the lesser of (i) the Revolving Commitments then in
effect and (ii) the Borrowing Base then in effect. Amounts borrowed pursuant to
this Section 2.3 may be repaid and reborrowed during the Revolving Commitment
Period. Swing Line Lender’s Revolving Commitment shall expire on the Revolving
Commitment Termination Date and all Swing Line Loans and all other amounts owed
hereunder with respect to the Swing Line Loans and the Revolving Commitments
shall be paid in full on the Revolving Commitment Termination Date.

 

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(b) Borrowing Mechanics for Swing Line Loans.

(i) Swing Line Loans shall be made in an aggregate minimum amount of $1,000,000
and integral multiples of $500,000 in excess of that amount.

(ii) Whenever NewPageCo desires that Swing Line Lender make a Swing Line Loan,
NewPageCo shall deliver to Swing Line Lender and Administrative Agent a Funding
Notice no later than 12:00 p.m. (New York City time) on the proposed Credit
Date. Unless Swing Line Lender has received notice from the Administrative Agent
to the contrary, Swing Line Lender shall be entitled to rely on any
certification from NewPageCo contained in any Funding Notice to the effect that
the conditions precedent to the issuance of any requested Swing Line Loan have
been satisfied in full, including, without limitation, that after giving effect
to the making of such Swing Line Loan, the Total Utilization of Revolving
Commitments would not exceed the lesser of (1) the Revolving Commitments then in
effect and (2) the Borrowing Base then in effect.

(iii) Unless Swing Line Lender has received notice from Administrative Agent
that the conditions precedent to the making of any requested Swing Line Loan
have not been satisfied in full, then Swing Line Lender shall make the amount of
its Swing Line Loan available to Administrative Agent by no later than 2:00 p.m.
(New York City time) on the applicable Credit Date by wire transfer of same day
funds in Dollars, at Administrative Agent’s Principal Office. Except as provided
herein, upon satisfaction or waiver of the conditions precedent specified
herein, Administrative Agent shall make the proceeds of such Swing Line Loans
available to NewPageCo on the applicable Credit Date by causing an amount of
same day funds in Dollars equal to the proceeds of all such Swing Line Loans
received by Administrative Agent from Swing Line Lender to be credited to the
account of NewPageCo at Administrative Agent’s Principal Office, or to such
other account as may be designated in writing to Administrative Agent by
NewPageCo.

(iv) With respect to any Swing Line Loans which have not been voluntarily
prepaid by NewPageCo pursuant to Section 2.13, Swing Line Lender may at any time
in its sole and absolute discretion (but no less frequently than weekly),
deliver to Administrative Agent (with a copy to NewPageCo), no later than 11:00
a.m. (New York City time) at least one Business Day in advance of the proposed
Credit Date, a notice (which shall be deemed to be a Funding Notice given by
NewPageCo) requesting that each Lender holding a Revolving Commitment make
Revolving Loans that are Base Rate Loans to NewPageCo on such Credit Date in an
amount equal to the amount of such Swing Line Loans (the “Refunded Swing Line
Loans”) outstanding on the date such notice is given which Swing Line Lender
requests Lenders to prepay. Anything contained in this Agreement to the contrary
notwithstanding, (1) the proceeds of such

 

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Revolving Loans made by the Lenders other than Swing Line Lender shall be
immediately delivered by Administrative Agent to Swing Line Lender (and not to
NewPageCo) and applied to repay a corresponding portion of the Refunded Swing
Line Loans and (2) on the day such Revolving Loans are made, Swing Line Lender’s
Pro Rata Share of the Refunded Swing Line Loans shall be deemed to be paid with
the proceeds of a Revolving Loan made by Swing Line Lender to NewPageCo, and
such portion of the Swing Line Loans deemed to be so paid shall no longer be
outstanding as Swing Line Loans and shall no longer be due under the Swing Line
Note of Swing Line Lender but shall instead constitute part of Swing Line
Lender’s outstanding Revolving Loans to NewPageCo and shall be due under the
Revolving Loan Note issued by NewPageCo to Swing Line Lender. NewPageCo hereby
authorizes Administrative Agent and Swing Line Lender to charge NewPageCo’s
accounts with Administrative Agent and Swing Line Lender (up to the amount
available in each such account) in order to immediately pay Swing Line Lender
the amount of the Refunded Swing Line Loans to the extent of the proceeds of
such Revolving Loans made by Lenders, including the Revolving Loans deemed to be
made by Swing Line Lender, are not sufficient to repay in full the Refunded
Swing Line Loans. If any portion of any such amount paid (or deemed to be paid)
to Swing Line Lender should be recovered by or on behalf of NewPageCo from Swing
Line Lender in bankruptcy, by assignment for the benefit of creditors or
otherwise, the loss of the amount so recovered shall be ratably shared among all
Lenders in the manner contemplated by Section 2.17.

(v) If for any reason Revolving Loans are not made pursuant to Section
2.3(b)(iv) in an amount sufficient to repay any amounts owed to Swing Line
Lender in respect of any outstanding Swing Line Loans on or before the third
Business Day after demand for payment thereof by Swing Line Lender, each Lender
holding a Revolving Commitment shall be deemed to, and hereby agrees to, have
purchased a participation in such outstanding Swing Line Loans, and in an amount
equal to its Pro Rata Share of the applicable unpaid amount together with
accrued interest thereon. Upon one Business Day’s notice from Swing Line Lender,
each Lender holding a Revolving Commitment shall deliver to Swing Line Lender an
amount equal to its respective participation in the applicable unpaid amount in
same day funds at the Principal Office of Swing Line Lender. In order to
evidence such participation each Lender holding a Revolving Commitment agrees to
enter into a participation agreement at the request of Swing Line Lender in form
and substance reasonably satisfactory to Swing Line Lender. In the event any
Lender holding a Revolving Commitment fails to make available to Swing Line
Lender the amount of such Lender’s participation as provided in this paragraph,
Swing Line Lender shall be entitled to recover such amount on demand from such
Lender together with interest thereon for three Business Days at the rate
customarily used by Swing Line Lender for the correction of errors among banks
and thereafter at the Base Rate, as applicable.

 

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(vi) Notwithstanding anything contained herein to the contrary, (1) each
Lender’s obligation to make Revolving Loans for the purpose of repaying any
Refunded Swing Line Loans pursuant to the second preceding paragraph and each
Lender’s obligation to purchase a participation in any unpaid Swing Line Loans
pursuant to the immediately preceding paragraph shall be absolute and
unconditional and shall not be affected by any circumstance, including without
limitation (A) any set-off, counterclaim, recoupment, defense or other right
which such Lender may have against Swing Line Lender, any Credit Party or any
other Person for any reason whatsoever; (B) the occurrence or continuation of a
Default or Event of Default; (C) any adverse change in the business, operations,
properties, assets, condition (financial or otherwise) or prospects of any
Credit Party; (D) any breach of this Agreement or any other Credit Document by
any party thereto; or (E) any other circumstance, happening or event whatsoever,
whether or not similar to any of the foregoing; provided that such obligations
of each Lender are subject to the condition that Swing Line Lender believed in
good faith that all conditions under Section 3.2 to the making of the applicable
Refunded Swing Line Loans or other unpaid Swing Line Loans, were satisfied at
the time such Refunded Swing Line Loans or unpaid Swing Line Loans were made, or
the satisfaction of any such condition not satisfied had been waived by the
Requisite Lenders prior to or at the time such Refunded Swing Line Loans or
other unpaid Swing Line Loans were made; and (2) Swing Line Lender shall not be
obligated to make any Swing Line Loans (A) if it has elected not to do so after
the occurrence and during the continuation of a Default or Event of Default or
(B) at a time when a Funding Default exists unless Swing Line Lender has entered
into arrangements satisfactory to it and NewPageCo to eliminate Swing Line
Lender’s risk with respect to the Defaulting Lender’s participation in such
Swing Line Loan, including by cash collateralizing such Defaulting Lender’s Pro
Rata Share of the outstanding Swing Line Loans.

(vii) Upon the request by Swing Line Lender to have a Revolving Loan made for
the purpose of repaying any Refunded Swing Line Loan pursuant to the preceding
paragraph (iv) or the request by Swing Line Lender to have Lender purchase a
participation in any unpaid Swing Line Loans pursuant to the preceding paragraph
(v), unless Swing Line Lender has received notice from the Administrative Agent
that the conditions precedent under Section 3.2 were not satisfied in full at
the time that the Swing Line Loan was made to NewPageCo to which such Refunded
Swing Line Loan relates or to which such participation in any unpaid Swing Line
Loans relates, Swing Line Lender shall be deemed to have satisfied the condition
of possessing a good faith belief that all conditions precedent under Section
3.2 have been satisfied for purposes of the immediately preceding paragraph
(vi).

 

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2.4. Issuance of Letters of Credit and Purchase of Participations Therein.

(a) Letters of Credit. During the Revolving Commitment Period, subject to the
terms and conditions hereof, Issuing Bank agrees to issue Letters of Credit for
the account of NewPageCo in the aggregate amount up to but not exceeding the
Letter of Credit Sublimit; provided, (i) each Letter of Credit shall be
denominated in Dollars; (ii) the stated amount of each Letter of Credit shall
not be less than $ 100,000 or such lesser amount as is acceptable to Issuing
Bank; (iii) after giving effect to such issuance, in no event shall the Total
Utilization of Revolving Commitments exceed the lesser of (1) the Revolving
Commitments then in effect and (2) the Borrowing Base then in effect; (iv) after
giving effect to such issuance, in no event shall the Letter of Credit Usage
exceed the Letter of Credit Sublimit then in effect; (v) in no event shall any
Standby Letter of Credit have an expiration date later than the earlier of (1)
the scheduled Revolving Commitment Termination Date set forth in clause (i) of
the definition of “Revolving Commitment Termination Date” and (2) the date which
is one year from the date of issuance of such Standby Letter of Credit; and (vi)
in no event shall any Commercial Letter of Credit (x) have an expiration date
later than the earlier of (1) the Revolving Loan Commitment Termination Date and
(2) the date which is 180 days from the date of issuance of such Commercial
Letter of Credit or (y) be issued if such Commercial Letter of Credit is
otherwise unacceptable to Issuing Bank in its reasonable discretion. Subject to
the foregoing, Issuing Bank may agree that a Standby Letter of Credit will
automatically be extended for one or more successive periods not to exceed one
year each, unless Issuing Bank elects not to extend for any such additional
period; provided, Issuing Bank shall not extend any such Letter of Credit if it
has received written notice that an Event of Default has occurred and is
continuing at the time Issuing Bank must elect to allow such extension;
provided, further, in the event a Funding Default exists, Issuing Bank shall not
be required to issue any Letter of Credit unless Issuing Bank has entered into
arrangements satisfactory to it and NewPageCo to eliminate Issuing Bank’s risk
with respect to the participation in Letters of Credit of the Defaulting Lender,
including by cash collateralizing such Defaulting Lender’s Pro Rata Share of the
Letter of Credit Usage. NewPageCo shall have the right to select the Issuing
Bank for each Letter of Credit it requests.

(b) Notice of Issuance. Whenever NewPageCo desires the issuance of a Letter of
Credit, it shall deliver to Administrative Agent and Issuing Bank an Issuance
Notice no later than 12:00 p.m. (New York City time) at least three Business
Days (in the case of Standby Letters of Credit) or five Business Days (in the
case of Commercial Letters of Credit), or in each case such shorter period as
may be agreed to by Issuing Bank in any particular instance, in advance of the
proposed date of issuance. Upon satisfaction or waiver of the conditions set
forth in Section 3.2, Issuing Bank shall issue the requested Letter of Credit
only in accordance with

 

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Issuing Bank’s standard operating procedures. Upon the issuance of any Letter of
Credit or amendment or modification to a Letter of Credit, Issuing Bank shall
promptly notify each Lender of such issuance, which notice shall be accompanied
by a copy of such Letter of Credit or amendment or modification to a Letter of
Credit and the amount of such Lender’s respective participation in such Letter
of Credit pursuant to Section 2.4(e). In the event there shall be any conflict
between the terms contained in any Issuance Notice and this Agreement, the terms
of this Agreement shall govern. Unless the Issuing Bank has received notice from
the Administrative Agent to the contrary, the Issuing Bank shall be entitled to
rely on any certification from NewPageCo contained in any Issuance Notice to the
effect that the conditions precedent to the issuance of any requested Letter of
Credit have been satisfied in full, including, without limitation, that after
giving effect to such issuance, the Total Utilization of Revolving Commitments
would not exceed the lesser of (1) the Revolving Commitments then in effect and
(2) the Borrowing Base then in effect.

(c) Responsibility of Issuing Bank With Respect to Requests for Drawings and
Payments. In determining whether to honor any drawing under any Letter of Credit
by the beneficiary thereof, Issuing Bank shall be responsible only to examine
the documents delivered under such Letter of Credit with reasonable care so as
to ascertain whether they appear on their face to be in accordance with the
terms and conditions of such Letter of Credit. As between NewPageCo and Issuing
Bank, NewPageCo assumes all risks of the acts and omissions of, or misuse of the
Letters of Credit issued by Issuing Bank, by the respective beneficiaries of
such Letters of Credit. In furtherance and not in limitation of the foregoing,
Issuing Bank shall not be responsible for: (i) the form, validity, sufficiency,
accuracy, genuineness or legal effect of any document submitted by any party in
connection with the application for and issuance of any such Letter of Credit,
even if it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (ii) the validity or sufficiency
of any instrument transferring or assigning or purporting to transfer or assign
any such 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; (iii) failure of the beneficiary of any such Letter of Credit to
comply fully (so long as such beneficiary has complied substantially) with any
conditions required in order to draw upon such Letter of Credit; (iv) errors,
omissions, interruptions or delays in transmission or delivery of any messages,
by mail, cable, telegraph, telex or otherwise, whether or not they be in cipher;
(v) errors in interpretation of technical terms; (vi) any loss or delay in the
transmission or otherwise of any document required in order to make a drawing
under any such Letter of Credit or of the proceeds thereof; (vii) the
misapplication by the beneficiary of any such Letter of Credit of the proceeds
of any drawing under such Letter of Credit; or (viii) any consequences arising
from causes beyond the control of Issuing Bank, including any Governmental Acts;
none of the above shall affect or impair, or prevent the vesting of, any of
Issuing Bank’s rights or powers hereunder. Without limiting the foregoing and in
furtherance thereof, any action taken or omitted by Issuing Bank under or in
connection with the Letters of Credit or any documents and

 

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certificates delivered thereunder, if taken or omitted in good faith, shall not
give rise to any liability on the part of Issuing Bank to NewPageCo.
Notwithstanding anything to the contrary contained in this Section 2.4(c),
NewPageCo shall retain any and all rights it may have against Issuing Bank for
any liability arising solely out of the gross negligence, willful misconduct or
bad faith of Issuing Bank.

(d) Reimbursement by NewPageCo of Amounts Drawn or Paid Under Letters of Credit.
In the event Issuing Bank has determined to honor a drawing under a Letter of
Credit, it shall immediately notify NewPageCo and Administrative Agent, and
NewPageCo shall reimburse Issuing Bank on the date on which such drawing is
honored (the “Reimbursement Date”) in an amount in Dollars and in same day funds
equal to the amount of such honored drawing; provided, anything contained herein
to the contrary notwithstanding, (i) unless NewPageCo shall have notified
Administrative Agent and Issuing Bank prior to 10:00 a.m. (New York City time)
on the date such drawing is honored that NewPageCo intends to reimburse Issuing
Bank for the amount of such honored drawing with funds other than the proceeds
of Revolving Loans, NewPageCo shall be deemed to have given a timely Funding
Notice to Administrative Agent requesting Lenders to make Revolving Loans that
are Base Rate Loans on the Reimbursement Date in an amount in Dollars equal to
the amount of such honored drawing, and (ii) subject to satisfaction or waiver
of the conditions specified in Section 3.2, Lenders shall, on the Reimbursement
Date, make Revolving Loans that are Base Rate Loans in the amount of such
honored drawing, the proceeds of which shall be applied directly by
Administrative Agent to reimburse Issuing Bank for the amount of such honored
drawing; and provided further, if for any reason proceeds of Revolving Loans are
not received by Issuing Bank on the Reimbursement Date in an amount equal to the
amount of such honored drawing, NewPageCo shall reimburse Issuing Bank, on
demand, in an amount in same day funds equal to the excess of the amount of such
honored drawing over the aggregate amount of such Revolving Loans, if any, which
are so received. Nothing in this Section 2.4(d) shall be deemed to relieve any
Lender from its obligation to make Revolving Loans on the terms and conditions
set forth herein, and NewPageCo shall retain any and all rights it may have
against any Lender resulting from the failure of such Lender to make such
Revolving Loans under this Section 2.4(d).

(e) Lenders’ Purchase of Participations in Letters of Credit. Immediately upon
the issuance of each Letter of Credit, each Lender having a Revolving Commitment
shall be deemed to have purchased, and hereby agrees to irrevocably purchase,
from Issuing Bank a participation in such Letter of Credit and any drawings
honored thereunder in an amount equal to such Lender’s Pro Rata Share (with
respect to the Revolving Commitments) of the maximum amount which is or at any
time may become available to be drawn thereunder. In the event that NewPageCo
shall fail for any reason to reimburse Issuing Bank as provided in
Section 2.4(d), Issuing Bank shall promptly notify each Lender of the
unreimbursed amount of such honored drawing and of such Lender’s respective
participation therein based on such Lender’s Pro Rata

 

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Share of the Revolving Commitments. Each Lender shall make available to Issuing
Bank an amount equal to its respective participation, in Dollars and in same day
funds, at the office of Issuing Bank specified in such notice, not later than
12:00 p.m. (New York City time) on the first business day (under the laws of the
jurisdiction in which such office of Issuing Bank is located) after the date
notified by Issuing Bank. In the event that any Lender fails to make available
to Issuing Bank on such business day the amount of such Lender’s participation
in such Letter of Credit as provided in this Section 2.4(e), Issuing Bank shall
be entitled to recover such amount on demand from such Lender together with
interest thereon for three Business Days at the rate customarily used by Issuing
Bank for the correction of errors among banks and thereafter at the Base Rate.
Nothing in this Section 2.4(e) shall be deemed to prejudice the right of any
Lender to recover from Issuing Bank any amounts made available by such Lender to
Issuing Bank pursuant to this Section in the event that it is determined that
the payment with respect to a Letter of Credit in respect of which payment was
made by such Lender constituted gross negligence, willful misconduct or bad
faith on the part of Issuing Bank. In the event Issuing Bank shall have been
reimbursed by other Lenders pursuant to this Section 2.4(e) for all or any
portion of any drawing honored by Issuing Bank under a Letter of Credit, such
Issuing Bank shall distribute to each Lender which has paid all amounts payable
by it under this Section 2.4(e) with respect to such honored drawing such
Lender’s Pro Rata Share of all payments subsequently received by Issuing Bank
from NewPageCo in reimbursement of such honored drawing when such payments are
received. Any such distribution shall be made to a Lender at its primary address
set forth below its name on Appendix B or at such other address as such Lender
may request.

(f) Obligations Absolute. The obligation of NewPageCo to reimburse Issuing Bank
for drawings honored under the Letters of Credit issued by it and to repay any
Revolving Loans made by Lenders pursuant to Section 2.4(d) and the obligations
of Lenders under Section 2.4(e) shall be unconditional and irrevocable and shall
be paid strictly in accordance with the terms hereof under all circumstances
including any of the following circumstances: (i) any lack of validity or
enforceability of any Letter of Credit; (ii) the existence of any claim,
set-off, defense or other right which NewPageCo or any Lender may have at any
time against a beneficiary or any transferee of any Letter of Credit (or any
Persons for whom any such transferee may be acting), Issuing Bank, Lender or any
other Person or, in the case of a Lender, against NewPageCo, whether in
connection herewith, the transactions contemplated herein or any unrelated
transaction (including any underlying transaction between NewPageCo or one of
its Subsidiaries and the beneficiary for which any Letter of Credit was
procured); (iii) any draft or other document presented under any Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any respect
or any statement therein being untrue or inaccurate in any respect; (iv) payment
by Issuing Bank under any Letter of Credit against presentation of a draft or
other document which does not substantially comply with the terms of such Letter
of Credit; (v) any adverse change in the business, operations, properties,
assets, condition (financial or otherwise) or prospects of NewPageHoldCo or any
of its Subsidiaries; (vi) any breach hereof or of any other

 

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Credit Document by any party thereto; (vii) any other circumstance or happening
whatsoever, whether or not similar to any of the foregoing; or (viii) the fact
that an Event of Default or a Default shall have occurred and be continuing;
provided, with respect to such obligations to such Issuing Bank, that payment by
Issuing Bank under the applicable Letter of Credit shall not have constituted
gross negligence, willful misconduct or bad faith of Issuing Bank under the
circumstances in question.

(g) Indemnification. Without duplication of any obligation of NewPageCo under
Section 11.2 or 11.3, in addition to amounts payable as provided herein,
NewPageCo hereby agrees to protect, indemnify, pay and save harmless Issuing
Bank from and against any and all claims, demands, liabilities, damages, losses,
costs, charges and expenses (including reasonable fees, expenses and
disbursements of counsel and allocated costs of internal counsel) which Issuing
Bank may incur or be subject to as a consequence, direct or indirect, of (i) the
issuance of any Letter of Credit by Issuing Bank, other than as a result of
(1) the gross negligence, willful misconduct or bad faith of Issuing Bank or
(2) the wrongful dishonor by Issuing Bank of a proper demand for payment made
under any Letter of Credit issued by it, or (ii) the failure of Issuing Bank to
honor a drawing under any such Letter of Credit as a result of any Governmental
Act.

2.5. Pro Rata Shares; Availability of Funds

(a) Pro Rata Shares. All Loans shall be made, and all participations purchased,
by Lenders simultaneously and proportionately to their respective Pro Rata
Shares, it being understood that no Lender shall be responsible for any default
by any other Lender in such other Lender’s obligation to make a Loan requested
hereunder or purchase a participation required hereby nor shall any Revolving
Commitment of any Lender be increased or decreased as a result of a default by
any other Lender in such other Lender’s obligation to make a Loan requested
hereunder or purchase a participation required hereby.

(b) Availability of Funds. Unless Administrative Agent shall have been notified
by any Lender prior to the applicable Credit Date that such Lender does not
intend to make available to Administrative Agent the amount of such Lender’s
Loan requested on such Credit Date, Administrative Agent may assume that such
Lender has made such amount available to Administrative Agent on such Credit
Date and Administrative Agent may, in its sole discretion, but shall not be
obligated to, make available to NewPageCo a corresponding amount on such Credit
Date. If such corresponding amount is not in fact made available to
Administrative Agent by such Lender, Administrative Agent shall be entitled to
recover such corresponding amount on demand from such Lender together with
interest thereon, for each day from such Credit Date until the date such amount
is paid to Administrative Agent, at the customary rate set by Administrative
Agent for the correction of errors among banks for three Business Days and
thereafter at the Base Rate. If such Lender does not pay such corresponding
amount forthwith

 

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upon Administrative Agent’s demand therefor, Administrative Agent shall promptly
notify NewPageCo and NewPageCo shall immediately pay such corresponding amount
to Administrative Agent together with interest thereon, for each day from such
Credit Date until the date such amount is paid to Administrative Agent, at the
rate payable hereunder for Base Rate Loans. Nothing in this Section 2.5(b) shall
be deemed to relieve any Lender from its obligation to fulfill its Revolving
Commitments hereunder or to prejudice any rights that NewPageCo may have against
any Lender as a result of any default by such Lender hereunder.

2.6. Use of Proceeds. The proceeds of the Revolving Commitments shall be applied
by NewPageCo (i) to fund the Paper Business Acquisition (including refinancing
or retiring on the Closing Date any existing debt of NewPageCo and its
Subsidiaries, (ii) to pay related transaction costs, fees, commissions and
expenses, (iii) for working capital and general corporate purposes of
NewPageHoldCo and its Subsidiaries, including Permitted Acquisitions and
permitted Capital Expenditures, and (iv) to fund the Commodities Hedge
Agreement. No portion of the proceeds of any Credit Extension shall be used in
any manner that causes or might cause such Credit Extension or the application
of such proceeds to violate Regulation T, Regulation U or Regulation X of the
Board of Governors of the Federal Reserve System or any other regulation thereof
or to violate the Exchange Act.

2.7. Evidence of Debt; Register; Lenders’ Books and Records; Notes.

(a) Lenders’ Evidence of Debt. Each Lender shall maintain on its internal
records an account or accounts evidencing the Obligations of NewPageCo to such
Lender, including the amounts of the Loans made by it and each repayment and
prepayment in respect thereof. Any such recordation shall be conclusive and
binding on NewPageCo, absent manifest error; provided, that the failure to make
any such recordation, or any error in such recordation, shall not affect any
Lender’s Revolving Commitments or NewPageCo’s Obligations in respect of any
applicable Loans; and provided further, in the event of any inconsistency
between the Register and any Lender’s records, the recordations in the Register
shall govern.

(b) Register. Administrative Agent (or its agent or sub-agent appointed by it)
shall maintain at the Principal Office a register for the recordation of the
names and addresses of Lenders and the Revolving Commitments and Loans of each
Lender from time to time (the “Register”). The Register shall be available for
inspection by NewPageCo, any Lender or any Issuing Bank (with respect to any
entry relating to such Lender’s or Issuing Bank’s Loans) at any reasonable time
and from time to time upon reasonable prior notice. Administrative Agent shall
record, or shall cause to be recorded, in the Register the Revolving Commitments
and the Loans in accordance with the provisions of Section 11.6, and each
repayment or prepayment in respect of the principal amount of the Loans, and any
such recordation shall be conclusive and binding on NewPageCo and each Lender,
absent manifest error; provided, failure to make any such recordation, or any
error in such recordation, shall not affect any Lender’s Revolving

 

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Commitments or NewPageCo’s Obligations in respect of any Loan. NewPageCo hereby
designates GSCP to serve as NewPageCo’s agent solely for purposes of maintaining
the Register as provided in this Section 2.7, and NewPageCo hereby agrees that,
to the extent GSCP serves in such capacity, GSCP and its officers, directors,
employees, agents, sub-agents and Affiliates shall constitute “Indemnitees.”

(c) Notes. If so requested by any Lender by written notice to NewPageCo (with a
copy to Administrative Agent) at least two Business Days prior to the Closing
Date, or at any time thereafter, NewPageCo shall execute and deliver to such
Lender (and/or, if applicable and if so specified in such notice, to any Person
who is an assignee of such Lender pursuant to Section 11.6) on the Closing Date
(or, if such notice is delivered after the Closing Date, promptly after
NewPageCo’s receipt of such notice) a Note or Notes to evidence such Lender’s
Revolving Loan or Swing Line Loan, as the case may be.

(d) All funds held by NewPageCo or any other Credit Party (except as permitted
by Section 9.1(e)(iii)) shall be deposited in one or more dominion and control
bank or investment accounts, in form and substance reasonably satisfactory to
Collateral Agent, and, following the occurrence and during the continuance of a
Cash Dominion Trigger Event at the option of the Administrative Agent shall be
applied on a daily basis to the repayment of the Swing Line Loans and,
thereafter, to any Revolving Loans which become due, without a reduction in the
Revolving Commitments. All funds held by a Borrowing Base Guarantor (except as
permitted by Section 9.1(e)(iii)) shall be deposited in one or more dominion and
control bank or investment accounts, in form and substance reasonably
satisfactory to Collateral Agent, and, following the occurrence and during the
continuance of a Cash Dominion Trigger Event, at the option of the
Administrative Agent, shall be applied on a daily basis to the repayment of the
Swing Line Loans and, thereafter, to any Revolving Loans which become due,
without a reduction in the Revolving Commitments (with a corresponding
adjustment to the Borrowing Base Guarantor Intercompany Loan Account).

2.8. Interest on Loans.

(a) Except as otherwise set forth herein, each Loan shall bear interest on the
unpaid principal amount thereof from the date made through repayment (whether by
acceleration or otherwise) thereof as follows:

(i) in the case of Revolving Loans,

(1) if a Base Rate Loan, at the Base Rate plus the Applicable Margin; or

(2) if a Eurodollar Rate Loan, at the Adjusted Eurodollar Rate plus the
Applicable Margin; and

 

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(ii) in the case of Swing Line Loans, at the Base Rate plus the Applicable
Margin.

(b) The basis for determining the rate of interest with respect to any Loan
(except a Swing Line Loan which can be made and maintained as Base Rate Loans
only), and the Interest Period with respect to any Eurodollar Rate Loan, shall
be selected by NewPageCo and notified to Administrative Agent and Lenders
pursuant to the applicable Funding Notice or Conversion/Continuation Notice, as
the case may be. If on any day a Loan is outstanding with respect to which a
Funding Notice or Conversion/Continuation Notice has not been delivered to
Administrative Agent in accordance with the terms hereof specifying the
applicable basis for determining the rate of interest, then for that day such
Loan shall be a Base Rate Loan.

(c) In connection with Eurodollar Rate Loans there shall be no more than ten
(10) Interest Periods outstanding at any time. In the event NewPageCo fails to
specify between a Base Rate Loan or a Eurodollar Rate Loan in the applicable
Funding Notice or Conversion/Continuation Notice, such Loan (if outstanding as a
Eurodollar Rate Loan) will be automatically converted into a Base Rate Loan on
the last day of the then-current Interest Period for such Loan (or if
outstanding as a Base Rate Loan will remain as, or (if not then outstanding)
will be made as, a Base Rate Loan). In the event NewPageCo fails to specify an
Interest Period for any Eurodollar Rate Loan in the applicable Funding Notice or
Conversion/Continuation Notice, NewPageCo shall be deemed to have selected an
Interest Period of one month. As soon as practicable after 10:00 a.m. (New York
City time) on each Interest Rate Determination Date, Administrative Agent shall
determine (which determination shall, absent manifest error, be final,
conclusive and binding upon all parties) the interest rate that shall apply to
the Eurodollar Rate Loans for which an interest rate is then being determined
for the applicable Interest Period and shall promptly give notice thereof (in
writing or by telephone confirmed in writing) to NewPageCo and each Lender.

(d) Interest payable pursuant to Section 2.8(a) shall be computed (i) in the
case of Base Rate Loans on the basis of a 365-day or 366-day year, as the case
may be, and (ii) in the case of Eurodollar Rate Loans, on the basis of a 360-day
year, in each case for the actual number of days elapsed in the period during
which it accrues. In computing interest on any Loan, the date of the making of
such Loan or the first day of an Interest Period applicable to such Loan or,
with respect to a Base Rate Loan being converted from a Eurodollar Rate Loan,
the date of conversion of such Eurodollar Rate Loan to such Base Rate Loan, as
the case may be, shall be included, and the date of payment of such Loan or the
expiration date of an Interest Period applicable to such Loan or, with respect
to a Base Rate Loan being converted to a Eurodollar Rate Loan, the date of
conversion of such Base Rate Loan to such Eurodollar Rate Loan, as the case may
be, shall be excluded; provided, if a Loan is repaid on the same day on which it
is made, one day’s interest shall be paid on that Loan.

 

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(e) Except as otherwise set forth herein, interest on each Loan (i) shall accrue
on a daily basis and shall be payable in arrears on each Interest Payment Date
with respect to interest accrued on and to each such payment date; (ii) shall
accrue on a daily basis and shall be payable in arrears upon any prepayment of
that Loan, whether voluntary or mandatory, to the extent accrued on the amount
being prepaid; and (iii) shall accrue on a daily basis and shall be payable in
arrears at maturity of the Loans, including final maturity of the Loans;
provided, however, with respect to any voluntary prepayment of a Base Rate Loan,
accrued interest shall instead be payable on the applicable Interest Payment
Date.

(f) NewPageCo agrees to pay to Issuing Bank, with respect to drawings honored
under any Letter of Credit, interest on the amount paid by Issuing Bank in
respect of each such honored drawing from the date such drawing is honored to
but excluding the date such amount is reimbursed by or on behalf of NewPageCo at
a rate equal to (i) for the period from the date such drawing is honored to but
excluding the applicable Reimbursement Date, the rate of interest otherwise
payable hereunder with respect to Revolving Loans that are Base Rate Loans, and
(ii) thereafter, a rate which is 2% per annum in excess of the rate of interest
otherwise payable hereunder with respect to Revolving Loans that are Base Rate
Loans.

(g) Interest payable pursuant to Section 2.8(f) shall be computed on the basis
of a 365/366-day year for the actual number of days elapsed in the period during
which it accrues, and shall be payable on demand or, if no demand is made, on
the date on which the related drawing under a Letter of Credit is reimbursed in
full. Promptly upon receipt by Issuing Bank of any payment of interest pursuant
to Section 2.8(f), Issuing Bank shall distribute to each Lender, out of the
interest received by Issuing Bank in respect of the period from the date such
drawing is honored to but excluding the date on which Issuing Bank is reimbursed
for the amount of such drawing (including any such reimbursement out of the
proceeds of any Revolving Loans), the amount that such Lender would have been
entitled to receive in respect of the letter of credit fee that would have been
payable in respect of such Letter of Credit for such period if no drawing had
been honored under such Letter of Credit. In the event Issuing Bank shall have
been reimbursed by Lenders for all or any portion of such honored drawing,
Issuing Bank shall distribute to each Lender which has paid all amounts payable
by it under Section 2.4(e) with respect to such honored drawing such Lender’s
Pro Rata Share of any interest received by Issuing Bank in respect of that
portion of such honored drawing so reimbursed by Lenders for the period from the
date on which Issuing Bank was so reimbursed by Lenders to but excluding the
date on which such portion of such honored drawing is reimbursed by NewPageCo.

 

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2.9. Conversion/Continuation

(a) Subject to Section 2.18 and so long as no Default or Event of Default shall
have occurred and then be continuing, NewPageCo shall have the option:

(i) to convert at any time all or any part of any Revolving Loan equal to
$5,000,000 and integral multiples of $1,000,000 in excess of that amount from
one Type of Loan to another Type of Loan; provided, a Eurodollar Rate Loan may
only be converted on the expiration of the Interest Period applicable to such
Eurodollar Rate Loan unless NewPageCo shall pay all amounts due under
Section 2.18 in connection with any such conversion; or

(ii) upon the expiration of any Interest Period applicable to any Eurodollar
Rate Loan, to continue all or any portion of such Loan equal to $5,000,000 and
integral multiples of $1,000,000 in excess of that amount as a Eurodollar Rate
Loan.

(b) NewPageCo shall deliver a Conversion/Continuation Notice to Administrative
Agent no later than 10:00 a.m. (New York City time) at least one Business Day in
advance of the proposed conversion date (in the case of a conversion to a Base
Rate Loan) and at least three Business Days in advance of the proposed
conversion/continuation date (in the case of a conversion to, or a continuation
of, a Eurodollar Rate Loan). Except as otherwise provided herein, a
Conversion/Continuation Notice for conversion to, or continuation of, any
Eurodollar Rate Loans (or telephonic notice in lieu thereof) shall be
irrevocable on and after the related Interest Rate Determination Date, and
NewPageCo shall be bound to effect a conversion or continuation in accordance
therewith.

2.10. Default Interest. Upon the occurrence and during the continuance of an
Event of Default, the principal amount of all Loans outstanding and, to the
extent permitted by applicable law, any interest payments on the Loans or any
fees or other amounts owed hereunder and not paid when due, shall thereafter
bear interest (including post-petition interest in any proceeding under the
Bankruptcy Code or other applicable bankruptcy laws) payable on demand at a rate
that is 2% per annum in excess of the interest rate otherwise payable hereunder
with respect to the applicable Loans (or, in the case of any such fees and other
amounts, at a rate which is 2% per annum in excess of the interest rate
otherwise payable hereunder for Base Rate Loans); provided, in the case of
Eurodollar Rate Loans, upon the expiration of the Interest Period in effect at
the time any such increase in interest rate is effective such Eurodollar Rate
Loans shall thereupon become Base Rate Loans and shall thereafter bear interest
payable upon demand at a rate which is 2% per annum in excess of the interest
rate otherwise payable hereunder for Base Rate Loans. Payment or acceptance of
the increased rates of interest provided for in this Section 2.10 is not a
permitted alternative to timely payment and shall not constitute a waiver of any
Event of Default or otherwise prejudice or limit any rights or remedies of
Administrative Agent or any Lender.

 

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2.11. Fees.

(a) NewPageCo agrees to pay to Lenders having Revolving Exposure:

(i) commitment fees equal to (1) the average of the daily difference between
(a) the Revolving Commitments, and (b) the Total Utilization of Revolving
Commitments, times (2) 0.375% per annum; and

(ii) letter of credit fees equal to (1) the Applicable Margin for Revolving
Loans that are Eurodollar Rate Loans, times (2) the average aggregate daily
maximum amount available to be drawn under all such Letters of Credit
(regardless of whether any conditions for drawing could then be met and
determined as of the close of business on any date of determination).

All fees referred to in this Section 2.11(a) shall be paid to Administrative
Agent at its Principal Office and upon receipt, Administrative Agent shall
promptly distribute to each Lender its Pro Rata Share thereof.

(b) NewPageCo agrees to pay directly to Issuing Bank, for its own account, the
following fees:

(i) a fronting fee equal to 0.250%, per annum, times the average aggregate daily
maximum amount available to be drawn under all Letters of Credit (determined as
of the close of business on any date of determination); and

(ii) such documentary and processing charges for any issuance, amendment,
transfer or payment of a Letter of Credit as are in accordance with Issuing
Bank’s standard schedule for such charges provided to NewPageCo and as in effect
at the time of such issuance, amendment, transfer or payment, as the case may
be.

(c) All fees referred to in Section 2.11(a) and 2.11(b) (i) shall be calculated
on the basis of a 360-day year and the actual number of days elapsed and shall
be payable quarterly in arrears on April 1, July 1, October 1 and January 1 of
each year during the Revolving Commitment Period, commencing on the first such
date to occur after the Closing Date, and on the Revolving Commitment
Termination Date.

In addition to any of the foregoing fees, NewPageCo agrees to pay to Agents such
other fees in the amounts and at the times separately agreed upon.

 

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2.12. [Reserved].

2.13. Voluntary Prepayments/Commitment Reductions.

(a) Voluntary Prepayments.

(i) Any time and from time to time:

with respect to Base Rate Loans, NewPageCo may prepay any such Loans without
penalty or premium on any Business Day in whole or in part, in an aggregate
minimum amount of $5,000,000 and integral multiples of $1,000,000 in excess of
that amount;

with respect to Eurodollar Rate Loans, NewPageCo may prepay any such Loans
without penalty or premium on any Business Day in whole or in part in an
aggregate minimum amount of $5,000,000 and integral multiples of $1,000,000 in
excess of that amount; and

with respect to Swing Line Loans, NewPageCo may prepay any such Loans without
penalty or premium on any Business Day in whole or in part in an aggregate
minimum amount of $1,000,000, and in integral multiples of $500,000 in excess of
that amount.

(ii) All such prepayments shall be made:

upon not less than one Business Day’s prior written or telephonic notice in the
case of Base Rate Loans;

upon not less than three Business Days’ prior written or telephonic notice in
the case of Eurodollar Rate Loans; and

upon written or telephonic notice on the date of prepayment, in the case of
Swing Line Loans; in each case given to Administrative Agent or Swing Line
Lender, as the case may be, by 12:00 noon (New York City time) on the date
required and, if given by telephone, promptly confirmed in writing to
Administrative Agent (and Administrative Agent will promptly transmit such
telephonic or original notice for Revolving Loans by telefacsimile or telephone
to each Lender) or Swing Line Lender, as the case may be. Upon the giving of any
such notice, the principal amount of the Loans specified in such notice shall
become due and payable on the prepayment date specified therein. Any such
voluntary prepayment shall be applied as specified in Section 2.15(a).

 

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(b) Voluntary Commitment Reductions.

(i) NewPageCo may, upon not less than three Business Days’ prior written or
telephonic notice confirmed in writing to Administrative Agent (which original
written or telephonic notice Administrative Agent will promptly transmit by
telefacsimile or telephone to each applicable Lender), at any time and from time
to time terminate in whole or permanently reduce in part, without premium or
penalty, the Revolving Commitments in an amount up to the amount by which the
Revolving Commitments exceed the Total Utilization of Revolving Commitments at
the time of such proposed termination or reduction; provided, any such partial
reduction of the Revolving Commitments shall be in an aggregate minimum amount
of $5,000,000 and integral multiples of $1,000,000 in excess of that amount.

NewPageCo’s notice to Administrative Agent shall designate the date (which shall
be a Business Day) of such termination or reduction and the amount of any
partial reduction, and such termination or reduction of the Revolving
Commitments shall be effective on the date specified in NewPageCo’s notice and
shall reduce the Revolving Commitment of each Lender proportionately to its Pro
Rata Share thereof.

2.14. Mandatory Prepayments. NewPageCo shall from time to time prepay first, the
Swing Line Loans, second, the Revolving Loans, third, reimbursement obligations
with respect to Letters of Credit, and fourth, to cash collateralize Letters of
Credit to the extent necessary so that the Total Utilization of Revolving
Commitments shall not at any time exceed the Revolving Commitments or the
Borrowing Base then in effect.

2.15. Application of Prepayments.

(a) Application of Voluntary Prepayments by Type of Loans. Any prepayment of any
Loan pursuant to Section 2.13(a) shall be applied as specified by NewPageCo in
the applicable notice of prepayment; provided, in the event NewPageCo fails to
specify the Loans to which any such prepayment shall be applied, such prepayment
shall be applied as follows (without reduction of the Revolving Loan
Commitments):

first, to repay outstanding Swing Line Loans to the full extent thereof; and

second, to repay outstanding Revolving Loans to the full extent thereof.

 

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(b) Application of Prepayments of Loans to Base Rate Loans and Eurodollar Rate
Loans. Any prepayment of any Loan shall be applied first to Base Rate Loans to
the full extent thereof before application to Eurodollar Rate Loans, in each
case in a manner which minimizes the amount of any payments required to be made
by NewPageCo pursuant to Section 2.18(c).

2.16. General Provisions Regarding Payments.

(a) All payments by NewPageCo of principal, interest, fees and other Credit
Agreement Obligations shall be made in Dollars in same day funds, without
defense, setoff or counterclaim, free of any restriction or condition, and
delivered to Administrative Agent not later than 12:00 noon (New York City time)
on the date due at the Principal Office designated by Administrative Agent for
the account of Lenders; for purposes of computing interest and fees, funds
received by Administrative Agent after that time on such due date shall be
deemed to have been paid by NewPageCo on the next succeeding Business Day.

(b) All payments in respect of the principal amount of any Loan (other than
voluntary prepayments of Revolving Loans) shall be accompanied by payment of
accrued interest on the principal amount being repaid or prepaid.

(c) Administrative Agent (or its agent or sub-agent appointed by it) shall
promptly distribute to each Lender at such address as such Lender shall indicate
in writing, such Lender’s applicable Pro Rata Share of all payments and
prepayments of principal and interest due hereunder, together with all other
amounts due thereto, including, without limitation, all fees payable with
respect thereto, to the extent received by Administrative Agent.

(d) Notwithstanding the foregoing provisions hereof, if any
Conversion/Continuation Notice is withdrawn as to any Affected Lender or if any
Affected Lender makes Base Rate Loans in lieu of its Pro Rata Share of any
Eurodollar Rate Loans, Administrative Agent shall give effect thereto in
apportioning payments received thereafter.

(e) Subject to the provisos set forth in the definition of “Interest Period” as
they may apply to Revolving Loans, whenever any payment to be made hereunder
with respect to any Loan shall be stated to be due on a day that is not a
Business Day, such payment shall be made on the next succeeding Business Day
and, with respect to Revolving Loans only, such extension of time shall be
included in the computation of the payment of interest hereunder or of the
Revolving Commitment fees hereunder.

(f) NewPageCo hereby authorizes Administrative Agent to charge NewPageCo’s
accounts with Administrative Agent in order to cause timely payment to be made
to Administrative Agent of all principal, interest, fees and expenses due
hereunder (subject to sufficient funds being available in its accounts for that
purpose).

 

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(g) Administrative Agent shall deem any payment by or on behalf of NewPageCo
hereunder that is not made in same day funds prior to 12:00 p.m. (New York City
time) to be a non-conforming payment. Any such payment shall not be deemed to
have been received by Administrative Agent until the later of (i) the time such
funds become available funds, and (ii) the applicable next Business Day.
Administrative Agent shall give prompt telephonic notice to NewPageCo and each
applicable Lender (confirmed in writing) if any payment is non-conforming. Any
non-conforming payment may constitute or become a Default or Event of Default in
accordance with the terms of Section 8.1(a). Interest shall continue to accrue
on any principal as to which a non-conforming payment is made until such funds
become available funds (but in no event less than the period from the date of
such payment to the next succeeding applicable Business Day) at the rate
determined pursuant to Section 2.10 from the date such amount was due and
payable until the date such amount is paid in full.

(h) If an Event of Default shall have occurred and not otherwise been waived,
and the maturity of the Credit Agreement Obligations shall have been accelerated
pursuant to Section 8.1, all payments or proceeds received by Agents hereunder
in respect of any of the Obligations, shall be applied in accordance with the
application arrangements described in Section 7.2 of the Pledge and Security
Agreement.

2.17. Ratable Sharing. Lenders hereby agree among themselves that, except as
otherwise provided in the Collateral Documents with respect to amounts realized
from the exercise of rights with respect to Liens on the Collateral, if any of
them shall, whether by voluntary payment (other than a voluntary prepayment of
Loans made and applied in accordance with the terms hereof), through the
exercise of any right of set-off or banker’s lien, by counterclaim or cross
action or by the enforcement of any right under the Credit Documents or
otherwise, or as adequate protection of a deposit treated as cash collateral
under the Bankruptcy Code, receive payment or reduction of a proportion of the
aggregate amount of principal, interest, amounts payable in respect of Letters
of Credit, fees and other amounts then due and owing to such Lender hereunder or
under the other Credit Documents (collectively, the “Aggregate Amounts Due” to
such Lender) which is greater than the proportion received by any other Lender
in respect of the Aggregate Amounts Due to such other Lender, then the Lender
receiving such proportionately greater payment shall (a) notify Administrative
Agent and each other Lender of the receipt of such payment and (b) apply a
portion of such payment to purchase participations (which it shall be deemed to
have purchased from each seller of a participation simultaneously upon the
receipt by such seller of its portion of such payment) in the Aggregate Amounts
Due to the other Lenders so that all such recoveries of Aggregate Amounts Due
shall be shared by all Lenders in proportion to the Aggregate Amounts Due to
them; provided, if all or part of such proportionately greater payment received
by such purchasing

 

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Lender is thereafter recovered from such Lender upon the bankruptcy or
reorganization of NewPageCo or otherwise, those purchases shall be rescinded and
the purchase prices paid for such participations shall be returned to such
purchasing Lender ratably to the extent of such recovery, but without interest.
NewPageCo expressly consents to the foregoing arrangement and agrees that, to
the extent permitted by law, any holder of a participation so purchased may
exercise any and all rights of banker’s lien, set-off or counterclaim with
respect to any and all monies owing by NewPageCo to that holder with respect
thereto as fully as if that holder were owed the amount of the participation
held by that holder.

2.18. Making or Maintaining Eurodollar Rate Loans.

(a) Inability to Determine Applicable Interest Rate. In the event that
Administrative Agent shall have determined (which determination shall, absent
manifest error, be final and conclusive and binding upon all parties hereto), on
any Interest Rate Determination Date with respect to any Eurodollar Rate Loans,
that by reason of circumstances affecting the London interbank market adequate
and fair means do not exist for ascertaining the interest rate applicable to
such Loans on the basis provided for in the definition of Adjusted Eurodollar
Rate, Administrative Agent shall on such date give notice (by telefacsimile or
by telephone confirmed in writing) to NewPageCo and each Lender of such
determination, whereupon (i) no Loans may be made as, or converted to,
Eurodollar Rate Loans until such time as Administrative Agent notifies NewPageCo
and Lenders that the circumstances giving rise to such notice no longer exist,
and (ii) any Funding Notice or Conversion/Continuation Notice given by NewPageCo
with respect to the Loans in respect of which such determination was made shall
be deemed to be rescinded by NewPageCo.

(b) Illegality or Impracticability of Eurodollar Rate Loans. In the event that
on any date any Lender shall have determined (which determination shall, absent
manifest error, be final and conclusive and binding upon all parties hereto but
shall be made only after consultation with NewPageCo and Administrative Agent)
that the making, maintaining or continuation of its Eurodollar Rate Loans
(i) has become unlawful as a result of compliance by such Lender in good faith
with any law, treaty, governmental rule, regulation, guideline or order (or
would conflict with any such treaty, governmental rule, regulation, guideline or
order not having the force of law even though the failure to comply therewith
could not be unlawful), or (ii) has become impracticable, as a result of
contingencies occurring after the date hereof which materially and adversely
affect the London interbank market or the position of such Lender in that
market, then, and in any such event, such Lender shall be an “Affected Lender”
and it shall on that day give notice (by telefacsimile or by telephone confirmed
in writing) to NewPageCo and Administrative Agent of such determination (which
notice Administrative Agent shall promptly transmit to each other Lender).
Thereafter (1) the obligation of the Affected Lender to make Loans as, or to
convert Loans to, Eurodollar Rate Loans shall be suspended until such notice
shall be withdrawn by the Affected Lender, (2) to the extent such determination
by the Affected Lender relates to a

 

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Eurodollar Rate Loan then being requested by NewPageCo pursuant to a Funding
Notice or a Conversion/Continuation Notice, the Affected Lender shall make such
Loan as (or continue such Loan as or convert such Loan to, as the case may be) a
Base Rate Loan, (3) the Affected Lender’s obligation to maintain its outstanding
Eurodollar Rate Loans (the “Affected Loans”) shall be terminated at the earlier
to occur of the expiration of the Interest Period then in effect with respect to
the Affected Loans or when required by law, and (4) the Affected Loans shall
automatically convert into Base Rate Loans on the date of such termination.
Notwithstanding the foregoing, to the extent a determination by an Affected
Lender as described above relates to a Eurodollar Rate Loan then being requested
by NewPageCo pursuant to a Funding Notice or a Conversion/Continuation Notice,
NewPageCo shall have the option, subject to the provisions of Section 2.18(c),
to rescind such Funding Notice or Conversion/Continuation Notice as to all
Lenders by giving notice (by telefacsimile or by telephone confirmed in writing)
to Administrative Agent of such rescission on the date on which the Affected
Lender gives notice of its determination as described above (which notice of
rescission Administrative Agent shall promptly transmit to each other Lender).
Except as provided in the immediately preceding sentence, nothing in this
Section 2.18(b) shall affect the obligation of any Lender other than an Affected
Lender to make or maintain Loans as, or to convert Loans to, Eurodollar Rate
Loans in accordance with the terms hereof.

(c) Compensation for Breakage or Non-Commencement of Interest Periods. NewPageCo
shall compensate each Lender, upon written request by such Lender (which request
shall set forth the basis for requesting such amounts), for all reasonable
losses, expenses and liabilities (including any interest paid by such Lender to
Lenders of funds borrowed by it to make or carry its Eurodollar Rate Loans and
any loss, expense or liability sustained by such Lender in connection with the
liquidation or re-employment of such funds but excluding loss of anticipated
profits) which such Lender may sustain: (i) if for any reason (other than a
default by such Lender) a borrowing of any Eurodollar Rate Loan does not occur
on a date specified therefor in a Funding Notice or a telephonic request for
borrowing, or a conversion to or continuation of any Eurodollar Rate Loan does
not occur on a date specified therefor in a Conversion/Continuation Notice or a
telephonic request for conversion or continuation; (ii) if any prepayment or
other principal payment of, or any conversion of, any of its Eurodollar Rate
Loans occurs on a date prior to the last day of an Interest Period applicable to
that Loan; or (iii) if any prepayment of any of its Eurodollar Rate Loans is not
made on any date specified in a notice of prepayment given by NewPageCo.

(d) Booking of Eurodollar Rate Loans. Subject to Section 2.21, any Lender may
make, carry or transfer Eurodollar Rate Loans at, to, or for the account of any
of its branch offices or the office of an Affiliate of such Lender.

(e) Assumptions Concerning Funding of Eurodollar Rate Loans. Calculation of all
amounts payable to a Lender under this Section 2.18 and under Section 2.19 shall
be made as

 

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though such Lender had actually funded each of its relevant Eurodollar Rate
Loans through the purchase of a Eurodollar deposit bearing interest at the rate
obtained pursuant to clause (i) of the definition of Adjusted Eurodollar Rate in
an amount equal to the amount of such Eurodollar Rate Loan and having a maturity
comparable to the relevant Interest Period and through the transfer of such
Eurodollar deposit from an offshore office of such Lender to a domestic office
of such Lender in the United States of America; provided, however, each Lender
may fund each of its Eurodollar Rate Loans in any manner it sees fit and the
foregoing assumptions shall be utilized only for the purposes of calculating
amounts payable under this Section 2.18 and under Section 2.19.

2.19. Increased Costs; Capital Adequacy.

(a) Compensation For Increased Costs and Taxes. Subject to the provisions of
Section 2.20 (which shall be controlling with respect to the matters covered
thereby), in the event that any Lender (which term shall include Issuing Bank
for purposes of this Section 2.19(a)) shall determine (which determination
shall, absent manifest error, be final and conclusive and binding upon all
parties hereto) that any law, treaty or governmental rule, regulation or order,
or any change therein or in the interpretation, administration or application
thereof (including the introduction of any new law, treaty or governmental rule,
regulation or order), or any determination of a court or governmental authority,
in each case that becomes effective after the date hereof, or compliance by such
Lender with any guideline, request or directive issued or made after the date
hereof by any central bank or other governmental or quasi-governmental authority
(whether or not having the force of law): (i) subjects such Lender (or its
applicable lending office) to any additional Tax (other than any Tax covered by
Section 2.20, regardless of whether any Credit Party is required to indemnify or
pay any additional amount in respect of such Tax) with respect to this Agreement
or any of the other Credit Documents or any of its obligations hereunder or
thereunder or any payments to such Lender (or its applicable lending office) of
principal, interest, fees or any other amount payable hereunder; (ii) imposes,
modifies or holds applicable any reserve (including any marginal, emergency,
supplemental, special or other reserve), special deposit, compulsory loan, FDIC
insurance or similar requirement against assets held by, or deposits or other
liabilities in or for the account of, or advances or loans by, or other credit
extended by, or any other acquisition of funds by, any office of such Lender
(other than any such reserve or other requirements with respect to Eurodollar
Rate Loans that are reflected in the definition of Adjusted Eurodollar Rate); or
(iii) imposes any other condition (other than with respect to a Tax matter) on
or affecting such Lender (or its applicable lending office) or its obligations
hereunder or the London interbank market; and the result of any of the foregoing
is to increase the cost to such Lender of agreeing to make, making or
maintaining Loans hereunder or to reduce any amount received or receivable by
such Lender (or its applicable lending office) with respect thereto; then, in
any such case, NewPageCo shall promptly pay to such Lender, upon receipt of the
statement referred to in the next sentence, such

 

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additional amount or amounts (in the form of an increased rate of, or a
different method of calculating, interest or otherwise as such Lender in its
sole discretion shall determine) as may be necessary to compensate such Lender
for any such increased cost or reduction in amounts received or receivable
hereunder. Such Lender shall deliver to NewPageCo (with a copy to Administrative
Agent) a written statement, setting forth in reasonable detail the basis for
calculating the additional amounts owed to such Lender under this
Section 2.19(a), which statement shall be conclusive and binding upon all
parties hereto absent manifest error.

(b) Capital Adequacy Adjustment. In the event that any Lender (which term shall
include Issuing Bank for purposes of this Section 2.19(b)) shall have determined
that the adoption, effectiveness, phase-in or applicability after the Closing
Date of any law, rule or regulation (or any provision thereof) regarding capital
adequacy, or any change therein or in the interpretation or administration
thereof by any Governmental Authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by any Lender
(or its applicable lending office) with any guideline, request or directive
regarding capital adequacy (whether or not having the force of law) of any such
Governmental Authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on the capital of such Lender or any
corporation controlling such Lender as a consequence of, or with reference to,
such Lender’s Loans, Revolving Commitments or Letters of Credit or
participations therein or other obligations hereunder with respect to the Loans
or the Letters of Credit to a level below that which such Lender or such
controlling corporation could have achieved but for such adoption,
effectiveness, phase-in, applicability, change or compliance (taking into
consideration the policies of such Lender or such controlling corporation with
regard to capital adequacy), then from time to time, within five Business Days
after receipt by NewPageCo from such Lender of the statement referred to in the
next sentence, NewPageCo shall pay to such Lender such additional amount or
amounts as will compensate such Lender or such controlling corporation on an
after-tax basis for such reduction. No Lender shall be entitled to request any
payment pursuant to Section 2.19(b) unless such Lender is generally demanding
payment under comparable provisions of its agreements with similarly situated
borrowers. Such Lender shall deliver to NewPageCo (with a copy to Administrative
Agent) a written statement, setting forth in reasonable detail the basis for
calculating the additional amounts owed to Lender under this Section 2.19(b),
which statement shall be conclusive and binding upon all parties hereto absent
manifest error.

(c) Notwithstanding anything to the contrary contained herein, NewPageCo will
not be required to compensate any Lender (which term shall include the Issuing
Bank for purposes of this Section 2.19(c)) for any such increased costs or
reduced return incurred by such Lender more than six (6) months prior to such
Lender’s written request to NewPageCo for such compensation.

 

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2.20. Taxes; Withholding, etc.

(a) Payments to Be Free and Clear. All sums payable by or on behalf of any
Credit Party hereunder and under the other Credit Documents shall (except to the
extent required by law) be paid free and clear of, and without any deduction or
withholding on account of, any Tax (other than a Tax on the overall net income
of any Lender or Agent) imposed, levied, collected, withheld or assessed by or
within the United States of America or any political subdivision in or of the
United States of America or any other jurisdiction from which a payment is made
by or on behalf of any Credit Party or by any federation or organization of
which the United States of America or any such jurisdiction is a member at the
time of payment.

(b) Withholding of Taxes. If any Credit Party or any other Person is required by
law to make any deduction or withholding on account of any such Tax from any sum
paid or payable by any Credit Party to Administrative Agent or any Lender (which
term shall include Issuing Bank for purposes of this Section 2.20(b)) under any
of the Credit Documents: (i) NewPageCo shall notify Administrative Agent of any
such requirement or any change in any such requirement as soon as NewPageCo
becomes aware of it; (ii) NewPageCo shall pay any such Tax before the date on
which penalties attach thereto, such payment to be made (if the liability to pay
is imposed on any Credit Party) for its own account or (if that liability is
imposed on Administrative Agent or such Lender, as the case may be) on behalf of
and in the name of Administrative Agent or such Lender; (iii) the sum payable by
such Credit Party in respect of which the relevant deduction, or withholding is
required shall be increased to the extent necessary to ensure that, after the
making of that deduction, withholding or payment, Administrative Agent or such
Lender, as the case may be, receives on the due date a net sum equal to what it
would have received had no such deduction, withholding or payment been required
or made; and (iv) within thirty days after paying any sum from which it is
required by law to make any deduction or withholding, and within thirty days
after the due date of payment of any Tax which it is required by clause
(ii) above to pay, NewPageCo shall deliver to Administrative Agent evidence
reasonably satisfactory to the other affected parties of such deduction,
withholding or payment and of the remittance thereof to the relevant taxing or
other authority; provided, no such additional amount shall be required to be
paid to any Lender under clause (iii) above except to the extent that any change
after the date hereof (in the case of each Lender listed on the signature pages
hereof on the Closing Date) or after the effective date of the Assignment
Agreement pursuant to which such Lender became a Lender (in the case of each
other Lender) in applicable law (including any change in the interpretation,
administration or application of any law or the introduction of any new law) in
respect of any such requirement for a deduction, withholding or payment as is
mentioned therein shall result in an increase in the rate of such deduction,
withholding or payment from that in effect at the date hereof or at the date of
such Assignment Agreement, as the case may be, in respect of payments to such
Lender.

(c) Evidence of Exemption From U.S. Withholding Tax. Each Lender that is not a
United States Person (as such term is defined in Section 7701(a)(30) of the
Internal Revenue

 

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Code) for U.S. federal income tax purposes (a “Non-US Lender”) shall deliver to
Administrative Agent for transmission to NewPageCo, on or prior to the Closing
Date (in the case of each Lender listed on the signature pages hereof on the
Closing Date) or on or prior to the date of the Assignment Agreement pursuant to
which it becomes a Lender (in the case of each other Lender), and at such other
times as may be necessary in the determination of NewPageCo or Administrative
Agent (each in the reasonable exercise of its discretion), (i) two original
copies of Internal Revenue Service Form W-8BEN and/or Form W-8IMY, as applicable
(claiming the benefits under an applicable treaty) or W-8ECI (or, in each case,
any successor forms), properly completed and duly executed by such Lender, and
such other documentation required under the Internal Revenue Code and reasonably
requested by NewPageCo to establish that such Lender is not subject to deduction
or withholding of United States federal income tax with respect to any payments
to such Lender of principal, interest, fees or other amounts payable under any
of the Credit Documents, or (ii) if such Lender is not a “bank” or other Person
described in Section 881(c)(3) of the Internal Revenue Code and cannot deliver
either Internal Revenue Service Form W-8ECI pursuant to clause (i) above, a
Certificate re Non-Bank Status together with two original copies of Internal
Revenue Service Form W-8BEN and/or Form W-8IMY, as applicable (or, in each case,
any successor form), properly completed and duly executed by such Lender, and
such other documentation required under the Internal Revenue Code and reasonably
requested by NewPageCo to establish that such Lender is not subject to deduction
or withholding of United States federal income tax with respect to any payments
to such Lender of interest payable under any of the Credit Documents. Each
Lender required to deliver any forms, certificates or other evidence with
respect to United States federal income tax withholding matters pursuant to this
Section 2.20(c) hereby agrees, from time to time after the initial delivery by
such Lender of such forms, certificates or other evidence, whenever a lapse in
time or change in circumstances renders such forms, certificates or other
evidence obsolete or inaccurate in any material respect, that such Lender shall
promptly deliver to Administrative Agent for transmission to NewPageCo two new
original copies of Internal Revenue Service Form W-8BEN and/or Form W-8IMY, as
applicable or W-8ECI, or a Certificate re Non-Bank Status and two original
copies of Internal Revenue Service Form W-8BEN and/or Form W-8IMY, as applicable
(or, in each case, any successor form), as the case may be, properly completed
and duly executed by such Lender, and such other documentation required under
the Internal Revenue Code and reasonably requested by NewPageCo to confirm or
establish that such Lender is not subject to deduction or withholding of United
States federal income tax with respect to payments to such Lender under the
Credit Documents, or notify Administrative Agent and NewPageCo of its inability
to deliver any such forms, certificates or other evidence. NewPageCo shall not
be required to pay any additional amount to any Non-US Lender under
Section 2.20(b)(iii) if such Lender shall have failed (1) to deliver the forms,
certificates or other evidence referred to in the second sentence of this
Section 2.20(c), or (2) to notify Administrative Agent and NewPageCo of its
inability to deliver any such forms, certificates or other evidence, as the case
may be; provided, if such Lender shall have satisfied the requirements

 

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of the first sentence of this Section 2.20(c) on the Closing Date or on the date
of the Assignment Agreement pursuant to which it became a Lender, as applicable,
nothing in this last sentence of Section 2.20(c) shall relieve NewPageCo of its
obligation to pay any additional amounts pursuant this Section 2.20 in the event
that, as a result of any change in any applicable law, treaty or governmental
rule, regulation or order, or any change in the interpretation, administration
or application thereof, such Lender is no longer properly entitled to deliver
forms, certificates or other evidence at a subsequent date establishing the fact
that such Lender is not subject to withholding as described herein.

(d) Partnerships. For purposes of this Section 2.20, in the case of any Lender
that is a treated as a partnership for U.S. federal income tax purposes, any
Taxes required to be deducted and withheld by such Lender with respect to
payments made by or on behalf of any Credit Party under any Credit Document
shall be treated as Taxes required to be deducted by such Credit Party, but only
to the extent such Taxes would have been required to be deducted and withheld by
the Lender if the Lender were treated as a corporation for U.S. federal income
tax purposes making such payments under the Credit Documents on behalf of such
Credit Party.

(e) Other Taxes. NewPageCo shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.

(f) Refunds. If Administrative Agent or any Lender determines, in its sole
discretion exercised in good faith, that it has received a refund of any Taxes
or Other Taxes as to which it has been indemnified by a Credit Party or with
respect to which a Credit Party has paid additional amounts pursuant to this
Section 2.20, it shall pay over such refund to such Credit Party (but only to
the extent of indemnity payments made, or additional amounts paid, by such
Credit Party under this Section 2.20 with respect to the Taxes or Other Taxes
giving rise to such refund), net of all out-of-pocket expenses of Administrative
Agent or such Lender and without interest (other than any interest paid by the
relevant Governmental Authority with respect to such refund); provided, that
such Credit Party, upon the request of Administrative Agent or such Lender,
agrees to repay the amount paid over to such Credit Party (plus any penalties,
interest or other charges imposed by the relevant Governmental Authority) to
Administrative Agent or such Lender in the event Administrative Agent or such
Lender is required to repay such refund to such Governmental Authority.

2.21. Obligation to Mitigate. Each Lender (which term shall include Issuing Bank
for purposes of this Section 2.21)agrees that, as promptly as practicable after
the officer of such Lender responsible for administering its Loans or Letters of
Credit, as the case may be, becomes aware of the occurrence of an event or the
existence of a condition that would cause such Lender to become an Affected
Lender or that would entitle such Lender to receive payments under Section 2.18,
2.19 or 2.20, it will, to the extent not inconsistent with the internal policies
of such Lender and any applicable legal or regulatory restrictions, use
reasonable efforts to (a) make,

 

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issue, fund or maintain its Credit Extensions, including any Affected Loans,
through another office of such Lender, or (b) take such other measures as such
Lender may deem reasonable, if as a result thereof the circumstances which would
cause such Lender to be an Affected Lender would cease to exist or the
additional amounts which would otherwise be required to be paid to such Lender
pursuant to Section 2.18, 2.19 or 2.20 would be materially reduced and if, as
determined by such Lender in its sole discretion, the making, issuing, funding
or maintaining of such Revolving Commitments, Loans or Letters of Credit through
such other office or in accordance with such other measures, as the case may be,
would not otherwise adversely affect such Revolving Commitments, Loans or
Letters of Credit or the interests of such Lender; provided, such Lender will
not be obligated to utilize such other office pursuant to this Section 2.21
unless NewPageCo agrees to pay all incremental expenses incurred by such Lender
as a result of utilizing such other office as described in clause (i) above. A
certificate as to the amount of any such expenses payable by NewPageCo pursuant
to this Section 2.21 (setting forth in reasonable detail the basis for
requesting such amount) submitted by such Lender to NewPageCo (with a copy to
Administrative Agent) shall be conclusive absent manifest error.

2.22. Defaulting Lenders. Anything contained herein to the contrary
notwithstanding, in the event that any Lender defaults (a “Defaulting Lender”)
in its obligation to fund (a “Funding Default”) any Revolving Loan or its
portion of any unreimbursed payment under Section 2.3(b)(iv) or 2.4(e) (in each
case, a “Defaulted Loan”), then (a) during any Default Period with respect to
such Defaulting Lender, such Defaulting Lender shall be deemed not to be a
“Lender” for purposes of voting on any matters (including the granting of any
consents or waivers) with respect to any of the Credit Documents; (b) to the
extent permitted by applicable law, until such time as the Default Excess with
respect to such Defaulting Lender shall have been reduced to zero, (i) any
voluntary prepayment of the Revolving Loans shall, if NewPageCo so directs at
the time of making such voluntary prepayment, be applied to the Revolving Loans
of other Lenders as if such Defaulting Lender had no Revolving Loans outstanding
and the Revolving Exposure of such Defaulting Lender were zero, and (ii) any
mandatory prepayment of the Revolving Loans shall, if NewPageCo so directs at
the time of making such mandatory prepayment, be applied to the Revolving Loans
of other Lenders (but not to the Revolving Loans of such Defaulting Lender) as
if such Defaulting Lender had funded all Defaulted Loans of such Defaulting
Lender, it being understood and agreed that NewPageCo shall be entitled to
retain any portion of any mandatory prepayment of the Revolving Loans that is
not paid to such Defaulting Lender solely as a result of the operation of the
provisions of this clause (b); (c) such Defaulting Lender’s Revolving Commitment
and outstanding Revolving Loans and such Defaulting Lender’s Pro Rata Share of
the Letter of Credit Usage shall be excluded for purposes of calculating the
Revolving Commitment fee payable to Lenders in respect of any day during any
Default Period with respect to such Defaulting Lender, and such Defaulting
Lender shall not be entitled to receive any Revolving Commitment fee pursuant to
Section 2.11 with respect to such Defaulting Lender’s Revolving Commitment in
respect of any Default Period with respect

 

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to such Defaulting Lender; and (d) the Total Utilization of Revolving
Commitments as at any date of determination shall be calculated as if such
Defaulting Lender had funded all Defaulted Loans of such Defaulting Lender. No
Revolving Commitment of any Lender shall be increased or otherwise affected,
and, except as otherwise expressly provided in this Section 2.22, performance by
NewPageCo of its obligations hereunder and the other Credit Documents shall not
be excused or otherwise modified as a result of any Funding Default or the
operation of this Section 2.22. The rights and remedies against a Defaulting
Lender under this Section 2.22 are in addition to other rights and remedies
which NewPageCo may have against such Defaulting Lender with respect to any
Funding Default and which Administrative Agent or any Lender may have against
such Defaulting Lender with respect to any Funding Default.

2.23. Removal or Replacement of a Lender. Anything contained herein to the
contrary notwithstanding, in the event that: (a) (i) any Lender (an
“Increased-Cost Lender”) shall give notice to NewPageCo that such Lender is an
Affected Lender or that such Lender is entitled to receive payments under
Section 2.18, 2.19 or 2.20, (ii) the circumstances which have caused such Lender
to be an Affected Lender or which entitle such Lender to receive such payments
shall remain in effect, and (iii) such Lender shall fail to withdraw such notice
within five Business Days after NewPageCo’s request for such withdrawal; or
(b) (i) any Lender shall become a Defaulting Lender, (ii) the Default Period for
such Defaulting Lender shall remain in effect, and (iii) such Defaulting Lender
shall fail to cure the default as a result of which it has become a Defaulting
Lender within five Business Days after NewPageCo’s request that it cure such
default; or (c) in connection with any proposed amendment, modification,
termination, waiver or consent with respect to any of the provisions hereof as
contemplated by Section 11.5(b), the consent of Requisite Lenders shall have
been obtained but the consent of one or more of such other Lenders (each a
“Non-Consenting Lender”) whose consent is required shall not have been obtained;
then, with respect to each such Increased-Cost Lender, Defaulting Lender or
Non-Consenting Lender (the “Terminated Lender”), NewPageCo may, by giving
written notice to Administrative Agent and any Terminated Lender of its election
to do so, elect to cause such Terminated Lender (and such Terminated Lender
hereby irrevocably agrees) to assign its outstanding Loans and its Revolving
Commitments, if any, in full to one or more Eligible Assignees (each a
“Replacement Lender”) in accordance with the provisions of Section 11.6 and
Terminated Lender shall pay any fees payable thereunder in connection with such
assignment; provided, (1) on the date of such assignment, the Replacement Lender
shall pay to Terminated Lender an amount equal to the sum of (A) an amount equal
to the principal of, and all accrued interest on, all outstanding Loans of the
Terminated Lender, (B) an amount equal to all unreimbursed drawings of Letters
of Credit that have been funded by such Terminated Lender, together with all
then unpaid interest with respect thereto at such time and (C) an amount equal
to all accrued, but theretofore unpaid fees owing to such Terminated Lender
pursuant to Section 2.11; (2) on the date of such assignment, NewPageCo shall
pay any amounts payable to such Terminated Lender pursuant to Section 2.18(c),
2.19 or 2.20; and (3) in the event such

 

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Terminated Lender is a Non-Consenting Lender, each Replacement Lender shall
consent, at the time of such assignment, to each matter in respect of which such
Terminated Lender was a Non-Consenting Lender; provided, NewPageCo may not make
such election with respect to any Terminated Lender that is also an Issuing Bank
unless, prior to or simultaneously with the effectiveness of such election,
NewPageCo shall have caused each outstanding Letter of Credit issued thereby to
be cancelled. Upon the prepayment of all amounts owing to any Terminated Lender
and the termination of such Terminated Lender’s Revolving Commitments, if any,
such Terminated Lender shall no longer constitute a “Lender” for purposes
hereof; provided, any rights of such Terminated Lender to indemnification
hereunder shall survive as to such Terminated Lender.

2.24. Determination of Borrowing Base

(a) Eligible Accounts. On any date of determination of the Borrowing Base, all
of the Accounts owned by NewPageCo and each Borrowing Base Guarantor, as
applicable, and reflected in the most recent Borrowing Base Certificate
delivered by NewPageCo to the Collateral Agent and the Administrative Agent
shall be “Eligible Accounts” for the purposes of this Agreement, except any
Account to which any of the exclusionary criteria set forth below applies. In
addition, the Collateral Agent and the Administrative Agent reserve the right,
at any time and from time to time after the Closing Date, to adjust any of the
criteria set forth below, to establish new criteria and to adjust the applicable
advance rate with respect to Eligible Accounts, in their Permitted Discretion,
subject to the approval of the Supermajority Lenders in the case of adjustments,
new criteria or changes in the applicable advance rates which have the effect of
making more credit available. Eligible Accounts shall not include any of the
following Accounts:

(i) any Account in which the Collateral Agent, on behalf of the Secured Parties,
does not have a first priority and perfected Lien and such Account shall be free
and clear of all Liens other than Permitted Collateral Liens;

(ii) any Account that is not owned by NewPageCo or Borrowing Base Guarantor;

(iii) any Account due from an Account Debtor that is not domiciled in the United
States or Canada and (if not a natural Person) organized under the laws of the
United States or Canada or any political subdivision thereof;

(iv) any Account that is payable in any currency other than Dollars or with
respect to any Account Debtor domiciled in Canada or organized under the laws of
Canada or any political subdivision thereof, Canadian Dollars, unless such
Account is supported by an irrevocable letter of credit in form and substance
satisfactory to the

 

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Collateral Agent, issued by a financial institution satisfactory to the
Collateral Agent and which has been duly transferred to the Collateral Agent
(together with sufficient documentation to permit direct draws by the Collateral
Agent thereon);

(v) any Account that does not arise from the sale of goods or the performance of
services by such NewPageCo or Borrowing Base Guarantor in the ordinary course of
its business;

(vi) any Account that does not comply with all applicable legal requirements,
including, without limitation, all laws, rules, regulations and orders of any
Governmental Authority (including any Account due from an Account Debtor located
in the States of Minnesota or New Jersey unless NewPage Co or the applicable
Borrowing Base Guarantor (at the time the Account was created and at all times
thereafter) (i) had filed and has maintained effective a current notice of
business activities report with the appropriate office or agency of such States,
as applicable, or (ii) was and has continued to be exempt from filing such
report and has provided the Lenders with satisfactory evidence thereof);

(vii) any Account (a) upon which either NewPageCo’s or any Borrowing Base
Guarantor’s, as applicable, right to receive payment is not absolute or is
contingent upon the fulfillment of any condition whatsoever unless such
condition is satisfied or (b) as to which either NewPageCo or any Borrowing Base
Guarantor, as applicable, is not able to bring suit or otherwise enforce its
remedies against the Account Debtor through judicial or administrative process
or (c) that represents a progress billing consisting of an invoice for goods
sold or used or services rendered pursuant to a contract under which the Account
Debtor’s obligation to pay that invoice is subject to NewPageCo’s or Borrowing
Base Guarantor’s, as applicable, completion of further performance under such
contract or is subject to the equitable lien of a surety bond issuer;

(viii) to the extent that any defense, counterclaim, setoff or dispute is
asserted as to such Account, it being understood that the remaining balance of
the Account shall be eligible;

(ix) any Account that is not a true and correct statement of bona fide
indebtedness incurred in the amount of the Account for merchandise sold to or
services rendered and accepted by the applicable Account Debtor;

(x) any Account with respect to which an invoice or other electronic
transmission constituting a request for payment, reasonably acceptable to the
Collateral Agent in form and substance, has not been sent on a timely basis to
the applicable Account Debtor according to the normal invoicing and timing
procedures of NewPageCo or Borrowing Base Guarantor, as applicable;

 

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(xi) any Account (other than a Portfolio Company Account) that arises from a
sale to any director, officer, other employee or Affiliate of NewPageCo or any
Borrowing Base Guarantor, or to any entity that has any common officer or
director with any NewPageCo or Borrowing Base Guarantor;

(xii) to the extent NewPageCo or any Subsidiary is liable for goods sold or
services rendered by the applicable Account Debtor to NewPageCo or any
Subsidiary but only to the extent of the potential offset;

(xiii) any Account that arises with respect to goods that are delivered on a
bill-and-hold, cash-on-delivery basis or placed on consignment, guaranteed sale
or other terms by reason of which the payment by the Account Debtor is or may be
conditional;

(xiv) any Account (a) not paid within 90 days following its original invoice
date or that is more than 60 days past due according to its original terms of
sale; or (b) with respect to which the Account Debtor obligated upon such
Account suspends business, makes a general assignment for the benefit of
creditors or fails to pay its debts generally as they come due; or (c) with
respect to which a petition is filed by or against any Account Debtor obligated
upon such Account under any bankruptcy law or any other federal, state or
foreign (including any provincial) receivership, insolvency relief or other law
or laws for the relief of debtors;

(xv) any Account that is the obligation of an Account Debtor (other than an
individual) if 50% or more of the Dollar amount of all Accounts owing by that
Account Debtor are ineligible under the other criteria set forth in this
Section 2.24(a);

(xvi) any Account as to which any of the representations or warranties in the
Credit Documents are untrue;

(xvii) to the extent such Account is evidenced by a judgment, Instrument or
Chattel Paper;

(xviii) to the extent such Account exceeds any credit limit established by the
Collateral Agent, in its Permitted Discretion, following prior notice of such
limit by the Collateral Agent to NewPageCo;

 

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(xix) that portion of any Account (a) in respect of which there has been, or
should have been, established by NewPageCo or any Borrowing Base Guarantor a
contra account, whether in respect of contractual allowances with respect to
such Account, audit adjustment, anticipated discounts or otherwise, or (b) which
is due from an Account Debtor to whom NewPageCo or any Borrowing Base Guarantor
owes a trade payable, but only to the extent of such trade payable or (c) which
NewPageCo or any Borrowing Base Guarantor knows is subject to the exercise by an
Account Debtor of any right of recession, set-off, recoupment, counterclaim or
defense; or

(xx) any Account on which the Account Debtor is a Governmental Authority, unless
NewPageCo or any Borrowing Base Guarantor, as applicable, has assigned its
rights to payment of such Account to the Administrative Agent pursuant to the
Assignment of Claims Act of 1940, as amended, in the case of a federal
Governmental Authority, and pursuant to applicable law, if any, in the case of
any other Governmental Authority, and such assignment has been accepted and
acknowledged by the appropriate government officers.

(b) Eligible Inventory. On any date of determination of the Borrowing Base, all
of the Inventory owned by NewPageCo and each Borrowing Base Guarantor, as
applicable, and reflected in the most recent Borrowing Base Certificate
delivered by NewPageCo to the Collateral Agent and the Administrative Agent
shall be “Eligible Inventory” for the purposes of this Agreement, except any
Inventory to which any of the exclusionary criteria set forth below applies. The
Collateral Agent shall have the right to establish, modify or eliminate Reserves
against Eligible Inventory from time to time in its Permitted Discretion. In
addition, the Collateral Agent and the Administrative Agent reserve the right,
at any time and from time to time after the Closing Date, to adjust any of the
criteria set forth below, to establish new criteria and to adjust the applicable
advance rate with respect to Eligible Inventory, in their Permitted Discretion,
subject to the approval of the Supermajority Lenders in the case of adjustments,
new criteria, changes in the applicable advance rate or the elimination of
Reserves which have the effect of making more credit available. Eligible
Inventory shall not include any Inventory of NewPageCo or any Borrowing Base
Guarantor that:

(i) the Collateral Agent, on behalf of Secured Parties, does not have a first
priority and perfected Lien on such Inventory and such Inventory shall be free
and clear of all Liens other than Permitted Collateral Liens;

(ii) (a) is stored at a location not owned by NewPageCo or a Borrowing Base
Guarantor where the aggregate value of Inventory exceeds $750,000 unless the
Collateral Agent has given its prior consent thereto and unless either (x) a
reasonably satisfactory Landlord Waiver and Consent Agreement has been delivered
to the Collateral Agent, or (y) Reserves reasonably satisfactory to the
Collateral Agent but in no

 

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event to exceed the aggregate of three (3) months’ rent with respect to each
such location have been established with respect thereto or (b) is stored with a
bailee or warehouseman where the aggregate value of Inventory exceeds $750,000
unless either (x) a reasonably satisfactory, acknowledged bailee waiver letter
has been received by the Collateral Agent or (y) Reserves reasonably
satisfactory to the Collateral Agent but in no event to exceed the aggregate of
three (3) months’ rent with respect to each such location have been established
with respect thereto, or (c) is located at an owned location subject to a
mortgage in favor of a lender other than the Collateral Agent where the
aggregate value of Inventory exceeds $750,000 unless either (x) a reasonably
satisfactory mortgagee waiver has been delivered to the Collateral Agent or
(y) Reserves reasonably satisfactory to the Collateral Agent have been
established with respect thereto;

(iii) is placed on consignment, unless a valid consignment agreement which is
reasonably satisfactory to Collateral Agent is in place with respect to such
Inventory;

(iv) is covered by a negotiable document of title, unless such document has been
delivered to the Collateral Agent with all necessary endorsements, free and
clear of all Liens except those in favor of the Collateral Agent and the Lenders
and landlords, carriers, bailees and warehousemen if clause (ii) above has been
complied with;

(v) is to be returned to suppliers;

(vi) is obsolete, unsalable, shopworn, damaged or unfit for sale;

(vii) consists of display items, samples or packing or shipping materials,
manufacturing supplies, work-in-process Inventory or replacement parts it being
understood that nothing in this clause (vii) shall be construed to exclude pulp
from Eligible Inventory;

(viii) is not of a type held for sale in the ordinary course of NewPageCo’s or
any Borrowing Base Guarantor’s, as applicable, business;

(ix) breaches any of the representations or warranties pertaining to Inventory
set forth in the Credit Documents;

(x) consists of Hazardous Material or goods that can be transported or sold only
with licenses that are not readily available;

(xi) is not covered by casualty insurance maintained as required by Section 5.5;

 

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(xii) is subject to any licensing arrangement the effect of which would be to
limit the ability of Collateral Agent, or any Person selling the Inventory on
behalf of Collateral Agent, to sell such Inventory in enforcement of the
Collateral Agent’s Liens, without further consent or payment to the licensor or
other; or

(xiii) is not located in the United States of America.

SECTION 3. CONDITIONS PRECEDENT

3.1. Closing Date. The obligation of any Lender to make a Credit Extension on
the Closing Date is subject to the satisfaction, or waiver in accordance with
Section 11.5, of the following conditions on or before the Closing Date:

(a) Credit Documents. Administrative Agent shall have received sufficient copies
of each Credit Document originally executed and delivered by each applicable
Credit Party for each Lender.

(b) Organizational Documents; Incumbency. Administrative Agent shall have
received (i) sufficient copies of each Organizational Document executed and
delivered by each Credit Party, as applicable, and, to the extent applicable,
certified as of a recent date by the appropriate governmental official, for each
Lender, each dated the Closing Date or a recent date prior thereto;
(ii) signature and incumbency certificates of the officers of such Person
executing the Credit Documents to which it is a party; (iii) resolutions of the
Board of Directors or similar governing body of each Credit Party approving and
authorizing the execution, delivery and performance of this Agreement and the
other Credit Documents and the Related Agreements to which it is a party or by
which it or its assets may be bound as of the Closing Date, certified as of the
Closing Date by its secretary or an assistant secretary as being in full force
and effect without modification or amendment; (iv) a good standing certificate
(or the equivalent thereof) from the applicable Governmental Authority of each
Credit Party’s jurisdiction of incorporation, organization or formation and in
each jurisdiction in which it is qualified as a foreign corporation or other
entity to do business, each dated a recent date prior to the Closing Date; and
(v) such other documents as Administrative Agent may reasonably request.

(c) Organizational and Capital Structure. The organizational structure and
capital structure of NewPageHoldCo and its Subsidiaries, both before and after
giving effect to the Paper Business Acquisition, shall be as set forth on
Schedule 4.1.

 

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(d) Capitalization of NewPageHoldCo and NewPageCo. On or before the Closing
Date:

(i) NewPageCo shall have received gross proceeds from the loans under the
NewPageCo First Lien Term Loan Agreement in an aggregate amount in cash not less
than $750,000,000;

(ii) TimberCo shall have received the gross proceeds under the TimberCo Credit
Agreement in an amount not less than $235,000,000;

(iii) NewPageCo shall have received (A) gross proceeds from the issuance of the
Senior Secured Fixed Rate Notes in an aggregate amount in cash of not less than
$345,705,500, (B) gross proceeds from the issuance of the Senior Secured
Floating Rate Notes in an aggregate amount in cash of not less than $225,000,000
and (C) gross proceeds from the issuance of the Senior Subordinated Notes in an
aggregate amount in cash of not less than $197,498,000; and

(iv) NewPageHoldCo shall have received (A) gross proceeds from the issuance of
the NewPageHoldCo PIK Notes in an aggregate amount in cash of not less than
$25,000,000 and (B) gross proceeds from Sponsor and management of common equity
contributions in an aggregate amount not less than $415,000,000 and contributed
such proceeds as common equity to NewPageCo;

(e) Consummation of the Transactions Contemplated by Related Agreements.

(i) (1) All conditions to the Paper Business Acquisition and the Timber Business
Acquisition as set forth in the Purchase Agreement shall have been satisfied or
the fulfillment of any such conditions shall have been waived with the consent
of the Co-Syndication Agents and Administrative Agent, (2) the Paper Business
Acquisition and the Timber Business Acquisition shall have become effective in
accordance with the terms of the Purchase Agreement and (3) the aggregate
consideration paid to MeadWestvaco in connection with the Paper Business
Acquisition and the Timber Business Acquisition in the form of cash and
NewPageHoldCo PIK Notes shall not exceed $2,300,000,000, subject to closing and
post-closing adjustments;

(ii) Co-Syndication Agents and Administrative Agent shall each have received a
fully executed or conformed copy of each Related Agreement and any documents
executed in connection therewith, together with copies of each of the opinions
of counsel, if any, delivered to the parties under the Related Agreements,
accompanied by a letter from each such counsel (to the extent not inconsistent
with such counsel’s established internal policies) authorizing Lenders to rely
upon such opinion to the same

 

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extent as though it were addressed to Lenders. Each Related Agreement shall be
in full force and effect, shall include terms and provisions reasonably
satisfactory to Administrative Agent and Co-Syndication Agents and no provision
thereof shall have been modified or waived in any respect determined by
Co-Syndication Agents or Administrative Agent to be material, in each case
without the consent of Co-Syndication Agents and Administrative Agent.

(f) Existing Indebtedness. On the Closing Date, NewPageHoldCo and its
Subsidiaries shall have (i) after giving effect to the initial Credit Extension
and application of the proceeds thereof, repaid in full all Existing
Indebtedness, (ii) terminated any commitments to lend or make other extensions
of credit thereunder, (iii) delivered to Co-Syndication Agents and
Administrative Agent all binding documents or instruments necessary to release
all Liens securing Existing Indebtedness or other obligations of NewPageHoldCo
and its Subsidiaries thereunder being repaid on the Closing Date, and (iv) made
arrangements satisfactory to Co-Syndication Agents and Administrative Agent with
respect to the cancellation of any letters of credit outstanding thereunder.

(g) Transaction Costs. On or prior to the Closing Date, NewPageCo shall have
delivered to Administrative Agent NewPageCo’s reasonable best estimate of the
Transaction Costs (other than fees payable to any Agent).

(h) Governmental Authorizations and Consents. Each Credit Party shall have
obtained all Governmental Authorizations and all consents of other Persons, in
each case that are necessary or advisable in connection with the transactions
contemplated by the Credit Documents, except where the failure to obtain such
Governmental Authorizations or consents could not reasonably be expected to have
a Material Adverse Effect, and each of the foregoing shall be in full force and
effect and in form and substance reasonably satisfactory to Co-Syndication
Agents and Administrative Agent. All applicable waiting periods shall have
expired without any action being taken or threatened by any competent
Governmental Authority which would restrain, prevent or otherwise impose
materially adverse conditions on the transactions contemplated by the Credit
Documents or the Related Agreements or the financing thereof and no action,
request for stay, petition for review or rehearing, reconsideration, or appeal
with respect to any of the foregoing shall be pending, and the time for any
applicable agency to take action to set aside its consent on its own motion
shall have expired.

(i) Personal Property Collateral. In order to create in favor of Collateral
Agent, for the benefit of Secured Parties, a valid, perfected First Priority
security interest in the “Collateral” as defined in the Pledge and Security
Agreement, Collateral Agent shall have received:

 

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(i) evidence satisfactory to Collateral Agent of the compliance by each Credit
Party of their obligations under the Pledge and Security Agreement and the other
Collateral Documents (including, without limitation, originals of securities,
instruments and chattel paper and any agreements governing deposit and /or
securities accounts as provided therein);

(ii) A completed Perfection Certificate dated the Closing Date and executed by
an Authorized Officer of each Credit Party, together with all attachments
contemplated thereby, including (A) the results of a recent search, by a Person
satisfactory to Collateral Agent, of all effective UCC financing statements (or
equivalent filings) made with respect to any personal or mixed property of any
Credit Party in the jurisdictions specified in the Perfection Certificate, as
applicable, together with copies of all such filings disclosed by such search,
and (B) UCC termination statements (or similar documents) duly executed by all
applicable Persons for filing in all applicable jurisdictions as may be
necessary to terminate any effective UCC financing statements (or equivalent
filings) disclosed in such search (other than any such financing statements in
respect of Permitted Liens);

(iii) opinions of counsel (which counsel shall be reasonably satisfactory to
Collateral Agent) with respect to the creation and perfection of the security
interests in favor of Collateral Agent in such Collateral and such other matters
governed by the laws of each jurisdiction in which any Credit Party is organized
as Collateral Agent may reasonably request, in each case in form and substance
reasonably satisfactory to Collateral Agent; and

(iv) evidence that each Credit Party shall have taken or caused to be taken any
other action, executed and delivered or caused to be executed and delivered any
other agreement, document and instrument (including without limitation, (i) a
Landlord Personal Property Collateral Access Agreement executed by the landlord
of any Leasehold Property leased facility where the aggregate value of Inventory
exceeds $750,000 and by the applicable Credit Party, (ii) a fully executed and
notarized Access Grant and Easement Agreement in proper form for recording in
all appropriate places in all applicable jurisdictions, encumbering each Closing
Date Mortgage Property, and (ii) any intercompany notes evidencing Indebtedness
permitted to be incurred pursuant to Section 6.1(b)) and made or caused to be
made any other filing and recording (other than as set forth herein) reasonably
required by Collateral Agent.

(j) Phase I Environmental Reports. Syndication Agent and Administrative Agent
shall have received Phase I Reports for each of the Facilities along with a
corresponding reliance letter authorizing the Agents and each Lender to rely
upon such reports, all of which shall be, in form, scope and substance,
reasonably satisfactory to the Administrative Agent. The Administrative Agent
acknowledges receipt of each of the reports identified on Schedule 3.1(j),
hereto, each of which is reasonably satisfactory for purposes of this condition.

 

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(k) Financial Statements; Projections. Lenders shall have received from
NewPageHoldCo (i) the Historical Financial Statements, (ii) pro forma
consolidated balance sheets of NewPageHoldCo and its Subsidiaries as at the
Closing Date, and reflecting the consummation of the Paper Business Acquisition,
the related financings and the other transactions contemplated by the Credit
Documents to occur on or prior to the Closing Date, which pro forma financial
statements shall be in form and substance reasonably satisfactory to
Administrative Agent and Syndication Agent, (iii) the Projections, and (iv) the
pro forma financial statements of the Coated and Carbonless Papers Group showing
pro forma Consolidated Adjusted EBITDA of at least $174,000,000 for the Coated
and Carbonless Papers Group for the twelve-month period ended December 31, 2004
and for the latest twelve-month period for which internal financial statements
are available (without giving effect to the deemed amount of Consolidated
Adjusted EBITDA set forth in the proviso of such definition, but giving effect
to such pro forma adjustments as are acceptable to the Administrative Agent),
and, if the Closing Date occurs after April 30, 2005, $60,000,000 for the latest
three-month period for which internal financial statements are available.

(l) Evidence of Insurance. Collateral Agent shall have received a certificate
from NewPageCo’s insurance broker or other evidence satisfactory to it that all
insurance required to be maintained pursuant to Section 5.5 is in full force and
effect, together with endorsements naming the Collateral Agent, for the benefit
of Lenders, as additional insured and loss payee thereunder to the extent
required under Section 5.5.

(m) Opinions of Counsel to Credit Parties. Lenders and their respective counsel
shall have received originally executed copies of the favorable written opinion
of Schulte Roth & Zabel LLP, special New York counsel for Credit Parties, in the
form of Exhibit D and as to such other matters as Administrative Agent or
Syndication Agent may reasonably request, dated as of the Closing Date and
otherwise in form and substance reasonably satisfactory to Administrative Agent
and Syndication Agent (and each Credit Party hereby instructs such counsel to
deliver such opinions to Agents and Lenders).

(n) Fees. NewPageCo shall have paid to the Agents, the fees payable to the
Agents on the Closing Date .

(o) Solvency Certificate. On the Closing Date, Co-Syndication Agents and
Administrative Agent shall have received a Solvency Certificate from
NewPageHoldCo dated the Closing Date and addressed to Co-Syndication Agents,
Administrative Agent and Lenders, and in form, scope and substance reasonably
satisfactory to Co-Syndication Agents and Administrative Agent, with appropriate
attachments and demonstrating that after giving effect to the consummation of
the Paper Business Acquisition, each of NewPageHoldCo and its Subsidiaries are
and will be Solvent.

 

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(p) No Litigation. There shall not exist any action, suit, investigation,
litigation or proceeding or other legal or regulatory developments, pending or
threatened in any court or before any arbitrator or Governmental Authority that,
in the reasonable opinion of Administrative Agent and Co-Syndication Agents,
singly or in the aggregate, materially impairs the Paper Business Acquisition,
the financing thereof or any of the other transactions contemplated by the
Credit Documents or the Related Agreements, or that could reasonably be expected
to have a Material Adverse Effect.

(q) Completion of Proceedings. All partnership, corporate and other proceedings
taken or to be taken in connection with the transactions contemplated hereby and
all documents incidental thereto not previously found acceptable by
Administrative Agent or Co-Syndication Agents and its counsel shall be
reasonably satisfactory in form and substance to Administrative Agent and
Co-Syndication Agents and such counsel, and Administrative Agent, Co-Syndication
Agents and such counsel shall have received all such counterpart originals or
certified copies of such documents as Administrative Agent or Co-Syndication
Agents may reasonably request.

(r) Initial Borrowing Base Certificate. The Collateral Agent and the
Administrative Agent shall have received a Borrowing Base Certificate, dated as
of the Closing Date.

(s) Hedging Agreement. Within twenty-one (21) days prior to the Closing Date,
Sponsor shall have entered into the Commodities Hedge Agreement, reasonably
satisfactory and in form and substance satisfactory to Administrative Agent, for
the purpose of hedging certain commodity price risk through the purchase of
options only, for an aggregate purchase price not to exceed $80,000,000, and, on
the Closing Date, Sponsor shall have assigned the Commodities Hedge Agreement to
NewPageCo.

(t) Fiber Supply Agreements. NewPageCo and/or certain of its Subsidiaries and
TimberCo shall have entered into the Fiber Supply Agreements, reasonably
satisfactory in form and substance to Administrative Agent, whereby TimberCo
will agree to sell, and such Subsidiaries of NewPageCo will agree to purchase
specified volumes of the timber requirements of NewPageCo and its Subsidiaries
for a term of at least four years.

(u) Take-Over Audit. Within five (5) days prior to the Closing Date, the
Collateral Agent’s staff shall have conducted a supplemental “take-over audit”
which supports and confirms (i) the calculation of the initial Borrowing Base,
(ii) no material change in the procedures of NewPageCo or any Borrowing Base
Guarantor with respect to its Inventory since the delivery of the Inventory
Appraisal, (iii) no material change in sales, Inventory turn or the level of
Inventory since the delivery of the Inventory Appraisal and (iv) no inaccuracies
with respect to representations and warranties set forth herein.

 

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(v) Cash Management. The Collateral Agent and the Administrative Agent shall
have reviewed and approved the Companies’ cash management system and shall have
received executed blocked account agreements (from all of the financial
institutions where the Credit Parties maintain bank accounts) evidencing
Collateral Agent’s security interest in such accounts and all funds from time to
time contained therein (and upon the occurrence and during the continuance of a
Cash Dominion Trigger Event enabling the Collateral Agent to obtain complete
dominion and control over such funds (except with respect to (i) payroll
account, (ii) trust accounts and (iii) local cash accounts which do not at any
time contain funds in excess of $2,500,000 in the aggregate).

(w) Intercreditor Agreement; Cash Management Intercreditor Agreement. The
Administrative Agent shall have received a fully executed copy of each of the
Intercreditor Agreement and the Cash Management Intercreditor Agreement, in each
case, in form and substance satisfactory to the Administrative Agent.

3.2. Conditions to Each Credit Extension.

(a) Conditions Precedent. The obligation of each Lender to make any Loan, or
Issuing Bank to issue any Letter of Credit, on any Credit Date, including the
Closing Date, are subject to the satisfaction, or waiver in accordance with
Section 11.5, of the following conditions precedent:

(i) Administrative Agent shall have received a fully executed and delivered
Funding Notice or Issuance Notice, as the case may be, and (A) in the case of
any Swing Line Loan, Swing Line Lender shall also have received such fully
executed and delivered Funding Notice with respect to such Swing Line Loan and
(B) in the case of any Letter of Credit, the applicable Issuing Bank shall also
have received such fully executed and delivered Issuance Notice with respect to
the issuance of such Letter of Credit;

(ii) after making the Credit Extensions requested on such Credit Date, the Total
Utilization of Revolving Commitments shall not exceed the lesser of (i) the
Revolving Commitments then in effect and (ii) the Borrowing Base;

(iii) as of such Credit Date, the representations and warranties contained
herein and in the other Credit Documents shall be true and correct in all
material respects on and as of that Credit Date to the same extent as though
made on and as of that date,

 

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except to the extent such representations and warranties specifically relate to
an earlier date, in which case such representations and warranties shall have
been true and correct in all material respects on and as of such earlier date
and any representation and warranty that is qualified as to “materiality” or
“Material Adverse Effect” shall be true and correct in all respects subject to
such qualification;

(iv) as of such Credit Date, no event shall have occurred and be continuing or
would result from the consummation of the applicable Credit Extension that would
constitute an Event of Default or a Default; and

(v) on or before the date of issuance of any Letter of Credit, Administrative
Agent shall have received all other information required by the applicable
Issuance Notice, and such other documents or information as Issuing Bank may
reasonably require in connection with the issuance of such Letter of Credit.

Any Agent or Requisite Lenders shall be entitled, but not obligated to, request
and receive, prior to the making of any Credit Extension, additional information
reasonably satisfactory to the requesting party confirming the satisfaction of
any of the foregoing if, in the good faith judgment of such Agent or Requisite
Lenders such request is warranted under the circumstances.

(b) Notices. Any Notice shall be executed by an Authorized Officer in a writing
delivered to Administrative Agent. In lieu of delivering a Notice, NewPageCo may
give Administrative Agent telephonic notice by the required time of any proposed
borrowing, conversion/continuation or issuance of a Letter of Credit, as the
case may be; provided each such notice shall be promptly confirmed in writing by
delivery of the applicable Notice to Administrative Agent on or before the
applicable date of borrowing, continuation/conversion or issuance. Neither
Administrative Agent nor any Lender shall incur any liability to NewPageCo in
acting upon any telephonic notice referred to above that Administrative Agent
believes in good faith to have been given by a duly authorized officer or other
person authorized on behalf of NewPageCo or for otherwise acting in good faith.

Each Lender, by delivering its signature page to this Agreement and funding a
Loan on the Closing Date, shall be deemed to have acknowledged receipt of, and
consented to and approved, each Credit Document and each other document required
to be approved by any Agent, Requisite Lenders or Lenders, as applicable on the
Closing Date.

SECTION 4. REPRESENTATIONS AND WARRANTIES

In order to induce Lenders and Issuing Bank to enter into this Agreement and to
make each Credit Extension to be made thereby, each Credit Party represents and
warrants to each

 

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Lender and Issuing Bank, on the Closing Date and on each Credit Date, that the
following statements are true and correct (it being understood and agreed that
the representations and warranties made on the Closing Date are deemed to be
made concurrently with the consummation of the Paper Business Acquisition):

4.1. Organization; Requisite Power and Authority; Qualification. Each of
NewPageHoldCo and its Subsidiaries (a) is duly organized, validly existing and
in good standing under the laws of its jurisdiction of organization as
identified in Schedule 4.1, (b) has all requisite power and authority to own and
operate its properties, to carry on its business as now conducted and as
proposed to be conducted, to enter into the Credit Documents to which it is a
party and to carry out the transactions contemplated thereby, and (c) is
qualified to do business and in good standing in every jurisdiction where its
assets are located and wherever necessary to carry out its business and
operations, except in jurisdictions where the failure to be so qualified or in
good standing has not had, and could not be reasonably expected to have, a
Material Adverse Effect.

4.2. Capital Stock and Ownership. The Capital Stock of each of NewPageHoldCo and
its Subsidiaries has been duly authorized and validly issued and is fully paid
and non-assessable. Except as set forth on Schedule 4.2, as of the date hereof,
there is no existing option, warrant, call, right, commitment or other agreement
to which NewPageHoldCo or any of its Subsidiaries is a party requiring, and
there is no membership interest or other Capital Stock of NewPageHoldCo or any
of its Subsidiaries outstanding which upon conversion or exchange would require,
the issuance by NewPageHoldCo or any of its Subsidiaries of any additional
membership interests or other Capital Stock of NewPageHoldCo or any of its
Subsidiaries or other Securities convertible into, exchangeable for or
evidencing the right to subscribe for or purchase, a membership interest or
other Capital Stock of NewPageHoldCo or any of its Subsidiaries. Schedule 4.2
correctly sets forth the ownership interest of NewPageHoldCo and each of its
Subsidiaries in their respective Subsidiaries as of the Closing Date both before
and after giving effect to the Paper Business Acquisition.

4.3. Due Authorization. The execution, delivery and performance of the Credit
Documents have been duly authorized by all necessary action on the part of each
Credit Party that is a party thereto.

4.4. No Conflict. The execution, delivery and performance by Credit Parties of
the Credit Documents to which they are parties and the consummation of the
transactions contemplated by the Credit Documents do not and will not
(a) violate any provision of any law or any governmental rule or regulation
applicable to NewPageHoldCo or any of its Subsidiaries, any of the
Organizational Documents of NewPageHoldCo or any of its Subsidiaries, or any
order, judgment or decree of any court or other agency of government binding on
NewPageHoldCo or any of its Subsidiaries; except to the extent such violation
could not

 

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reasonably be expected to have a Material Adverse Effect; (b) conflict with,
result in a breach of or constitute (with due notice or lapse of time or both) a
default under any Contractual Obligation of NewPageHoldCo or any of its
Subsidiaries, except to the extent such conflict, breach or default could not
reasonably be expected to have a Material Adverse Effect; (c) result in or
require the creation or imposition of any Lien upon any of the properties or
assets of NewPageHoldCo or any of its Subsidiaries (other than any Liens created
under any of the Credit Documents in favor of Collateral Agent, on behalf of
Secured Parties); or (d) require any approval of stockholders, members or
partners or any approval or consent of any Person under any Contractual
Obligation of NewPageHoldCo or any of its Subsidiaries, except for any such
approval or consent (i) which will be obtained on or before the Closing Date and
disclosed in writing to Lenders or (ii) where the failure to obtain such
approval or consent could not be reasonably expected to have a Material Adverse
Effect.

4.5. Governmental Consents. The execution, delivery and performance by Credit
Parties of the Credit Documents to which they are parties and the consummation
of the transactions contemplated by the Credit Documents do not and will not
require any registration with, consent or approval of, or notice to, or other
action to, with or by, any Governmental Authority except as otherwise set forth
in the Related Agreements, and except when the failure of which to be so made or
delivered could not reasonably be expected to have a Material Adverse Effect and
except for when filings and recordings with respect to the Collateral to be
made, or otherwise delivered to Collateral Agent for filing and/or recordation,
as of the Closing Date.

4.6. Binding Obligation. Each Credit Document has been duly executed and
delivered by each Credit Party that is a party thereto and is the legally valid
and binding obligation of such Credit Party, enforceable against such Credit
Party in accordance with its respective terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to
or limiting creditors’ rights generally or by equitable principles relating to
enforceability.

4.7. Historical Financial Statements. The Historical Financial Statements were
prepared in conformity with GAAP and fairly present, in all material respects,
the financial position, on a consolidated basis, of the Persons described in
such financial statements as at the respective dates thereof and the results of
operations and cash flows, on a consolidated basis, of the entities described
therein for each of the periods then ended, subject, in the case of any such
unaudited financial statements, to the absence of footnotes and changes
resulting from audit and normal year end adjustments. As of the Closing Date,
any contingent liability or liability for taxes, long-term lease or unusual
forward or long term commitments of NewPageHoldCo and its Subsidiaries which in
any such case is material in relation to the business, operations, or financial
condition NewPageHoldCo and its Subsidiaries taken as a whole has been reflected
in the most recent Historical Financial Statements or the notes thereto to the
extent required by GAAP.

 

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4.8. Projections. On and as of the Closing Date, the Projections of
NewPageHoldCo and its Subsidiaries for the period Fiscal Year 2005 through and
including Fiscal Year 2011 (the “Projections”) are based on good faith estimates
and assumptions made by the management of NewPageHoldCo believed to be
reasonable at the time made; provided, the Projections are not to be viewed as
facts and that actual results during the period or periods covered by the
Projections may differ from such Projections and that the differences may be
material.

4.9. No Material Adverse Change. Since September 30, 2004, no event,
circumstance or change has occurred that has caused or evidences or could
reasonably be expected to cause or evidence, either in any case or in the
aggregate, a Material Adverse Effect.

4.10. Wickliffe Paper Company. As of the close of business on the Closing Date,
Wickliffe Paper Company shall own all of the assets owned by Wickliffe Paper
Company, L.P. preceding the Closing Date.

4.11. Adverse Proceedings, etc. There are no Adverse Proceedings, individually
or in the aggregate, that could reasonably be expected to have a Material
Adverse Effect. Except as set forth on Schedule 4.14, neither NewPageHoldCo nor
any of its Subsidiaries (a) is in violation of any applicable laws (including
Environmental Laws) that, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect, or (b) is subject to or in default
with respect to any final judgments, writs, injunctions, decrees, rules or
regulations of any court or other Governmental Authority, that, individually or
in the aggregate, could reasonably be expected to have a Material Adverse
Effect.

4.12. Payment of Taxes. Except as otherwise permitted under Section 5.3, all
federal and state income tax returns and all other material tax returns and
reports of NewPageHoldCo and its Subsidiaries required to be filed by any of
them have been timely filed, and all taxes shown on such tax returns to be due
and payable and all assessments, fees and other governmental charges upon
NewPageHoldCo and its Subsidiaries and upon their respective properties, assets,
income, businesses and franchises which are due and payable have been paid when
due and payable. NewPageHoldCo knows of no proposed tax assessment against
NewPageHoldCo or any of its Subsidiaries which is not being actively contested
by NewPageHoldCo or such Subsidiary in good faith and by appropriate
proceedings; provided, such reserves or other appropriate provisions, if any, as
shall be required in conformity with GAAP shall have been made or provided
therefor.

 

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4.13. Properties.

(a) Title. Each of NewPageHoldCo and its Subsidiaries has (i) good, sufficient
and legal title to (in the case of fee interests in real property), (ii) valid
leasehold interests in (in the case of leasehold interests in real or personal
property), and (iii) good title to (in the case of all other personal property),
all of their respective properties and assets reflected in their respective
Historical Financial Statements referred to in Section 4.5 and in the most
recent financial statements delivered pursuant to Section 5.1, in each case
except for assets disposed of since the date of such financial statements in the
ordinary course of business or as otherwise permitted under Section 6.9. Except
as permitted by this Agreement, all such properties and assets are free and
clear of Liens.

(b) Real Estate. As of the Closing Date, Schedule 4.13 contains a true, accurate
and complete list of (i) all Real Estate Assets, and (ii) all leases, subleases
or assignments of leases (together with all amendments, modifications,
supplements, renewals or extensions of any thereof) with respect to any real
property of any Credit Party which provides for monthly rental payments after
the date of this Agreement of more than $10,000 or is otherwise material to the
business or operations of such Credit Party, regardless of whether such Credit
Party is the landlord or tenant (whether directly or as an assignee or successor
in interest) under such lease, sublease or assignment. Each agreement listed in
clause (ii) of the immediately preceding sentence is in full force and effect
and NewPageHoldCo does not have knowledge of any default that has occurred and
is continuing thereunder, and each such agreement constitutes the legally valid
and binding obligation of each applicable Credit Party, enforceable against such
Credit Party in accordance with its terms, except as enforcement may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws relating
to or limiting creditors’ rights generally or by equitable principles.

4.14. Environmental Matters. Except as set forth in Schedule 4.14, and except to
the extent, individually or in the aggregate, could not reasonably be expected
to have a Material Adverse Effect: (i) NewPageHoldCo and each of its
Subsidiaries is in compliance with all applicable Environmental Laws, including
any permits or licenses issued pursuant thereto, and, to NewPageHoldCo’s and its
Subsidiaries’ knowledge, NewPageHoldCo and each of its Subsidiaries will be
capable of maintaining compliance with applicable Environmental Laws, including
any reasonably foreseeable future requirements of existing environmental
regulations or regulations that have been formally proposed but have not yet
been adopted; (ii) neither NewPageHoldCo nor any of its Subsidiaries nor any of
their respective Facilities or operations are subject either to (a) any
Environmental Claim or (b) any settlement agreement with any Person relating to
any Environmental Claim; (iii) neither NewPageHoldCo nor any of its Subsidiaries
has received any letter or written request for information under Section 104(e)
of the Comprehensive Environmental Response, Compensation, and Liability Act (42
U.S.C. § 9601, et seq.) or any comparable state law; (iv) to NewPageHoldCo’s and
its Subsidiaries’ knowledge, there are and have been no conditions, occurrences,
or Hazardous Materials Activities that could

 

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reasonably be expected to form the basis of an Environmental Claim against
NewPageHoldCo or any of its Subsidiaries or that could require Remedial Action
at any Facility or could require Remedial Action by NewPageHoldCo or any of its
Subsidiaries at any other location; or (v) neither NewPageHoldCo nor any of its
Subsidiaries nor, to either NewPageHoldCo’s and its Subsidiaries’ knowledge, any
predecessor of NewPageHoldCo or its Subsidiaries, has been issued or been
required to obtain a permit for the treatment, storage or disposal of hazardous
waste for any of its Facilities pursuant to the federal Resource Conservation
and Recovery Act, 42 U.S.C. § 6901, et. seq. (“RCRA”), or any comparable state
law, nor are any such Facilities regulated as “interim status” facilities
required to undergo corrective action pursuant to RCRA or any comparable state
law.

4.15. No Defaults. NewPageHoldCo nor any of its Subsidiaries is in default in
the performance, observance or fulfillment of any of the obligations, covenants
or conditions contained in any of its Contractual Obligations, and no condition
exists which, with the giving of notice or the lapse of time or both, could
constitute such a default, except where the consequences, direct or indirect, of
such default or defaults, if any, could not reasonably be expected to have a
Material Adverse Effect.

4.16. Material Contracts. Schedule 4.16 contains a true, correct and complete
list of all the Material Contracts in effect on the Closing Date, and except as
described thereon, all such Material Contracts are in full force and effect and
no defaults by any Credit Party or, to the Credit Parties’ knowledge, any other
party thereto currently exist thereunder.

4.17. Governmental Regulation. Neither NewPageHoldCo nor any of its Subsidiaries
is subject to regulation under the Public Utility Holding Company Act of 2005,
the Federal Power Act or the Investment Company Act of 1940 or under any other
Federal or state statute or regulation which may limit its ability to incur
Indebtedness or which may otherwise render all or any portion of the Obligations
unenforceable. Neither NewPageHoldCo nor any of its Subsidiaries is a
“registered investment company” or a company “controlled” by a “registered
investment company” or a “principal underwriter” of a “registered investment
company” as such terms are defined in the Investment Company Act of 1940.

4.18. Margin Stock. Neither NewPageHoldCo nor any of its Subsidiaries is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying any Margin Stock. No part of
the proceeds of the Loans made to such Credit Party will be used to purchase or
carry any such Margin Stock or to extend credit to others for the purpose of
purchasing or carrying any such Margin Stock or for any purpose that violates,
or is inconsistent with, the provisions of Regulation T, U or X of said Board of
Governors.

 

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4.19. Employee Matters. Neither NewPageHoldCo nor any of its Subsidiaries is
engaged in any unfair labor practice that could reasonably be expected to have a
Material Adverse Effect. There is (a) no unfair labor practice complaint pending
against NewPageHoldCo or any of its Subsidiaries, or to the best knowledge of
NewPageHoldCo and NewPageCo, threatened against any of them before the National
Labor Relations Board and no grievance or arbitration proceeding arising out of
or under any collective bargaining agreement that is so pending against
NewPageHoldCo or any of its Subsidiaries or to the best knowledge of
NewPageHoldCo and NewPageCo, threatened against any of them, (b) no strike or
work stoppage in existence or threatened involving NewPageHoldCo or any of its
Subsidiaries that could reasonably be expected to have a Material Adverse
Effect, and (c) to the best knowledge of NewPageHoldCo and NewPageCo, no union
representation question existing with respect to the employees of NewPageHoldCo
or any of its Subsidiaries and, to the best knowledge of NewPageHoldCo and
NewPageCo, no union organization activity that is taking place, except (with
respect to any matter specified in clause (a), (b) or (c) above, either
individually or in the aggregate) such as could not reasonably be expected to
have a Material Adverse Effect.

4.20. Employee Benefit Plans. NewPageHoldCo and each of its Subsidiaries and
each of their respective ERISA Affiliates are in substantial compliance with all
applicable provisions and requirements of ERISA and the Internal Revenue Code
and the regulations and published interpretations thereunder with respect to
each Employee Benefit Plan, and have performed all their obligations under each
Employee Benefit Plan in all material respects. Each Employee Benefit Plan which
is intended to qualify under Section 401(a) of the Internal Revenue Code has
received a favorable determination letter from the Internal Revenue Service or
NewPageHoldCo or its Subsidiaries shall submit an application to the Internal
Revenue Service to receive such a letter, indicating that such Employee Benefit
Plan is so qualified and nothing has occurred subsequent to the issuance of such
determination letter which would cause such Employee Benefit Plan to lose its
qualified status. No liability to the PBGC (other than required premium
payments), the Internal Revenue Service, any Employee Benefit Plan or any trust
established under Title IV of ERISA has been or is expected to be incurred by
NewPageHoldCo, any of its Subsidiaries or any of their ERISA Affiliates. No
ERISA Event has occurred or is reasonably expected to occur. Except to the
extent required under Section 4980B of the Internal Revenue Code or similar
state laws and except as set forth on Schedule 4.20, no Employee Benefit Plan
provides health or welfare benefits (through the purchase of insurance or
otherwise) for any retired or former employee of NewPageHoldCo, any of its
Subsidiaries or any of their respective ERISA Affiliates. The present value of
the aggregate benefit liabilities under each Pension Plan sponsored, maintained
or contributed to by NewPageHoldCo, any of its Subsidiaries or any of their
ERISA Affiliates, (determined on the basis of the actuarial assumptions
specified for funding purposes in the most recent actuarial valuation for such
Pension Plan), did not exceed the aggregate current value of the assets of such
Pension Plan in an amount that would reasonably be expected to have a Material
Adverse Effect. As of the most recent valuation date

 

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for each Multiemployer Plan occurring on or prior to the date hereof for which
the actuarial report is available, the potential liability of NewPageHoldCo, its
Subsidiaries and their respective ERISA Affiliates for a complete withdrawal
from such Multiemployer Plan (within the meaning of Section 4203 of ERISA), when
aggregated with such potential liability for a complete withdrawal from all
Multiemployer Plans, based on information available upon request pursuant to
Section 4221(e) of ERISA is zero. NewPageHoldCo, each of its Subsidiaries and
each of their ERISA Affiliates have complied with the requirements of
Section 515 of ERISA with respect to each Multiemployer Plan and are not in
material “default” (as defined in Section 4219(c)(5) of ERISA) with respect to
payments to a Multiemployer Plan.

4.21. Certain Fees. No broker’s or finder’s fee or commission will be payable by
or on behalf of Sponsor, NewPageHoldCo or NewPageCo with respect to the
transactions contemplated hereby.

4.22. Solvency. Each Credit Party is and, upon the incurrence of any Obligation
by such Credit Party taking into account rights of contribution against or
reimbursement from other Credit Parties on any date on which this representation
and warranty is made, will be, Solvent.

4.23. Related Agreements.

(a) Delivery. NewPageHoldCo and NewPageCo have delivered to Syndication Agent
and Administrative Agent complete and correct copies of (i) each Related
Agreement and of all exhibits and schedules thereto as of the date hereof and
(ii) copies of any material amendment, restatement, supplement or other
modification to or waiver of each Related Agreement entered into after the date
hereof.

(b) Representations and Warranties. Except to the extent otherwise expressly set
forth herein or in the schedules hereto, and subject to the qualifications set
forth therein, each of the representations and warranties given by any Credit
Party in any Related Agreement (including the Notes Offering Memorandum, but
excluding the Purchase Agreement) and by TimberCo under the Purchase Agreement
is true and correct in all material respects as of the Closing Date (or as of
any earlier date to which such representation and warranty specifically
relates). Notwithstanding anything in the Related Agreement to the contrary, the
representations and warranties of each Credit Party set forth in this
Section 4.23 shall, solely for purposes hereof, survive the Closing Date for the
benefit of Lenders.

(c) Governmental Approvals. All Governmental Authorizations and all other
authorizations, approvals and consents of any other Person required by the
Related Agreements or to consummate the Paper Business Acquisition and the
Timber Business Acquisition (other than such authorizations, approvals and
consents, the failure of which to so obtain could not reasonably be expected to
have a Material Adverse Effect), have been obtained and are in full force and
effect.

 

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(d) Conditions Precedent. On the Closing Date, (i) all of the conditions to
effecting or consummating the Paper Business Acquisition set forth in the
Related Agreements have been duly satisfied or, with the consent of
Administrative Agent and Syndication Agent, waived, and (ii) the Paper Business
Acquisition has been consummated in accordance with the Related Agreements and
all applicable laws.

4.24. Compliance with Statutes, etc. Each of NewPageHoldCo and its Subsidiaries
is in compliance with all applicable statutes, regulations and orders of, and
all applicable restrictions imposed by, all Governmental Authorities, in respect
of the conduct of its business and the ownership of its property (including
compliance with all applicable Environmental Laws with respect to any Real
Estate Asset or governing its business and the requirements of any permits
issued under such Environmental Laws with respect to any such Real Estate Asset
or the operations of NewPageHoldCo or any of its Subsidiaries), except as set
forth on Schedule 4.14 hereto and except such non-compliance that, individually
or in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect.

4.25. Disclosure. No representation or warranty of any Credit Party contained in
any Credit Document (including the Notes Offering Memorandum) or in any other
documents, certificates or written statements furnished to Lenders by or on
behalf of NewPageHoldCo or any of its Subsidiaries for use in connection with
the transactions contemplated hereby contains any untrue statement of a material
fact or omits to state a material fact (known to NewPageHoldCo or NewPageCo, in
the case of any document not furnished by either of them) necessary in order to
make the statements contained herein or therein not misleading in light of the
circumstances in which the same were made. Any projections and pro forma
financial information contained in such materials are based upon good faith
estimates and assumptions believed by NewPageHoldCo or NewPageCo to be
reasonable at the time made, it being recognized by Lenders that such
projections as to future events are not to be viewed as facts and that actual
results during the period or periods covered by any such projections may differ
from the projected results. There are no facts known (or which should upon the
reasonable exercise of diligence be known) to NewPageHoldCo or NewPageCo (other
than matters of a general economic nature) that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect
and that have not been disclosed herein or in such other documents, certificates
and statements furnished to Lenders for use in connection with the transactions
contemplated hereby.

4.26. Patriot Act. To the extent applicable, each Credit Party is in compliance,
in all material respects, with the (i) Trading with the Enemy Act, as amended,
and each of the foreign assets control regulations of the Untied States Treasury
Department (31 CFR, Subtitle B, Chapter

 

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V, as amended) and any other enabling legislation or executive order relating
thereto, and (ii) Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism (USA Patriot Act of 2001)
(the “Act”). No part of the proceeds of the Loans will be used, directly or
indirectly, for any payments to any governmental official or employee, political
party, official of a political party, candidate for political office, or anyone
else acting in an official capacity, in order to obtain, retain or direct
business or obtain any improper advantage, in violation of the United States
Foreign Corrupt Practices Act of 1977, as amended.

4.27. Location of Material Inventory. As of the date hereof, Schedule 4.27 sets
forth all locations in the United States where the aggregate value of Inventory
owned by the Credit Parties exceeds $250,000.

4.28. Accuracy of Borrowing Base. At the time any Borrowing Base Certificate is
delivered pursuant to this Agreement, each Account and each item of Inventory
included in the calculation of the Borrowing Base satisfies all of the criteria
stated herein (or of which NewPageCo has hereafter been notified by Collateral
Agent under Section 2.24) to be an Eligible Account and an item of Eligible
Inventory, respectively.

4.29. Post-Audit Asset Dispositions. As of the Closing Date, NewPageCo and it’s
the other Credit Parties have not disposed of assets (other than Inventory sold
in the ordinary course of their business) which are set forth in the Inventory
Appraisal and which have an aggregate fair market value of more than $250,000.

4.30. Collateral Documents.

(a) The Pledge and Security Agreement is effective to create in favor of the
Collateral Agent for the benefit of the Secured Parties, a legal, valid and
enforceable security interest in and Lien on the Collateral and, when
(i) financing statements and other filings in appropriate form are filed in the
offices specified on Schedule 4 to the Perfection Certificate and (ii) upon the
taking of possession or control by the Collateral Agent of the Collateral with
respect to which a security interest may be perfected only by possession or
control (which possession or control shall be given to the Collateral Agent to
the extent possession or control by the Collateral Agent is required by each
Pledge and Security Agreement), the Lien created by the Pledge and Security
Agreement shall constitute a fully perfected First Priority Lien on, and
security interest in, all right, title and interest of the grantors thereunder
in the Collateral (other than such Collateral in which a security interest
cannot be perfected under the UCC as in effect at the relevant time in the
relevant jurisdiction).

(b) Each Collateral Document delivered pursuant to Section 5.13 will, upon
execution and delivery thereof, be effective to create in favor of the
Collateral Agent, for the

 

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benefit of the Secured Parties, a legal, valid and enforceable security interest
in and First Priority Lien on all of the Credit Parties’ right, title and
interest in and to the Collateral thereunder, and when all appropriate filings
or recordings are made in the appropriate offices as may be required under
applicable law, such Collateral Document will constitute a fully perfected Lien
on, and security interest in, all right, title and interest of the Credit
Parties in such Collateral, in each case subject to no Liens other than the
applicable Permitted Collateral Liens.

4.31. NewPageHoldCo. NewPageHoldCo does not (i) engage in any trade or business,
(ii) own any assets (other than Capital Stock of NewPageCo which is pledged to
the Collateral Agent on the Closing Date) nor (iii) have any Indebtedness (other
than for the NewPageHoldCo PIK Notes and the guarantee obligations with respect
to this Agreement and the NewPageCo First Lien Term Loan Agreement) in an
aggregate amount that exceeds $25,000.

4.32. Common Enterprise. NewPageHoldCo is the direct or indirect and beneficial
owner and holder of all of the issued and outstanding shares of stock or other
Equity Interests in NewPageCo and the other Borrowing Base Guarantors. NewPageCo
and the Borrowing Base Guarantors make up a related organization of various
entities constituting a single economic and business enterprise so that
NewPageCo and the Borrowing Base Guarantors share a substantial identity of
interests such that any benefit received by any one of them benefits the others.
NewPageCo and certain Borrowing Base Guarantors render services to or for the
benefit of NewPageCo and/or the other Borrowing Base Guarantors, as the case may
be, purchase or sell and supply goods to or from or for the benefit of the
others, make loans, advances and provide other financial accommodations to or
for the benefit of NewPageCo and the Borrowing Base Guarantors (including, inter
alia, the payment by NewPageCo and the Borrowing Base Guarantors of creditors of
NewPageCo and the Borrowing Base Guarantors and guarantees by NewPageCo and the
Borrowing Base Guarantors of indebtedness of NewPageCo and the Borrowing Base
Guarantors and provide administrative, marketing, payroll and management
services to or for the benefit of NewPageCo and the Borrowing Base Guarantors).
NewPageCo and the Borrowing Base Guarantors have centralized accounting, common
officers and directors and are in certain circumstances identified to creditors
as a single economic and business enterprise.

SECTION 5. AFFIRMATIVE COVENANTS

Each Credit Party covenants and agrees that so long as any Revolving Commitment
is in effect and until payment in full of all Credit Agreement Obligations and
cancellation or expiration or cash collateralization of all Letters of Credit,
each Credit Party shall perform, and shall cause each of its Subsidiaries to
perform, all covenants in this Section 5.

 

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5.1. Financial Statements and Other Reports. NewPageHoldCo will deliver to
Administrative Agent, Lead Arranger and Lenders:

(a) Monthly Reports. As soon as available, and in any event within 30 days after
the end of each month ending after the Closing Date, the consolidated balance
sheet of NewPageHoldCo and its Subsidiaries as at the end of such month and the
related consolidated statements of income, stockholders’ equity and cash flows
of NewPageHoldCo and its Subsidiaries for such month and for the period from the
beginning of the then current Fiscal Year to the end of such month, setting
forth in each case in comparative form the corresponding figures for the
corresponding periods of the previous Fiscal Year beginning with the monthly
statements for April 2006 and the corresponding figures from the Financial Plan
for the current Fiscal Year, to the extent prepared on a monthly basis, all in
reasonable detail, together with a Financial Officer Certification with respect
thereto;

(b) Quarterly Financial Statements. As soon as available, and in any event
within 45 days (or 60 days in the case of the Fiscal Quarter ending June 30,
2005) or such shorter period in which NewPageHoldCo or NewPageCo shall have
filed its Quarterly Reports on Form 10-Q after the end of each of the first
three Fiscal Quarters of each Fiscal Year, the consolidated and (beginning with
the Fiscal Quarter ending June 30, 2005) consolidating balance sheets of
NewPageHoldCo and its Subsidiaries (or of the Coated and Carbonless Paper Group
in the case of the Fiscal Quarters ended March 31, 2005) as at the end of such
Fiscal Quarter the related consolidated (and with respect to statements of
income, beginning with the Fiscal Quarter ending June 30, 2005, consolidating)
statements of income, stockholders’ equity and cash flows of NewPageHoldCo and
its Subsidiaries (or of the Coated and Carbonless Paper Group in the case of the
Fiscal Quarters ended March 31, 2005) for such Fiscal Quarter and for the period
from the beginning of the then current Fiscal Year to the end of such Fiscal
Quarter, setting forth in each case (beginning with the Fiscal Quarter ending
June 30, 2006) in comparative form the corresponding figures for the
corresponding periods of the previous Fiscal Year and the corresponding figures
from the Financial Plan for the current Fiscal Year, all in reasonable detail,
together with a Financial Officer Certification and a Narrative Report with
respect thereto.

(c) Annual Financial Statements. As soon as available, and in any event within
90 days or such shorter period in which NewPageHoldCo or NewPageCo shall have
filed its Annual Reports on Form 10-K after the end of each Fiscal Year, (i) the
consolidated and consolidating balance sheets of NewPageHoldCo and its
Subsidiaries as at the end of such Fiscal Year and the related consolidated (and
with respect to statements of income, consolidating) statements of income,
stockholders’ equity and cash flows of NewPageHoldCo and its Subsidiaries for
such Fiscal Year, setting forth in each case in comparative form the
corresponding figures for the previous Fiscal Year and the corresponding figures
from the Financial Plan for the Fiscal Year covered by such financial
statements, in reasonable detail, together with a Financial Officer
Certification and a Narrative Report with respect thereto; and

 

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(ii) with respect to such consolidated financial statements a report thereon of
PricewaterhouseCoopers LLP or other independent certified public accountants of
recognized national standing selected by NewPageHoldCo, and reasonably
satisfactory to Administrative Agent (which report shall be unqualified as to
going concern and scope of audit, and shall state that such consolidated
financial statements fairly present, in all material respects, the consolidated
financial position of NewPageHoldCo and its Subsidiaries as at the dates
indicated and the results of their operations and their cash flows for the
periods indicated in conformity with GAAP applied on a basis consistent with
prior years (except as otherwise disclosed in such financial statements) and
that the examination by such accountants in connection with such consolidated
financial statements has been made in accordance with generally accepted
auditing standards) together with a written statement by such independent
certified public accountants stating (1) that their audit examination has
included a review of the terms of Section 6.8 and (2) whether, in connection
with their audit examination, any condition or event that constitutes a Default
or an Event of Default under Section 6.8 has come to their attention and, if
such a condition or event has come to their attention, specifying the nature and
period of existence thereof;

(d) Compliance Certificate. Together with each delivery of financial statements
of NewPageHoldCo and its Subsidiaries pursuant to Sections 5.1(b) and 5.1(c), a
duly executed and completed Compliance Certificate;

(e) Statements of Reconciliation after Change in Accounting Principles. If, as a
result of any change in accounting principles and policies from those used in
the preparation of the Historical Financial Statements (other than any such
changes from such principles and policies followed by MeadWestvaco in connection
with the financial statements it maintained with respect to the Paper Business
and which changes are implemented by NewPageCo as of the Closing Date), the
consolidated financial statements of NewPageHoldCo and its Subsidiaries
delivered pursuant to Section 5.1(b) or 5.1(c) will differ in any material
respect from the consolidated financial statements that would have been
delivered pursuant to such subdivisions had no such change in accounting
principles and policies been made, then, together with the first delivery of
such financial statements after such change, one or more statements of
reconciliation for all the most recent prior financial statements in form and
substance reasonably satisfactory to Administrative Agent;

(f) Notice of Default. Promptly upon any Senior Officer of NewPageHoldCo or
NewPageCo obtaining knowledge (i) of any condition or event that constitutes a
Default or an Event of Default or that notice has been given to NewPageHoldCo or
NewPageCo with respect thereto; (ii) that any Person has given any notice to
NewPageHoldCo or any of its Subsidiaries or taken any other action with respect
to any event or condition set forth in Section 8.1(b); or (iii) of the
occurrence of any event or change that has caused or evidences, either in any
case or in the aggregate, a Material Adverse Effect, a certificate of its
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nature and period of existence of such condition, event or change, or specifying
the notice given and action taken by any such Person and the nature of such
claimed Event of Default, Default, default, event or condition, and what action
NewPageCo has taken, is taking and proposes to take with respect thereto;

(g) Notice of Litigation. Promptly upon any Senior Officer of NewPageHoldCo or
NewPageCo obtaining knowledge of (i) the institution of, or non-frivolous
written threat of, any Adverse Proceeding not previously disclosed in writing by
NewPageCo to Lenders, or (ii) any material development in any Adverse Proceeding
that, in the case of either (i) or (ii) if adversely determined, could be
reasonably expected to have a Material Adverse Effect, or seeks to enjoin or
otherwise prevent the consummation of, or to recover any damages or obtain
relief as a result of, the transactions contemplated hereby, written notice
thereof together with such other information as may be reasonably available to
NewPageHoldCo or NewPageCo to enable Lenders and their counsel to evaluate such
matters;

(h) ERISA. (i) Promptly upon becoming aware of the occurrence of or forthcoming
occurrence of any ERISA Event, a written notice specifying the nature thereof,
what action NewPageHoldCo, any of its Subsidiaries or any of their respective
ERISA Affiliates has taken, is taking or proposes to take with respect thereto
and, when known, any action taken or threatened by the Internal Revenue Service,
the Department of Labor or the PBGC with respect thereto; and (ii) with
reasonable promptness after receipt of a written request from the Administrative
Agent, copies of (1) each Schedule B (Actuarial Information) to the annual
report (Form 5500 Series) filed by NewPageHoldCo, any of its Subsidiaries or any
of their respective ERISA Affiliates with the Internal Revenue Service with
respect to each Pension Plan; (2) all notices received by NewPageHoldCo, any of
its Subsidiaries or any of their respective ERISA Affiliates from a
Multiemployer Plan sponsor concerning an ERISA Event; and (3) copies of such
other documents or governmental reports or filings relating to any Employee
Benefit Plan as Administrative Agent shall reasonably request;

(i) Financial Plan. As soon as practicable and in any event no later than 30
days after the beginning of each Fiscal Year, a consolidated plan and financial
forecast for such Fiscal Year and each Fiscal Year (or portion thereof) through
the final maturity date of the Loans (a “Financial Plan”), including (i) a
forecasted consolidated balance sheet and forecasted consolidated statements of
income and cash flows of NewPageHoldCo and its Subsidiaries for each such Fiscal
Year, together with pro forma Compliance Certificates for each such Fiscal Year
and an explanation of the assumptions on which such forecasts are based,
(ii) forecasted consolidated statements of income and cash flows of
NewPageHoldCo and its Subsidiaries for each month of the current Fiscal Year and
each Fiscal Quarter for the immediately succeeding Fiscal Year, (iii) forecasts
demonstrating the projected compliance with the requirements of Section 6.8 for
the current and immediately succeeding Fiscal Year and (iv) forecasts
demonstrating the liquidity of NewPageHoldCo and its Subsidiaries for the
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immediately succeeding Fiscal Year without giving effect to any additional debt
or equity offerings not reflected in the Projections, together, in each case,
with an explanation of the assumptions on which such forecasts are based all in
form and substance reasonably satisfactory to Agents;

(j) Insurance Report. As soon as practicable and in any event by the last day of
each Fiscal Year, a report in form and substance satisfactory to Administrative
Agent and the Collateral Agent outlining all material insurance coverage
maintained as of the date of such report by NewPageHoldCo and its Subsidiaries
and all material insurance coverage planned to be maintained by NewPageHoldCo
and its Subsidiaries in the immediately succeeding Fiscal Year;

(k) Notice of Change in Board of Directors. With reasonable promptness, written
notice of any change in the Board of Directors of NewPageHoldCo or NewPageCo;

(l) Notice Regarding Material Contracts. Together with the delivery of the
financial statements pursuant to Section 5.1(b) and 5.1(c) notice of (i) any
Material Contract of NewPageHoldCo or any of its Subsidiaries that is terminated
or amended in a manner that could reasonably be expected to have a Material
Adverse Effect, or (ii) any new Material Contract is entered into, a written
statement describing such event, with copies of such material amendments or new
contracts, delivered to Administrative Agent (to the extent such delivery is
permitted by the terms of any such Material Contract, provided, no such
prohibition on delivery shall be effective if it were bargained for by
NewPageHoldCo or its applicable Subsidiary with the intent of avoiding
compliance with this Section 5.1(l)), and an explanation of any actions being
taken with respect thereto;

(m) Environmental Reports and Audits. As soon as practicable following receipt
thereof, copies of all environmental audits and reports with respect to
environmental matters at any Facility or which relate to any environmental
liabilities of NewPageHoldCo or its Subsidiaries which, in any such case,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect;

(n) [Reserved].

(o) Financial Officer’s Certificate Regarding Collateral. Concurrently with any
delivery of financial statements under paragraph (b) and (c) above, an Officer’s
Certificate setting forth the information required pursuant to the Perfection
Certificate or confirming that there has been no change in such information
since the date of the Perfection Certificate or Supplement;

(p) Other Information. (A) Promptly upon their becoming available, copies or
notification of the electronic posting through any electronic system, including
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other Internet or extranet-based site, of (i) all financial statements, reports,
notices and proxy statements sent or made available generally by NewPageHoldCo
to its security holders acting in such capacity or by any Subsidiary of
NewPageHoldCo to its security holders other than NewPageHoldCo or another
Subsidiary of NewPageHoldCo, (ii) all regular and periodic reports and all
registration statements and prospectuses, if any, filed by NewPageHoldCo or any
of its Subsidiaries with any securities exchange or with the Securities and
Exchange Commission or any governmental or private regulatory authority,
(iii) all press releases and other statements made available generally by
NewPageHoldCo or any of its Subsidiaries to the public concerning material
developments in the business of NewPageHoldCo or any of its Subsidiaries, and
(B) such other information and data with respect to NewPageHoldCo or any of its
Subsidiaries as from time to time may be reasonably requested by Administrative
Agent or any Lender; and

(q) Delivery of Information. Documents required to be delivered pursuant to
Sections 5.1(a), 5.1(b), 5.1(c), 5.1(e) or 5.1(i) may be delivered
electronically, and if so delivered, shall be deemed to have been delivered on
the date (i) on which NewPageCo posts such documents or provides a link thereto
on NewPageCo’s website on the Internet at the website address listed on Appendix
B; or (ii) on which such documents are posted on NewPageCo’s behalf on
IntraLinks/IntraAgency or another relevant website, if any, to which each Lender
and the Administrative Agent have access (whether a commercial, third-party
website or whether sponsored by the Administrative Agent); provided, however,
that: (x) NewPageCo shall deliver paper copies of such documents to the
Administrative Agent or any Lender that requests NewPageCo to deliver such paper
copies until a written request to cease delivering paper copies is given by the
Administrative Agent or such Lender and (y) NewPageCo shall notify (which may be
by facsimile or electronic mail) the Administrative Agent and each Lender of the
posting of any such documents and provide to the Administrative Agent by
electronic mail electronic versions (i.e., soft copies) of such documents.
Notwithstanding anything contained herein, in every instance NewPageCo shall be
required to provide paper copies of the Compliance Certificates to the
Administrative Agent and each of the Lenders. Except for such Compliance
Certificates, the Administrative Agent shall have no obligation to request the
delivery or to maintain copies of the documents referred to above, and in any
event shall have no responsibility to monitor compliance by NewPageCo with any
such request for delivery and each Lender shall be solely responsible for
requesting delivery to it or maintaining its copies of such documents.

5.2. Existence. Except as otherwise permitted under Section 6.9, each Credit
Party will, and will cause each of its Subsidiaries to, at all times preserve
and keep in full force and effect (i) its existence and (ii) all rights and
franchises, licenses and permits material to its business, except in the case of
clause (ii) to the extent that failure to do so could not reasonably be expected
to have a Material Adverse Effect.

5.3. Payment of Taxes and Claims. Each Credit Party will, and will cause each of
its Subsidiaries to, pay all Taxes imposed upon it or any of its properties or
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any of its income, businesses or franchises before any penalty or fine accrues
thereon, and all claims (including claims for labor, services, materials and
supplies) for sums that have become due and payable and that by law have or may
become a Lien upon any of its properties or assets, prior to the time when any
penalty or fine shall be incurred with respect thereto; provided, no such Tax or
claim need be paid if it is being contested in good faith by appropriate
proceedings promptly instituted and diligently conducted, so long as
(a) adequate reserve or other appropriate provision, as shall be required in
conformity with GAAP shall have been made therefor, and (b) in the case of a Tax
or claim which has or may become a Lien against any of the Collateral, such
contest proceedings conclusively operate to stay the sale of any portion of the
Collateral to satisfy such Tax or claim. No Credit Party will, nor will it
permit any of its Subsidiaries to, file or consent to the filing of any
consolidated income tax return with any Person (other than NewPageHoldCo or any
of its Subsidiaries).

5.4. Maintenance of Properties. Each Credit Party will, and will cause each of
its Subsidiaries to, maintain or cause to be maintained in good repair, working
order and condition, ordinary wear and tear excepted, all material properties
used or useful in the business of NewPageHoldCo and its Subsidiaries and from
time to time will make or cause to be made all appropriate repairs, renewals and
replacements thereof, all subject to and in accordance with its usual custom and
practice and provided that nothing herein shall be deemed to restrict any Credit
Party of any of its Subsidiaries from carrying out alterations and improvements
to, or changing the use of, any assets in the ordinary course.

5.5. Insurance. NewPageHoldCo will maintain or cause to be maintained, with
financially sound and reputable insurers such public liability insurance, third
party property damage insurance, business interruption insurance and casualty
insurance with respect to liabilities, losses or damage in respect of the
assets, properties and businesses of NewPageHoldCo and its Subsidiaries as may
customarily be carried or maintained under similar circumstances by Persons of
established reputation engaged in similar businesses (and, with respect to the
Collateral, otherwise maintain all insurance coverage required under each
applicable Collateral Document), in each case in such amounts (giving effect to
self-insurance), with such deductibles, covering such risks and otherwise on
such terms and conditions as shall be customary for such Persons. Each such
policy of insurance shall (i) name Collateral Agent, on behalf of Lenders as an
additional insured thereunder as its interests may appear and (ii) in the case
of each casualty insurance policy, contain a loss payable clause or endorsement,
reasonably satisfactory in form and substance to Collateral Agent, that names
Collateral Agent, on behalf of Lenders as the loss payee thereunder and provides
for at least thirty days’ prior written notice to Collateral Agent of any
modification or cancellation of such policy (or 10 days in the event of
cancellation for nonpayment of applicable premiums) and waiver of subordination
in favor of the Collateral Agent, on behalf of the Lenders, of any claim the
applicable insurance company with respect to payments made under such policy.

 

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5.6. Maintaining Records; Access to Properties and Inspections. Each Credit
Party will keep proper books of record and account in which full, true and
correct entries in conformity (in all material respects) with GAAP and all
applicable statutes, regulations and orders of, and all applicable restrictions
imposed by, all Governmental Authorities are made of all dealings and
transactions in relation to its business and activities. Each Credit Party will
keep proper records of intercompany accounts (including, without limitation, the
Borrowing Base Guarantor Intercompany Loan Account) with full, true and correct
entries reflecting all payments received and paid (including, without
limitation, funds received by NewPageCo from swept deposit accounts of the other
Credit Parties). Each Credit Party will, and will cause each of its Subsidiaries
to, permit any authorized representatives designated by any Lender to visit and
inspect any of the properties of any Credit Party and any of its respective
Subsidiaries, to inspect, copy and take extracts from its and their financial
and accounting records, and to discuss its and their affairs, finances and
accounts with its and their officers and independent public accountants, all
upon reasonable notice and at such reasonable times during normal business hours
and as often as may reasonably be requested. The Credit Parties shall have no
obligation to disclose materials that are protected by attorney-client privilege
and materials the disclosure of which would violate confidentiality obligations
of such Credit Party.

5.7. Lenders Meetings. NewPageHoldCo and NewPageCo will, upon the request of
Administrative Agent or Requisite Lenders, participate in a meeting of
Administrative Agent and Lenders once during each Fiscal Year to be held at
NewPageCo’s corporate offices (or at such other location as may be agreed to by
NewPageCo and Administrative Agent) at such time as may be agreed to by
NewPageCo and Administrative Agent.

5.8. Compliance with Laws. Each Credit Party will comply, and shall cause each
of its Subsidiaries and all other Persons, if any, on or occupying any
Facilities to comply, with the requirements of all applicable laws, rules,
regulations and orders of any Governmental Authority (including all
Environmental Laws), noncompliance with which could reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.

5.9. Environmental.

(a) Environmental Disclosure.

(i) Promptly upon the occurrence of NewPageHoldCo’s or NewPageCo’s obtaining
knowledge thereof, NewPageHoldCo shall deliver to Administrative Agent and
Lenders written notice describing in reasonable detail (1) any Release that
could reasonably be expected to require a Remedial Action or give rise to
Environmental Claims resulting in NewPageHoldCo or its Subsidiaries incurring
liability or expenses in excess of $2,500,000, (2) any Remedial Action taken by
NewPageHoldCo, its Subsidiaries or any other Person in response to any Hazardous
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existence of which has a reasonable possibility of resulting in one or more
Environmental Claims resulting in liability of NewPageHoldCo or its Subsidiaries
in excess of $2,500,000, (3) any Environmental Claims (including any requests
for information by a Governmental Authority) that could reasonably be expected
to result in liability of NewPageHoldCo or its Subsidiaries in excess of
$2,500,000, and (4) NewPageHoldCo’s or its Subsidiaries’ discovery of any
occurrence or condition at any Facility, or on any real property adjoining or in
the vicinity of any Facility, that could cause such Facility or any part thereof
to be subject to any material restrictions on the ownership, occupancy,
transferability or use thereof under any Environmental Laws;

(ii) NewPageHoldCo shall submit to the Administrative Agents semi-annually at
the time of the delivery of the quarterly financial statements delivered
pursuant to Section 5.1 for each Fiscal Quarter ending in June of each Fiscal
Year and at the time of the delivery of the annual financial statements
delivered pursuant to Section 5.1 for each Fiscal Year, a written report on the
status of (A) any non-compliance with Environmental Law (B) any pending or
threatened Environmental Claim, and (C) any Remedial Action that, in each case,
could reasonably be expected to give rise to liability of or expenditures by
NewPageHoldCo or its Subsidiaries of $2,500,000 or more. Such report shall
specify in reasonable detail (1) the status of the matter including any
significant developments since the date of the prior report, (2) any material
technical reports or material correspondence prepared or received relating to
the matter, (3) the current plan for resolution or completion of the matter, and
(4) the anticipated cost to achieve such resolution or completion of the matter,
as applicable. At the request of the Administrative Agent, NewPageHoldCo shall
provide the Administrative Agent with copies of all material documents related
to such matters that are in its or its Subsidiaries’ possession or control. At
the Administrative Agents’ reasonable written request, NewPageHoldCo shall, at
its own expense, retain an independent environmental engineer reasonably
acceptable to the Administrative Agent to evaluate the adequacy of NewPageHoldCo
and its Subsidiaries’ actions to correct, cure or contest any such matter. Such
environmental engineer shall prepare and deliver to both NewPageHoldCo and the
Administrative Agent, a report setting forth the results of such evaluation,
recommendations for further response actions, and an estimate of the costs
thereof;

(iii) NewPageHoldCo shall deliver to Administrative Agent and Lenders, prompt
written notice describing in reasonable detail (1) any proposed acquisition of
stock, assets, or property by NewPageHoldCo or any of its Subsidiaries that
could reasonably be expected to expose NewPageHoldCo or any of its Subsidiaries
to, or result in, Environmental Claims that could reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect and (2) any
proposed action to be taken by NewPageHoldCo or any of its Subsidiaries to
modify current operations in a manner that could reasonably be expected to
subject NewPageHoldCo or any of its Subsidiaries to any additional material
obligations or requirements under Environmental Laws; and

 

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(iv) NewPageHoldCo shall deliver to Administrative Agent and Lenders with
reasonable promptness, such other documents and information as from time to time
may be reasonably requested by Administrative Agent in relation to any matters
addressed by this Section 5.9(a).

(b) Hazardous Materials Activities, Etc. NewPageHoldCo shall take, and shall
cause each of its Subsidiaries promptly to take, any reasonable actions
necessary to (i) cure any violation of applicable Environmental Laws by
NewPageHoldCo or its Subsidiaries that could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect, and (ii) make an
appropriate response to any Environmental Claim against NewPageHoldCo or any of
its Subsidiaries and discharge any obligations it may have to any Person
thereunder where failure to do so could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.

(c) Right of Access and Inspection.

(i) With respect to any matter disclosed pursuant to subsection (a) above, or if
an Event of Default has occurred and is continuing, or if Administrative Agent
reasonably believes either that NewPageHoldCo or any of its Subsidiaries has
breached any representation, warranty or covenant contained in Sections 4.14 or
5.9 of this Agreement or that there has been a material violation of
Environmental Laws at any Facility or by NewPageHoldCo or any of its
Subsidiaries at any other location, for the purposes of protecting the Lenders’
security interests and rights under the Credit Documents, the Administrative
Agent and its representatives shall have the right, but not the obligation, at
any reasonable time and after reasonable notice, to enter into and observe the
condition and operations of the Facilities.

(ii) The exercise of the Administrative Agent’s rights under this subsection
(c) shall not constitute a waiver of any default by NewPageHoldCo or any
Subsidiary and shall not impose any liability on the Administrative Agent or any
of the Lenders. In no event will any site visit or observation by the
Administrative Agent be deemed a representation that Hazardous Materials are or
are not present in, on or under any of the Facilities, or that there has been or
will be compliance with any Environmental Law and the Administrative Agent shall
not be deemed to have made any representation or warranty to any party regarding
the truth, accuracy or completeness of any report or findings with regard
thereto. Without express written authorization, neither NewPageHoldCo nor any
other party shall be entitled to rely on any site visit observation or
investigation by the Administrative Agent. The Administrative Agent and the
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owe no duty of care to protect NewPageHoldCo or any other party against, or to
inform NewPageHoldCo or any other party of, any Hazardous Materials or any other
adverse condition affecting any of the Facilities. The Administrative Agent may
in its discretion disclose to NewPageHoldCo, or to any other party if so
required by law, any report or findings made as a result of, or in connection
with, any site visit, observation, or investigation by the Administrative Agent.
If the Administrative Agent is required to disclose any such report or finding
to any third party pursuant to law, then the Administrative Agent shall provide
NewPageHoldCo prompt written notice of such disclosure and afford NewPageHoldCo
the opportunity to object or defend against such disclosure at its own and sole
cost; provided, that the failure of the Administrative Agent to give any such
notice or afford NewPageHoldCo the opportunity to object or defend against such
disclosure shall not result in any liability to the Administrative Agent.
NewPageHoldCo acknowledges that it or its Subsidiaries may be obligated to
notify relevant Governmental Authorities regarding the results of any site
visit, observation or investigation by the Administrative Agent and that such
reporting requirements are site and fact-specific, and are to be evaluated by
NewPageHoldCo without advice or assistance from the Administrative Agent.

(d) If counsel to NewPageHoldCo or its Subsidiaries reasonably determines that
provision to Administrative Agent of a document otherwise required to be
provided pursuant to this Section 5.9 (or any other provision of this Agreement
or any other Credit Document relating to environmental matters) would jeopardize
an applicable attorney-client or work product privilege pertaining to such
document, then the NewPageHoldCo or its Subsidiary shall not be obligated to
deliver such document to Administrative Agent but shall provide Administrative
Agent with a notice identifying the author and recipient of such document and
generally describing the contents of the document. Upon request of
Administrative Agent, NewPageHoldCo and its Subsidiaries shall take all
reasonable steps necessary to provide Administrative Agent with the factual
information contained in any such privileged document.

5.10. Subsidiaries. In the event that any Person becomes a Domestic Subsidiary
of NewPageCo, NewPageCo shall (a) promptly cause such Domestic Subsidiary to
become a Guarantor hereunder and a Grantor under the Pledge and Security
Agreement by executing and delivering to Administrative Agent and Collateral
Agent a Counterpart Agreement, and (b) take all such actions and execute and
deliver, or cause to be executed and delivered, all such documents, instruments,
agreements, and certificates as are similar to those described in Sections
3.1(b), 3.1(i), 3.1(j), 3.1(l) and 3.1(m). With respect to each such Subsidiary,
NewPageCo shall promptly send to Administrative Agent written notice setting
forth with respect to such Person (i) the date on which such Person became a
Subsidiary of NewPageCo, and (ii) all of the data required to be set forth in
Schedules 4.1 and 4.2 with respect to all Subsidiaries of NewPageCo; provided,
such written notice shall be deemed to supplement Schedule 4.1 and 4.2 for all
purposes hereof.

 

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5.11. [Reserved.]

5.12. Interest Rate Protection. No later than 60 days following the Closing Date
and at all times thereafter, NewPageCo shall maintain, or caused to be
maintained, in effect one or more Interest Rate Agreements for a term of not
less than 2 years and otherwise in form and substance reasonably satisfactory to
Administrative Agent, which Interest Rate Agreements shall effectively limit the
Unadjusted Eurodollar Rate Component of the interest costs to NewPageCo with
respect to an aggregate notional principal amount such that not less than 50% of
the aggregate principal amount of the Indebtedness for borrowed money of
NewPageHoldCo and its Subsidiaries outstanding as of the Closing Date (exclusive
of the NewPageHoldCo PIK Notes) is either (i) subject to such Interest Rate
Agreements or (ii) fixed rate Indebtedness, in each case for a period of not
less than two years after the Closing Date.

5.13. Security Interests; Further Assurances. Promptly, upon the reasonable
request of the Administrative Agent, the Collateral Agent or any Lender, at
NewPageCo’s expense, execute, acknowledge and deliver, or cause the execution,
acknowledgment and delivery of, and thereafter register, file or record, or
cause to be registered, filed or recorded, in an appropriate governmental
office, any document or instrument supplemental to or confirmatory of the
Collateral Documents or otherwise deemed by the Administrative Agent or the
Collateral Agent reasonably necessary or desirable for the continued validity,
perfection and priority of the Liens on the Collateral covered thereby superior
to and prior to the rights of all third Persons other than the holders of
Permitted Liens and subject to no other Liens except as permitted by the
applicable Collateral Document. Deliver or cause to be delivered to the
Administrative Agent and the Collateral Agent from time to time such other
documentation, consents, authorizations, approvals and orders in form and
substance reasonably satisfactory to the Administrative Agent and the Collateral
Agent as the Administrative Agent and the Collateral Agent shall reasonably deem
necessary to perfect or maintain the Liens on the Collateral pursuant to the
Collateral Documents. Upon the exercise by the Administrative Agent, the
Collateral Agent or the Lenders of any power, right, privilege or remedy
pursuant to any Credit Document which requires any consent, approval,
registration, qualification or authorization of any Governmental Authority
execute and deliver all applications, certifications, instruments and other
documents and papers that the Administrative Agent, the Collateral Agent or the
Lenders may be so required to obtain.

5.14. Miscellaneous Business Covenants. Unless otherwise consented to by Agents
or Requisite Lenders:

(a) Non-Consolidation. NewPageHoldCo will and will cause each of its
Subsidiaries to: (i) maintain entity records and books of account separate from
those of any

 

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other entity which is an Affiliate of such entity; (ii) not commingle its funds
or assets with those of any other entity which is an Affiliate of such entity
(other than such funds of NewPageCo and the Borrowing Base Guarantors which may
be commingled with each other in the ordinary course of their cash management
system); and (iii) provide that its board of directors or other analogous
governing body will hold all appropriate meetings to authorize and approve such
entity’s actions, which meetings will be separate from those of other entities.

(b) Cash Management Systems. NewPageHoldCo and its Subsidiaries shall establish
and maintain cash management systems reasonably acceptable to the Administrative
Agent and the Collateral Agent.

5.15. Information Regarding Collateral.

(a) Furnish to the Administrative Agent and the Collateral Agent 15 days prior
written notice (in the form of an officer’s certificate), clearly describing any
of the following changes (i) in any Credit Party’s corporate name or in any
trade name used to identify it in the conduct of its business or in the
ownership of its properties, (ii) in the location of any Credit Party’s chief
executive office, its principal place of business, any office in which it
maintains books or records relating to Collateral owned by it or any office or
facility at which Collateral having a value in excess of $250,000 owned by it is
located (including the establishment of any such new office or facility),
(iii) in any Credit Party’s identity or corporate structure, (iv) in any Credit
Party’s Federal Taxpayer Identification Number or (v) in any Credit Party’s
jurisdiction of organization. NewPageCo agrees not to effect or permit any
change referred to in the preceding sentence unless all filings have been made
under the UCC or otherwise that are required in order for the Collateral Agent
to continue at all times following such change to have a valid, legal and
perfected security interest in all the Collateral. NewPageCo agrees to provide
to the Collateral Agent such other information in connection with such changes
as the Collateral Agent may reasonably request. NewPageCo also agrees promptly
to notify the Administrative Agent and the Collateral Agent if any material
portion of the Collateral is damaged or destroyed or taken by condemnation or
other eminent domain proceeding.

(b) Each year, at the time of delivery of annual financial statements with
respect to the preceding Fiscal Year pursuant to paragraph (a) of Section 5.1,
deliver to the Administrative Agent and the Collateral Agent a certificate of
the chief financial officer of NewPageCo (i) setting forth any changes to the
information required pursuant to the Perfection Certificate Supplement or
confirming that there has been no change in such information since the date of
the Perfection Certificate delivered on the Closing Date or the date of the most
recent certificate delivered pursuant to this Section 5.15(b) and
(ii) certifying that NewPageCo and its Subsidiaries have not taken any actions
(and are not aware of any actions so taken) to terminate any UCC Financing
Statements (including fixture filings, as applicable) and that all UCC Financing
Statements (including fixture filings, as applicable) and other appropriate
filings,

 

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recordings or registrations, including all refilings, rerecordings and
reregistrations, containing a description of the Collateral have been filed of
record in each governmental, municipal or other appropriate office in each
jurisdiction identified pursuant to clause (i) above to the extent necessary to
protect and perfect the security interests and Liens under the Collateral
Documents for a period of not less than 18 months after the date of such
certificate (except as noted therein with respect to any continuation statements
to be filed within such period).

5.16. Post-Closing Collateral Matters. Execute and deliver the documents and
complete the tasks set forth on Schedule 5.16, in each case within the time
limits specified on such schedule.

5.17. Borrowing Base-Related Reports. NewPageCo shall deliver or cause to be
delivered (at the expense of NewPageCo) to the Collateral Agent and the
Administrative Agent the following:

(a) in no event less frequently than 20 days after the end of each month for the
month most recently ended (or in the event that a Cash Dominion Trigger Event
shall have occurred and be continuing, no less frequently than two (2) Business
Days after the end of each week), a Borrowing Base Certificate from NewPageCo
accompanied by such supporting detail and documentation as shall be requested by
the Collateral Agent in its Permitted Discretion;

(b) upon request by the Collateral Agent, and in no event less frequently than
20 days after the end of (i) each month, a monthly trial balance showing
Accounts outstanding aged from statement date as follows: 1 to 30 days, 31 to 60
days, 61 to 90 days and 91 days or more, accompanied by a comparison to the
prior month’s trial balance and such supporting detail and documentation as
shall be requested by the Collateral Agent in its Permitted Discretion and
(ii) each month, a summary of Inventory by location and type accompanied by such
supporting detail and documentation as shall be requested by the Collateral
Agent in its Permitted Discretion (in each case, together with a copy of all or
any part of such delivery requested by any Lender in writing after the Closing
Date);

(c) on the date any Borrowing Base Certificate is delivered pursuant to
Section 5.17(a) or at such more frequent intervals in the event there shall
exist an Event of Default or Excess Availability shall be less than $25,000,000
on any day thirty (30) days prior to the date of such request, (i) a copy of the
ledger registering the Borrowing Base Guarantor Intercompany Loan Account as of
the date of the Borrowing Base Certificate and (ii) a collateral report with
respect to the Credit Parties, including all additions and reductions (cash and
non-cash) with respect to intercompany loan accounts of NewPageCo and Borrowing
Base Guarantors, accompanied by such supporting detail and documentation as
shall be requested by the Collateral Agent in its Permitted Discretion;

 

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(d) at the time of delivery of each of the financial statements delivered
pursuant to Sections 5.1(a) and (b), a reconciliation of the Accounts trial
balance and quarter-end Inventory reports of NewPageCo and Borrowing Base
Guarantors to the general ledger of such Credit Party, in each case, accompanied
by such supporting detail and documentation as shall be requested by the
Collateral Agent in its Permitted Discretion;

(e) upon the request of the Administrative Agent or the Collateral Agent, a
general description of fixed assets owned by the Credit Parties which have been
disposed of since the date of the most recent Inventory Appraisal conducted
pursuant to Section 5.17(g) and the aggregate book value thereof;

(f) together with the delivery of the Compliance Certificate delivered with the
financial statements for each Fiscal Quarter pursuant to Section 5.1(b), a list
of any applications for the registration of any patent, trademark or copyright
with the United States Patent and Trademark Office, the United States Copyright
Office or any similar office or agency which any Credit Party has filed in the
prior fiscal quarter;

(g) a desktop collateral appraisal and Inventory Appraisal to be conducted, in
each case, one time per annum, or, following the occurrence and during the
continuation of an Event of Default or when the Total Utilization of Revolving
Commitments shall exceed the Revolving Commitments or the Borrowing Base then in
effect, more frequently at Collateral Agent’s reasonable request, by an auditor
or outside appraisal firm, and in form, scope and substance, reasonably
satisfactory to the Collateral Agent and Administrative Agent;

(h) from time to time upon the request of the Administrative Agent an “Officers’
Certificate” as defined in each the Senior Secured Fixed Rate Notes Indenture
and the Senior Secured Floating Rate Notes Indenture confirming that the
outstanding Obligations and any requested Revolving Loans hereunder are
permitted to be incurred under such Indentures and permitted to be secured by
the Collateral; and

(i) such other reports, statements and reconciliations with respect to the
Borrowing Base or Collateral of any or all Credit Parties as the Collateral
Agent shall from time to time request in its Permitted Discretion.

The delivery of each certificate and report or any other information delivered
pursuant to this Section 5.17 shall constitute a representation and warranty by
NewPageCo that the statements and information contained therein are true and
correct in all material respects on and as of such date.

 

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SECTION 6. NEGATIVE COVENANTS

Each Credit Party covenants and agrees that, so long as any Revolving Commitment
is in effect and until payment in full of all Credit Agreement Obligations and
cancellation or expiration of all Letters of Credit, such Credit Party shall
perform, and shall cause each of its Subsidiaries to perform, all covenants in
this Section 6.

6.1. Indebtedness. No Credit Party shall, nor shall it permit any of its
Subsidiaries to, directly or indirectly, create, incur, assume or guaranty, or
otherwise become or remain directly or indirectly liable with respect to any
Indebtedness, except:

(a) the Indebtedness under the NewPageCo First Lien Term Loan Agreement in an
amount not to exceed a principal amount equal to $750,000,000 in the aggregate;

(b) (i) Indebtedness of any Guarantor Subsidiary to NewPageCo or to any other
Guarantor Subsidiary, or of NewPageCo to any Guarantor Subsidiary;
(ii) Indebtedness of any Subsidiary of NewPageCo that is not a Guarantor to
NewPageHoldCo or NewPageCo or any Subsidiary of NewPageHoldCo in aggregate
principal amount that, together with Indebtedness under the proviso of
Section 6.1(h) and other Investments permitted by Section 6.7(b)(iii), does not
exceed $5,000,000 at any time; and (iii) Indebtedness of NewPageHoldCo or
NewPageCo or any Guarantor Subsidiary to any Subsidiary of NewPageHoldCo that is
not a Guarantor; provided, (A) to the extent requested by the Administrative
Agent or the Collateral Agent, all such Indebtedness shall be evidenced by
promissory notes and all such notes shall be subject to a First Priority Lien
pursuant to the Pledge and Security Agreement (except to the extent that the
Indebtedness is owed to a Foreign Subsidiary), (B) all such Indebtedness shall
be unsecured and subordinated in right of payment to the payment in full of the
Obligations pursuant to the terms of 7.7 of this Agreement (or, if applicable,
the applicable promissory notes or an intercompany subordination agreement that
in any such case, is reasonably satisfactory to Administrative Agent), and
(C) any payment by any such Guarantor Subsidiary under any guaranty of the
Obligations shall result in a pro tanto reduction of the amount of any
Indebtedness owed by such Subsidiary to NewPageCo or to any of its Subsidiaries
for whose benefit such payment is made;

(c) the Senior Secured Floating Rate Notes Indebtedness in an amount not to
exceed a principal amount equal to $225,000,000 in the aggregate, the Senior
Secured Fixed Rate Notes Indebtedness in an amount not to exceed a principal
amount equal to $350,000,000 in the aggregate and the Senior Subordinated Notes
Indebtedness in an amount not to exceed a principal amount equal to $200,000,000
in the aggregate; and Indebtedness of NewPageHoldCo with respect to the
NewPageHoldCo PIK Note Indebtedness in an aggregate amount not to exceed a
principal amount equal to $125,000,000;

(d) Indebtedness incurred by NewPageCo or any of its Subsidiaries arising from
agreements providing for indemnification, adjustment of purchase price or
similar obligations, in each case, incurred or assumed in connection with
Permitted Acquisitions or permitted dispositions of any business, assets or
Subsidiary of NewPageHoldCo or any of its Subsidiaries;

 

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(e) Indebtedness of NewPageCo and/or its Subsidiaries which may be deemed to
exist pursuant to any guaranties, performance, surety, statutory, appeal or
similar obligations incurred in the ordinary course of business;

(f) Indebtedness of NewPageCo and/or its Subsidiaries in respect of netting
services, overdraft protections and otherwise in connection with deposit
accounts;

(g) guaranties of NewPageCo and/or its Subsidiaries in the ordinary course of
business of the obligations of suppliers, customers, franchisees and licensees
of NewPageHoldCo and its Subsidiaries;

(h) guaranties by NewPageCo of Indebtedness of a Subsidiary or guaranties by a
Subsidiary of NewPageCo of Indebtedness of NewPageCo or a Subsidiary, in each
case, with respect to Indebtedness otherwise permitted to be incurred pursuant
to this Section 6.1; provided, that the aggregate amount of Indebtedness of
Subsidiaries of NewPageCo that are not Guarantors which has been guaranteed by
NewPageCo or any Guarantor Subsidiary, together with Indebtedness under clause
(b)(ii) and Investments permitted by Section 6.7(b)(iii), shall not exceed
$5,000,000 at any time;

(i) Existing Indebtedness not refinanced on the Closing Date set forth on
Schedule 6.1;

(j) Indebtedness with respect to Capital Leases and purchase money Indebtedness
in an aggregate amount not to exceed at any time $25,000,000; provided, any such
Indebtedness (i) shall be secured only by the asset acquired in connection with
the incurrence of such Indebtedness, and (ii) shall constitute not less than 95%
of the aggregate consideration paid with respect to such asset;

(k) Indebtedness in connection with the repurchase otherwise permitted hereunder
of equity issued to current or former employees, executives or directors of a
Credit Party (including any promissory notes issued by a Credit Party to
repurchase equity of employees, executives or directors of a Credit Party) in an
amount not to exceed $4,000,000 in the aggregate at any time outstanding;

(l) Indebtedness under Hedge Agreements required pursuant to, and entered into
in accordance with, Section 5.12 or any Hedge Agreements entered into in the
ordinary course of business and not for speculative purposes; provided that any
Hedge Agreement that could result in any uncovered short positions with respect
to commodities shall not be permitted pursuant to this clause (l);

 

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(m) unsecured Indebtedness under the Commodities Hedge Agreement;

(n) unsecured Indebtedness in an amount not to exceed $40,000,000 in the
aggregate at any time outstanding (i) consisting of subordinated indebtedness of
NewPageCo or any of its Subsidiaries issued to a seller in connection with a
Permitted Acquisition and which is subordinated in right of payment to the
Obligations and containing such other terms, including with respect to tenor,
covenants, events of default and remedies satisfactory to the Administrative
Agent, or (ii) incurred or assumed by NewPageCo and its Subsidiaries as a result
of Permitted Acquisition;

(o) obligations on account of non-current accounts payable which the applicable
Credit Party is contesting in good faith and by appropriate proceedings
diligently conducted and with respect to which adequate reserves have been
established and are being maintained in accordance with GAAP;

(p) the incurrence by any Foreign Subsidiary of NewPageHoldCo of Indebtedness
owing to Persons other than NewPageHoldCo and any of its Subsidiaries in an
aggregate principal amount (or accreted value, as applicable) at any time
outstanding, not to exceed the sum of $50,000,000;

(q) any extensions, renewals, refinancings or replacements of such Indebtedness
described in subsection (a), (c), (i), (j) or (o) above (subject to any
limitations set forth in such subsections), including renewals and extensions
expressly provided for in the agreements evidencing any such Indebtedness as the
same are in effect on the date of this Agreement, provided that such
refinancings and extensions of any such Indebtedness shall be permitted only so
long as the covenants, events of default, subordination and terms and conditions
thereof are not less favorable to the obligor thereon or to the Lenders than the
Indebtedness being refinanced or extended, and the average life to maturity
thereof is greater than or equal to that of the Indebtedness being refinanced or
extended; provided, such Indebtedness permitted under this subsection shall not
(x) include Indebtedness of an obligor that was not an obligor with respect to
the Indebtedness being extended, renewed or refinanced, (y) exceed in a
principal amount the Indebtedness being renewed, extended or refinanced, accrued
cash interest payable thereon, premium (if any) thereon, other reasonable
amounts necessary to accomplish such extension, renewal or refinancing, and
reasonable fees and expenses incurred in connection therewith, or (z) be
incurred, created or assumed if any Default or Event of Default has occurred and
is continuing or would result therefrom;

 

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(r) other unsecured Indebtedness of NewPageCo and its Subsidiaries (other than
Foreign Subsidiaries), in an aggregate amount not to exceed at any time
$30,000,000; and

(s) guaranties by NewPageHoldCo of Indebtedness of NewPageCo and its
Subsidiaries in an aggregate amount, together with the guaranties permitted by
clause (h), Indebtedness under clause (b)(ii) and Investments permitted by
Section 6.7(b)(iii), not to exceed $10,000,000 at any time.

To the extent that the creation, incurrence or assumption of any Indebtedness
could be attributable to more than one subsection of this Section 6.1, NewPageCo
may allocate such Indebtedness to any one or more of such subsections and in no
event shall the same portion of Indebtedness be deemed to utilize or be
attributable to more than one item.

6.2. Liens. No Credit Party shall, nor shall it permit any of its Subsidiaries
to, directly or indirectly, create, incur, assume or permit to exist any Lien on
or with respect to any property or asset of any kind (including any document or
instrument in respect of goods or accounts receivable) of NewPageHoldCo or any
of its Subsidiaries, whether now owned or hereafter acquired, or any income or
profits therefrom, or file or permit the filing of, or permit to remain in
effect, any financing statement or other similar notice of any Lien with respect
to any such property, asset, income or profits under the UCC of any State or
under any similar recording or notice statute, except:

(a) (i) Liens in favor of Collateral Agent for the benefit of Secured Parties
granted pursuant to any Credit Document, (ii) Liens granted pursuant to the
NewPageCo First Lien Term Loan Agreement or any “Credit Document” as defined
thereunder, (iii) Liens in the Second Lien Financing Collateral securing the
obligations and indebtedness incurred pursuant to the Senior Secured Floating
Rate Note Documents and the Senior Secured Fixed Rate Note Documents and
(iv) Liens securing Indebtedness permitted by Section 6.1(q) that extends,
renews, refinances or replaces any Indebtedness described in clause (ii) or
(iii) of this subsection (a) so long as such Liens do not extend to any assets
other than those securing such Indebtedness at the time of any such extension,
renewal, refinancing or replacement and are subject to the terms of the
Intercreditor Agreement;

(b) Liens for Taxes that are not yet required to be paid pursuant to
Section 5.3;

(c) statutory Liens of landlords, carriers, warehousemen, suppliers, mechanics,
repairmen, workmen and materialmen, and other Liens imposed by law (other than
any such Lien imposed pursuant to Section 401 (a)(29) or 412(n) of the Internal
Revenue Code or by ERISA), in each case incurred in the ordinary course of
business (i) for amounts not yet overdue or (ii) for amounts that are overdue
and that (in the case of any such amounts overdue for a period in excess of five
days) are being contested in good faith by appropriate proceedings, so long as
such reserves or other appropriate provisions, if any, as shall be required by
GAAP shall have been made for any such contested amounts;

 

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(d) Liens incurred in the ordinary course of business in connection with
workers’ compensation, unemployment insurance and other types of social
security, or to secure the performance of tenders, statutory obligations, surety
and appeal bonds, bids, leases, government contracts, trade contracts,
performance and return-of-money bonds and other similar obligations (exclusive
of obligations for the payment of borrowed money or other Indebtedness), so long
as no foreclosure, sale or similar proceedings have been commenced with respect
to any portion of the Collateral on account thereof;

(e) Any state of facts an accurate survey would disclose, public and private
roads, timber cutting and hauling contracts, timber sales contracts,
prescriptive easements or adverse possession claims, minor encumbrances,
easements or reservations of, or rights of others for, pursuant to any leases,
licenses, rights-of-ways or other similar agreements or arrangements,
development, air or water rights, sewers, electric lines, telegraph and
telephone lines and other utility lines, pipelines, service lines, railroad
lines, improvements and structures located on, over or under any real property,
drains, drainage ditches, culverts, electric power or gas generating or
co-generation, storage and transmission facilities another similar purposes or
minor defects or irregularities in title, in each case which, individually or in
the aggregate, do not and will not materially adversely affect the value of the
subject property or interfere in any material respect with the ordinary conduct
of the business of NewPageCo or any of its Subsidiaries;

(f) any interest or title of a lessor or sublessor under any lease of real or
personal property which is not a Capital Lease and any leases or subleases
granted by NewPageCo or any of its Subsidiaries in the ordinary course of their
respective businesses that are not otherwise prohibited by this Agreement and
not interfering in any material respect with the business of NewPageCo or such
Subsidiary;

(g) Liens solely on any cash earnest money deposits made by NewPageCo or any of
its Subsidiaries in connection with any letter of intent or purchase agreement
for a Permitted Acquisition;

(h) purported Liens evidenced by the filing of precautionary UCC financing
statements relating solely to operating leases of personal property entered into
in the ordinary course of business;

(i) Liens in favor of customs and revenue authorities or freight handlers or
forwarders to secure payment of customs duties in connection with the
importation of goods;

 

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(j) any zoning or similar law or right reserved to or vested in any Governmental
Authority;

(k) licenses and sublicenses of patents, trademarks and other intellectual
property rights granted by NewPageHoldCo or any of its Subsidiaries in the
ordinary course of business and not interfering in any respect with the ordinary
conduct of the business of NewPageCo or such Subsidiary;

(l) Liens described in Schedule 6.2 or on a title report delivered pursuant to
Section 3.1(i)(iv);

(m) Liens securing Indebtedness permitted pursuant to 6.1(j); provided, any such
Lien shall encumber only the asset acquired, constructed or improved with the
proceeds of such Indebtedness;

(n) any attachment or judgment Lien not constituting an Event of Default under
Section 8.1(h) so long as the enforcement of any such Lien on any Collateral is
stayed;

(o) customary security deposits under operating leases in the ordinary course of
business;

(p) customary rights of set off, bankers’ lien, refund or charge back under
deposit agreements, the UCC or common law of banks or other financial
institutions where NewPageCo or any of its Subsidiaries maintains deposits
(other than deposits intended as cash collateral) in the ordinary course of
business;

(q) Liens to secure Indebtedness permitted by Section 6.1(p); provided that such
Liens shall be limited solely to the assets of the Foreign Subsidiary obligated
with respect to such Indebtedness;

(r) Liens in favor of NewPageHoldCo or any Subsidiary;

(s) Liens on property of a Person existing at the time such Person is merged
with or into or consolidated with NewPageHoldCo or a Subsidiary thereof or at
the time NewPageHoldCo or one of its Subsidiaries acquires the Capital Stock of
such Person; provided, that such Liens were in existence prior to and were not
incurred in connection with or in contemplation of, such merger or consolidation
or acquisition and do not extend to any assets other than those of the Person
merged into or consolidated with or acquired by NewPageHoldCo or it
Subsidiaries;

 

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(t) Liens securing Indebtedness from extensions, renewals or replacements, in
whole or in part, of any Lien described in clause (s) of this Section 6.2;
provided, that any such extension, renewals or replacement is no more
restrictive in any material respect than the Lien so extended, renewed or
replaced and does not extend to any additional property or assets;

(u) Customary rights of first refusal, “tag-along” and “drag-along” rights, and
put and call arrangements under joint venture agreements; and

(v) other Liens on assets other than the Collateral securing Indebtedness in an
aggregate amount not to exceed $10,000,000 at any time outstanding.

6.3. Equitable Lien. If any Credit Party or any of its Subsidiaries shall create
or assume any Lien upon any of its properties or assets, whether now owned or
hereafter acquired, other than Permitted Liens, it shall make or cause to be
made effective provisions whereby the Obligations will be secured by such Lien
equally and ratably with any and all other Indebtedness secured thereby as long
as any such Indebtedness shall be so secured; provided, notwithstanding the
foregoing, this covenant shall not be construed as a consent by Requisite
Lenders to the creation or assumption of any such Lien not otherwise permitted
hereby.

6.4. No Further Negative Pledges. Except with respect to (a) specific property
encumbered to secure payment of particular Indebtedness or to be sold pursuant
to an executed agreement with respect to a permitted Asset Sale, (b) each of the
NewPageHoldCo PIK Note Indenture, NewPageCo First Lien Term Loan Agreement, the
Senior Secured Floating Rate Notes and the Senior Secured Fixed Rate Notes, in
each case, as in effect on the date hereof and (c) restrictions by reason of
customary provisions restricting assignments, subletting or other transfers
contained in leases, licenses and similar agreements entered into in the
ordinary course of business (provided that such restrictions are limited to the
property or assets secured by such Liens or the property or assets subject to
such leases, licenses or similar agreements, as the case may be) no Credit Party
nor any of its Subsidiaries shall enter into any agreement prohibiting the
creation or assumption of any Lien upon any of its properties or assets, whether
now owned or hereafter acquired.

6.5. Restricted Junior Payments. No Credit Party shall, nor shall it permit any
of its Subsidiaries or Affiliates through any manner or means or through any
other Person to, directly or indirectly, declare, order, pay, make or set apart,
or agree to declare, order, pay, make or set apart, any sum for any Restricted
Junior Payment except that:

(a) (i) NewPageCo may make regularly scheduled payments of interest in respect
of the NewPageCo First Lien Term Loan Agreement, Senior Secured Floating Rate
Notes, the Senior Secured Fixed Rate Notes and the Senior Subordinated Notes in
accordance with the terms of, and only to the extent required by, and subject to
any applicable subordination provisions

 

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contained in, the indenture or other agreement pursuant to which any such
Indebtedness was issued, (ii) NewPageCo may make scheduled payments of principal
and mandatory prepayments required pursuant to the terms of the NewPageCo First
Lien Term Loan Agreement, (iii) NewPageCo may make voluntary prepayments of
principal under the NewPage First Lien Term Loan Agreement so long as (A) both
before and after giving effect to any such voluntary prepayment no Default or
Event of Default shall have occurred and be continuing and (B) after giving
effect to any such prepayment Excess Availability shall be at least $50,000,000,
and (iv) so long as no Default or Event of Default shall have occurred and be
continuing NewPageHoldCo may make mandatory prepayments or mandatory redemptions
of the NewPageHoldCo PIK Notes pursuant to the terms thereof with any proceeds
from a capital contribution to, or the issuance of any Capital Stock of
NewPageHoldCo (other than proceeds of Permitted Cure Securities);

(b) so long as no Default or Event of Default shall have occurred and be
continuing or shall be caused thereby, NewPageCo may make Restricted Junior
Payments to NewPageHoldCo in an aggregate amount not to exceed $2,000,000 (or
after the occurrence of an IPO, $3,000,000) in any Fiscal Year, to the extent
necessary to permit NewPageHoldCo to pay general administrative costs and
expenses, and out-of-pocket legal, accounting, filing and other general
corporate overhead costs, so long as NewPageHoldCo applies the amount of any
such Restricted Junior Payment for such purpose;

(c) Subsidiaries of NewPageCo may make Restricted Junior Payments (i) to
NewPageCo or to any parent entity of such Subsidiary which is a Subsidiary and
(ii) on a pro rata basis to the other equity holders of such Subsidiary;

(d) for so long as NewPageCo is a member of a group filing a consolidated or
combined tax return with any direct or indirect parent of NewPageCo, payments to
such direct or indirect parent in respect of an allocable portion of the tax
liabilities of such group that is attributable to NewPageCo and its Subsidiaries
(“Tax Payments”) and to pay franchise or similar taxes and fees of such direct
or indirect parent required to maintain such direct or indirect parent’s
corporate existence; provided that such Tax Payments shall not exceed the lesser
of (i) the amount of the relevant tax (including any penalties and interest)
that NewPageCo would owe if NewPageCo were filing a separate tax return (or a
separate consolidated or combined return with its Subsidiaries that are members
of the consolidated or combined group), taking into account any carryovers and
carrybacks of tax attributes (such as net operating losses) of NewPageCo and
such Subsidiaries from other taxable years and (ii) the net amount of the
relevant tax that the direct or indirect parent actually owes to the appropriate
taxing authority; provided further that any Tax Payments received from NewPageCo
shall be paid over to the appropriate taxing authority within 60 days of the
direct or indirect parent’s receipt of such Tax Payments or refunded to
NewPageCo;

 

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(e) so long as no Default or Event of Default shall have occurred and be
continuing or shall be caused thereby, NewPageCo may make Restricted Junior
Payments to NewPageHoldCo to the extent necessary to permit NewPageHoldCo to:

(i) repurchase, redeem or otherwise acquire or retire shares of, or options or
warrants to purchase shares of, Capital Stock of NewPageHoldCo, or to make a
Restricted Junior Payment to Maple Timber Acquisition LLC and Maple Timber
Acquisition II LLC to repurchase, redeem or otherwise acquire or retire their
equity interests or options or warrants to purchase their equity interests, from
current or former employees, consultants, officers or directors of
NewPageHoldCo, NewPageCo or any Subsidiaries thereof or their respective
estates, spouses, former spouses, family members or other permitted transferees,
in an aggregate amount not to exceed $5,000,000 in any calendar year provided,
that NewPageCo may carry over and make in subsequent calendar years, in addition
to the amounts permitted for such calendar year, the amount of such purchases,
redemptions or other acquisitions or retirements for value permitted to have
been made but not made in any preceding calendar year up to a maximum of
$15,000,000 million in any calendar year; provided further that such amount in
any calendar year may be increased by an amount not to exceed (A) the net cash
proceeds from the sale of equity or other beneficial ownership interests of
NewPageCo (or NewPageHoldCo or a direct or indirect parent or NewPageHoldCo to
the extent such net cash proceeds are contributed to the common equity of
NewPageCo) to employees, officers, directors or consultants of NewPageHoldCo,
NewPageCo and the Subsidiaries or NewPageHoldCo that occurs after the date of
this Agreement (to the extent the cash proceeds from the sale of such equity or
other beneficial ownership interests have not otherwise been applied to the
payment of Restricted Junior Payments) plus (B) the cash proceeds of key man
life insurance policies received by NewPageCo and its Subsidiaries after the
date of this Agreement less any amounts previously applied to the payment of
Restricted Junior Payments pursuant to this clause (e);

(ii) (A) substantially concurrently with the consummation of any IPO, pay
dividends or repurchase or redeem equity interests (or options or warrants to
purchase equity interests) in an aggregate amount not to exceed $35,000,000, and
(B) after the occurrence of any such IPO, so long (x) as the Total Leverage
Ratio as of the end of the most recently ended Fiscal Quarter prior to such
payment was less than or equal to 2.50 to 1 and (y) after giving effect to any
such payment Excess Availability shall be at least $50,000,000, pay dividends or
repurchase or redeem equity interests (or options or warrants to purchase equity
interests) during any Fiscal Year in an aggregate amount not to exceed 50% of
Consolidated Excess Cash Flow for the immediately preceding Fiscal Year;

 

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(iii) repurchase, redeem or otherwise acquire or retire the NewPageHoldCo PIK
Notes, term loans outstanding under the NewPageCo First Lien Term Loan
Agreement, any Senior Secured Floating Rate Notes, any Senior Secured Fixed Rate
Notes or any Senior Subordinated Notes with (x) the amount of Net Asset Sale
Proceeds received from any Asset Sale that is not otherwise required to be used
to repay Indebtedness or reinvested in assets used or useful in a Permitted
Business and (y) an amount equal to Consolidated Excess Cash Flow during the
immediately preceding Fiscal Year (and that is not otherwise required to be used
to repay Indebtedness or used to pay a dividend or repurchase or redeem equity
interests pursuant to clause (e)(ii) above); provided that no such repurchase,
redemption, acquisition or retirement may be made in reliance on this clause
(e)(iii) unless (1) the Senior Leverage Ratio as of the end of the most recently
ended Fiscal Quarter prior to such repurchase, redemption, acquisition or
retirement, was less than or equal to 2.50 to 1 and (2) the aggregate amount
paid in connection with all such repurchases, redemptions, acquisitions and
retirements pursuant to this clause (e)(iii) shall not exceed $250,000,000;

(f) the repurchase of Capital Stock deemed to occur upon any “cashless” exercise
of stock options, warrants or other convertible securities;

(g) so long as no Default or Event of Default shall have occurred and be
continuing or shall be caused thereby, the redemption, repurchase or other
acquisition for value of any Capital Stock of any Subsidiary that is held by a
Person that is not an Affiliate of NewPageCo to the extent required to satisfy
applicable laws, rules or regulations; provided that the consideration for such
redemption, repurchase or other acquisition shall not exceed $1,000,000 during
the term of this Agreement;

(h) repayments of the NewPageHoldCo PIK Notes, the NewPageCo First Lien Term
Loan Agreement, Senior Secured Floating Rate Notes, the Senior Secured Fixed
Rate Notes or the Senior Subordinated Notes in connection with any refinancing
thereof permitted pursuant to Section 6.1(q);

(i) payments made to officers, directors, consultants or employees of NewPageCo
on or about the Closing Date in an amount not to exceed $3,000,000;

(j) payments to NewPageHoldCo to permit NewPageHoldCo to pay reasonable
accounting, legal and administrative expenses incurred in connection with
NewPageHoldCo’s obligations under the NewPageHoldCo PIK Notes (other than
principal and interest thereon) and the related registration rights agreement
when due, in an aggregate amount not to exceed $1.5 million per annum.

 

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6.6. Restrictions on Subsidiary Distributions. Except as provided herein, no
Credit Party shall, nor shall it permit any of its Subsidiaries to, create or
otherwise cause or suffer to exist or become effective any consensual
encumbrance or restriction of any kind on the ability of any Subsidiary of
NewPageCo to (a) pay dividends or make any other distributions on any of such
Subsidiary’s Capital Stock owned by NewPageCo or any other Subsidiary of
NewPageCo, (b) repay or prepay any Indebtedness owed by such Subsidiary to
NewPageCo or any other Subsidiary of NewPageCo, (c) make loans or advances to
NewPageCo or any other Subsidiary of NewPageCo, or (d) transfer any of its
property or assets to NewPageCo or any other Subsidiary of NewPageCo, other than
restrictions (i) existing under this Agreement, (ii) in the NewPageHoldCo PIK
Note Documents, the NewPageCo First Lien Term Loan Documents, the Senior Secured
Floating Rate Notes Documents, the Senior Secured Fixed Rate Notes Documents,
the Senior Subordinated Notes Documents as in effect on the Closing Date or as
modified in accordance with this Agreement, (iii) in agreements evidencing
Indebtedness permitted by Section 6.1(j) that impose restrictions on the
property so acquired, (iv) in agreements evidencing Indebtedness permitted by
Section 6.1(p) that impose restrictions on the Foreign Subsidiary obligated on
such Indebtedness, (v) by reason of customary provisions restricting
assignments, subletting or other transfers contained in leases, licenses, asset
or stock sale agreements, joint venture agreements and similar agreements
otherwise permitted hereunder, entered into in the ordinary course of business,
(vi) in agreements or instruments that prohibit the payment of dividends or the
making of other distributions with respect to any Capital Stock of a Person
other than on a pro rata basis, (vii) that are or were created by virtue of any
transfer of, agreement to transfer or option or right with respect to any
property, assets or Capital Stock not otherwise prohibited under this Agreement,
(viii) in any instrument governing Indebtedness of Capital Stock of a Person
acquired by NewPageHoldCo of one of its Subsidiaries as in effect at the time of
such acquisition (except to the extent such Indebtedness or Capital Stock was
incurred or issued in connection with or in contemplation of such acquisition),
so long as the encumbrance or restriction thereunder is not applicable to any
Person, or the properties or assets of any Person, other than the Person or
property or assets of the Person so acquired, (ix) arising under applicable
laws, rules, regulations or orders, and (x) any encumbrance or restriction
imposed by any amendments, modifications, restatements, increases, supplements,
refundings, replacements, or refinancings of the contracts, instruments or
obligations referred to in clauses (ii) through (ix) above; provided that the
encumbrances or restrictions in such amendments, modifications, restatements,
renewals, increases, supplements, refundings, replacements or refinancings are
not materially more restrictive, in the good faith judgment of the Board of
Directors of NewPageCo, taken as a whole, than the encumbrances or restrictions
prior to such amendment, modification, restatement, renewal, increase,
supplement, refunding, replacement or refinancing

 

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6.7. Investments. No Credit Party shall, nor shall it permit any of its
Subsidiaries to, directly or indirectly, make or own any Investment in any
Person, including without limitation any Joint Venture, except:

(a) Investments in Cash and Cash Equivalents and, in the case of any Subsidiary
of NewPageHoldCo organized or operating in any country that is a member of the
Organization for Economic Development, Foreign Cash Equivalents with respect to
such country;

(b) (i) Investments owned as of the Closing Date in any Subsidiary;
(ii) Investments made after the Closing Date in any Wholly-Owned Guarantor
Subsidiary, and (iii) Investments made after the Closing Date in any Subsidiary
of NewPageCo that is not a Guarantor Subsidiary that, together with Indebtedness
under Section 6.1(b)(ii) and the proviso of 6.1(h) does not exceed $5,000,000 at
any time in the aggregate;

(c) Investments (i) received in satisfaction or partial satisfaction of
delinquent accounts and disputes with customers or suppliers of such Person in
the ordinary course of business; (ii) acquired as a result of foreclosure of a
Lien securing an Investment or the transfer of the assets subject to such Lien
in lieu of foreclosure and (iii) consisting of deposits, prepayments and other
credits to suppliers made in the ordinary course of business consistent with the
past practices of NewPageHoldCo and its Subsidiaries;

(d) intercompany loans to the extent permitted under Section 6.1(b);

(e) Consolidated Capital Expenditures permitted by Section 6.8(e);

(f) loans and advances to employees of NewPageHoldCo and its Subsidiaries made
in the ordinary course of business not to exceed $3,000,000 in the aggregate at
any one time outstanding and payroll, travel and similar advances to employees
to cover matters that are expected at the time of such advances ultimately to be
treated as expenses for accounting purposes and that are made in the ordinary
course of business;

(g) Investments made in connection with Permitted Acquisitions permitted
pursuant to Section 6.9;

(h) Investments described in Schedule 6.7 and renewals or extensions of any such
Investment to the extent not involving any additional Investments other than as
the result of the accrual or accretion of interest or original issue discount or
the issuance of pay-in-kind securities, in each case pursuant to the terms of
such Investments as in effect on the date of this Agreement;

 

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(i) extensions of credit to customers or advances, deposits and payment to or
with suppliers, lessors or utilities or for workers’ compensation, in each case,
in the ordinary course of business that are recorded as accounts receivable,
prepaid expenses or deposits on the balance sheet of NewPageCo and its
Subsidiaries prepared in accordance with GAAP;

(j) Investments constituting non-Cash consideration received by NewPageCo or any
of its Subsidiaries in connection with permitted Asset Sales and other sales and
dispositions permitted under Section 6.9;

(k) Investments under Hedge Agreements to the extent permitted under Section 6.1
and Investments under the Commodities Hedge Agreement;

(l) Investments consisting of loans by NewPageCo to NewPageHoldCo, Maple Timber
Acquisition LLC, or Maple Timber Acquisition II LLC for purposes otherwise
permitted under Section 6.5 to be distributed to NewPageHoldCo;

(m) loans, guarantees of loans, advance, and other extensions of credit to
current and former officers, directors, employees, and consultants of
NewPageHoldCo, a Subsidiary of NewPageHoldCo, or a direct or indirect parent of
NewPageHoldCo for the purpose of permitting such Persons to purchase Capital
Stock of NewPageCo, NewPageHoldCo or any direct or indirect parent of
NewPageHoldCo, not to exceed $4,000,000 in aggregate outstanding at any time;

(n) purchases of the Rumford JV Interests for aggregate consideration for all
such purchases not to exceed $50,000,000;

(o) Investments resulting from a Permitted Acquisition, which Investments at the
time of such acquisition were held by the acquired Person and were not acquired
in contemplation of the acquisition of such Person;

(p) other Investments in an aggregate amount not to exceed at any time
$10,000,000;

Notwithstanding the foregoing, in no event shall any Credit Party make any
Investment which results in or facilitates in any manner any Restricted Junior
Payment not otherwise permitted under the terms of Section 6.5.

6.8. Financial Covenants.

(a) Interest Coverage Ratio. For any Fiscal Quarter during which Excess
Availability during any ten (10) consecutive Business Days in such Fiscal
Quarter shall be less than $25,000,000, then NewPageHoldCo shall not permit the
Interest Coverage Ratio as of the last day of such Fiscal Quarter, to be less
than 2.00:1.00.

 

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(b) Fixed Charge Coverage Ratio. For any Fiscal Quarter during which Excess
Availability during any ten (10) consecutive Business Days in such Fiscal
Quarter shall be less than $25,000,000, then NewPageHoldCo shall not permit the
Fixed Charge Coverage Ratio as of the last day of such Fiscal Quarter, to be
less than 1.00:1.00.

(c) Total Leverage Ratio. For any Fiscal Quarter during which Excess
Availability during any ten (10) consecutive Business Days in such Fiscal
Quarter shall be less than $25,000,000, then NewPageHoldCo shall not permit the
Total Leverage Ratio as of the last day of such Fiscal Quarter, to exceed the
correlative ratio indicated:

 

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Fiscal Quarter

   Total Leverage Ratio

3rd Fiscal Quarter 2005

   6.00:1.00

4th Fiscal Quarter 2005

   6.00:1.00

1st Fiscal Quarter 2006

   6.00:1.00

2nd Fiscal Quarter 2006

   5.75:1.00

3rd Fiscal Quarter 2006

   5.50:1.00

4th Fiscal Quarter 2006

   5.00:1.00

1st Fiscal Quarter 2007

   5.00:1.00

2nd Fiscal Quarter 2007

   5.00:1.00

3rd Fiscal Quarter 2007

   5.00:1.00

4th Fiscal Quarter 2007

   4.75:1.00

1st Fiscal Quarter 2008

   4.75:1.00

2nd Fiscal Quarter 2008

   4.75:1.00

3rd Fiscal Quarter 2008

   4.75:1.00

4th Fiscal Quarter 2008

   4.50:1.00

1st Fiscal Quarter 2009

   4.50:1.00

2nd Fiscal Quarter 2009

   4.50:1.00

3rd Fiscal Quarter 2009 and each Fiscal Quarter thereafter

   4.25:1.00

(d) Senior Leverage Ratio. For any Fiscal Quarter during which Excess
Availability during any ten (10) consecutive Business Days in such Fiscal
Quarter shall be less than $25,000,000, then NewPageHoldCo shall not permit the
Senior Leverage Ratio as of the last day of such Fiscal Quarter, to exceed the
correlative ratio indicated:

 

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Fiscal Quarter

   Senior Leverage Ratio

3rd Fiscal Quarter 2005

   3.00:1.00

4th Fiscal Quarter 2005

   3.00:1.00

1st Fiscal Quarter 2006

   3.00:1.00

2nd Fiscal Quarter 2006

   2.75:1.00

3rd Fiscal Quarter 2006

   2.75:1.00

4th Fiscal Quarter 2006

   2.50:1.00

1st Fiscal Quarter 2007

   2.50:1.00

2nd Fiscal Quarter 2007

   2.25:1.00

3rd Fiscal Quarter 2007

   2.25:1.00

4th Fiscal Quarter 2007

   2.00:1.00

1st Fiscal Quarter 2008

   2.00:1.00

2nd Fiscal Quarter 2008

   2.00:1.00

3rd Fiscal Quarter 2008

   2.00:1.00

4th Fiscal Quarter 2008 and each Fiscal Quarter thereafter

   1.75:1.00

(e) Maximum Consolidated Capital Expenditures. NewPageHoldCo shall not, and
shall not permit its Subsidiaries to, make or incur Consolidated Capital
Expenditures, in any Fiscal Year indicated below, in an aggregate amount for
NewPageHoldCo and its Subsidiaries in excess of the corresponding amount set
forth below opposite such Fiscal Year; provided, that (x) if the aggregate
amount of Consolidated Capital Expenditures for any Fiscal Year shall be less
than the amount set forth in the table below for such Fiscal Year (before any
carryover), then such shortfall may be added to the amount of Consolidated
Capital Expenditures permitted for the immediately succeeding (but not any
other) Fiscal Year and (y) in determining whether any

 

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amount is available for carryover, the amount expended in any Fiscal Year shall
first be deemed to be from the amount allocated to such year before any
carryover:

 

Fiscal Year

  

Consolidated

Capital Expenditures

2005

   $ 140,000,000

2006

   $ 175,000,000

2007 and each Fiscal Year Thereafter

   $ 225,000,000

If at the end of any Fiscal Quarter the Total Leverage Ratio as of the end of
such Fiscal Quarter shall be 3.50:1 or less then NewPageCo and its Subsidiaries
may make or incur Consolidated Capital Expenditures during such Fiscal Quarter
in addition to those otherwise permitted by this Section 6.8(e).

(f) Certain Calculations. With respect to any period during which a Permitted
Acquisition or an Asset Sale has occurred (each, a “Subject Transaction”), for
purposes of determining compliance with the financial covenants set forth in
this Section 6.8 (but not for purposes of determining the Applicable Margin or
Applicable Commitment Fee Percentage), Consolidated Adjusted EBITDA and the
components of Consolidated Fixed Charges shall be calculated with respect to
such period on a pro forma basis (including pro forma adjustments arising out of
events which are directly attributable to a specific transaction, are factually
supportable and are expected to have a continuing impact, in each case
determined on a basis consistent with Article 11 of Regulation S-X promulgated
under the Securities Act and as interpreted by the staff of the Securities and
Exchange Commission, which would include cost savings resulting from head count
reduction, closure of facilities and similar restructuring charges, which pro
forma adjustments shall be certified by the chief financial officer of Parent)
using the historical audited financial statements of any business so acquired or
to be acquired or sold or to be sold and the consolidated financial statements
of NewPageHoldCo and its Subsidiaries which shall be reformulated as if such
Subject Transaction, and any Indebtedness incurred or repaid in connection
therewith, had been consummated or incurred or repaid at the beginning of such
period (and assuming that such Indebtedness bears interest during any portion of
the applicable measurement period prior to the relevant acquisition at the
weighted average of the interest rates applicable to outstanding Loans incurred
during such period).

 

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(g) Right to Cure. Notwithstanding anything to the contrary contained in this
Section 6.8, in the event that any Credit Party would otherwise be in default of
any financial covenant set forth in this Section 6.8, until the 10th day
subsequent to delivery of the related Compliance Certificate, NewPageHoldCo
shall have the right, but in any event no more than (i) two (2) times in any
twelve-month period and (ii) four (4) times from the Closing Date to the date of
determination, to issue Permitted Cure Securities for cash or otherwise receive
cash contributions to the capital of NewPageHoldCo (which proceeds and
contributions will be contributed to the common equity capital of NewPageCo), in
either case in an aggregate amount equal to the lesser of (a) the amount
necessary to cure the relevant failure to comply with all the applicable
financial covenants and (b) $25,000,000, (collectively, the “Cure Right”), and
upon the receipt by NewPageCo of such cash (the “Cure Amount”) pursuant to the
exercise of such Cure Right such financial covenants shall be recalculated
giving effect to the following pro forma adjustments:

(i) Consolidated Adjusted EBITDA shall be increased, in accordance with the
definition thereof, solely for the purpose of measuring the financial covenants
and not for any other purpose under this Agreement, by an amount equal to the
Cure Amount;

(ii) if, after giving effect to the foregoing recalculations, the Credit Parties
shall then be in compliance with the requirements of all financial covenants set
forth in this Section 6.8, the Credit Parties shall be deemed to have satisfied
the requirements thereof as of the relevant date of determination with the same
effect as though there had been no failure to comply therewith at such date, and
the applicable breach or default thereof which had occurred shall be deemed
cured for all purposes of the Agreement; and

(iii) to the extent that the Cure Amount proceeds are used to repay
Indebtedness, such Indebtedness shall not be deemed to have been repaid for
purposes of calculating the Senior Leverage Ratio or the Total Leverage Ratio
for the period with respect to which such Compliance Certificate applies.

(h) Notwithstanding anything to the contrary set forth in this Section 6.8, in
no event shall the financial covenants set forth in clauses (a), (b), (c) or
(d) be tested for any Fiscal Quarter ending prior to NewPageHoldoCo’s Fiscal
Quarter ending September 30, 2005.

6.9. Fundamental Changes; Disposition of Assets; Acquisitions. No Credit Party
shall, nor shall it permit any of its Subsidiaries to, enter into any
transaction of merger or consolidation, or liquidate, wind-up or dissolve itself
(or suffer any liquidation or dissolution), or convey, sell, lease or sub-lease
(as lessor or sublessor), exchange, transfer or otherwise dispose of, in one
transaction or a series of transactions, all or any part of its business, assets
or property

 

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of any kind whatsoever, whether real, personal or mixed and whether tangible or
intangible, whether now owned or hereafter acquired, or acquire by purchase or
otherwise (other than purchases or other acquisitions of inventory, supplies,
intellectual property, materials and equipment and Capital Expenditures in the
ordinary course of business) the business, or all or substantially all of the
property or fixed assets of, or stock or other evidence of beneficial ownership
of, any Person or any division or line of business or other business unit of any
Person, except:

(a) any Subsidiary of NewPageCo may be merged with or into NewPageCo or any
Guarantor Subsidiary, or be liquidated, wound up or dissolved, or all or any
part of its business, property or assets may be conveyed, sold, leased,
transferred or otherwise disposed of, in one transaction or a series of
transactions, to NewPageCo or any Guarantor Subsidiary; provided, in the case of
such a merger, NewPageCo or such Guarantor Subsidiary, as applicable shall be
the continuing or surviving Person and any Subsidiary of NewPageHoldCo which is
not a Guarantor Subsidiary may be merged with or into any Wholly-Owned
Subsidiary which is not a Guarantor Subsidiary, or be liquidated, wound up or
dissolved, or all or any part of its business, property or assets may be
conveyed, sold, leased, transferred or otherwise disposed of, in one transaction
or a series of transactions to any Wholly-Owned Subsidiary which is not a
Guarantor Subsidiary;

(b) sales, leases, licenses or other dispositions of assets that do not
constitute Asset Sales and sales of equipment that is obsolete, worn-out,
condemned or no longer used or useful in the business of NewPageHoldCo,
NewPageCo or any of its Subsidiaries;

(c) Asset Sales by NewPageCo or any of its Subsidiaries, the proceeds of which
(valued at the principal amount thereof in the case of non-Cash proceeds
consisting of notes or other debt Securities and valued at fair market value in
the case of other non-Cash proceeds) do not exceed $200,000,000 in the aggregate
for all such Asset Sales from and after the Third Amendment Closing Date;
provided (1) the consideration received for such assets shall be in an amount at
least equal to the fair market value thereof (determined in good faith by the
board of directors of NewPageCo (or similar governing body)), (2) no less than
80% thereof shall be paid in Cash, and (3) the Net Asset Sale Proceeds thereof
shall be applied as required by Section 2.14;

(d) Permitted Acquisitions, the consideration for which constitutes less than
$150,000,000 in the aggregate from the Closing Date to the date of
determination;

(e) Investments made in accordance with Section 6.7; and

(f) prior to receipt of notice from the Collateral Agent given after the
occurrence of an Event of Default, the settlement or write-off of accounts
receivable or sale of overdue accounts receivable for collection in the ordinary
course of business consistent with past practice.

 

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6.10. Disposal of Subsidiary Interests. Except for any sale of all of its
interests in the Capital Stock of any of its Subsidiaries in compliance with the
provisions of Section 6.9, no Credit Party shall, nor shall it permit any of its
Subsidiaries to (a) directly or indirectly sell, assign, pledge or otherwise
encumber or dispose of any Capital Stock of any of its Subsidiaries, except to
qualify directors if required by applicable law; or (b) permit any of its
Subsidiaries directly or indirectly to sell, assign, pledge or otherwise
encumber or dispose of any Capital Stock of any of its Subsidiaries, except to
another Credit Party (subject to the restrictions on such disposition otherwise
imposed hereunder), or to qualify directors if required by applicable law.

6.11. Sales and Lease-Backs. No Credit Party shall, nor shall it permit any of
its Subsidiaries to, directly or indirectly, become or remain liable as lessee
or as a guarantor or other surety with respect to any lease of any property
(whether real, personal or mixed) having a fair market value in excess of
$25,000,000 in the aggregate for all such property subjected to any lease
described in this Section, whether now owned or hereafter acquired, which such
Credit Party (a) has sold or transferred or is to sell or to transfer to any
other Person (other than NewPageHoldCo or any other Credit Party), or
(b) intends to use for substantially the same purpose as any other property
which has been or is to be sold or transferred by such Credit Party to any
Person (other than NewPageHoldCo or any other Credit Party) in connection with
such lease.

6.12. Transactions with Shareholders and Affiliates. No Credit Party shall, nor
shall it permit any of its Subsidiaries to, directly or indirectly, enter into
or permit to exist any transaction (including the purchase, sale, lease or
exchange of any property or the rendering of any service) with any Affiliate of
NewPageHoldCo or any of its Subsidiaries, on terms that are less favorable to
NewPageHoldCo or that Subsidiary, as the case may be, than those that might be
obtained at the time from a Person who is not such a holder or Affiliate;
provided, the foregoing restriction shall not apply to (a) any transaction
between NewPageCo and any Guarantor Subsidiary; (b) reasonable and customary
fees paid to members of the board of directors (or similar governing body) of
NewPageHoldCo and its Subsidiaries; (c) compensation arrangements for officers
and other employees of NewPageHoldCo and its Subsidiaries entered into in the
ordinary course of business; (d) transactions described in Schedule 6.12;
(e) reimbursement of expenses on or about the Closing Date incurred by Sponsor
or its Affiliates in connection with the Paper Business Acquisition; (f) the
transactions pursuant to the Fiber Supply Agreements; (g) the transactions
pursuant to the Transition Services Agreement; (h) the transactions pursuant to
the Allocation and Services Agreement; and (i) transactions between
NewPageHoldCo and such Affiliates that are expressly permitted by Section 6.5 or
6.7.

6.13. Conduct of Business. From and after the Closing Date, no Credit Party
shall, nor shall it permit any of its Subsidiaries to, engage in any business
other than a Permitted Business.

 

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6.14. Permitted Activities of NewPageHoldCo. NewPageHoldCo shall not (a) incur,
directly or indirectly, any Indebtedness or any other obligation or liability
whatsoever other than the Indebtedness and obligations under the Related
Agreements; (b) create or suffer to exist any Lien upon any property or assets
now owned or hereafter acquired by it other than the Liens created under the
Collateral Documents to which it is a party or permitted pursuant to
Section 6.2; (c) engage in any business or activity or own any assets other than
(i) holding 100% of the Capital Stock of NewPageCo, (ii) performing its
obligations and activities incidental thereto under the Credit Documents, and to
the extent not inconsistent therewith, the Related Agreements; and (iii) making
Restricted Junior Payments to the extent permitted by this Agreement;
(d) consolidate with or merge with or into, or convey, transfer or lease all or
substantially all its assets to, any Person; (e) sell or otherwise dispose of
any Capital Stock of any of its Subsidiaries except as permitted under
Section 6.9; (f) create or acquire any Subsidiary or make or own any Investment
in any Person other than NewPageCo; or (g) fail to hold itself out to the public
as a legal entity separate and distinct from all other Persons.

6.15. Amendments or Waivers of Certain Related Agreements. Except as otherwise
provided in the Intercreditor Agreement, no Credit Party shall nor shall it
permit any of its Subsidiaries to, agree to any material amendment, restatement,
supplement or other modification to, or waiver of, any of its material rights
under any Related Agreement after the Closing Date if the effect of such
amendment, restatement, supplement, modification or waiver would be adverse to
any Credit Party or Lender (or in the case of the Purchase Agreement or Fiber
Supply Agreements, materially adverse to any Credit Party or Lender) without in
each case obtaining the prior written consent of Requisite Lenders to such
amendment, restatement, supplement or other modification or waiver; provided,
the foregoing shall not prohibit the sale, transfer, conveyance or other
disposition of the Commodities Hedge Agreement.

6.16. Amendments or Waivers of with respect to NewPageHoldCo PIK Note Documents
or Senior Subordinated Notes Indebtedness. No Credit Party shall, nor shall it
permit any of its Subsidiaries to, amend or otherwise change the terms of any
Senior Subordinated Notes Indebtedness or NewPageHoldCo PIK Note Indebtedness,
or make any payment consistent with an amendment thereof or change thereto, if
the effect of such amendment or change is to increase the interest rate on such
Senior Subordinated Notes Indebtedness or NewPageHoldCo PIK Note Indebtedness,
change (to earlier dates) any dates upon which payments of principal or interest
are due thereon, change any event of default or condition to an event of default
with respect thereto (other than to eliminate any such event of default or
increase any grace period related thereto), change the redemption, prepayment or
defeasance provisions thereof, change the subordination provisions of such
Subordinated Indebtedness (or of any guaranty thereof) or any NewPageHoldCo PIK
Note Indebtedness (or of any guaranty thereof), or if the effect of such
amendment or change, together with all other amendments or changes made, is to
increase materially the obligations of the obligor thereunder

 

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or to confer any additional rights on the holders of such Senior Subordinated
Notes Indebtedness (or a trustee or other representative on their behalf) or the
NewPageHoldCo PIK Note Indebtedness which would be adverse to any Credit Party
or Lenders.

6.17. Fiscal Year. No Credit Party shall, nor shall it permit any of its
Subsidiaries to change its Fiscal Year-end from December 31.

SECTION 7. GUARANTY

7.1. Guaranty of the Obligations. Subject to the provisions of Section 7.2,
Guarantors jointly and severally hereby irrevocably and unconditionally guaranty
to Administrative Agent for the ratable benefit of the Beneficiaries the due and
punctual payment in full of all Obligations when the same shall become due,
whether at stated maturity, by required prepayment, declaration, acceleration,
demand or otherwise (including amounts that would become due but for the
operation of the automatic stay under Section 362(a) of the Bankruptcy Code,
11 U.S.C. § 362(a)) (collectively, the “Guaranteed Obligations”).
Notwithstanding the foregoing or any other provision of this Agreement to the
contrary, if the obligations of any Guarantor under this Section 7.1 would, in
any action or proceeding involving any state corporate law, or any state,
federal or foreign bankruptcy, insolvency, reorganization or other law affecting
the rights of creditors generally, otherwise be held or determined to be subject
to avoidance as a fraudulent transfer or conveyance under Section 548 of Title
11 of the United States Code or any comparable applicable provisions of state
law on account of the amount of its liability under this Section 7.1, then the
amount of such liability shall, without further action by such Guarantor, or any
Credit Party or any other Person, be automatically limited and reduced to the
highest amount that is valid and enforceable as determined in such action or
proceeding.

7.2. Contribution by Guarantors. All Guarantors desire to allocate among
themselves (collectively, the “Contributing Guarantors”), in a fair and
equitable manner, their obligations arising under this Guaranty. Accordingly, in
the event any payment or distribution is made on any date by a Guarantor (a
“Funding Guarantor”) under this Guaranty such that its Aggregate Payments
exceeds its Fair Share as of such date, such Funding Guarantor shall be entitled
to a contribution from each of the other Contributing Guarantors in an amount
sufficient to cause each Contributing Guarantor’s Aggregate Payments to equal
its Fair Share as of such date. “Fair Share” means, with respect to a
Contributing Guarantor as of any date of determination, an amount equal to
(a) the ratio of (i) the Fair Share Contribution Amount with respect to such
Contributing Guarantor to (ii) the aggregate of the Fair Share Contribution
Amounts with respect to all Contributing Guarantors multiplied by (b) the
aggregate amount paid or distributed on or before such date by all Funding
Guarantors under this Guaranty in respect of the Obligations. “Fair Share
Contribution Amount” means, with respect to a Contributing Guarantor as of any
date of determination, the maximum aggregate amount of the obligations of such
Contributing

 

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Guarantor under this Guaranty that would not render its obligations hereunder or
thereunder subject to avoidance as a fraudulent transfer or conveyance under
Section 548 of Title 11 of the United States Code or any comparable applicable
provisions of state law; provided, solely for purposes of calculating the “Fair
Share Contribution Amount” with respect to any Contributing Guarantor for
purposes of this Section 7.2, any assets or liabilities of such Contributing
Guarantor arising by virtue of any rights to subrogation, reimbursement or
indemnification or any rights to or obligations of contribution hereunder shall
not be considered as assets or liabilities of such Contributing Guarantor.
“Aggregate Payments” means, with respect to a Contributing Guarantor as of any
date of determination, an amount equal to (1) the aggregate amount of all
payments and distributions made on or before such date by such Contributing
Guarantor in respect of this Guaranty (including, without limitation, in respect
of this Section 7.2), minus (2) the aggregate amount of all payments received on
or before such date by such Contributing Guarantor from the other Contributing
Guarantors as contributions under this Section 7.2. The amounts payable as
contributions hereunder shall be determined as of the date on which the related
payment or distribution is made by the applicable Funding Guarantor. The
allocation among Contributing Guarantors of their obligations as set forth in
this Section 7.2 shall not be construed in any way to limit the liability of any
Contributing Guarantor hereunder. Each Guarantor is a third party beneficiary to
the contribution agreement set forth in this Section 7.2.

7.3. Payment by Guarantors. Subject to Section 7.2, Guarantors hereby jointly
and severally agree, in furtherance of the foregoing and not in limitation of
any other right which any Beneficiary may have at law or in equity against any
Guarantor by virtue hereof, that upon the failure of NewPageCo to pay any of the
Guaranteed Obligations when and as the same shall become due, whether at stated
maturity, by required prepayment, declaration, acceleration, demand or otherwise
(including amounts that would become due but for the operation of the automatic
stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. § 362(a)),
Guarantors will upon demand pay, or cause to be paid, in Cash, to Administrative
Agent for the ratable benefit of Beneficiaries, an amount equal to the sum of
the unpaid principal amount of all Guaranteed Obligations then due as aforesaid,
accrued and unpaid interest on such Guaranteed Obligations (including interest
which, but for NewPageCo’s becoming the subject of a case under the Bankruptcy
Code, would have accrued on such Guaranteed Obligations, whether or not a claim
is allowed against NewPageCo for such interest in the related bankruptcy case)
and all other Guaranteed Obligations then owed to Beneficiaries as aforesaid.

7.4. Liability of Guarantors Absolute. Each Guarantor agrees that its
obligations hereunder are irrevocable, absolute, independent and unconditional
and shall not be affected by any circumstance which constitutes a legal or
equitable discharge of a guarantor or surety other than payment in full of the
Guaranteed Obligations. In furtherance of the foregoing and without limiting the
generality thereof, each Guarantor agrees as follows:

(a) this Guaranty is a guaranty of payment when due and not of collectability.
This Guaranty is a primary obligation of each Guarantor and not merely a
contract of surety;

 

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(b) Administrative Agent may enforce this Guaranty upon the occurrence of an
Event of Default notwithstanding the existence of any dispute between NewPageCo
and any Beneficiary with respect to the existence of such Event of Default;

(c) the obligations of each Guarantor hereunder are independent of the
obligations of NewPageCo and the obligations of any other guarantor (including
any other Guarantor) of the obligations of NewPageCo, and a separate action or
actions may be brought and prosecuted against such Guarantor whether or not any
action is brought against NewPageCo or any of such other guarantors and whether
or not NewPageCo is joined in any such action or actions;

(d) payment by any Guarantor of a portion, but not all, of the Guaranteed
Obligations shall in no way limit, affect, modify or abridge any Guarantor’s
liability for any portion of the Guaranteed Obligations which has not been paid.
Without limiting the generality of the foregoing, if Administrative Agent is
awarded a judgment in any suit brought to enforce any Guarantor’s covenant to
pay a portion of the Guaranteed Obligations, such judgment shall not be deemed
to release such Guarantor from its covenant to pay the portion of the Guaranteed
Obligations that is not the subject of such suit, and such judgment shall not,
except to the extent satisfied by such Guarantor, limit, affect, modify or
abridge any other Guarantor’s liability hereunder in respect of the Guaranteed
Obligations;

(e) any Beneficiary, upon such terms as it deems appropriate, without notice or
demand and without affecting the validity or enforceability hereof or giving
rise to any reduction, limitation, impairment, discharge or termination of any
Guarantor’s liability hereunder, from time to time may (i) renew, extend,
accelerate, increase the rate of interest on, or otherwise change the time,
place, manner or terms of payment of the Guaranteed Obligations; (ii) settle,
compromise, release or discharge, or accept or refuse any offer of performance
with respect to, or substitutions for, the Guaranteed Obligations or any
agreement relating thereto and/or subordinate the payment of the same to the
payment of any other obligations; (iii) request and accept other guaranties of
the Guaranteed Obligations and take and hold security for the payment hereof or
the Guaranteed Obligations; (iv) release, surrender, exchange, substitute,
compromise, settle, rescind, waive, alter, subordinate or modify, with or
without consideration, any security for payment of the Guaranteed Obligations,
any other guaranties of the Guaranteed Obligations, or any other obligation of
any Person (including any other Guarantor) with respect to the Guaranteed
Obligations; (v) enforce and apply any security now or hereafter held by or for
the benefit of such Beneficiary in respect hereof or the Guaranteed Obligations
and direct the order or manner of sale thereof, or exercise any other right or
remedy that such Beneficiary may have against any such security, in each case as
such Beneficiary in its discretion may determine

 

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consistent herewith, including foreclosure on any such security pursuant to one
or more judicial or nonjudicial sales, whether or not every aspect of any such
sale is commercially reasonable, and even though such action operates to impair
or extinguish any right of reimbursement or subrogation or other right or remedy
of any Guarantor against NewPageCo or any security for the Guaranteed
Obligations; and (vi) exercise any other rights available to it under the Credit
Documents; and

(f) this Guaranty and the obligations of Guarantors hereunder shall be valid and
enforceable and shall not be subject to any reduction, limitation, impairment,
discharge or termination for any reason (other than payment in full of the
Guaranteed Obligations), including the occurrence of any of the following,
whether or not any Guarantor shall have had notice or knowledge of any of them:
(i) any failure or omission to assert or enforce or agreement or election not to
assert or enforce, or the stay or enjoining, by order of court, by operation of
law or otherwise, of the exercise or enforcement of, any claim or demand or any
right, power or remedy (whether arising under the Credit Documents, at law, in
equity or otherwise) with respect to the Guaranteed Obligations or any agreement
relating thereto, or with respect to any other guaranty of or security for the
payment of the Guaranteed Obligations; (ii) any rescission, waiver, amendment or
modification of, or any consent to departure from, any of the terms or
provisions (including provisions relating to events of default) hereof, any of
the other Credit Documents or any agreement or instrument executed pursuant
thereto, or of any other guaranty or security for the Guaranteed Obligations, in
each case whether or not in accordance with the terms hereof or such Credit
Document or any agreement relating to such other guaranty or security; (iii) the
Guaranteed Obligations, or any agreement relating thereto, at any time being
found to be illegal, invalid or unenforceable in any respect; (iv) the
application of payments received from any source (other than payments received
pursuant to the other Credit Documents or from the proceeds of any security for
the Guaranteed Obligations, except to the extent such security also serves as
collateral for indebtedness other than the Guaranteed Obligations) to the
payment of indebtedness other than the Guaranteed Obligations, even though any
Beneficiary might have elected to apply such payment to any part or all of the
Guaranteed Obligations; (v) any Beneficiary’s consent to the change,
reorganization or termination of the corporate structure or existence of
NewPageHoldCo or any of its Subsidiaries and to any corresponding restructuring
of the Guaranteed Obligations; (vi) any failure to perfect or continue
perfection of a security interest in any collateral which secures any of the
Guaranteed Obligations; (vii) any defenses, set-offs or counterclaims which
NewPageCo may allege or assert against any Beneficiary in respect of the
Guaranteed Obligations, including failure of consideration, breach of warranty,
payment, statute of frauds, statute of limitations, accord and satisfaction and
usury; and (viii) any other act or thing or omission, or delay to do any other
act or thing, which may or might in any manner or to any extent vary the risk of
any Guarantor as an obligor in respect of the Guaranteed Obligations.

 

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7.5. Waivers by Guarantors. Each Guarantor hereby waives, for the benefit of
Beneficiaries: (a) any right to require any Beneficiary, as a condition of
payment or performance by such Guarantor, to (i) proceed against NewPageCo, any
other guarantor (including any other Guarantor) of the Guaranteed Obligations or
any other Person, (ii) proceed against or exhaust any security held from
NewPageCo, any such other guarantor or any other Person, (iii) proceed against
or have resort to any balance of any Deposit Account or credit on the books of
any Beneficiary in favor of NewPageCo or any other Person, or (iv) pursue any
other remedy in the power of any Beneficiary whatsoever; (b) any defense arising
by reason of the incapacity, lack of authority or any disability or other
defense of NewPageCo or any other Guarantor including any defense based on or
arising out of the lack of validity or the unenforceability of the Guaranteed
Obligations or any agreement or instrument relating thereto or by reason of the
cessation of the liability of NewPageCo or any other Guarantor from any cause
other than payment in full of the Guaranteed Obligations; (c) any defense based
upon any statute or rule of law which provides that the obligation of a surety
must be neither larger in amount nor in other respects more burdensome than that
of the principal; (d) any defense based upon any Beneficiary’s errors or
omissions in the administration of the Guaranteed Obligations, except behavior
which amounts to gross negligence, willful misconduct, or bad faith; (e) (i) any
principles or provisions of law, statutory or otherwise, which are or might be
in conflict with the terms hereof and any legal or equitable discharge of such
Guarantor’s obligations hereunder, (ii) the benefit of any statute of
limitations affecting such Guarantor’s liability hereunder or the enforcement
hereof, (iii) any rights to set-offs, recoupments and counterclaims, and
(iv) promptness, diligence and any requirement that any Beneficiary protect,
secure, perfect or insure any security interest or lien or any property subject
thereto; (f) notices, demands, presentments, protests, notices of protest,
notices of dishonor and notices of any action or inaction, including acceptance
hereof, notices of default hereunder or any agreement or instrument related
thereto, notices of any renewal, extension or modification of the Guaranteed
Obligations or any agreement related thereto, notices of any extension of credit
to NewPageCo and notices of any of the matters referred to in Section 7.4 and
any right to consent to any thereof; and (g) any defenses or benefits that may
be derived from or afforded by law which limit the liability of or exonerate
guarantors or sureties, or which may conflict with the terms hereof.

7.6. Guarantors’ Rights of Subrogation, Contribution, etc. Until the Guaranteed
Obligations shall have been indefeasibly paid in full and the Revolving
Commitments shall have terminated and all Letters of Credit shall have expired
or been cancelled, each Guarantor hereby waives any claim, right or remedy,
direct or indirect, that such Guarantor now has or may hereafter have against
NewPageCo or any other Guarantor or any of its assets in connection with this
Guaranty or the performance by such Guarantor of its obligations hereunder, in
each case whether such claim, right or remedy arises in equity, under contract,
by statute, under common law or otherwise and including without limitation
(a) any right of subrogation, reimbursement or indemnification that such
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respect to the Guaranteed Obligations, (b) any right to enforce, or to
participate in, any claim, right or remedy that any Beneficiary now has or may
hereafter have against NewPageCo, and (c) any benefit of, and any right to
participate in, any collateral or security now or hereafter held by any
Beneficiary. In addition, until the Guaranteed Obligations shall have been
indefeasibly paid in full and the Revolving Commitments shall have terminated
and all Letters of Credit shall have expired or been cancelled, each Guarantor
shall withhold exercise of any right of contribution such Guarantor may have
against any other guarantor (including any other Guarantor) of the Guaranteed
Obligations, including, without limitation, any such right of contribution as
contemplated by Section 7.2. Each Guarantor further agrees that, to the extent
the waiver or agreement to withhold the exercise of its rights of subrogation,
reimbursement, indemnification and contribution as set forth herein is found by
a court of competent jurisdiction to be void or voidable for any reason, any
rights of subrogation, reimbursement or indemnification such Guarantor may have
against NewPageCo or against any collateral or security, and any rights of
contribution such Guarantor may have against any such other guarantor, shall be
junior and subordinate to any rights any Beneficiary may have against NewPageCo,
to all right, title and interest any Beneficiary may have in any such collateral
or security, and to any right any Beneficiary may have against such other
guarantor. If any amount shall be paid to any Guarantor on account of any such
subrogation, reimbursement, indemnification or contribution rights at any time
when all Guaranteed Obligations shall not have been finally and indefeasibly
paid in full, such amount shall be held in trust for Administrative Agent on
behalf of Beneficiaries and shall forthwith be paid over to Administrative Agent
for the benefit of Beneficiaries to be credited and applied against the
Guaranteed Obligations, whether matured or unmatured, in accordance with the
terms hereof.

7.7. Subordination of Other Obligations. Any Indebtedness of NewPageCo or any
Guarantor now or hereafter held by any Guarantor (the “Obligee Guarantor”) is
hereby subordinated in right of payment to the Guaranteed Obligations, and any
such indebtedness collected or received by the Obligee Guarantor after an Event
of Default has occurred and is continuing shall be held in trust for
Administrative Agent on behalf of Beneficiaries and shall forthwith be paid over
to Administrative Agent for the benefit of Beneficiaries to be credited and
applied against the Guaranteed Obligations but without affecting, impairing or
limiting in any manner the liability of the Obligee Guarantor under any other
provision hereof. Notwithstanding the foregoing, to the extent that any
Guarantor makes a payment under Section 7.1 and also is obligated to NewPageCo
or any Contributing Guarantor on any Account or other Indebtedness of NewPageCo
or any Guarantor and the Collateral Agent holds the first Lien with respect to
such Account or other Indebtedness, the Guarantor making such payment shall be
entitled to offset and reduce the amount of such intercompany Indebtedness on a
dollar-for-dollar basis up to the amount of its payment, notwithstanding the
fact that such intercompany Indebtedness may represent Collateral hereunder.

 

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7.8. Continuing Guaranty. This Guaranty is a continuing guaranty and shall
remain in effect until all of the Guaranteed Obligations shall have been paid in
full and the Revolving Commitments shall have terminated and all Letters of
Credit shall have expired or been cancelled. Each Guarantor hereby irrevocably
waives any right to revoke this Guaranty as to future transactions giving rise
to any Guaranteed Obligations.

7.9. Authority of Guarantors or NewPageCo. It is not necessary for any
Beneficiary to inquire into the capacity or powers of any Guarantor or NewPageCo
or the officers, directors or any agents acting or purporting to act on behalf
of any of them.

7.10. Financial Condition of NewPageCo. Any Credit Extension may be made to
NewPageCo or continued from time to time, without notice to or authorization
from any Guarantor regardless of the financial or other condition of NewPageCo
at the time of any such grant or continuation. No Beneficiary shall have any
obligation to disclose or discuss with any Guarantor its assessment, or any
Guarantor’s assessment, of the financial condition of NewPageCo. Each Guarantor
has adequate means to obtain information from NewPageCo on a continuing basis
concerning the financial condition of NewPageCo and its ability to perform its
obligations under the Credit Documents, and each Guarantor assumes the
responsibility for being and keeping informed of the financial condition of
NewPageCo and of all circumstances bearing upon the risk of nonpayment of the
Guaranteed Obligations. Each Guarantor hereby waives and relinquishes any duty
on the part of any Beneficiary to disclose any matter, fact or thing relating to
the business, operations or conditions of NewPageCo now known or hereafter known
by any Beneficiary.

7.11. Bankruptcy, etc. (a) So long as any Guaranteed Obligations remain
outstanding, no Guarantor shall, without the prior written consent of
Administrative Agent acting pursuant to the instructions of Requisite Lenders,
commence or join with any other Person in commencing any bankruptcy,
reorganization or insolvency case or proceeding of or against NewPageCo or any
other Guarantor. The obligations of Guarantors hereunder shall not be reduced,
limited, impaired, discharged, deferred, suspended or terminated by any case or
proceeding, voluntary or involuntary, involving the bankruptcy, insolvency,
receivership, reorganization, liquidation or arrangement of NewPageCo or any
other Guarantor or by any defense which NewPageCo or any other Guarantor may
have by reason of the order, decree or decision of any court or administrative
body resulting from any such proceeding.

(b) Each Guarantor acknowledges and agrees that any interest on any portion of
the Guaranteed Obligations which accrues after the commencement of any case or
proceeding referred to in clause (a) above (or, if interest on any portion of
the Guaranteed Obligations ceases to accrue by operation of law by reason of the
commencement of such case or proceeding, such interest as would have accrued on
such portion of the Guaranteed Obligations if such case or proceeding had not
been commenced) shall be included in the Guaranteed Obligations because it

 

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is the intention of Guarantors and Beneficiaries that the Guaranteed Obligations
which are guaranteed by Guarantors pursuant hereto should be determined without
regard to any rule of law or order which may relieve NewPageCo of any portion of
such Guaranteed Obligations. Guarantors will permit any trustee in bankruptcy,
receiver, debtor in possession, assignee for the benefit of creditors or similar
person to pay Administrative Agent, or allow the claim of Administrative Agent
in respect of, any such interest accruing after the date on which such case or
proceeding is commenced.

(c) In the event that all or any portion of the Guaranteed Obligations are paid
by NewPageCo, the obligations of Guarantors hereunder shall continue and remain
in full force and effect or be reinstated, as the case may be, in the event that
all or any part of such payment(s) are rescinded or recovered directly or
indirectly from any Beneficiary as a preference, fraudulent transfer or
otherwise, and any such payments which are so rescinded or recovered shall
constitute Guaranteed Obligations for all purposes hereunder.

7.12. Discharge of Guaranty Upon Sale of Guarantor. If all of the Capital Stock
of any Guarantor or any of its successors in interest hereunder shall be sold or
otherwise disposed of (including by merger or consolidation) in accordance with
the terms and conditions hereof, the Guaranty of such Guarantor or such
successor in interest, as the case may be, hereunder shall automatically be
discharged and released without any further action by any Beneficiary or any
other Person effective as of the time of such Asset Sale.

SECTION 8. EVENTS OF DEFAULT

8.1. Events of Default. If any one or more of the following conditions or events
shall occur:

(a) Failure to Make Payments When Due. Failure by NewPageCo to pay (i) when due
any installment of principal of any Loan, whether at stated maturity, by
acceleration, by notice of voluntary prepayment, by mandatory prepayment or
otherwise; (ii) when due any amount payable to Issuing Bank in reimbursement of
any drawing under a Letter of Credit; or (iii) any interest on any Loan or any
fee or any other amount due hereunder within five days after the date due; or

(b) Default in Other Agreements. (i) Failure of any Credit Party or any of their
respective Subsidiaries to pay when due any principal of or interest on or any
other amount payable in respect of one or more items of Indebtedness (other than
Indebtedness referred to in Section 8.1(a)) with an aggregate principal amount
of $10,000,000 or more, in each case beyond the grace period, if any, provided
therefor; or (ii) breach or default by any Credit Party with respect to any
other material term of (1) one or more items of Indebtedness in the individual
or

 

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aggregate principal amounts referred to in clause (i) above or (2) any loan
agreement, mortgage, indenture or other agreement relating to such item(s) of
Indebtedness, in each case beyond the grace period, if any, provided therefor,
if the effect of such breach or default is to cause, or to permit the holder or
holders of that Indebtedness (or a trustee on behalf of such holder or holders),
to cause, that Indebtedness to become or be declared due and payable (or
redeemable) prior to its stated maturity or the stated maturity of any
underlying obligation, as the case may be; or

(c) Breach of Certain Covenants. (i) Failure of any Credit Party to perform or
comply with any term or condition contained in Section 2.6 or Section 5.2(i);
(ii) failure of any Credit Party to perform or comply with any term or condition
contained in Section 6.8 (after giving effect to Section 6.8(g)), or
(iii) failure of any Credit Party to perform or comply with any term or
condition contained in Section 5.17 or Section 6 (other than Section 6.8) and
such failure shall not have been remedied, cured, reversed or waived within ten
(10) days after the earlier of (A) receipt by Company of written notice from
Administrative Agent or the Requisite Lenders of such failure or (B) a Senior
Officer having knowledge of such failure; provided, that the Credit Parties may
not remedy, cure, reverse or waive such failure if such failure was made
intentionally with the knowledge by any Senior Officer that such failure was
prohibited at the time thereof ;or

(d) Breach of Representations, etc. Any representation, warranty, certification
or other statement made or deemed made by any Credit Party in any Credit
Document or in any statement or certificate at any time given by any Credit
Party or any of its Subsidiaries in writing pursuant hereto or thereto or in
connection herewith or therewith shall be false in any material respect as of
the date made or deemed made and such breach shall not have been remedied,
cured, reversed or waived within ten (10) days after the earlier of (i) receipt
by NewPageCo of written notice from Administrative Agent or the Requisite
Lenders of the foregoing or (ii) a Senior Officer having knowledge of such
failure; provided, that the Credit Parties may not remedy, cure, reverse or
waive such breach if such breach was made intentionally with the knowledge by
any Senior Officer that such representation or warranty was false at the time
made; or

(e) Other Defaults Under Credit Documents. Any Credit Party shall default in the
performance of or compliance with any term contained herein or any of the other
Credit Documents, other than any such term referred to in any other Section of
this Section 8.1, and such default shall not have been remedied or waived within
thirty days after the earlier of (i) a Senior Officer having knowledge of such
default or (ii) receipt by NewPageCo of notice from Administrative Agent or the
Requisite Lenders of such default; provided, however, that such thirty day cure
period shall be extended by an additional 10 days, for a total of 40 days, if
(A) such default cannot be cured by the payment of money and (B) such Credit
Party promptly takes action reasonably designed to achieve a cure within the
initial thirty days and thereafter diligently and continuously pursues such cure
(it being agreed and understood that during such cure period any such default
shall not constitute an Event of Default); or

 

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(f) Involuntary Bankruptcy; Appointment of Receiver, etc. (i) A court of
competent jurisdiction shall enter a decree or order for relief in respect of
NewPageHoldCo or Significant Subsidiary of NewPageHoldCo or any group of
Subsidiaries constituting a Significant Subsidiary of NewPageHoldCo in an
involuntary case under the Bankruptcy Code or under any other applicable
bankruptcy, insolvency or similar law now or hereafter in effect, which decree
or order is not stayed; or any other similar relief shall be granted under any
applicable federal or state law; or (ii) an involuntary case shall be commenced
against NewPageHoldCo or any Significant Subsidiary of NewPageHoldCo or any
group of Subsidiaries constituting a Significant Subsidiary of NewPageHoldCo
under the Bankruptcy Code or under any other applicable bankruptcy, insolvency
or similar law now or hereafter in effect; or a decree or order of a court
having jurisdiction in the premises for the appointment of a receiver,
liquidator, sequestrator, trustee, custodian or other officer having similar
powers over NewPageHoldCo or any Significant Subsidiary of NewPageHoldCo or any
group of Subsidiaries constituting a Significant Subsidiary of NewPageHoldCo, or
over all or a substantial part of its property, shall have been entered; or
there shall have occurred the involuntary appointment of an interim receiver,
trustee or other custodian of NewPageHoldCo or any Significant Subsidiary of
NewPageHoldCo or any group of Subsidiaries constituting a Significant Subsidiary
of NewPageHoldCo for all or a substantial part of its property; or a warrant of
attachment, execution or similar process shall have been issued against any
substantial part of the property of NewPageHoldCo or any of its Subsidiaries,
and any such event described in this clause (ii) shall continue for sixty days
without having been dismissed, bonded or discharged; or

(g) Voluntary Bankruptcy; Appointment of Receiver, etc. (i) NewPageHoldCo or any
Significant Subsidiary of NewPageHoldCo or any group of Subsidiaries
constituting a Significant Subsidiary of NewPageHoldCo shall have an order for
relief entered with respect to it or shall commence a voluntary case under the
Bankruptcy Code or under any other applicable bankruptcy, insolvency or similar
law now or hereafter in effect, or shall consent to the entry of an order for
relief in an involuntary case, or to the conversion of an involuntary case to a
voluntary case, under any such law, or shall consent to the appointment of or
taking possession by a receiver, trustee or other custodian for all or a
substantial part of its property; or NewPageHoldCo or any Significant Subsidiary
of NewPageHoldCo or any group of Subsidiaries constituting a Significant
Subsidiary of NewPageHoldCo shall make any assignment for the benefit of
creditors; or (ii) NewPageHoldCo or any Significant Subsidiary of NewPageHoldCo
or any group of Subsidiaries constituting a Significant Subsidiary of
NewPageHoldCo shall be unable, or shall fail generally, or shall admit in
writing its inability, to pay its debts as such debts become due; or the Board
of Directors (or similar governing body) of NewPageHoldCo or any Significant
Subsidiary of NewPageHoldCo or any group of Subsidiaries constituting a

 

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Significant Subsidiary of NewPageHoldCo (or any committee thereof) shall adopt
any resolution or otherwise authorize any action to approve any of the actions
referred to herein or in Section 8.1(f); or

(h) Judgments and Attachments. One or more money judgments, writs or warrants of
attachment or similar process involving an amount in the aggregate in excess of
$10,000,000 (in either case to the extent not adequately covered by insurance as
to which a solvent and unaffiliated insurance company has acknowledged coverage)
shall be entered or filed against NewPageHoldCo or any Significant Subsidiary of
NewPageHoldCo or any group of Subsidiaries constituting a Significant Subsidiary
of NewPageHoldCo or any of their respective assets and shall remain
undischarged, unvacated, unbonded or unstayed for a period of sixty days (or in
any event later than five days prior to the date of any proposed sale
thereunder); or

(i) Dissolution. Any order, judgment or decree shall be entered against any
Credit Party decreeing the dissolution or split up of such Credit Party and such
order shall remain undischarged or unstayed for a period in excess of thirty
days; or

(j) Employee Benefit Plans. There shall occur one or more ERISA Events which
individually or in the aggregate results in or might reasonably be expected to
result in liability of NewPageHoldCo, any of its Subsidiaries or any of their
respective ERISA Affiliates in excess of $10,000,000 during the term hereof; or

(k) Change of Control. A Change of Control shall occur; or

(l) Guaranties, Collateral Documents and other Credit Documents. At any time
after the execution and delivery thereof, (i) the Guaranty for any reason, other
than the satisfaction in full of all Obligations, shall cease to be in full
force and effect (other than in accordance with its terms) or shall be declared
to be null and void or any Guarantor shall repudiate its obligations thereunder,
(ii) this Agreement or any Collateral Document ceases to be in full force and
effect (other than by reason of a release of Collateral in accordance with the
terms hereof or thereof or the satisfaction in full of the Obligations in
accordance with the terms hereof) or shall be declared null and void, or
Collateral Agent shall not have or shall cease to have a valid and perfected
Lien in any Collateral with a value in the aggregate in excess of $500,000
purported to be covered by the Collateral Documents with the priority required
by the relevant Collateral Document, in each case for any reason other than the
failure of Collateral Agent or any Secured Party to take any action within its
control, or (iii) any Credit Party shall contest the validity or enforceability
of any Credit Document in writing or deny in writing that it has any further
liability, including with respect to future advances by Lenders, under any
Credit Document to which it is a party; or

 

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(m) Subordination Provisions. failure by any holder of Senior Subordinated Notes
Indebtedness (or any such holder’s representative or agent) to comply in any
material respect with, or any breach in any material respect by any such Person
of, any of the subordination terms or conditions with respect to such Senior
Subordinated Notes Indebtedness, or NewPageHoldCo or any Credit Party shall make
any payment in violation of any such subordination terms;

THEN, (1) upon the occurrence of any Event of Default described in
Section 8.1(f) or 8.1(g), automatically, and (2) upon the occurrence of any
other Event of Default, at the request of (or with the consent of) Requisite
Lenders, upon notice to NewPageCo by Administrative Agent, (A) the Revolving
Commitments, if any, of each Lender having such Revolving Commitments and the
obligation of Issuing Bank to issue any Letter of Credit shall immediately
terminate; (B) each of the following shall immediately become due and payable,
in each case without presentment, demand, protest or other requirements of any
kind, all of which are hereby expressly waived by each Credit Party: (I) the
unpaid principal amount of and accrued interest on the Loans, and (II) all other
Obligations; provided, the foregoing shall not affect in any way the obligations
of Lenders under Section 2.3(b)(iv) or Section 2.4(e); (C) Administrative Agent
may cause Collateral Agent to enforce any and all Liens and security interests
created pursuant to Collateral Documents; and (D) Administrative Agent shall
direct NewPageCo to pay (and NewPageCo hereby agrees upon receipt of such
notice, or upon the occurrence of any Event of Default specified in
Section 8.1(f) and (g) to pay) to Administrative Agent such additional amounts
of cash, to be held as security for NewPageCo’s reimbursement Obligations in
respect of Letters of Credit then outstanding, equal to the Letter of Credit
Usage at such time.

SECTION 9. COLLATERAL ACCOUNT; APPLICATION OF COLLATERAL PROCEEDS

9.1. Accounts and Account Collections.

(a) NewPageCo and each Borrowing Base Guarantor shall notify Collateral Agent
promptly of: (i) any material delay in the performance by NewPageCo or any
Borrowing Base Guarantor of any of their material obligations to any Account
Debtor or the assertion of any material claims, offsets, defenses or
counterclaims by any Account Debtor, or any material disputes with Account
Debtors, or any settlement, adjustment or compromise thereof, (ii) all material
adverse information known to any Credit Party relating to the financial
condition of any Account Debtor and (iii) any event or circumstance which, to
any Credit Party’s knowledge, would result in any Account no longer constituting
an Eligible Account, in each of the foregoing cases to the extent the
outstanding amount of the Accounts affected thereby exceeds $500,000 in the
aggregate. NewPageCo and each Borrowing Base Guarantor hereby agree not to
grant, or permit its Subsidiaries to grant, to any Account Debtor any credit,
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extension, or to enter into any agreement for any of the foregoing, without
Collateral Agent’s consent, not to be unreasonably withheld or delayed, except
in the ordinary course of business in accordance with practices and policies
previously disclosed in writing to Collateral Agent. So long as no Event of
Default exists or has occurred and is continuing, NewPageCo and its Subsidiaries
and each Borrowing Base Guarantor may settle, adjust or compromise any claim,
offset, counterclaim or dispute with any Account Debtor. At any time that an
Event of Default exists or has occurred and is continuing, Collateral Agent
shall, at its option, have the exclusive right to settle, adjust or compromise
any claim, offset, counterclaim or dispute with Account Debtors of any Credit
Party or grant any credits, discounts or allowances.

(b) With respect to each Account: (i) the amounts shown on any invoice delivered
to Collateral Agent or schedule thereof delivered to Collateral Agent shall be
true and complete in all material respects, (ii) no payments shall be made
thereon except payments immediately delivered to Collateral Agent pursuant to
the terms of this Agreement or any applicable Collateral Document (to the extent
so required), (iii) there shall be no setoffs, deductions, contras, defenses,
counterclaims or disputes existing or asserted with respect thereto except as
reflected in the reporting of the Borrowing Base or otherwise reported to the
Collateral Agent, in accordance with the terms of this Agreement, and (iv) none
of the transactions giving rise thereto will violate any applicable laws or
regulations, all documentation relating thereto will be legally sufficient under
such laws and regulations and all such documentation will be legally enforceable
in accordance with its terms.

(c) Collateral Agent shall have the right at any time or times, in Collateral
Agent’s name or in the name of a nominee of Collateral Agent, and may
communicate directly with any Account Debtor, to verify the validity, amount or
any other matter relating to any Account or other Collateral, by mail,
telephone, e-mail, facsimile transmission or otherwise. To facilitate the
exercise of the right described in the immediately preceding sentence, NewPageCo
hereby agrees to provide Collateral Agent upon request the name and address of
each Account Debtor of NewPageCo or any Borrowing Base Guarantor or its
Subsidiaries.

(d) NewPageCo shall establish and maintain, at its sole expense, and shall cause
each Guarantor to establish and maintain, at its sole expense blocked accounts
or lockboxes and related deposit accounts (in each case, “Blocked Accounts”), as
Collateral Agent may specify, with such banks as are acceptable to Collateral
Agent into which NewPageCo and Guarantors shall promptly deposit and direct
their respective Account Debtors to directly remit all payments on Accounts and
all payments constituting proceeds of Inventory or other Collateral in the
identical form in which such payments are made, whether by cash, check or other
manner and shall be identified and segregated from all other funds of the Credit
Parties. NewPageCo and Guarantors shall deliver, or cause to be delivered, to
Collateral Agent a Deposit Account Control Agreement duly authorized, executed
and delivered by each bank where a Blocked Account for the benefit of NewPageCo
or any Guarantor is maintained, and by each bank where any other

 

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deposit account is from time to time maintained. NewPageCo shall further execute
and deliver, and shall cause each Guarantor to execute and deliver, such
agreements and documents as Collateral Agent may require in connection with such
Blocked Accounts and such Deposit Account Control Agreements. Except as
permitted by Section 9.1(e)(iii), NewPageCo and Guarantors shall not establish
any deposit accounts after the Closing Date, unless NewPageCo or Guarantor (as
applicable) have complied in full with the provisions of this Section 9.1 with
respect to such deposit accounts. After the occurrence and during the
continuance of a Cash Dominion Trigger Event NewPageCo agrees that all payments
made to such Blocked Accounts or other funds received and collected by
Collateral Agent or any Lender, whether in respect of the Accounts, as proceeds
of Inventory or other Collateral or otherwise shall be treated as payments to
Collateral Agent and Lenders in respect of the Obligations and therefore shall
constitute the property of Collateral Agent and Lenders to the extent of the
then outstanding Obligations.

(e) NewPageCo and each Guarantor shall maintain a cash management system which
is acceptable to the Administrative Agent and the Collateral Agent (the “Cash
Management System”). The Cash Management System shall contain, among other
things, the following:

(i) With respect to the Blocked Accounts of NewPageCo and such Guarantors as the
Collateral Agent shall determine in its sole discretion, the applicable bank
maintaining such Blocked Accounts shall agree, pursuant to the applicable
Deposit Account Control Agreement, to forward daily all amounts in each Blocked
Account to one Blocked Accounts designated as concentration account in the name
of NewPageCo (the “Concentration Account”) at the bank that shall be designated
as the Concentration Account bank for NewPageCo (the “Concentration Account
Bank”), which, on the Closing Date, shall be account #695210443 maintained by
JPMorgan Chase Bank, N.A. The Concentration Account Bank shall agree, pursuant
to the applicable Deposit Account Control Agreement from and after the receipt
of a notice (an “Activation Notice”) from the Collateral Agent (which Activation
Notice may only be given after the occurrence and during the continuance of a
Cash Dominion Trigger Event), to forward daily all amounts in the Concentration
Account to the account designated as collection account (the “Collection
Account”) which shall be under the exclusive dominion and control of the
Collateral Agent;

(ii) With respect to the Blocked Accounts of such Guarantors as the Collateral
Agent shall determine in its sole discretion, the applicable bank maintaining
such Blocked Accounts shall agree, from and after the receipt of an Activation
Notice from the Collateral Agent (which Activation Notice may be given by
Collateral Agent at any time after the occurrence and during the continuance of
a Cash Dominion Trigger Event), to forward all amounts in each Blocked Account
to the applicable Collection Account and to commence the process of daily sweeps
from such Blocked Account into the Collection Account;

 

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(iii) Any provision of this Section 9.1 to the contrary notwithstanding,
(A) Credit Parties may maintain payroll accounts and trust accounts that are not
a part of the Cash Management Systems provided that no Credit Party shall
accumulate or maintain cash in such accounts as of any date of determination in
excess of checks outstanding against such accounts as of that date and amounts
necessary to meet minimum balance requirements and (B) Credit Parties main
maintain local cash accounts that are not a part of the Cash Management Systems
which in the aggregate do not at any time contain funds in excess of $2,500,000.

(f) The Collateral Agent shall apply all funds received in the Collection
Account on a daily basis to the repayment (by transferring same to the account
of or pursuant to direction of Administrative Agent) of (i) first, fees and
reimbursable expenses of Agents then due and payable; (ii) second, to interest
then due and payable on all Loans, (iii) third, Overadvances, (iv) fourth, the
Swing Line Loans, (v) fifth, Base Rate Loans, (vi) sixth, Eurodollar Rate Loans,
together with all accrued and unpaid interest thereon (excluding Eurodollar Rate
Loans (A) with respect to which the application of such payment would result in
the payment of the principal prior to the last day of the relevant Interest
Period and (B) which NewPageCo elects to continue pursuant to Section 2.8(b)),
(vii) seventh, other amounts which are due (other than (A) obligations with
respect to any purchasing card or similar program owed to any Lender, any
Affiliate of any Lender, the Administrative Agent or the Collateral Agent and
(B) Banking Services Obligations) and (ix) last, pro rata to Obligations with
respect to any purchasing card or similar program owed to any Lender, any
Affiliate of any Lender, the Administrative Agent or the Collateral Agent (not
to exceed $1,500,000) and Banking Services Obligations, in each case without a
reduction in the Revolving Commitments; all further funds received in any of the
Collection Account shall, unless an Event of Default has occurred and is
continuing, be transferred or applied by the Collateral Agent in accordance with
the directions of NewPageCo or the respective other Credit Party. If an Event of
Default has occurred and is continuing, the Collateral Agent shall not transfer
or apply any such funds from the Collection Account in accordance with such
directions unless the Administrative Agent and the Collateral Agent determine to
release such funds to NewPageCo. Absent any such determination by the
Administrative Agent and the Collateral Agent, all such funds in the Collection
Account shall be transferred to the Cash Collateral Account to be applied to the
Eurodollar Rate Loans on the last day of the relevant Interest Period of such
Eurodollar Rate Loan or to the Obligations as they come due (whether at stated
maturity, by acceleration or otherwise). If consented to by the Administrative
Agent, the Collateral Agent and the Requisite Lenders, such funds in the Cash
Collateral Account may be released to NewPageCo.

 

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(g) NewPageCo and its directors, employees, agents and other Affiliates and
Borrowing Base Guarantors shall, acting as trustee for Collateral Agent,
receive, as the property of Collateral Agent, any monies, checks, notes, drafts
or any other payment relating to and/or proceeds of Accounts, Inventory or other
Collateral which come into their possession or under their control and
immediately upon receipt thereof, shall deposit or cause the same to be
deposited in the Blocked Accounts, or remit the same or cause the same to be
remitted, in kind, to Collateral Agent. In no event shall the same be commingled
with NewPageCo’s own funds. NewPageCo agrees to reimburse Collateral Agent on
demand for any amounts owed or paid to any bank at which a Blocked Account is
established or any other bank or Person involved in the transfer of funds to or
from the Blocked Accounts arising out of Collateral Agent’s payments to or
indemnification of such bank or Person.

9.2. Inventory. With respect to the Inventory: (a) NewPageCo and Borrowing Base
Guarantors shall at all times maintain records of Inventory reasonably
satisfactory to Collateral Agent, keeping correct and accurate records itemizing
and describing the kind, type, quality and quantity of Inventory, the cost
therefor and daily withdrawals therefrom and additions thereto; (b) any of the
Administrative Agent’s and Collateral Agent’s officers, employees or agents
shall have the right, at any time or times, in the name of the Administrative
Agent or Collateral Agent, as applicable, any designee of the Administrative
Agent, Collateral Agent or NewPageCo, to verify the validity, amount or any
other matter relating to Accounts or Inventory by mail, telephone, electronic
communication, personal inspection or otherwise and to conduct desktop
collateral appraisals of the financial affairs and Collateral of the Credit
Parties, and NewPageCo shall cooperate fully with the Administrative Agent and
Collateral Agent in an effort to facilitate and promptly conclude any such
verification process; (c) the Credit Parties shall cooperate fully with the
Collateral Agent and its agents during all desktop collateral appraisals and
Inventory Appraisals each of which shall be at the expense of NewPageCo and each
of which shall be conducted annually (i.e. one desktop appraisal per annum and
one Inventory Appraisal per annum), or, following the occurrence and during the
continuation of an Event of Default or when the Total Utilization of Revolving
Commitments shall exceed the Revolving Commitments or the Borrowing Base then in
effect, more frequently at Collateral Agent’s reasonable request; (d) neither
NewPageCo nor any Borrowing Base Guarantor shall sell Inventory to any customer
on approval, or any other basis which entitles the customer to return (except
for the right of customers for Inventory which is defective or non-conforming)
or may obligate any Credit Party to repurchase such Inventory; and (e) NewPageCo
and each Borrowing Base Guarantor shall keep the Inventory in good and
marketable condition. In addition to the other provisions of this Section 9, the
Collateral Agent shall have the right to conduct such collateral audits as it
may determine appropriate; provided at any time when no Event of Default shall
have occurred and be continuing the Collateral Agent shall not conduct more than
three such collateral audits in any calendar year.

 

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9.3. Appointment of Collateral Agent as “Fondé de Pouvoir”. Without prejudice to
the foregoing, each Secured Party hereby irrevocably appoints and authorizes
JPMorgan Chase Bank, N.A. (and any successor acting as Collateral Agent) to act
as the person holding the power of attorney (fondé de pouvoir) (in such capacity
“Attorney”) of the Secured Parties as contemplated under Article 2692 of the
Civil Code of Quebec, and to enter into, to take and to hold on their behalf,
and for their benefit, any hypothec, and to exercise such powers and duties
which are conferred upon the Attorney under any hypothec. Moreover, without
prejudice to such appointment and authorization to act as the person holding the
power of attorney as aforesaid, each Secured Party hereby irrevocably appoints
and authorizes JPMorgan Chase Bank, N.A. (and any successor acting as Collateral
Agent) (in such capacity, the “Custodian”) to act as agent and custodian for and
on behalf of the Secured Parties to hold and to be the sole registered holder of
any bond which may be issued under any hypothec, the whole notwithstanding
Section 32 of the Act respecting the special powers of legal persons (Quebec) or
any other applicable law. In this respect: (i) the Custodian shall keep a record
indicating the names and addresses of, and the pro rata portion of the
obligations and indebtedness secured by any pledge of any such bond and owing to
each Secured Party, and (ii) each Secured Party will be entitled to the benefits
of any charged property covered by any hypothec and will participate in the
proceeds of realization of any such charged property, the whole in accordance
with the terms hereof. Each of the Attorney and the Custodian shall: (a) have
the sole and exclusive right and authority to exercise, except as may be
otherwise specifically restricted by the terms hereof, all rights and remedies
given to the Attorney and the Custodian (as applicable) pursuant to any
hypothec, bond, pledge, applicable laws or otherwise, (b) benefit from and be
subject to all provisions hereof with respect to the Collateral Agent mutatis
mutandis, including, without limitation, all such provisions with respect to the
liability or responsibility to and indemnification by the Secured Parties, and
(c) be entitled to delegate from time to time any of its powers or duties under
any hypothec, bond, or pledge on such terms and conditions as it may determine
from time to time. Any person who becomes a Secured Party shall be deemed to
have consented to and confirmed: (i) the Attorney as the person holding the
power of attorney as aforesaid and to have ratified, as of the date it becomes a
Secured Party, all actions taken by the Attorney in such capacity, and (ii) the
Custodian as the agent and custodian as aforesaid and to have ratified, as of
the date it becomes a Secured Party, all actions taken by the Custodian in such
capacity.

SECTION 10. AGENTS

10.1. Appointment of Agents. GSCP and UBSS are hereby appointed Co-Syndication
Agents hereunder, and each Lender hereby authorizes each Co-Syndication Agent to
act as its agent in accordance with the terms hereof and the other Credit
Documents. GSCP is hereby appointed Administrative Agent hereunder and under the
other Credit Documents and each Lender hereby authorizes Administrative Agent to
act as its agent in accordance with the terms hereof and the other Credit
Documents. JPMorgan Chase Bank, N.A. is hereby appointed

 

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Collateral Agent hereunder, and each Lender hereby authorizes Collateral Agent
to act as its agent in accordance with the terms hereof and the other Credit
Documents. Each Agent hereby agrees to act upon the express conditions contained
herein and the other Credit Documents, as applicable. The provisions of this
Section 10 are solely for the benefit of Agents and Lenders and no Credit Party
shall have any rights as a third party beneficiary of any of the provisions
thereof. In performing its functions and duties hereunder, each Agent shall act
solely as an agent of Lenders and does not assume and shall not be deemed to
have assumed any obligation towards or relationship of agency or trust with or
for NewPageHoldCo or any of its Subsidiaries. Each of Co-Syndication Agents,
without consent of or notice to any party hereto, may assign any and all of its
rights or obligations hereunder to any of its Affiliates. As of the Closing
Date, neither GSCP nor UBSS, in their capacity as Co-Syndication Agents, shall
have any obligations but shall be entitled to all benefits of this Section 10.

10.2. Powers and Duties. Each Lender irrevocably authorizes each Agent to take
such action on such Lender’s behalf and to exercise such powers, rights and
remedies hereunder and under the other Credit Documents as are specifically
delegated or granted to such Agent by the terms hereof and thereof, together
with such powers, rights and remedies as are reasonably incidental thereto. Each
Agent shall have only those duties and responsibilities that are expressly
specified herein and the other Credit Documents. Each Agent may exercise such
powers, rights and remedies and perform such duties by or through its agents or
employees. No Agent shall have, by reason hereof or any of the other Credit
Documents, a fiduciary relationship in respect of any Lender; and nothing herein
or any of the other Credit Documents, expressed or implied, is intended to or
shall be so construed as to impose upon any Agent any obligations in respect
hereof or any of the other Credit Documents except as expressly set forth herein
or therein. Administrative Agent hereby agrees that it shall (i) furnish to
GSCP, in its capacity as Sole Lead Arranger, upon GSCP’s request, a copy of the
Register, (ii) cooperate with GSCP in granting access to any Lenders (or
potential lenders) who GSCP identifies to the “intralinks” site or other
relevant information platform (such platform, the “Information Site”), and
(iii) maintain GSCP’s access to the Information Site. Each Lender irrevocably
authorizes the Collateral Agent to execute and deliver the Intercreditor
Agreement and the Cash Management Intercreditor Agreement and to take such
action, and to exercise the powers, rights and remedies granted to the
Collateral Agent thereunder and with respect thereto. In addition, each Lender
hereby: (i) agrees to be bound by, and consents to, the terms and provisions of
the Intercreditor Agreement and (ii) authorizes and directs the Collateral
Agent, in its discretion, to execute any Intercreditor Agreement Joinders (as
defined in the Intercreditor Agreement) on behalf of each Lender in order to
evidence that each Lender is bound by the terms and provisions of the
Intercreditor Agreement, including the provisions relating to the ranking of
Priority Liens (as defined in the Intercreditor Agreement) and the order of
application of proceeds from enforcement of such Priority Liens (as defined in
the Intercreditor Agreement).

 

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10.3. General Immunity.

(a) No Responsibility for Certain Matters. No Agent shall be responsible to any
Lender for the execution, effectiveness, genuineness, validity, enforceability,
collectability or sufficiency hereof or any other Credit Document or for any
representations, warranties, recitals or statements made herein or therein or
made in any written or oral statements or in any financial or other statements,
instruments, reports or certificates or any other documents furnished or made by
any Agent to Lenders or by or on behalf of any Credit Party, and Lender to any
Agent or any Lender in connection with the Credit Documents and the transactions
contemplated thereby or for the financial condition or business affairs of any
Credit Party or any other Person liable for the payment of any Obligations, nor
shall any Agent be required to ascertain or inquire as to the performance or
observance of any of the terms, conditions, provisions, covenants or agreements
contained in any of the Credit Documents or as to the use of the proceeds of the
Loans or as to the existence or possible existence of any Event of Default or
Default or to make any disclosures with respect to the foregoing. Anything
contained herein to the contrary notwithstanding, neither Administrative Agent
nor Swing Line Lender shall have any liability arising from confirmations of the
amount of outstanding Loans or the component amounts thereof and neither
Administrative Agent nor any Issuing Bank shall have any liability arising from
confirmations of the amount of the Letter of Credit Usage or the component
amounts thereof.

(b) Exculpatory Provisions. No Agent or any of its officers, partners,
directors, employees or agents shall be liable to Lenders for any action taken
or omitted by any Agent under or in connection with any of the Credit Documents
except to the extent caused by such Agent’s gross negligence or willful
misconduct. Each Agent shall be entitled to refrain from any act or the taking
of any action (including the failure to take an action) in connection herewith
or any of the other Credit Documents or from the exercise of any power,
discretion or authority vested in it hereunder or thereunder unless and until
such Agent shall have received instructions in respect thereof from Requisite
Lenders (or such other Lenders as may be required to give such instructions
under Section 11.5) and, upon receipt of such instructions from Requisite
Lenders (or such other Lenders, as the case may be), such Agent shall be
entitled to act or (where so instructed) refrain from acting, or to exercise
such power, discretion or authority, in accordance with such instructions.
Without prejudice to the generality of the foregoing, (i) each Agent shall be
entitled to rely, and shall be fully protected in relying, upon any
communication, instrument or document believed by it to be genuine and correct
and to have been signed or sent by the proper Person or Persons and shall be
entitled to rely and shall be protected in relying on opinions and judgments of
attorneys (who may be attorneys for NewPageHoldCo and its Subsidiaries),
accountants, experts and other professional advisors selected by it; and (ii) no
Lender shall have any right of action whatsoever against any Agent as a result
of such Agent acting or (where so instructed) refraining from acting hereunder
or any of the other Credit Documents in accordance with the instructions of
Requisite Lenders (or such other Lenders as may be required to give such
instructions under Section 11.5).

 

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(c) Delegation of Duties. Administrative Agent may perform any and all of its
duties and exercise its rights and powers under this Agreement or under any
other Credit Document by or through any one or more sub-agents appointed by
Administrative Agent. 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 Affiliates. The exculpatory, indemnification and other provisions of
this Section 10.3 and of Section 10.6 shall apply to any the Affiliates of
Administrative 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. All of the rights, benefits, and
privileges (including the exculpatory and indemnification provisions) of this
Section 10.3 and of Section 10.6 shall apply to any such sub-agent and to the
Affiliates of any such sub-agent, and shall apply to their respective activities
as sub-agent as if such sub-agent and Affiliates were named herein.
Notwithstanding anything herein to the contrary, with respect to each sub-agent
appointed by the Administrative Agent, (i) such sub-agent shall be a third party
beneficiary under this Agreement with respect to all such rights, benefits and
privileges (including exculpatory rights and rights to indemnification) and
shall have all of the rights and benefits of a third party beneficiary,
including an independent right of action to enforce such rights, benefits and
privileges (including exculpatory rights and rights to indemnification)
directly, without the consent or joinder of any other Person, against any or all
of the Credit Parties and the Lenders, (ii) such rights, benefits and privileges
(including exculpatory rights and rights to indemnification) shall not be
modified or amended without the consent of such sub-agent, and (iii) such
sub-agent shall only have obligations to Administrative Agent and not to any
Credit Party, Lender or any other Person and no Credit Party, Lender or any
other Person shall have any rights, directly or indirectly, as a third party
beneficiary or otherwise, against such sub-agent.

10.4. Agents Entitled to Act as Lender. The agency hereby created shall in no
way impair or affect any of the rights and powers of, or impose any duties or
obligations upon, any Agent in its individual capacity as a Lender hereunder.
With respect to its participation in the Loans and the Letters of Credit, each
Agent shall have the same rights and powers hereunder as any other Lender and
may exercise the same as if it were not performing the duties and functions
delegated to it hereunder, and the term “Lender” shall, unless the context
clearly otherwise indicates, include each Agent in its individual capacity. Any
Agent and its Affiliates may accept deposits from, lend money to, own securities
of, and generally engage in any kind of banking, trust, financial advisory or
other business with NewPageHoldCo or any of its Affiliates as if it were not
performing the duties specified herein, and may accept fees and other
consideration from NewPageCo for services in connection herewith and otherwise
without having to account for the same to Lenders.

 

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10.5. Lenders’ Representations, Warranties and Acknowledgment.

(a) Each Lender represents and warrants that it has made its own independent
investigation of the financial condition and affairs of NewPageHoldCo and its
Subsidiaries in connection with Credit Extensions hereunder and that it has made
and shall continue to make its own appraisal of the creditworthiness of
NewPageHoldCo and its Subsidiaries. No Agent shall have any duty or
responsibility, either initially or on a continuing basis, to make any such
investigation or any such appraisal on behalf of Lenders or to provide any
Lender with any credit or other information with respect thereto, whether coming
into its possession before the making of the Loans or at any time or times
thereafter, and no Agent shall have any responsibility with respect to the
accuracy of or the completeness of any information provided to Lenders.

(b) Each Lender, by delivering its signature page to this Agreement and funding
its Revolving Loans on the Closing Date, shall be deemed to have acknowledged
receipt of, and consented to and approved, each Credit Document and each other
document required to be approved by any Agent, Requisite Lenders or Lenders, as
applicable on the Closing Date.

10.6. Right to Indemnity. Each Lender, in proportion to its Pro Rata Share,
severally agrees to indemnify each Agent, to the extent that such Agent shall
not have been reimbursed by any Credit Party (and without limiting any Credit
Party’s obligation to do so), for and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including counsel fees and disbursements) or disbursements of any kind
or nature whatsoever which may be imposed on, incurred by or asserted against
such Agent in exercising its powers, rights and remedies or performing its
duties hereunder or under the other Credit Documents or otherwise in its
capacity as such Agent in any way relating to or arising out of this Agreement
or the other Credit Documents; provided, no Lender shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from such Agent’s
gross negligence or willful misconduct. If any indemnity furnished to any Agent
for any purpose shall, in the opinion of such Agent, be insufficient or become
impaired, such Agent may call for additional indemnity and cease, or not
commence, to do the acts indemnified against until such additional indemnity is
furnished; provided, in no event shall this sentence require any Lender to
indemnify any Agent against any liability, obligation, loss, damage, penalty,
action, judgment, suit, cost, expense or disbursement in excess of such Lender’s
Pro Rata Share thereof; and provided further, this sentence shall not be deemed
to require any Lender to indemnify any Agent against any liability, obligation,
loss, damage, penalty, action, judgment, suit, cost, expense or disbursement
described in the proviso in the immediately preceding sentence.

10.7. Successor Administrative Agent. Administrative Agent and Collateral Agent
(or either of them) may resign at any time by giving thirty days’ prior written
notice thereof to Lenders and NewPageCo, and Administrative Agent and Collateral
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may be removed at any time with or without cause by an instrument or concurrent
instruments in writing delivered to NewPageCo and Administrative Agent or
Collateral Agent, as applicable, and signed by Requisite Lenders. Upon any such
notice of resignation or any such removal, Requisite Lenders shall have the
right, upon five Business Days’ notice to NewPageCo, to appoint a successor
Administrative Agent and/or Collateral Agent, provided that so long as no Event
of Default then exists such successor shall have been approved in writing by
NewPageCo which approval shall not be unreasonably withheld or delayed. Upon the
acceptance of any appointment as Administrative Agent or Collateral Agent, as
applicable, hereunder by a successor Administrative Agent or Collateral Agent,
as applicable, that successor Administrative Agent or Collateral Agent, as
applicable, shall thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring or removed Administrative Agent or
Collateral Agent, as applicable, and the retiring or removed Administrative
Agent or Collateral Agent, as applicable, shall promptly (i) transfer to such
successor Administrative Agent or Collateral Agent, as applicable, all sums,
Securities and other items of Collateral held under the Collateral Documents,
together with all records and other documents necessary or appropriate in
connection with the performance of the duties of the successor Administrative
Agent or Collateral Agent, as applicable, under the Credit Documents, and
(ii) execute and deliver to such successor Administrative Agent or Collateral
Agent, as applicable, such amendments to financing statements, and take such
other actions, as may be necessary or appropriate in connection with the
assignment to such successor Administrative Agent or Collateral Agent, as
applicable, of the security interests created under the Collateral Documents,
whereupon such retiring or removed Administrative Agent shall be discharged from
its duties and obligations hereunder. After any retiring or removed
Administrative Agent’s or Collateral Agent’s resignation or removal hereunder as
Administrative Agent or Collateral Agent, as applicable, the provisions of this
Section 10 shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Administrative Agent or Collateral Agent hereunder
hereunder.

10.8. Collateral Documents and Guaranty.

(a) Agents under Collateral Documents and Guaranty. Each Lender hereby further
authorizes Administrative Agent or Collateral Agent, as applicable, on behalf of
and for the benefit of Lenders, to be the agent for and representative of
Lenders with respect to the Guaranty, the Collateral and the Collateral
Documents. Subject to Section 11.5, without further written consent or
authorization from Lenders, Administrative Agent or Collateral Agent, as
applicable may execute any documents or instruments necessary to (i) release any
Lien encumbering any item of Collateral that is the subject of a sale or other
disposition of assets permitted hereby or to which Requisite Lenders (or such
other Lenders as may be required to give such consent under Section 11.5) have
otherwise consented or (ii) release any Guarantor from the Guaranty pursuant to
Section 7.12 or with respect to which Requisite Lenders (or such other Lenders
as may be required to give such consent under Section 11.5) have otherwise
consented.

 

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(b) Right to Realize on Collateral and Enforce Guaranty. Anything contained in
any of the Credit Documents to the contrary notwithstanding, NewPageCo,
Administrative Agent, Collateral Agent and each Lender hereby agree that (i) no
Lender shall have any right individually to realize upon any of the Collateral
or to enforce the Guaranty, it being understood and agreed that all powers,
rights and remedies hereunder may be exercised solely by Administrative Agent,
on behalf of Lenders in accordance with the terms hereof and all powers, rights
and remedies under the Collateral Documents may be exercised solely by
Collateral Agent, and (ii) in the event of a foreclosure by Collateral Agent on
any of the Collateral pursuant to a public or private sale, Collateral Agent or
any Lender may be the purchaser of any or all of such Collateral at any such
sale and Collateral Agent, as agent for and representative of Secured Parties
(but not any Lender or Lenders in its or their respective individual capacities
unless Requisite Lenders shall otherwise agree in writing) shall be entitled,
for the purpose of bidding and making settlement or payment of the purchase
price for all or any portion of the Collateral sold at any such public sale, to
use and apply any of the Obligations as a credit on account of the purchase
price for any collateral payable by Collateral Agent at such sale.

10.9. Overadvances. Administrative Agent shall not make (and shall prohibit the
Issuing Bank and Swing Line Lender, as applicable, from making) any Revolving
Loans or provide any Letters of Credit to NewPageCo on behalf of Lenders
intentionally and with actual knowledge that such Revolving Loans, Swing Line
Loans, or Letters of Credit would cause the aggregate amount of the Revolving
Exposure to exceed the Borrowing Base, without the prior consent of all Lenders
(other than Sponsor Affiliated Lenders), except, that, Administrative Agent may
make (or cause to be made) such additional Revolving Loans or Swing Line Loans
or provide such additional Letters of Credit on behalf of Lenders (each an
“Overadvance” and collectively, the “Overadvances”), intentionally and with
actual knowledge that such Loans or Letters of Credit will cause the total
outstanding Revolving Exposure to exceed the Borrowing Base, as Administrative
Agent may deem necessary or advisable in its discretion, provided, that: (a) the
total principal amount of the Overadvances to NewPageCo which Administrative
Agent may make or provide (or cause to be made or provided) after obtaining such
actual knowledge that the Revolving Exposure equals or exceeds the Borrowing
Base shall not exceed the amount equal to $15,000,000 million outstanding at any
time less the then outstanding amount of any Special Agent Advances and shall
not cause the Revolving Exposure to exceed the Revolving Commitments of all of
the Lenders or the Revolving Exposure of a Lender to exceed such Lender’s
Revolving Commitment, (b) without the consent of all Lenders (other than Sponsor
Affiliated Lenders), (i) no Overadvance shall be outstanding for more than sixty
(60) days and (ii) after all Overadvances have been repaid, Administrative Agent
shall not make any additional Overadvance unless sixty (60) days or more have
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Overadvance was outstanding and (c) Administrative Agent shall be entitled to
recover such funds, on demand from NewPageCo together with interest thereon for
each day from the date such payment was due until the date such amount is paid
to Administrative Agent at the interest rate provided for in Section 2.10. Each
Lender shall be obligated to pay Administrative Agent the amount of its Pro Rata
Share of any such Overadvance provided, that Administrative Agent is acting in
accordance with the terms of this Section 10.9. All Overadvances shall be
secured by Collateral.

10.10. Collateral Matters.

Administrative Agent may, at its option, from time to time, at any time on or
after an Event of Default and for so long as the same is continuing or upon any
other failure of a condition precedent to the making of Loans hereunder, make
such disbursements and advances (“Special Agent Advances”) which Administrative
Agent, in its sole discretion, deems necessary or desirable either (i) to
preserve or protect the Collateral or any portion thereof or (ii) to pay any
other amount chargeable to NewPageCo pursuant to the terms of this Agreement or
any of the other Credit Documents consisting of costs, fees and expenses and
payments to any Issuing Bank (provided, that in no event shall (i) Special Agent
Advances for such purpose exceed the amount equal to $15,000,000 million in the
aggregate outstanding at any time less the then outstanding Overadvances under
Section 10.9 hereof and (ii) Special Agent Advances plus the Revolving Exposure
exceed the Lenders’ Commitment at the time of such Event of Default or cause any
Lender’s Revolving Exposure to exceed such Lender’s Revolving Loan Commitment at
the time of such Event of Default). Special Agent Advances shall be repayable on
demand and be secured by the Collateral. Special Agent Advances shall not
constitute Loans but shall otherwise constitute Obligations hereunder.
Administrative Agent shall notify each Lender and NewPageCo in writing of each
such Special Agent Advance, which notice shall include a description of the
purpose of such Special Agent Advance. Each Lender agrees that it shall make
available to Administrative Agent, upon Administrative Agent’s demand, in
immediately available funds, the amount equal to such Lender’s Pro Rata Share of
each such Special Agent Advance. If such funds are not made available to
Administrative Agent by such Lender, Administrative Agent shall be entitled to
recover such funds, on demand from such Lender together with interest thereon
for each day from the date such payment was due until the date such amount is
paid to Administrative Agent at the Federal Funds Effective Rate for each day
during such period (as published by the Federal Reserve Bank of New York or at
Administrative Agent’s option based on the arithmetic mean determined by
Administrative Agent of the rates for the last transaction in overnight Federal
funds arranged prior to 9:00 a.m. (New York City time) on that day by each of
the three leading brokers of Federal funds transactions in New York City
selected by Administrative Agent) and if such amounts are not paid within three
(3) days of Administrative Agent’s demand, at the highest interest rate provided
for in Section 2.8(a). Special Agent Advances shall bear interest at the rate
applicable to Base Rate Loans.

 

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10.11. Withholding Tax. To the extent required by any applicable law,
Administrative Agent may withhold from any interest payment to any Lender an
amount equivalent to any applicable withholding tax. If any Governmental
Authority asserts a claim that the Administrative Agent did not properly
withhold tax from amounts paid to or for the account of any Lender because the
appropriate form was not delivered or was not properly executed or because such
Lender failed to notify Administrative Agent of a change in circumstance which
rendered the exemption from, or reduction of, withholding tax ineffective or for
any other reason, such Lender shall indemnify Administrative Agent fully for all
amounts paid, directly or indirectly, by Administrative Agent as tax or
otherwise, including any penalties or interest and together with all expenses
(including legal expenses, allocated internal costs and out-of-pocket expenses)
incurred.

SECTION 11. MISCELLANEOUS

11.1. Notices. Unless otherwise specifically provided herein, any notice or
other communication herein required or permitted to be given to a Credit Party,
Co-Syndication Agent, Collateral Agent, Administrative Agent, Swing Line Lender,
or Issuing Bank, shall be sent to such Person’s address as set forth on Appendix
B or in the other relevant Credit Document, and in the case of any Lender, the
address as indicated on Appendix B or otherwise indicated to Administrative
Agent in writing. Each notice hereunder shall be in writing and may be
personally served, telexed or sent by telefacsimile or United States certified
or registered mail or courier service and shall be deemed to have been given
when delivered in person or by courier service and signed for against receipt
thereof, upon receipt of telefacsimile, or three Business Days after depositing
it in the United States mail with postage prepaid and properly addressed;
provided, no notice to any Agent shall be effective until received by such
Agent; provided further, any such notice or other communication shall at the
request of the Administrative Agent be provided to any sub-agent appointed
pursuant to Section 10.3(c) hereto as designated by the Administrative Agent
from time to time.

11.2. Expenses. Whether or not the transactions contemplated hereby shall be
consummated, NewPageCo agrees to pay promptly (a) all the actual and reasonable
costs and expenses of preparation of the Credit Documents and any consents,
amendments, waivers or other modifications thereto; (b) all the costs of
furnishing all opinions by counsel for NewPageCo and the other Credit Parties;
(c) the reasonable fees, expenses and disbursements of counsel to Agents (in
each case including allocated costs of internal counsel) in connection with the
negotiation, preparation, execution and administration of the Credit Documents
and any consents, amendments, waivers or other modifications thereto and any
other documents or matters requested by NewPageCo; (d) all the actual and
reasonable costs and expenses of creating and perfecting Liens in favor of
Collateral Agent, for the benefit of Lenders pursuant hereto, including filing
and recording fees, expenses and taxes, stamp or documentary taxes,

 

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search fees, title insurance premiums and reasonable fees, expenses and
disbursements of counsel to each Agent and of counsel providing any opinions
that any Agent or Requisite Lenders may request in respect of the Collateral or
the Liens created pursuant to the Collateral Documents, and the costs and
expenses of the Collateral Agent with respect to collateral audits conducted by
the Collateral Agent not more than three times in any calendar year (or in the
event an Event of Default shall have occurred and be continuing, with such
frequency as the Collateral Agent may determine); (e) all the actual and
reasonable costs, fees, expenses and disbursements of any auditors, accountants,
consultants or appraisers; (f) all the actual and reasonable costs and expenses
(including the reasonable fees, expenses and disbursements of any appraisers,
consultants, advisors and agents employed or retained by Collateral Agent and
its counsel) in connection with the custody or preservation of any of the
Collateral; (g) all other actual and reasonable costs and expenses incurred by
each Agent in connection with the syndication of the Loans and Revolving
Commitments and the negotiation, preparation and execution of the Credit
Documents and any consents, amendments, waivers or other modifications thereto
and the transactions contemplated thereby; and (h) after the occurrence of a
Default or an Event of Default, all costs and expenses, including reasonable
attorneys’ fees (including allocated costs of internal counsel) and costs of
settlement, incurred by any Agent and Lenders in enforcing any Obligations of or
in collecting any payments due from any Credit Party hereunder or under the
other Credit Documents by reason of such Default or Event of Default (including
in connection with the sale of, collection from, or other realization upon any
of the Collateral or the enforcement of the Guaranty) or in connection with any
refinancing or restructuring of the credit arrangements provided hereunder in
the nature of a “work-out” or pursuant to any insolvency or bankruptcy cases or
proceedings. The expenses with respect to the appraisals described in
Section 5.17(g) and Section 9.2(c) and conducted at times when no Event of
Default shall exist shall not exceed $125,000 per annum.

11.3. Indemnity.

(a) In addition to the payment of expenses pursuant to Section 11.2, whether or
not the transactions contemplated hereby shall be consummated, each Credit Party
agrees to defend (if requested by the Indemnitees and subject to Indemnitees’
selection of counsel), indemnify, pay and hold harmless, each Agent and Lender
and the Issuing Bank and the officers, partners, directors, trustees, employees,
agents, sub-agents and Affiliates of each Agent and each Lender and the Issuing
Bank (each, an “Indemnitee”), from and against any and all Indemnified
Liabilities; provided, no Credit Party shall have any obligation to any
Indemnitee hereunder with respect to any Indemnified Liabilities to the extent
such Indemnified Liabilities arise from the gross negligence or willful
misconduct of that Indemnitee. To the extent that the undertakings to defend,
indemnify, pay and hold harmless set forth in this Section 11.3 may be
unenforceable in whole or in part because they are violative of any law or
public policy, the applicable Credit Party shall contribute the maximum portion
that it is permitted to pay and satisfy under applicable law to the payment and
satisfaction of all Indemnified Liabilities incurred by Indemnitees or any of
them.

 

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(b) To the extent permitted by applicable law, no Credit Party shall assert, and
each Credit Party hereby waives, any claim against Lenders, Agents and their
respective Affiliates, directors, employees, attorneys, agents or sub-agents, on
any theory of liability, for special, indirect, consequential or punitive
damages (as opposed to direct or actual damages) (whether or not the claim
therefor is based on contract, tort or duty imposed by any applicable legal
requirement) arising out of, in connection with, as a result of, or in any way
related to, this Agreement or any Credit Document or any agreement or instrument
contemplated hereby or thereby or referred to herein or therein, the
transactions contemplated hereby or thereby, any Loan or the use of the proceeds
thereof or any act or omission or event occurring in connection therewith, and
NewPageHoldCo and NewPageCo hereby waives, releases and agrees not to sue upon
any such claim or any such damages, whether or not accrued and whether or not
known or suspected to exist in its favor.

11.4. Set-Off. In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, upon the
occurrence of any Event of Default each Lender is hereby authorized by each
Credit Party at any time or from time to time subject to the consent of
Administrative Agent (such consent not to be unreasonably withheld or delayed),
without notice to any Credit Party or to any other Person (other than
Administrative Agent), any such notice being hereby expressly waived, to set off
and to appropriate and to apply any and all deposits (general or special,
including Indebtedness evidenced by certificates of deposit, whether matured or
unmatured, but not including trust accounts) and any other Indebtedness at any
time held or owing by such Lender to or for the credit or the account of any
Credit Party against and on account of the obligations and liabilities of any
Credit Party to such Lender hereunder, the Letters of Credit and participations
therein and under the other Credit Documents, including all claims of any nature
or description arising out of or connected hereto, the Letters of Credit and
participations therein or with any other Credit Document, irrespective of
whether or not (a) such Lender shall have made any demand hereunder or (b) the
principal of or the interest on the Loans or any amounts in respect of the
Letters of Credit or any other amounts due hereunder shall have become due and
payable pursuant to Section 2 and although such obligations and liabilities, or
any of them, may be contingent or unmatured. Administrative Agent and each
Lender agree promptly to notify NewPageCo after any such set-off and application
made by such Person; provided, that failure to provide such notice does not
affect the validity of any such set-off or create any liability against the
Administrative Agent, the Collateral Agent or any Lender.

11.5. Amendments and Waivers.

(a) Requisite Lenders’ Consent; Supermajority Lenders’ Consent. Subject to
Section 11.5(b) and 11.5(c), (i) except as set forth in clause (ii), no
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termination or waiver of any provision of the Credit Documents, or consent to
any departure by any Credit Party therefrom, shall in any event be effective
without the written concurrence of the Requisite Lenders and (ii) no amendment,
modification, termination or waiver with respect to the definition of “Borrowing
Base”, “Cost”, “Eligible Inventory”, “Eligible Accounts, “Net Recovery Cost
Percentage”, “Reserves” or Section 2.24 which has or would have the effect of
making more credit available under this Agreement, shall in any event be
effective without the written concurrence of the Supermajority Lenders.

(b) Affected Lenders’ Consent. Without the written consent of each Lender (other
than a Defaulting Lender and other than any Sponsor Affiliated Lenders) that
would be affected thereby, no amendment, modification, termination, or consent
shall be effective if the effect thereof would:

(i) extend the scheduled final maturity of any Loan or Note;

(ii) waive, reduce or postpone any scheduled repayment (but not prepayment);

(iii) extend the stated expiration date of any Letter of Credit beyond the
Revolving Commitment Termination Date;

(iv) reduce the rate of interest on any Loan (other than any waiver of any
increase in the interest rate applicable to any Loan pursuant to Section 2.10)
or any fee payable hereunder;

(v) extend the time for payment of any such interest or fees;

(vi) reduce or forgive the principal amount of any Loan or any reimbursement
obligations in respect of any Letter of Credit;

(vii) amend, modify, terminate or waive any provision of Section 2.16(c), 2.17,
this Section 11.5(b) or Section 11.5(c) or Section 7.2 of the Pledge and
Security Agreement;

(viii) amend the definition of “Requisite Lenders” “Supermajority Lenders” or
“Pro Rata Share”; provided, with the consent of Supermajority Lenders,
additional extensions of credit pursuant hereto may be included in the
determination of “Requisite Lenders”, “Supermajority Lenders” or “Pro Rata
Share” on substantially the same basis as the Revolving Commitments and the
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(ix) release, or subordinate the Collateral Agent’s lien in, all or
substantially all of the Collateral or release all or substantially all of the
Guarantors from the Guaranty, except in each case as expressly provided in the
Credit Documents; or

(x) consent to the assignment or transfer by any Credit Party of any of its
rights and obligations under any Credit Document except as otherwise provided
herein.

(c) Other Consents. No amendment, modification, termination or waiver of any
provision of the Credit Documents, or consent to any departure by any Credit
Party therefrom, shall:

(i) increase any Revolving Commitment of any Lender over the amount thereof then
in effect without the consent of such Lender; provided, no amendment,
modification or waiver of any condition precedent, covenant, Default or Event of
Default shall constitute an increase in any Revolving Commitment of any Lender;

(ii) amend, modify, terminate or waive any provision hereof relating to the
Swing Line Sublimit or the Swing Line Loans without the consent of Swing Line
Lender;

(iii) amend, modify, terminate or waive any obligation of Lenders relating to
the purchase of participations in Letters of Credit as provided in
Section 2.4(e) or any other provision relating to Letter of Credit Usage or
Letters of Credit without the written consent of Administrative Agent and of
Issuing Bank; or

(iv) amend, modify, terminate or waive any provision of Section 11 as the same
applies to any Agent, or any other provision hereof as the same applies to the
rights or obligations of any Agent, in each case without the consent of such
Agent.

(d) Execution of Amendments, etc. Administrative Agent may, but shall have no
obligation to, with the concurrence of any Lender, execute amendments,
modifications, waivers or consents on behalf of such Lender. Any waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which it was given. No notice to or demand on any Credit Party in
any case shall entitle any Credit Party to any other or further notice or demand
in similar or other circumstances. Any amendment, modification, termination,
waiver or consent effected in accordance with this Section 11.5 shall be binding
upon each Lender at the time outstanding, each future Lender and, if signed by a
Credit Party, on such Credit Party.

(e) Sponsor Affiliated Lender. Notwithstanding anything to the contrary
contained in this Agreement or any other Credit Document, in no event shall any
Sponsor Affiliated Lender be entitled: (i) to consent to any amendment,
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other such action with respect to any of the terms of this Agreement or any
other Credit Document, (ii) to require any Agent or other Lender to undertake
any action (or refrain from taking any action) with respect to this Agreement or
any other Credit Document, (iii) otherwise vote on any matter related to this
Agreement or any other Credit Document, (iv) attend any meeting with any Agent
or Lender or receive any information from any Agent or Lender or (v) make or
bring any claim, in its capacity as Lender, against the Agent with respect to
the fiduciary duties of the any Agent or Lender and the other duties and
obligations of the Administrative Agent hereunder; provided, however, no
amendment, modifications or waiver shall deprive any Sponsor Affiliate Lender of
its Pro Rata Share of any payments to which the Lenders are entitled to share on
a pro rata basis hereunder.

(f) Other Limitations. No Affiliate of a Lender that is a party to any Bank
Services agreement shall have any right to consent to or participate in any
manner in the modification or waiver of this Agreement or any Loan Document.

11.6. Successors and Assigns; Participations.

(a) Generally. This Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of the parties
hereto and the successors and assigns of Lenders. No Credit Party’s rights or
obligations hereunder nor any interest therein may be assigned or delegated by
any Credit Party without the prior written consent of all Lenders (other than
Sponsor Affiliated Lenders). 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 and, to the extent
expressly contemplated hereby, Affiliates of each of the Agents and Lenders) any
legal or equitable right, remedy or claim under or by reason of this Agreement.

(b) Register. NewPageCo, Administrative Agent and Lenders shall deem and treat
the Persons listed as Lenders in the Register as the holders and owners of the
corresponding Revolving Commitments and Loans listed therein for all purposes
hereof, and no assignment or transfer of any such Revolving Commitment or Loan
shall be effective, in each case, unless and until recorded in the Register
following receipt of an Assignment Agreement effecting the assignment or
transfer thereof as provided in Section 11.6(d). Each assignment shall be
recorded in the Register on the Business Day the Assignment Agreement is
received by the Administrative Agent, if received by 12:00 noon New York City
time, and on the following Business Day if received after such time, prompt
notice thereof shall be provided to NewPageCo and a copy of such Assignment
Agreement shall be maintained. The date of such recordation of a transfer shall
be referred to herein as the “Assignment Effective Date.” Any request, authority
or consent of any Person who, at the time of making such request or giving such
authority or consent, is listed in the Register as a Lender shall be conclusive
and binding on any subsequent holder, assignee or transferee of the
corresponding Revolving Commitments or Loans.

 

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(c) Right to Assign. Each Lender shall have the right at any time to sell,
assign or transfer all or a portion of its rights and obligations under this
Agreement, including, without limitation, all or a portion of its Revolving
Commitment or Loans owing to it or other Credit Agreement Obligations owing to
it (provided, however, that each such assignment shall be of a uniform, and not
varying, percentage of all rights and obligations under and in respect of any
Loan and any related Revolving Commitments):

(i) to any Person meeting the criteria of clause (i) of the definition of the
term of “Eligible Assignee” upon the giving of notice to NewPageCo and
Administrative Agent; and

(ii) to any Person meeting the criteria of clause (ii) of the definition of the
term of “Eligible Assignee” and, in the case of assignments of Revolving Loans
or Revolving Commitments to any such Person (except in the case of assignments
made by or to GSCP), consented to by each of NewPageCo and Administrative Agent
(such consent not to be (x) unreasonably withheld or delayed or, (y) in the case
of NewPageCo, required at any time an Event of Default shall have occurred and
then be continuing); provided, further each such assignment pursuant to this
Section 11.6(c)(ii) shall be in an aggregate amount of not less than $5,000,000
(or such lesser amount as may be agreed to by Administrative Agent and (so long
as no Event of Default exists) NewPageCo or as shall constitute the aggregate
amount of the Revolving Commitments and Revolving Loans of the assigning Lender
(and aggregating assignments to or by Related Funds for this purpose) with
respect to the assignment of Revolving Commitments and Revolving Loans.

In addition to the consents, if any, required by the preceding provisions of
this Section 11.6(c), each assignment by a Lender of all or a portion of its
Revolving Commitment shall require the consent of the Issuing Bank (such consent
not to be unreasonably withheld or delayed).

(d) Mechanics. Assignments and assumptions of Revolving Loans and Revolving
Commitments shall only be effected by manual execution and delivery to the
Administrative Agent of an Assignment Agreement. Assignments made pursuant to
the foregoing provision shall be effective as of the Assignment Effective Date.
In connection with all assignments there shall be delivered to Administrative
Agent such forms, certificates or other evidence, if any, with respect to United
States federal income tax withholding matters as the assignee under such
Assignment Agreement may be required to deliver pursuant to Section 2.20(c).

(e) Representations and Warranties of Assignee. Each Lender, upon execution and
delivery hereof or upon succeeding to an interest in the Revolving Commitments
and Loans,

 

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as the case may be, represents and warrants as of the Closing Date or as of the
Assignment Effective Date that (i) it is an Eligible Assignee; (ii) it has
experience and expertise in the making of or investing in commitments or loans
such as the applicable Revolving Commitments or Loans, as the case may be; and
(iii) it will make or invest in, as the case may be, its Revolving Commitments
or Loans for its own account in the ordinary course of its business and without
a view to distribution of such Revolving Commitments or Loans within the meaning
of the Securities Act or the Exchange Act or other federal securities laws (it
being understood that, subject to the provisions of this Section 11.6, the
disposition of such Revolving Commitments Loans or any interests therein shall
at all times remain within its exclusive control).

(f) Effect of Assignment. Subject to the terms and conditions of this
Section 11.6, as of the “Assignment Effective Date” (i) the assignee thereunder
shall have the rights and obligations of a “Lender” hereunder to the extent of
its interest in the Loans and Revolving Commitments as reflected in the Register
and shall thereafter be a party hereto and a “Lender” for all purposes hereof;
(ii) the assigning Lender thereunder shall, to the extent that rights and
obligations hereunder have been assigned to the assignee, relinquish its rights
(other than any rights which survive the termination hereof under Section 11.8)
and be released from its obligations hereunder (and, in the case of an
assignment covering all or the remaining portion of an assigning Lender’s rights
and obligations hereunder, such Lender shall cease to be a party hereto on the
Assignment Effective Date; provided, anything contained in any of the Credit
Documents to the contrary notwithstanding, , (y) Issuing Bank shall continue to
have all rights and obligations thereof with respect to such Letters of Credit
until the cancellation or expiration of such Letters of Credit and the
reimbursement of any amounts drawn thereunder and (z)such assigning Lender shall
continue to be entitled to the benefit of all indemnities hereunder as specified
herein with respect to matters arising out of the prior involvement of such
assigning Lender as a Lender hereunder); (iii) the Revolving Commitments shall
be modified to reflect the Revolving Commitment of such assignee and any
Revolving Commitment of such assigning Lender, if any; and (iv) if any such
assignment occurs after the issuance of any Note hereunder, the assigning Lender
shall, upon the effectiveness of such assignment or as promptly thereafter as
practicable, surrender its applicable Notes to Administrative Agent for
cancellation, and thereupon NewPageCo shall issue and deliver new Notes, if so
requested by the assignee and/or assigning Lender, to such assignee and/or to
such assigning Lender, with appropriate insertions, to reflect the new Revolving
Commitment and/or outstanding Loans of the assignee and/or the assigning Lender.

(g) Participations. Each Lender shall have the right at any time to sell one or
more participations to any Person (other than NewPageHoldCo, any of its
Subsidiaries or any of its Affiliates) in all or any part of its Revolving
Commitments, Loans or in any other Obligation. The holder of any such
participation, other than an Affiliate of the Lender granting such
participation, shall not be entitled to require such Lender to take or omit to
take any action

 

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hereunder, or to consent to any action to be taken or omitted hereunder by such
Lender, except with respect to any amendment, modification or waiver that would
(i) extend the final scheduled maturity of any Loan, Note or Letter of Credit
(unless such Letter of Credit is not extended beyond the Revolving Commitment
Termination Date) in which such participant is participating, or reduce the rate
or extend the time of payment of interest or fees thereon (except in connection
with a waiver of applicability of any post-default increase in interest rates)
or reduce the principal amount thereof, or increase the amount of the
participant’s participation over the amount thereof then in effect (it being
understood that a waiver of any Default or Event of Default or of a mandatory
reduction in the Revolving Commitment shall not constitute a change in the terms
of such participation, and that an increase in any Revolving Commitment or Loan
shall be permitted without the consent of any participant if the participant’s
participation is not increased as a result thereof), (ii) consent to the
assignment or transfer by any Credit Party of any of its rights and obligations
under this Agreement (except as otherwise expressly permitted by a Credit
Document) or (iii) release all or substantially all of the Collateral under the
Collateral Documents (except as expressly provided in the Credit Documents)
supporting the Loans hereunder in which such participant is participating.
NewPageCo agrees that each participant shall be entitled to the benefits of
Sections 2.18(c), 2.19 and 2.20 to the same extent as if it were a Lender and
had acquired its interest by assignment pursuant to paragraph (c) of this
Section; provided, (i) a participant shall not be entitled to receive any
greater payment under Section 2.19 or 2.20 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 is made
with NewPageCo’s prior written consent and (ii) a participant that would be a
Non-US Lender if it were a Lender shall not be entitled to the benefits of
Section 2.20 unless NewPageCo is notified of the participation sold to such
participant and such participant agrees, for the benefit of NewPageCo, to comply
with Section 2.20 as though it were a Lender and Section 2.20 is applied to such
Participant as if such Participant were a Lender. To the extent permitted by
law, each participant also shall be entitled to the benefits of Section 11.4 as
though it were a Lender, provided such Participant agrees to be subject to
Section 2.17 as though it were a Lender.

(h) Certain Other Assignments. In addition to any other assignment permitted
pursuant to this Section 11.6, any Lender may, without the consent of NewPageCo
or the Administrative Agent, assign and/or pledge all or any portion of its
Loans, the other Obligations owed by or to such Lender, and its Notes, if any,
to secure obligations of such Lender including, without limitation, any Federal
Reserve Bank as collateral security pursuant to Regulation A of the Board of
Governors of the Federal Reserve System and any operating circular issued by
such Federal Reserve Bank; provided, no Lender, as between NewPageCo and such
Lender, shall be relieved of any of its obligations hereunder as a result of any
such assignment and pledge, and provided further, in no event shall the
applicable Federal Reserve Bank, pledgee or trustee be considered to be a
“Lender” or be entitled to require the assigning Lender to take or omit to take
any action hereunder, until such time as such Federal Reserve Bank, pledgee or
trustee has complied with the provisions of this Section 11.6 regarding
assignments.

 

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11.7. Independence of Covenants. All covenants hereunder shall be given
independent effect so that if a particular action or condition is not permitted
by any of such covenants, the fact that it would be permitted by an exception
to, or would otherwise be within the limitations of, another covenant shall not
avoid the occurrence of a Default or an Event of Default if such action is taken
or condition exists.

11.8. Survival of Representations, Warranties and Agreements. All
representations, warranties and agreements made herein shall survive the
execution and delivery hereof and the making of any Credit Extension.
Notwithstanding anything herein or implied by law to the contrary, the
agreements of each Credit Party set forth in Sections 2.18(c), 2.19, 2.20, 11.2,
11.3 and 11.4 and the agreements of Lenders set forth in Sections 2.17, 10.3(b)
and 10.6 shall survive the payment of the Loans, the cancellation or expiration
of the Letters of Credit and the reimbursement of any amounts drawn thereunder,
and the termination hereof.

11.9. No Waiver; Remedies Cumulative. No failure or delay on the part of any
Agent or any Lender in the exercise of any power, right or privilege hereunder
or under any other Credit Document shall impair such power, right or privilege
or be construed to be a waiver of any default or acquiescence therein, nor shall
any single or partial exercise of any such power, right or privilege preclude
other or further exercise thereof or of any other power, right or privilege. The
rights, powers and remedies given to each Agent and each Lender hereby are
cumulative and shall be in addition to and independent of all rights, powers and
remedies existing by virtue of any statute or rule of law or in any of the other
Credit Documents. Any forbearance or failure to exercise, and any delay in
exercising, any right, power or remedy hereunder shall not impair any such
right, power or remedy or be construed to be a waiver thereof, nor shall it
preclude the further exercise of any such right, power or remedy.

11.10. Marshalling; Payments Set Aside. Neither any Agent nor any Lender shall
be under any obligation to marshal any assets in favor of any Credit Party or
any other Person or against or in payment of any or all of the Obligations. To
the extent that any Credit Party makes a payment or payments to Administrative
Agent or Lenders (or to Administrative Agent, on behalf of Lenders), or
Administrative Agent or Lenders enforce any security interests or exercise their
rights of setoff, and such payment or payments or the proceeds of such
enforcement or setoff or any part thereof are subsequently invalidated, declared
to be fraudulent or preferential, set aside and/or required to be repaid to a
trustee, receiver or any other party under any bankruptcy law, any other state
or federal law, common law or any equitable cause, then, to the extent of such
recovery, the obligation or part thereof originally intended to be satisfied,
and all Liens, rights and remedies therefor or related thereto, shall be revived
and continued in full force and effect as if such payment or payments had not
been made or such enforcement or setoff had not occurred.

 

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11.11. Severability. In case any provision in or obligation hereunder or any
Note shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.

11.12. Obligations Several; Independent Nature of Lenders’ Rights. The
obligations of Lenders hereunder are several and no Lender shall be responsible
for the obligations or Revolving Commitment of any other Lender hereunder.
Nothing contained herein or in any other Credit Document, and no action taken by
Lenders pursuant hereto or thereto, shall be deemed to constitute Lenders as a
partnership, an association, a joint venture or any other kind of entity. The
amounts payable at any time hereunder to each Lender shall be a separate and
independent debt, and, subject to the final paragraph of Section 8 and
Section 10.8(b) or as otherwise expressly provided in this Agreement, each
Lender shall be entitled to protect and enforce its rights arising hereunder and
it shall not be necessary for any other Lender to be joined as an additional
party in any proceeding for such purpose.

11.13. Headings. Section headings herein are included herein for convenience of
reference only and shall not constitute a part hereof for any other purpose or
be given any substantive effect.

11.14. APPLICABLE LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF
LAWS PRINCIPLES THEREOF.

11.15. CONSENT TO JURISDICTION. ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY
CREDIT PARTY ARISING OUT OF OR RELATING HERETO OR TO ANY OTHER CREDIT DOCUMENT,
OR TO ANY OF THE OBLIGATIONS, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF
COMPETENT JURISDICTION IN THE STATE, AND COUNTY OF NEW YORK. BY EXECUTING AND
DELIVERING THIS AGREEMENT, EACH CREDIT PARTY, FOR ITSELF AND IN CONNECTION WITH
ITS PROPERTIES, IRREVOCABLY (a) ACCEPTS GENERALLY AND UNCONDITIONALLY THE
NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS; (b) WAIVES ANY DEFENSE OF
FORUM NON CONVENIENS; (c) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH
PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN
RECEIPT REQUESTED, TO THE APPLICABLE

 

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CREDIT PARTY AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH SECTION 10.1; (d) AGREES
THAT SERVICE AS PROVIDED IN CLAUSE (c) ABOVE IS SUFFICIENT TO CONFER PERSONAL
JURISDICTION OVER THE APPLICABLE CREDIT PARTY IN ANY SUCH PROCEEDING IN ANY SUCH
COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT;
AND (e) AGREES AGENTS AND LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST ANY CREDIT PARTY IN THE
COURTS OF ANY OTHER JURISDICTION.

11.16. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY AGREES TO WAIVE
ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING HEREUNDER OR UNDER ANY OF THE OTHER CREDIT DOCUMENTS OR ANY DEALINGS
BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE
LENDER/COMPANY RELATIONSHIP THAT IS BEING ESTABLISHED. THE SCOPE OF THIS WAIVER
IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN
ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING
CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND
STATUTORY CLAIMS. EACH PARTY HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL
INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED
ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT, AND THAT EACH WILL CONTINUE TO
RELY ON THIS WAIVER IN ITS RELATED FUTURE DEALINGS. EACH PARTY HERETO FURTHER
WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL
AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN
WAIVER SPECIFICALLY REFERRING TO THIS SECTION 10.16 AND EXECUTED BY EACH OF THE
PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS HERETO OR ANY OF THE OTHER CREDIT
DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS MADE
HEREUNDER. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN
CONSENT TO A TRIAL BY THE COURT.

 

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11.17. Confidentiality. Each Lender shall hold all non-public information
regarding NewPageCo and its Subsidiaries and their businesses identified as such
by NewPageCo and obtained by such Lender pursuant to the requirements hereof in
accordance with such Lender’s customary procedures for handling confidential
information of such nature, it being understood and agreed by NewPageCo that, in
any event, a Lender may make (i) disclosures of such information to Affiliates
of such Lender and to their agents and advisors (and to other persons authorized
by a Lender or Agent to organize, present or disseminate such information in
connection with disclosures otherwise made in accordance with this
Section 11.17), (ii) disclosures of such information reasonably required by any
bona fide or potential assignee, transferee or participant in connection with
the contemplated assignment, transfer or participation by such Lender of any
Loans or any participations therein or by any pledge referred to in
Section 11.6(h) (provided, such pledges and advisors are advised of and agree to
be bound by the provisions of this Section 11.17), (iii) disclosure to any
rating agency when required by it, provided that, prior to any disclosure, such
rating agency shall undertake in writing to preserve the confidentiality of any
confidential information relating to the Credit Parties received by it from any
of the Agents or any Lender, and (iv) disclosures required or requested by any
governmental agency or representative thereof or by the NAIC or pursuant to
legal or judicial process; provided, unless specifically prohibited by
applicable law or court order, each Lender shall make reasonable efforts to
notify NewPageCo of any request by any governmental agency or representative
thereof (other than any such request in connection with any examination of the
financial condition or other routine examination of such Lender by such
governmental agency) for disclosure of any such non-public information prior to
disclosure of such information.

11.18. Usury Savings Clause. Notwithstanding any other provision herein, the
aggregate interest rate charged with respect to any of the Obligations,
including all charges or fees in connection therewith deemed in the nature of
interest under applicable law shall not exceed the Highest Lawful Rate. If the
rate of interest (determined without regard to the preceding sentence) under
this Agreement at any time exceeds the Highest Lawful Rate, the outstanding
amount of the Loans made hereunder shall bear interest at the Highest Lawful
Rate until the total amount of interest due hereunder equals the amount of
interest which would have been due hereunder if the stated rates of interest set
forth in this Agreement had at all times been in effect. In addition, if when
the Loans made hereunder are repaid in full the total interest due hereunder
(taking into account the increase provided for above) is less than the total
amount of interest which would have been due hereunder if the stated rates of
interest set forth in this Agreement had at all times been in effect, then to
the extent permitted by law, NewPageCo shall pay to Administrative Agent an
amount equal to the difference between the amount of interest paid and the
amount of interest which would have been paid if the Highest Lawful Rate had at
all times been in effect. Notwithstanding the foregoing, it is the intention of
Lenders and NewPageCo to conform strictly to any applicable usury laws.
Accordingly, if any Lender contracts for, charges, or receives any consideration
which constitutes interest in excess of the

 

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Highest Lawful Rate, then any such excess shall be cancelled automatically and,
if previously paid, shall at such Lender’s option be applied to the outstanding
amount of the Loans made hereunder or be refunded to NewPageCo.

11.19. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument.

11.20. Effectiveness. This Agreement shall become effective upon the execution
of a counterpart hereof by each of the parties hereto and receipt by NewPageCo
and Administrative Agent of written or telephonic notification of such execution
and authorization of delivery thereof.

11.21. Patriot Act. Each Lender and Administrative Agent (for itself and not on
behalf of any Lender) hereby notifies NewPageCo that pursuant to the
requirements of the Act, it is required to obtain, verify and record information
that identifies NewPageCo, which information includes the name and address of
NewPageCo and other information that will allow such Lender or Administrative
Agent, as applicable, to identify NewPageCo in accordance with the Act.

11.22. Electronic Execution of Assignments. The words “execution,” “signed,”
signature,” and words of like import in any Assignment Agreement 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.

[Remainder of page intentionally left blank]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by their respective officers thereunto duly authorized as
of the date first written above.

 

NEWPAGE CORPORATION By:  

 

Name: Title: NEWPAGE HOLDING CORPORATION By:  

 

Name: Title: CHILLICOTHE PAPER, INC. ESCANABA PAPER COMPANY LUKE PAPER COMPANY
RUMFORD PAPER COMPANY WICKLIFFE PAPER COMPANY NEWPAGE ENERGY SERVICES LLC UPLAND
RESOURCES INC. RUMFORD COGENERATION INC. RUMFORD FALLS POWER COMPANY By:  

 

Name: Title:

 

APPENDIX B-1

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

GOLDMAN SACHS CREDIT PARTNERS L.P.,

as Administrative Agent, Joint Lead Arranger, Co-Syndication Agent, Swing Line
Lender and a Lender

By:  

 

  Authorized Signatory

 

APPENDIX B-2

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

UBS SECURITIES LLC,

as Co-Syndication Agent and Joint Lead Arranger

By:  

 

Name: Title:

 

APPENDIX B-3

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

JPMORGAN CHASE BANK, N.A.

as Collateral Agent, Issuing Bank and a Lender

By:  

 

Name:   Title:  

 

APPENDIX B-4

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

UBS LOAN FINANCE LLC,

as a Lender

By:

     Name:   Title:  

 

APPENDIX B-5